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In today’s healthcare landscape, managing costs remains an ongoing challenge, with a small percentage of the population responsible for a disproportionately large share of healthcare spending. Known as the “high-cost population,” these individuals typically have chronic conditions, multiple comorbidities, and require frequent medical interventions [1]. According to the U.S. Department of Health and Human Services (HHS), the top 5% of patients account for nearly 50% of total healthcare spending [2].
Proactively identifying this high-cost population can lead to early interventions, reducing unnecessary hospitalizations, emergency visits, and long-term complications. It’s not only a matter of cutting costs but also a way to enhance the quality of care and improve patient outcomes.
In this article, we’ll explore how healthcare organizations identify the high-cost population and why this approach is crucial for sustainable healthcare.
Who Are the High-Cost Population?
The high-cost population typically includes patients with complex medical needs, chronic conditions, and a history of frequent hospital admissions or emergency room visits. These patients often require more intensive care coordination and face greater challenges in managing their health.
The ability to identify and predict which individuals are at risk for becoming high-cost patients is critical to improving care and reducing spending.
Robert Wood – Johnson Foundation
Conditions such as diabetes, hypertension, heart disease, mental health disorders, and chronic obstructive pulmonary disease (COPD) are common among high-cost patients. In addition to chronic diseases, socioeconomic factors like poverty, housing instability, and lack of access to healthy foods can also drive healthcare costs by worsening existing conditions.
The high-cost population isn’t limited to older adults. While age is a significant risk factor, high-cost patients can also include younger people with rare or complex diseases, individuals recovering from major surgeries, or those facing serious injuries. Regardless of age, the common denominator is their high consumption of healthcare resources.
Why Early Identification Matters
Early identification of high-cost patients allows healthcare providers to intervene before a medical condition worsens, dramatically reducing both direct and indirect costs. Direct costs include hospital stays, surgeries, and emergency room visits, while indirect costs can encompass lost productivity, caregiving expenses, and long-term disability support. By catching health problems early, the healthcare system can avoid many of these expenses.
Moreover, early identification improves patient health. Individuals in the high-cost population often experience fragmented care, where multiple providers are involved but poorly coordinated. This leads to worse outcomes, higher readmission rates, and repeated treatments. Identifying and managing high-cost patients early allows healthcare organizations to provide more cohesive, patient-centered care.
Key Strategies for Identifying the High-Cost Population
1. Data Analytics and Predictive Modeling
Data analytics has become a cornerstone in identifying high-cost patients. By leveraging large datasets, healthcare organizations use predictive modeling to analyze patient histories, identify patterns, and forecast future healthcare needs. These models consider factors like medical diagnoses, prescription records, and healthcare utilization to estimate the likelihood of a patient becoming high-cost in the near future.
For example, predictive models can flag patients at high risk of hospitalization due to poorly managed chronic conditions. With this information, healthcare providers can implement targeted interventions—such as regular check-ups, medication management, and personalized care plans—before the patient’s condition worsens.
Predictive modeling allows healthcare systems to focus on prevention rather than reactive care by ensuring that at-risk patients are monitored closely.
2. Chronic Disease Management Programs
Chronic diseases are one of the main drivers of high healthcare costs. Managing these conditions effectively is essential to keep costs under control. Chronic disease management programs focus on comprehensive care that includes patient education, lifestyle counseling, regular monitoring, and personalized care plans. These programs aim to prevent complications that could lead to hospitalization or emergency care.
One successful approach is using disease registries to track patients with conditions like diabetes or hypertension. These registries help healthcare providers monitor patient progress, ensuring timely interventions if a patient’s health deteriorates.
Chronic disease management programs have successfully reduced hospital readmissions, improved treatment adherence, and lowered healthcare costs.
Effective management of high-need, high-cost patients have the potential to improve health outcomes and reduce costs. Doing so, however, requires overcoming challenges in identifying this population and determining which interventions are most effective.
The Commonwealth Fund
3. Care Coordination and Integrated Care Teams
High-cost patients often see multiple providers, which can result in fragmented care. Care coordination ensures that all aspects of a patient’s treatment are aligned. Integrated care teams— comprising physicians, nurses, care managers, and social workers—work together to address the holistic needs of high-cost patients.
Care coordination helps prevent duplication of services, ensures proper medication management, and fosters better communication among healthcare professionals involved in a patient’s care. Care managers, for instance, track medication adherence, coordinate follow-up appointments, and offer health education. These steps are crucial in managing chronic diseases and preventing acute episodes that require costly interventions.
By providing a single point of contact and consistent monitoring, care coordination can drastically improve outcomes for high-cost patients and reduce overall healthcare expenditures.
4. Incorporating Social Determinants of Health (SDOH)
Social determinants of health (SDOH)—such as housing, transportation, education, and access to nutritious food—significantly impact healthcare outcomes. Many high-cost patients face barriers related to SDOH, which can exacerbate their medical conditions and drive up costs.
Healthcare organizations that incorporate SDOH into their identification and intervention strategies are better positioned to manage high-cost patients. For instance, a patient struggling with food insecurity may have difficulty managing their diabetes. By addressing these underlying social issues—perhaps through partnerships with local food banks—healthcare providers can reduce the likelihood of complications.
Programs focusing on SDOH often see better patient engagement and compliance, as patients are more likely to participate in their care when their basic needs are met.
5. Telemedicine and Remote Monitoring
Telemedicine and remote monitoring technologies are becoming increasingly important in managing high-cost patients. These tools allow healthcare providers to monitor patients from their homes, reducing the need for in-person visits or emergency care. Patients with chronic conditions, in particular, benefit from remote monitoring systems that track vital signs, medication adherence, and other health metrics.
For example, patients with heart disease can use wearable devices to monitor their blood pressure and heart rate in real-time. When abnormalities are detected, healthcare providers can intervene early, often preventing the need for hospitalization.
Telemedicine also improves access to care for patients in rural or underserved areas, making it easier to consult with specialists without the need for travel.
Conclusion
Proactively identifying the high-cost population is a critical strategy for reducing healthcare expenses while improving patient outcomes. By leveraging data analytics, chronic disease management programs, care coordination, and addressing social determinants of health, healthcare providers can take a preventive approach. The integration of telemedicine and remote monitoring further enhances patient engagement and ensures timely interventions, preventing costly hospitalizations [5].
As healthcare continues to evolve, focusing on the high-cost population through proactive identification and intervention is essential for achieving sustainable healthcare delivery. Are you ready to transform your approach to managing high-cost patients?
Contact Netrin Health to learn how our solutions can help your organization achieve better outcomes, reduce costs, and ensure sustainable healthcare delivery.
References
[1] Blumenthal, D., Chernof, B., Fulmer, T., Lumpkin, J., & Selberg, J. (2016). Caring for high-need, high-cost patients – An urgent priority. New England Journal of Medicine, 375(10), 909-911.
[2] Cohen, S. B., & Yu, W. (2012). The concentration and persistence in the level of health expenditures over time: Estimates for the U.S. population, 2008-2009. Agency for Healthcare Research and Quality.
[3] Robert Wood Johnson Foundation. (2016). High-Need, High-Cost Patients: Who Are They and How Do They Use Health Care?
[4] The Commonwealth Fund. (2017). High-Need, High-Cost Patients: Who Are They and How Do They Use Health Care?
[5] Bates, D. W., Saria, S., Ohno-Machado, L., Shah, A., & Escobar, G. (2014). Big data in health care: using analytics to identify and manage high-risk and high-cost patients. Health Affairs, 33(7), 1123-1131.