Welcome to our “Innovators Worth Watching” series, spotlighting interesting and potentially disruptive players across a spectrum of industries.
As U.S. providers continue their slow but steady march away from fee-for-service reimbursement and toward value-based payments, they’re increasingly seeking means of addressing patients’ health-related social needs. That’s because social determinants of health—life circumstances including socioeconomic status, housing, education, and employment—are estimated to have at least twice the impact on risk of premature death than health care. So addressing them is an important part of value-based strategies aiming to improve health while reducing health care costs.
Hennepin Health, a safety-net Accountable Care Organization (ACO) serving Medicaid patients in Minneapolis, Minnesota, is an encouraging example of the trend. Hennepin Health’s ACO is a partnership between the county’s local Human Services and Public Health Department, a local teaching hospital, a Medicaid managed care health plan, and a Federally Qualified Health Center. Its innovative care model is designed to meet the unique needs of the partners’ shared, “high-risk” members, whose complex combination of issues—such as mental illness, addiction, homelessness and/or other hallmarks of social deprivation—often prevent them from accessing or receiving appropriate care through the traditional health system.
The ACO is staffed by an integrated care team comprised of physicians, nurses, pharmacists, social workers and community health workers. Unlike traditional care processes, which often only involve medical assessment, Hennepin Health’s begins with an assessment of members’ social needs, like housing and food insecurity, or lack of transportation and unemployment, so that its care team can tackle those barriers to health in conjunction with members’ medical problems. And throughout members’ care, the team strives to develop and maintain a trusting relationship with members, many of whom have been let down by traditional health care, so that they can continue to identify and assist with more health and social needs over time.
Results thus far has been impressive—according to a Commonwealth Fund case study, the ACO’s medical costs fell an average of 11% per year between 2012 and 2016. And, between 2012 and 2013, its members’ emergency room visits decreased by approximately 9%, with hospital admissions remaining flat and outpatient visits increased by 3.3%. Assuming its results have continued on the same trajectory (we could not find more recent figures), Hennepin Health’s innovative care model shows significant promise.
But does it have the potential to disrupt America’s traditional, episodic, acute care delivery model? We put it to the test with six questions for identifying a Disruptive Innovation.
- Does it target people whose only alternative is to buy nothing at all(nonconsumers) or who are overserved by existing offerings in the market?
Yes. Hennepin Health’s model is designed to serve nonconsumers—people whose serious mental health and social needs are generally not addressed by traditional health care providers, and often prevent them from accessing or effectively engaging with what care may be available to them.
- Is the offering not as good as existing offerings as judged by historical measures of performance?
No—results suggest that it may be better care for its members than what traditional health care models provide. However, this doesn’t necessarily mean that Hennepin Health’s model isn’t disruptive, as not all disruptive strategies improve affordability and convenience at the expense of performance according to historical measures.
- Is the innovation simpler to use, more convenient, or more affordable than existing offerings?
Yes. For instance, Hennepin Health offers transportation to appointments, operates a 24/7 nurse help line, staffs primary care providers in a county mental health facility that serves many of its members, and has located its Coordinated Care Clinic for its highest risk members within the local hospital, where they may be accustomed to seeking care in the emergency department. Finally, as referenced above, Hennepin Health’s care model is apparently yielding cost savings.
- Does the offering have a technology that enables it to improve and move upmarket?
Yes. As an ACO, Hennepin Health’s financial sustainability particularly depends on identifying, engaging and improving the health of its highest-risk, highest-cost members. So it uses an algorithm to mine the electronic health records of its member population, along with data from the correctional and foster care systems, housing services, and other local agencies, to find those members most in need of its unique, bio-psycho-social approach to health care. This technologically-enabled approach to ensuring members get the support they need, given their specific circumstances, should help the ACO improve results and serve changing population needs over time.
- Is the technology paired with an innovative business model that allows it to be sustainable?
Yes, with caveats. Hennepin Health’s partners pool their funding—including per-member-per-month Medicaid payments—thus creating the financial means and flexibility to innovate to address the unique needs of their members. For instance, Hennepin Health staffs paramedics at a county homeless shelter to triage and direct resident members to the appropriate network care facilities, which wouldn’t be possible if the ACO depended solely on fee-for-service revenues.
When, in aggregate, such innovative practices lead to improved health for Hennepin Health members, the ACO realizes medical savings that can be reinvested in care to drive further health improvements, fueling a virtuous cycle. Whether this cycle leads to financial sustainability over the long term, however, depends not only on Hennepin Health’s continued ability to drive health improvements, but also on the magnitude and timing of medical expenses and offsetting health improvements over the long term.
- Are existing providers motivated to ignore the new innovation and not feel threatened by it at the outset?
Probably. The many existing providers still rooted in traditional care models and fee-for-service profit formulas might ignore Hennepin Health’s innovative model, given it targets patients they have not historically been able to serve effectively and/or profitably.
Verdict: Based on strict application of the Theory of Disruptive Innovation and what we know about Hennepin Health from public information, the ACO has strong potential to become a disruptive force in its market. However, in taking on some of the most devastating and costly issues of our day—mental health, addiction, social deprivation and chronic disease—Hennepin Health no doubt faces challenging times ahead. We hope they can go the distance, and share learnings that will help other innovators on the same mission.
