Health care leaders know all too well that a very small number of patients use an outsize proportion of medical services. By creatively addressing the needs of these patients, Denver Health has not only improved their care, but has also cut millions of dollars in health care costs over a two-year period, says Chief Quality Officer Thomas MacKenzie, M.D.  

Much of the impetus for Denver Health’s shift in priorities came from a report out of Camden, N.J., which found that just 1 percent of the city’s population accounted for 30 percent of its health care costs. In a 2011 article in The New Yorker, Atul Gawande, M.D., chronicled how Camden health care leaders developed a comprehensive program to identify and serve those super-utilizers.

“In that article, he really described well the dilemma we face in terms of [continually confronting] chronic medical conditions,” recalls MacKenzie, who is an internal medicine doctor and also teaches at the University of Colorado School of Medicine. Inspired by the story, “we set out to avoid high-cost utilizations that we felt were preventable,” McKenzie says.

Using funding from the Center for Medicare and Medicaid Innovation, Denver Health set out to transform its primary care practice into one that uses population health strategies and predictive modeling to improve health care delivery and reduce costs. “We applied it to the entire population,” MacKenzie says. “That was something we hadn’t seen done in other health care systems.”

Denver Health decided that the best way to meet the medical, behavioral and social needs of its roughly 150,000-patient primary care population was to divide it into four tiers:

  • Tier One – Patients without a history of hospitalizations or chronic medical conditions.
  • Tier Two – Patients accounting for health care expenditures four times greater than Tier One’s. Denver Health designated patient navigators for Tier Two, embedded behavioral health technicians and had social workers focus on this group.
  • Tier Three – Patients with quadrupled health care costs compared with Tier Two. Members of Tier Three have multiple chronic medical conditions, may have mental illness and substance abuse issues.
  • Tier Four – These are Denver Health’s “hot spotters,” Tier Four often deals with homelessness, substance abuse and serious mental illness. Denver Health created a special outpatient clinic for this patient group, designated psychologists, nursing care coordinators and substance abuse counselors

Using sophisticated actuarial analyses, Denver Health determined it had saved $15.8 million in medical expenditures over a 26-month period. The biggest reduction of unnecessary utilizations took place within Tier Four, where every member of that population wound up using fewer health care dollars. “We as an organization said that this had such a high value for us, that we subsidized funding for an additional year,” MacKenzie says.

“The main takeaway for me was that when you design a care system that proactively manages a population, you can provide higher quality health care, improve health care outcomes and reduce unnecessary expenditures,” he says. “Rather than sitting back and waiting for [a population] to show up in the emergency department.”