Newly Covered Members in 2014 Represent Uncharted Territory — … · 2020-07-07 · 04.02 09.10 04.84 Inhaled Corticosteroids Carvedilol, Nitrates and Nitrites, Digoxin Insulin

Newly Covered Members in 2014 Represent Uncharted Territory — and Opportunity

2

T he rapid pace of health care industry change

will accelerate further as tens of millions of

newly covered members enter the insurance

marketplace. Exchange-based enrollment

is expected to add 12 to 30 million new

members, and expanded Medicaid rolls could increase the

insured population by 15 to 20 million consumers. Most new

populations will come from the currently uninsured.

Without claims or utilization history to understand the risk

that health plans are taking on, plus uncertainty around

initial member volumes, plans are entering a period of

unprecedented potential risk and volatility. Yet there are

remarkable opportunities as well.

As a result, payers must position their organizations to adapt

swiftly to opportunities and recover quickly from missteps.

Institutional agility is at a premium, with the most agile plans

holding the advantage.

Focusing on four assessment activities — related to

integrated, strategic investments in care management,

quality improvement, and provider engagement — will

maximize payer preparation and agility to manage

expanded-population complexities and benefit from the

opportunities newly covered members present.

1 Understand population characteristics and risk.

The standard analytics approach to population identification

and stratification leverages available claims or self-reported

data to create broad, patient-centric risk profiles used to

intervene appropriately with members. The new member

infusion from exchanges, however, will not include the

robust 12 to 24 months of experience customarily used to

quickly engage people in appropriate care programs.

In the absence of complete claims data, plans can deploy

pharmacy-based risk prediction tools that use prescription

data and classification systems to understand and measure

member health risk in a timely manner. By analyzing

pharmacy data, which comes in much more quickly and

completely than medical data, payers can create markers

of health risk that enable prospective risk assignment by

classifying disease prevalence, severity and comorbidities.

Actuaries can then more accurately predict future health

care costs.

2 Ensure the network is adequate for new populations.

As health plans work to put new members into the right

care programs, they also aspire to place them with the

correct and the best-performing providers. Considering

providers’ relative cost performance, quality-of-care metrics

as measured by evidence-based medical rules, episodic cost

and efficiency analytics helps segment networks to identify

providers that will deliver the best member experience and

the greatest cost-saving opportunity.

In addition to evaluating network adequacy for newly

covered members, understanding the relative performances

across a network aids a payer in building the narrow

networks that help plans position themselves on exchanges.

Four core competencies (see Figure 1), are critical in

optimizing a network to achieve business objectives around

how a payer engages with providers to provide members

with the right care at the highest possible level of quality.

Expert presenters

Steve Griffiths, PhD, MS, VP, Medical Informatics Consulting, Optum

Paul McBride, SVP and General Manager, Network Optimization, Optum

DCC Description PRG Description Risk Weight

57401

24901

50401

11.01

04.02

09.10

04.84

Inhaled Corticosteroids

Carvedilol, Nitrates and Nitrites, Digoxin

Insulin

Higher Risk CAD, Insulin Comorbidity

Age-Sex Group — Males, 55+

Total Risk Score

0.1195

0.3131

1.0682

1.2375

1.0219

3.7602

Flunisolide

Carvedilol

Insulin

Comorbid PRG

Age-Sex — Male, 58

1Build and maintain

provider-planpartnerships

2Measure and improvenetwork performance

with analytical intelligence

3Evaluate local-marketnetwork and provide

tailored solutions

4Align network

and product strategy

Core Medical Management Programs

Strategy and Design

Underlying Technologies and Functions

Segment, Identityand Stratify

Measure and Improve

Longitudinal

Medical Policy

derlying Technologies aCore Medical Management Systems and Tools

Process Standardization

Strat

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Program Design

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St

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ConsumerSegmentation


PredictiveModeling

Und

PredictiveModeling

OpportunityIdentification

Measureand Improve

FinancialFinancial

OperationsOperations

Outcomes

Episodic

and Functi

t Programss

ons

Pro

vid

er N

etw

ork

Care Facilitation Care Coordination

Analyticsand Reporting

DataManagement

CampaignManagement

ConsumerTools

MonitoringTechnologies

Complex CareManagement

SpecialPopulations

Utilization Management(Prior and Concurrent

TransitionManagement

Retrospective Review

TreatmentDecision Support

ACO sharedsavings, globalpaymentBundled

payment

Hospital-physician gain-sharing

Payment for coordination

Payment adjustment for hospital-acquiredconditions, readmissions

Payment for shared decision making

Fee for service

Medical home

Physician and hospital P4P

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Payment adjustment for hospital-acquirednt adjustment for hospital-acconditions, readmissionsons readmissions

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Fee forservice

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Size ofcircle = abilityto bend themedical costtrend curveOptimize for volume Optimize for outcome

Figure 1Four core competencies

3

3 Decide how to provide clinical services to members.

A clinical management framework (see Figure 2) incorporates key

components across the medical management continuum. It is

fundamentally driven through the domains of value: clinical quality,

risk-adjusted reimbursement and appropriate use of provider

services. Building the clinical services concept begins with broad

and meaningful strategy and design.

Key elements of the framework include:

• Determining whether a function should be centralized or

decentralized.

• Identifying the correct level of intensity and staff ratios.

• Confirming that processes are correct and being leveraged

consistently.

• Establishing a robust analytic engine to identify and prioritize

members for interventions.

• Delivering longitudinal and episodic programs correct for the

population.

• Putting a process in place to measure and improve across

multiple domains of value to ensure that models impact

utilization, quality of care and satisfaction outcomes.

• Supporting the clinical concept with appropriate underlying

technology solutions.


57401

24901

50401

11.01

04.02

09.10

04.84



Insulin



Total Risk Score

0.1195

0.3131

1.0682

1.2375

1.0219

3.7602

Flunisolide

Carvedilol

Insulin

Comorbid PRG


1Build and maintain





tailored solutions

4Align network



Strategy and Design



Measure and Improve

Longitudinal

Medical Policy



Strat

ore Medical

L

Co

Program Design

nt

esign

St

tegy and De

Managemen

it di l



y



PredictiveModeling

Und

PredictiveModeling


Measureand Improve

FinancialFinancial


Outcomes

Episodic

and Functi

t Programss

ons

Pro

vid

er N

etw

ork



DataManagement

CampaignManagement

ConsumerTools



SpecialPopulations






payment





Fee for service

Medical home


AspBundled

payment




y j


Fee forservice

Medical home


Co

llab

ora

tio

n


P


A clinical management framework (see below) incorporates key

components across the medical management continuum.

— Steve Griffiths, PhD, MS, VP, Medical Informatics Consulting, Optum

Figure 2Clinical Management Framework

4

4 Ensure that provider programs are in place to drive quality and efficiency.

A recent RAND Corporation study identified 90 current payer/

provider payment models classified into 11 types defined by

levels of collaboration and provider-managed risk (see Figure 3).

The bubble size assigned to a model indicates the potential for a

plan to bend the medical cost trend curve, with the ACO model

(upper right) offering the most opportunity.

Payers have begun to identify and invest administratively in

arrangements to realize cost-saving potential, but the endeavors

are fairly tepid and early stage. Optum estimates that greater

than 90 percent of health plan dollars and memberships remain

in the least-impactful fee-for-service (FFS) space (see Figure 3).

In addition, the investment to date in value-based programs has

been too small and non-scalable to achieve a fundamental shift.

With payer reimbursement increasingly dependent upon quality

scores, using care management and leveraging the network to

deliver on quality goals is critical. Moving provider programs into

the high-return quadrant — and making them assets for creating

strategic and competitive advantages — will require making

meaningful contributions of medical cost incentive dollars. Ideally,

at least 15 percent of total revenue for a provider should be in the

form of contract incentives that compensate for behaviors that

generate value.

Payers have begun to identify and invest administratively

in arrangements to realize cost-saving potential, but the

endeavors are fairly tepid and early stage.

— Steve Griffiths, PhD, MS, VP, Medical Informatics Consulting, Optum


57401

24901

50401

11.01

04.02

09.10

04.84



Insulin



Total Risk Score

0.1195

0.3131

1.0682

1.2375

1.0219

3.7602

Flunisolide

Carvedilol

Insulin

Comorbid PRG


1Build and maintain





tailored solutions

4Align network



Strategy and Design



Measure and Improve

Longitudinal

Medical Policy



Strat

ore Medical

L

Co

Program Design

nt

esign

St

tegy and De

Managemen

it di l



y



PredictiveModeling

Und

PredictiveModeling


Measureand Improve

FinancialFinancial


Outcomes

Episodic

and Functi

t Programss

ons

Pro

vid

er N

etw

ork



DataManagement

CampaignManagement

ConsumerTools



SpecialPopulations






payment





Fee for service

Medical home


AspBundled

payment




y j


Fee forservice

Medical home


Co

llab

ora

tio

n


P


Figure 3RAND Corporation study: Payment Reform: Analysis of Models and Performance Measurement Implications1

5

In addition, payers must engage and collaborate with provider

communities on a robust basis — particularly via technology,

data, communication, care management support and member

incentives — to help providers maximize the incentive program

on a real-time basis by enabling behavior changes. One example:

Integrating the administrative records the health plan has

historically managed with the medical records historically owned

by providers. Putting those two pictures together and then

feeding the information back to a provider in a consumable way

so the data is actionable at the time of care to close identified

care gaps.

Assessment Key to Benefitting From Increased PopulationMarketplace churn and volatility accompanying the addition of as

many as 50 million new members clearly brings uncertainties and

challenges that may exacerbate existing stress points within

health plans.

Although the appetites and consumption levels of this new

population initially will be a question mark hanging over the

marketplace, the evolution is driving significant behavior change in

the payer community and throughout the health care system. On

a positive note, the changes are renewing interest and investment

in care management, quality improvement and provider

engagement activities viewed as essential to driving health care

quality and cost efficiency.

The changes are renewing interest and investment in

care management, quality improvement and provider

engagement activities viewed as essential to driving health

care quality and cost efficiency.

— Paul McBride SVP and General Manager, Network Optimization, Optum

Want to learn more?

Visit optum.com

or call 1-800-765-6807.

How Optum can helpOptum offers a variety of solutions to help detect evidence-based medicine gaps and

provide targeted intervention strategies to directly impact members’ health outcomes and

decision making. Our solutions are aimed at helping members:

• Gethealthy

• Navigatecareoptions

• Livewithacondition

• Livewithanadvancedillness

Addressing the expanding member population requires

addressing key implications that cut across all health plan aspects,

from operations and cost efficiency to quality and compliance.

Positioning payer organizations to benefit from opportunity,

while mitigating risk, benefits from a four-part assessment.

The elements include: understand population characteristics and

risk; ensure network adequacy; optimize clinical services delivery;

and move provider relationships toward relationships that increase

collaboration and risk sharing.

Addressing the expanding member population requires addressing key implications that cut across all

health plan aspects, from operations and cost efficiency to quality and compliance.

— Paul McBride SVP and General Manager, Network Optimization, Optum

1 Schneider E., Hussey P., Schnyer C. Payment Reform. Analysis of Models and Performance Measurement Implications, 2011. RAND Corporation,

Santa Monica, CA. rand.org

optum.com

13625 Technology Drive, Eden Prairie, MN 55344

OptumTM and its respective marks are trademarks of Optum, Inc. All other brand or product names are trademarks or registered marks of their respective owner. Because we are continuously improving our products and services, Optum reserves the right to change specifications without prior notice. Optum is an equal opportunity employer.

OPTPRJ1804_Print 09/13 © 2013 Optum, Inc. All rights reserved.

Documents

Newly Covered Members in 2014 Represent Uncharted Territory — … · 2020-07-07 · 04.02 09.10 04.84 Inhaled Corticosteroids Carvedilol, Nitrates and Nitrites, Digoxin Insulin