Using Patient Care Management to Preserve and Enhance ... · collaborative strategy. ... • Personalization is the key to balancing high-touch and high-tech. ... Workflow Requirements

GartnerEntire contents © 2002 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to bereliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretationsthereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

R-17-4637C. Burghard, N. Frey

Strategic Analysis Report6 September 2002

Using Patient Care Management to Preserve and Enhance Profitability

Healthcare organizations (HCOs) must expand their business and technology strategies to embrace acollaborative model for patient care management to improve profitability. Gartner examines the strategicand technical imperatives of patient care management for HCOs.

Management Summary

As patient care management moves from a financially driven event model to a collaborative mode —where stakeholders provide the right information to the clinician and patient to improve healthcareoutcomes — enormous benefits and challenges loom for HCOs:

• Benefits include reducing administrative hassles by automating the submission and processing ofauthorization transactions, and by increasing patients’ active involvement in their healthcare.

• Challenges are posed by social, political and economic forces — such as the introduction of newlegislation and the enactment of a U.S. federal "patient’s bill of rights" — that are outside the control ofmost HCOs. However, many challenges can be overcome through wisely selecting applications andtechnology as well as aligning business decisions and processes.

Business issues for consideration include building collaborative relationships in healthcare andaddressing adversarial relationships among stakeholders, which can be improved by introducingincentives for clinicians and consumers to act together. Gartner's business-related conclusions on patientcare management include:

• Payer and provider profitability rely on medical expense management through the use of acollaborative strategy.

• A collaborative model for care management will be possible by 2007.

• Successful consumer and physician participation in care management relies on financial incentives.

From a technology perspective, the need to adopt a technology architecture that supports collaborationand the flow of near-real-time or real-time information is a central consideration. HCOs that do not expandtheir "high-personal-touch" strategies to improve their use of technology — that is, balance "high-touch"with "high-tech" — will lose profitability. Gartner's technology-related conclusions on patient caremanagement include:

• An information sharing architecture is critical to enable a collaborative model.

• Key technology requirements include flexible workflow, predictive modeling and interactive Webcapabilities for guided patient self-care.


Copyright 2002R-17-46376 September 2002 2

• Personalization is the key to balancing high-touch and high-tech.

This Strategic Analysis Report offers in-depth analysis and recommendations on how HCOs can best usepatient care management business and technology strategies to protect and increase their profitability.Strategic Planning Assumptions presented in this report include:

• HCOs that adopt a collaborative model for patient care management by 2007 will improve profitabilityby 10 percent (0.8 probability).

• By 2006, HCOs that automate the authorization process will be able to reduce administrativeexpenses for this process by 50 percent (0.8 probability).

• By 2007, HCOs that expand care management to more patients through the use of guided self-careprograms will see a return on investment (ROI) of 5-to-1 (0.6 probability).

• HCOs that do not recognize the critical nature of flexible workflow in patient care management will findthemselves reinvesting in applications by 2007 (0.8 probability).

• Only HCOs that provide multiple communication channels — such as interactive voice response (IVR)and the Internet — to automate utilization management transactions will achieve a physician adoptionrate of more than 85 percent by year-end 2007 (0.8 probability).

• By year-end 2003, 90 percent of patient risk identification and stratification vendors will be acquired,form strong partnerships with care management vendors or be out of business (0.7 probability).

• By 2007, HCOs that do not employ predictive modeling and personalization strategies to identify andstratify patients into the appropriate care management strategies will overspend in their programs byat least 50 percent (0.7 probability).



CONTENTS

1.0 The Evolution of Patient Care Management.............................................................................5

1.1 The Collaborative Model............................................................................................................6

1.2 Key Challenges of a Collaborative Approach ..........................................................................7

2.0 Strategic and Investment Considerations................................................................................8

3.0 Architectural Considerations ..................................................................................................10

3.1 Clinical Content Sources.........................................................................................................12

4.0 Technology Markets for Patient Care Management...............................................................13

4.1 Workflow ..................................................................................................................................14

4.2 Automation...............................................................................................................................15

4.3 Predictive Modeling .................................................................................................................16

5.0 The Road to High-Tech, High-Touch Patient Care Management ..........................................16

5.1 Levels of Personalization ........................................................................................................17

5.2 Guided Patient Self Care .........................................................................................................18

5.3 The Right Recipe of Technology and Touch..........................................................................19

6.0 Summary and Recommendations...........................................................................................20

Appendix A:Acronym Key.....................................................................................................................21



FIGURES

Figure 1. Patient Care Management Model by 2005...............................................................................6

Figure 2. Realizing the Collaborative Model — What It Will Take .........................................................7

Figure 3. Patient Care Management Strategies: Projected Investment Levels ....................................8

Figure 4. Healthcare Information-Sharing Architecture.......................................................................11

Figure 5. Clinical Content and Guidelines in Silos ..............................................................................12

Figure 6. Technology Market Evolution Timeline.................................................................................13

Figure 7. Workflow Requirements and Vendor Positioning ................................................................14

Figure 8. The 2002 Automation Landscape: Referrals and Authorizations........................................15

Figure 9. Predictive Modeling: Selected Approaches..........................................................................16

Figure 10. Personalized Web Interactivity ............................................................................................17

Figure 11. Three Levels of Personalization ..........................................................................................18

Figure 12. Key Features for Interactive Self-Management...................................................................19



1.0 The Evolution of Patient Care Management

Consumer demands, "patient bill of rights" legislation, managed-care backlash and provider networksexercising their negotiating clout have all contributed to the dismantling of the traditional costmanagement strategies of healthcare payer organizations. Consumer pressure requires that these payersoffer comprehensive networks — almost regardless of the terms and conditions. These trends havecaused payers to loosen their authorization and referral requirements.

Based on the study results reported recently by Healthcare Affairs ("Tracking Health Care Costs: HospitalCare Surpasses Drugs as the Key Cost Driver," by Bradley C. Strunk, Paul B. Ginsburg and Jon R.Gabel, 26 September 2001), spending for inpatient and outpatient hospital services was responsible for43 percent of overall healthcare spending increases between 2000 and 2001. The study suggests thatthis loosening of requirements may, in fact, be one of the drivers of increased spending, which is peggedat 7.7 percent per capita, nearly twice the estimated increase in the growth of the gross domestic product.

As pre-certification programs decline in favor, payers are investing in disease management programs.Disease management — the longitudinal management of patients with selected chronic or high-riskillnesses — has been slowly taking hold with payers and employers. During 2001, nurse-based diseasemanagement programs grew to an estimated $350 million industry, and are forecast to grow to a $500million industry during the next 12 to 18 months, according to results released by the DiseaseManagement Purchasing Consortium. Some of that growth is being fueled by healthcare purchasers aswell as payers.

The cost of today’s nurse-based disease management programs is high, however — estimated at morethan $1,000 per patient per year. This limits the number of patients that can participate, and was onecause the relatively slow growth of payer-sponsored disease management until mid-2001. At that pricelevel, managing 15,000 diabetics for a year might cost more than $15 million.

The largest cost elements are the salaries of the nurses and the expenses of guideline development.Experienced nurses are expensive. Many of the nurses leaving the in-patient hospital setting were makingsalaries of $50,000 to $75,000. Additionally, many of the disease management outsourcing vendorscontinue to use nurses for some clerical and other tasks for which they may be overqualified. Forexample, there are less-expensive ways of delivering patient educational materials, such as trainededucators and interactive material for consumers. The cost of nurses is appropriately high; the challengeis to use those skills in the most effective and valuable fashion.

Although still largely unproven, technology-based disease management programs are showing promise. Ahandful of vendors offer stand-alone, technology-based disease management programs (such asResolution Health, and Landacorp with its "Managing for Tomorrow" program). Virtually all the leadingdisease management vendors, including LifeMasters, CorSolutions and American Healthways, areoffering technology-based programs along with traditional nurse-based ones. Patients are typicallysupported by whatever intervention is most appropriate, given their clinical conditions. Although there arestill issues concerning how to appropriately balance technology with a personal touch, there is a place fortechnology solutions in disease management.

The challenge for the industry is to establish a model for care management, and then determine how toassign the right individuals to the right programs to improve outcomes at an affordable price. To that end,Gartner presents its model for patient care management in 2005 (see Figure 1).



Guided Patient Self-ManagementStable Chronic Patients, Low-Intensity, Heavy Use ofTechnology

Disease ManagementUnstable Chronic Disease,Nurse-Based Programs

Population ManagementWellness Reminders, Periodic Patient Assessment

Utilization AuthorizationManagementAutomation of 80 Percentof Requests, TargetedProcedures Only

Source: Gartner Research

Figure 1. Patient Care Management Model by 2005

1.1 The Collaborative Model

Strategic Planning Assumption: HCOs that adopt a collaborative model for patient care management by2007 will improve profitability by 10 percent (0.8 probability).

For too many years, patients and clinicians have had other healthcare stakeholders interfering withdiagnosis and treatment of illness. Healthcare stakeholders must supply information to the clinician andpatient at the point of care to improve outcomes. Consensus on "best practices" using evidence-basedguidelines is a key enabler of the collaborative model.

Several factors are driving HCOs in the United States to examine and adopt new care managementstrategies and become more collaborative rather than adversarial. In addition to the growing patient andprovider dissatisfaction and double-digit premium increases, factors that will mandate a change fromadversarial-event management (that is, utilization management) to a collaborative management ofmedical care include:

• Escalating medical expenses, which threaten HCO profitability: Medical expenses in the United Statesgrew at more than twice the growth of the gross domestic product in 2000 and into 2001.

• Patient protection legislation: The enactment of a patient’s bill of rights and increased provider cloutthreaten to dismantle today's managed-care strategies.



• Increased demand driven by an aging "baby boom" generation: The crushing resources that will berequired to care for aging baby boomers will all act as inflection points for change. Enabling thatchange is the availability of technology to support collaboration.

• New applications and technology vendors: Access to historical, real-time or near-real-time informationfor care management at the point of care — physician offices — is years away; however, the use ofelectronic media, such as IVR and the Internet, offers the potential to reduce the administrative burdenof current approaches. There are also opportunities for patients and physicians to communicate via e-mail to improve relationships and share information, and some early-stage tools are being developedto support collaborative and interactive patient management.

Action Item: HCOs must establish opportunities to bring patients and clinicians closer through theadoption of evidence-based guidelines, reimbursement of clinicians for electronic patient visits (e-mailcommunication) and the inclusion of physicians in disease management programs.

1.2 Key Challenges of a Collaborative Approach

To fully realize a collaborative model for care management, a number of key barriers must be addressed(see Figure 2). To begin with, the political environment must change, and reasonable privacy regulations— such as the Health Insurance Portability and Accountability Act (HIPAA) guidelines — must be adoptedthat allow patient-specific information to be shared among those with a need to know.

PoliticalCompromise

• Provider involvement • Reasonable privacy regulations• Aligned incentives• New HCO business models• Evidence-based guidelines• Patient protection legislation

• Proactive — programs of value to the consumer• Rewards and penalties for consumers• Incentives for providers to participate (such as gold-carding)

Incentives

• Transaction standards• Warehousing and

business intelligence• Predictive modeling• Personalized Web

interactivity

Technology • Flexible workflow• Wireless• CPR• Controlled medical

vocabulary

CPR Computer-based patient recordHCO Healthcare organization


Figure 2. Realizing the Collaborative Model — What It Will Take

In addition, administrative burdens that create dissatisfaction and distrust among stakeholders must bereduced. These stakeholders include:

• Patients, who are often victims of clinicians' heavy administrative burdens



• Clinicians, who are themselves often the victims of the healthcare payers that imposed these burdens

• Payers, who often feel burdened by what they perceive as capricious overuse by clinicians

• Purchasers, who feel burdened by growing premium increases that threaten their profitability

With the resulting level of distrust and alienation among healthcare stakeholders, it is no wonder thatdeveloping a collaborative environment is a challenge.

Collaboration can begin if consumers have the right incentives to be more active in care management,and if physicians are rewarded to participate (for example, through "gold carding," the practice ofawarding a "no pre-approval" status for physicians that practice within the guidelines). Consumers needfinancial rewards for being actively involved in care management and the outcomes they can control.Patients who comply with jointly agreed treatment recommendations, and whose condition remains stableor improves, should "feel better" and be rewarded financially through lower premiums or co-payments.

Technology is available to support the collaborative model. Although the costs are not insignificant, theseinvestments will support future reductions in medical expenses.

Action Item: HCOs must begin to evaluate opportunities for collaboration with clinicians and consumers.They should initially focus on meeting transaction standards (such as those mandated by HIPAA), and onproviding consumer and provider behavior-changing incentives.

2.0 Strategic and Investment Considerations

Strategic Planning Assumptions:

• By 2006, HCOs that automate the authorization process will be able to reduce administrativeexpenses for this process by 50 percent (0.8 probability).

• By 2007, HCOs that expand care management to more patients through the use of guided self-careprograms will see an ROI of 5-to-1 (0.6 probability).

Patient care management strategies in 2007 will be based on the strategies used in 2002; however,Gartner expects the level of effort and investment, per member or per consumer, will change significantlyduring the next five years (see Figure 3).

2002 2007 2012 2017

Populationmanagement

Utilizationmanagement

Guided patientself-management

Nurse-baseddiseasemanagement

High

Low

InvestmentLevel


Figure 3. Patient Care Management Strategies: Projected Investment Levels



Population Management: The objectives of population management are to maintain and improve healththrough wellness, screening and other prevention strategies. With the introduction of Web technology, it ispossible to reach more consumers. Through personalization, it is possible to positively influenceconsumer behavior.

However, the ROI from population management will never be strong, because improved outcomes arehard to track and should be considered more "marketing tools" than parts of a significant "cost reductionstrategy." With access to Internet technology, healthcare information can be pushed to consumers and bepersonalized to their needs, not the needs of the broad patient population. Many healthcare content Websites — such as those offered by InteliHealth, WellMed, the Mayo Clinic and WebMD/Medscape — offersome of these capabilities, but most limit the degree of personalization.

To be effective (defined as delivering value to customers), population management must be personalizedfor individual consumers, and cause consumers to take action to maintain or improve their own health.Technology for personalization is available today and widely used in retail and financial markets, but theapplication of personalization techniques to healthcare is still in its infancy.

All consumers should have access to population management. The success of these strategies willincrease with the availability of Internet technology and the use of incentives for consumers. Populationmanagement is unlikely to result in immediate, strong ROI, and should be considered almost a marketingtool to grow consumer loyalty.

Utilization Management: This is largely a manual process to provide approval for high-cost medicalservices — inpatient hospitalization and selected outpatient diagnostic procedures.

Rumors of the death of utilization management are highly exaggerated. The process will remain becauseof its importance as a cost management strategy, and as a planning tool for expense recognition. But thelevel of effort expended and the efficiency of the process must change.

Today the process requires significant human intervention on the part of all of the stakeholders. Thislabor-intensive process cannot survive and is often cited as the No. 1 reason for claims suspense and is asource of consumer and provider dissatisfaction. Providers, consumers and payers spend unproductivehours tracking down referrals and authorizations and, in the end, 80 percent to 90 percent of requests forservices are approved.

In 2002, healthcare payers continue to focus on utilization management as the cornerstone of patient caremanagement strategies. Through the use of technology, this paper-bound process can becomeautomated and turn authorizations and referrals into "purchase orders." Eighty percent to 90 percent ofrequests for authorizations can be reviewed and determinations made using strong and flexible ruleengines. The results achieved by payers that have accomplished this automation include staff reductionsand reassignments. By 2012, these processes will be automated (see "Automating HealthcareAuthorizations: Four Tiers," SPA 13-1056).

Guided Patient Self-Management: This strategy relies heavily on technology to personalize and deliverpatient self-care and management programs. There is general agreement that establishing the "right"intervention for patients with chronic illnesses, or for diseases where treatment variability is high, is thekey to success. However, the challenge is to define the intervention that improves financial, clinical andpatient satisfaction outcomes. This is the goal of disease management.

Self-management programs (for example, enabling diabetics to record key metrics, such as glucose levelsin relationship to food intake and insulin) are effective for the highly motivated and stable patient with a



chronic condition. This presents a prime opportunity to expand the effectiveness and patient populationfor disease management at a low per-patient cost (compared to the $1,000 or more per year for nurse-based disease management). This strategy relies heavily on the use of technology to personalize anddeliver content and interactive tools to patients enrolled in disease management programs.

These programs are in their infancy, but domain experience will grow through programs offered byvendors in the disease management service business. If consumers are provided with incentives, theseprograms will be on the rise in 2007.

Many of the initial efforts at patient-guided disease management were unsuccessful, but the recentintroduction of technology-based strategies by major disease management vendors (such as AmericanHealthways and CorSoutions) will help evolve this strategy. Vendors such as WellMed and Landacorpoffer technology-based strategies (some with Web-based and some with fundamental communications,such as paper), where patients and consumers are provided with tools to manage their health andtreatment.

Nurse-Based Disease Management: This strategy is for patients with the most unstable and complexmedical conditions, where high-touch is most effective. However, initial strategies that rely heavily onnursing intervention have proven to be too expensive. With costs up to $2,000 per patient per year, theability to demonstrate ROI is elusive.

Continued investment at current levels in nurse-based disease management programs will result in fewerpatients under management. Beginning in 2007, nurse-based disease management programs will level offas a primary care management strategy. In its place, the deployment of guided patient self-caremanagement will increase.

A technology infrastructure is still required as a core foundation, but the primary channel of contact withpatients is personal. Patients receiving disease management services may also be using guided patientself-management strategies and technology. Nurses will be used in those situations when the training,intuition and reasoning capabilities of a human are required.

Action Items:

• As part of a population management program, HCOs should provide Web links to validated clinicalcontent sites and begin to initiate limited, but focused, "push" technology to members or patients forscreenings and other preventive measures.

• As part of a utilization management program, HCOs must require notification for all costly procedures,but should review only those procedures where there is variability in the site of care or efficacy.

• HCOs should incrementally invest in guided patient self-management strategies for selectedpopulations that have been identified through predictive-modeling methodologies, and further stratifiedto determine their suitability for such programs.

3.0 Architectural Considerations

Timely access to information by all stakeholders is the key to creating a collaborative patient caremanagement strategy. This poses a number of architectural requirements (see Figure 4), which include:

• The availability of data from operational applications (such as scheduling, clinical decision support andfinance)



• Enabling technologies for workflow, the wireless, secure capture of clinical data (for example, viapersonal digital assistants), the adoption of transaction standards, service-oriented architectures,controlled medical vocabularies and the Internet

• Investments in data warehouse architectures — coupled with investments in data transformation (viaintegration brokers) and advanced analytics (such as artificial intelligence, inference and predictivetechniques) — to support all of the information requirements of stakeholders, including performancemetrics and personalization

• The ability to send and receive information in real time within, and outside of, the enterprise

• Applications to support patient care management

Consumer PortalsProvider Portals

Shared DataMedical Knowledge

Purchaser Portals

CSS

Scheduling/

RegistrationAdmin./Finance

CDR/

CPR

Personalhealthrecord

PatientCareMgmt.

CDR Clinical data repositoryCPR Computer-based patient recordCSS Customer service and support

EnablingTechnology

EnablingTechnology


Figure 4. Healthcare Information-Sharing Architecture

Realization of this architecture will take years to accomplish. HCOs must incorporate niche applications —such as nurse triage, utilization management, case management and disease management — as part oftheir enterprise architecture.

HCOs that do not view patient care management as part of their overall system architecture andmanagement strategies will experience process misalignment and data redundancy. This will limit theirability to move to real-time or near-real-time information sharing.



Action Item: HCOs must insist that niche vendor applications be available on technology platforms thatenable future real-time data sharing, including the use of service-oriented architectures and XMLmessaging.

3.1 Clinical Content Sources

Clinical content is available for a wide range of applications, from general healthcare information to usageguidelines, disease management guidelines and, at the most granular level, care pathways. Virtually allhealthcare stakeholders, except consumers (payers, providers and purchasers) and other suppliers, areoffering their own guidelines in addition to those available to the public:

• Most vendors, such as Milliman and LifeMasters, have proprietary guidelines that have beendeveloped through a combination of literature review, peer review and internal research.

• Many individual HCOs have developed their own guidelines, which they often use in conjunction withthose from a vendor.

A number of vendors, including Milliman and McKesson, are extending their clinical content across thecontinuum of care. Today, no single source of clinical content crosses all domains, from content throughcare paths. Such "silos" add to the fractured nature of the healthcare system (see Figure 5).

InpatientCare Paths

HCO-specific

ChronicDisease

ManagementGuidelines

LifeMasters,American

Healthways,HCO-specific

Utilizationand Cost

Guidelines

InterQual,Milliman,

HCO-specific,Apache

WebMD,InteliHealth,

Mayo

GeneralHealth

Information

Guidelines acrossthe continuum from

a single vendor


Figure 5. Clinical Content and Guidelines in Silos

The next generation of clinical-content vendors will provide more-comprehensive guidelines. Yet it willtake at least five years before there will be enough consolidation in the market that multiple vendors willoffer comprehensive guidelines. Part of that consolidation will include the use of evidence-basedguidelines and rationalized and consistent management strategies. There are evidence-based guidelinesfor simple conditions (such as ear infections); however, the challenge ahead includes the "political armtwisting" required for uniform acceptance among caregivers.

Action Items:

• HCOs must look for clinical content sources that can provide validated, evidence-based content thatcrosses the continuum from general educational content to clinical pathways.

• HCOs need to work internally to rationalize and vet the multiple sources of clinical content andguidelines with which they are managing care.



4.0 Technology Markets for Patient Care Management

The application market for patient care management is a combination of submarkets. There continues tobe slow growth in the utilization management market (including vendors such as MEDecision, McKessonand Landacorp), as HCOs are uncertain of the future of these strategies. Other applications are emerging,which include remote monitoring, predictive modeling, personalized Web interactivity and computer-basedpatient record (CPR) systems.

The predictive-modeling market has experienced consolidation as disease management companies suchas American Healthways acquired the assets of Axonal. Gartner expects the utilization management andmobile-monitoring markets to enter similar consolidation periods within the next five years (see Figure 6).

2001 2003 2005 2007 2009

Evolution Timeline

Growth ConsolidationUtilization Management

EmergingCPR Growth

EmergingPersonalized WebInteractivity

Growth through partnerships

ConsolidationEmergingPredictive Modeling

emerging Growth ConsolidationEmergingMobile Monitoring

CPR Computer-based patient record


Figure 6. Technology Market Evolution Timeline

The personalized Web interactivity market for patient care management (applications that will supportguided patient self-management) is in its infancy, with the disease management vendors only just addingsuch capabilities to their nurse-based programs. Stand-alone vendors of personalized Web interactivitywill consolidate through acquisition or partnerships through 2005, as HCOs will demand to work with onlyone vendor for disease management. Although these applications are perceived as having high value toconsumers, issues such as who will pay for the services and the definition of a successful business modelremain unresolved.

The CPR market — including vendors such as Cerner, 3M, McKesson, Siemens, Epic Systems, Eclipsys,IDX Systems and Medical Information Technology (Meditech) — will evolve and become a growth marketbeginning in 2004. Gartner forecasts that, by 2010, CPR technology will become the foundationapplication for patient care management, and that the functionality of utilization management applicationswill be integrated or tightly coupled with CPR systems.

Action Item: HCOs must evaluate market maturity against internal business strategies as one measure ofwhen to invest in technology, and recognize that some investments may be short-term and tactical.



4.1 Workflow

Strategic Planning Assumption: HCOs that do not recognize the critical nature of flexible workflow inpatient care management will find themselves reinvesting in applications by 2007 (0.8 probability).

From business-to-business care management transactions (authorizations) to self-service models,workflow can be the underlying engine delivering a state-aware, process-focused control service for e-health applications and users. Workflow will allow e-business to supplement and, in some cases,eliminate reliance on human intervention. Fortunately, the repeatable, controlled processes of healthcare(such as authorization request submission) can be married with a data-driven, user-tailored experience.

All utilization management vendors provide varying levels of fixed and flexible workflow (see Figure 7):

• A fixed workflow represents a vendor’s perception of optimal utilization management processes, whichis useful for organizations requiring a quick implementation. This approach provides little flexibility toconfigure workflow.

• A more flexible workflow engine will support end users designing new programs and the creation ofpersonalized interventions. The business user, not the IS organization or the vendor, should be thesole source of the configuration.

• User-configurable• Rules-based• Graphical process

management

Landacorp

MEDecision

McKesson

TCS HealthcareTechnologies

Meets all requirements

Meets most requirements

Meets some requirements

Meets minimal requirements

Workflow Requirements

As of July 2002


Figure 7. Workflow Requirements and Vendor Positioning

Configuration "on the fly" rather than via a compile-and-restart process is a major differentiator. Otherdesirable features include a graphical development environment based on icons that can be linkedtogether, via decision-branching points, to support serial and parallel processing.

Action Item: HCOs that select vendors with inflexible workflow will be unable to improve patientcompliance through the personalization of program interventions. Therefore, HCOs in the process ofevaluating utilization management applications must consider the flexibility and configurability of thesystem’s workflow as a key decision point.



4.2 Automation

Strategic Planning Assumption: Only HCOs that provide multiple communication channels — such as IVRand the Internet — to automate utilization management transactions will achieve a physician adoption rateof more than 85 percent by year-end 2007 (0.8 probability).

The automation of care management transactions, authorizations and referrals is an opportunity to reducethe administrative burden. Vendors — utilization management and electronic — have begun to respond tomarket demand, but the market is still young and emerging.

Utilization management vendors are better positioned than e-vendors to meet the requirements ofautomation today (see Figure 8). It is an extension of their core competency and a solution that will helpensure their future. Their products are designed to integrate with core workflow tools, and most utilizationmanagement vendors have recognized the need to support multichannel communication (including fax,IVR and the Internet).

Utilization Management Vendors

Landacorp — 1McKesson — 2MEDecision — 2

E-Vendors

NaviMedix — 3HealthTrio — 1TriZetto Group (HealthWeb) — 12

+ Higher rates of automation+ Available today+ Integration with care management

application+ Multichannel approaches

– Solution is limited toauthorizations/referrals

+ Part ofmultitransactionstrategy

– Usually later in vendor’splans

– Internet-only communication

Strengths

Challenges

Challenges

Strengths

Selected Vendors:No. of AutomationClients (as of July 2002)


Figure 8. The 2002 Automation Landscape: Referrals and Authorizations

E-vendors may be well-positioned as a long-term option. Most e-vendors have focused on higher-volumetransactions, such as claims and enrollment. Although authorizations are on the development agenda,only a handful of vendors have installed clients. Once e-vendors offer this capability, it will be thepreferred option for HCOs, assuming there is equivalent functionality. Having only one vendor supportingthe automation of transactions is a best-practice, long-term strategy.

Action Item: HCOs considering the automation of care management transactions must decide whetherthey are willing to make a short-term investment vs. waiting for a longer-term solution (available during2003). Healthcare organizations that currently license a vendor's niche care management applicationshould consider using that vendor's authorization automation capability. Other payers are advised to lookto the vendor that is automating the remainder of the administrative transactions (such as claims andenrollment).



4.3 Predictive Modeling

Strategic Planning Assumption: By year-end 2003, 90 percent of patient risk identification andstratification vendors will be acquired, form strong partnerships with care management vendors or be outof business (0.7 probability).

The importance of predictive modeling in healthcare is growing, and the time has come for HCOs tounderstand and evaluate the various approaches available in the market. Historically, predictive modelingwas restricted to financial and actuarial domains in setting premium and provider reimbursement rates.Predictive methodologies for care management are under development, but are in their infancy. Theevolution to more-collaborative and patient-centered care management requires that patients be identifiedand stratified so they can be assigned to the right interventions.

Many of the once-small niche vendors in the market have been acquired or have developed strongpartnerships with care management vendors. For example, American Healthways acquired Axonal withCareSteps. Vendors that are defined as "hybrid" include those that have developed the underlyinggrouping methodologies that can be used for actuarial and care management purposes.

The challenge for HCOs is to clearly understand the methodologies offered by each type of vendor anddetermine if they provide the right approach and solution. For example, methodologies offered by caremanagement vendors will support patient identification and stratification, rather than provide a predictivemodel for underwriting purposes (see Figure 9).

Vendor Primary Use

IHCIS Financial/Actuarial and Clinical

Ingenix Financial/Actuarial

McKesson Clinical

MEDecision Clinical

Medical Scientist Financial/Actuarial and Clinical

Medstat Financial/Actuarial

Milliman Clinical

ViPS Financial/Actuarial and Clinical

IHCS Integrated Healthcare Information ServicesSource: Gartner Research

Figure 9. Predictive Modeling: Selected Approaches

Action Item: HCOs must have a clear understanding of their application of predictive modeling to ensurethey get the highest value from their acquisition.

5.0 The Road to High-Tech, High-Touch Patient Care Management

HCOs must evaluate information sensitivity and personal preferences to determine the appropriateness of"high-tech, high-touch" solutions for patient care management. The right balance will produce highlypersonalized interventions (see Figure 10), which will improve patient compliance with medical treatmentsand instructions.



Specialized education and paper-based tracking programsfor chronic disease management

1990s 2002

Low

High

XML adoption, data mining,Web-based applications,mobile computing, personal health record

2007

Point-of-carepatient/clinicianmanagement and tracking— Type A onlyPersonalized

interactive patientmanagement andtracking that isvendor-sponsored

What’s Needed• Incentives• Technology• Personalization

Value

Value increases as personalization and interactivity are added.


Figure 10. Personalized Web Interactivity

Once information — particularly clinical information — becomes personalized for a member, and two-wayinteraction is required, the sensitivity of the information increases and members show strong preferencesfor personal contact. The full range of high-tech, high-touch solutions will be required to fulfill this need.

For example, a homebound elderly patient with impairments that make computer use difficult may prefer aphone call from a medical professional to collect information and provide feedback. Another individualaccustomed to online communication may prefer posting information to a Web site and receiving feedbackonline.

Whether conducted in person or electronically, healthcare coaching is critical to improving patientcompliance and using resources more effectively. As technology gets introduced into this process, theuse of personalization techniques and the need for real-time information increases.

Action Item: Create patient care management strategies that balance high-tech and high-touch solutionsto move patients and clinicians closer together.

5.1 Levels of Personalization

HCOs must design their Web sites to include three levels of functionality (see Figure 11):

• Basic corporate information

• Constituent-specific information

• Highly personalized information (which is most critical to consumer satisfaction)



HCO's Web Site Structure

IndividualIndividuals personalize

administrative(claims status) andclinical information

Personalize at constituent level: consumers view general

clinical information

Constituent

Basic corporate information forall constituents (infomercial);

no personalization

Corporate


Figure 11. Three Levels of Personalization

Healthcare consumers will use HCO Web sites when they perceive value through interactivity,customization, ease of use and availability. Consumers want to be able to complete the same interactionsthey can accomplish by phone or other media. In addition, they want continued access to the "oldmethods."

Best practices for Web design include:

• Customizing content and interactivity

• Designing the site to support quick and easy navigation

• Including layers that are rational and limited (in terms of the number of clicks and the navigation path)

• Testing user interfaces (professional design makes a big difference here)

• Achieving integration across Web content and applications

• Including customer personalization and customization

Basic administrative functionality, such as contact names and online marketing material, does not need tobe constituent-specific. Once transactions (such as changing a primary-care physician or inquiring aboutthe status of a claim) or interactivity is introduced, the "view" into the Web site should be customized forspecific constituents. Web site "stickiness" is achieved when consumers can create their own personalview of the Web site. For example, guided patient self-management will require high degrees ofpersonalization to ensure compliance and increased security.

Action Item: HCOs must review current or proposed Web content against three levels of access:corporate, constituent-specific and personalized to the individual. As information on the Web sitebecomes more personalized, privacy concerns become heightened and security requirements increase.

5.2 Guided Patient Self Care

Supporting guided patient self-care is a complex undertaking that requires a continuous information loopamong the patients, clinicians and the HCO (see Figure 12). Today, most HCOs provide high-level access



to health risk assessment and general clinical information through their Web sites, as well as some limitedalerts. Typically, however, the information and tools are not coordinated with other patient needs.

Health Risk

Assessment

GeneralClinical

Information

Peer Support

Confirm diagnosis andtreatment with a clinician

Health Record

Vital Signs

PersonalSelf-Management Tools

"What more can I find out aboutasthma, andare there other options?"

"What kind ofair filters doother asthmaticsuse?"

E-mail reminderthat it is time tochange the air filterand begin springmedications

"It lookslike Imighthave asthma."


Figure 12. Key Features for Interactive Self-Management

For example, a consumer might take a health risk assessment survey that indicates they may be at riskfor a clinical condition. It may describe the condition in a general way, and researching it further may becomplicated. Virtually none of today's internally built self-care tools includes notification of clinicians.

However, disease management vendors such as LifeMasters and others have built the links forinformation to flow between the patients and a clinician as they collect vital signs. Having a feedback loopthat balances technology with a personal touch will be a critical success factor in managing escalatingmedical expenses and improving consumer satisfaction.

The technology and domain expertise to implement and maintain interactive self-management capabilitiesare not typically found in most payer organizations. As a result, using a product or outsourcing vendor isoften the right choice.

Action Item: HCOs should carefully evaluate their own organization’s ability to support interactive patientself-management; it is a prime candidate for outsourcing.

5.3 The Right Recipe of Technology and Touch

Strategic Planning Assumption: By 2007, HCOs that do not employ predictive modeling andpersonalization strategies to identify and stratify patients into the appropriate care management strategieswill overspend in their programs by at least 50 percent (0.7 probability).

The key to effective patient care management is the ability to get the right patients the right interventions,using tools such as predictive modeling and personalization. The objective is to evaluate patients enoughto understand, from a clinical and personal perspective, what the likely outcome and "best intervention"might be.



For example, a working, middle-aged person with an unstable diabetic condition might benefit frommonthly personal coaching. Another individual with the same demographic and clinical profile, however,may best respond to an interactive Web experience that is highly personalized and provides "electroniccoaching."

When designing interactive Web experiences, the key to effectiveness is personalizing the experience.Key elements of personalization include creating the right context (for example, the individual may be abusy person who forgets to take the medication) and including a list of techniques that address the issue(such as reminders to take medications). Other Web site best practices must also be part of the electroniccoaching experience (such as providing quick response, and navigation that is intuitive and takes only twoclicks to get to the right information).

Action Item: HCOs should budget for predictive-modeling tools in 2002 and into 2003, and evaluatewhich available methodologies best meet their requirements.

6.0 Summary and Recommendations

Payer and provider profitability will increasingly rely on medical expense management through the use ofa collaborative strategy. Therefore, most HCOs will adopt a collaborative model for care management by2007. Successful consumer and physician participation in care management will rely on financialincentives.

From a technology perspective, the need to adopt an architecture that supports collaboration and the flowof near-real-time or real-time information is a core consideration. Technologies that will be key in the next12 months include user-configurable workflow, predictive modeling and interactive Web capabilities.Personalization will be key to balancing high-touch and high-tech solutions. HCOs that do not expandtheir strategies to improve the use of technology will lose profitability.

Gartner offers the following general recommendations to HCOs seeking to exploit patient caremanagement strategies and technologies to preserve and increase their profitability:

• Support stakeholder collaboration by:

− Providing consumers with incentives to participate in their own healthcare management.

− Decreasing the "hassle factor" of established utilization management systems.

− Providing "gold carding" incentives for physicians.

− Reducing the number of procedures requiring authorization.

− Automating the authorization process.

• Incorporate user-configurable workflow in all patient care management applications.

• Invest carefully, directly or through an outsourcing agreement, in applications and technology tosupport guided patient self-management.

• Balance technology and access to human coaches in all collaborative patient care managementefforts.



Appendix A: Acronym Key

CDR Clinical data repository

CPR Computer-based patient record

CSS Customer service and support

HCO Healthcare organization

IHCIS Integrated Healthcare Information Services

IS Information systems

IVR Interactive voice response

ROI Return on investment

XML Extensible Markup Language



Documents

Using Patient Care Management to Preserve and Enhance ... · collaborative strategy. ... • Personalization is the key to balancing high-touch and high-tech. ... Workflow Requirements