Society of Actuaries June 13-15, 2007
Holly Michaels Fisher, Senior Consultant Reden & Anders
SPH81Fisher
Designing Care Management
Programs to Improve Outcomes
© Ingenix, Inc. 3
Traditional Components of Medical Management
“Utilization Review”
Pre-Authorization
Concurrent Review
Case Management
Demand Management
Disease Management
Specialty Case Management
Population Health Management
What is care management?
An umbrella term
Incorporates components of traditional medical management In concept, reflects a more integrated approach to managing care
A few examples
A set of activities which assures that every person served by the system has a single approved care (service) plan that is coordinated, not duplicative, and designed to assure cost effective and good outcomes. Initial and continuing authorizations are generated by care coordinators.
– www.cmpmhmr.cog.pa.us/glossary.htm Case Management Society of America
– Case management is a collaborative process that assesses, plans, implements, coordinates, monitors, and evaluates the options and services required to meet the client's health and human service needs.
– It is characterized by advocacy, communication, and resource management and promotes quality and cost-effective interventions and outcomes.
© Ingenix, Inc. 5
Overlapping Definitions
Disease Management Association of America
Disease management:
– A system of coordinated health care interventions and
communications for populations with conditions in which patient self-care efforts are significant.
National Quality Forum
Care coordination
– Is a function that helps ensure that the patient’s needs and preferences for health services and information sharing across people, functions, and sites are met over time.
– Coordination maximizes the value of services delivered to patients by facilitating beneficial, efficient, safe, and high-quality patient experiences and improved healthcare outcomes.
What we know…
There is no single definition of “Care Management”
Care management is a broad term that describes approaches to
medical management that are changing and evolving
Terminology is imprecise, is not standardized, and is evolving and
changing
Care management means different things to different people
Can be considered narrowly as one component of medical management Can be considered as the overarching medical management framework or
umbrella
Measuring outcomes, especially financial outcomes is difficult
Common themes that cross definitions
Coordination Stratification Targeting/Focus
© Ingenix, Inc. 7
Key Reasons Why Care Management
Initiatives Often Fail
Problem 2 Institutionalization of programs
Problem 7 Evaluation metrics for savings or quality not planned
Problem 3 Physician support assumed, not earned
Problem 6 Little rigor in estimating costs and returns on investment
Problem 4 Misalignment with provider risk sharing arrangements
Problem 1 Too many initiatives and not enough focus
Problem 5 Other organization activities not supportive of initiatives
Too many medical cost management initiatives are
unfocused or unnecessary, and as a result, not optimally
productive
Plans initiate multiple individual care management programs at the same time without testing for overall impact or integration HEDIS has diverted resources
from high cost and high acuity cases
Since a large percentage of medical costs are attributed to a small percentage of members, fewer resource-intensive and focused initiatives are generally most productive
© Ingenix, Inc. 9
Once a medical management program is initiated, it
becomes institutionalized and, therefore, difficult to change
Most programs produce some positive results
As a result, marketing and other executive staff are fearful of discontinuing or changing the programs Metrics are usually weak or
absent, but anecdotes are prevalent and powerful
Programs without clinical value make providers and members cynical
Problem 2
Example
Pre-authorization program implemented for specific procedures by a health plan Program in place for many years Large number of resources required to
manage process which is highly manual
No process or outcomes measurements in place to monitor operational costs, operation efficiency, outcomes, or savings
Retrospective analysis:
– Low cost high volume procedures approved 100% of the time – Changes implemented without
analysis of underlying data
Physician support of care management initiatives is
often assumed, not earned
Example 1
Implementing a cardiac disease management program without involving plan physicians in intervention design or outcomes metrics
Beta blocker use post-MI only rose 5% despite a significant educational effort…
Example 2
Health plan held a series of physician focus groups to obtain input and test ideas for a series of pharmacy-related care management interventions
Interventions incorporated physician feedback
Outcomes included a nearly 50% improvement
Problem 3
The true payoff from care management programs is dependent on the
understanding and cooperation of the members’ physicians Care management
interventions often rely extensively on a change in physician practice
Physician to physician communication is critical to ensure appropriate
Not enough resources are devoted to physician communication
© Ingenix, Inc. 11
Care management programs are often mis-aligned with
provider risk-sharing arrangements
The relationship of the
intervention cost to the savings and provider payment
incentives and structures is sometimes not considered in program design
The distribution of costs and savings between providers and the plan is sometimes not estimated
The plan may incur the cost for the intervention but the provider realizes the majority of savings
Example
Administrative cost for intervention at $1,800 per participating member and cost is borne by health plan
Medical cost savings at $5,400 and is accrued by providers in full risk arrangement
Health plan return on investment = ($1,800)
Provider return on investment = +$5,400
Problem 4
Network Strategy Provider Reimbursement
Product Design & Pricing
Other plan activities and initiatives do not always
support care management initiatives
Specialty and ancillary contracting may be inconsistent with care management programs Risk arrangements may not
be aligned with care management programs Payment incentives at odds
with care management interventions
Effects of risk sharing do not reach to individual providers within medical groups or institutions
HMO vs. PPO vs. POS medical management programs and strategies sometimes different but networks often overlap causing physician confusion Delegation in the HMO vs.
centralization for some products may challenge a uniform, state-of-art, approach
Benefit design does not incent appropriate use of services by members Marketing may “sell” what
can’t or shouldn’t be delivered
Insufficient time spent on designing after sales -service and reporting
© Ingenix, Inc. 13
Little rigor in quantifying care management program
costs and returns on investment leads to confusion about
program effectiveness
Plans do not develop sound business cases for investments or define expected outcomes prior to implementation
The measurement of programs’ ROI is complex and varies by program and disease type
For disease management programs, measurement must take into account the natural course of the disease (regression to the mean) Program costs are often
underestimated, not consistently defined or measures
Multiple methods to track disease management program savings include:
Comparing total disease-related costs before and after program implementation
Comparing affected member costs before and after program Concurrent and prospective risk
scores
Savings must include quantifying costs of avoided care less costs of substitute care
Problem 6
Metrics for evaluating care management program
effectiveness are often not built into the program’s design
Metrics that are not built into the program upfront are therefore unavailable during the program evaluation phase Clinical and financial outcome
measurement is complex “Clean” claims data and total
health related costs can be a challenge to obtain and measure in a timely manner Programs are sometimes
instituted for a specific customer, and development time is often limited
Example
A health plan instituted a congestive heart failure disease management program
A year later it wants to evaluate the program’s effectiveness Not able to measure outcomes
and quantify cost savings because:
Appropriate claim and clinical data were not collected initially or at the appropriate intervals during the program
© Ingenix, Inc. 15
$1.30 $1.35
0.21 0.234
Developing effective care management programs:
Start by
measuring current performance against comparative benchmarks to
identify opportunities and set priorities
1999 1998 Visits/member $65.80 $70.20 1999 1998 Cost/visit 1999 1998 Gross PMPM 0.250 0.210 $64.00 $60.00 $1.25 $1.05 National Average Best practice HMO 1999 National
Average Best Practice
Visits/member
Cost/visit
Gross PMPM
Total savings opportunity
Savings Opportunity 0.234 $70.20 $1.35 0.25 $64.00 $1.25 0.21 $60.00 $1.05 $6.20 $0.10 $1.6 Million
Example: Physical Therapy Costs
Development of interventions:
Identify multiple interventions
for each opportunity, based on data, analyses, and clinical input,
pilot and/or vet with key stakeholders before implementation
Possible Interventions
Central authorization on non-targeted diagnosis of
physical therapy visits after 20 visits rather than 30 visits
Implement case rates for certain conditions
Increase the list of procedures requiring prior
authorization
Narrow provider network
Implement annual benefit cap at 20 – 25 visits per year
or graduated copayments
© Ingenix, Inc. 17
Care Management Program design and implementation:
Facilitated by work groups and a collaborative process to enhance
buy-in throughout the organization and with providers
Project Manager
Steering Committee Project sponsors
Primary work groups
Project Facilitator/Integrator Pre Authorization Care Management Disease Management Benefit design, Pricing Pharmacy Network Strategy
An Example
© Ingenix, Inc. 19
Population-Based Care Management
Population-based care management disease-neutral compared with disease management which focuses on patients with target conditions. Population-based care management approach includes:
Data analysis Predictive modeling
Selective management of members predicted to be at highest risk 2002 study by Lynch, et al1 of population management reported:
Reduction of 5.3 percent in total commercial admissions 3.0 percent reduction in total Medicare population admissions
Reduction of 35.7 percent in claims for the high-risk sub-set of the combined Medicare and commercial populations
Diabetes as an example
Numerous valid studies that show clinical improvement in diabetic populations as a result of DM interventions2
Causal link from clinical to financial improvement has not been proven with respect to diabetes
1- Lynch, J. P., S. A. Forman, S. Graff, and M. C. Gunby. 2000. High Risk Population Health Management--Achieving Improved Patient Outcomes and Near-Term Financial Results. American Journal of Managed Care 6 (7): 781-91
2- Dove, Henry G. and Duncan, Ian An Introduction to Care Management Interventions and Their Implications for Actuaries, Paper 3: Estimating Savings, Utilization Rate Changes, and Return on Investment from Care Management Interventions Selective Literature Review of Care Management Interventions, March 2005
Medicare analysis suggests positive causal relationship
between compliance and cost for diabetic population
Analysis of the relationship between compliance with
evidence-based testing standards and preventative care
and Medicare fee-for-service (FFS) claims costs
Medicare-eligible population with diabetes
Medicare 2004 5% FFS Standard Analytical File
Evidence of compliance measured as the presence or
absence of claims with procedural codes for particular
diagnostic tests and preventative care services
Findings:
Medicare beneficiaries with diabetes who are compliant on
average have lower medical expenses compared to
non-compliant beneficiaries
Lower Medicare costs primarily the result of reduced hospital
admissions
© Ingenix, Inc. 21
Findings from Diabetes Compliance and Medicare Cost
Study
Relationship of A1c Testing for Inidivduals with Diabetes to Medicare FFS Claims Experience
$600 $800 $1,000 $1,200
No A1c tests One A1c test One or more A1c
tests Tw o or more A1c tests M ed ic a re C lai m s $ P M P M
Relationship of LDL-C Testing for Diabetics and Medicare FFS Claims Expense
$600 $800 $1,000 $1,200
No LDL-C tests One or more LDL-C tests
One or more A1c tests & one or more LDL-C
tests
Two or more A1c tests & one or more LDL-C
tests Me d ic a re Cl a ims $ P MP M Inpatient Acute SNF ER PMPM
Compliance Testing Admits/1,000 Admits/1,000 Util/1,000 Professional
No A1c tests 698 133 674 $261
Two or more A1c tests 435 61 456 $272
© Ingenix, Inc. 23
Diabetes:
Relationship of Compliance to “Margin”
0% 5% 10% 15% 20% 25% 30% 35% No A1c test s No L DL-C No l ipid pa nel No flu v ac. No D RE Micr o./n eph. No pne umon ia vac . On e A1 c te st No m icro ./nep h. Pneu mon ia v ac. DR E Lipi d pa nel 1+ L DL -C te sts 1+ A 1c Flu vac. 1+ A 1c, 1+ L DL-C 2+ A1 c 2+ A 1c, 1+ LD L-C
Measures of Diabetes Compliance
Ma rg in Av er ag e M a rg in
Margin Percentage Average
Margin – Measured as the difference between average Medicare FFS medical expense and HCC adjusted payment rates
Contact Information
Holly Michaels Fisher
Senior Consultant
Reden & Anders
One Penn Plaza, Suite 615
New York, New York 10019
Office: (212) 817-6003
Cell:
(347) 306-8579
Presentation No. SPH81
Case Management in a Medicaid Population
Denise Christian, M.D.
National Chief Medical Officer
Founded in Pennsylvania in 1989. Acquired by UnitedHealth Group in
September 2002. Leading public sector health care specialist: Medicaid,
SCHIP, and Medicare SNP with 1.4 million members in 12 health plans.
3
AmeriChoice MSO
• Contract with state of Georgia to provide
Disease Management Services
• Fees at Risk based on a combination of
Financial and Clinical Outcomes
• Managing Sickle Cell, Hemophilia,
HIV/AIDS, Schizophrenia, Depression and
Bipolar Disease
• Subcontracting subset of population to
LifeMasters
Case Management
•Nurse /social worker team assigned •Understand total environment
•Engage family, friends, community organizations •Develop individualized care program
•Targeted education •Periodic telephone calls •Regular review of encounters / utilization •General outreach and
education
•Encourage preventive care
Members with Chronic, Acute Conditions Members with Chronic,
Non-Acute Conditions All Members
5
Case Management Interventions
Coronary Artery Disease (CAD) or Ischemic Heart Disease (IHD)
• LDL screening performed on or between 60 and 365 days after discharge for an acute cardiovascular event
• Members who received a flu vaccination within the last 12 months Congestive Heart Failure
• Heart failure members taking ACE inhibitors, or in the case of ACE-intolerant patients, those taking ARBs
• Heart Failure members who received a flu vaccination within the last 12 months
Diabetes
• Members with diabetes who had at least two A1C tests in measurement year
• Members with diabetes who completed one fasting lipid panel test in the measurement year
Case Management Interventions
Asthma
•
Asthma members with at least one dispensed prescription for
inhaled corticosteroids, cromolyn sodium, or leukotriene modifiers in
the measurement year
Chronic Obstructive Pulmonary Disease (COPD)
•
Members with annual spirometry testing as supported by American
Thoracic Society (ATS) guidelines
•
COPD members who received a flu vaccination within the last 12
months
Schizophrenia
•
Members receiving maintenance treatment (atypical antipsychotic
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Barriers to Case Management
• Fluctuating Eligibility
• Social Barriers – inadequate housing, food,
transportation, etc
• Behavioral Health and Substance Abuse (state
carve outs)
• Low contact rates with mailings and telephonic
outreach
Impact Pro Capabilities
• Identifies members at risk before they experience
problems
• Quantifies the relative risk between members
• Translates risk scores into potential health care
costs in dollars
• Helps to deploy resources effectively by targeting
the right members proactively
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Medicaid Specific Considerations in
Implementation
• Benefit “carve outs” – e.g. pharmacy, behavioral
health
• “Forced” eligibility – ignore gaps in enrollment
• Multiple sources of data – e.g. pharmacy files, new
member data
• Customized case definitions and care opportunities
e.g. lead testing, schizophrenia
• Inclusion of denied claims – lack of eligibility; COB
(Medicaid is payor of last resort)
Impact Pro Implementation
• ASP Model
• Implementation kick off: September 2006
• Established Weekly IPRO Workgroup
• Data extract preparation and submission:
October 2006 – February 2007
• Data processing: February 2007 with
monthly refreshes
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Impact Pro Implementation
• December 2006: High Risk definition
established by medical team of nurses and
physicians
• Plan-Wide Training (3 locations)
• February 2007: User Acceptance Testing
• National Medical Management Dept
distributes Top 1% High Risk List monthly
High Risk Definition
• Utilization – 4 admits in 6 months; 2 ER
visits in 3 months
• Medical condition that is “impactable”
• Critical “gaps in care”
• Inpatient Stay Probability greater than
40% in the next 3 months
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Overall Population Outcome Statistics
• Decrease in emergency department visits
• Decrease in hospital admissions
• Decrease in total inpatient days
• Increase overall health status of members
Demographics and Distributions
AmeriChoice Health Plans
15 Average Age 17 22 20 24 17 16 15 13 25 18 9 16 38 48 0 5 10 15 20 25 30 35 40 45 50 AC N J AC N Y AC P A AP IPA GL H P UH G F L UH G M D UH G NE UH G NY UH G R I UH G T X UH G W I MSO G A MSO W A Ag e
Age
High Risk Condition Prevalence
Member Count % of Total Members Member Count % of Total MembersHigh Risk Asthma 14896 1.09% 5199 4.12%
High Risk CAD 11481 0.84% 2018 1.60%
High Risk CHF 5999 0.44% 1906 1.51%
High Risk COPD 4669 0.34% 2275 1.80%
High Risk Depression 1497 0.11% 725 0.57%
High Risk Diabetes 19072 1.40% 12598 9.99%
High Risk HIV 1149 0.08% 579 0.46%
High Risk Kidney Disease 510 0.04% 219 0.17%
High Risk Sickle Cell 534 0.04% 128 0.10%
Health Plans MSO
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Asthma Prevalence
Asthma 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%ACNJ ACNY ACPA AP
IP A GL H P UHG F L UHG M D UHG NE UHG NY UHG RI UHG T X UHG W I MS OGA MS OW A P er c en t o f M e m b er s h ip
Asthma High Risk Asthma
CAD Prevalence
CAD 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%ACNJ ACNY ACPA AP
IP A GL H P UHG F L UHG M D UHG NE UHG NY UHG RI UHG T X UHG W I MS OGA MS OW A Per c ent o f M e m b er s h ip
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COPD Prevalence
COPD 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% A CNJ A CNY ACP A AP IP A GL H P UHG F L UHG M D UHG NE UHG NY UHG RI UHG T X UHG W I MS O G A MS OW A P er c en t o f M e m b e rsh ipCOPD High Risk COPD
Diabetes Prevalence
Diabetes 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%ACNJ ACNY ACPA AP
IP A GL H P UHG F L UHG M D UHG NE UHG NY UHG RI UHG T X UHG W I MS OGA MS OW A Per c ent o f M e m b er s h ip
21
HIV Prevalence
HIV 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0%ACNJ ACNY ACPA AP
IP A GL H P UHG F L UHG M D UHG NE UHG NY UHG RI UHG T X UHG W I MS OGA MS OW A Per c ent o f M e m b er s h ip
HIV High Risk HIV
IP Stay Probability by Age
Inpatient Stay Probability by Age
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% A ge 0 t o 5 A ge 6 t o 10 A g e 11 t o 15 A g e 16 t o 20 A g e 21 t o 25 A g e 26 t o 30 A g e 31 t o 35 A g e 36 t o 40 A g e 41 t o 45 A g e 46 t o 50 A g e 51 t o 55 A g e 56 t o 60 A g e 61 t o 65 A g e 66 t o 70 A g e 71 t o 75 A ge 76+ In p a ti e n t St a y Pr o b a b ilit y
Health Plans MSO
Health Plan Avg = 3%
MSO Avg = 11%
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Future Costs by Age
Expected Future Costs by Age
$-$5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 A ge 0 t o 5 A ge 6 t o 10 A ge 11 t o 15 A ge 16 t o 20 A ge 21 t o 25 A ge 26 t o 30 A ge 31 t o 35 A ge 36 t o 40 A ge 41 t o 45 A ge 46 t o 50 A ge 51 t o 55 A ge 56 t o 60 A ge 61 t o 65 A ge 66 t o 70 A ge 71 t o 75 A ge 76+ E xp ect ed F u tu re C o st s P er M em b er
Health Plans MSO
Health Plan Avg = $2,811
MSO Avg = $33,459
Expected Future Costs – Health Plans
AmeriChoice Risk Distribution
Percent of Members in Expected Future Cost Range
68% 19% 8% 2% 1% 2% $0.00 - $1,999.99 $2,000.00 - $4,999.99 $5,000.00 - $9,999.99 $10,000.00 - $14,999.99 $15,000.00 - $19,999.99 $20,000.00 and more
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Expected Future Costs - MSO
MSO Risk Distribution
Percent of M embers in Expected Future Cost Range
5% 10% 13% 54% 9% 9% $0.00 - $1,999.99 $2,000.00 - $4,999.99 $5,000.00 - $9,999.99 $10,000.00 - $14,999.99 $15,000.00 - $19,999.99 $20,000.00 and more
