The Big Data Dividend

The Big Data

Dividend

Enhancing Revenue in an Era of Change

May 7, 2015

Agenda

■

“Big Data”

■

Sample Healthcare Big Data Sets

■

Healthcare Applications of Big Data

■

Revenue Enhancement Opportunities

–

Rate Benchmarking/Rate Parity Analytics

–

Strategic Pricing/Pricing Transparency

–

“Value Based” (at-risk) Contracting

■

Total Cost of Care Analytics

■

Volume/”Leakage” Analytics

“Big Data”

Any collection of datasets so large or complex that it becomes difficult to capture,

aggregate, analyze, store, process, share, or visualize them using traditional data

processing applications

In healthcare, the term Big Data can apply to a wide range of datasets including:

■

Clinical data – diagnoses, disease patterns, clinical outcomes, co-morbidities, readmissions,

clinical site infections, etc.

■

Financial data – costs, pricing, charges, coding, billing, accounts receivable, payments (credit

balances, underpays, and denials), etc.

■

Population Health Management data – membership and eligibility, utilization, physician

“Big Data”

Big Data and Advanced Analytics is

essential to flourish

in today’s changing

Healthcare

environment…

Regulatory Reforms

■ Quality Reporting

■ Value Based Purchasing

■ Focus on Outcomes

Economic Pressures

■ Fee-for-service Declines

■ At-Risk Contracting

■ Need for Increased

Coordination

Consumerism

■ Quality & Cost

Comparisons

■ Access to Data/

Interoperability

Sample Healthcare Big Data Sets

Sample Data

Source

Standard

Charge Data

Claims Paid

Data

Total Cost of

Care Data

Quality of Care

Data

Milliman &

Robertson

MEDPAR

State Agencies (e.g.

VHCURES)

Blue Health

Intelligence

Truven Analytics

Definitive

Optum

American Hospital

Directory

LeapFrog

Healthcare Applications of Big Data

Total Cost of

Care Analytics

Provider

Benchmarking

M&A Due

Diligence

Support

Patient Safety

and Quality

Volume/Revenue

Leakage

Analytics

Business

Planning and

Forecasting

Rate

Benchmarking/

Rate Parity

Patient Risk

Stratification

Population

Health

Management

Market Share

Analytics

At-Risk and

Value-Based

Contracting

Potentially

Avoidable

Complications

Strategic Pricing/

Pricing

Transparency

Chronic Disease

Management

Community

Health Needs

Assessment

Clinical

Guideline

Analytics

Revenue Enhancement Opportunities

Total Cost of

Care Analytics

Provider

Benchmarking

M&A Due

Diligence

Support

Patient Safety

and Quality

Volume/Revenue

Leakage

Analytics

Business

Planning and

Forecasting

Rate

Benchmarking/

Rate Parity

Patient Risk

Stratification

Population

Health

Management

Market Share

Analytics

At-Risk and

Value-Based

Contracting

Potentially

Avoidable

Complications

Strategic Pricing/

Pricing

Transparency

Chronic Disease

Management

Community

Health Needs

Assessment

Clinical

Guideline

Analytics

Rate Benchmarking & Rate Parity Analyses

Rate Benchmarking: an independent, 3rd party comparison of contract rates to the area

average using commercially available claims paid databases. Often used in strategic contract

negotiations.

Big Data:

■

Increases statistical significance

■

Improves reliability of the results

■

Allows for a lower level of specificity

Rate Parity Analysis: independent, 3rd party assessment of contract rates relative to market

competitors. Often used to mediate contract reimbursement disputes.

Big Data:

Rate Benchmarking & Rate Parity Analyses

$2,949,231

$5,897,463

$2,183,000

$4,364,000

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

IP Low

IP High

OP Low

OP High

$3,725,497

$672,277

$16,919 $33,312

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

SJ

SM

HVI

HC

HMO

IND

PPO

Aggregate Impact

Understand financial

impact across the

entire system, among

hospitals, and major

service categories

(IP, OP, Physician,

etc.).

Service Category

Opportunity Low

Opportunity High

% Below the Area Average

Behavioral Health

$123,000

$246,120

-77%

Cardiac

$84,605

$169,210

-16%

General Surgery

$344,382

$1,088,764

1%

Neurology

$363,839

$727,639

-36%

Neurosurgery

$92,237

$184,473

-7%

OB

$348,757

$1,097,514

-40%

Rehab

$72,383

$144,766

-38%

Service Line

Assessment

Understand financial

impact at the service

line level (IP and OP).

Rate Benchmarking & Rate Parity Analyses

$193

$405

$0

$100

$200

$300

$400

$500

Contract

Area Avg.

CPT Code 99283 (ER Visit)

$12,910

$29,917

$0

$10,000

$20,000

$30,000

$40,000

Contract

Area Avg.

DRG 460 (Spinal Fusion except cervical w/o

MCC)

Procedure Code

Impact

Understand financial

impact at the

individual procedure

code level.

Strategic Pricing

Strategic Pricing: a “re-balancing” of the CDM that protects revenue while meeting pricing

transparency objectives. Well designed studies include:

■

An understanding of the enterprise-wide strategic plan

■

A trend analysis of historical utilization over a multi-year period

■

An analysis of local demographics

■

An analysis of contract terms and their impact on pricing

Big Data:

■

Promotes a better understanding of local demographics and its potential impact on service

line demand

■

Allows providers to compare unit prices (at the procedure code level – DRGs, CPT codes,

Strategic Pricing

29%

16%

14%

13%

11%

7%

6%

2%

1%

Inpatient

Pharmacy

Laboratory

Respiratory therapy

Medical records

Radiology

Emergency room

Operating room

Central supply

Physical therapy

0%

10%

20%

30%

40%

50%

60%

70%

2011

2012

2013

P

e

opl

e

Gender Trends

F

M

■

While shrinking, there is more female volume than

male volume

■

There is a spike in age cohorts

0–15, 16–31 & 32–47.

■

The white and black populations are going in opposite

directions.

0 5,000 10,000 15,000 20,000 25,000 30,000 2011 2012 2013 P e opl e Age Trends 0-15 16-31 32-47 48-63 64-79 80-95 96-111 10% 20% 30% 40% 50% 60% 70% er cen tag e o f P o p u lat io n Race Trends A B H I N O U

Revenue Center

Performance

Understand which

hospital entities,

service lines, and/or

CDM codes generate

the most revenue.

Local

Demographics

Understand how

prevailing and future

demographic trends

impact utilization, the

pricing strategy, and

the enterprise-wide

strategic plan.

Strategic Pricing

Note: Charts above should be viewed as examples and not as actual data

Payer Performance

Understand how

payer volume,

contract terms, and

even contract rates

impact standard

pricing.

18%

15%

8%

6%

4%

3%

2%

2%

2%

1%

1%

1%

0%

Medicare

UHC

BCBS

Self Pay

Medicaid

Aetna Coventry

Care Improvements

Amerigroup

Wellcare

Cigna

Humana

Other

Universal

Peach State

“Value” (at-risk) Based Contracting

■

The move from volume (FFS) to value (at-risk) has moved from concept to reality

■

In value based contracting, understanding and managing utilization is critical to success

■

Big Data allows providers to understand how they compare relative to the market in terms of

utilization (at both the unit and episodic level), price (charges, payments, etc.), and quality of

care (readmissions, “never events” [hospital acquired conditions], etc.)

“Value” (at-risk) Based Contracting

Total Cost of Care Analysis:

■

An analysis of the total “cost” (price or payment rate) and clinical outcome of providing a

specific episode of care (e.g. pneumonia) from diagnostic testing and the E.R. to inpatient

admission, step down facilities, and home health

■

Results allow providers to determine which services can go “at-risk” and for what “price”

Big Data:

■

Without Big Data, providers only have insight into their own practice patterns, utilization, and

clinical outcomes.

■

With Big Data, providers are able to understand how they compare relative to the market and

Total Cost of Care Analysis

Case Study

■

A leading cancer center

analyzed 4 years of

regional claims data for

several cancers using a Big

Data source.

■

The analysis focused on

total cost of care (TCOC)

over longitudinal

episodes

■

Wanted to understand

whether TCOC and patient

outcomes were better at

their center relative to the

market

Patient Cohorts

Medications

Claims Data

Procedures

Phase I

Phase 2

Phase 3

■

Definition of cohorts,

patient attribution to

different centers

■

Compute TCOC,

outcomes for care

across centers

■

Visualization/Analytics to

determine impact of care

site on TCOC

Phase 2

Phase 1

Approach

■ Analysis of Total

Cost of Care

(TCOC)

■ Impact of

Treatment location

on patient

outcomes & costs

■

Referral

Patterns

■ Adjusted for

Severity

Goal: Assess if Cancer center’s high quality care processes are

reflected in lower reimbursement and improved outcomes across

the episode or continuum of care. Develop a business case for the

preferred use (e.g. narrow network participation) of their facility for

Cancer Care:

Short term goal of increased volume

“Value” (at-risk) Based Contracting

Volume/Revenue Leakage Analytics

Volume/”Leakage” Analytics

■

Where do patients travel through the continuum of care?

■

What are physicians’ referral patterns?

■

What can be done to capture more clinical care and referrals?

■

Impacts volume for FFS payments

■

Protects value based payments by ensuring care is delivered by physicians that follow

treatment patterns and clinical pathways resulting in high quality outcomes

Big Data:

■

Provides the data (physician referral patterns, site of healthcare delivery, “spend”, etc.)

Volume/Revenue Leakage Analytics

ABC hospital saw 8,916 unique Medicare

patients in 2013 – generating $38M in inpatient

payments. This represents 40% of total inpatient

payments for this patient group.

Where did the 8,916 unique Medicare patients

go for services in 2013?

■

This patient group generated $11M in

payments for Major Joint procedures in 2013.

ABC Hospital represents 73% of those

payments with $8M.

■

This patient group also sought services at the

following facilities:

1.

DEF Medical Center ($5.4M)

2.

Med Ctr of PLACE NAME ($4.4M)

3.

HIJ Rehab of PLACE NAME ($3.2M)

4.

KLM Rehabilitation Hospital ($2.7M)

5.

OPQ Institute for Rehab ($2.6M)

6.

RST Med Ctr ($2.5M)

$20,059

$1,800

$2,466

$3,218

$2,404

$2,140

$2,990

$2,883

$2,746

$4,074

$5,966

$4,561

$8,403

$6,830

$6,481

$7,726

$11,066

$3,041

$567

$855

$968

$970

$1,053

$1,152

$1,157

$1,182

$1,926

$2,044

$2,486

$2,620

$2,866

$2,912

$3,369

$9,040

Other

Thoracic Surgery

Vascular Surgery

Neurology

Oncology/Hematology

Neurosurgery

Surgical Tracheostom

Nephrology

Open Heart

Gastroenterology

General Medicine

Spine

Pulmonary

General Surgery

Cardiology

Other Orthopaedics

Major Joint Procedure

Key Infrastructure Needs

Subject matter professionals with expertise in:

■

Analytics

■

Advanced modeling technologies

■

Value based contracting

Advanced Modeling and Visualization Technology

■

“Low tech solutions” can pose capacity problems

Thank you

Presentation by Patrick Spoletini

Managing Director

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 363461 The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.