To illustrate how a business use-case-driven investment in analytics can impact a healthcare organization, let’s consider the total cost of care (TCOC) and look at how it impacts various stakeholders in value-based programs.
As we discussed in the first blog in this series, total cost of care (TCOC) is a calculated metric that captures the overall cost of care for a specific population. It is a key metric that is tracked by healthcare organizations that are involved in any kind of value-based contracts with other parties.
For this example, let’s take a healthcare insurance company (or payor) that arranged value-based payments and incentives with a group of providers. Let’s also assume the payor runs a diabetes management program and partners with a pharmacy benefits administrator (PBA).
The payor structures the diabetes management program as a set of benefits and proactive management of a panel of members diagnosed with various types of diabetes or prediabetes. The benefit structure consists of:
- Guidance and support regarding nutrition, weight management and smoking cessation
- Glucose monitor at low or no additional cost
- Medication adherence management.
- Care coordination for routine and preventive health visits and screenings.
The goals of this program are to provide support and disease management tools to members with diabetes to prevent the exacerbation of their condition.
The TCOC metric for these members is one of the indicators pointing to how well they manage the disease. Provider performance and quality of care metrics are another set of indicators that contribute to the complete picture. The payer needs to aggregate and monitor all these metrics to define the payment and incentive structure of a value-based contract with providers that deliver services and care to diabetes patients.
Let’s use the approach we outlined in the second blog in this series to explore how we might apply use-case-driven solutions in this scenario.
Measuring Total Cost of Care
Payors typically correlate TCOC against benchmarks. These may be the average TCOC for providers or groups that deliver similar services. These may also be benchmarks the Centers for Medicare and Medicaid Services (CMS) published for similar Medicare Shared Savings Programs (MSSP).
In general, higher-than-expected TCOC may indicate utilization of services higher than necessary, poor provider performance or disease exacerbation due to various factors.
Lower-than-expected TCOC is not automatically indicative of the high quality of care or a successful disease management program. That metric should correlate with Social Determinants of Health (SDOH) data to account for socioeconomic factors and potential barriers in accessing care. In other words, lower overall TCOC may simply mean people in need cannot access required care and are not using the services they need. TCOC that starts trending lower, along with the introduction of services and benefits for a specific member panel, can indicate the success of disease management programs.
What would the payor in our diabetes management example need in place to accurately measure TCOC, and how would they define and plan a business use case to provide the right level of analysis for various stakeholders?
The following are key attributes of data aggregation and analytics capabilities. These attributes are necessary for accurate cost tracking, actionable insights for care managers and gauging of the financial performance of the provider network.
- Data platform: based on modern architecture principles that aggregate data from disparate sources, master data for key domains into a unified, high-quality dataset and generate advanced analytics in real-time.
- Master Data Management(MDM): a solution that matches, links and deduplicates membership, claims and clinical data into a unified record:
- Member domain: enables measurement of the total cost associated with an individual, as well as sets and continuously refines a risk score that provides insights into future costs and care management approaches.
- Provider domain: tracks provider performance across all associated care settings, allows for optimal modeling of value-based contracts and incentives structures and provides insights into the quality of care.
- Required data: includes membership (demographics), eligibility, benefit coverage, claims (CPT and ICD codes, claim amounts), clinical, provider (demographics, NPI, TIN, EIN) and financials (risk factor formulas, contract values, budget forecasts).
- Panel management: involves the process of monitoring the patient population for important preventive and chronic care milestones based on guidelines determined by the provider practice or care management program.
- Payors may base panels on conditions, risk scores, care gaps, demographics, socioeconomic status, and so on. In the case of our example, the payor defines the panel based on diabetes diagnosis.
Assuming these prerequisites are in place, the detailed breakdown of the use-case-definition framework for TCOC in our diabetes management example looks like this:
Business Problem: Proactive disease management improves health outcomes and reduces unnecessary costs due to disease exacerbation. Monitors TCOC for diabetes panel to direct diabetes management program’s efforts, as well as rewards providers with incentive payments that meet or exceed targeted goals.
Strategic Benefit: Lower cost of care equals higher revenue for the payor and less waste of services and resources within the healthcare system. Better proactive disease management equals better member experience, which means better member retention, higher satisfaction and higher quality scores (CAHPS). There are also financial incentives for value-based contracts with providers participating in Merit-Based Incentive Systems (MIPS) and Quality Payment Program Overview (QPP) programs.
TCOC Use-Case-Driven Solution Adoption Scenarios
For adoption scenarios in our example, let’s look at three roles within the organization that would be primary consumers of the TCOC analytics solution.
The Chief Actuary finds value in reviewing a monthly TCOC report filtered by diabetes diagnosis to see if numbers are out of range against benchmarks and goals. Numbers out of range may require updates to financial projections, forecasts, incentive payments and reimbursement rates.
The Care Coordination Manager benefits from an increased access rate to TCOC reports. This includes accessing a daily report filtered to a targeted list of members who require outreach. The report based on CMS measure defines a member panel of patients who are:
- Missing HbA1c test in the past 3 months. This may require reaching out and setting up an appointment.
- HbA1c poor control (> 9.0%). This may require outreach and discussion with the patient about diet, exercise and medications.
- Missing a retinal eye exam. This may require reaching out to the patient and specialist and setting up an appointment.
- Medicare members missing nephropathy screening test. This may require reaching out to the patient and specialist and setting up an appointment.
The CMO reviews a weekly or monthly TCOC report showing trends for high-risk patient cohorts or panels, including a diabetes panel, to gauge any improvements stemming from the diabetes management program. Poor trending may require a review and evaluation of the program, as well as improvements in provider engagement. Stagnant or rising TCOC for a specific provider or group may indicate a lack of preventative screening and may require adjustments to the incentive payments.
These are just a few possible examples of key users in this adoption scenario. Here are some additional points of desirable analysis for our example of a TCOC use-case-driven solution for diabetes management:
Desired Analysis or Reporting
- TCOC metric for total member population expressed in per-member-per-month (PMPM) dollar amount
- Ability to drill down into the metric and filter it by:
- Diabetes panel based on criteria in the HEDIS Measure for Comprehensive Diabetes Care (CDC)
- Geographical territory
- Age, sex, race and other demographic factors
- Each component of the measure
- By individual Provider or Group.
- Sub-selection of members requiring outreach based on care gaps.
Desired Outcomes: Measuring Improvement and Adoption
As we covered earlier in this blog series, a solid use case should include a discussion of the desired outcomes of the program, as well as key measures of success and methods for collecting them. For our TCOC use-case example, one desired outcome is that the TCOC for a defined population panel is within pre-defined targets or is trending down. Measuring improvement would require a comparison of TCOC for diabetes measures with other reporting periods or benchmarks from CMS and peer providers.
For the care manager, a related desirable outcome is helping their patients get the care they need to prevent or slow the exacerbation of their condition. They can measure proactively managing diabetes through preventative care in terms of patient outreach success. For example, how many outreach attempts resulted in appointments? How many of those appointments resulted in no-shows? How many outreach attempts resulted in the acquisition of new data? How many days is the same member on the list for outreach? How many members do they repeatedly add to the list and at what rate? How many have declined in their rate of need for outreach?
Measuring user adoption is another key indicator of success in implementing a TCOC use-case-driven solution. Actuary adoption means increased access to more accurate data for financial forecasts, risk scoring and provider contract and incentive structures.
Finally, when the CMO has access to KPIs and can drill down into data to understand the performance of the TCOC for diabetes management program, their use becomes an indicator of truly data-driven decision making occurring at the heart of the healthcare organization.
The TCOC example posed in this blog illustrates the wide range of impacts a single metric and its associated analytics can have on an organization and its contracted partners. This example also demonstrates why an implementation of a use case must reflect those impacts on various stakeholders to meet the organization’s strategic goals.
As we’ve discovered over the course of this blog series, TCOC is an actionable insight with broad implications for population health management and partnerships between providers and payors. Gaining alignment between business users and IT via well-defined use cases is crucial to reap the benefits of TCOC and other key healthcare metrics. How will you define use cases and leverage key metrics to become a more data-driven healthcare organization?