Category Archives: Quality of Care

Complex/high-risk patient targeting case study

Many health systems globally are introducing new care models that purport to replace expensive, and often clinically unnecessary, acute inpatient care with more primary and community-based services. This article by Milliman’s Lalit Baveja and Tanya Hayward explores a clinic-based community intervention designed to improve access and quality of care for high-utilising, high-risk patients over the course of three years.

Principles and evaluation of care management interventions

With greater emphasis on delivering quality health outcomes while reducing costs, organizations are making care management an indispensable part of their system. This paper by Milliman consultants Neha Taneja and Joanne Buckle illustrates the importance of evaluating interventions for policymakers, healthcare organizations, payers, and providers seeking to implement care management.

Reduce healthcare’s long-tail problem with telemedicine

Technology has enabled many industries to reduce or eliminate the long-tail problem. Similarly, telemedicine offers the healthcare industry a solution to its long-tail problem—access barriers to healthcare services. A new article entitled “Telemedicine and the long-tail problem in healthcare” by Milliman’s Jeremy Kush and Susan Philip explores the benefits of telemedicine as a mode for healthcare delivery. The authors also analyze current levels of telemedicine utilization and identify five factors limiting adoption.

All risk adjusters are not created equal

Incorporating risk adjustment into an alternative provider payment arrangement can help payers and providers share risk, align financial incentives, and reduce health plan costs. There are many risk adjustment models on the market for payers and providers to choose from. However, both parties need to know the predictive abilities of a risk adjuster and its implications on projected reimbursement levels. Milliman consultant Ksenia Whittal provides some perspective in her article “Provider payment: What does risk adjustment have to do with it?

Not all risk adjusters are created equal. There are multiple models available on the market and they vary in their predictive abilities, the populations they are calibrated to assess, and the time periods for which analyses can be conducted. It is no surprise that the results of any risk-adjustment analysis will be more reliable using a model with stronger predictive power. In large part, the predictive power will be driven by the algorithms underlying the model, but consideration should also be given to the model’s intended use. For provider payment specifically, it is critical to ensure that the variables used for risk score development are resistant to manipulation by providers and do not create perverse incentives. Examples of potentially problematic variables include incurred cost in a prior period, procedures, or diagnostic testing, because these items could lead to model exploitation and distort true morbidity levels.

Arrangements should also specify whether risk adjustment will be applied to actual experience at the end of a contract period (a concurrent analysis), and result in a retrospective adjustment to prior payments to account for the risk level actually encountered, or if the rate will be set prospectively, using current experience to project the appropriate rate for the next contract period. Concurrent risk adjustment is far more accurate than prospective because it seeks to explain what already happened rather than predict what will happen. However, concurrent models can introduce uncertainty during the payment year as to what the retrospective settlement may be. This uncertainty can create challenges for insurers and providers in their budgeting and financial reporting processes. Additionally, a prospective approach should exclude the use of prior cost levels to project future risk levels in order to avoid incentivizing activities that would artificially inflate costs and result in exaggerated prospective risk scores.

Beyond ensuring that the model used is a strong and accurate predictor, it is also important to choose a risk adjuster that will most closely model results for the population in question or the payment arrangement in place. Risk-adjustment models should ideally be calibrated for a population reasonably similar to the one being analyzed. For instance, a model calibrated to a commercial population will not generally be appropriate for risk-adjusting a population of Medicare enrollees, and vice versa. Broad population categories such as these have different morbidity profiles, and risk adjusters should target and be calibrated to capture these nuances, or at least a study should be done to check if a model is performing adequately if it is used on a population that differs significantly from the one used in calibration.

For more Milliman perspective on risk adjustment, click here.

Alternative payment models advancing telehealth use

Alternative payment models that incentivize value and improve population health management are a catalyst increasing telehealth’s acceptance. Employers also realize the potential cost-saving advantages of offering telehealth benefits under alternative payment models.

In her article “Telehealth under alternative payment models,” Milliman’s Susan Philip highlights some alternative payment models adopting telehealth services to improve the quality and delivery of care. In addition, she discusses how an assessment of these solutions can help organizations gauge their prospective returns on investment (ROI).

Here is an excerpt:

Cost savings and efficiency gains under alternative payment models will be driven by delivery system transformation and successful population health management initiatives. Telehealth has the potential to boost the impact of population health management initiatives while improving access and convenience of healthcare delivery.

Telehealth’s potential is not lost on investors and employers. In 2014, companies focused on telehealth technologies received about $285 million in venture capital funding, a substantial increase from less than $100 million in 2013.6 A recent employer survey indicated that about a third of employers expect to offer or are considering offering telemedicine consultations to employees as a low-cost alternative to emergency room or physician office visits for nonemergency health issues.7 The same survey found that telemedicine has the potential to deliver close to $6 billion in savings to U.S. companies.

Such high expectations must be calibrated. To conduct appropriate ROI evaluations, telehealth solutions and programs should be designed to consider the purpose of the solution. In general, we think of telehealth solutions for one of three primary purposes: improve access to specialty care, support care management, or provider nonemergency acute care services….

By design, telehealth programs intended to provide convenient access to a limited set of nonemergency, acute care services can be expected to increase the use of those services. Vendors such as Teledoc, American Well, or Doctors on Demand typically offer 24/7 video visits for common symptoms that may require consultation with an advance care practitioner or a physician. Examples include UTIs, skin issues and rashes, diarrhea and vomiting, and cold and flu symptoms such as sinusitis, or bronchitis. These services are not designed to substitute for an ongoing relationship with patients’ primary care providers but rather to provide an alternative to urgent care or ER visits for nonemergency conditions. Robust evaluations of the potential return on investment should consider whether services merely drive up total use and cost of healthcare for a given population, or whether the telehealth services successfully replace other, more costly services such as emergency care or urgent care visits.

Health insurers, purchasers, and investors will look to properly designed evaluations to assess return on investment and metrics related to utilization, costs, access, and quality of care.

For perspective on how telehealth technologies are being used within microinsurance schemes in sub-Saharan Africa and rural health clinics in California, read the article “m-Health: Remote access.”

Healthcare provider performance metrics

Organizations that employ provider performance metrics can position themselves better for long-term success as provider reimbursement continues to transition from pay-for-volume to pay-for-value. In her article “Evaluating healthcare provider performance,” Milliman’s Jill Herbold discusses how healthcare organizations can select the best metrics to increase the overall performance of their organizations.

Here is an excerpt:

There are many types of providers involved in the delivery of healthcare—tertiary hospitals, primary care and specialty physicians, skilled nursing facilities, and home health providers, to name a few—and each plays a unique role. Though there are commonalities, a unique set of metrics is often useful to evaluate the performance of different provider types.

The specific metrics selected should depend upon the quality and robustness of available data, the ability of providers to control or influence the metric, and the ability to compare the metric across providers in an objective manner. Ideally, metrics address each component of the triple aim (cost, quality, and access) and are aligned with the organization’s financial and other goals. It is important to ensure metrics are appropriate for the particular value-based payment arrangement, the organization’s circumstances, and the population that care is being provided to. For example, skilled nursing facility utilization is an important metric for an aged Medicare population but not for a pediatric Medicaid population. It is helpful to use metrics that can be compared over time so changes can be monitored. Comparison of metrics across peer groups and to targets or benchmarks can potentially be helpful to motivate and drive performance improvements….

To achieve financial and other goals, some organizations are using performance metrics when selecting preferred providers to partner with and driving performance improvements across the organization. More specifically, adjusted performance metrics can be useful as part of:

• Evaluating physician groups and other providers for participation in a narrow network, accountable care organization (ACO), or other affiliation of providers
• Identifying post-acute care and other providers with whom to develop preferred relationships
• Identifying preferred specialty physicians to whom primary care physician can refer patients
• Rewarding participating providers via incentive compensation programs
• Driving performance improvement across hospitals, primary care physicians, specialty physicians, and other providers