Health systems in many countries in the Middle East are currently undergoing radical transformations as they strive to balance quality, cost and access to healthcare. Healthcare spending continues to increase, driven by the region’s growing healthcare consumerism, ageing populations and the increasing prevalence of chronic conditions and lifestyle diseases.
As providers, payers and patients alike recognise that the current healthcare financing framework—a predominantly fee-for-service (FFS) environment—is not sustainable, a key focus for reform in the region is developing high-value provider reimbursement models that tie healthcare spending to the achievement of the best possible health outcomes. A value-based healthcare system encourages the efficiency of hospitals and clinics in ways that optimise the services they provide. By tying payment to the value of services provided instead of just the quantity of services, value-based payment incentivises providers to give the best possible care to patients in order to maximise health outcomes, patient safety, patient experience and efficiency.
Countries like the United Arab Emirates and the Kingdom of Saudi Arabia have recognised this need and are leading the region’s initiatives to adopt value-based healthcare. The successful adoption of value-based care in the Middle East faces important challenges. In this article, Milliman’s Lalit Baveja, Alison Counihan, and Carol Bazell discuss six of those challenges.
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.
Disease management strategies can include a range of activities with varying approaches and levels of intensity. These strategies are also often mixed with other care management approaches.
Differentiating the disease management programme components, targets and interventions is important before evaluating return on investment or cost and quality impact. There are three broad programme designs to consider:
• Transitional care models
• Telephone-based disease management
• Utilisation and case-based disease management programmes
Although demonstrating savings in disease management programmes has proven difficult, it is not impossible. In this paper, Milliman’s Lalit Baveja and Mason Roberts explain the reasons why and also explain why it’s important to thoughtfully manage and continually review performance.
In India, recent regulatory changes mandating guaranteed renewability, lifetime coverage and restricted premium revision opportunities imply that any substandard risk in the current portfolio could potentially be retained for life. This necessitates a different approach to managing insurers’ growing portfolios.
This article by Milliman’s Lalit Baveja explains how insurers can benefit from treating their covered members using analytics based on population health principles. Such an approach requires a better clinical understanding of member populations to identify the most effective and cost-efficient strategies for managing members’ health and preventing hospitalizations and claims in the long run.
Health insurance is the fastest growing segment in India’s nonlife insurance sector. Health insurance costs are also increasing quickly. According to Milliman’s Lalit Baveja, insurers in the market should consider the benefits of administrative savings as a larger part of a cost containment strategy.
Administrative costs, customer acquisition costs and benefit payment (in the form of claims payouts) are the three key expense areas for insurers. Going forward, the importance of managing administrative expenses will increase as competition continues to put pressure on overall premiums. In line with other markets, the Indian regulator also restricts the percentage of premium income that can be used as management expenses to promote efficiency and the availability of funds for benefit payments after a defined inception period. Insurers themselves have a vested interest in keeping these costs manageable. Topline focus must be complemented with cost containment in both benefits and administrative costs to achieve desired profitability and sustainability. While claims cost containment requires effective provider contracting and optimal utilisation management (and is reliant on multiple providers and other intermediaries), acquisition costs are dictated by market forces. Administrative efficiency within internal operations is one area where an insurance company can effectuate changes more directly. Tracking and managing these administrative costs can be a challenge, and identification of areas where there is opportunity to optimise administrative spending can be an even greater challenge.
Lalit discusses how benchmarking is an effective tool that can help health insurers manage their administrative efficiencies and expenses. To learn more, read his article “Administrative benchmarks for health insurance in India.”
A top-down cost-allocation model averages out all of a hospital’s expenses based on its activities. This type of model provides a more accurate reflection of a hospital’s expenses when defining package rates. In this short film, Lalit Baveja provides a primer on top-down cost-allocation and discusses a Milliman project for the state government of Mandholi, India, that used the methodology.
Read more about how Milliman consultants assisted India’s Meghalaya Health Insurance Scheme (MHIS) set up a top-down cost-allocation model here.
To read the video transcript, click here.