An Advanced Optimization Tool Can Help You

Rick Valentine
Managing Director of Business Intelligence Strategy
DST Health Solutions

Payers have developed an arsenal of programs, including case, disease, and utilization management, as well as education and wellness initiatives, aimed at managing member care. Yet most payers have difficulty determining how cost-effective these programs are.

What’s the right amount to spend on each program? What are the trade-offs involved in focusing more heavily on one program than another; for example, spending more on disease management and less on prevention? Which programs are most likely to yield the greatest bang for the buck?

There is a solution. An advanced optimization tool can help you evaluate a wide range of data so that you can identify and then focus your resources on those programs that best meet your members’ specific health needs as well as your organization’s unique business objectives.

Critical Stages

The need for cost-effective care management has reached a critical stage. More than 133 million Americans, or 45 percent of the population, have at least one chronic condition, according to the Partnership to Fight Chronic Disease.

Payers are dealing with a growing share of the problem. In the wake of the Affordable Care Act, millions of previously uninsured Americans are gaining healthcare coverage, and many have chronic conditions that have gone untreated for years. Meanwhile, the government is moving more and more Medicaid beneficiaries and dually eligible Medicare-Medicaid beneficiaries into managed care.

For payers, the need to get maximum value for the care management dollar has reached a critical stage as well. The U.S. Centers for Disease Control reports that chronic diseases account for $3 of every $4 spent on healthcare.

Yet the growth of chronic conditions – and spending on them – will only accelerate as the U.S. population ages. So how can you tell whether you’re spending your money in the right places? Does your smoking-cessation or weight-loss program merit more or less investment? Should you allocate more money for prevention than for disease management? What’s the right mix of programs for your members’ needs?

Turning Data into Actionable Information Requires New Technologies

The answers to these and many other critical questions about care management lies in the interpretation of the massive volumes of data that payers possess. But finding these answers has been difficult at best, because the analytics tools used in the payer industry today don’t have the power to conduct complex analyses efficiently or cost-effectively.

An advanced optimization tool, in contrast, leverages sophisticated modeling and analytics capabilities to efficiently turn these massive volumes of care management data into actionable information. This allows payers to benefit from their data in new ways, by identifying the best possible business decisions and their consequence, before decisions are implemented.

Within care management, optimization enables you to:

  • Identify optimal programs for members’ needs and determine how much to invest in each program
  • Determine whether your current spending on wellness, cessation, and education programs is producing the results you want
  • Model varying levels of patient adherence
  • Create policies, procedures, and programs that enhance patient adherence
  • Achieve the optimal balance of interventional, wellness, disease management, case management, and utilization management strategies
  • Identify the optimal distribution of care management dollars

You can offer the results of your optimization analyses to physicians, who can encourage patients to participate in appropriate care management programs.

Fully Informed Decisions

As care management spending increases, payers need to precisely target the dollars they spend on case, disease, and utilization management as well as other care management initiatives. An advanced optimization tool will help you make fully informed decisions about the most appropriate way to allocate your care management resources.

In my next blog, I’ll focus on how advanced optimization can help you ensure that your provider payment strategy delivers maximum value.





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