Overcoming the data hurdles impeding medical management and risk

Data and robust analytics are foundational to success for physician groups interested in taking on medical management and risk. However, the lack of useful claims data from payers can present a major stumbling block.

In markets where risk delegation is commonplace, physician groups have a contracted network and pay claims – so they have crucial utilization, provider, and other rich, timely data to analyze and act on. In contrast, providers in markets in the early stages of taking risk typically encounter a steep learning curve regarding what to measure, how to measure, and what initiatives will have the most significant impact.

It’s part of a bigger struggle: Practices need to invest in critical infrastructure and expertise, not only to synthesize and interpret data, but to provide all of the utilization management, care management, quality and other services, support, monitoring, and reporting for effective medical management and alternative payments. Rather than take on too many delegated responsibilities at once, some practices adopt a hybrid model: They assume medical management while continuing with the health plan’s contracted network, and the plan continues to pay claims, providing reports to the group.

Inadequate data

This arrangement can lead to data gaps because provider agreements require that rates remain confidential. Blinding the dollars impedes their effectiveness and forces practices to fly blind. Further tipping the scales, waiting for historic payer data versus real-time information leaves the practices three months behind.

Payers may redact behavioral health and other utilization information, such as sites of care and providers, to maintain confidentiality.

Some plans may share summary reports with little utility at a patient level. To effectively manage risk and financial outcomes, medical groups need to know the cost of care being provided. “The “value” in value-based healthcare is derived from measuring health outcomes against the cost of delivering the outcomes.”[1] Dollar amounts and all utilization data are essential.

Plans will supply summary-level key performance indicators (KPIs), like total costs by categories such as acute care inpatient, ED visits, and specialists, the total cost of care, and the related per-member, per-month (PMPM) amounts. But risk-bearing providers need to know which patients cost the most, why, where, and how much. They need unit costs.

Overcoming data hurdles

One solution for getting the detailed information needed to succeed is to partner with a health data analytics firm. These firms can produce actionable and timely information while preserving the obligation to confidentiality. The analytics partner works with the plan to document methodologies that position the risk provider to manage costs better while shielding confidential rates. The data analytics-as-a-service provider executes a confidentiality agreement with the plan and risk provider. The firm acts as a firewall.

Another advantage of outsourcing data and analytics is that practices instantly acquire the necessary knowledge, experience, and infrastructure. Some health analytics providers can draw on national claims data, such as Medicare and Medicaid, which allows for benchmarking against industry leaders and standards and within specific geographies and lines of business. Practices can get up and running on medical management without the need to buy the technology and additional data sets, hire data analysts and otherwise build out and manage the entire operation themselves.

Considerations for data analytics partners

When choosing an analytics firm, look for the following knowledge, capabilities, and qualifications:

• Experience: It should demonstrate expertise working with providers and payers and with all lines of value-based business – commercial, Medicare, and Medicaid. Each has unique factors, and an experienced firm will achieve results faster.
• Clinical Informatics: Population health has an ever-changing and constant flow of information. It is vital to have the ability to systematically normalize data from claims or EHRs into actionable information and deliver reports regularly.
• Medical Management: It must know how to interpret the information to identify impactable issues, suggest solutions quickly, and prioritize where an organization’s energies will have the greatest effect.
• Financial Forecasting: The ability to predict the cascading impact of interventions with detailed budgets and pro formas that evaluate the potential return on investment from identified opportunities is essential.
• Quality: There are hundreds of quality measures. If there is flexibility, the selected measures should be ones that can best meet the risk-bearing organization’s objectives. An analytics partner should be able to help prioritize quality measures that are most impactful for patients, that have the highest incentive opportunities, and maximize revenue.

Current healthcare hyperinflation is accelerating the shift to alternative-based reimbursement. A good analytics partner will make the transition easier and faster and help avoid mistakes.

The right information and insights from an analytics-as-a-service partner also allow medical groups to better control their destiny. The critical understanding derived from accurate, complete and timely data and benchmarking will help groups succeed at medical management and risk, enabling them to deliver higher-quality care and improve care delivery efficiencies while enhancing their financial returns.

Andrew Snyder, MD is Chief Medical Officer and Principal of COPE Health Solutions. He previously served as senior vice president and CMO for Brown & Toland IPA and executive vice president and chief clinical officer for Mount Sinai Health System.

Tom Dougherty, FACHE, a COPE Health Solutions Principal, is a former executive for such health care systems and health plans as Downey Regional Medical Center, Valley Health System and Inter Valley Health Plan, and PPO Alliance.

[1] What Is Value-Based Healthcare? (nejm.org)