Published: October 27, 2011
TriZetto Says Systematic Health Management Can Improve Cost and Quality and Strengthen Payers' Role in U.S. Healthcare
DENVER - (BUSINESS WIRE) - According to The
TriZetto Group, healthcare
reform legislation creates new opportunities to improve the quality
of care and reduce
healthcare costs, and in response, payer organizations are
evaluating strategies that align incentives to reward value instead of
volume. One new strategy, which prizes value over volume, is called Systematic
Healthcare Management TM (SHM). A unique approach to population
health management, SHM leverages a suite of technology-enabled
solutions to help payers implement innovative new delivery and
reimbursement models, improve the coordination of care and benefits,
align incentives, modify behaviors, improve outcomes, and reduce costs.
Design Value-Driven Strategies to Improve Cost and Quality of Care
Healthcare payers are in a position to be knowledge leaders in
leveraging technology and clinical
analytics to engage providers in coordinating care based on value
rather than volume. The following are examples of SHM initiatives that
payers can deploy:
Payers can address medical-loss ratio (MLR) rules and bend the cost
curve by encouraging consumers to make healthier choices; incenting
providers to practice proven, evidence-based medicine; and, hence,
reducing the volume and cost of acute care. Additionally,
payment-bundling, or episode-of-care reimbursement, can both reduce
costs and improve quality by helping move U.S. healthcare away from a
historically ineffective, inefficient fee-for-service model.
Make Investments That Reward Payers, Providers and Patients
Often treated favorably under MLR rules, SHM solutions address quality
improvements and create value in the following areas:
-
Improved health outcomes: Care and disease management,
coaching, compliance support, patient-centered medical home (PCMH),
reporting, data analytics
-
Hospital readmission prevention: Discharge planning,
post-discharge care, analytics, information sharing post-discharge
-
Improved patient safety and medical error reduction: Error
identification and prevention, infection control, analytics, data
sharing
-
Increased wellness: Wellness assessments, coaching and
education, prevention, healthcare information technology associated
with these activities
Such activities proactively engage consumers in the management of their
health and tap into growing interest among employers, the primary
customers of health plans, in value-based purchasing strategies.i
Reduce Cost Variances With Value-Based Insurance Design
Value-based insurance design (VBID) presents one way for payers to
incent members to manage chronic illnesses, engage in treatment
management (e.g., informed consent), obtain preventive care, and make
better lifestyle choices concerning nutrition and fitness. Examples of
member incentives include contributions to health fund accounts, gift
cards, co-pays, and coinsurance reductions for specific diagnosis or
procedures. Health plans base rewards on participation or specific
actions by members, such as adhering to recommended doctor visits and
completing online educational programs.
Growing employer interest in VBID creates an opportunity for payers to
gain a competitive edge in the market, but only if health plans manage
member benefits cost-effectively and measure results accurately. Both
require technology-enabled solutions, available today, that capture data
and enable payers to adjust benefits accordingly, process claims,
administer incentives, answer member questions and carry out member
communications.
Bundle Payments for a Winning Strategy
Additional technology-enabled solutions help payers manage the
automation and scalability of payment-bundling programs. Health plans
can administer such programs for clearly defined provider groups and
episodes of care for which financial incentives can improve clinical
outcomes and control costs. Payers often target episodes of care
involving high-volume, high-cost cardiac or orthopedic procedures. One
such example is a bundled reimbursement to a group of providers for a
member's hip replacement, an episode of care that would include an
inpatient stay, rehabilitation, primary care, emergency room services
and other care related to the procedure.
Using episodic-based payment can reduce medical costs 5 percent to 6
percent in some patient-management models, according to the Centers for
Medicare and Medicaid Services (CMS).ii, iii About 80 percent
of payers and 52 percent of all providers are expected to adopt payment
bundling for a range of medical events by the end of 2012, according to
an industry survey by TriZetto.iv
Payment bundling offers multiple benefits to health plans. Evidence from
the CMS Healthcare Financing Administration project during the 1990sv
suggests the following benefits:
-
Reduces medical expenses, which can help healthcare payers meet reform
mandates to control costs
-
Shifts some risk to providers in an intelligent way
-
Creates a stepping stone to integrated patient-centric models of care
that are essential to health reform goals
Pave the Pathway to Improving the Cost and Quality of Care
Healthcare payer organizations have an opportunity to use SHM solutions
- available today - to identify and stratify their member populations;
improve care management, especially for members with chronic conditions;
implement VBID programs; and leverage payment bundling to improve
episodic-care outcomes. A marked focus on value will position payers for
a strong role in accountable care organizations, PCMH and other
coordinated care models that can help improve the cost and quality of
care delivery.
Reporters interested in speaking with TriZetto executives for further
comment about this evolving trend in U.S. healthcare should contact
Davida Dinerman or Nicole Solera at Schwartz MSL, trizetto@schwartzmsl.com
or 781-684-0770.
About TriZetto
TriZetto provides world-class healthcare IT software and service
solutions that drive administrative efficiency, improve the cost and
quality of care, and increase payer
and provider collaboration and connectivity. TriZetto solutions,
many of which are patented or patent-pending, touch half the U.S.
insured population and reach more than 21,000 physician
practices. TriZetto's payer offerings include enterprise
and component software, application
hosting and management, business
process outsourcing services and consulting. Provider
offerings, delivered through TriZetto's Gateway
EDI wholly owned subsidiary, include
tools and services that monitor, catch and fix claims issues before they
can impact a practice. TriZetto's integrated
payer-provider platform will enable deployment of promising new
models of post-reform healthcare. For information, visit www.trizetto.com.
Footnotes
i. "Value" refers loosely to how much a buyer gets
for each dollar spent. In value-based healthcare, it denotes the quality
and extent of health outcomes per dollar spent, reflecting a shift away
from the prevailing care model of fee-for-service.
ii.. Medicare Participating Heart Bypass Center
Demonstration - Executive Summary, Final Report, prepared by Health
Economics Research Inc for HCFA, July 24, 1998.
iii. Samitt, Craig; Walters, Barbara; and Zucker,
Michael. "Medical Home Reimbursement ABCs: Funding Care Delivery through
ACOs, Bundled Payments and Concrete Contracts." Healthcare
Intelligence Network, November 2009. Dobbs, Steve. "The Medicare
ACE Demonstration Program, Testing a New Bundled Payment System at
Hillcrest Medical Center," Presentation at the World Healthcare Congress
Leadership Summit 2010.
iv. Industry survey research conducted by TriZetto
using a professional research company, unpublished.
v. The Commonwealth Fund Commission on a High
Performance Health System, The Path to a High Performance U.S. Health
System: A 2020 Vision and the Policies to Pave the Way; and Robert E.
Mechanic and Stuart A. Altman, "Payment Reform Options: Episode Payment
Is a Good Place to Start," Health Affairs 28, 2, Web Exclusive (Jan. 27,
2009), http://content.healthaffairs.org/cgi/content/abstract/28/2/w262.
The TriZetto Group
Loren Finkelstein, 303-542-2460
loren.finkelstein@trizetto.com
or
Schwartz
MSL
Davida Dinerman/Nicole Solera, 781-684-0770
trizetto@schwartzmsl.com
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