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Fairleigh Dickinson Executive MBA Health Systems Management Managed Care and Provider Reimbursement Robert Eidus MD, MBA.

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Presentation on theme: "Fairleigh Dickinson Executive MBA Health Systems Management Managed Care and Provider Reimbursement Robert Eidus MD, MBA."— Presentation transcript:

1 Fairleigh Dickinson Executive MBA Health Systems Management Managed Care and Provider Reimbursement Robert Eidus MD, MBA

2 May 31 Final Exam (First Hour) Final Exam (First Hour) Case Study- Merck- Medco: Ken Case Study- Merck- Medco: Ken Population Based Health Management Population Based Health Management Preventive Health Services in Managed Care Preventive Health Services in Managed Care Demand Management Demand Management Disease Management Disease Management Case Management Case Management Case Study- Accordant Health Services- Araceli Case Study- Accordant Health Services- Araceli Oral Presentations of Project Oral Presentations of Project Wrap Up and Feedback Wrap Up and Feedback

3 Case Study Merck-Medco Managed Care: Ken Merck-Medco Managed Care: Ken

4 Population Based Health Management Key Premise Key Premise Different populations have different needs/ risks/ health cost exposure Different populations have different needs/ risks/ health cost exposure Strategies should be tailored to sup-population needs Strategies should be tailored to sup-population needs

5 Population based health management 1% 5% 95% 25-35% of health care costs 30% of health care costs 35% of health care costs People with complex multisystem illness People with chronic illnesses Healthy or asymptomatic and at risk for illness

6 Population based health management 1% 5% 95% Care management (Catastrophic Case Management Disease Management Preventive Health, Demand Management People with complex multisystem illness People with chronic illnesses Healthy or asymptomatic and at risk for illness

7 Preventive Health Services Why do this if you are in managed care? Why do this if you are in managed care? Historical Roots (except Medicare) Historical Roots (except Medicare) Societal Expectations Societal Expectations Marketing Marketing Risk Selection Risk Selection You are graded on this You are graded on this

8 Why not do preventive services? Time to benefit is greater than member retention Time to benefit is greater than member retention Member turnover can be as high as 35% per year Member turnover can be as high as 35% per year Cost of management services and cost of testing Cost of management services and cost of testing Lack of clarity on what preventive services should be promoted Lack of clarity on what preventive services should be promoted

9 Examples of managed care success stories in prevention Mammography Mammography Pediatric immunizations Pediatric immunizations Cholesterol Screening Cholesterol Screening Adult immunizations Adult immunizations Beta blockers after MI (tertiary prevention) Beta blockers after MI (tertiary prevention) ACE inhibitors in diabetics (secondary prevention) ACE inhibitors in diabetics (secondary prevention) Colorectal cancer screening Colorectal cancer screening Kaiser Kaiser US Healthcare US Healthcare

10 Examples of un-success Screening for depression Screening for depression Why? Why?

11 Typical Prevention Interventions Registries Registries Reminders Reminders Educational activities Educational activities Provider incentives Provider incentives

12 Barriers to effective managed care preventive efforts Migrating membership Migrating membership Inaccurate data bases Inaccurate data bases Lack of point of service effectiveness Lack of point of service effectiveness Missed opportunities Missed opportunities Physician overload Physician overload Lack of systems in providers offices Lack of systems in providers offices

13 Demand Management Basic Principle: Basic Principle: 70% of illness is self limited 70% of illness is self limited Much of primary care visits and ER visits are patient initiated; very often due to lack of education/ information Much of primary care visits and ER visits are patient initiated; very often due to lack of education/ information Giving patients information/ advice/ and alternative venues for care can save money Giving patients information/ advice/ and alternative venues for care can save money

14 Typical conditions which can be managed via demand management Colds: (avoid a PCP visit) Colds: (avoid a PCP visit) Asthma, ear infections (avoid an ER visit) Asthma, ear infections (avoid an ER visit) Minor strains/ sprains Minor strains/ sprains Allergies Allergies Urinary tract infections Urinary tract infections

15 Types of Demand Management Interventions Algorithmic books and other literature Algorithmic books and other literature On-line advice systems On-line advice systems E-health care (future) E-health care (future) Nurse advice lines (advice and triage) Nurse advice lines (advice and triage) Example: Access Health Example: Access Health After hours clinics and urgent care centers After hours clinics and urgent care centers

16 Does Demand Management Work? Probably- but don’t believe the press you hear Probably- but don’t believe the press you hear Nurse advice lines are well received by patients, but: Nurse advice lines are well received by patients, but: Most patients don’t use them Most patients don’t use them They are costly They are costly Cost savings may be difficult to calculate, particularly after year one Cost savings may be difficult to calculate, particularly after year one

17 Disease Management Definition: A systematic attempt to improve health outcomes for patients with chronic illnesses using managed care techniques in the framework of quality improvement Definition: A systematic attempt to improve health outcomes for patients with chronic illnesses using managed care techniques in the framework of quality improvement Look at systematic barriers to optimizing outcomes Look at systematic barriers to optimizing outcomes Design interventions which attack those barriers Design interventions which attack those barriers

18 Barriers to Optimizing Outcomes Lack of patient education Lack of patient education Lack of patient readiness to change Lack of patient readiness to change Lack of physician education Lack of physician education Missed opportunities Missed opportunities Patient adherence Patient adherence Lifestyle issues Lifestyle issues Fragmentation of care Fragmentation of care Lack of access Lack of access Affordability Affordability

19 Disease Management Toolkit Identify, enroll, and stratify members Identify, enroll, and stratify members Guidelines to physicians Guidelines to physicians Disease registries to physicians Disease registries to physicians Reminders to patients Reminders to patients Educational material to patients Educational material to patients Care management for the sickest patients Care management for the sickest patients

20 How are DMs Paid? Administrative Fees Administrative Fees Shared Savings Shared Savings Capitation Capitation

21 Most Common Conditions that have DM Programs Asthma Asthma High Risk Pregnancy High Risk Pregnancy Diabetes Diabetes Congestive Heart Failure Congestive Heart Failure

22 Conditions Where There are Few DM Programs Infertility Infertility Hypertension Hypertension Osteoporosis Osteoporosis Arthritis Arthritis What are the problems with the above programs?

23 Issues with Disease Management Clear identification of eligible members using administrative data Clear identification of eligible members using administrative data Measured costs and savings Measured costs and savings Regression to the mean Regression to the mean Preloading the baseline Preloading the baseline Length of time to achieve cost savings Length of time to achieve cost savings

24 Presentation Accordant Health Systems Accordant Health Systems Araceli Araceli

25 Care Management Also called case management or catastrophic case management Also called case management or catastrophic case management Operating assumptions Operating assumptions Sutton’s Law Sutton’s Law If I can manage the few cases with big ticket items, then I can ease off the micromanagement of the masses If I can manage the few cases with big ticket items, then I can ease off the micromanagement of the masses

26 Typical Cases Managed Transplants Transplants Parenteral Hyperalimentation Parenteral Hyperalimentation HIV/AIDS HIV/AIDS Premies Premies Traumatic Brain Injury Traumatic Brain Injury Stroke Stroke

27 Care Management Toolkit Discounted contracting Discounted contracting Home nursing, PT, DME, Rehab., Centers of Excellence Home nursing, PT, DME, Rehab., Centers of Excellence Substitution of benefits Substitution of benefits Coordination of care Coordination of care Guidelines monitoring Guidelines monitoring Telephonic or on-site support Telephonic or on-site support

28 Care Management The bulk of the services are provided by nurses that work for the health plan or an independent company that contracts with the health plan or employer The bulk of the services are provided by nurses that work for the health plan or an independent company that contracts with the health plan or employer Nurses are specially trained Nurses are specially trained Documentation software Documentation software

29 Care Management Problems Although most people believe that Care Management helps patients and save money, it is hard to quantify Although most people believe that Care Management helps patients and save money, it is hard to quantify Small numbers and large dollars give large amounts of variation Small numbers and large dollars give large amounts of variation You are basing savings on what would have happened had you not intervened You are basing savings on what would have happened had you not intervened

30 Prospective Care Management- A new paradigm Basic tenet: Basic tenet: Identify people at risk for high medical expenditures before they get sick Identify people at risk for high medical expenditures before they get sick People with chronic illness People with chronic illness Depressed Depressed Social Isolation Social Isolation Poor self efficacy Poor self efficacy Poor decision-making skills Poor decision-making skills

31 Course Summary Managed Care should be differentiated from HMOs Managed Care should be differentiated from HMOs Managed care started in response to a societal need for access Managed care started in response to a societal need for access In the last 25 years, the growth has been fueled by a need to control costs In the last 25 years, the growth has been fueled by a need to control costs Managed care will continue to respond in the future to the balancing and changing needs of access, coverage, and cost containment Managed care will continue to respond in the future to the balancing and changing needs of access, coverage, and cost containment

32 Course Summary Although it seems to be an ideal situation, the development of integrated delivery systems has been fraught with problems Although it seems to be an ideal situation, the development of integrated delivery systems has been fraught with problems Within the sphere of cost containment, the general tactics are benefits constriction, cost sharing, transfer of risk, incentives, and utilization management Within the sphere of cost containment, the general tactics are benefits constriction, cost sharing, transfer of risk, incentives, and utilization management None of these have worked very well alone- together they have helped to modify the escalation of medical costs None of these have worked very well alone- together they have helped to modify the escalation of medical costs The basic factors that contribute to cost escalation are aging of the population, new technology and consumer demand The basic factors that contribute to cost escalation are aging of the population, new technology and consumer demand

33 Course Summary Managed care has made many contributions to improving quality of health care. There is little evidence that the tactics used to contain cost have adversely impacted quality Managed care has made many contributions to improving quality of health care. There is little evidence that the tactics used to contain cost have adversely impacted quality Despite public statements to the contrary, employers chose health plans based upon cost, no quality Despite public statements to the contrary, employers chose health plans based upon cost, no quality Population based care management has become increasing popular to prospectively influence outcomes Population based care management has become increasing popular to prospectively influence outcomes


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