Total population health management 2.0. An innovative approach to delivering healthcare in a reformed environment
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1 Total population health management 2.0 An innovative approach to delivering healthcare in a reformed environment
2 Total Population Health Management (TPHM) is a fresh and innovative approach to healthcare services delivery designed to address the clinical and lifestyle management needs of an entire population. Included are efforts to improve a member s clinical status, identify and support at-risk members, and maintain the status of healthy members. While the idea of effectively managing an entire population is not new, the Affordable Care Act and the move to value-based payment bring emphasis back to the management of the total population to foster future success of health plans and Accountable Care Organizations. Three key takeaways 1. A renewed focus on members who are most likely to be impacted through engagement will lead to improved clinical and financial outcomes. This represents a departure from the traditional concentration on the most expensive members in a population. 2. New skills and technologies are required to fully leverage the unprecedented volumes of federated data gathered and distributed by electronic medical records, social media, mobile apps and other sources. 3. Turning massive amounts of consumer data into personalized and actionable segmentation strategies is the key to successfully managing the health of a growing and diverse population. 1 ExlService Holdings, Inc
3 The state of healthcare It is well documented that health status in the United States continues to decline at a rapid rate. Illness prevalence rates within employers are on the rise, with one of every two working-age adults diagnosed with a chronic condition. Additionally, the employee turnover rate for those with a protracted state is much lower than those without a condition, which exacerbates the risk burden of employers and health plans. In younger generations, the trend doesn t seem to get better. Obesity has more than doubled in children and quadrupled in adolescents over the past 30 years, according to the Journal of the American Medical Association. In 2012, more than a third of children and adolescents were overweight or obese. Meanwhile, healthcare costs continue to increase. Last quarter costs were up 9% and the increases aren t slowing down anytime soon. These factors, along with numerous others, have created a perfect storm. All eyes are on the healthcare industry. Consumers and healthcare professionals alike are looking for answers. And, it all starts with a mindset change. An impact focused mindset Currently, 3% of an employer s population is driving roughly 50% of the total healthcare costs. Each year a member s annual cost is expected to increase by 3% due to aging. The healthcare community has historically focused its efforts on this group because of the anticipated return on investment. Unfortunately, the financial impact of a member s clinical risk is not a variable that can be easily impacted by factors the employer or health plan can control. In contrast, the clinical risk of each member can be greatly reduced when the member is properly engaged in care management and feels empowered to close the gaps in clinical care. This engagement can take many forms but often includes maintaining the current health status of a member, actively preventing a chronic disease, or treating a current condition to appropriate level of evidence-based medicine. This is a complete mindset change for many health plans and employers because it expands the attention to include the totality of the population they serve. It is no longer in their best interest to focus only on the few who drive the majority of the expenses. A renewed concentration on maximizing resources by engaging the segment of the population that is most likely to be impacted is the key to improving clinical and financial outcomes. 2 ExlService Holdings, Inc
4 New data, new skills Making this mindset change truly impactful requires the collection of new data on a different subset of the population, possibly from new sources. Health plans need to begin to take advantage of what emerging data sources like electronic medical records, mobile apps, social media, wearable technologies, and others have to offer. These sources, along with the more traditional ones, will increase the volume of data that needs to be acquired, aggregated and managed efficiently. The ability to stratify this data and draw action-orientated conclusions from it is imperative in building the proper engagement plans and strategies. Traditionally, patients were looked at from one dimension, their health status, falling somewhere on the graph from healthy to terminally ill. Lifestyle risk, clinical risk and duration have since been included in the risk analysis. Care management providers need to begin to look at an additional dimension as well: the likelihood of the patient to engage. The personal nature of the data being captured by new multimedia channels has made this analysis possible. The ability to drive member engagement has been the bane of the care management and wellness industry. Without incentives or disincentives, typically less than one in four members targeted for engagement actively participates. One of the main reasons for this lack of engagement is the healthcare industry s lack of leadership in developing and deploying segmentation strategies to engage and influence members behaviors. Healthcare continues to lag behind other industries, like retail and banking, in using external resources to segment and understand its members. Rectifying this will require deep analytic skill sets that do not currently exist in abundance within the healthcare industry. This is an area where health plans can rely on third parties, or professionals from other industries, to understand best practices and implement the proper tools and technologies. The financial and clinical benefits associated with engaging members at all levels of health are the future of the healthcare industry. Getting insights and measuring ROI The Affordable Care Act (ACA) and other recent regulations and policies have created an environment in which providers will increasingly be measured and reimbursed by the quality of care they provide and the impact they have on their entire populations. The principal motive behind these changes is to move away from fee-forservice based payment, which rewards quantity, to value-based payment, which focuses on clinical outcomes. 3 ExlService Holdings, Inc
5 As healthcare reform continues to evolve, there will be significantly less member turnover than seen historically due to enrollment in exchanges and market consolidation. This too forces health plans to concentrate efforts on lifestyle behaviors of total populations to better manage long-term risks, not merely the short-term risks of the sick. Analytics will play a vital role in gaining insight and determining success for health plans moving forward. The opportunities to utilize analytics throughout the stratification and engagement process are endless. For example, a use case could include one or more of the following: Identify trends related to risk Further segment and stratify a population Calculate the likelihood of a member or group to engage Optimize clinical resources through constant validation of engagement strategies Predict impactability of a member or group Determine engagement best practices for a member or group Recognize progress in clinical and financial outcomes Track sustained improvements in outcomes Developing metrics that are actionable and then structuring them in a value chain helps create a cause and effect analysis. This helps to precisely pinpoint the breakdown in the process so a corrective action can be taken without interrupting the parts of the strategy that are working. Bottom-line impact Given the complexity of healthcare, there is skepticism about the attribution of the savings from lower than expected trend. A year-overyear analysis will show that for most employers prevalence rates have been increasing about 2% year over year. Within two years, and very possibly within one year, the proof point of success will be the slowing in the employer s prevalence rates of members with a chronic condition. Ultimately, the prevalence rate will flatten out, and potentially even decrease. Assumed cost of $3,600 per member per year for a group of 100,000 employer basedmembers (commercial) Expected annual cost for the group is $360M Assuming an 8% annual trend, the expected cost increases by $28.8M year over year A net reduction in trend of 2% (3:1 ROI) results in an annual savings of $7.2M, per 100,000 members See Table 1 entitled Prevalence Rates by Year with and without Population Management in the appendix of this paper. 4 ExlService Holdings, Inc
6 Table 1: Prevalence rates by year with and without population management 50% Prevalence rates by year 45% 40% With TPHM Without TPHM 35% Estimated Estimated Estimated 5 ExlService Holdings, Inc
7 EXL Triple Play EXL is uniquely positioned to offer integrated and modular solutions to meet the industry s changing and growing needs. Our care management technologies, clinical operations teams and analytics experts can help with data acquisition and aggregation strategies, techniques to successfully stratify the data, innovative channels for engagement and more. We are the first in the industry to provide and integrate all three solutions and, by design, enable them to benefit from the strength of the other solutions. The technology CareRadius integrates data from multiple sources and shares it among health plans, practitioners and members in real time. Its holistic view of the member enables personalized care plans, the ability to make timely decisions, and earlier interventions to improve health outcomes. The experts Our 1,200+ clinical staff and URAC Core Certified programs can enhance your organizations professional capacity management through the use of global clinical talent and analytics expertise. When clinical resources are scarce, internal resources must be focused on the highest-priority initiatives that impact quality outcomes and the bottom line. in data management, reporting, analytics and predictive modeling that provide actionable insights. TPHM Value Chain Healthcare analytics Our team of clinicians, behavioral economists, statisticians, and segmentation experts can help address rapidly evolving needs. We specialize 6 ExlService Holdings, Inc
8 Platform Clinical Operations Analytics Table 2: Total Population Health Management Value Chain Who is eligible? What is the risk of the population? Eligibility CareRadius Eligibility is determined upstream from the application and reviewed by staff prior to executing enrollment, authorization, review or appeals Identification CareFind Risk may be determined by cost and frequency of procedures/hospitalizations by condition; level of compliance with treatment or psycho-social barriers to care Mixed media modeling to optimize prospective enrollees Existing risk engines can be leveraged using EXL analytics, or EXL can develop customized solutions Who should be targeted for the program? Stratification CareFind Condition-specific high utilizers, multiple provider encounters, specific Rx and/or clinical metrics EXL segmentation models will determine who can be impacted clinically and likely to actively participate in the program; risk transfer arbitrage opportunities can also be built into the model Who is enrolled in the program? Engagement CareRadius Members who are ready to commit due to issues identified above with support of integrated providers and care managers EXL can leverage, marketing, segmentation, and work force management techniques to optimize participation What is the clinical progress of members? Outcomes CareRadius Improvement in medication compliance, clinical metrics; reduction in provider encounters; program participation; portal access and use Biometric, risk score and gap closures are constantly measured to determine changes in clinical status; initial progress will be seen in these analyses rather than claim amounts What is the return on the program? Financial Savings CareRadius/ CareFind Reduction in overall expenses associated with identified conditions Medical savings will be calculated using the industry leading approach which creates a credible control group 7 ExlService Holdings, Inc
9 EXL (NASDAQ: EXLS) is a leading business process solutions company that looks deeper to drive business impact through integrated services and industry knowledge. EXL provides operations management, decision analytics and technology platforms to organizations in insurance, healthcare, banking and financial services, utilities, travel, and transportation and logistics, among others. We work as a strategic partner to help our clients streamline business operations, improve corporate finance, manage compliance, create new channels for growth and better adapt to change. Headquartered in New York and in business since 1999, EXL has more than 22,800 professionals in locations throughout the U.S., Europe and Asia. EXLservice.com GLOBAL HEADQUARTERS 280 Park Avenue, 38th Floor, New York, NY T: F: UK SALES OFFICE 6 York Street, London, W1U 6PJ, United Kingdom T: F: INVESTOR RELATIONS Jarrod Yahes ExlService Holdings, Inc. Phone: ir@exlservice.com United States United Kingdom Czech Republic Romania Bulgaria India Philippines Malaysia
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