MANAGING RISING HEALTHCARE COSTS SOLUTIONS TO A FRAGMENTED SYSTEM

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2 Copyright 2014 Veridicus Health tm. All rights reserved.

3 CONTENTS EXECUTIVE SUMMARY 1 INTRODUCTION 2 BY THE NUMBERS HOW VERIDICUS CARE MANAGEMENT IS DIFFERENT 4 COLLABORATION RIGHT PATIENT, RIGHT TIME THE VCM APPROACH VERIDICUS CARE MANAGEMENT PROCESS HOW CAN VERIDICUS CARE MANAGEMENT DECREASE SPENDING? 7 VARIOUS APPROACHES TO COST AVOIDANCE THE RIGHT TEAM, THE RIGHT TOOLS VERIDICUS CARE MANAGEMENT TEAM 8 TEAM STRATEGY TEAM MEMBERS CONCLUSION 8

4 EXECUTIVE SUMMARY Healthcare spending in the United States continues to rise at an exponential rate. Managing rising healthcare costs is essential to ensure that all health care dollars are being utilized appropriately and in the most cost-effective manner. As a solution to this issue, there are many different programs available from pharmacist-driven medication therapy management, to nurse case management, and even targeted educational mailings through disease state management. While all these services can provide benefit to the management of a patient s chronic health care needs, these services are offered separately with little to no collaboration. Working in silos often misses the most important part of the equation, the patient. With 80% of healthcare dollars consumed by 20% of the population with chronic diseases, identifying these patients and proactively preventing costs before they occur becomes a crucial step. By working in collaboration and identifying these complex patients, Veridicus Care Management is able to ensure patients are receiving an elevated level of care and that the plan sponsor is getting the most out of their health care expenditures. Our goal is simple. As health care professionals, we strive to improve patient outcomes and significantly reduce costs for both the patient and the plan. We know there is a growing need for management that is effective and coordinated as health care costs continue to rise year after year. 1

5 INTRODUCTION Health care spending in the United States continues to rise faster than the overall economy, wages, and inflation. National Health Expenditure Accounts data from 2008 reveals, as a nation, we spend more than $2 trillion per year on healthcare that is $7,681 per person. * Rising healthcare costs are commonly linked to chronic health conditions for which we spend over 75% of our budgeted health care expense. Sixtysix percent of employers say the most common challenge in providing affordable health care is providing coverage to all while managing the population that has these chronic conditions. ** Commonly, 80% of healthcare dollars are consumed by 20% of the population with chronic diseases as seen in Figure 1. *** BY THE NUMBERS More than $2 trillion per year spent on healthcare $7681 per person 75% of budgeted healthcare expense spent on chronic conditions 25% of Americans have 2+ chronic conditions As health care costs continue to rise, plan sponsors are faced with the challenge of effectively managing these alarming trends. The obvious solution is to focus on the top 20% of the population with the hopes of controlling costs realized by this small group of members. However, managing these patients effectively and identifying them before the costs are incurred is the real challenge. FIGURE 1 100% 80% 60% 40% 20% 0% 22% Top 1% (>$35,543) CONSUMPTION OF HEALTH CARE SPENDING 49% Top 5% (>$11,487) 64% Top 10% (>$6,444) 80% Top 20% (>$3,219) 97% Top 50% (>$664) 3% Bottom 50% (<$644) *AMA 2010 **GALLUP POLL 2011 ***AHRQ

6 IMPORTANCE OF CARE MANAGEMENT High-touch disease management often times does not get to the root of the problem with a member who has a chronic disease. Many companies offer separate services that fall short in managing complex patients. The services become fragmented and leave plan sponsors with the difficult decision of deciding which service will provide the most benefit to their members: Chronic Care Management (Disease Management) Care Management MTM Utilization Review Mental Health Management Chronic Care Management (also known as Disease Management) - This service offers high-level targeted mailings regarding chronic disease states as well as health coaching to targeted patients. Care Management by a Registered Nurse - This service provides support and guidance to patients by addressing their physical, emotional and psychosocial needs, access and barriers to care, and identification of medical problems. Medication Therapy Management by a Clinical Pharmacist (MTM) - This includes a complete review of a patient s medications. Utilization Review by a Registered Nurse - This includes precertification of medical procedures, supplies and medications. This is often the front line in recognizing a patient that has complex medical needs; companies only offering this service often miss opportunities to refer these high risk patients to a Care Manager for additional support. Mental Health Care Management by a Licensed Mental Health Provider - This includes the review of social and mental health issues and navigation of the system. This service alone is limited in addressing the chronic healthcare needs that often have negative effects on mental health. While these services are all integral to the management of a patient s chronic health care needs, these services are primarily offered separately with little to no collaboration. Working in silos often misses the most important part of the equation, the patient. 3

7 HOW VERIDICUS CARE MANAGEMENT IS DIFFERENT COLLABORATION Collaborative interaction with the patient is what makes the Veridicus Care Management (VCM) approach different. Our team-based approach is focused on interacting and empowering patients to take an active role in their health. Our health care specialists utilize motivational interviewing techniques to help patients understand their health conditions and the necessary steps to continue in the right direction. A literature review conducted by the Institute of Medicine found substantial evidence that programs providing counseling, education, information feedback and other supports to patients with common chronic conditions are associated with improved outcomes. * RIGHT PATIENT, RIGHT TIME Detecting health conditions with the potential for high-dollar costs is an important step in helping plan sponsors gain control over long-term health care spending. Our VCM model offers a program that helps plan sponsors do just that, both retrospectively and prospectively. We identify the high-risk populations who may need intervention now to prevent hospitalization, ER visits or other costly health care expenses later. This proactive approach uses mathematical models and tools to identify the right patient at the right time. THE VCM APPROACH Veridicus Care Management is delivered by an integrated team of registered nurses, clinical pharmacists, and mental health professionals. The VCM nurses are great in helping the patient maneuver through the healthcare system and find resources that they may not otherwise know about. Our nurses are also trained in case management and know how and when to work with individuals that require longterm assistance. The VCM clinical pharmacists are the medication experts, who hold a doctorate of pharmacy and are MTM certified by the American Pharmacists Association. Our pharmacists are respected healthcare professionals in the medical community. As such, they are able to have a true impact when making recommendations to health care providers on evidence-based changes in care. A recent study conducted on our Medication Therapy Management program revealed that 80% of recommendations made are accepted by the patient s medical provider. This acceptance rate far exceeds industry standards and provides a measurable return-on-investment to plan sponsors who participate in our program. The pharmacist not only addresses issues with medications *IOM,

8 such as adverse reactions and cost effective alternatives, but also spends time educating patients about their disease state(s) and assisting them to understand their goals of therapy. Collaboratively, the VCM team provides what is missing in care management programs a personal touch and accomplishes this while improving outcomes and managing costs for both the patient and the plan sponsor. VERIDICUS CARE MANAGEMENT PROCESS The VCM model uses predictive modeling developed from quality improvement measures and evidenced-based treatment guidelines. The goal is to identify not only high-risk populations, but also those patient s with gaps in care who have the potential to become high utilizers of the healthcare system in the future. By working in collaboration with the patient, family/caregiver, and the patient s health care providers, our team is able to improve the patient s overall health and well-being. Improved health status equates to direct and indirect savings for all stakeholders. 5

9 VCM Process Overview Bringing the entire care management team together eliminating gaps in care High risk patients receive collaboration eliminating confusing calls from multiple sources Collaboration meetings invoke discussion on complex patients and formulation of the best treatment option from multiple perspectives Member Identification Welcome Packet VCM Team Collaboration (Pharmacist, Nurse, Mental Health) Intervention Members are identified via the predictive modeling tool VCM system identifies patients based on patient complexity, risk, gaps in therapy and, potential for hospitalization and readmission Team approach allows for one point of contact for the member with an entire team of specialists providing advice and support Motivational interviewing empowers patients to take an active role in their care Education sent to Member Communication with Provider Results Improved Patient Outcomes Elevated Level of Care Effective use of Healthcare Dollars Reduction in Unnecessary Costs 6

10 HOW CAN VERIDICUS CARE MANAGEMENT DECREASE SPENDING? VARIOUS APPROACHES TO COST AVOIDANCE Chronic Care Management (Disease Management) MTM Mental Health Management Care Management Utilization Review Our VCM model saves health care dollars both directly, and indirectly. While it is recognized that plans who provide all of the above mentioned patient-centered functions continually provide superior service to their members, many organizations struggle with the cost and logistics of integrating the programs to work together. Veridicus Care Management directly reduces costs by integrating all of these programs into one complete package, thus reducing overhead costs and redundancy. Furthermore, VCM indirectly reduces costs by incorporating the clinical professionals (nurses, pharmacists, mental health specialists) into one care management model. This integrated approach has demonstrated proven cost savings by not only decreasing re-admission rates in high risk patients, but more importantly, identifying and interveing on patients before they fall into the high risk category. Our unique approach to preventative health care is not only beneficial to the patient in helping them understand the importance of taking an active role in their health, but also beneficial to the plan sponsor by preventing future unnecessary costs to the system. THE RIGHT TEAM, THE RIGHT TOOLS A recent retrospective analysis of the VCM model was conducted to evaluate the potential cost savings of this integrated care management approach. The analysis looked at interventions conducted by the VCM team for nearly 2,000 patients over the first 10 months of the program. Patients enrolled in the analysis consisted of a mix of both high-risk patients with acute care needs and also patients with chronic diseases that were found to have gaps in care and required intervention to prevent further complications. Over the course of the 10 months analyzed, the VCM program was able to avoid over $4 Million in costs to the plan. These results were due to the indirect cost avoidance of using integrated care management and the collaboration it inherently promotes. Upon further analysis, it was discovered that without the collaboration between the health care professionals, the cost avoidance to the plan would have been approximately half of the total savings. 7

11 VERIDICUS CARE MANAGEMENT TEAM TEAM STRATEGY Our qualified staff undergoes specialized training each year to better serve and engage every patient, motivating them to participate in their own health. Each VCM team member is certified in their respective fields of expertise with credentials that exceed national standards. TEAM MEMBERS NAME TITLE SPECIALTY Alisa Thomas, PharmD, BCPS VP, Clinical & Pharmacy Services Clinical Pharmacy Alex C. Bitting, PharmD Clinical Pharmacy Manager Clinical Pharmacy, Managed Care Alan Pannier, PharmD, MBA Clinical Pharmacy Resident Clinical Pharmacy Jonathan W. Magness, PharmD MTM/VCM Clinical Pharmacist Clinical Pharmacy LeeAnn Madrid, PharmD MTM/VCM Clinical Pharmacist Clinical Pharmacy Cathryn Passey, RN, MSN, CCM Nurse Care Manager Pediatrics, adult medicine, pain management, transplant, behavioral health Cindy Jones, RN, BSN, CMCN Nurse Care Manager Oncology, chronic diseases Michael Adamson, LCSW Licensed Social Worker Mental Health Polly Grizzell, RN Nurse Care Manager Critical care, transplant, utilization management, chronic diseases Richard Smith, RN, BSN Nurse Team Lead Utilization Review Talleatha Silversmith RN, BSN, BSPE, CCM CONCLUSION Nurse Care Manager Catastrophic illness or injuries, chronic diseases With Veridicus Care Management you can experience a new and innovative approach to health care. The VCM team is dedicated to assisting both the patient and plan sponsor achieve their clinical, economic and humanistic goals. We know a win-win is possible and we provide the means to do so. There is a better way to manage healthcare services than the current model and it starts with collaboration. By working together, we are able to fill the gaps in care leading to improved patient outcomes and more effective managed care. 8

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