Integrated medical management: setting a clear strategy and driving results

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1 This article is an extract from Performance, Volume 7, Issue 2, May The full journal is available at Integrated medical management: setting a clear strategy and driving results The goal of medical management, an emerging discipline within the health care sector, is to integrate the distinct processes of case management, disease management and utilization management, thereby achieving better clinical outcomes and reduced costs. We offer insight into a disciplined, structured approach that will help give health care providers a clear, integrated medical management strategy, an efficient operating model and technology enablers that will enable them to realize the full benefit of their investments in this new field. 44 Volume 7 Issue 2

2 This article is an extract from Performance, Volume 7, Issue 2, February The full journal is available at Authors Samuel Hughes Principal, Strategy, EY, US Katie Kramer Senior Manager, Federal Health, EY, US 45

3 This article is an extract from Performance, Volume 7, Issue 2, May The full journal is available at Integrated medical management: setting a clear strategy and driving results Jumping into execution without a clearly defined strategy risks suboptimized investments at best, and an organizational rejection of the concept at worst. The core idea is that this integrated approach will position the right health care professional at the right time with the right treatment. TThe term medical management is not specifically and uniformly defined in the health care field, but generally, it refers to the integration of three specific disciplines case management, disease management and utilization management supported by population health and referral management activities (see Figure 1). The core idea is that this integrated approach will position the right health care professional at the right time with the right treatment. Patient satisfaction is also a key outcome, with the goal being that they feel their time is better utilized, their treatment is more effective and their overall experience is more positive. The vision of a truly effective medical management model is that tighter integration of these disciplines supported by new processes, technology and organizational roles will improve overall health care outcomes while also driving down costs. The ability to simultaneously provide better care and lower average cost Figure 1. The activities and disciplines of medical management Population health management helps assess the continuum of care. It involves the stratification of patients into risk groups and the creation of care strategies based on each group s needs. Its goal is to reduce costs by preventing illness, improving quality of life and enhancing health outcomes for those suffering from chronic conditions. Integrated referral management is a model for directing, monitoring and controlling patient referrals with the aim of achieving the most clinically driven and cost-effective outcomes. It involves a streamlined process and standard workflow to manage the life cycle of patient referrals. Its goal is to optimize the referral process, drive patient accountability and minimize disruptions. Population health management Case management Medical management components Utilization management Disease management Integrated referral management Case management is a collaborative process that assesses, plans, implements, coordinates, monitors and evaluates options and services to meet an individual s health care needs. Disease management is a system of multidisciplinary efforts focused on improving the quality and cost-effectiveness of care associated with chronic illness. Utilization management is a coordinated set of techniques focused on balancing health care resources in order to provide patients with the right care at the right time. 46 Volume 7 Issue 2

4 This article is an extract from Performance, Volume 7, Issue 2, February The full journal is available at Figure 2. The medical management approach Population health management Case management Disease management Utilization management Integrated referral management Strategy Environment Current state Scope Strategic objectives Initiatives Outcome metrics Operating model What is our space? Process model How are we organized? What is our starting point? Organizational structure What are our organizational roles, spans of control and reporting lines? Where do we or should we play? Technology infrastructure What are our key technology capabilities? What do we need to accomplish? Operating locations What is our operating infrastructure? How do we get it done? Governance structure Who has decision-making authority? How do we know if we are successful? Performance metrics and accountability How is performance defined and measured? Performance and change management Standard operating procedures Responsibilities and competencies Training and education is enabled by processes, technology and analytics. For example, predictive data elements, combined with tighter patient communications and scheduling, allows for earlier interventions and better, cheaper care. Intuitively, this approach makes sense to patients, providers and administrators, because high-quality, cost-effective health care is dependent on patients interacting with the right health care professionals at the right times to treat the right issues. But in today s environment, it s widely understood that health care faces extraordinary challenges, both external and self-imposed, when it comes to attacking problems in a holistic, integrated manner. A huge amount has been written on the process, technology and organizational issues that inhibit integrated health care solutions lack of standardized electronic health records, distributed-provider care models and unclear cost parameters are just a few of these fundamental issues. It is within these constraints that the medical management discipline needs to operate, creating unique challenges for health care providers as they evolve and develop this capability. Recognizing the opportunity presented by medical management, many health care organizations have invested in disparate, tactical solutions such as redesigning clinical operations workflows, creating new standard operating procedures or implementing new training classes. These tactical efforts are usually met with mixed success. Too often, medical management investments are not driven by a clear, integrated strategy. As a result, to use a medical analogy, it is the symptoms that are being treated rather than the patient as a whole. The remainder of this article outlines a path forward for organizations that are looking to embrace the full potential of integrated medical management and ensure the changes they make will stick. 47

5 This article is an extract from Performance, Volume 7, Issue 2, May The full journal is available at Integrated medical management: setting a clear strategy and driving results How Navy Medicine implemented its Care Management strategic vision To prioritize and implement strategic initiatives relative to its Case Management Program, the Bureau of Medicine and Surgery, Care Management Directorate proactively took steps to develop a formal plan and road map to define the program objectives and align the program direction with its leadership s focus for change priorities. This effort culminated in a two-day strategic visioning session in which key leaders, both internal and external to Navy Medicine (e.g., Defense Health Agency (DHA) and Veterans Affairs (VA)), came together to help define and shape the program s future state. This strategic plan served as a critical component of the program s success, as it clearly defined the prioritized initiatives and future-state outcomes. It also served as a key change management enabler by aligning leadership and stakeholders to the mission and objectives, while also ensuring alliance from other organizations going forward. The importance of a strategic approach If medical management is to be a core capability within complex health care systems, it will require strategic transformation of systems, processes, data, organizational roles and performance metrics. Given the scope of this change, and the potential for material clinical and financial benefits, organizations need to approach this as a strategic management problem that requires rigorous planning. Jumping into execution without a clearly defined strategy risks sub-optimized investments at best, and an organizational rejection of the concept at worst. A tightly focused strategic plan is an invaluable tool to get an organization focused on delivering large-scale, medical management change. Such planning exercises have many forms but, at a minimum, should include the following components: Environment scan what are other health care providers doing in this space? How are patient needs and preferences changing? Current-state review what is the organization s starting point and level of maturity in key medical management processes? 48 Volume 7 Issue 2

6 This article is an extract from Performance, Volume 7, Issue 2, February The full journal is available at Figure 3. Operating model framework 2 The complexity and cost of a major transformation combined with what is often an unclear organizational vision regarding the purpose, scope and objectives of medical management require a disciplined approach to investment priorities and timing. Low Process integration High Coordination Operationally unique business units Shared customers, services or suppliers drive the need for integrated data standards across the organization Business unit control over process design Management company Diversification Operationally unique business units Few shared customers or suppliers with limited need for data standards across the organization Business unit control over process design and IT application decisions Holding company Low Process standardization Unification Globally integrated business processes, often with the support of enterprise systems Shared customers, services or suppliers Standardized processes designed by designated process owners Operating company Replication Operationally similar business units Few shared customers Autonomous business unit leaders with limited discretion over process design Centralized control over process design and IT services Franchise company High Scope where should the organization focus efforts for change and, just as importantly, what areas are out of bounds? Objectives what needs to be accomplished, and how will the organization operate or differ when the objectives are achieved? Initiatives how do we chunk up the work into manageable projects and when can they each be completed? Outcome metrics how will we quantitatively know if the organization is successful? 1. J. W. Ross, P. Weill and D. C. Robertson, Define Your Operating Model, chapter 2 in Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, (Harvard Business Review, 2006). 2. Framework adapted from J. W. Ross, P. Weill and D. C. Robertson, Define Your Operating Model, chapter 2 in Enterprise Architecture as Strategy: Creating a Foundation for Business Execution, (Harvard Business Review, 2006). Defining the operating model Once the strategy has been clearly articulated, the next step is to define the medical management operating model. The term operating model is one that can have very different meanings to different people but, in this context, the operating model should define the operational infrastructure through which the strategy will be executed. By specifying the operating model, an organization is committing to a way of doing business both today and tomorrow, while also setting the parameters for future people, process and technology investments. Many health care organizations still do not formally design their operating models, focusing their planning energy on budgeting or strategic planning. However, research indicates that organizations with a foundational, clearly defined operating model report significantly greater performance across a range of outcome metrics, including operational efficiency, customer intimacy, product or service leadership and strategic agility. 1 In the context of medical management, the end goal is an operating model with highly standardized processes (e.g., executing clinical pathways with minimal unwanted variation), but also highly integrated processes (e.g., clear hand off of patient data from one care delivery team to another). This presents a huge shift for many health care organizations with distributed facilities that operate with relatively low levels of process standardization and integration. In effect, many health care organizations are moving from the bottom left to the top right of the matrix shown in Figure 3. 49

7 This article is an extract from Performance, Volume 7, Issue 2, May The full journal is available at Integrated medical management: setting a clear strategy and driving results Reducing costs and improving the customer experience At a prominent commercial integrated delivery system (IDS) organization, health care was siloed, and the organization wanted to simplify population management and improve the customer experience while reducing operating costs. By developing a new operational strategy, implementing a system that allows one nurse to have a complete overview of the patient, and designing and implementing data analytics and reporting that provide insight into member demographic trends, the organization was able to: Reduce operating costs by centralizing member care delivery Improve patient care, since the primary nurse could now see all aspects of it, from medical history and lab results to prescriptions Enable the proactive identification of members at risk of chronic illness (such as diabetes, asthma or smoking) via the Population Health Management system, thus allowing early enrollment in disease preventive wellness programs 50 Volume 7 Issue 2

8 This article is an extract from Performance, Volume 7, Issue 2, February The full journal is available at Executing this shift requires a blueprint for the operating model that describes how the strategy will be implemented in the following areas: Process model how will processes be aligned in support of patient outcomes? Organizational structure what new roles are required and what are the appropriate reporting lines? Governance where will the decisionmaking authority reside for each process within the organizational structure? Technology architecture what new data, systems and interfaces will be required to support the process model? Operating locations what activities will be performed and where, and will any new locations or facilities be required? Performance metrics how will we monitor the processes and then hold people accountable for results? Execution enables implementation success With a clearly defined medical management strategy and operating model, investments in operational capabilities can be built within the context of the broader vision and plan. This is because there is a greater understanding of the medical management architecture and the organizational home for new capabilities. As a result, there is a much greater chance of implementation success, with strong return on investment. Ultimately, medical management is executed at the frontline of health care delivery. As such, implementation requires detailed standard operating procedures (SOPs), roles and responsibilities, skill profiles, and a robust training and education program. Position descriptions will also be required for new roles, which may be filled from existing resources or new hires into the organization. Real change, measurable results When done correctly, an integrated medical management model of clinical pathways represents a breakthrough in how health care organizations optimize the disciplines of case management, disease management and utilization management to drive improved clinical outcomes, lower costs and a better patient experience. But health care providers should be cautious about the ready, fire, aim approach with major medical management investments. The complexity and cost of a major transformation combined with what is often an unclear organizational vision regarding the purpose, scope and objectives of medical management require a disciplined approach to investment priorities and timing. An integrated framework that clearly defines the medical management strategy, operating model and execution components will set the foundation for real change with measurable results. The vision of a truly effective medical management model is that tighter integration of these disciplines supported by new processes, technology and organizational roles will improve overall health care outcomes while also driving down costs. 51

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