Convergence In Healthcare

Transcription

1 White Paper Convergence In Healthcare Foreseeing a Greater Good Frank M. Roby, CEO Averify February 2015

2 Table of Contents Introduction 3 Preparing for Convergence 3 The Employer dilemma 4 About Averify 5 Convergence in Healthcare: Foreseeing a Greater Good 2

3 Introduction Healthcare Convergence: The process of aligning currently divergent healthcare actions through a cohesive set of standardized delivery system metrics in order to realize optimal patient and financial outcomes. Analytics must lead the convergence in healthcare. Realizing convergence alignment is contingent upon the speed that raw data yields actionable insights. Today, accurate real time interpretation of data must be viewable at any time and seen interdependently from multiple perspectives. Silos of information, in static single tenant formats, are too slow, costly and vague to keep up with the pace of change. A cloud based SaaS structure that provides every user with the latest version can simplify customization and enable the robust reporting required today. Preparing For Convergence The force behind healthcare convergence is rooted in the market variability caused by market demands for steep discounts (as a percentage) and broad access to providers. The result of this squeeze play was highly variable billable charges and other moves by all parties to source revenue. In turn, this created variability in contract rates and by association, claims cost. We believe this cost of variability can be as high as 25% of total claim cost based solely on how covered members access their healthcare plan and providers. Network discounts work, but not alone. Ironically, to prepare for this convergence, employers must first survive even more fragmented offerings due to innovation; niche solutions that address specific weaknesses in the delivery system. While these niche networks solve some problems, they complicate plan management. Metric standardization is required to restore order and realize dramatic improvements in cost and quality. The beginning of alignment from today s fragmenting system is coming through the key metrics of transparency, capacity, quality and collaboration. Each metric will dramatically improve care and reduce cost once definable and delivery systems align around them. Here are just a few examples: Price transparency will mature beyond CPT codes and expand to procedure costs through bundled pricing and direct contracting Mobile apps and communication hosting services will track hundreds of procedures including price and outcome metrics from competing delivery systems, enabling the patient to access choice and document their out of pocket cost under a reference based price cap system. Collaboration between providers is improving quality and will soon reduce redundancy. Newly formed ACOs and AHOs are both administrator and provider, enabling the connection of claim data to clinical data. This access will realize value in compliance of care plans and better predictive modeling capability. Outcome based compensation for providers will proliferate and traditional networks will cross-over through alliances to achieve the same result. Convergence in Healthcare: Foreseeing a Greater Good 3

4 Centers of Excellence are proving carve-out procedures can improve quality and reduce costs and will broaden their scope of services to include comorbidity patients. Efficiencies in capacity, like smartphone apps that track home based medical tests and services that book physician office visits 24/7, will reduce costs of services and improve access. On-site clinics can save money, but will soon learn to leverage the eco-system of care, extending savings beyond the clinic doors while improving quality. Conversely, exchange plans now flooding the marketplace will not create sustainable pricing advantage or participation until their underlying delivery system is sustainably aligned on cost and quality. There will be no automatic winners that control tomorrow s healthcare system. Instead, optimal network performance will be based on influence. Thus, convergence is a race to performance-based influence. The Employer Dilemma The challenge for employers is that these successes are not yet integrated into their company-wide delivery system. To an employer, everything that happens in healthcare is a distraction to their core business. While innovators seek to create disruptive technology, employers seek order. This is why analytics companies must deliver actionable insights that continuously optimize network performance assuring purposeful, rather than unchecked, disruption. While data employers receive may be more prevalent, it will be less insightful if it does not identify variability cost and actionable insights, including managing disruption. Employers can only effectively implement change when they can: 1 Set end goals 2 Identify key steps 3 Form new employee habits The employer dilemma is that the process of convergent alignment is evolutionary, which is more difficult to accommodate at the employee level. Not only are the changes in delivery systems and technology happening, but corporate structure is changing competition, partnership and ownership as well. Employers and their consultants must act purposefully. Metrics for transparency, collaboration, capacity and quality can only be implemented as they are developed. Change must be precise, managed and monitored. Convergence in Healthcare: Foreseeing a Greater Good 4

5 About Averify Averify is a SaaS healthcare analytics company whose purpose is to reduce cost through reduced delivery system variability. Our Variability Cost Index acts as a dynamic model that illuminates savings opportunities through five layers of cross measurement, thereby directing delivery system structure toward optimal network performance. Averify generates actionable insights and decision process logic to guide orderly delivery system transition. We serve large self-funded employers and their advisors, as well as healthcare delivery systems that seek data centered insights into the convergence transition. The Index literally allows a customer to dial its tolerance for variability to a desired level based on its balance of priorities between its two resources people and money. It is always available in real time, fluid enough to provide instant answers to questions and simple enough to use a single measurement to summarize plan performance; all for the purpose of navigating through todays changing environment. We believe our mission, analytics for the greater good, is required today because healthcare has such a profound effect on America s social structure. Three million companies and their employees 1 will spend a cumulative $1 trillion covering almost 150 million people 2 who live in over 40,000 zip code areas 3 and who are billed for over 60,000 separate billed medical expense codes 4 ; too much diversity for a single payer system that would crush innovation and too variable for competitive divergence to survive without alignment. Averify is the independent analytics company dedicated to building the bridge that supports unbiased delivery system decision-making and respects fair practices for all parties. Information made actionable. Performance made verifiable. Transition made orderly. To learn more about Averify, please visit References Systems/ICD-Coding/ICD-10-Changes-from-ICD-9.html Averify, LLC Dallas, Texas info@averify.com Convergence in Healthcare: Foreseeing a Greater Good 5 Averify, LLC All Rights Reserved. WP M