Targeting populations at highest risk: IT delivers a 2:1 ROI for Midwest health plan - What works: disease management

Health Management Technology, Sept, 2003

All managed care professionals understand that 5 percent of a health plan's members generally account for 50 percent or more of total medical expenditures. What is less well understood is that within this group, there is a highest-risk segment--1 percent or less of the total population--that typically accounts for 20 percent to 30 percent of all costs. On average, these highest-risk members cost about $3,000 to $4,000 per member per month (PMPM), 20 or more times the overall average for most health plans. Several years ago, our health plan set out to improve its care and reduce these costs.

PROBLEM

Established in 1985 by the physicians of the Arnett Clinic (itself founded in 1922), Arnett Health Plans is a locally focused, physician-involved health plan headquartered in Lafayette, Ind., that serves 63,000 members.

Traditional case management at Arnett was not effectively reaching our highest-risk, highest-cost members. We were identifying members for case management based on concurrent review of inpatient cases, combined with assessing claims to find catastrophic cases with high incurred costs. But, as we say in Indiana, at that point, the horse is already out of the barn. Thus, our problem was how to precisely target and then manage potentially highest cost members prospectively--before they generated such dramatically high costs.

SOLUTION

In 1999, there were no real alternatives for Arnett to consider. StatusOne Health Systems of Westborough, Mass., was the only company we found that had developed a sophisticated data analysis methodology to prospectively identify members at greatest risk for generating high costs in the near future. We chose its CareLink solution.

CareLink has two basic components: the creation and monthly updating of a registry of highest risk members, and software tools for managing their care. The process begins with preparation and transmission of encrypted I files, with a comprehensive claims history for all eligible members, to StatusOne. Data fields include member demographics and diagnosis and procedure codes. StatusOne runs the data through its sequence of proprietary algorithms that distinguish patterns suggestive of potentially worsening conditions, likely complications and predictably high costs.

The patterns include all diagnoses, places of service, orders of services, certain absences of services and, finally, prescriptions. Members' patterns of care are run against a predictive model. The model stratifies the population into a set of chronic condition indices that correspond to between 12 and 15 major chronic illnesses and long-term conditions. This analytic process to establish a registry prospectively targets about five to six members per 1,000 (around 0.5 percent of a plan's population) with the highest predicted, subsequent-year PMPM costs.

The registry is updated monthly. The registry and case management tools reside on a server at a secure location and are accessible only through user authentication and secure, encrypted transmissions over the Internet. Our users, whom we call "personal care coordinators," access the registry and the working tools for designing and implementing care plans over the Internet on an ASP platform, which makes it easy to implement and maintain for Arnett.

IMPLEMENTATION

No highest-risk member-identification methodology or segmentation strategy, however accurate and timely, can achieve bottom-line clinical and financial results unless the process and content of care are changed for the better. StatusOne offers two alternatives: Its nurses can manage the highest-risk population telephonically, or a health plan's own nurses can take on this task.

One of the advantages of the size of our plan is that we can efficiently and effectively manage our highest-risk population ourselves. Moreover, since Arnett is a local health plan owned by local physicians, we saw an opportunity for our coordinators to work directly and closely with physicians. We chose the second alternative.

We define, develop and implement care plans in a member-centered manner. Plans are based on priorities and goals important to each individual highest risk member. As a unique feature, Arnett's coordinators meet face-to-face with members identified in the StatusOne registries. In fact, for 50 percent of the members we manage using CareLink, our coordinators meet with members during their office visits with physicians.

Not every health plan can implement highest-risk population management in this very direct and highly personalized way. For Arnett, it has proven to be a great success. It conveys to members that their health plan is genuinely interested in their care and improving their health. Also, it has enabled physicians to quickly learn how the coordinators can assist them in the care process with their most challenging patients.

Arnett began our CareLink implementation in September 1999. Initial implementation required about eight weeks and was completed in November. StatusOne trained our personal care coordinators on CareLink and on communicating with and managing highest-risk members.