5 strategies for health plans to improve their bottom line
February 1, 2014
Four are easy, but one is not so easy
DeltaSigma Healthcare Consulting in Littleton, Colo., has found the most-overlooked opportunities for plans to boost their margins in healthcare’s changing landscape. Growth can come from several market strategies, but plans must keep in mind that diversity is becoming increasingly important.
Review your Medicare risk scores and compare them to the actual risks presented. You might be missing out on revenue. Plans that close the gap between actual and potential capitation could realize Risk Adjustment Factor increases. Also, assess the 2014 CMS blended model to determine the impact on your risk score, which translates to future revenue. Have an outside risk adjustment firm review your claims to make the match against your data. Consider home visit assessments to identify the needs of high-risk members, which is especially effective when integrated with care management outreach.
PBM contract review
It’s likely your pharmacy benefit has hidden savings, even if you’ve just completed your contract with your pharmacy benefit manager (PBM). The marketplace for PBMs is extremely dynamic with frequent changes in discounts, trends and formulary management. A thorough contract review can identity potential cost savings prior to any engagement. Look for metrics to ensure the PBM is performing at its fully contracted terms and is bringing clinical and pharmacy trend management strategies to the table. Your PBM should be providing cost-saving ideas on a regular basis.
Integrated care management
Research has demonstrated behavioral health issues have a direct effect on separate outcomes for comorbid conditions. A significant number of health plans still maintain separate medical and behavioral protocols. Integrated programs offer powerful synergy and can result in return on investment of 2-to-1 or more. Those with multiple chronic illness and behavioral health issues might only represent 10% of a population but often account for 35% of the spending or more. Members might be difficult to identify and engage, especially with new Medicaid enrollment in 2014. Make sure your plan is prepared to engage members in care management.
Benchmark your performance
Compare your medical and administrative costs to similar plans. A benchmarking assessment can be an effective evaluation approach to identify issues that are unique to your plan, your community or your market. Many of your competitors take advantage of operational benchmarks, MLR benchmarks, staff performance and productivity assessments. Don’t forget to analyze your IT, as data is increasingly becoming a competitive advantage. Look for opportunities to improve your efficiency and optimize administrative processes.
Create a sales culture
This strategy is a bit more difficult than the other four. For a surprising number of plans, the idea of “selling” is relegated to the marketing department. While it’s important to grow membership, the separation ignores the importance of creating an organizational culture in which growing and retaining membership is part of your firm’s DNA. A comprehensive approach starts with a meaningful description of what your plan stands for. From there, embed your mission and vision into every aspect of the organization from job descriptions to marketing materials. A sales culture is not high-pressure sales, but rather it’s “walking the talk.”