Automation, collaboration deliver higher cost savings

March 1, 2012

A new urgency for collaboration is breathing new life into old concepts.

Utilization management (UM) processes transitioned from retrospective utilization review in the 1980s to prospective review in the 1990s. Because of the sentinel effect of early prospective programs, payers no longer review many services but do continue to manage high-cost services such as imaging and molecular diagnostics.

Also, payers and hospitals have continuously used evidence-based clinical criteria to help ensure unneeded or inefficient care is avoided. However, from the practitioners' point of view, UM means oversight of their medical practices as well as a drain on time and resources.

A more collaborative approach to UM changes the dynamic between payers and physicians and enables better, quicker processes. Automation can provide evidence-based decision support at the point of care for a range of services that includes acute care, procedures, imaging and specialty drugs.

Add access to medical policies and information about which providers are in-network for a particular patient at the time the physician and patient are making a decision, and you dramatically increase the power to influence quality and cost. Everyone wins: More consistent and better decisions improve outcomes, automated approval for most requests lowers the hassle factor for physicians, and an easy way to identify in-network providers lowers costs for payers and patients.

Another concept being revisited is bundling payment for episodes of care, the goal of which is to encourage care team coordination around evidence-based best practices and improve clinical and financial outcomes. Our industry has long discussed payment reform, agreeing that payment for value, not volume, is the desired goal. The question has been, with the complexity of interconnecting process and the need for buy-in from so many different stakeholders, how do you encourage effective care management through value-based reimbursement?

Early attempts to bundle payments for episodes of care were rife with problems. Manual processes were inefficient, preventing scalability and impact. Capitation without monitoring of quality, access and patient experience-call it "cap and run"-was the norm. Payers set goals, such as reducing the cost of a specific procedure by 5%, and providers were left to figure out how to meet them. There were no standards or technology to adjust risk or measure quality.

Here, too, automation and collaboration are driving progress. New technologies automate episode definitions and analytics that reflect 30 years of stakeholder agreement around quality metrics, reinforcing best practices and care coordination while addressing scalability issues. Together, these advances and a willingness-truly a need-to collaborate have helped bundled payment move light years beyond its early attempts, to the point where it is now viewed as one of the most promising payment reform strategies.

Which combination of approaches will prevail is not certain, but one thing is: Progress depends on all healthcare stakeholders working as an ensemble, supported by technology.

David K. Nace, MD, is vice president, medical director, for McKesson Corporation.