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Managed Care – a Path to the Future


Though value-based care is a critically important topic today, the question of—and obsession with—healthcare value goes back more than half a century.

Though value-based care is a critically important topic today, the question of—and obsession with—healthcare value goes back more than half a century.

Looking Back

When President Lyndon Johnson signed Medicare and Medicaid into law in 1965, he turned the federal government into the country’s largest healthcare payer. As such, the government quickly began trying to ensure its money was well spent. With Medicare and Medicaid costs climbing faster than predicted, the government created Professional Standards Review Organizations in 1972 to review the quality, quantity and cost of care. These organizations evolved over the years and still exist as Quality Improvement Organizations today.

Still, healthcare costs spiraled, as national health expenditures grew from 5.3% of gross national product in 1960 to 9.5% in 1980 and 17.7% today. HMOs were introduced under the Nixon administration to stop this spike, while commercial insurers also sought ways to contain costs and increase value. Accordingly, managed care organizations—which employ or contract with providers to deliver care to defined groups of people as an alternative to fee-for-service care—grew in popularity. Today, managed care is the predominant form of healthcare in the U.S.

Present Day Issues

Despite MCOs’ efforts to improve the quality of care delivery over the past four decades, the value-based care revolution that was supposed to usher in a new era of better, cheaper healthcare has not materialized. While healthcare spending in the U.S. has steadily climbed and now accounts for nearly a fifth of GDP, Americans nonetheless suffer from a higher rate of chronic diseases compared to people in other wealthy, industrialized countries. Even worse, the U.S. ranks dead last among peer countries when it comes to health care access and quality.

Today, the issue of value-based care has accrued renewed urgency as the COVID-19 pandemic has illustrated systemic deficiencies and introduced unprecedented financial pressures. After years of offering voluntary value-based care programs that involved minimal risk for providers, the Centers for Medicare and Medicaid Services is moving forward with initiatives that increase providers’ downside risk.

Future Solutions

To succeed under this new paradigm, healthcare leaders must expand their focus from merely data and measurement. HEDIS (Healthcare Effectiveness Data and Information Sets) is critically important, but it must be complemented by a focus on workforce development and increasing teams’ quality competencies. Specifically, leaders must clarify and validate the knowledge and skills that each health care role must learn to successfully shift to outcome-focused care.

Three areas of competency are especially important for managed care:

Population Health and Care Transitions: MCOs do a great job of monitoring and reporting their prevention compliance rate. But do the teams responsible for reporting the measure interact with the teams responsible for improving the rates? Do care management teams have a clear process to move the needle on wellness and prevention measures? Across the organization, teams must have shared quality goals, aligned work plans and robust collaboration to realize improved population health.

For example, HEDIS scores reflect compliance with prevention measures, such as scheduling flu shots, mammograms and annual physicals—all important elements of population health. However, in traditional reporting structures where vertical silos prevail, providers, pharmacy workers, health system call centers and care management teams all try to reach these goals separately. To improve, health care leaders should look for ways to create horizontal integration and collaboration. For instance, when a patient calls to get an updated membership card, call center workers should be empowered to help them schedule a flu shot or preventative care appointment, as well.

Healthcare Data Analytics: Managed care’s emphasis on reporting and measurement has historically resulted in a tremendous amount of work to collect and collate huge reams of data from disparate sources. In fact, some health plans shell out well over $1 million annually to produce a HEDIS report that requires paying a vendor to print EMR records and upload them to another location for analysis—a costly, inefficient method that should have no place in today’s technologically enabled world.

Managed care providers are beginning to recognize the opportunity for ROI that comes from supporting practitioners’ back-end systems. Investing in IT capabilities—along with teaching employees how to use new systems to generate reports and analyze data—would streamline the process of collecting electronic clinical quality data. Better systems, better data and people better trained in using them will go a long way toward creating better outcomes and strong partnerships between MCOs and providers, all at a lower cost to execute.

Quality Review and Accountability: The good news is that MCOs have created standard business practices around collecting data related to quality and value-based care. For example, pharmacists from MCOs receive report cards related to medication adherence, which track how accurately patients are refilling and taking their prescriptions. Data collection and analysis is an excellent first step, but then what?

If healthcare professionals don’t have the skills to implement improvement plans, then the insights are meaningless. As downside risk contracts proliferate, MCOs must be able to not only accurately collect performance reviews, report cards and other measurements, but also to conduct root cause analyses to determine the “why” behind the scores and move from measurement to improvement.

Value-based care is here to stay. By developing specific competencies in quality, population health, care coordination, data analytics, governance and care delivery, MCOs can empower their workforces to meet the challenges and opportunities presented by this new model—and ultimately improve health care outcomes for all.

Patricia Kirkpatrick, MJ RN CPHQ, is director of Quality and Performance Improvement at Prospero Health, and NAHQ Board Member, Secretary/Treasurer.

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