Académique Documents
Professionnel Documents
Culture Documents
Author:
The Details
In the wake of healthcare reform, administrative cost cutting has been a primary strategy deployed by healthcare payers as a result of caps put on how fast payers can raise premium rates and new compliance costs associated with implementation of the ACA. However, administrative cost cutting alone is not a sustainable fix. Administrative costs account for only 15% of the total medical loss ratio (MLR) for large plans and only 20% for small plans. Therefore, while Healthcare organizations have aggressively focused on reducing the administrative cost side, it only represents a small part of a much larger problem. Today with the advent of the challenges and opportunities posed by Big Data, the introduction of accountable care organizations (ACOs), and the governments greater scrutiny on the value of healthcare services, HfS sees a robust opportunity to address the medical cost side of the healthcare equation, and unlock greater value by creating new ways for patients to engage in the management of their health.
Care Management | 2
and their customers, if executed effectively. Ambitious healthcare organizations need to see that the time is now to jump on the care management bandwagon if they want to lead in this evolving market.
$10-20B 5% $5B-$10B 3%
$20B+ 13%
<$1B 24%
$2.5B-$5B 31%
Source: HfS Healthcare Payer Blueprint 2013 The above charts illustrate that care management services are being delivered to organizations primarily with above $1B in revenues. The sticking point is that more of this type of work will be needed. HfS estimates a CAGR of 7.9% growth in the medical management function through 2017. Also, about 30 million more people will enter the healthcare system over the next few years, so the opportunity to help healthcare buyers is significant.
Care Management | 3
What to Watch
HfS will be looking for payers to recognize that care management could be utilized as a catalyst to not only
create a value additive service value for customers, but also increase brand perception and create a customer facing company. Increasing care management services to customers helps to stem the B2B mentality associated with payers today. Care management services could also be used down the line by healthcare providers as well by helping providers do their job better, they can become advocates of payers and help build brand recognition with their own patients. Healthcare providers can be powerful allies in the rapidly changing healthcare insurance market. For buyers, care management is going to be the place to be for creating a brand and helping consumers better manage their health helping to solve the B2B to B2C issue for healthcare payers and increasing the overall value of healthcare delivery services.
HfS will be looking for service providers to extend and broaden their care management capabilities and
offerings. Care management services represent a relatively untapped opportunity to help both payers and providers increase productivity, improve patient satisfaction, and create better outcomes for patients through increasing efficiency of operations and increasing the use of analytics. Service providers have a wealth of experience in continuous improvement methodologies and utilizing analytics to drive results, so now is the time to jump on the care management services bandwagon and help payers become true B2C organizations.
Care Management | 4
Care Management | 5