At a recent healthcare summit panel discussion in Oklahoma City, I was asked, “why aren’t health plans and providers not embracing proactive care management?” The question totally took me by surprise. The subtext of the question implied that the benefits of proactive care are obvious, and the concepts involved are quite simple to understand. So why isn’t every organization that is participating in a value-based healthcare prioritizing proactive care?
I’ve been thinking about this question since that day. I thought through all our experiences with different payer and provider customers. I tried to compare the accounts that made a successful transition to value-based care versus those that failed at an early stage, or those that failed to successfully scale up after a pilot stage. I came up with 4 reasons why organizations fail during the transition to value-based care.
1. Most healthcare provider organizations aren’t taking significant downside risk yet.
Medicare advantage plans and Medicaid MCOs are more likely to prioritize and invest in proactive care, because without proactive intervention, they risk significant financial loss every single time a member seeks sick care. Organizations with value-based contracts that include down-side risk similar to CMS Pathways to Success ACOs, need to adopt the same mindset: “by allowing preventable events to occur, we are losing money.”
2. “Healthcare leadership approach to Cost Containment is too conventional”.
According to recent Kaufman Hall Report “2018 State of Cost Transformation in U.S. Hospitals and Health Systems: Time for Big Steps”, leadership teams in healthcare market are far too timid and risk-averse in their approach to cutting costs. They are still expense management driven. They are using old, tired tools in the hopes of solving new, complex problems.
2018 Kaufman Hall survey,
70% of executives cited the need to prepare for transition to value-based care as their top cost transformation driver. But only 15% said the organization is “very prepared” to manage evolving payment and delivery model with current financial planning process and tools
In 2016, I met with the VP of Care Management managing a Medicare Advantage population and presented the customer results executing on proactive care management to prevent avoidable ER events and Rising Risk populations. She categorically dismissed stating “Proactive Care Management will never work, and only post-discharge case management delivers on ROI”. Fast forward 2019, they are no longer in business as they kept losing market share and losing monies year over year.
Lack of leadership vision and buy-in leads to prioritization challenges for competing projects. Proactive care will not work as a one-time project. Everyone must prepare for a 2-3-year commitment to that goal. To succeed in a future that’s sure to be marked by disruption, it’s going to take a new mindset and willingness to go well beyond the traditional areas of cost focus.
3. You don’t know how to measure cost avoidance
Proactive care management is difficult and challenging to execute on. To understand how to measure proactive care (at a member level) and preventive care (at a population level), one must grasp the concept of cost avoidance versus cost reduction.
“When you do the proactive management work, you’ve got to be able to identify the problems, but also track them and measure them” Said Lane Robinson MD at Kaufman Hall.
This truly is the dirty little secret of proactive care is that most organizations have no clue how to measure cost avoidance, and if you can’t measure it, you can’t take credit for it. Cost avoidance should include savings due to preventing avoidable ER events, readmissions, and unnecessary diagnostic tests.
4. Lack of a Game Plan.
Your analytics, strategies, work flows, processes, and infrastructure need to be reconfigured as your business transitions focus into proactive and preventive care to succeed in value-based care. Here’s some areas that I recommend that you pay close attention to:
- Invest in data infrastructure. Proactive care must be a data-driven process. If you don’t trust your data due to system inaccuracies, you won’t be able to get off the starting block.
- Predictive Analytics: Partner with a vendor with significant experience in predictive analytics for the healthcare market. They need to provide you actionable predictive and prescriptive insights that you can trust and execute on. Don’t confuse risk stratification with predictive analytics.
- Proactive care workflow integration and member engagement strategies are different compared to reactive utilization management approach. Proactive outreach requires different communication skills from care managers compared to case managers. Reaching out to someone who thinks they are healthy and letting them know that they are a “ticking time bomb” with an imminent danger is not easy. It requires different set of training and skills. Leverage low cost, technology-driven member engagement interventions to reach out to more members early in the health risk progression, not after they become a high utilizer.
We would love to hear from you all: what other reasons do some organizations have difficulty in delivering proactive care?