Health Plans: Contract Performance Monitoring Made Much Easier
April 18, 2017
Mark A. Caron, FACHE, CHCIO, CEO
The relationships between health plans and participating providers have changed more in the past six years than they have in my 30-year career in health insurance and information technology.
At the risk of repeating myself, health plans have been aggressively creating value-based relationships with network providers. In 2015, nearly all health plans reported having some type of value-based arrangements in place:
- 72 percent of health plans had one or more patient-centered medical homes for their commercial population,
- 62 percent had accountable care organizations (ACOs) with shared savings,
- 45 percent had ACOs with shared risk,
- 45 percent used global capitation, and
- 41 percent used bundled payments.
Two years later, I am confident these numbers are higher. A recent Chilmark Research report found the number of ACOs has grown 13–15 percent each of the last two years and there are now more than 935 ACOs with 1,300+ contracts.
Value-based care changes the contractual relationship between health plans and providers
These value-based arrangements reward quality and outcome improvement and, in doing so, fundamentally change and complicate the contractual relationships between health plans and providers. Rather than a simple fee schedule, these contracts necessitate a new level of collaboration and cooperation, one that requires much more information-sharing between the two parties. It’s quite common to have contract provisions covering quality performance such as rates for breast and colon cancer screening and comprehensive diabetes care and utilization such as urgent care and emergency department visits per 1,000 members. But rather than absolute numbers, value-based contracts typically reward providers who exceed the performance of their peers.
The health plans I have worked for over the years have all had robust analytics and reporting (A&R) departments. Truth be told that as a health plan CIO, the head of A&R typically reported to me. So I’m intimately aware of the traditional A&R strengths and challenges. Reporting and analytic needs have evolved; health plans now need integrated and comprehensive reporting and predictive analytics. Most A&R departments have valiantly sought to keep up with the reporting changes required of value-based contracts with ad-hoc reports and workarounds, many of which are quite manual and labor-intensive.
There is a better way. Really.
The health plans using our Theon® advanced analytics platform simply and efficiently analyze provider performance, and readily share this information with participating providers who have on-demand access to the Theon® tool.
For example, the Theon® platform dashlets – Acute Care Utilization, Inpatient Utilization, PMPM Medical Cost, and PMPM Pharmacy Cost – present high-level views of utilization and cost categories compared to peer populations along with self-serve, drill-down capability to the supporting detail. There also are segmentation and filtering capabilities to create customized views to monitor health system, provider group and individual practitioner performance.
Looking at the screenshots below, we can easily see acute admits and especially emergency department visits are exceeding peer performance whereas urgent care visits are significantly less than the peer comparator. We also know risk-adjusted medical PMPM cost without outliers is better than the peer as is risk-adjusted pharmacy PMPM cost.
In short, a quick glance at our Theon® platform reveals this provider group is doing many things right, but there are also opportunities for improvement, ones that will improve member care and the group’s contractual performance. The health plan and the provider group can readily view this timely information, diagnose problems and undertake corrective action whenever they want rather than wait for traditional monthly or annual paper reports.
And perhaps just as importantly, health plans implementing the Theon® platform are able to begin this sophisticated contract monitoring in as few as 12 weeks and have the opportunity to save millions in legacy software contracts and support.
The growth of value-based care relationships and the evolution to more sophisticated cost and quality metrics means health plan A&R departments need a reporting and analytics tool that simplifies contract performance monitoring. The future of health plan-provider relationships – and patient health - depends on it.
 Deloitte 2015 Study of Medicare Advantage Health Plans and Providers, https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-dchs-medicare-advantage-vbc-final.pdf