The Next Generation of Care and Cost Improvements

Sam Muppalla, for HealthLeaders Media, January 14, 2009

Health plans have been on a journey of leveraging process and technology to improve access to high quality, affordable healthcare.

Until recently, emphasis has been on optimizing care management and claims processing. Now, there's compelling evidence that the next generation of care and cost improvements will come from innovative provider management approaches.

Provider management is the common success enabler behind health plan initiatives, such as consumer-directed health plans, patient centric medical homes, pay-for-performance, the introduction of new products, and geographic expansion. Leveraging an integrated approach to provider management is the innovation that is propelling health plans forward.

What is Integrated Provider Management (IPM)?

IPM is a three-pronged approach to deliver the next generation of care and cost improvements through:

  • End-to-end provider process simplification
  • Collaborative and coordinated patient care
  • Transparent provider performance and incentive management

Fundamental to this approach is the ability to bring together the provider network view, patient clinical view, and claims view. By harnessing this integrated view, health plans will take the initial critical steps that allow them to facilitate holistic member care planning, innovative network design, and cost reduction. This approach represents an opportunity for a new collaborative relationship paradigm between health plans, providers, and members.

How does IPM reduce medical costs?

A logical first step in managing medical costs is to ensure that providers are reimbursed at the right level. Current barriers include the quality of provider data within the health plan system and the complexity of provider contracts. It's estimated that 2-3% of claims must be re-processed because they are priced incorrectly. The process simplification used in the IPM approach significantly improves provider data quality through automated data integrity enforcement.

The IPM approach promotes the standardization of provider contracts. Having one consolidated view of the provider allows health plans to have more streamlined provider contract negotiations, leading to better contract terms and conditions. There is market evidence of a 1-5% reduction in medical costs driven by improved contract terms and conditions.

Effective provider incentive programs could have a measurable impact on quality and cost of care. However, transparency of quality measurement methods and data is essential to alignment between health plans and providers. The integrated provider view leveraged by the IPM approach enables health plans to both measure and report on quality.

The provider and patient collaboration envisioned by the IPM approach also facilitates better compliance with evidence-based care planning. Connectivity and health information exchange with provider offices, under the IPM approach, enables a single view of patient clinical data and suggested intervention opportunities. Early intervention has been shown to increase the health of patients while reducing their medical costs.

How does IPM reduce operational costs?

The process simplification prescribed by the IPM approach reduces operational costs by increasing staff productivity, eliminating redundant processes, minimizing manual handoffs, and decreasing re-work. This process simplification is largely enabled by workflow automation and data integration.

Once the internal processes have become systematized, it enables the health plans to take those processes and extend them to the providers through self-service portals. Self-service capabilities are heavily sought after from both health plans and providers because they reduce the amount of time both parties need to carry out simple administrative activities.

The systematic recording of the process steps and information under IPM enables analytics. These analytics allow health plans to measure provider workforce performance and proactively identify process bottlenecks. The IPM approach incorporates tools to rapidly re-configure processes and eliminate bottlenecks.

How does IPM reduce provider IT costs?

As with the introduction of most of the innovative technologies on the market today, IPM solutions are allowing health plans to do more with less infrastructure and resources. For example, IPM solutions empower users to make selective changes to workflows, create new business rules and create ad-hoc reports. All of these actions, either in the past or with the existing legacy systems, could not take place without significant internal IT or external consultant intervention. Additionally, once IPM solutions are deployed, health plans have the ability to sunset redundant provider systems.

IPM can achieve savings

IPM enables health plans to turn provider networks into strategic corporate assets. By modernizing the health plan's provider environment through IPM, health plans can achieve greater medical, operational and IT cost savings.

At the same time, the innovative provider management approach allows health plans to execute new programs that answer the demand stemming from new market trends. While the health plan's mission is to ensure members have access to affordable, high-quality care, focusing on the systems and processes that directly affect the agents of care—the providers—is an important next step.

Sam Muppalla is COO of Portico Systems, a Blue Bell, PA-based healthcare technology company that specializes in integrated provider management solutions.
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