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BCBS Plan Targets Behavioral Health to Reduce Total Cost of Care

Analysis  |  By Laura Beerman  
   December 06, 2021

"It's really about connecting the dots. We said, 'Let's build a model that links the behavioral with the physical and SDOH, then put virtual and community interventions in place beyond traditional care management,' " says one Horizon Blue Cross Blue Shield of New Jersey executive.

In October 2021, Horizon Blue Cross Blue Shield of New Jersey announced that its Neighbors in Health program had reduced total cost of care (TCOC) while increasing needed behavioral health services. Horizon credits integrated data and advanced analytics for "identifying patients at risk upstream, providing insights on best timing and type of intervention, and reducing cost and utilization." The plan seeks to continue these first-year results by making these strategies part of its overall value-based care solutions.

Program results

Horizon's behavioral health initiative uses multiple, disparate data sources, structured and unstructured, to look backward and forward. Using "advanced analytics," Horizon identified probable high-cost members and generated risk scores to link patients with providers, programs, and community resources.

Specific populations aided included mothers at risk for postpartum depression, members with inpatient behavioral health admissions, and younger members at risk for conditions like schizophrenia. For the latter group, Horizon reported shorter times between initial psychotic episodes and subsequent treatment. Horizon reported an overall "25% reduction in total cost of care and a 60% increase in utilization of behavioral health resources."

Behavioral health's impact on overall costs

Focusing on behavioral health's role in TCOC reduction is an important component of not only the Horizon program but a larger industry concern: that a small percentage of patients represent the highest costs and that a majority of this group include those with behavioral health conditions.

In their white paper, Allen J. Karp, Horizon's executive vice president of healthcare management and transformation, and Sheila Talton, CEO of Horizon's platform partner Gray Matters Analytics—cite the following 2020 Milliman study statistics:

  • 10% of study participants generated 70% of overall costs.
  • Of this 10%, 57% had documented behavioral health diagnoses and/or treatments.
  • Only 4.4% of TCOC was spent on behavioral health treatment across the entire study population.

These statistics begin to demonstrate how prevalent, costly, and paradoxically under-addressed behavioral health conditions are. And why targeted interventions informed by data and other factors can make a difference.

The role of "advanced analytics"

Karp and Talton say that the "fundamental problem" is a "lack of behavioral health quantitative data in the right format for traditional reporting and analytics systems. The inability of organizations to access, digitize, and integrate behavioral health data makes it virtually impossible to treat the whole person."

If this is the problem, what is the solution? According to Karp and Talton, "advanced analytics" that are as integrated as the behavioral healthcare they are designed to facilitate.

On the data side, this includes a combination of clinical, claims, social determinants of health (SDOH), and other historical member information. Combined with Natural Language Processing (NLP), artificial intelligence, and other aspects of the Gray Matters platform, these data combine to identify populations most at risk and the resources that may help them most.

Gray Matter's Talton sums it up this way: "It's all about identifying the data's signals and patterns so that the analytics can provide directional answers and serve up different subsets of members that could be targets for intervention."

The importance of integration

Another kind of integration may be aiding Horizon's success: its OMNIA Health Alliance with large health systems and physician groups across New Jersey.

Talton agrees that OMNIA reflects Horizon's leadership: "Because of OMNIA, Horizon can identify in-need populations to its provider care managers (CM)." This is in addition to the outreach the plan's own CMs deliver. In both cases, the key is mutual accountability. "The opportunity as we mature around behavioral health," Talton adds, "is for outreach and recommendations to become part of the payment model."

Another integration component is tied to Horizon's decision to move behavioral health management back in house from its vendor, Beacon Health Options. Karp cites this as an advantage. "Behavioral health is a small part of overall cost and not necessarily flagged when it's outsourced. Insourcing integrated the data, which helped reveal trends that validated our thesis about the impact of behavioral health. This, married with the Neighbors program, creates a much better model."

Karp adds how vital community health integration has been. "It's really about connecting the dots. We said, 'Let's build a model that links the behavioral with the physical and SDOH, then put virtual and community interventions in place beyond traditional care management.' " This has included hiring and training unemployed or underemployed community residents who know their neighbors and provide peer support so that members don’t slip through the cracks.

Behavioral health in value-based care

Karp and Talton agree that "[i]n a value-based care environment, it is critical that behavioral health conditions are effectively managed as part of a comprehensive strategy to control total healthcare costs and deliver positive outcomes for patients."

Even with this commitment, industry challenges abide including the "hidden costs" and hidden populations related to behavioral healthcare. Here, Karp and Talton cite Milliman study advisor Dr. Henry Harbin: “There's commonly a misconception it's the patients with more severe mental illnesses like psychosis or schizophrenia that are the ones that drive these costs. … That's not true. They represent a very small percent of prevalence."

Karp and Talton bring this reality and the help integrated, advanced analytics hope to provide by adding: "People with mild to moderate mental health challenges would be relatively easy to treat if they could be more readily identified, which in turn would result in lower total costs for medical care because their chronic conditions could be better managed or even averted with education and preventative care."

Laura Beerman is a contributing writer for HealthLeaders.


Data suggests that high-cost patients and behavioral health needs are strongly linked, even as diagnosis and treatment for these conditions lag.

One health plan, Horizon Blue Cross Blue Shield of New Jersey, has included behavioral health in its interventions to reduce total cost of care while improving outcomes.

By using "advanced analytics," the plan is integrating data to create integrated solutions.

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