How Payers Can Improve Care Management To Enhance Quality, ROI

Payers are not leveraging care management to its fullest capacity and they have an opportunity reform their care management programs to improve quality of care and return on investment, a report from McKinsey & Company (McKinsey) found.

“We propose a more expansive definition of care management that involves any payer-driven efforts to engage with targeted members and their care ecosystems to encourage and enable high-value decisions,” the researchers asserted.

In order to achieve this broader vision for care management, payers may have to take four actions.

First, the report recommended that payers target high-potential sources of value.

There are at least seven sources of value that payers can tap into with care management, even though payers frequently target only a fraction of the sources. These seven areas impact both medical cost and revenue.

Payers fail to reap savings from each of these sources of value because they focus their care management on sources that do not have immediate results—wellness programming, for example—and because they leverage primarily preventive measures.

However, in addition to long-term health goals and preventive care services, care management can produce immediate returns on investment by targeting appropriate sites of care and unit price in network rates, as well as appropriate diagnosis, treatment, and condition management.

Clinically accurate coding, closing care gaps, improving Consumer Assessment of Healthcare Providers and Systems (CAHPS) performance, buy-ups, and member attraction and retention are all areas in which payers can use care management to boost revenue.

Since different members can benefit from care management in various ways, payers may separate their member populations into member archetypes and identify areas in which care management can best drive quality of care and return on investment for each of those categories.

Medicare Advantage plans have become a beacon for this. Payers in this line of business have effectively used care management to redirect high-cost members to primary care in order to lower costs and improve patient outcomes.

Second, payers should leverage care management to address clinically inappropriate healthcare spending, instead of seeking only to reduce total healthcare spend.

Member engagement strategies in care management programs must be shaped by members’ preferences, the researchers stated. High needs members may prefer more constant interaction with their care management teams than low needs members.

Payers can avoid under-investing in high needs members or over-investing in low needs members by reaching out at “health inflection points” such as around the time that a member is expected to have surgery.

For example, children with rare diseases formed a high need, high-cost patient population for UnitedHealthcare. In order to better serve this group, the payer had to rethink member engagement in its care management program, recognizing that families needed payers to be more proactive and more involved.

Third, the researchers urged payers to embrace consumerism.

Micro-targeting, personalization, and other consumer-driven strategies have not entered payers’ playbooks to the extent that these tactics have in other industries.

Introducing better member identification data sets, improving member contact information and channels, segmenting members psychographically, and adopting an “engagement first” attitude can bolster consumerism and enhance a payer’s care management approach.

Finally, payers should adopt operational metrics and disciplines to govern their care management programs, McKinsey researchers indicated.

Incorporating staffing ratios and “top of license” practices into their operational functions can enhance payers’ care management strategies.

Digitization and automation also play a key role, reducing costs by investing in robo-dialers, algorithms that prioritize cases, automating billing processes, and more.

“By creating a strategic plan that considers targeting multiple high-potential sources of value, right-sizing care management to member need at a point in time, engaging members the way a consumer company would, and running care management with an operational mindset, payers may improve the ROI on their care-management programs, while also ensuring a better, healthier experience for members,” the researchers concluded. “The time for payers to act is now.”