Approximately 42% of Medicare beneficiaries are enrolled in Medicare Advantage plans—a segment projected to reach 46% by 2025. Due to rapid growth of the 65-and-older portion of the population, Medicare expenditures are forecast to reach $1,559.4 billion in 2028, with spending per enrollee reaching $20,751.
Key trends are influencing this growth, including:
– An aging population
– Continued increase in overall Medicare costs
– Government support and benefit flexibility (e.g., transportation, food assistance, social support)
– Innovation-driven initiatives from the Centers for Medicare & Medicaid Services (CMS)
As more providers and companies enter the MA market and take on the responsibility for both provider and payer, healthcare technology and services vendors are also seeking opportunities to serve the growing number of stakeholders. They bring promises to lower costs, improve operating performance and/or increase financial returns.
The issue is that many healthcare organizations may not have the data to quantify the returns realized from investment in a vendor’s product or service. To ensure that vendors and service providers deliver the value they promise, MA plan leaders increasingly recognize the advantages of partnering with a data analysis expert that can deliver a financial benefit and ROI of ~ 5:1.
Actionable Data Enhances Value
Actionable data or information that can automatically prompt the optimal care decisions at the point of care requires the integration of information into a comprehensive workflow, as well as the ability to utilize information from many different sources by various stakeholders. For instance, an oncologist treating a 64-year-old woman who has been diagnosed with breast cancer could provide better care with clinical and payer guidelines or information regarding the appropriateness of certain tests, as well as a recommendation about which commercially available test is indicated and covered by payers.
Given the tight margins in healthcare, health plans must establish a structured framework for managing vendors and other service providers who promise to deliver this level of actionable data. In fact, the highest-performing health plans do have a structured framework for managing vendors and other service providers. The goal is to focus on ensuring that the vendor or service provider actually provides the plan with regular updates on ROI. The challenge of providing this data for many payers and vendors is knowing how to develop an accurate and reliable ROI model.
The right analytical software partner can measure the actual financial value realized from a plan’s investment in a tool and from its widespread adoption. To begin, stakeholders should look for a data analysis partner that facilitates end-to-end population health management for payers, ACOs, provider groups and health systems that aspire to provide superior, high-quality care to their patients and members.
They should offer an infrastructure that supports the secure exchange of patient data as the client migrates from disparate sources to the partner’s secure solution. Also, their analytics and reporting capabilities should normalize claims, lab and pharmacy data from provider and payer systems to provide views into critical patient care needs. Patient data should be presented to providers during patient visits to remind the provider about the patient’s chronic conditions that may require care.
Ultimately, the provider is seeking to assess and treat a patient’s existing conditions, and accurately document the status and care of each condition with a goal of ensuring more complete patient visits that increase care quality, lead to better patient outcomes and reduce long-term healthcare costs.
Case in Point
To provide one example, the analytical software partner enabled a customer to roll out access to its platform to hundreds of provider groups in 2018 and 2019 as part of an initiative to promote data-sharing between the payor and its provider network, assist providers with clinical decision-making, and improve patient care and outcomes.
Over the first two years of the contract, adoption and use of the platform varied across the customer’s provider network. As part of its contract review process, the customer asked the analytical software partner to study and calculate the degree to which platform use was driving favorable risk, quality and utilization outcomes.
To calculate the customer’s ROI, the partner designed a difference-in-differences (DiD) estimation framework (1) to measure performance changes in the treatment group versus a control group at two points in time, and (2) to understand the effect provider use of the platform had on key outcome metrics, including the financial return resulting from improved performance in those areas.
At the completion of important projects, many organizations reflect on the work and conduct a debriefing or analysis of lessons learned to determine if a project met its objectives and delivered results. In the case provided above, the results of the ROI analysis showed that users of the analysis platform generated a positive ROI — approximately $14 million per 100,000 members, which is an average return of five times their client annual investment.
About Ashish Kachru
Ashish Kachru is the Chief Executive Officer of DataLink Software (DataLink), a leading solutions provider that delivers interoperability, reduced costs, improved quality scores and risk adjustment accuracy. Mr. Kachru is leading the company’s executive team and spearhead its business strategy and strategic growth. Ashish has over 20 years of operational and executive leadership experience in healthcare technology, most recently serving as Co-founder and Chief Executive Officer of Altruista Health, which focuses on clinical analytics and care-coordination solutions to manage population health outcomes at scale. Prior to co-founding Altruista Health, Ashish served as the National Director for United Health Groups Business Risk Management (BRM) division. He also earned his Master of Business Administration from The University of Chicago, Booth School of Business. Ashish lives with his wife and two kids in Northern Virginia.
