Analytics To Improve Outcomes And Reduce Cost: Health .

Analytics to improveoutcomes and reduce cost:Health systems and health planscan work together to jointly winthe shift from volume to valueFindings from the Deloitte Center for HealthSolutions 2017 US Health Plan Analytics SurveyExecutive summaryMany health systems and health plans are making valuebased care a priority, and are investing in populationhealth analytics to enable their strategies. However,our research suggests that most health systems andhealth plans are not yet sufficiently focusing on effectiveanalytic collaboration approaches that could unlock thesynergistic benefits of combining the best of what eachstakeholder has to offer.The analytics approach of each stakeholder typicallyconcentrates on their native proprietary datasets, which can constrain their ability to effectivelycollaborate, and make it difficult to deliver a jointvalue proposition to the market generally—and toconsumers specifically—of high-quality, affordablehealth care with a differentiated experience. Thisanalytics issue is central to the health care industry’sability to fix some of its fundamental challenges.Health plans typically use claims and enrollment datato identify high-cost populations and inefficient carepatterns at a macro level, while health systems tend torely on clinical data to deliver patient-centered care. Ifthese two stakeholders partner on analytics and shareddata, they could be better equipped to understandresource use and practice patterns. They also couldbe more likely to develop innovative opportunities toimprove outcomes and reduce total cost of care forpatients as well as the overall population. Furthermore,as health plans and health systems share financial riskthrough value-based payment and governance models,their efforts could become better aligned to enablemore mutually beneficial business models.In today’s silo-based approach, patients sometimesreceive follow-up calls from both the health systemand the health plan, which demonstrates the costlyduplicative nature of our system. Neither group is bestpositioned to maximize the patient experience on itsown. While claims data can give health plans a morecomprehensive view of the patient, they often lackpatient trust. Conversely, patients generally do trust theirphysicians, but health systems might not have accessto the patient’s complete health history, let alone theeconomic and social conditions (e.g., income, housing,transportation, education, etc.) that impact their health.As a result of our research and real-world clientexperiences, we believe that improvements in sharedanalytics strategies between health plans and healthsystems can significantly advance the performance ofthe US health care system.Deloitte’s recent survey of 45 health plans found that: 76 percent of respondents stated that they areworking with providers on population health. However,interviews with health plans and health systemsdetermined that often such collaborations remainlimited in maturity and effectiveness. Just 16 percent of health plan survey respondentssaid collaboration with providers is a priority for theiranalytics investments—commonly a vital part of valuebased care—demonstrating a disconnect betweenhealth plans’ goals and their ability to influence thecritical patient/provider experience.

Analytics to improve outcomes and reduce cost: Health systems and health plans can work together to jointly win the shift from volume to valueTo work together on analytics, health plans and healthsystems may need to overcome competitive dynamics,human capital skill gaps, and technology constraints.Transforming long-time adversaries (purchasers ofcare vs. providers of care) into collaborators can taketime, effort, and trust. Moreover, the requirements forteamwork will likely become increasingly important ifboth sides are to win in a value-based care environment.Based on our research, the most effective collaborationsare those where executive alignment, governance, andshared economic incentives are mutually agreed on byboth the health plan and the health system.Two key steps forward include: Executive alignment: Successful collaborationsbetween health plans and providers cannot occurwithout first achieving strategic alignment betweenexecutive leadership teams. This requires trust. Trustthat each side is going to help the other win. Potentialcritical enablers to this alignment and trust modelinclude innovative corporate structures, governance,and financial commitment. Identifying a common setof mutually beneficial business goals, aiming for earlywins, and providing support and education are a fewof the lessons learned in our research. Operational integration with an emphasison technology and analytics: The synergisticpotential between health plans and health systemsrequires effective integration of data and analyticassets and capabilities. Analytics will likely beintegral to driving innovative care-managementprograms, digitally enabling clinical interventions,and activating physicians and patients in new ways.Both stakeholders have compelling assets that—oncecombined to drive new actionable insights—canenable clinical interventions to address unnecessaryutilization in high-cost sites of care.“We are not sharing enough data.Payers are not sharing enoughwith us; we do not share enoughwith them. We need to work bettertogether and share data If youshare the costs, the solutions canbe elegant and better.”—Chief Innovation and Technology Strategistat a large health systemHealth care MoneyballIn the late 1990s and early 2000s, Billy Beane, general manager of the Oakland A’s, turned “one of thepoorest teams in baseball” into “one of the most successful franchises in Major League Baseball” throughthe use of analytics.1 Oakland’s payroll was less than a third of the team that had the highest payroll,yet they “won more regular season games than any other team,” except one, bucking the trend that thehighest-paying teams were the highest-scoring ones.2 By rewriting the traditional tenets of baseball—andleveraging analytics—Beane was able to find undervalued players, capitalize on inefficiencies, and gain newinsights that fundamentally changed the way baseball is played.Health systems and health plans are still in the first inning of their collaboration journey, albeit atdifferent stages of maturity, but the impact analytics could have on health care could be as dramaticas what we saw in Major League Baseball. Analytics has the potential to upend today’s health careknowledge about how to determine the most cost-effective treatments, how to change physician andpatient behavior, and how to help patients avoid unnecessary emergency room visits and acute care.When health systems and health plans collaborate, these insights can be even more valuable and canhelp the industry achieve its triple aim of improving the patient experience, improving populationhealth, and reducing the cost of care.2

Analytics to improve outcomes and reduce cost: Health systems and health plans can work together to jointly win the shift from volume to valueIntroductionWhat is population health?We define population health as health care effortsthat aim to use resources effectively and efficiently toimprove the lifetime health and wellbeing of specificpopulations.3 Population health activities include thepromotion of health and wellbeing, as well as preventing,managing, and reversing disease progression.Why focus on value-based care andpopulation health?Market and policy forces place significant pressure onhealth care organizations to improve the efficiencyand quality of health care services, shifting the overallsystem toward value. Consider these trends: Employers demand effective benefit designs andinnovative care delivery models from health plansand health systems.4 Consumers are responsible for an increasing shareof health care costs. As a result, they seek healthsystems and health insurance plans that can deliverbetter clinical quality, access, and convenience at moreaffordable prices. The federal government champions new paymentmodels through the enactment of the MedicareAccess and CHIP Reauthorization Act of 2015 (MACRA),a game-changing law that solidifies many elementsof this payment reform. The law is poised to driveincreased participation in risk-bearing coordinatedcare models across all health plans, not just Medicare.Traditional fee-for-service (FFS) payment systemsoffer little incentive to health systems to invest inanalytics. The implementation of MACRA, which willprovide payment updates to physicians based upontheir past year’s performance—and offer alternativecompensation models to providers that take on greaterrisk—might be the catalyst that drives the developmentof analytical tools that help providers improve theiroverall performance.Key definitions“Analytics” refers to the systematic use of technologies,methods, and data to derive insights and to enablefact-based decision-making for planning, management,operations, measurement, and learning.What is MACRA?The Medicare Access and CHIP Reauthorization Act of 2015is a transformative law from the US Centers for Medicareand Medicaid Services that is intended to drive payment anddelivery reforms for clinicians and health systems acrossMedicare and other government programs, and commercialpayers. The law establishes a path toward a new paymentsystem that is intended to help align reimbursement withquality and outcomes. MACRA offers significant financialincentives for health care professionals to participate in riskbearing, coordinated care models, and to move away fromthe traditional FFS system. 5 In addition to new performancemeasures and new reporting and compliance requirements,MACRA will require considerable investments in data andanalytics to enable clinicians to thrive under the new rules.For health plans, supporting performance metrics in theirvalue-based contracts that line up with those in MACRA willhelp ensure alignment of incentives, and will build off theinvestments that providers are already making.Provider reimbursement methodologies are important todrive the adoption of analytics and innovation in patientcare delivery models. Reimbursement models that alignpayment with desired outcomes should not only helpfund the investments required in analytics, but also alignthe measures, metrics, and insights needed to achieveimproved outcomes. Many of the payment methods usedtoday have yet to achieve that alignment, in part becausehealth plans and health systems have not yet fully utilizedthe analytics required to provide real insights.Innovation will occur when the constraints of theexisting model are broken. Analytics can be the smartfirst step to finding opportunities to reduce variances inpractice patterns, improve patient compliance issues,identify gaps in care, and find leading practices. Throughour research, we have identified elements for improvingthe impact of analytical tools and key strategies forfacilitating broader adoption.3