Making Order from Chaos
“Big data” is often described in terms of colorful dashboards and a roomful of SQL programmers. Gorman Health Group (GHG) thinks of it as a symphony of moving parts that all play a role in managing quality healthcare.
The year 2014 was the first time since 2005 that saw an increase in Medicare Advantage (MA) plans explode on the market, largely due to the Medicaid-Medicare Dual Expansion program, but sheer volume of Health Maintenance Organizations (HMOs) increased as well.
To attract new plans to the MA market, the Centers for Medicare & Medicaid Services (CMS) allows a 3.5% new plan bonus for the first three years. This includes a 65% rebate for supplemental benefits and is applicable to the double bonus counties.
However, at the end of the three years, these new plans must sink or swim. If they do not achieve 4 stars and get 5% bonus and 65% or more rebate, then they lose ALL of the bonus, and rebates level out to 50%. This Quality Bonus Program does not apply to dual eligibles or Programs of All-Inclusive Care for the Elderly (PACE), but a financial trend analysis is still appropriate.
So an operational priority for new plans is to focus on Star Ratings, but what about the rest of the operation and the financial bottom line? The high penetration of HMOs means best practices and diligence to manage networks and utilization. Recent increased demand for Preferred Provider Organizations (PPOs) with more consumer choice means managing the out-of-network costs. A financial checkup can review trends as well as point-in-time variance reports for medical and pharmacy claims as well as revenue projections based on demographics and risk adjustment.
Big data can help quantify this organizational dilemma. Without real-life experience, the dashboards can be just a set of graphics.
Right now is the ideal time to leverage this data into action. Bids are in, and Marketing is fine-tuning its message and demographics for open enrollment. A perfect complement to budgeting and year-end reconciliation of incurred but not reported (IBNR) and risk adjustment is to determine benchmark metrics for achieving the budget!
Dashboards supplemented with trend analysis and cross-functional discussion about outlier operational areas (referral patterns, emergency room usage, readmissions, high utilizers, pharmacy spend, etc.) is the real answer — not just an algorithm. Then the comparisons of real to benchmarks (and budget) become meaningful.
In recent blogs, we talked about evolution. A financial checkup by GHG gives you the tools and insight to evolve and succeed.
Resources
On Tuesday, September 13, 2016, from 1:00 — 2:00 pm ET, join colleagues Diane Hollie, Senior Director of Sales & Marketing Services, and Carrie Barker-Settles, Director of Sales & Marketing Services, as they outline the keys to building an integrated member experience program that will deliver a significant and positive impact on health plan enrollment, retention, and revenue generation. Register now >>
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