Utilization Review Management makes $8 million difference for JCWS Health Plan
Utilization Review Management Situation
Like several American firms, the rising price of healthcare was significantly affecting Johnson Controls World Services (JCWS). Their self-funded health plan trust encompassed 14,000 personnel who’re spread out over at least seventy US locations and a minimum of 10 international locales. The populace had been separated in half with somewhere around fifty percent of the members assigned to government contracts and fifty percent to commercial. The medical plan was facing DCAA direction in order to segregate the trust resources into distinct government and private accounts, had no reliable claims experience, had been experiencing astonishing massive claim expenses, as well as had been projecting a 2.1 million dollar shortcoming on twelve million dollars in claims.
Once the resources were segregated the balance inside the federal government area of the trust began to deplete at an escalating rate. Exploration of the cause led to various areas of concern. Initially, the private side of the trust had surprisingly been subsidizing the federal and the federal population appeared to possess a greater risk profile. Secondly, 31 specific claimants accounted for 39.4% of the annual claim experience in 2003. Two unique claimants accounted for 8% of the plan’s total annual claims increase. Over the same time frame, individual claims in the $20-49K range had elevated by 61%. All these issues ran JCWS’s average claims fees 24% above their TPA’s book of business. This was a inappropriate rate for virtually any group to face.
To deal with the problem, the Company instituted weekly supervising and reporting of trust assets, monthly executive reviews, leading-edge trust payments, and made mid-year adjustments to the plan. The erosion of benefits as well as growing payments weren’t well received with this population who had bathed inside the comfort associated with steady premiums for two years. Even with these kinds of significant efforts in place, JCWS nonetheless endured double-digit inflation, an predicted $3.6 million dollar short-fall, in addition to 40% CollectiveBargaining Agreements, together with increasing workforce unhappiness in a highly cut-throat industry.
Remedy Explanation
In order to locate some method of reversing the skyrocketing expenditures that to date had mainly been slowed, the plan decided to refocus by recognizing and taking on several fundamental health plan and health care concepts. The plan recognized what they entitled “basic facts regarding health care”:
* Quality Treatment Costs Less
* Most Individuals Don’t Have an idea on Finding High quality Providers
* Patients with Advocates in the HealthCare System Get Much better Final results
* Non-Compliance is actually Hazardous and also Expensive
* A Small Portion within the Populace Accounts for a large percentage of the general Cost (Beginning/End State)
* Most Diagnoses is performed by way of Lab Work
* The Very first Part of Medical Information is by way of Lab Work or Rx
* Prevention Costs Less Compared to Treating Disease
* Most Chronic Medical conditions Have Expected Patterns
* People Will Take the path of Least Resistance, Including the Path involving Lowest Cost
The plan embarked on a mission to find a partner who could address these issues. The fundamental premise was to follow the data to identify the specific areas that required attention. The objectives included improved employee satisfaction, improved healthcare quality, decreased absenteeism, increased productivity, and finally overall control of health care costs. Ault International Medical Management (A.I.M.M.) was selected to partner with the health plan to provide PC3M®, a unique Patient-Centric Comprehensive Care Management model of medical management services.
The PC3M® service focuses on improving health care quality through patient education and empowerment as a means of decreasing the self-funded health plan’s claims costs. The usage of evidence-based clinical care guidelines was executed in a step-wise approach allowing the health plan to realize opportunities for immediate impact and reinvestment of saved resources into additional services. This new approach yielded steady progress toward meeting JCWS’s goal: a population that is well-educated, and empowered to utilize preventative health strategies, early intervention for health issues, and best-in-class medical care. Resources were able to allocated to areas of highest need through the specific, actionable results of data mining. Outbound calls started with the top 1% of claimants in cost and/or risk.
Once the 1% was completed, the top 5% were addressed. Additional condition specific areas where JCWS’s occurrences and or spending were out of proportion to national averages/benchmarks were addressed. The group’s covered members were provided with one-on-one interactions with RNs. Members asked questions and offered informative details that RNs used to further assist them in becoming educated, empowered consumers. Consistent, dedicated communication between THE ANCHOR GROUP and members developed a relationship and trust in the plan that was rare in previous years. The use of the PC3M® model also provided the ability to measure the impact of interventions from a clinical quality stand-point, a patient satisfaction stand-point, and from a financial stand-point.
Results
JCWS was grossly aware of the deficits in their health plan. The first step to securing their future was initiation of Utilization Management, Case Management, and Maternity Management. Not until results of this first claims analysis were they able to visualize the depths of the previous deficits. This inaugural step was able to decrease the projected claims by $54.11 PMPM. The number of hospitalizations per 1000 members was down, as well as the length of stay for each of those admissions. The second step was to identify and rank the plan’s issues with a now-solid database. Individual members and general trends were identified and interventions were put in place to evaluate and alleviate projected costs. Step three of the Step-Wise Method of Implementation of PC3M® was to sit down and do something with the facts on hand. Registered Nurses start touching individual patients through outbound phone calls and mailings. These nurses have been trained to not only educate the member on the condition that identified them but also on any other facts that present themselves through thorough evaluation.
Risk Indicators and overall claims dollars spent were used as “triggers”, not just the top conditions as in older medical management models. Population Management Initiatives were developed based on data mining results. These included a six-month drive on key issues identified in this population as well as direct mailings to high-risk members. The next step was to identify risk using data and surveys. This simple and relatively inexpensive step had several unexpected results.
Members actually reported making lifestyle and health behavior changes based solely on the survey. A better understanding of lifestyle behavior issues that were driving the health conditions in the population was revealed through claims mining as well as the ability to begin predicting the next year’s issues and proactively address them in hopes of averting them. This self-assessment also brought to light the impact corporate culture had on health care costs.
At the end of year one of these interventions, the self-funded health plan had gone from a 3.5 million dollar deficit to a 4.5 million dollar surplus! ER visits almost disappeared, and premature babies virtually disappeared. The savings were used to enhance benefits, and the plan now offers preventative health services at NO COST to members. The financial results from year 2 interventions will soon be through the auditing process. In year 3 the plan will continue their current services with A.I.M.M. and will enhance those services to take an even more assertive stance on preventative health initiatives. Medical claims costs for the self-funded health plan continue to decrease and the plan has completed avoided all cost escalation for 3 years, even with increased coverage and benefits, and no increase in employee cost-sharing.