Digital Health Strategies: What Matters to Payers?

Digital Health Strategies:

What Matters to Payers?

Presented by

Susan Philip, MPP

Healthcare Management Consultant

January 20, 2016

This document is proprietary and is intended solely for the use and information of the client to whom it is addressed.

This document is intended solely for the party to whom it is addressed and is confidential

2Confidential and Proprietary

Milliman, Inc.

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for the rapidly changing healthcare industry.

Milliman is among the world's largest providers of actuarial and related products and

services. Founded in 1947, Milliman is an independent firm with offices in major cities

around the globe. We are independently owned and managed by our principals.

Known for our technical and business acumen, we provide expert consultation on

both the financing and delivery of healthcare. Clients include most of the leading

health insurers, Blue Cross plans, and HMOs, as well as providers, employers and

sponsors, government policymakers, pharmaceutical companies, and foundations.

Milliman consultants include actuaries, clinicians, and information-technology

specialists—offering a diversity of experience to help you cost-effectively manage

your organization without compromising quality of care.

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Market AnalysisAnalyze market environment, trends, competitors, and differentiators

Readiness AssessmentAssess readiness to enter into a market, develop a new product, change product offerings

Accreditation AssessmentAssess ability to obtain accreditation or meet programmatic requirements, e.g. NCQA, URAC, CMS programs, 5-Star Quality

Operational Assessment and Process RenovationEvaluate processes and programs for compliance with best practices and identification of opportunities for improvement

Implementation SupportAssist implementation efforts including project management support, detailed project/work plans, training tools and programs

Administrative BenchmarkingCompare and benchmark administrative efficiency, staffing, and costs using proprietary tools and data

Consulting services overview


Payers 101

Entities are called payers, health plans, health insurers, carriers, and

issuers

Entities authorized to provide insurance within a state. Must

demonstrate that they can effectively manage risk for their members

Health insurance is regulated at a state level with a few exceptions

Payers offer different health insurance products for each business line

which vary by

– Costs (including premiums, cost-sharing, such as deductibles and coinsurance,

out-of-pocket maximums)

– Benefits (including those required by law and additional benefits)

– Network (in-network versus out-of-network providers)

– Terms and conditions (for example, medical necessity criteria typically applies)


Key Drivers Examples of Market EffectsPolicy and Regulatory Changes Resulting from the Affordable Care Act

Insurance reform: Guaranteed issue, mandates, subsidies have increased those with insurance

Payment reform: Moving from volume based payments that have no link to quality or outcomes to value-based payments that encourage evidence-based practices

Delivery system reform: Moving to patient-centered, population-based care which is more integrated with the community

Public and Private Purchaser Demands

Self-insured employers seeking ways to better manage healthcare costs associated with chronic conditions

State Medicaid agencies seeking ways to better coordinate care for Medicaid-Medicare beneficiaries

Medicare penalizes hospitals for avoidable readmissions

Consumer Demand Demographics Ease of use and growing demand for digital devices and tools

Supply Side Changes Provider consolidations– vertical and horizontal New provider entrants (e.g. retail care) Pharmaceutical, biotech, and medical device advancements Digital health innovations

Drivers of payers’ digital health investment strategy


Key Drivers Examples of Payer ResponsesPolicy and Regulatory Changes Resulting from the Affordable Care Act

Consolidation Market exit/entry: offer new business lines (e.g. health insurance exchanges); Develop new products using value-based insurance design Allow prospective members to comparison shop among products

Public and Private Purchaser Demands

Price transparency tools: allow members of self-insured plans to compare potential out of pocket costs between providers

Investment in analytics to inform business intelligence, strategy, and day-to-day operations

Investment in programs to address “high-risk” or “high-utilizers” Investment in care management tools for care managers and coordinators Consider piloting innovations for subset of population

Consumer Demand Investing in consumer portals and other consumer-facing digital tools Investment in engagement tools/programs for those with chronic conditions

Supply Side Changes Partnering with providers in share savings/risks arrangements (e.g. ACOs) Investment in health information exchange infrastructure Investments in decision support tools imbedded in the workflow (i.e. through EHR) Develop “narrow,” “high-value” networks

Payers’ responses are opportunities for innovation


Company Type Functions/ExamplesPopulation Health Management

Diabetes self-management tools and devices Medication adherence tools Wellness/patient engagement tools involving gamification Behavioural health assessment Post-discharge coordination and management tools

Administrative Efficiency Referral management Solutions to improve data exchange from/to primary, speciality and tertiary providers

Healthcare Delivery Telehealth Cognitive behavioural therapy tools Remote/ongoing monitoring

Analytics Aggregate data across care continuum Quality of care reporting support Provider-level performance reporting Data visualization

Entrepreneurs are honing in on these opportunities

Provider Support Imbedded tools in EHR Real-time, evidence-based decision support tools

Payment Model Tools combining members’ coverage and negotiated prices to estimate comparative out-of-pocket costs

Healthcare services “groupers” End-to-end solutions for ACOs


Checklist: Considerations for approaching payer

1

Clear value proposition:

How does the solution save healthcare and/or administrative dollars?

Other measures: quality of care, outcomes, efficiencies, patient satisfaction,

provider satisfaction

2Target population clear:

Medicare, Medicaid, Dual, commercial, self-insured

Condition-specific, if applicable

3 Solution aligned with payers’ growth strategy

4 Solution aligned with payers’ payment and delivery transformation strategy

5 FDA review: If applicable, what is the status of the FDA approval?

6Integration: Can the solution be integrated into existing systems/EHRs, if

applicable? Estimated cost of integration

7 Analytics: Does solution support ongoing analytics to measure impact of solution?

8 Key provider partners: Are they using the solution or willing to use the solution?

9 Pilot conducted and evaluated (more later)

10 Plans to scale solution with realistic cost projections


November 20, 2015

This presentation has been prepared for informational purposes only. No portion may be provided to or relied upon by

any other party without Milliman’s prior written consent. Milliman does not intend to benefit or create a legal duty to any

third party recipient of its work.

The materials in this presentation represent the opinion of the authors and are not representative of the views of

Milliman, Inc.

These slides are for discussion purposes only. These slides should not be relied upon without benefit of the discussion

that accompanied them.

Susan Philip MPP

Healthcare Management

Consultant

[email protected]

650 California Street, 17th Floor

San Francisco, California 94108

USA

Tel +1 415 394 3788

Fax +1 415 403 1334

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