CEO SUMMARY: Managed Care is shifting into a new operational model that places prime emphasis on using clinical information to drive improvements in the quality of healthcare. At UnitedHealth Group, one of the nation’s largest health insurers, early efforts to analyze clinical data have stimulated worthwhile improvements in physician treatment patterns. Laboratory Corporation of America is feeding increasingly detailed lab test data sets to United Health as part of this effort. Here’s a look at how and why United Health Group is pushing hard to develop these resources.
EFFORTS ARE UNDERWAY to boost the value that UnitedHealth Group brings to its employer-customers, hospitals, providers and beneficiaries.
A key component of this effort is to pool laboratory test data with other clinical information and use the resulting knowledge to improve outcomes and bring about a higher standard of health.
This development will have great impact upon the clinical laboratory industry. UnitedHealth and other managed care companies (MCOs) are actively learning how to combine lab test data with other healthcare information. Their goal is to use this information to improve the quality of care even as unnecessary costs are eliminated.
As these MCOs become more sophisticated in how they acquire and use laboratory test data, clinical laboratories will be required to upgrade the type of clinical test information they provide. Labs which fail to do so will be excluded as providers.
Improved Health Services
Based in Minneapolis, Minnesota, UnitedHealth Group is one of the nation’s largest health insurers, with 15 million beneficiaries. Ingenix is the business division spearheading United’s efforts to develop and apply improved clinical information services to the healthcare industry.
At this year ’s Executive War College in Cincinnati, Richard J. Migliori, M.D., Chief Clinical Strategist at Ingenix, described the company’s vision for using improved health information to drive clinical decision-making.
“It’s no secret that most people involved in healthcare recognize the need for serious reform,” stated Dr. Migliori. “The many fragmented and inefficient components of the existing healthcare system have proved a hurdle to both innovation and the rapid introduction of healthcare techniques that have proven worth.
“Among other things, during the past two decades of managed care, a ‘siege mentality’ emerged,” he continued. “Providers found themselves fighting for access to patients while simultaneously dealing with the complexities of new technologies and new science.
Managed Care Restrictions
“On the consumer side, managed care became synonymous with restricted choices, restricted access, and increased control,” noted Dr. Migliori. “The intimate privacy between patient and physician was interrupted. Consumers perceived that other people besides the physicians were making decisions about their care.
“What sets UnitedHealth Group apart from other insurers is how we define our role,” explained Dr. Migliori. “United HealthCare is organized to establish an efficient market place between people who are looking for healthcare and people willing to offer it.
“We get to shop for 15 million Americans and our purchasing volume helps us get good prices for our employers and beneficiaries,” he went on. “We also focus on eliminating waste from the provision of healthcare as well as its administration.”
“It’s important to understand that UnitedHealth Group has been building a
brand for the past 14 years,” Dr. Migliori said. “This is what sets our company apart from other healthcare firms. We want our patients to recognize that our brand of healthcare gives them individual choice to select their doctors, hospitals and, other providers.
Give Consumers Control
“Beyond choice, we also give them control,” he added. “Why? Because we give them the information they need to make informed decisions. We want them to be better informed about their future and current health risks. And this is where laboratory test data plays an important role.
“We offer information which helps patients and physicians in three fundamental ways,” stated Dr. Migliori. “First, we want to provide information which allows them to make better choices when they shop for medical services.
“Second is information about all available therapies. Patients should have no doubt that their doctors discussed every aspect and potential treatment of the clinical problem,” he noted.
“Third, patients should have information about the clinical capabilities of the physician standing in front of them, as well as confidence in the quality, speed, and affordability of healthcare services,” Dr. Migliori said.
Gaps in Care Provide Major Opportunities
TWO YEARS AGO United Health abolished pre-approval for health services. “We said no more nurse-in-a-box, no more mother-may-I, no more pre-certification,” explained Richard J. Migliori, M.D. Chief Clinical Strategist at Ingenix/UnitedHealth Group.
“It was an economic decision,” he explained. “For all the phone calls we got from doctors saying, ‘Can I do this to patients,’ only 3% of the time would we ever say no. We were spending $108 million dollars each year to aggravate our doctors and patients.
“At the same time, however, we observed some unsettling situations. In one city noted for outstanding outcomes and high HEDIS scores, we examined records for all the asthmatic kids in that community,” recalled Dr. Migliori. “Of 1,400 asthmatic children, we found that 70% didn’t get a single prescription filled for an inhaler! And that is the standard of care. We felt if we redirected the efforts of those nurses who were saying ‘yes’ to doctors to address this situation, we could have an impact.
“These asthmatic kids weren’t getting their asthma medications and they were the ones ending up in ICUs and emergency rooms. We instituted a program to help physicians and patients address this situation. It reduced in-patient days and reduced the amount of money spent on health care services. We didn’t have much influence on the ER rate but we did influence the number of kids who visited the ER and could then go right home,” explained Dr. Migliori.
“The fascinating part is what happened in their lives,” added Dr. Migliori. “We asked parents about what had changed. Parents told us their children woke up far less often at night suffocating from their disease. Kids missed less school; more importantly parents were missing work less often.
Lab Test Data Is Crucial
“This is a total value equation, and the role of laboratory test information is crucial,” he continued. “Our brand also makes a difference with physicians. Doctors recognize they can practice medicine without being distracted by us. Doctors also recognize that there is ready access to credible information about the same issues I just mentioned above.
“Now that I have explained the philosophy of UnitedHealth Group, I would like to specifically discuss the ways in which we are using information, including lab test data, to improve healthcare,” offered Dr. Migliori.
“We use an engineering model to evaluate and improve both administrative and clinical practices,” he noted. “For example, look at the cycle of events which starts when patients say ‘I need a service,’ either for prevention or to treat a specific symptom. They see a clinician, who then renders care at the clinician’s discretion. Following that care, the physician codes the bill and submits a claim. Based on our contract, we take that coded bill, apply a discount, and effect reimbursement.
“These events are managed mathematically. Tracking these events on a flux diagram generates a series of ratios,” Dr. Migliori observed, “These ratios describe patient demand as a function of that population, and the care provided is expressed as the services rendered for a given need. Any doctor doing too much will have a higher ratio than any doctor that does not do enough.
“Likewise, coding, over-coding, unbundling, and doing a number of fraudulent things will lead to a higher ratio compared to somebody who is a minimalist when it comes time to sending the bill,” noted Dr. Migliori. “Finally, we study contracts, expressed in dollars per given code. If you simplify this math, it comes out to a PMPM (per member per month) expression of healthcare. This allows us at Ingenix, part of UnitedHealth Group, to apply a variety of products to either measure or influence those ratios.
“Now it’s time to see how these business approaches directly contribute to better healthcare outcomes,” said Dr. Migliori. “First, we must identify patient demand for health services. Our model says that if you involve yourself with only those people who need you, you provide greater value and stay out of the lives of the patients who would otherwise do the right thing on their own.
Identifying Source of Costs
“The power of this model comes from this fact: in any given year, 5% of the population is responsible for 45% of the healthcare costs that year,” he noted. “The challenge is to identify those 45%, because, if you earmark them and follow them the next year, these same individuals only generate about 18% of the costs. That’s logical, because most of them got well. They had their appendectomy or coronary artery bypass and it has fully healed by the following year.
“Our challenge is to predict, each year, that 5%,” he said. “We look at our claims data. It’s got names, addresses, the doctors, the patients, the diseases, the procedures that were done, the time at which they’re done, and so forth.
“When looking at individual patients, we know all their disease entities and the costs of their care in previous years,” stated Dr. Migliori. “We also know what’s called inter-vulnerability factors—places and gaps in care—that may be important to their ongoing health.
“This analysis allows us to identify people with high risk. Essentially, our nurses take the top 5% of the group we believe is at high risk and contact them to make sure they’re getting enough utilization,” he explained. “Our business risk for this high-risk group of patients is not getting enough utilization! I want to repeat that: Our business risk is when patients who need health services don’t get the care they need that would mitigate catastrophe.”
Building A “Care Portrait”
UnitedHealth Group follows a similar process with providers, including physicians, hospitals, and laboratories. “We build a ‘care portrait” on every provider,” said Dr. Migliori. “This reflects the quality, resource consumption, prescribing habits, fraud, billing practices, and patient satisfaction. It’s an effort to determine the quality of services offered by each provider.
“This is an opportunity for clinical laboratories to participate with us in this effort, because currently we only use administrative claims data,” he explained. “We examine patients for the application of ACE inhibitors or medication for congestive heart failure, anti-coagulation Coumidin for chronic defibrillation, beta-blockers after MI, glycerinated hemoglobins in diabetics, mammography and potassium screening for patients on diuretics.
“Twice each year we send the doctor a report showing what percentage of their patients deserved the therapy and what percentage actually received the therapy,” explained Dr. Migliori. “Additionally, the doctor also gets the names and addresses of the patients who deserve the therapy and didn’t receive it. This allows the doctor to verify this fact about each so he/she can call to get them in for treatment. This is the way that UnitedHealth helps reduce the risk of under-utilization.
“As we work with this information, we recognize there is further opportunity, an opportunity for clinical laboratories to participate.
“These tools work in real life. Physicians in America are motivated to do the right thing. The problem is the absence of information. Let me illustrate. We undertook a project to study the generic prescribing habits of physicians in one market. After participation, these doctors had a 12% pharmacy trend at a time when people expect 20% pharmacy trends and the control group had a 16% trend. This is a very meaningful outcome,” noted Dr. Migliori.
“We find willingness to respond to good information to be also true of laboratories and hospitals,” he noted. “We have truly good partnerships.
“Likewise,” he continued, “when studies are done on a variety of other healthcare resources being consumed, following the delivery of these reports, over time we see a marked decrease in the consumption of resources, largely because the doctors are focusing.
“There’s no penalty, by the way. We’ve not fired a doctor. We’ve not penalized their pay. All we’ve done is provide them with useful information. They use this information to take appropriate action,” he said.
“Now you see why UnitedHealth Group wants to improve the data we collect and analyze,” Dr. Migliori explained. “It allows us to store it in the way people buy healthcare, by episode. We then apply software applications to these data bases, allowing us to find outliers. Outliers can include patients with special needs and doctors who are different.
“We can profile the same data by looking at doctors, profiling medication use, profiling lab use, and profiling disease frequency in entities,” he commented. “We then build intervention rules organized around evidence-based medicine.
“This knowledge is used in our contact management systems and transmitted to the health plans,” noted Dr. Migliori. “They use it to contact doctors, patients, the laboratory, and other providers. As we work with this information, we recognize there is further opportunity, an opportunity for clinical laboratories to participate.
“Let’s examine a case, for example, a heart attack, where a given set of events would occur in a normal episode,” said Dr. Migliori. “However, when we pull up the data, we find there may be some extra physician visits and that the lab visit kicked out a potassium of 51/2 and a creatine of 4.
“Recall though, this was treatment of a heart attack,” he observed. “Here is the ability to identify things that were done beyond exception, things that were missed. We didn’t see a beta-blocker after their MI, so we can contact the doctor about that. Additionally, we can also respond to the patient’s critical lab values. ‘By the way, doctor, flash alert! You have a patient out there with imminent renal failure.’
“I would like to conclude by saying that the earliest forms of managed care were organized to serve a different set of needs,” explained Dr. Migliori, “But ongoing evolution of the healthcare system in the United States requires managed care firms to respond to these new challenges. Whereas the emphasis might once have been primarily on managing costs, now the goal will be to partner with providers to improve patient care.
“We view our role very differently at UnitedHealth Group,” noted Dr. Migliori. “We’re going to have more fun and provide more value working as lifeguards at the deep end of the pool.
“There are three points to understand about this approach to healthcare,” concluded Dr. Migliori. “Number one, that old processes in managed care have ceased to provide value; at one time they may have eliminated untoward variation.
“Number two, the application of information is allowing us to make the reforms in healthcare that we’ve initiated. But there’s plenty more to do!,” he declared. “Number three, I want to stress that laboratories are key to the future. You hold the future because these tools require lab test data to work with maximum effectiveness.
Opportunity For Labs
“As we go forward, the experience UnitedHealth Group has had with
Laboratory Corporation of America is the experience we expect with other laboratory providers. It may become a rule of our provider relationships with labs that, in order to render services, the laboratory must provide comprehensive lab test data. It is that data which enables UnitedHealth Group to provide added value to our employers, physicians, and beneficiaries.”