Monday, August 10, 2009

Health Care Management

Electronic patient chart of a health informati...Image via Wikipedia

Medical benefits delivery presents an interesting challenge. The aging demographics of America coupled with health care inflation presents a dilemma that can only be attacked by the combined efforts of patients (through good preventative health and wellness practices) and healthcare professionals (through more effective and efficient service delivery). Short- and long-term cost containment in health care depends on an integration of health care delivery systems, technological innovation, an understanding of the regulatory environment, and an increased focus on preventive care. In approaching health care management, I’d consider a three-pronged approach: information, education, and management.


A long-term approach to health care informatics involves an immersion in many of the concepts underlying the Nationwide Health Information Network (NHIN). Consolidation of patient medical records into patient health records will increase opportunities for traditional (statistical/actuarial) and exploratory (data mining) analysis of conditions, treatments, and outcomes and highlight more and less effective strategies. For example, there is a wide variance in medical costs for patients with the same condition due to variations in the number of physicians involved, specialty consultations, treatment regimens selected, and lengths of stay. Many studies have shown that there is no statistically significant difference in mortality rates between high-cost and low-cost patients with the same condition. Recognizing this, one could consider pooling data on provider charges and patient outcomes, establishing median total charges for patients with certain conditions, and setting maximum payment caps based on these rates instead of on units of service (e.g., hospital days, physician visits, procedures, or consultations). In addition, a provider could track complications caused by preventable medical errors such as hospital-acquired infections, falls, or medication errors. For costs related to such errors, a provider might establish co-morbidity adjustments. Costs for unnecessary duplication could be denied to further reinforce care coordination. My preferred version of NHIN would not only be a clearinghouse for enrollment, eligibility, and claims management, it would also be an interactive RMIS whose goal is to maximize patient outcomes while minimizing costs.


In order to reduce the overutilization of medical procedures and drugs, a provider could spearhead increased education about treatment options (e.g., prostate surgery, spinal fusion surgery, bariatric surgery, gastric esophageal reflux, palliative care). Systematically informing patients about the risks and benefits of different treatments could be established as a condition for the approval of procedures. Similarly, systematically and periodically reviewing overall (over-the-counter, prescription, naturopathic, and home remedy) medication use could be a condition for approval of drugs.


Effective chronic patient health care management can advocate proper monitoring of such patients (e.g., asthma buddy and similar monitors) and support transitional care benefits (since 10 % of patients account for 70% of all healthcare costs). Negotiated pharmaceutical prices coupled with reimbursements based on the lowest cost-effective drug (i.e., reference pricing) may also be effective management strategies. In coordination with healthcare providers, refinement of evidence-based medicine guidelines can be established to determine when a given test or procedure should be done and may help achieve significant savings and promote higher-quality care. Moreover, simplified and standardized documentation might reduce administrative expenses

Wellness encouragement is another integral component in health care management. A provider could ensure that every patient has a regular provider who is responsible for prevention, management of chronic conditions, and coordination of care through contractual reward or penalty. Regular providers could be required to off same-day appointments for urgent care.

From plan benefit design and actuarial perspectives, health benefit management can involve optimization of Section 105 HRAs, Section 125 FSAs, and specific and aggregate stop loss in conjunction with traditional or hybridized coverage plans.

Overall savings could be invested in information systems, bonus programs to primary care physicians and advanced practice nurses who are willing to work with patients to improve health behavior and manage their chronic condition, and other rewards that encourage medical stewardship.
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