The biggest winner in health reform

Now health plans can visit physicians and, clinician-to-clinician, discuss ways of cutting costs based on data. Those savings can go to the bottom lines of both health plans and clinics. Health plans also have an incentive to talk to patients, based on their profiles, with real incentives for changing behaviors to habits that keep them out of the hospital.

The biggest winners out of health reform may come from an industry you never heard of.

Predictive modeling.

The idea has been around for 20 years. Compare the risks of patients, or the costs of clinics, in an effort to lower both. Collect the data, analyze it, then act on the analysis.

Verisk Health is in this business. Much of their work in the past was done with health insurance companies, and chief medical officer Nathan Gunn (right) admitted that in the old fee-for-service era it wasn't working.

Tiering physicians into high-cost and low-cost networks did not work. Cutting off patients based on risk assessments proved to be political poison.

But capitation, the change from a fee-for-service to a fee-per-patient model, changes everything, he said. Capitation is the health reform the insurance industry wanted, and got, in the bill that passed Congress earlier this year.

Now health plans can visit physicians and, clinician-to-clinician, discuss ways of cutting costs based on data. Those savings can go to the bottom lines of both health plans and clinics, sometimes in the form of bonuses.

Health plans also have an incentive to talk to patients, based on their profiles, with real incentives for changing behaviors to habits that keep people out of the hospital.

Predictive modeling can also bring value to Electronic Medical Records (EMRs), Dunn said. Combining EMRs and billing data creates a "complete information system that helps physicians do risk management."

Risk management is the key concept. Insurers have done this for decades with commercial accounts. It's why your car insurance company offers a "good driver discount."

By combining multiple data sources, predictive modeling companies like Verisk can now work with hospitals and health plans to deliver the equivalent of Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) to small clinics.

The money saved can increase margins for the health plan, increase the income of the physicians, improve the health of the patients, and, in time, even bend the health care cost curve, which has been skewed by chronic conditions like diabetes that mean more cash in a fee-for-service model but no longer do in a fee-for-patient model.

All this spells opportunity for Verisk. Their data now has value. Their consulting opportunities now increase. Instead of being the "bad guys" who try to force patients and doctors to change their habits, they're now the "good guys" who help both make money.

Which could make these database-driven services the biggest winners from health reform.

This post was originally published on Smartplanet.com

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