A new report from McKinsey & Company (McKinsey) has revealed that many payers are not getting return on investment (ROI) from their care-management programs despite allocating at least 10 percent of administrative spend on care management. According to the researchers, payers mostly depend on utilization management, payment integrity, or network to manage medical cost and boost revenue. But the outbreak of Covid-19 pandemic has necessitated a four-step review of the payer care management.
- The report says payers should target high-potential sources of value. It says payers can target sources of value that can be achieved while a member is still enrolled with their plan and broaden the sources of value that they target. They can also target the relevant sources of value for each member archetype. The paper points out seven sources of value — which impact medical cost and revenue — that payers can tap into with care management.
- The report further suggests payers to consider ways to match the intensity of care management to the needs of the targeted population and not just seek to reduce total healthcare spend. The researchers say payers can avoid under-investing in high needs members or over-investing in low needs members by reaching out at “health inflection points”.
- The third step recommended by the report is engaging members as consumer companies do with updated data sets to find more potential members, enhance member contact information and leverage multiple channels to reach members. It points out how healthcare has been relatively slow to pick up consumer engagement trends.
- The last step suggested is running care management with an operational mindset by setting clear metrics like staffing ratios, case length expectations, and case graduation criteria, besides Incorporating “top of license” practices. The report further highlights the role of digitization and automation in reducing costs.