1. 1 Soyal Momin MS, MBA December 14 th, 2007 Maximizing the Value of Predictive Modeling: The BlueCross BlueShield of Tennessee Experience

2. 2 Outline Understanding Population Needs Historical View: Care Management at BCBST Concept: Next Generation Care Management (NGCM) Implementation of NGCM –Improving the Process Efficiency Information Shared with CM Using Predictive Modeling to Evaluate Care Mgmt. ROI Conclusions

3. 3 Understanding Population Needs Utilization distribution –Total healthcare cost and its components Population assessment Total cost assessment – direct & indirect costs

4. 4 Cumulative Total Healthcare Cost

5. 5 Cumulative Professional and Outpatient Cost

6. 6 Cumulative Pharmacy Cost

7. 7 Cumulative Inpatient Cost

8. 8 Population Assessment Population Assessment is an analysis of claims and membership data to determine characteristics of a given population (Network, Region, Group) that might affect the population’s interaction with the health care system

9. 9 Propensity to Utilize Index – The average number of episodes of illness for a member month Episode Seriousness Index – A measure of the average cost to treat the categories of illness experienced by a population Illness Burden – A measure of the level of illness within a group determined by multiplying the propensity to utilize index by the Episode Seriousness Index Major Analysis Variables

10. 10 Provider Efficiency Index – A measure of the efficiency to treat a specific episode of illness determined by dividing the cost to treat the specific episode by the average cost for the category of illness PMPM Cost Index – An index that measures the PMPM submitted costs for a population determined by multiplying the Illness Burden by the Provider Efficiency Index Major Analysis Variables, Continued

11. 11 Population Profile

12. 12 Illness Burden by Major Practice Category

13. 13 Provider Efficiency by Major Practice Category

14. 14 PMPM Cost Index by Major Practice Category

15. 15 Total Cost Assessment  Direct costs are dollars paid out for medical treatment  Indirect costs are labor resources lost due to illness Direct Costs Direct Costs = Inpatient + Professional/Outpatient + Pharmacy Indirect Costs Indirect Costs = Sick Leave + Presenteeism + Family & Medical Leave + Short Term Disability + Long Term Disability + Turnover + Worker’s Compensation

16. 16 Total Cost Assessment: Company XYZ Total Healthcare Cost = $23,237,422 $5,631 per FTE Direct $ = $13,761,278 $3,334 / FTE 59.2% Indirect $ = $9,476,144 $2,296 / FTE 40.8% Inpatient $376 6.7% Professional/ Outpatient $2,154 38.3% Pharmacy $804 14.3% Sick Leave $1,322 23.5% Presenteeism $318 5.7% FMLA $274 4.9% STD $220 3.9% LTD $4 0.1% Turnover $74 1.3% Work Comp $82 1.5% Total Healthcare Cost = $23,237,422 $5,631 per FTE Direct $ = $13,761,278 $3,334 / FTE 59.2% Indirect $ = $9,476,144 $2,296 / FTE 40.8% Inpatient $376 6.7% Professional/ Outpatient $2,154 38.3% Pharmacy $804 14.3% Sick Leave $1,322 23.5% Presenteeism $318 5.7% FMLA $274 4.9% STD $220 3.9% LTD $4 0.1% Turnover $74 1.3% Work Comp $82 1.5%

17. 17 Top 20 Cost Drivers

18. 18 History Identifying Members for Case Management –Referrals from Internal Sources External Sources An internally developed ICD9 Trigger list –The ICD9 Trigger list included Asthma, Diabetes, High Risk OB, AIDs, Cancer, CHF, COPD etc Case managers workload –103/CM/Month PM implementation validation revealed missed opportunities for case management

19. 19 Next Generation Care Management: Triage Guidelines

20. 20 Lifestyle/Health Counseling for Healthy and Worried Well Information on disease/condition –Web resources –Pamphlets –Telephonic health library Encouragement to take more active role/accountability

21. 21 Care Coordination for Chronically Ill Telephonic coordination with members and their providers Ensures appropriate treatments and pharmaceuticals Five different programs included in this model

22. 22 Care Coordination Programs Pharmacy Care Management Emergency Room (ER) Visits Mgmt. Transition of Care Condition Specific Care Coordination Disease Management

23. 23 Catastrophic Case Management Directed to members with – Terminal illness – Major trauma – Cognitive/physical disability – High-risk condition – Complicated care needs Systematic process of assessing, planning, coordinating, implementing, and evaluation of care

24. 24 Next Generation Care Management: Implementation Predictive Modeling Using –DCG –ETG Rolling 12 Months DCG Explanation Prospective Model ETG Cost to Supplement DCG Prediction

25. 25 Next Generation Care Management: Process Enhancements Developed SQL database containing DCG and ETG information –Improved processes/workflow –Easy and continuous access –Better documentation

26. 26 Next Generation Care Management : Process Enhancements

27. 27 Next Generation Care Management : Process Enhancements

28. 28 Under prediction at all risk levels Use pharmacy data for prediction –NDCs Prediction of utilization Provide information to help prioritize members for interventions Evidence-based guideline gaps Care Management Staff Feedback

29. 29 MEDai RNC Prediction of utilizationEvidence-based guideline gapsUse pharmacy data for prediction Provide information to help prioritize members for interventions Forecasted cost –Overall –Pharmacy ER and IP LOS prediction Mover identification Impact index –Acute –Chronic Risk drivers Gaps in care

30. 30 Improving the Information Shared with Care Management Staff Enhancing SQL database with RNC information ETG Low/Med/High Amount  MEDai forecasted costs (total and Rx)  ER and IP LOS prediction  Impact index  Care management history  Active PCP - Risk drivers - Latest Rx data - Gaps in Care - Risk History

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37. 37 Why? 1) To reliably identify higher cost, highly impactable members 2) To enhance prioritization of members for nurse-intervention management How? Use predictive output from MEDai Select key MEDai measures to construct a composite score Use the composite score as an index to stratify members Focus on members with the highest index scores Developing a Stratification Index (SI)

38. 38 Chronic Impact: Break Down by SI Score

39. 39 Acute Impact: Break Down by SI Score

40. 40 Chronic Gaps: Break Down by SI Score

41. 41 Preventative Gaps: Break Down by SI Score

42. 42 NGCM Risk Levels: Break Down by SI Score

43. 43 Movers are members who are likely to make the transition from low or moderate to high risk Movers can be identified by comparing current vs. forecasted NGCM risk level if a member’s current cost is less than $1,000 (Risk Level I) and is predicted to cost more than $25,000 (Risk Level V) Do movers have higher index scores? Mover Identification

44. 44 Current Risk Level Forecasted Risk Level Frequency Mean Index Score III 430,312 4.52 IIII 11,370 9.87 IIV 451 12.75 IV 2 11.00 IIIII 96,352 10.26 IIIV 7,737 13.03 IIV 51 13.04 IIIIV 22,492 13.47 IIIV 225 13.95 IVV 2,142 14.85 Index Scores for Movers

45. 45 Commercial LOB 10/2005 High Scores: >=11 (10.2%) Moderate Scores: 6-10 (18.4%) Low Scores: <=5 (71.4%) Distribution of Index Scores

46. 46 Basic research problem: measuring what would have happened vs. what actually happened Methodologies: Randomized Control Group Population-Based Pre-Post Methodology Predictive Modeling Control Group Matching Combination How Do We Measure Care Management (CM) Impact?

47. 47 Predictive Modeling Group's Inflation Factor5%7% CM Mbrs Actual PMPM574$ 542$ CM Mbrs Predictive Modeling PMPM629$ 638$ Inflated CM Mbrs Predictive Modeling PMPM 659$ 682$ CM Savings PMPM85$ 140$ Total CM Savings42,005$ 99,560$ Admin Cost29,399$ 26,749$

48. 48 Predictive Modeling w/Adjustments Non CM Mbrs Actual PMPM225$ 217$ Non CM Mbrs PMPM Predictive Modeling205$ 232$ Inflation Adjusted Non CM Mbrs PMPM Predictive Modeling214$ 248$ Adjustment for Actual to Predictive Modeling5%-13% CM Mbrs Actual PMPM574$ 542$ CM Mbrs Predictive Modeling PMPM629$ 638$ Inflated CM Mbrs Predictive Modeling PMPM659$ 682$ Adjusted Predictive Model692$ 597$ Adjusted CM Savings PMPM $ 117 $ 55 Adjusted CM Savings $ 57,819 $ 39,113 Admin Cost 29,39926,749$$ Adjusted Net Savings28,296$ 12,364$ Adjusted ROI1.96 1.46

49. 49 Conclusions of DM Evaluations A statistically valid predictive model should be incorporated in lieu of randomized control group Adjustments (inflation factors, inaccuracy of predictive models, etc.) should be made to the model information

50. 50 Conclusions More scientific/standardized approach Able to touch more lives efficiently Well accepted by our case managers NGCM has helped –Streamline our processes –Better manage case managers case load Provide “Peace of Mind” to our members and clients