1. 1 Soyal Momin MS, MBA September 23, 2008 Predictive Modeling 2008: The BlueCross BlueShield of Tennessee Experience

2. 2 Outline Maximizing the Value of Predictive Modeling: A Health Plan Perspective –Care Management Challenges: Understand Population Care Management Needs Identify Stratify Triage –Care Management Model, Implementation, Process Efficiencies Intervene –Care Management Programs Evaluate –Conclusions

3. 3 Care Management Challenges: Understand Population Care Management Needs Cost distribution and trend over time –Quantitative assessment Population assessment –Qualitative assessment – clinical cost drivers based on healthcare cost (direct cost) Total cost assessment – direct & indirect costs –Qualitative assessment – clinical cost drivers based on healthcare cost and personnel cost (indirect cost)

4. 4 Understand Population Care Management Needs Cost Distribution and Trend Over Time Cumulative Total Healthcare Cost

5. 5 Cost Distribution and Trend Over Time Cumulative Professional and Outpatient Cost

6. 6 Cost Distribution and Trend Over Time Cumulative Pharmacy Cost

7. 7 Cost Distribution and Trend Over Time Cumulative Inpatient Cost

8. 8 Understand Population Care Management Needs 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 Population Assessment 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 Population Assessment Major Analysis Variables, Continued

11. 11 Population Assessment Population Profile

12. 12 Population Assessment Illness Burden by Major Practice Category

13. 13 Population Assessment Provider Efficiency by Major Practice Category

14. 14 Population Assessment PMPM Cost Index by Major Practice Category

15. 15  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 Understand Population Care Management Needs Total Cost Assessment

16. 16 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% Total Cost Assessment Account Group XYZ

17. 17 Total Cost Assessment Top 20 Cost Drivers

18. 18 Identifying Members for Care 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 –High cost member report Case managers workload 103/CM/Month High predicted cost member report Stratification index report Care Management Challenges: Identify & Stratify Members for Care Management

19. 19 Commercial LOB 2005 Allowed >= $50K GROUP A N = 9,017 ( 100%) PMPM: $9,025 PMPY: $108,305 Average MM: 10.98 IP PFO Rx $4,379 $4,211 $441 $52,543 $50,534 $5,289 Experience in 2006 Allowed >= $50K GROUP B N = 1,968 ( 22%) PMPM: $10,706 PMPY: $128,469 Average MM: 11.12 IP PFO Rx $3,107 $6,686 $913 $37,280 $80,232 $10,957 ? N = 7,049 (78%) Eligible Members With < $50K GROUP C N =5,180 (57%) PMPM: $1,414 PMPY: $16,966 Average MM: 10.44 Members Not Eligible N = 1,723 (19%) Eligible Members W/O Claims$ N = 146 (2%) N = 2,011,903 PMPY: $2,979 Identify & Stratify Members for Care Management Value of Working High Cost Member Report (Y1  Y2)

20. 20 Commercial LOB 2006 Allowed >= $50K GROUP A N = 10,194 ( 100%) PMPM: $8,772 PMPY: $105,258 Average MM: 11.09 IP PFO Rx $4,110 $4,196 $467 $49,316 $50,358 $5,608 Experience in 2005 Allowed >= $50K GROUP B N = 1,969 ( 19%) PMPM: $10,155 PMPY: $121,857 Average MM: 11.60 IP PFO Rx $3,285 $6,082 $761 $39,426 $72,990 $9,131 ? N = 8,225 (81%) Eligible Members With < $50K GROUP C N =6,651 (65%) PMPM: $1,095 PMPY: $13,134 Average MM: 11.14 Members Not Eligible N = 1,166 (11%) Eligible Members W/O Claims$ N = 408 (5%) N = 2,091,256 PMPY: $2,995 Identify & Stratify Members for Care Management Value of Working High Cost Member Report (Y2  Y1)

21. 21 Year 2004 Commercial LOB 2004 N = 1,837,214 PMPY: $2,836 Allowed >= $50K N = 7,404 (100%) PMPM: $8,910 PMPY: $ 106,921 Average MM: 10.94 Year 2005 Allowed >= $50K N = 1,635 (22%) PMPM: $10,251 PMPY: $ 123,006 Average MM: 11.47 Year 2006 Allowed >= $50K GROUP D N = 650 (9%) PMPM: $9,493 PMPY: $ 113,915 Average MM: 11.24 Identify & Stratify Members for Care Management Value of Working High Cost Member Report (Y1  Y2  Y3)

22. 22 Identify & Stratify Members for Care Management Value of Working High Cost Member Report: Cost Drivers

23. 23 Identify & Stratify Members for Care Management Value of Working High Cost Member Report: Cost Drivers

24. 24 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 Identify & Stratify Members for Care Management Developing a Stratification Index (SI)

25. 25 Validating SI Score Chronic & Acute Impact: Break Down by SI Score

26. 26 Validating SI Score Chronic & Preventative Gaps: Break Down by SI Score

27. 27 Validating SI Score Forecasted Cost Risk: Break Down by SI Score

28. 28 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 cost 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? Validating SI Score Mover Identification

29. 29 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 Validating SI Score Index Scores for Movers

30. 30 Commercial LOB 10/2005 High Scores: >=11 (10.2%) Moderate Scores: 6-10 (18.4%) Low Scores: <=5 (71.4%) Validating SI Score Distribution of Index Scores

31. 31 Care Management Challenges: Triage & Intervene Members for Care Management Needs Care Management Model

32. 32 Information on disease/condition –Web resources –Pamphlets –Telephonic health library –24/7 Nurse Line –HRA/PHR Encouragement to take more active role/accountability Care Management Model Lifestyle/Health Counseling for Healthy and Worried Well

33. 33 Telephonic coordination with members and their providers Ensures appropriate treatments and pharmaceuticals Five different programs included in this model Care Management Model Care Coordination for Chronically Ill

34. 34 Pharmacy Care Management Emergency Room (ER) Visits Mgmt. Transition of Care Condition Specific Care Coordination Disease Management Care Management Model Care Coordination Programs

35. 35 Directed to members with – Terminal illness (HOPE) – Major trauma – Cognitive/physical disability – High-risk condition – Complicated care needs Systematic process of assessing, planning, coordinating, implementing, and evaluation of care Care Management Model Catastrophic Case Management

36. 36 Triage & Intervene Members for Care Management Needs Implementation Predictive modeling using –MEDai, DCG, ETG Rolling 12 months DCG explanation prospective model ETG cost to supplement MEDai prediction Developed SQL database containing MEDai, DCG, and ETG information Improved processes/workflow Easy and continuous access Better documentation

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44. 44 Triage & Intervene Members for Care Management Needs Implementation: Future Enhancements Accreditation Analytics Member non-compliance for HEDIS measures Satisfaction profile Geo-spatial Analytics (imputed race, vicinity to Centers of Excellence (COE) or efficient/quality providers) Data Mining Analytics Probability of engagement, segmentation profile Psychosocial Profile Speech Analytics Indirect Cost Profile

45. 45 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 Care Management Challenges: Evaluate Care Management Interventions

46. 46 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$ Evaluate Care Management Interventions Predictive Modeling

47. 47 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 Evaluate Care Management Interventions Predictive Modeling w/Adjustments

48. 48 Evaluate Care Management Interventions Total Cost Approach Direct Costs Direct Costs by SI Score – 2007 Commercial Subscribers

49. 49 Evaluate Care Management Interventions Total Cost Approach Indirect Costs Indirect Costs by SI Score – 2007 Commercial Subscribers

50. 50 Evaluate Care Management Interventions Total Cost Approach Total Costs Total Costs by SI Score – 2007 Commercial Subscribers

51. 51 Evaluate Care Management Interventions Total Cost Approach Change in SI Score vs. Change in Median THC for Commercial Subscribers in 2006 & 2007 SI Score Reduced SI Score Increased Each 1 point reduction in Score = $775 in THC savings PMPY Each 1 point increase in Score = $750 THC increase PMPY Median Change in Costs SI Score Change From December 2006 to 2007

52. 52 Conclusions More scientific/standardized approach Able to touch more lives efficiently Well accepted by our care managers PM approach has helped –Streamline our processes –Better manage case managers case load Provide “Peace of Mind” to our members and clients