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Impact of Physical/Behavioral Healthcare Integration

The American Psychiatric Association (APA) recently released a report prepared for them by Milliman, Inc., entitled, “Economic Impact of Integrated Medical-Behavioral Healthcare: Implications for Psychiatry”.  The analysis provided in the report summarizes by payor (Commercial, Medicare, Medicaid) the elevated levels of
healthcare costs related to beneficiaries who have chronic medical and behavioral comorbidities. Based on the outcomes of several recent integration projects, the actuaries estimate the portion of the elevated healthcare costs that can be controlled through such programs. The report is interesting with its detailed, claims based analysis of costs, its methodology for conducting the analysis, and for producing per member per cost data by payor for enrollees with no behavioral health services, those with non-SPMI behavioral health, those with SPMI, and those with substance use disorders.

Themes from Innovative Complex Care Management Programs


In many regions across the country, robust “super-utilizer” programs providing intensive outpatient care management to high-need, high-cost patients are beginning to emerge. The term “super-utilizer” describes individuals whose complex physical, behavioral, and social needs are not well met through the current fragmented health care system. As a result, these individuals often bounce from emergency department to emergency department, from inpatient admission to readmission or institutionalization—all costly, chaotic, and ineffective ways to provide care and improve patient outcomes.

The Center for Health Care Strategies (CHCS), in partnership with the National Governors Association, hosted a Super-Utilizer Summit on February 11 and 12, 2013. The Summit brought together leaders from super-utilizer programs across the country, states, the Centers for Medicare & Medicaid Services, the Robert Wood Johnson Foundation (RWJF) Aligning Forces for Quality (AF4Q) alliances, health plans, and other key stakeholders to share strategies for changing how our health care system interacts with these high-need, high-cost patients.

This report presents the Summit’s common themes and key recommendations for building better systems of care for high utilizers. The appendices also include materials related to existing complex care management programs that can be educational resources for states and policy-makers considering ways to implement, spread, and sustain such programs.SuperUtilizersSummitReport 2013

Emerging Models of Integrated Care Coordination

As behavioral health providers strategize on where they can fit in healthcare reform, I see care coordination as an obvious role where many providers could thrive. Central to healthcare reform is improved coordination and navigation of the complex healthcare delivery system to ensure whole-person, whole-life prevention, early intervention, supports, and care. Some of the models for care coordination read like good old fashion social work, while other more intensive models sound like modified ACT teams.

Sure, to really excel at this “new” care coordination, behavioral health providers will need to makes some changes but bottom line, this work should be in the wheelhouse of behavioral health core competencies. Likely behavioral health provider development needs include:
~ Shift of staff resources from “therapies” to care coordination
~ Robust training, development, and supervision in medical management
~ Effective partnering with primary care organizations
~ State of the art care coordination data management system

The Institute for Healthcare Innovations published a white paper in 2011 IHICareCoordinationModelWhitePaper2011 which provides a great overview of successful care coordination models.

EHR Return on Investment Webinar

Parker Dennison and Qualifacts Systems, Inc. hosted a webinar on January 21, 2011 discussing the return on investment analysis on implementing an electronic health record for behavioral health.  Presenters Susan Parker and Craig Fair, discussed:

  • Operating metrics that will be positively influenced with the use of an EHR
  • How you can predict the impact on your bottom line
  • Examples of behavioral health providers who have experienced net financial improvement as a direct result of implementing an EHR

Download the handouts from this presentation here.

Goodbye UR, Hello “Quality Improvement”

With the interim final rule (MLRFinalInterimRule 11-22-2010) defining allowable costs to meet the health plan medical loss ratio (MLR) requirements under healthcare reform published on December 1, 2010, the federal Department of Health and Human Services (HHS) has given the managed care industry a significant incentive to evolve their utilization management practices.  Under the Rule, health plans can include the costs of quality improvement activities as a medical expense toward the MLR, but not the costs of retrospective and concurrent utilization reviews.

Some health plans will no doubt attempt to re-label and slightly modify UR activities and argue that it is quality improvement but the most plans will likely shift focus to more pro-active care management, and clinical consultation for protocol outliers.  This will also be consistent with the growing focus on evidence-informed and evidence-based practices.

Now is the time for providers to start the process of revamping their own utilization review processes to focus on quality improvement rather than utilization controls or singular cost containment.

Getting Ready for Healthcare Reform

As a healthcare professional, you would have to be living under a rock not to have heard about “bending the cost curve” as an integral part of healthcare reform.  But have you thought about what that might mean in your state, in your organization?

Anything that reduces the cost to deliver a unit of service, the total number of units required to treat an illness successfully, or the amount of other, more expensive services will bend the cost curve.  There has been much early attention on changes to reimbursement structures to change the production driven incentives that currently exist in fee-for-service models.  Hopefully, the reform legislation will create a fertile environment for demonstration projects that will find viable alternatives to the current reimbursement structures.

But any reimbursement model will still include benefits for provider cost efficiencies in delivering services.  Low cost providers will have competitive advantages for years to come, and will be able to have the financial margins to invest in technologies or creative delivery system ventures that position the organization for long-term success.  Low unit costs are also imperative to surviving the current environment of state budget crises and the near term future prior to the arrival of more thoughtful reimbursement mechanisms.

One of the most important aspects of managing costs is to ensure staff are producing reasonable levels of billable units—achieving targeted productivity levels.  Managing productivity is one of the most challenging aspects of provider operations.  As a manager, as soon as you take your eye off the ball, productivity is likely to fall.  And it falls much faster than it rises!

Consider the following example—For an organization with 55 FTEs who deliver services at an average rate of $100/hour, a 1% productivity improvement will yield nearly $100,000 in additional revenues (FFS billing), or reduce the staff needed to produce the same volume of services by 0.5 FTEs (capped reimbursement).  If this organization had been operating at breakeven, a 1% productivity improvement yields a 2% reduction in costs per hour.  You just can’t afford to ignore productivity as a healthcare provider.

We can all hope that there will be additional future revenue streams that reward clinical effectiveness as well as cost effectiveness.  In the meantime, those providers who manage staff productivity effectively are going to be in the best position to be successful in both the short and long term.

Stayed tuned for future entries on provider cost effectiveness and productivity.  Comments with proven strategies to improve staff productivity are invited!

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