Predictive Modeling 2008: The BlueCross BlueShield of Tennessee Experience

Soyal Momin MS, MBA September 23, 2008

1

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 2

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) 3

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

4

Cost Distribution and Trend Over Time Cumulative Professional and Outpatient Cost

5

Cost Distribution and Trend Over Time Cumulative Pharmacy Cost

6

Cost Distribution and Trend Over Time Cumulative Inpatient Cost

7

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

8

Population Assessment Major Analysis Variables

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 9

Population Assessment Major Analysis Variables, Continued

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

10

Population Assessment Population Profile

2.5

2

1.5

1

0.5

0 Propensity to Utilize

Episode Seriousness Index

Population A

Provider Efficiency

PMPM Cost Index

Population B 11

In fe ct io u s En Dis d o ea cr se s in H e olo m g Ch at y em o i c Ps lo g al y y D e ch i pe atr nd y N en c e O ph u r o y th l al og m y C o lo O t ar d gy ol i ar olo y g Pu n go y l G l as mo ogy n tr oe olo nt g er y o H ep lo g y a N tol ep og h y ro lo U gy ro O log bs te y G yn tri c ec s D e ol o g O rm r t h at o y lo o gy & N Rh eo e na um to lo gy

Illness Index

Population Assessment Illness Burden by Major Practice Category

0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0

Major Practice Category

Population A Population B 12

In fe ct io Provider Efficiency Index us E Di nd s e o a cr se in s H e ol o C m he at gy m o ic Ps lo g al y De ch y pe iat r nd y e O N eu n cy ph th rolo al m gy C ol O ar og y t o di l ar ol o y g Pu ngo y G a lm lo g st o ro no y en lo te gy H rol ep og a y N to l ep o g h ro y lo U gy ro lo O b s gy G te yn t r i e c cs D e ol O r m a og y rt h o t ol & og R y N eo he n a um to lo g y

Population Assessment Provider Efficiency by Major Practice Category

4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Major Practice Category

Population A Population B 13

In fe ct io us En Di s d oc eas es ri H e nol C m og he y at m o ic Ps lo g al y De ch y pe iat r nd y e O Ne u n c ph r y th ol o al m gy C ol O t ar d og y ol ar iolo y g Pu n go y G as l mo log y tr oe nol n t og y e H ro l ep o g a y N e t ol o p hr g y ol o Ur gy o O lo g b G ste y y n tri ec c s D e ol O r r m og y th at o o l & og R Ne h y on e u at m ol og y

Cost Index

Population Assessment PMPM Cost Index by Major Practice Category

0.35 0.3 0.25 0.2 0.15 0.1 0.05 0

Major Practice Category

Population A Population B 14

Understand Population Care Management Needs Total Cost Assessment

Direct costs are dollars paid out for medical treatment ƒ Indirect costs are labor resources lost due to illness ƒ

Direct Costs = Inpatient + Professional/Outpatient + Pharmacy Indirect Costs = Sick Leave + Presenteeism + Family & Medical Leave + Short Term Disability + Long Term Disability + Turnover + Worker’s Compensation

15

Total Cost Assessment Account Group 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

Presenteeism

STD

Turnover

$804

$318

$220

$74

5.7%

3.9%

Work Comp

1.3%

$82

14.3%

Sick Leave $1,322

FMLA

LTD

23.5%

$274

$4

4.9%

0.1%

1.5%

16

IN T

B EN

D

EG EN /IN IG G FL A N ST N EO AM R O PL IN A FE SM C /IN H D YP EP FL ER A R O M E R TE S TH & N SI A PR O D O N X N E EG IE R A T & N Y G D D E/ EL IS TR IV M ER A A LI U Y M G A W N A / C N -S T N EO EC PL A SM R D H I PR A IN B IT EG ET IS ES /S & IN D EL U SI IV TI N S O C -S C O EC R A O ST N A C H O R O M T Y H N A D ER D I SE A C SS A A SE O R G D C A I A M LL C EN D B S IS LA T/ VI IN D SU D ER FER A L T D D IS IS E TU A SE H R H ER B YP A ED N ER C IT ES L A I PI R D Y/ EM C O M IA N IN G EN O R D O I R TH S O D IS

JO

Total Cost Assessment Top 20 Cost Drivers

$2,000,000

$1,800,000

Direct Costs Indirect Costs

$1,600,000

$1,400,000

$1,200,000

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0

17

Care Management Challenges: Identify & Stratify Members for Care Management

• 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 18

Identify & Stratify Members for Care Management Value of Working High Cost Member Report (Y1ÆY2) Experience in 2006 Commercial LOB 2005

Allowed >= $50K

GROUP B

Allowed >= $50K

N = 1,968 (22%)

GROUP A N = 9,017 (100%)

PMPM: $10,706 PMPY: $128,469 Average MM: 11.12

PMPM: $9,025 PMPY: $108,305 Average MM: 10.98 IP

PFO

$4,379 $52,543

$4,211 $50,534

IP

Rx

PFO

$3,107 $37,280

$441 $5,289

N = 2,011,903

$6,686 $80,232

Rx $913 $10,957

?

PMPY: $2,979

N = 7,049 (78%)

Eligible Members With < $50K

GROUP C N =5,180 (57%)

Members Not Eligible N = 1,723 (19%)

Eligible Members W/O Claims$ N = 146 (2%)

PMPM: $1,414 PMPY: $16,966 Average MM: 10.44

19

Identify & Stratify Members for Care Management Value of Working High Cost Member Report (Y2ÆY1) Experience in 2005 Commercial LOB 2006

Allowed >= $50K

GROUP B

Allowed >= $50K

N = 1,969 (19%)

GROUP A N = 10,194 (100%)

PMPM: $10,155 PMPY: $121,857 Average MM: 11.60

PMPM: $8,772 PMPY: $105,258 Average MM: 11.09 IP

PFO

$4,110 $49,316

$4,196 $50,358

Rx $467 $5,608

N = 2,091,256

IP

PFO

$3,285 $39,426

$6,082 $72,990

Rx $761 $9,131

?

PMPY: $2,995

N = 8,225 (81%)

Eligible Members With < $50K

GROUP C N =6,651 (65%)

Members Not Eligible N = 1,166 (11%)

Eligible Members W/O Claims$ N = 408 (5%)

PMPM: $1,095 PMPY: $13,134 Average MM: 11.14

20

Identify & Stratify Members for Care Management Value of Working High Cost Member Report (Y1ÆY2ÆY3)

Year 2004

Year 2005

Allowed >= $50K

Allowed >= $50K

N = 7,404 (100%)

N = 1,635 (22%)

PMPM: $8,910 PMPY: $ 106,921 Average MM: 10.94

Year 2006

Allowed >= $50K

GROUP D N = 650 (9%)

PMPM: $10,251 PMPY: $ 123,006 Average MM: 11.47

PMPM: $9,493 PMPY: $ 113,915 Average MM: 11.24

Commercial LOB 2004 N = 1,837,214 PMPY: $2,836

21

Identify & Stratify Members for Care Management Value of Working High Cost Member Report: Cost Drivers Commercial LOB: TOP 20 ETGs

GROUP A: >=$50K in 2005

GROUP B: >=$50K in 2005 and 2006 %

ETG Code

ETG Code

Total

Allw

Allw

Allowed

Allw

553 Chronic Renal Failure, w ith ESRD

$47,923,994

5.4

553 Chronic Renal Failure, w ith ESRD

$38,761,827

16.1

721 Joint Degeneration, Local, w / Surgery

$35,771,711

4.0

656 Malignant Neoplasm of Breast w /o Surgery

$10,600,438

4.4

786 Other major Neonatal d/o perinatal origin

$30,891,125

3.5

75

Non-Neoplastic Blood Disease, Major

$9,977,285

4.1

Neoplastics Disorder Blood & Ly mph, Ex Leu $30,658,775

3.4

73

Neoplastic Disorder Blood & Ly mph, Ex Leuk $9,880,412

4.1

73

ETG Description

%

Total

260 Coronary Disease w /o AMI w / CABG

ETG Description

$27,081,959

3.0

72

Leukemia w /o Splenectomy

$7,787,074

3.2

655 Malignant Neoplasm Breast, w / Surgery not B $21,565,875

2.4

76

Non-Neoplastic Blood Disease, Minor

$7,526,867

3.1

251 Coronary Disease w / AMI w /CABG

$21,287,899

2.4

991 Orphan Drug Record

$5,929,881

2.5

401 Malignant Pulmonary Neoplasm, w /o Surgery $20,113,568

2.2

401 Malignant Pulmonary Neoplasm, w /o Surgery $5,921,153

2.5

72

Leukemia w /o Splenectomy

$19,282,495

2.2

478 Malignant Neoplasm Rectum/Anus, w /o Surg $4,566,464

1.9

75

Non-Neoplastic Blood Disease, Major

$17,920,993

2.0

721 Joint Degeneration, Local, w / Surgery

$3,616,225

1.5

253 Coronary Disease w /o AMI w / Angioplasty

$16,713,020

1.9

373 Bacterial Lung Infection w ith Comorbidity

$3,494,225

1.4

477 Malignant Neoplasm Rectum/Anus w /Surgery $16,288,401

1.8

51

$3,339,403

1.4

656 Malignant Neoplasm of Breast w /o Surgery

$16,052,116

1.8

655 Malignant Neoplasm Breast, w / Surgery not B $3,310,015

1.4

262 Coronary Disease w /o AMI w /Angioplasty

$15,814,419

1.8

810 Late Effects and Late Complications

$3,206,696

1.3

373 Bacterial Lung Infection w ith Comorbidity

$11,639,075

1.3

454 Malignant Neoplasm Intest/Abdom w /o Surge $3,178,822

1.3

264 Coronary Disease w /o AMI w /Cardiac Cath

$10,862,902

1.2

477 Malignant Neoplasm Rectum/Anus w /Surgery $2,985,750

1.2

153 Malignant Neoplasm of CNS w /Surgery

$10,366,887

1.2

262 Coronary Disease w /o AMI w /Angioplasty

$2,352,321

1.0

282 Cardiac Congenital Disorder w /Surgery

$10,178,199

1.1

452 Inflam of Intestines/Abdomen w /o Surgery

$2,293,327

1.0

$9,999,538

1.1

282 Cardiac Congenital Disorder w /Surgery

$2,103,403

0.9

$9,938,655

1.1

153 Malignant Neoplasm of CNS w /Surgery

$2,011,666

0.8

$400,351,606

45.0

$132,843,254

55.0

76

Non-Neoplastic Blood Disease, Minor

162 Major Brain Trauma w /o Surgery Total For Top 20 ETGs

Grand Total = $893,294,617

Other Metabolic Disorder

Total For Top 20 ETGs

Grand Total = $241,542,404

22

Identify & Stratify Members for Care Management Value of Working High Cost Member Report: Cost Drivers Commercial LOB: TOP 20 ETGs

GROUP C: >=$50K in 2005 and =$50K in 2004, 2005 and 2006 %

ETG Code

ETG Description

ETG Code

Total

Allowed

Allw

Allowed

Allw

$2,592,627

3.3

553 Chronic Renal Failure, w ith ESRD

$20,649,142

23.2

Neoplastic Disorder Blood & Ly mph, Ex Leuk $2,297,356

2.9

75

Non-Neoplastic Blood Disease, Major

$5,249,796

5.9 4.7

722 Joint Degeneration, Local, w /o Surgery 73

%

Total

ETG Description

656 Malignant Neoplasm of Breast w /o Surgery

$1,887,226

2.4

76

Non-Neoplastic Blood Disease, Minor

$4,212,880

721 Joint Degeneration, Local, w / Surgery

$1,873,126

2.4

656 Malignant Neoplasm of Breast w /o Surgery

$4,192,427

4.7

401 Malignant Pulmonary Neoplasm, w /o Surgery $1,736,043

2.2

73

Neoplastic Disorder Blood & Ly mph, Ex Leuk $3,544,421

4.0

265 Ischemic Heart Disese, Ex , CHF w /o AMI

$1,718,398

2.2

991 Orphan Drug Record

$3,063,321

553 Chronic Renal Failure, w ith ESRD

$1,589,758

2.0

72

Leukemia w /o splenectomy

$2,571,613

2.9

655 Malignant Neoplasm Breast, w / Surgery not B $1,465,064

1.9

51

Other Metabolic Disorder

$1,810,990

2.0

262 Coronary Disease w /o AMI w / Angioplasty

$1,409,685

1.8

478 Malignant Neoplasm Rectum/Anus w /o Surge $1,748,250

1.9

Non-Insulin Dependent Diabetes w / Comorbidi $1,352,197

1.7

454 Malignant Neoplasm Intest/Abdom w /o Surge $1,380,751

1.5

29

3.4

786 Other Major Neonatal D/O Perinatal Origin

$1,194,070

1.5

373 Bacterial Lung Infection w ith Comorbidity

$1,350,668

1.5

999 Orphan Record

$1,145,019

1.5

401 Malignant Pulmonary Neoplasm

$1,174,693

1.3

991 Orphan Drug Record

$1,090,253

1.4

394 Emphy sema w ith Chronic Bronchitis

$1,053,345

1.2

433 Inflammation of Esophagus w /o Surgery

$1,018,298

1.3

262 Coronary Disease w /o AMI w /Angioplasty

$985,902

1.1

160 Cereb Vasc Accident w /o Surgery

$981,220

1.3

810 Late Effects and Late Complications

$861,726

1.0

51

Other Metabolic Disorder

$908,220

1.2

27

Insulin Dependent Diabetes w /Comorbidity

$846,994

1.0

75

Non-Neoplastic Blood Disease Major

$888,965

1.1

452 Inflam of Intestines/Abdomen w /o Surgery

$754,833

0.9

47

Hy perlipidemia

$887,798

1.1

280 Benign Hy pertension w /Comorbidity

$723,403

0.8

72

Leukemia w /o Splenectomy

$856,636

1.1

167 Hered/Degen Dis CNS w /o Surgery

$708,984

0.8

$792,093

1.0

266 Pulmonary Hear Disease w /o AMI

$698,100

0.7

$27,684,052

35.0

$57,582,239

71.0

253 Coronary Disease w /o AMI w / Angioplasty Total For Top 20 ETGs

Grand Total = $78,098,373

Total For Top 20 ETGs

Grand Total = $81,451,176

23

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

Validating SI Score Chronic & Acute Impact: Break Down by SI Score 80% High Index Scores Moderate Index Scores Low Index Scores

60% 40% 20% 0% 0

10

80-85

86-90

91-95 96-100 100%

Chronic Impact Level

90%

Percent of Members

Percent of Members

100%

80% 70%

High Index Scores Moderate Index Scores Low Index Scores

60% 50% 40% 30% 20% 10% 0% 0-50

51-70

71-85

86-95

96-100

Acute Index Level

25

Validating SI Score Chronic & Preventative Gaps: Break Down by SI Score 100% 80% 70%

High Index Scores Moderate Index Scores Low Index Scores

60% 50% 40% 30% 20% 10% 0% 0

1-2

3-4

>=5

100%

Number of Chronic Gaps

Percent of M em bers

Percent of Mem bers

90%

90% 80% 70% 60%

High Index Scores Moderate Index Scores Low Index Scores

50% 40% 30% 20% 10% 0% 0

1-2

>=3

Number of Preventative Gaps

26

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

Percent of Members

100% 80%

High Index Scores Moderate Index Scores Low Index Scores

60% 40% 20% 0% $0-999

$1000-4999 $5000-9999

$1000024999

>$25000

Forecasted Cost Level

27

Validating SI Score Mover Identification

• 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?

28

Validating SI Score Index Scores for Movers

Current Risk Level

Forecasted Risk Level

Frequency

Mean Index Score

I

II

430,312

4.52

I

III

11,370

9.87

I

IV

451

12.75

I

V

2

11.00

II

III

96,352

10.26

II

IV

7,737

13.03

II

V

51

13.04

III

IV

22,492

13.47

III

V

225

13.95

IV

V

2,142

14.85 29

Validating SI Score Distribution of Index Scores Commercial LOB 10/2005 100% 90% 80% 70% 60%

High Scores: >=11 (10.2%) Moderate Scores: 6-10 (18.4%)

50% 40%

Low Scores: