WellPoint Creates Reimbursement Algorithm to Cut Down Hospital Annual Payment Increases and Reward Only Those Who “Score
Posted May 15 2011 11:00pm
The big ticket item here again is hospital re-admissions and there are other quality issues at hand too but again when crammed into a data base for analytics, it’s the interpretation that determines the final outcome. The algorithm contains 51 units of measurement to qualify and 1500 hospitals are now going to be under the new policy. This is an example of business models created and changed quickly with mathematical formulas. Sure there’s room for improvement all over the place and in every area of healthcare, but you also have this 800# gorilla called technology that keeps changing the game plan. Wellpoint knows this as they have invested heavily like most other carriers with more business intelligence analytics. Its how big business runs their shops today. I first wrote about these efforts back in December of 2008.
In addition to their own development they use SAS business analytics. Below is a short explanation of how the software works to include data mining and identifying a “risk” classification to patients, so if you are one with a chronic disease as a patient they want all the information they can dig up. The services include detecting fraud, proactively managing risk driven by preventative interactions and other areas that make the system more efficient and effective."
“Identification and Severity Classification The SAS solution uses a variety of methods for identifying patients and assigning a severity classification, including:
Pre-designated lists (as determined by medical evaluations and diagnoses or hospital discharge data).
Rules-based algorithms based on diagnosis or procedure codes, pharmacy scripts, lab results and medical assessment questionnaires.
Advanced analytical methods, such as data mining.”
Last year Anthem Blue Cross announced their contract with Ideal Life so those being discharged will more than likely be connected soon to some type of home monitoring device.
In addition back in 2009 WellPoint also entered into a partner ship with Red Brick Behavior based Employer Insurance who runs Ingenix (United Healthcare algorithm software) for analytics. Red Brick uses biometrics as an option for employers to have employee movement, activity and so forth sent back to the Wellness group of Red Brick and who knows who gets it and where it goes from there. If you have not seen the presentation on Red Brick from their CEO it is not really that impressive as far as the CEO goes and he somewhat looks like a puppet of a bigger conglomeration, my opinion anyway.
Sometimes the algorithms they use to run through and assign risk and evaluate risk potential go haywire such as the breast cancer algorithm from April of 2010 where those members were targeted for cancellation as they of course would carry a high risk factor as anyone does with cancer and it’s all in how the algorithmic process parameters are set to run those queries.
So in recapping here just from this article here you can see a good example of the complex data analytics Wellpoint uses and there’s more you can bet on. When you look at the numbers they are using only 10% of the judging goes toward patient satisfaction, so what does that tell you? Patient is last on the list once again and the company profits were up 5.7% for the first quarter. It’s all mathematics for profit in the long run and as each day goes forward this year transparency is bringing more and more of this to light. BD
WellPoint Inc. is raising the stakes for reimbursing about 1,500 hospitals across the country, cutting off annual payment increases if they fail to deliver on the big health insurer's definition of quality patient care.
WellPoint is replacing the system it uses to help offset rising medical and other costs at hospitals in 14 states that serve its Blue Cross Blue Shield plans, which cover 34 million people. In recent years, it has raised its payments to those hospitals by an average 8% a year.
Under the new system, the company will pay increases only to hospitals that score high enough on a test based on 51 indicators of treatment quality. The indicators include whether the facility tries to prevent patients from relapsing after they leave the hospital, whether it follows a safety checklist and how satisfied the hospital's patients say they are with their treatment.
Most other large insurers have made some effort to tie certain hospital payments to better outcomes. But lobbyists and industry experts say WellPoint is the first major carrier to make such a system mandatory for all hospitals that serve its affiliated health plans. The WellPoint formula for measuring quality of care is based 55% on health outcomes, 35% on patient-safety measures and 10% on patient satisfaction.
Almost one-fifth of Medicare beneficiaries who were hospitalized returned within 30 days. Wellpoint says preventable returns to the hospital cost it $2 billion a year.