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Power Shift

July 1, 1998
by Lisa Paul
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MANAGED CARE ADMINISTRATORS have had difficulties finding a better way--other than capitation--to regulate costs and care. Until recently. An emerging model for case management that provides less hassle, more choice and better use of information could replace the gatekeeper pattern of care created by capitation.

In a study recently released from Deloitte & Touche and VHA, 42 percent of the healthcare providers surveyed cited care management as their second highest priority during the next three years. Though care management often is synonymous with case management, for this study Deloitte & Touche also included other patient management tools, such as inpatient protocols and community education within the definition of care management.

Oxford Specialty Management (OSM), a subsidiary of Oxford Health Plans, Norfolk, Conn., formed in 1996 to revolutionize case management under managed care. Although this group currently contracts only with Oxford and its members, other payors could adapt to this case management model.

OSM puts together teams of specialty physicians case by case, taking over the care of members with specific, acute conditions. When a member is diagnosed with cataracts, for example, the primary care physician fills out a "case trigger form" and faxes it to Oxford Specialty Management. OSM receives the form and immediately assigns the patient to a team of specialists focusing on cataract surgery. The patient’s name and ID number are entered into the OSM information system. "We bundle patient care around episodes," explains Pat Marafiote, OSM’s director of business technology. "We have these care teams that manage a member’s care all the way to successful completion."

To successfully complete the different cases, the OSM information system interfaces with Oxford’s Oracle database. Every night the OSM computer receives data updates from the Oxford database for members receiving care through OSM. Since all the logic for this data mining resides on the OSM computer system, the specialty group maintains the option to contract with other payors. Also, as claims go through the host system nightly, the system matches the members’ ID numbers to those of the health plan’s members. This ensures the numbers are accurate and that claims will be paid accordingly.

In this way, OSM is giving the power of decision-making back to the patient and taking some pressure off the primary care provider. But this is only the beginning of the power shift. "Unlike typical managed care systems, the payor isn’t going out and saying ’you have to have a, b and c done,’" Marafiote says. "We went out and asked the doctors what needs to be done for a case because we don’t know."

Each specific illness Oxford Specialty Management covers includes a clinical pathway that directs the specialty team through the process of care. Each case also includes a set price for the entire case. An advisory group made up of physicians, consultants and informaticists developed the clinical pathways that the information system also uses to track patients. Advisors are beginning to investigate the development of care teams and clinical pathways for chronic diseases.

The OSM information system, a three-tiered client/server architecture, was developed with the help of Tanning Technology, Denver. The front-end is minimal in the OSM model, as it is used just for displaying the present data. The back-end of the system is a database that stores all the data needed for current and past patients. The middle tier is where all the logic resides and where the system processes and organizes the data it gathers. According to Marafiote, this system is very scaleable.

For cataract surgery, patients are listed as "complicated" or "non-complicated." Either pathway guides the team of physicians through each of the appropriate steps. Each procedure includes benchmarks that must be satisfied before physicians receive payment or go on to the next step. "This ensures quality because if physicians do skip something, the case isn’t correct and it isn’t closed," explains Marafiote.

OSM’s case management model also helps manage the payors’ claims. "Our intent was to try and make this [system of case management] seamless and painless for the payor," Marafiote says.

Oxford proccesses nearly 50,000 claims a day. As the payor’s system checks its own claims, Oxford Specialty Management intersects those belonging to its patients. "This way we can do our magic on the claims," explains Marafiote. "Because we have a case arrangement, any [OSM] claims are going to be paid through our methodology--not through a standard claims methodology."

When an Oxford member is listed in the Specialty Management system, claims go back to the physicians in the team as paid at zero until certain, specified points during the case. The information system tracks these periodic interim payments (usually three per case).

Though specialist groups may very well be the next step in case management, there seems to be another revolution around the bend. Episode treatment groups (ETGs) were developed in the early 1990s by Symmetry Health Data Systems, Inc., Phoenix. Tanning Technology and a number of other vendors incorporate these case-based measurement tools into their overall business strategies. In the case of Oxford Specialty Management, ETGs were used to develop the clinical pathways and pricing for the different acute diseases. Besides case management, ETGs can be used for disease management, claims management, outcomes measurements and a host of other data needs.

Tim Currie, Tanning’s group VP of business units, explains how episode grouping can act as a hybrid between capitation and fee-for-service: