Innovation in Health Care Management

Abstract:  The care management models in use by most health plans are vintage designs created over 20 years ago, and are more about controlling utilization than consumer engagement.  These aging models create antagonistic relationships between payers and providers.

Blog Entry:

Care Management is the simple idea of assisting individuals and their support system to become engaged in a process designed to manage health conditions more effectively.  Having been in the industry for nearly 30 years, I’ve both watched and helped lead change in this space. We have moved from a very basic form of care management known as utilization management to today’s member portals and self-help tools. But the underlying business model of care management is dated.  It was built for a different era and for a different purpose.  It’s time for a change.

Before the Affordable Care Act took the industry by storm in 2010, health plans were the primary group who cared about managing the health of populations. These payers cared a lot, because they had so much economically on the line. They needed data-driven systems that could help identify and manage patients who might incur large healthcare expenses at some future time. The care management industry was born out of this need.

Highlights of Legacy Care Management

What began as a simple notion in the early 1980s, has had layers upon layers added over the years with very little change in the underlying business model. These legacy care management systems look much like a ball of duct tape - utilization management, case management, disease management, wellness and prevention, financial incentives for providers and individuals to change behavior, predictive tools, provider portals, member portals – all with good intention - but as relevant today as the VHS tape in a streaming media world.  

These old style, health plan based care management systems have certainly evolved over time, and they typically worked like this:

       Utilizing the data sources they had access to, payers would analyze their claims data for the people whose health they insured – looking for the outliers of cost and use.

       Insurers would notify employers if they had a lot of high-risk people within their covered work force.  They would do the same evaluation for their own insureds.

       Employers would deploy a variety of incentive programs to try to reduce the future cost of care for those patients. Company weight-loss contests, walk-a-thons and health club membership subsidies were typical examples of such wellness programs.

       The payer’s care management systems would further target at-risk individuals by sending letters and faxes to doctors’ offices suggesting they look into the possible gaps in care and offering to link individuals to community resources.

       The health plans built massive infrastructures of phone-based nurses who would call doctors and patients to alert them to potential issues and follow up to make sure the issue was being addressed. 

Everybody slowly figured out that they actually needed the patients’ participation in order to make all this care management work. So patient engagement capabilities like online health records and employee wellness portals were added to the mix.  But the patient was simply a by-product of a system originally designed to keep providers “in line.” 

It’s Time for a New Business Model 

The entire care management market is under serious strain – the underlying business model is mostly broken. The basis of analysis, healthcare data (claims), is typically retrospective in nature, often delayed by one to three months.  Without timely, relevant data, one cannot address today’s reality of needing to know, accounting for and supporting the day-to-day needs of individuals with significant medical conditions.   

Care management data do not universally include the actual clinical information required for critical insight.  Even more important, there is virtually no patient reported data collected by anyone. At best, today’s data models are derived from claims, making a series of assumptions about the current patient status that are largely wrong.  Without day-to-day patient reported information (especially for those who have significant illness), nothing changes.

The big gains from this entire care management approach have plateaued.  Most of these programs are using dated technology tools, bloated with layers of beaucracy and largely out of touch with the individual consumer.

So what should take its place now? There are lots of buzz terms floating out there: Accountable Care, Population Health Management, Value-Based Care, Patient-Centered Medical Home. But in order to be different, it all comes down to this simple notion – the new business model of care management must involve a massive shift from payer-based care management to strategic partnerships that include the patient, the provider(s), payers and technology-enabled strategic care partners.

To move away from the “we know best” model to a consumer-centric model requires transformational thinking of care management systems. For starters, we must focus on the development of tools and indicators that immediately identify new acute diagnoses that must be managed.  Each day, our health plans enroll members in their plans who no longer have waiting periods as mandated by the Affordable Care Act (ACA). It’s vital to know which of these new members will become high-cost members as soon as possible. 

Next, community-based care support must be implemented. A support model that links the health plan, various care partners and providers in the field must become ubiquitous.  These teams need remote access to share insights from their interactions with patients.  We should engage the consumer as an active participant in their care management through their smartphone. The patient and their family want be able to have 24/7 access to clinical support (especially those with serious or life-limiting conditions). The era of an evening “call service” or “go to the ER” must end. 

Today’s care management partnerships must share and act upon relevant data so that the time gap between practitioner office visits and treatment cycles are coordinated and the patient feels engaged, supported, well informed, and actually “cared for”.  We should link this work to retail health and employers’ on-site health clinics to coordinate care management as part of employer-based care management programs.  We should embrace remote, electronic monitoring of members’ biometrics such as weight and blood pressure.


Let’s face it; payers and providers have tended to butt heads since the first attempts were made to manage care by payers. But in the world of patient-centered care, these groups need each other more than ever.

With over 90 percent of the actual healthcare spend in the U.S. still based on the old fee-for-service model, the natural conflict between insurance companies and providers will linger. The speed of technology innovation will always outpace the ability of any one payer or provider to truly deliver all the solutions a newly at-risk population healthcare model will require. One of the key objectives of care management, controlling the rise of medical costs, remains unsatisfied. And while the quality of care focus is having an impact, the United States continues to have one of the unhealthiest, costliest populations in the world. Furthermore, the experience of health care for many people is largely chaotic and unsatisfying.

It’s time to use our entrepreneurial and innovative thinking to bring a new care management business model to the market. We need a model that requires a focus on individuals and families – not patients or members. Let’s work together to create a business model that is about people; individuals and their families with unique medical, emotional, spiritual, cultural, literacy, economic and social needs (the key determinants of health).  It’s time for a business model in care management that actually is focused on the word “care” rather than “management”. 

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