Health Plans continue to grow but in a post-reform environment the burdens of compliance, medical loss ratio and ceilings on rate increases are making midsize and small local plans less sustainable. For many, the staffing costs and staffing ratios are a large cost to bear and for others the switch to a new technology platform is needed to lower these costs but impractical due to investment expense.
Pendulum offers several solutions to Health Plans that want to grow.
First, many of the staffing issues can be outsourced blending an existing senior local staff with a "back office" equipped with state of the art technology. Claims processing, underwriting, some medical management informatics roles and even compliance can be connected to Pendulum who can use its technology and expertise to augment staffing thereby slowing projected staffing requirements and expenses. We find in doing staffing ratio analysis that some processers can handle 5,000 claims while others can handle 9,000. The difference is certainly found in auto-adjudication but also in the technology used by the plan for the 10% to 15% of claims that need to be managed.
Second, comes the technology that is complex and constantly changing. We found in early plans that simple utilization reporting off of paid claims information was all that was needed, but now, as charges rise and care becomes more difficult to predict, the ability to report encounter data and link it to episodes of care is a true necessity to make sure guidelines are followed and excellent doctors and hospitals continue to gain marketshare because of the plan’s efforts. To build a technology platform including software, hardware, staffing, connectivity, telecommunications and data warehouse, would cost upwards of $10 million to $15 million for a midsize plan of 200,000 to 300,000 members. In addition, the sophisticated expertise of data analysts, informatics specialists and clinically trained data management staff would add at least another $1 million to this decision. Many plans who have done this have also lost their footing during the transfer of data and they have lost customers and revenue due to poor service follow-up or just unsolvable paperwork issues.
Our approach would be to parrellel the process and build upon strengths by improving each process point and sharing data between our data warehouse and your plan to make process capabilities unlimited. We would also build a better infrastructure shutting down legal systems and transferring data to the newer system processed by a combination of your team and ours. Our business intelligence capability and overall experience in building and rebuilding plans has made the plan’s internal staff more effective while transferring IT risk of operation to be a shared process.
Finally, the application of our technology has been used in Medicare and commercial environments. This means, as plans decide to grow by product line and perhaps by acquisition of members from other plans, this volume of new patient data combined with our critical knowledge of ERISA and CMS reporting, enables the plan to share the risk of rule changes with a partner instead of developing all new programming from scratch and buying servers to support the opportunity.
Many plans are asking about bundled payment and ACOs; see our Health Reform section on this and similar needs that all plans will deal with in the future.