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Medical Management Retakes Center Stage on Strategic Agenda of U.S. Health Plans
| Source: The Boston Consulting Group
BOSTON, MA--(Marketwire - August 29, 2007) - Today's health plans are rapidly reinventing
themselves, emerging with more power, greater sophistication, and
surprisingly deep ambition to transform their environment. The term
"managed care" is rarely heard, and "health insurance" seems increasingly
inappropriate terminology for describing the industry that organizes U.S.
health care delivery: many contracts have little relationship to insurance
functions. At the core of these changes, insurers are taking a fresh view
of medical management for responding to the pressures. In its new report
"The Emerging World of Medical Management I: New Levers and New Strategic
Choices," The Boston Consulting Group (BCG) examines the rapid evolution of
medical management at private health plans, as well as the new tools and
strategies that plans are using to gain competitive advantage.
Very broadly, medical management aims not only to contain health care costs
but also to improve health care quality by improving decision making and
changing the behaviors of physicians, other providers, and patients. "Our
research shows that in recent years, health plans have begun to
dramatically expand their capabilities in medical management," says David
Matheson, a BCG senior partner and managing director and an author of the
report. "The health plans all see the promise of medical management," he
continues, "but they differ markedly on how best to realize that promise
and capture the benefits."
Today's portfolio of medical management tools is the culmination of three
generations of innovation: tools that involve direct interventions with
providers (for example, utilization management and prior authorization);
those involving direct intervention with patients (including disease
management, total population management, and wellness programs); and more
recently, those deploying new incentives and information flows to improve
the decision making of providers and patients (for instance, electronic
health records, pay-for-performance bonuses, and rewards for adopting
healthier lifestyles). "We see a number of these third-generation tools
being piloted more widely now," says Anne Wilkins, a BCG partner and
managing director and another of the report's authors. "But to maximize the
benefits of medical management, health plans must fully integrate medical
management into their operations. Ideally, this means integrating data,
integrating functions, and integrating health care delivery," she adds.
"The health plan landscape has been very unsettled lately," Matheson
explains. "How well the plans survive and thrive over the next five to
seven years will be determined largely by the medical-management strategies
they adopt today. And as there are substantial uncertainties surrounding
these strategies, the pressure is on." He continues, "Payers will find
themselves in a race to demonstrate impact. The winners will be those who
prove best at managing the multiple drivers of cost and quality. It's going
to be a difficult balancing act."
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