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E-CareManagement News 

August 12, 1999



Here's an excerpt from a recent (July 27) investment analyst report on Internet health opportunities.  "The E*Volution of Healthcare" is published by E*Offering, the investment bank arm of E*Trade. You can download the full report, "The Next Generation of Managed Care--Clinical Management

  "After nearly a decade of managed care and its emphasis on cost containment, we believe that the 'low-hanging fruit' has already been picked from the healthcare system and that HMOs will now need to move toward truly managing clinical care to reduce costs. In the industry's initial stage, HMOs reduced costs by garnering deep discounts from physicians and hospitals in exchange for steering volumes of patients their way. In addition, they shortened hospital lengths of stay (remember the furor and government reaction to 'drive-by' C-section deliveries), restricted access to higher cost specialists, and used 'delay-then-deny' techniques, in our view, to reduce costs. But we believe that the savings that resulted from these actions were mostly administrative or cosmetic in nature-not clinical.

"With healthcare premiums on the rise again..., managed care companies must demonstrate their value-added beyond exploiting one-time administrative inefficiencies that account for 10-15% of total healthcare costs. The real money to be saved is in the area of patient care costs, which comprise 80-85% of the $1 trillion spent on healthcare each year. In our view, managed care hasn't even scraped the surface of this huge market opportunity-but it's about to. As such, we believe that the industry is poised to enter the next generation of managed care-clinical management, followed closely by disease management. In our view, the role that information technology could play as the managed care industry moves in this direction is enormous. In fact, we would argue that information technology holds the key to eliminating clinical inefficiencies, such as adverse drug reactions and improving patient care in the healthcare system." (p.11)


We know there are many experts in care management among our diverse readership.  We're asking for reader input to an article that's in the works.

The working title is "Top 10 List for CMOs:  What To Do and NOT To Do in Sustaining Care Management Initiatives."  The Chief Medical Officer (CMO) is the KEY person in spearheading and driving care management initiatives.  CMOs have encountered barriers: limitations on budget authority, short term ROI expectations, inability to obtain needed data, politics, etc.  However, we see the tide turning:  CEOs are understanding the strategic importance of care management, pressures to demonstrate improvements in clinical outcomes, Y2K preoccupation diminishing, the Internet, regulatory compliance, etc.  We'd like to highlight ACTIONS that should be taken by the CMO to start and sustain a successful care management initiative within a health plan or IDS.  What works, what doesn't?

Please write Vince Kuraitis, or call (208) 395-1197.  Thanks.


The National Committee for Quality Assurance (NCQA), an accrediting agency for health plans, has just released a report entitled "The State of Managed Care Quality 1999."  The study provides information on health plans that collectively cover 52 million Americans.  The full report is available.

Some of the key findings:

"Managed care plans that consistently monitor and report on quality are showing significant improvements in quality.  The differences in performance ranged from about 3% to more than 12%.

"NCQA-Accredited health plans scored between 3% and 16% higher on clinical and service measures, and these differences have strong public health significance. As an example, accredited plans reported a cholesterol screening rate of 62.9%, as opposed to a rate of 53.3% in non-accredited plans, and an adolescent immunization rate of 60%, as opposed to 44% in non-accredited plans. Members of accredited plans also report higher overall ratings of their health plans, and better customer service.

"Overall improvements on most measures between 1997 and 1998 were small, but newer measures saw larger - and very meaningful - improvements. Driving home the message that "what gets measured gets done," several important and relatively new measures, including Beta Blocker Treatment after a Heart Attack and Chicken Pox Vaccine saw the largest increases. The average reported rate for Beta Blockers in 1998 rose to 79.9%, from an initial rate of 62.5% in 1996.

"Health plans that score high on clinical quality also have the most satisfied members.  Members of plans that scored in the top 25% on HEDIS Effectiveness of Care measures rated their plans higher across every single measure of satisfaction, access, customer service and overall performance."


"Status One:  Breakthroughs in High Risk Population Management", by Matt Kelliher, MBA and Samuel Forman, MD, MPPM, MPH.  "Status One" refers to the sickest 1% of patients  (and those at highest risk) who typically account for 25% of all heath care costs.   This inspired book describes how health care organizations must refocus clinical care on managing patients--not providers--and partner with patients, families, and communities.  Commentary:  this group of patients offers tremendous opportunity for clinical improvements AND reduced costs.  Many health plans are understanding the value of focusing on this small segment of patients.

E-CareManagement News  is an e-newsletter that tracks a major change in health care and managed care—the paradigm shift from “managing cost” to “managing care”.  This e-newsletter is brought to you by Better Health Technologies, LLC (  BHT provides consulting and business development services relating to disease management, demand management, and patient health information technologies.

You may copy, reprint or forward this newsletter to friends, colleagues or customers, as long as the use is not for resale or profit and the following copyright notice is included intact. Copyright © 1999, Better Health Technologies, LLC. All rights reserved.

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