Value, Inc.: The Top 3 Habits of the Most Innovative Health Plans

By Scott Honken, Vice President, Market Access & Payer Relations

Omada Health
Aug 23, 2016 · 7 min read

For decades, health plans have been trying to pull themselves out of a business model that’s akin to whack-a-mole. You’ve seen this yourself. A member’s doctor treats a health problem, then the plan reimburses the doctor or member for the cost of the pill, procedure, or therapy necessary to correct that problem.

Whack.

If a member has a recurring medical problem, or one that requires multiple interventions, the plan reimburses for each necessary intervention.

That’s not necessarily unreasonable. But it is completely reactive. And as health plans and their members know all too well, it can quickly lead to too many expensive interventions.

The ACA has forced many of us in healthcare to shift our energies and resources to promoting Value Based Care, from rethinking how to reimburse or incentivise providers, to considering interventions that have greater potential to move the needle on claim costs. With the incidence of chronic disease and the cost of healthcare both skyrocketing, it’s crucial for insurers to develop business models that are more proactive.

So what are some of the most innovative ways the healthcare system has been shifting to Value Based Care? Here are three big ones:


Forward-thinking health plans use “Proactive Member Surveillance” or “Hot Spotting” to help protect their members’ health and reduce spending. Basically, plans look at member health data and larger health trends to understand which conditions are most likely to impact their populations in the next three to five years. When health plans can predict how many — and precisely which — of their members are on the brink of costly but preventable conditions, they can invest in appropriate preventive treatments.

Rock Health, a venture fund focused on digital health, points out that traditional medicine has been using predictive analytics for a long time, driven by physicians’ memories and case notes. Now that it can be driven by software, the data set swells vastly beyond an individual patient’s medical history. So it allows for more more accurate predictions.

What does it look like?

Clover Health is a data-driven Medicare Advantage plan operating in California and New Jersey. They offer seniors less expensive, private Medicare coverage by using predictive analytics to identify members at high risk of costly medical conditions. When they pinpoint a high-risk member, they send a nurse practitioner to the member’s home to counsel them about necessary tests or provide preventive care.

Where’s the value?

Each nurse practitioner visit saves Clover an average of $10,000 in avoided hospitalizations.


Tech has been a big game-changer in just about every field, including healthcare. As we mentioned above, it plays a role in predicting and preventing costly medical conditions. It also lowers barriers to healthcare access by bringing care to the patient, either at home or online. Tech can increase patient engagement, leading to better health outcomes. And ironically, it can even create more personalized interactions. But perhaps one of the most valuable things technology does for healthcare is allow providers and payers to deliver services to more people, efficiently and effectively.

What does it look like?

About 10% of New Mexico’s population suffers from asthma. That’s a bit under 200,000 people. And when they aren’t controlling their asthma with maintenance meds, they can end up in the ER or admitted to the hospital. Repeatedly. Expensively. If only they could keep better tabs on the situations that tend to trigger their attacks, and stick to their dosing schedule.

Actually, they can. Earlier this year, Molina Healthcare of New Mexico partnered with Propeller, a leader in digital health solutions for people with asthma and COPD. Together, they launched a program that aims to enroll Molina members who currently aren’t controlling their asthma. Propeller’s digital device, which attaches to a rescue inhaler, collects data on what tends to trigger patients’ attacks, and reminds them to take their preventive medicine on schedule to better manage their disease. Molina will use the data collected by the devices to help doctors proactively identify patients at risk of an attack, so they can intervene before a trip to the ER is required.

Where’s the value?

Annual healthcare costs for a patient with controlled asthma are $2,101 less than a patient with uncontrolled asthma.


Shifting from the traditional fee-for-service model to a pay-per-outcome model aligns health plans with doctors’ goals of keeping patients healthy. Think about it: under the fee-for-service model, a patient with type 2 diabetes requires a lot more (billable) office visits than a patient whose doctor catches their prediabetes and helps them keep it from progressing further.

Innovative plans are creating financial incentives for doctors to practice preventive medicine. And preventive medicine, done right, has the convenient effect of lowering health plans’ long-term spending. So everybody wins.

What does it look like?

Intermountain Healthcare, is out to align the incentives of health plans, providers and patients. To that end, they’ve developed a model that incentivizes hospitals and physicians to provide “the right care, rather than than just providing more care,” and encourages patient-engagement in healthcare choices.

The model creates a new health plan product based on Shared Accountability principles. Think, Medicare Advantage plans and Accountable Care Organizations, where the plan makes an annual, up-front, lump-sum payment to a provider or provider group for an entire population of beneficiaries. If the provider (group) cares for the population for less than the predicted amount, while meeting quality measures, they and the plan share the savings.

The model also proposes paying providers based on measures that assess quality of care, patient satisfaction and total cost of care; and rewarding members who get more involved in their personal health decisions.

Where’s the value?

An estimated 40% of health plans’ adult members have prediabetes. For each one who follows their doctor’s orders to develop and maintain healthier habits that reduce their risk of type 2 diabetes, your plan can save $1,533(1).


Adopting these three habits doesn’t require a major corporate restructure. Sure, some plans are creating their own innovation centers, where dedicated teams develop and integrate new programs and technology to solve their plans’ most costly health challenges. But others are solving the same challenges by partnering wisely with innovative providers, like Propeller. And Omada.

Omada works with health plans across the country to help pinpoint which members are likely to develop type 2 diabetes or heart disease, and then pull those at risk back from the brink of chronic disease. Our digital behavior change program combines a CDC-approved DPP curriculum, wireless tracking, data-empowered health coaches, and peer support to help at-risk members create healthy habits that stick. Because our program is delivered digitally, plans can offer it to tens or hundreds of thousands of at-risk members, and know they’ll all be able to participate. All participants need is an internet connection. And our outcomes-based fees are in total alignment with health plans’ goals of providing better health at lower cost. Predictive analytics, scaleable technology, and outcomes-based pricing, all in one fell swoop.

Advances in medicine are making it possible for people to live longer lives, but often with more costly treatments and interventions. And the increase in chronic disease rates shows few signs of slowing. Health plans need to advance if they want to survive. If that’s not incentive enough, the ACA has effectively sweetened the pot.

The move toward Value Based Care in America is inevitable. And innovative plans are helping to define and shape the new model. By doing so, they are delivering better care for their members at a lower cost for all stakeholders. No carnival games required.


(1)Su W, Chen F, Dall TM, Iacobucci W, Perreault L. Return on Investment for Digital Behavioral Counseling in Patients With Prediabetes and Cardiovascular Disease. Prev Chronic Dis. 2016;13:E13.

Omada Health Stories

We help employers and health plans tackle chronic disease in the most engaging, effective, and scalable way possible. www.omadahealth.com

Omada Health

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Inspiring and enabling people everywhere to live free of chronic disease. To learn more, visit www.omadahealth.com

Omada Health Stories

We help employers and health plans tackle chronic disease in the most engaging, effective, and scalable way possible. www.omadahealth.com

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