Care Management Vendors Are Poised for Growth

Among the many changes in the health care ecosystem, perhaps one of the most far reaching is the shift towards value-based care, with providers increasingly on the hook for patient outcomes both in and outside the immediate care setting.

Because not all providers have the capabilities to manage those outcomes successfully, it’s likely they will need to look to third parties for assistance—and that spells big opportunity for care management specialists.

While traditionally care management vendors have offered their services primarily to payers, their customer base should expand considerably as more providers, under pressure from payers and regulators, are driven away from fee-for-service care delivery toward more outcomes-based reimbursement models.

Building all of the capabilities required to manage outcomes across the care continuum is beyond the reach of some providers. For those who are less familiar with risk-based care management,  outsourcing is an attractive alternative, at least in the near term.

Filling the Void in Care Management

Care management vendors have long assisted payers with improving outcomes and efficiency of/care for high-risk, chronically ill members. They do this by enhancing coordination, eliminating duplication, and using various tools and approaches to help patients and their caregivers manage health conditions more effectively.

These specialists collaborate with health systems across multiple care sites, using risk stratification and sometimes sophisticated data analytics to identify the highest-acuity and costliest patients who are most in need of care management. For Medicare Advantage populations, they can capture hierarchical coding categories and optimize risk coding.

Other services these vendors provide include telephonic outreach and member engagement, development of care plans based on proprietary clinical intervention protocols, and care plan implementation, follow-up, and reassessment.

Some leading vendors, including Landmark and ConcertoHealth, are directly involved in care delivery and may deploy in-field clinicians or other medical professionals to members’ homes or skilled nursing facilities in order to evaluate, educate, and provide feedback on a patient’s condition.

Opportunities for Serving Risk-Bearing Providers

Payers benefit from the third-party services of care management providers through better clinical outcomes and greater cost savings than they would be able to achieve on their own. Care service specialists can offer similar benefits to risk-bearing providers, albeit with some minor adjustments to service offerings or shifts in focus. For example, because these providers can suffer negative financial consequences (e.g., penalties, lower shared savings, etc.) if covered members end up returning to the hospital after being treated, they are more likely to value services such as post-discharge feedback and evaluation.

They may also gravitate to vendors with on-staff physicians or nurse practitioners who can visit patients in their homes or skilled nursing facilities in order to monitor recovery.

There are other ways for care management vendors to grow their offerings that will appeal to payers and providers alike. For example, existing vendors can expand across disease states into such categories as dementia or end-stage renal disease to create more holistic solutions.

They can also extend services into a broader range of care settings, such as hospice or assisted living facilities. Vendors can also leverage in-home touchpoints to deliver more services, including activities of daily living checks, home and community-based services, social determinants of health evaluations, and behavioral health checks.

Finally, care management vendors can expand from primarily serving the Medicare Advantage population to also serving Medicaid, Medicaid/Medicare dual eligibles, and commercial health plan members.

As care management vendors diversify their customer base to include risk-bearing providers, they will need to be mindful of how they target specific offerings: payers will certainly not want to assume financial responsibility for services that their provider partners are already outsourcing to a third party.

To avoid duplicating services, care management vendors will need to carefully assess appropriate customer targets as the health care ecosystem continues to evolve.

Nevertheless, as that ecosystem does evolve—driven by rising costs and pressure to deliver value-based care -- there are significant opportunities for care management vendors to offer their capabilities to a growing base of customers who are unfamiliar with risk-based care management.

LEK is a proud sponsor of the upcoming KLAS Digital Health Investment Symposium.