Two topics occupy almost every conversation about value-based care (VBC): risk adjustment and quality. They are undoubtedly the foundation. Risk adjustment sets financial benchmarks for each patient population, while quality indicators confirm that we are providing the right prevention and long-term care services. Yet even if it can greatly damage organizational performance: utilization, there is a third pillar that often escapes from the spotlight.
Why use delays its shimmering siblings
In value-based care, utilization is the sum of services patients receive – how often they use, where they are delivered and at how much they cost. When patients get clinically appropriate services in lower-cost settings (e.g., outpatient surgical centers rather than hospital outpatient departments), we say utilization is “optimized.” Utilization will become a hidden revenue leak when they get repeated tests, avoidable emergency room access or expensive service on-site upgrades.
If leverage is so why is it behind the risk coding and quality reporting of thinking and investment? One reason is visibility. Clinicians lack clear windows to understand where patients go to care, what services are offered and crucially the cost of these services.
Claim data is 30 to 90 days late, usually arrives in a clumsy spreadsheet. The administrative team will do their best to convert the claim into a viable report, but delays mean that months after the encounter, months after the shift change are impossible or expensive. In those time frames, utilization becomes a retrospective audit rather than a real-time leverage.
Price changes across care settings are surprising. Although both offer the same clinical value, the cost of routine procedures at a hospital outpatient department may be twice as expensive as an outpatient surgical center across the street. Multiply this delta by thousands of programs and the edge of the ACO can evaporate. During the pandemic, electives were suspended and exploitation costs plummeted. When the restrictions are lifted, we see a surge in whipping of delayed (more complex) programs. Spike collided with CMS's V28 risk model, which had its own negative impact on revenue, which was a perfect storm for organizations underinvested in utilization supervision.
Afterward transfer to prospectt
Good news: Successful scripts are emerging. High performance groups are subject to stringency processing utilization for coding and quality. They invest in tools that pull claims, align them with clinical records every night and push actionable insights to the point of care.
In this case, the clinician can initiate care coordination referrals before unnecessary costs accumulate, discuss setting options with the patient and record decisions. The same workflow highlights out-of-network leaks, identifying unfilled referrals, and marking patients with overdue evidence of early interventions. In other words, leverage intelligence to become promising and proactive.
Four principles of operation and utilization management
So how do you realize this vision? First, build a system that turns delayed claims data into real-time intelligence, and then converts intelligence into action. These are four key principles we see successful organizations adopt.
- Make claim time sensitive and actionable. Waiting for a quarter of claims is the secret to missing out on opportunities. Claims are often automatically (ideally ideal for every day) and integrate them with clinical records into surface issues while still having time to intervene.
- Embed costs and leverage insights into clinical workflows. No provider has time to filter spreadsheets or log in to a separate portal. Make suggestions in clear clinician-friendly language.
- Make use of a team sport. Utilization is rarely a solo issue. Authorized nursing coordinators, front desk staff and recommendation teams use tools and protocols to close the nursing cycle, follow up unfilled orders, and direct patients to a network of low-cost facilities.
- Share incentives by prompting feedback loops. Show providers how their choices affect organizational performance and patient experience. Whether it’s out-of-pocket expenses, shared savings or benchmark scores, they can connect points between individual decisions and collective rewards.
Establish a culture of utilization management
The ultimate ingredient is mentality. In cost-effective service medicine, higher utilization equals higher income. In VBC, each unnecessary service field upgrade represents a shared potential for loss, or (under downside risk) actual cash sale. Leadership must be communicated, and optimised utilization can help ensure both cost-effective and excellent care.
Initiatives such as healthier life strategy innovations recently announced by CMS show double accountability. Utilizing management will determine which organizations thrive and which organizations strive to keep pace. The script is clear: treating utilization as a common pillar, in addition to risk adjustment and quality, can also enable clinicians to have timely and context-rich cost insights, and enhance behavior through consistent incentives. Doing so, the income you save can fund the innovation you dream of today.
Photo: Hong Lee, Getty Images
Dana L. McCalley, MBA is Navina’s vice president of value-based nursing. With over 15 years of experience in value-based care and population health, she leads large high-performance teams and optimizes workflows to drive results. Prior to joining Navina, Dana served as Director of Quality and Risk Adjustment for Honesty Healthcare Group. Prior to that, she served as Director of Risk Adjustment and Quality for Millennium Physicians Group (MPG) for nearly a decade, and she is committed to simplifying the workflow of more than 700 providers across the organization. Her efforts resulted in more than $159 million in CMS ACO sharing savings throughout her tenure. Dana received her Bachelor of Psychology from the University of South Florida and her MBA from the University of Freedom.
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