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CPX Domains: Total Cost of Care

A Comprehensive Look at Total Cost of Care

AMGA’s Collaborative for Performance Excellence (CPXTM) will support organizations by offering granular benchmarking and tracking reduction in total cost of care for patient populations for whom participants are receiving adjudicated claims as part of our Total Cost of Care domain. CPXTM participants will leverage expertise from their peers, as well as from domain advisor Beth Averbeck, M.D., HealthPartners Care Group’s senior medical director, primary care.

Domain Measures

CPXTM participants will receive the following measures:

  • Total Cost Index: Broken out by type of service, Episode Treatment Groups (ETG) and Severity
  • Per Member per Month (PMPM): Broken Out by Episode Treatment Groups (ETG) and Severity

See our benchmarks in action

The power of data and advanced analytics enable CPXTM participants to:

  • Leverage health plan industry standard episodes of care, based on Symmetry tools that form the foundation of Optum Impact Intelligence
  • Compare cost metrics against high-performing peers, overall and in actionable detailed reports, and adopt the best practices of peer organizations

Figure 1 – Total Cost Index: Major Practice Category vs. Type of Service

Total Cost Index: Major Practice Category vs. Type of Service

Figure 1 shows cost data at a single organization with $875 million in annual costs for covered services. Here, cost indices are analyzed overall and in major practice categories (rows) and types of service groupings (columns), based on Optum’s Episode Treatment Groups (ETGs). The overall cost index for this organization was 1.01, indicating observed costs are 1% higher than expected costs, based on the same mix of ETGs across all participating organizations.

The major practice category with the highest cost index was Nephrology at 1.11, accounting for 8.1% of total cost. Emergency room costs were 5% higher than expected, but only accounted for 2.5% of overall costs.

CPXTM participants who submit adjudicated claims are included in these benchmarks. The cost data in these figures is calculated using Optum Normalized pricing, which creates uniform and consistent pricing across healthcare organizations and payer contracts for all services, in order to enable apples-to-apples comparisons of cost-weighted utilization.

Figure 2 – Total Cost Index: ETG Family vs. Type of Service

Total Cost Index: ETG Family vs. Type of Service

The Total Cost Index measure has several levels of detail available. In Figure 2, we are able to drill down and view cost indices for the ETG families within the Cardiology major practice category for the commercial population at this organization. Because cardiology episodes make up a large percentage of total costs at this organization (18.5% shown in figure 1), there could be significant opportunities to impact the total cost of care through interventions targeted at these episodes.

Though the cost index for Cardiology in this example is 1.00, meaning the observed costs are in line with the expected costs compared to the same mix of ETGs across all participating organizations, the drill down view reveals higher than expected cost-weighted utilization of some types of service, including professional services, which account for 29.5% of cardiology costs and are 12% higher than expected.

While this is a static image, on the CPXTM data portal (cpx.amga.org), users can dynamically interact with the datapoints shown to uncover additional information on the index. As shown here, the dashboard reveals that there are 8,722 episodes of ischemic heart disease during this one year period, and the average cost per episode is $6,251.78 (calculated using Optum normalized pricing). Users can explore the dashboards at various levels of detail to identify opportunities for intervention.

CPXTM participants have access to similar dashboards and can benchmark against other high performing groups using cost data from their own organization. With this information, groups can quickly identify areas which account for the highest cost or are higher than expected, leading to unprecedented analysis for their entire patient population, particularly important for those with whom you hold risk.

Figure 3 – Risk Adjusted PMPM Costs by Organization and Type of Service (Coming July 2020)

Risk Adjusted PMPM Costs by Organization and Type of ServiceFigure 3 compares risk-adjusted PMPM costs at 12 different AMGA member organizations with adjudicated claims data. Across all organizations, average PMPM costs were $447, with a range of $296 to $527 for commercially insured patients aged 18–64. Beyond variation in total cost for covered services, there is even greater varation in costs by type of service. Some organizations have high PMPM for every type of service, compared to peers. They can consider broader approaches to reducing utilization, learning from peers what has and hasn’t worked for them. Others have only a few areas with high cost, where they can focus their attention.

To guide this focus, CPXTM will explore data by type of clinical episode and type of service for your organization. The benchmarks will be trended over time, to track each organization’s progress relative to other market leaders.

* Data source: Optum, AMGA’s Distinguished Data and Analytics Collaborator.

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