PPCs Episode 360 Solution White Paper

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White Paper

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aced with fast-paced changes in the health care market landscape, a dynamic regulatory

environment, and ever increasing competition, the managed health care sector is constantly

looking to increase competitiveness, reduce costs, and deliver better patient care.

While Managed Care Organizations (MCOs) strive for sustainable competitive advantage, IT can play a

very important role in their overall strategy for achieving it. MCOs have long understood the potential

value locked up in the data they routinely collect and store. However many factors have kept them from

harnessing the complete value of this data. These include:

Lack of data integration across multiple heterogeneous systems (claims, laboratories,

pharmacy systems)

Tedious management reporting process that may require numerous iterations to produce even

simple reports

Lack of timely access to data required for operational and strategic decision making

In addition to impeding operations, lack of this data also affects consumer-focused sales and marketing

efforts. To sum it up, a fragmented IT system impedes decision making for both operational and strategic

purposes.

How can this diverse data, in multiple systems be integrated and used to make health care organizations

more competitive? Bringing together the various pieces of data around ‘Episode of Care’ presents onesuch opportunity.

What is an Episode of Care (EOC)?An Episode of Care (EOC) can be defined as the set of services required to manage a specific medical

condition of a patient over a defined period of time1. For example, in the case of a tonsillectomy

procedure, an EOC would include the pre-surgical evaluation; the actual surgery; the anesthesiologist;

the operating room; pathologist; the operating room team; and follow-up visits to the ear, nose, and throat

specialist and primary care physician, all bundled together for a single price.

EOC is increasingly proving to be a more accurate and holistic approach to estimating the cost of health

care1

. To be competitive in the marketplace, a health care organization’s operational data must contain acomplete, i.e., 360 degree view, of all occurrences associated with an episode of care.

1Shreeve, Scott, “Episodes of Care: You have g ot to be kidding,” May 27, 2008 (http://blog.crossoverhealth.com/2008/05/27/episodes-of-care-you-have-got-

to-be-kidding)

F



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Why is EOC Useful?The traditional fee for service (FFS) approach uses measurement based on population measures, such

as absolute counts, or averages. For example, the number of times a practitioner prescribed antibiotics,

the average number across patients, across number of visits, etc. However, this approach lacks clinicalcorrelation. Based simply on population measures, it cannot be convincingly ascertained that one

physician prescribes more antibiotics than another does. Any assessment of appropriateness needs to

look into individual episodes. Moreover, the above approach creates practitioner distrust.

An EOC-based approach allows for better clinical correlation. For example, the use of azithromycin is

appropriate in a case of pneumonia, but is an overuse if prescribed for a chest cold. The use of antibiotics

per episode (an EOC-based measure) is a much more accurate measure than the average antibiotics

usage across patient population (a traditional population-based measure.)

In addition, an EOC-based approach allows providers and payers to better estimate the cost of health

care delivery by allowing charges to be based on categories of episodes – also called Episode Treatment

Groups (ETG). Since a finer grain of data is used, the risk estimation techniques also yield better results.EOC is a step towards the overall goal of improving quality of health care that can be achieved by

reducing overuse, underuse, and misuse.2

The concepts of EOC are relatively new, and the idea of reimbursing for care in this way is picking up

momentum. This is an important ideological transition, moving from providing ‘fee for service’, ‘pay for

procedure’ mentality to a more comprehensive, holistic approach to delivering care. It also is a very

important enabler towards the eventual state of a retail health market and organizing health care into a

service-based “product” that consumers can compare, shop, and purchase. While that market-state is far

out in the future, implementation of EOC-based analytics is something that the health care payers can

implement today, and start reaping big benefits.

Introducing Episode 360TM – a 360 degree view of every episode of care in your

data, allows you to get a single consolidated view from a variety of systems – claims, laboratory,pharmacy, dental, and vision, to name a few.

It helps you slice and dice, and completely analyze:

The performance of health care providers

High dollar episodes

Top procedures overview, and other similar business focus areas

Episode 360 TM is an end-to-end Business Intelligence (BI) solution comprising:

Dashboards and scorecards that provide vital Key Performance Indicators (KPI) to users – fromoperational decision-making analysts to analytical decision-making executives

Enterprise Reporting capability from a central consolidated data repository

2Greene, Robert, MD, FACP, “Why use episode of care methodology?” PAI Seminar – Understanding Episodes of care, Chicago, June 22, 2007

(www.ismanet.org/pdf/resources/PowerPoint%20Presentations/PAI%20-%203%20Why%20useful%20FINAL.ppt)



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Flexibility DeliveredThe implementation of PPC’s Episode 360 TM solution is vendor agnostic, thus allowing companies to

leverage their current investments in business intelligence and data integration tools.

With our ready-to-go data warehouse models and report templates, your organization will need to invest

minimum effort to integrate our solution with your current environment. The figure below illustrates a high-

level architecture of Episode 360 TM.

Figure 1: Episode 360 TM System



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Benefits Realized

Episode 360 TM allows MCOs to focus on health care costs.

You cannot control what you cannot measure. Using data

to facilitate cost comparisons across delivery systems,

bundling related treatments into logical packages of

EOCs, and providing visibility into pricing data are all

capabilities offered by Episode 360 TM, thus allowing

MCO’s to measure, and ultimately control, costs.

As an end-to-end Business Intelligence solution, Episode

360 TM not only offers significant capabilities out-of-box for

faster time to value, but can also be extended to related

areas to provide a single view of patients or of providers.Below are some examples of the analysis that can be

performed using this BI solution:

Process Area Episode360 Reports Data Sources

Identify your providers Create a 360 degree view of providers bydeduplication of provider information existingin multiple systems

Identify high volume providers and assesstheir business value/costs

CRM Application

Plans System

General Ledger

Improve Operations Track dollars spent on physicians, facilities,and pharmacies

Optimize provider networks

Understand provider quality metrics tosupport ‘Pay for performance’

Provider System

Pharmacy System

Plans System

Claims System

Meet customer needs Analyze cost/benefit ratio of bringing newproducts to market

Plans System

Claims System

Call Center Log

Source: Rajeev Kumar, Adaptive Insurance Data Warehouse



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ConclusionIt is clear that Business Intelligence has a significant role to play as health care organizations try to

understand all of the cost components of various treatments and use this information to develop average

costs for procedures, such as hip replacements and heart surgeries. Industry-standard cost comparisons

that look across providers are not far away.

The logical next step is to provide accessibility to this data to facilitate consumer choice based on pricing

and, looking forward, on quality of care. Medicare is already reporting on common costs for physicians

and hospital procedures, and insurers are beginning to provide cost comparison data to their customers.

As this trend continues, providers will have no choice but to focus on cost analysis themselves,

particularly, if their pricing is outside industry norms.

To remain competitive in the market, Managed Care Organizations must become more agile and employ

efficient ways of looking at organizational data for improving efficiencies, reducing costs, and managing

risks. Towards this end, PPC’s Episode 360 TM can be a very important, and powerful, tool in their hands.

About Project Performance CorporationProject Performance Corporation (PPC), part of the AEA group, is a management consulting firm

integrating world leading expertise in the areas of environment and energy with cutting edge IT and global

management. Our customers include Fortune 500 and top government decision makers.

PPC offers a unique blend of experience combining our understanding of the customer and subject matter

expertise with information technology to devise a meaningful solution that make a difference. Visit us at

www.ppc.com.

PPC offers a wide range of expertise for the health insurance industry. PPC service areas include:

Business Intelligence and Data Warehousing

Master Data Management

Business Process Management

Portal Solutions

Knowledge Management

Enterprise Security

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4 Lisa Loftis, "Transforming Health Care with BI", Subset//BI & performance management, Information Management Magazine,

March 2, 2009

PPCs Episode 360 Solution White Paper

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