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Managed care capitation: manage the risk, reap the rewards.


According to the Center for Medicare Services (CMS), more than 10 million people in the United States are eligible for both Medicare and Medicaid. These Medicare‐Medicaid enrollees – or dually eligible beneficiaries, as they are sometimes called – not only have the highest level of need, they often have the highest level of costs. And because Medicare and Medicaid operate as separate programs, these dually eligible beneficiaries often receive fragmented, poorly coordinated care.

In 2011, CMS introduced a number of “dual” demonstrations utilizing a capitated model to coordinate and align the financial and care incentives of Medicare and Medicaid recipients. As of June 2016, over 370,000 members in 9 states have launched these financial alignment demonstrations; with CMS, a state, and a health plan entering into a three-way contract to provide comprehensive, coordinated care.

A.R. Weiler, CEO of Healthsense, a remote monitoring services platform focused on reducing cost and increasing quality of care for the frail elderly and chronically ill, observes, “Financial alignment means that Managed Care organizations are increasingly responsible for both medical and custodial cost of care because they are receiving a fixed, capitated reimbursement per member per month. If they can catch early signs of a chronic condition getting worse – and send a member to their physician rather than a hospital or emergency room – this provides significant financial savings as well as a higher quality of care. And case management – at the individual level – is absolutely essential to delivering this superior result”.

In order to engage sooner, and preempt serious acute care, caregivers need a way to identify relevant changes on a daily basis. This is leading many in the senior care industry to an “a-ha moment”. They’re learning that a Passive Remote Monitoring System (PRMS) can be a valuable tool in providing a higher level of care, managing risk, and managing cost.

Mr. Weiler believes that the innovative design of the Healthsense system makes it ideally suited to financially-aligned, capitated care models, explaining, “Healthsense uses unobtrusive sensors to passively gather data on seniors’ Activities of Daily Living (ADLs). For example, if someone hasn’t been sleeping in their bed for several days, and is using the toilet less, it could indicate a health issue. Caregivers receive alerts from the Healthsense system when there are changes in behavior which could indicate a health concern.”

Mr. Weiler adds, “The real difference in the Healthsense system is our proprietary analytics. No other PRMS has anything like it or monitors the type of data we do. We transform that raw data into information that providers need, so they can deliver a much higher level of care – at a lower cost. Best of all, seniors enjoy more independence and higher quality of life.

“By definition, capitated care is all about the bottom line,” says Mr. Weiler, “And the bottom line is that Healthsense can improve return on investment (ROI). In one pilot program, seniors with Healthsense systems had health care claims that were independently calculated to be nearly $700 per month lower than those without Healthsense. It’s hard to argue with results like that.”

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