CareOregon Manages Costs with ACG-Predicitve Model Software

When David Ford became the CEO of CareOregon in March 2003, he needed to make some sweeping changes - quickly. The not-for-profit Medicaid-managed healthcare plan, which serves approximately 85,000 low-income Oregonians, lost $12 million in 2002 and was down to 48 hours of cash on hand.

Predicting Costs of At-Risk Patients
Ford's first step for controlling expenses was implementing the ACG Predictive Model (ACG-PM) to identify CareOregon's highest-cost patients. Sixty percent of CareOregon's total dollars were consumed by the 12 percent of members in groups experiencing the highest levels of morbidity. CareOregon used ACG-PM, developed by Johns Hopkins' Bloomberg School of Medicine, to identify existing and new members at risk for high future resource use. The objective was to assess if intensive case management could benefit these at-risk individuals and reduce future expenditures. The patients' progression was plotted with three predictor models: ACG-PM score, historical aggregate, and actual expenditures.

Generating Reports, Drilling Down to Details
A Complex Care Patient Health Record (CCPHR) was created in a matter of days to provide easy-to-use reports for the clinical staff to track high-use patients with multiple morbidities over time. The CCPHR contains patient demographic information ACG, ADG, and EDC assignments medication list paid medical history and medical expenditures over time, including current and predicted expenses produced by ACG-PM.

Users can drill down into claims details including diagnosis, type of services, cost, drug used, and amount prescribed. Graphics visually display patient history, predictions, and actual-to-prediction comparisons. Physicians had never seen their patients profiled so comprehensively in a unified view.

Creating a Physician's Report Card
As the tool becomes fully integrated at CareOregon, Ford said it is creating "an iterative dialogue” with the providers. "We want to create a sense of investment in the patients,” he said, "and the CCPHR will become the physician's 'report card' that they look forward to and judge their own performance against. ACGs helped people to look at things quite differently and it was an excellent teaching mechanism in the plan for organizational learning.”

To view more information on this case study as published in Advance for Health Information Executives, click here.

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