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Casualty Actuarial Society
1999 Special Interest Seminar
Health and Managed Care
October 18, 1999
Managed Care –
What Is It and
What Might It Be?
“The Next Generation”
Presented by:
David V. Axene, FSA, MAAA
Milliman & Robertson, Inc.
Milliman & Robertson, Inc.
Woodrow Milliman
INTERNATIONALLY
San Diego, California
1
The Butterflying of Managed Care
Fee maximums
Cost containment
Fee discounts
Incident management
Episodic management
Health status management
Milliman & Robertson, Inc.
Woodrow Milliman
INTERNATIONALLY
2
Five Guiding Principles
Only medically necessary services, and
no more intense than necessary to
provide the improvement in health
status that is reasonable for the patient
to expect.
Provided by a healthcare provider with
the appropriate expertise level, or at a
cost level not greater than the charge
of the appropriate expertise level.
Milliman & Robertson, Inc.
Woodrow Milliman
INTERNATIONALLY
3
Five Guiding Principles
continued
Provided in a setting not more intensive
or costly than necessary, recognizing
the key non-clinical factors.
Provided at a competitive price with
other providers in the marketplace.
Provided at a reasonable administrative
cost.
Milliman & Robertson, Inc.
Woodrow Milliman
INTERNATIONALLY
4
Components Needed to Effectively
Manage Health Status
 Clinical descriptions of appropriate care
 Utilization review and case management templates to
monitor care concurrently and retrospectively
 Patient behavior/activity modification guidelines
 Duration of care guidelines describing key monitoring
points to chart patient progress
 Computerized patient medical records to permit realtime monitoring (past, present and near term)
 Course-of-care maps and decision trees showing
alternatives and interventions to minimize decline
Milliman & Robertson, Inc.
Woodrow Milliman
INTERNATIONALLY
5
Resource Management Models
Financial or actuarial models to optimize
structural and practice efficiency
Helps providers adapt to more efficient
structures and practices
Key components
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
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Statistical data consistent with practice
guidelines
What, how many and how much it costs
Incentives to achieve desired outcomes
Milliman & Robertson, Inc.
Woodrow Milliman
INTERNATIONALLY
6
Real Life Examples
Outpatient surgery facility models
Consumer communication tools
Workers’ Compensation
Milliman & Robertson, Inc.
Woodrow Milliman
INTERNATIONALLY
7
Summary
Valuable education tool for both
patients and physicians
Basis for benchmarking
Foundation for future improvements
Success through simple thoroughness
Integration of actuarial science with the
practice of medicine provides a strong
foundation for all developments
Milliman & Robertson, Inc.
Woodrow Milliman
INTERNATIONALLY
8
Outpatient Surgery Facility Models
Milliman & Robertson, Inc.
Woodrow Milliman
INTERNATIONALLY
9
Consumer Communication Tools
Milliman & Robertson, Inc.
Woodrow Milliman
INTERNATIONALLY
10
Workers’ Compensation
Milliman & Robertson, Inc.
Woodrow Milliman
INTERNATIONALLY
11