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2014

Ariel Bayewitz was beyond frustrated. One of his employees had just quit, saying, “All I do is pound my fist, and I can’t take it anymore. IT keeps saying we’re going to be iterative, but we’re not.”

Bayewitz works in analytics for WellPoint, Inc., a Fortune 50 company, and one of the nation’s largest providers of health care benefits and insurance. He’s one of the leaders of WellPoint’s major strategic initiative to change how it delivers health care in the United States.

WellPoint wanted to shift from a model where it paid physicians based on volume (procedures, visits, admissions) to one where its payments to doctors were based on “value” (ability to manage costs and improve patient outcomes and quality of care). That model is sometimes called the shared savings model, because insurers share any savings with primary care providers. WellPoint has said that shared savings could help physicians increase their earnings by 30 to 50%.

Getting there meant giving doctors data about patients with chronic conditions to help care for them more effectively. WellPoint also wanted to use analytics to spot patients who were likely to go to the emergency room or be readmitted to a hospital. Emergency room visits and readmissions are an enormous expense, part of the reason why U.S. health care’s share of GDP is more than double the average of other industrialized countries.1 The Enhanced Personal Health Care project was WellPoint’s answer to this problem.

WellPoint had already run nearly a dozen pilots with physicians to figure out how to get them more involved with patient care. These pilots showed improved quality and a decrease in costs, which caught the attention of WellPoint’s executive leadership team. With the potential to reduce costs by 20% if successful — meaning billions of dollars in savings within a few short years — Enhanced Personal Health Care became a company priority.

But after a series of fits and starts, Bayewitz thought a key part of the project was in jeopardy, and needed to be declared “Status Red.” Such a move would send ripples to the very tops of the company ranks.

First, Bayewitz had to convince his boss, Jill Hummel, WellPoint’s vice president of payment innovation.

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Research Information
About the Author:

Michael Fitzgerald is a contributing editor at MIT Sloan Management Review.

References

1. http://www.oecd.org/unitedstates/Briefing-Note-USA-2013.pdf

Comments

1 Comment On: Preparing Analytics for a Strategic Role

  • Shravan Kumar P | July 19, 2014

    Superb article

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