Focusing on Total Cost of Care (TCC) Leads to Better Care, Reduced Costs

Focusing on Total Cost of Care (TCC) Leads to Better Care, Reduced Costs

<0> Treo SolutionsPatty Montone Charvat, 978-273-7764 </0>

“Total Cost of Care: A Discipline That Leads to Better Care,” which appears in the July/September 2013 edition of the, provides an in-depth look at an innovative approach, developed by Treo Solutions, for improving care and outcomes while lowering costs.

Authors L. Gordon Moore, MD, Chief Medical Officer of Treo Solutions, and Barbara DeBuono, MD, MPH, Treo Solutions’ Senior Vice President of Market Development, argue that healthcare organizations seeking to modify their business models to either more effectively share or better manage risk must have an understanding of Total Cost of Care (TCC) across a variety of dimensions. They note that other metrics—such as access and quality—are important, but they all ultimately relate back to TCC.

The article defines TCC as a composite measure of costs (defined as the total cost in dollars of all services rendered in the delivery of care for an individual or group, including amounts paid by the insurer and by the individual in the form of copayments, deductibles, and other cost sharing mechanisms) and utilization (inpatient admissions, outpatient visits, physician visits, prescriptions, etc.) for a person or a population.

“TCC is more than just a metric or an approach, it is an overriding, unifying concept that enables all metrics related to access, quality, and costs to be brought together to measure the overall (or total) cost of care impact,” said Dr. Moore. “The comprehensive view offered by TCC gives healthcare payers and providers the ability to assess the impact of effectively utilizing care and financial resources, better managing the care of patients and populations, and aligning incentives of a population-based system.”

According to the authors, effectively managing population health and controlling or reducing TCC are integrally linked.

“As the healthcare system moves from volume to value-based, it is critical that healthcare leaders— from payer or provider organizations—have the ability to gauge each intervention and initiative based on how it impacts system-wide metrics like TCC,” said Dr. DeBuono. “Through TCC, the financial attributes of care are tied directly to quality outcomes, which results in lower costs and better care at each level of the healthcare system.”

The article cites the Colorado Accountable Care Collaborative (ACC) for Medicaid, for which Treo serves as the Statewide Data Analytics Contractor, as an example of the relationship between TCC and better health. The ACC (2012), prepared by the Colorado Department of Health Care Policy and Financing, the agency responsible for the program, showed significant progress toward meeting the goal of improving care and costs. Specifically, the report shows that members enrolled in the ACC program experienced:

- An 8.6% reduction in hospital readmissions

- A 3.3% reduction in utilization rates of high cost imaging services

- A lower rate of increase (0.23%) in ER utilization compared to non-enrollees (1.47%)

Simultaneously, the ACC Annual Report stated that there was “a range of estimated gross program savings between $9 million and $30 million for FY 2011-12.”

Since 2002, Treo Solutions, a healthcare data analytics and business intelligence firm, is the essential partner for anticipating and managing change in healthcare. Treo leverages enhanced data assets to deliver value to its payer and provider clients. Treo’s highly scalable tools, optimized claims database of over 45-million covered lives, and expertise in collaborative care logistics enables clients to make value-informed decisions to create new risk-sharing and total cost-of-care models. Treo’s focused experience and agility allows clients to anticipate—and rapidly react to—a constantly changing market.

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