"Healthcare is a noble business, but a business nonetheless", writes Robin Blair in her editorial IT Reality Show for Health Management Technology magazine (April 2003). The focus of MCOs is consciously shifting to the business of healthcare and the role of healthcare IT in supporting and boosting profitability. IT initiatives are moving into the business realm, away from fulfilling tactical roles and toward addressing strategic goals of organizations. MMDS solutions have arrived to address MCOs' critical need to synthesize disparate data into actionable business insights.

Information saves lives. When looked at from an MCO's point of view, information - complete, consolidated and timely - can save the company, or provide the much needed boost to effectiveness, efficiency and even profitability. Thus, an MMDS solution is expected to add value on several fronts that are currently on top of the MCOs' pain list.

MCOs are suffering from islands of data, where each island is dedicated to a specific MCO functional area. The integration of these data "stove pipes" unveils and exposes business performance trends, health patterns of the member base, and behavior patterns of the provider network. Consolidation of the information can yield tremendous value across multiple MCO operational functions, netting real bottom-line results.

• Which providers habitually upcode or miscode services?

• For a given disease, which providers' health treatment protocols yielded the best health outcomes? And which providers yielded the poorest health outcomes?

• Which disease management programs should we invest in that will yield the highest payback, given our current member base?

• Which providers optimally utilized admissions, procedures and prescriptions? And which providers over-utilized?

• Which members are candidates for case and disease management?

• Which generic or alternative prescription drugs will have the biggest impact on our annual pharmaceutical costs for our member base?

• How "healthy" is each of our subscribing employer groups? What proactive health initiatives will have the greatest impact for the employee population of each our employer groups?

• What new products could we offer that would be of most interest to our member community?

An MMDS solution gives an MCO the much needed insights required to make informed business decisions that drive business performance. It allows the organization to fully understand the performance and behavior of its provider network, and reveals health patterns within member populations. Being in the position to definitively answer key questions, as listed above, directs critical business performance initiatives such as:

• Physician education programs that inform providers about proper service coding and best practice compliance, and advise on over-utilization.

• Pharmacy programs and preferred drug lists to advise targeted physicians of lower price/equally effective drug alternatives.

• Disease management strategies and proactive intervention programs to improve healthcare outcomes and lower medical costs.

Implementing these types of programs over the entire provider and member networks - in a rifle shot fashion - were once cost prohibitive to MCOs. Now, aided by an MMDS solution, MCOs can hone in on just those physicians and members that represent the greatest opportunity for cost reduction impact. With all the necessary data at hand, MCOs can direct their attention to clinical areas and specific providers where additional network efficiency can be achieved. Not only can MCOs achieve lower healthcare costs, they can derive increased revenues from two key sources:

• Decrease in member (employer group or individual subscriber) fall out due to an MCO's improved understanding of true member needs and the ability to address them properly.

• Increase in new member growth rate due to customization of care for different populations, increased quality of care delivered by more efficient provider networks, and improved satisfaction with personalized healthcare services.

Regulatory Profiling and Reporting is a difficult burden for healthcare organizations. Not only does it take up a lot of time, but, in absence of an MMDS solution, also requires a tremendous investment in both labor hours and IT resources to integrate and analyze healthcare data. Selected MMDS suites on the market offer optional integrated components that facilitate regulatory quality profiling and reporting, such as the annual HEDIS reporting. As a result of more effective reporting, the key benefits materialize in increased revenues and reduced costs due to:

• Improved quality scores

• Increased membership from higher quality scores (particularly important for states that annually auto-assign Medicare/Medicaid members to selected MCOs based on the criteria of the highest HEDIS score)

• Reduced quality benchmark preparation cost

According to a report by Forrester Research (Health Management Technology Magazine, October 2003), the next 7 years will see a significant increase in healthcare IT investment. It is clear that MCOs have realized and embraced information technology as a paramount component of moving forward and achieving both regulatory and bottom-line oriented organizational goals. It is vital to note, however, that they intend to make such investments wisely, based on a quantitative rationale and business justification.

In the case of MMDS solutions, a clear link can be drawn between the effective implementation of the solution today and achievement of organizational goals tomorrow. And this is exactly what MCO executives are looking for when evaluating an investment. As the article, Some CIOs Tired of Making the Same Old Requests (Health Data Management Magazine, February 2004), points out, MCOs are reevaluating the very questions they include in their RFPs for technology solutions. Vendor and solution selection becomes a drill-down of a cause-and-effect nature, stripped of the general questions and cookie-cutter presentations of the past. Partially, these changes in technology procurement procedures are due to the transformation of the group responsible for assessment of the technology in question. The selection group now includes not only the technical management, but also end-users and, most importantly, the CFO. With tight budgets and a hard stand on non-discretionary spending, CFOs have reclaimed their role as the gatekeeper of MCOs' monetary resources.

CFOs are bringing their own set of questions to the table and the theme is clear: How and when will your technology solution deliver net bottom-line value to our business? With market challenges and organizational goals clearly identified, MCOs now - more than ever - demand quantitative ROI analysis for each planned technology purchase. Investing in technology for its own sake is not a privilege any organization enjoys. Solution vendors need to show how and when their offering is going to deliver value and impact the bottom-line of the organization.

In order for MCOs to make investments in compelling healthcare analytic solutions, such as MMDS, they need to be convinced of the quantitative value proposition of each technology offering under consideration. MCOs' desire detailed drill-down on delivered value and total costs, delivery timing, and direct economic impact on current business processes. Healthcare technology vendors are investing in selling tools that demonstrate proof of value, including:

ROI Value Driver White Papers that itemize MCOs' pain points and challenges, specifying how the ROI value drivers of a technology vendor's offering positively impact MCO operations to overcome these challenges. Such white papers reinforce the fact that the technology vendor has taken careful consideration to build value into the product with a deep understanding of the buyer's business. An ROI white paper is a good first step since it enforces the discipline of getting a solid foundation of your tangible ROI message first, even prior to calculating it. The ROI Value Driver paper is particularly useful for companies who do not have an established customer base or whose customer base does not have a long enough deployment track record with the offering being modeled to produce a customer-validated ROI.

ROI Calculators have proven to be excellent frameworks for advancing the sales process. While the end goal of the ROI calculator is to reveal a bottom-line number, the real value of this tool is establishing a thought process in the prospect's mind about the discrete areas where the solution vendor's product delivers value. Offering a high degree of customization to fit unique products and clients, the ROI Calculator allows the seller to practically discuss how the product will affect the buyer's business. This helps the seller to shift to a consultative sales approach more aligned with the buyer's needs.

ROI Benchmark Studies can be used to project a prospect's expected ROI with the IT solution under review prior to purchasing and deploying the product. By applying the ROI Calculator to a set of real customers prior to application with a prospect, a statistically representative set of ROI profiles is developed for companies who have sufficient experience with the deployed solution. Aggregated, averaged data for each value driver can then used as recommended values within the ROI Calculator, transforming the tool into a credible forecasting model. 

ROI Case Studies help prospects learn and vicariously experience value delivery through vendor's existing clients. The participating clients are carefully selected to provide a business situation that resonates with those of potential buyers. The resulting ROI case study outlines the precise business situation and challenges as well as strategic motivations and the decision process that led to purchase of the product. Moreover, the study uncovers how the offering helped the customer overcome the outlined challenges and details the key realized ROI value drivers.

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