Over the past several years, premium increases in many markets have provided health plans with enough revenue to operate profitably even if appropriate medical management programs were not in place. This has changed with many health plans, insurance companies and third party risk managers such as IDNs failing. In fact, the leading cause of death among most health plans has been medical expense ratios that represent losses in excess of premium due to a poor understanding of how to design and implement a meaningful medical management program.

This is very different than what most of us learned in the health plan business. UR and QA processes were thought about in terms of unit price and volume. We separate inpatient from outpatient and many of us have not even measured pharmacy until just the last 5 years when it became a big issue. The problem is when you measure just services use at different locations in the delivery system, you never really get a chance to link all the services together around one or two doctors. The total patient care for a certain individual cannot be compared to other individuals with a similar diagnosis without a large population database that stratifies patients by severity, age, gender and actual resources used. If we could compare all of that, we could actually determine who was the best provider and why.

From these benchmarks of practice norms in a specified area, we could now start looking at trend factors to alter price and benefits to have a fit with the needs of our populations and a link with the best practitioners for the patient with these same diagnoses. This is what Pendulum can do, right now, today.

We use episodes of care or Episode Treatment Groupings ( ETGs) to convert all of your claims and utilization data to measurable globally defined groupings of services linked to diagnosis. Once analyzed we can adjust for complexity and severity to start ranking physicians to performance.

This represents a new approach to medical management.