As fee-for-value payment models replace fee-for-volume models, providers are more often managing medical costs and risk. These are roles once dominated by payers.
As providers find themselves needing to analyze risk, they can learn from health plans, employers and other payers — and adopt some of the same tools they use.
One tactic providers can consider is the use of actuaries to manage risk.
Actuaries are trained to use mathematics, statistics and business knowledge to predict future events. They assign risk to those events thereby uncovering opportunities to avert the risk or turn it into an advantage. They aim to uncover new profits and savings — and create stability.
Payers have teams of actuaries working to construct fair and equitable contract terms, while maximizing their own potential. Providers taking on the financial risk need to have the same level of actuarial analysis to ensure their best interests are protected.
Actuaries can help set reimbursement terms, assess liability and determine what is driving costs.
They can also work outside of a financial role to quantify the effects of clinically integrated strategies and develop network optimization.
To learn more about their role beyond financial decisions and the troubles you might encounter if you choose not to use an actuary, take five minute to listen to this #5in5 podcast: What is an actuary and do I need one?
About the author
Elena White currently serves as vice president of the Risk Quality & Network Solutions division for Optum. She has more than 18 years’ experience leading network optimization initiatives, network development and expansion, business planning, provider reimbursement development, transformation to risk-based arrangements and medical cost management strategies for both health plan and provider organizations.
Elena holds a bachelor’s degree from University of California at Riverside and master’s degree in business administration from Loyola Marymount University.