Contract negotiations — Healthcare - Private sector

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Milliman assists health insurers with the sophisticated data analysis needed to compare providers of varying size that serve differing patient populations. Our broad expertise in this area has been gleaned from previous assignments in Europe and worldwide.

Our UK team helps clients employ contract performance analysis to reduce healthcare costs while maintaining quality of care. We excel in creating financial models designed to cross-compare providers on an equal basis, adjusting for differences in their services and patient populations. These models enable us to perform precise actuarial analysis and offer impartial advice based on statistical, rather than anecdotal, evidence. Our process enables us to isolate inefficiencies and quality problems, as well as identify outstanding providers.

From this increased understanding, insurers can then develop strategies to target unjustified variations in practice patterns between contracted hospitals and physicians. By developing appropriate financial strategies to reward quality and efficiency, insurers can increase the average quality of care and reduce costs. One common method is to employ the use of evidence-based best-practice protocols to ensure providers implement improved delivery systems that result in better clinical outcomes at less expense.

Delivering better quality outcomes efficiently

Milliman assisted a startup UK health insurer with a range of services, including contract analysis. We first analysed the proposed contracts and using our proprietary benchmarks, Milliman's Health Cost GuidelinesTM, to calculate likely utilisation and average prices for different healthcare procedures and services. Our consultants were then able to provide an opinion on the reasonableness of the proposed service prices and assist in developing appropriate length of stay guidelines to build into contracts.

As a result, the insurer was able to contract with providers on a basis which encouraged efficiencies in the healthcare delivery system. The client was also able to initiate a longer-term strategy to reward quality, ensuring better outcomes for members.