From Provider to Risk Bearer: The Evolution of Healthcare Analytics

At the recent Zus Summit, an invite-only gathering of healthcare leaders focused on accountable care, our CEO, Frank Cheung, FSA, MAAA, shared insights that resonated deeply with risk-bearing entities across the industry. One message stood out clearly: Actuarial analytics have become essential for success in value-based care.

In this blog post, we'll explore the critical role of actuarial analytics in risk-bearing success, examine the major challenges providers face in building these capabilities, and reveal how technology is democratizing access to these crucial insights.

In today's rapidly evolving healthcare landscape, providers are increasingly taking on financial risk through value-based care arrangements. This fundamental shift requires healthcare providers to develop capabilities traditionally associated with health plans. At the heart of this transformation lies a critical component: Actuarial analytics.

The Health Plan Advantage: Understanding the Role of Actuaries

Actuarial workflows are fundamental to the success of health plans. These organizations embed actuarial workflows into every core function of their business:

• Financial Planning & Analysis: Tracking performance, forecasting outcomes, and evaluating strategic initiatives
• Commercial Operations: Managing pricing, renewals, and payer contracting
• Clinical Operations: Optimizing cost management and care delivery
• Network Management: Negotiating and managing provider contracts

Actuarial workflows enable health plans to make data-driven decisions across all aspects of their operations. Without this foundation, health plans cannot predict future healthcare costs, set appropriate premiums, or manage risk effectively — thereby risking insolvency and suboptimal quality of coverage for their members. However, maintaining these capabilities requires significant investment — typically 1 to 4 full time actuarial, medical economics, and analytics employees for every 10,000 covered lives.

The Provider's Challenge

Providers transitioning to risk-bearing arrangements require the same enterprise actuarial capabilities as health plans. However, three major obstacles stand in their way:

1. Scarcity: Finding actuaries with the right mix of skills and value-based care expertise is challenging
2. Cost: Traditional actuarial staffing models are prohibitively expensive for most provider organizations
3. Time: Incorporating actuarial workflows can create bottlenecks in time-sensitive operations

This capability gap leaves many providers "flying blind" as they take on increased financial risk. Without robust actuarial analytics, organizations struggle to:

• Accurately forecast financial performance
• Optimize pricing and contract terms
• Identify and implement effective clinical interventions
• Negotiate favorable value-based care agreements

The Technology Solution: Democratizing Actuarial Analytics

The remedy to these challenges lies in technology — specifically, platforms that can automate and scale actuarial workflows. Modern solutions like Accorded leverage:

• Data interoperability to seamlessly integrate information across systems
• API exchanges to enable real-time analytics
• Flexible data platforms that adapt to various provider needs

At Accorded, we've developed a B2B SaaS product that automates actuarial workflows, delivering best-in-class actuarial analytics at a fraction of the traditional cost and time. Recognized by Pearl Health as one of 2024's Top Value-Based Care Thinkers, Accorded applies modern data engineering to traditional actuarial analytics, giving risk-bearing entities a competitive advantage in the market while optimizing their financial outcomes.

Looking Ahead

The transition to risk contracts represents both a challenge and an opportunity for providers. While the hurdles are significant, new technology solutions are making it possible for providers to develop the actuarial capabilities they need — without the traditional overhead and complexity of legacy alternatives.

As the healthcare system continues its journey from fee-for-service toward value-based care, success will increasingly depend on risk-bearing organizations' ability to harness actuarial insights. Those who can effectively bridge this capability gap will be best positioned to thrive in the evolving healthcare landscape.

Ready to transform your organization's actuarial capabilities?

Get started here or email us at learn@accorded.com.