Carved-Out Care: Learn How This Approach Lowers Costs and Improves Patient Outcomes


Installment 4 of 6: “Empowering Employers in 2024: Strategies for Effective Employee Health Management and Financial Optimization”

Empowering Employers in 2024 Series

Installment 4
Carved-Out Care: Learn How This Approach Lowers Costs and Improves Patient Outcomes

The inflationary medical cost of covering chronic conditions and new medications—especially biosimilars—is soaring, costing employers billions each year. To reduce these costs, health plans have begun offering care management programs explicitly aimed at high-risk members and those with chronic conditions.

Utilization Trends of High-Risk Members

Greater likelihood of face-to-face encounters

Higher rates of hospitalization

Increased rates of emergency department use

Care management programs help high-risk and chronic care members better understand their healthcare costs and more effectively navigate the healthcare landscape while providing the support they need to better manage their health—all of which lead to improved outcomes, lower costs, and increased member satisfaction.

Not All Care Management Programs are Created Equal

Although TPAs may boast positive results from their care management programs, those programs are often part of a larger bundle of services, making it difficult to determine actual ROI.

Many organizations choose care management offerings as part of a bundled benefits program through a third-party administrator (TPA). However, these programs are typically the bare minimum effort without a specific price with other offering in the bundle such as network discounts and benefits changes to drive returns. This makes it nearly impossible to calculate the effectiveness and financial benefit of their care management program.

A carved-out care management solution is a better approach because the expense for care management, including coordination of services and management of high-risk members, can be isolated. With a carved-out solution, outcomes can be tracked to the distinct elements of the programs. At the same time, highly detailed analyses provide a level of transparency that bundled service providers cannot offer.

Benefits of a Carved-Out Care Management Program

Focused solely on improving outcomes and lowering costs

Hyper-personalized member engagement strategies backed by research

Payment models tied to outcomes and results

Five Essential Questions to Ask When Choosing a Care Management Partner

For employers to conduct an accurate cost-benefit analysis on their care management program, their vendor must be able to isolate the actual cost of that program from any other services provided—bundled or not. Using a percentage of the total bundled cost is not good enough. The vendor should also be able to break out any provider rate changes to show what portion of the increase or decrease applies to the care management program.

Sending members information about their care management benefits or conducting employee benefits meetings should not be counted as member engagement or used in determining ROI. Vendors must be able to track and measure actual engagement activities, such as members actively participating in care management conversations.

Often stop loss carriers require members to be in care management to qualify for stop loss payments. Having a care management provider that will work with the stop loss carrier to provide the information needed is vital to ensuring the employer is receiving the correct stop loss payments.

Members can be identified for care management through multiple models. The care management partner must have the analytics necessary to identify members both retrospectively and prospectively.  Specifically, they should target newly diagnosed members or those needing care coordination. Additionally, the care management partner should proactively reach out to these members instead of waiting for members to ask for support.

Genuine health improvements, especially regarding chronic conditions, typically require lifestyle changes. While following up with the member after a specific event or acute episode can help facilitate recovery, it takes consistent engagement to ensure genuine lifestyle changes that lead to better health and lower costs. Therefore, employers should seek a partner with an ongoing, strategic care management program customized for each member or beneficiary.

Ensuring Transparency and Trust


Implementing a carved-out care management program is vital to lowering costs and creating a healthier workforce. Conifer Health can help. With Conifer’s carved-out care management model, employers and members get a clearer understanding of the costs associated with healthcare services, as well as the value provided by Conifer’s solutions, fostering trust and financial transparency. And unlike health plans that are paid based on a percentage of the cost, Conifer Health operates independently, ensuring that its incentives focus solely on reducing expenses and improving outcomes. This alignment drives cost-containment efforts and promotes the delivery of high-quality, efficient care.

To learn how your organization can benefit from a carved-out care management program, contact Conifer Health today!

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