Session: Revenue Optimization through Risk Adjustment
Speakers: Monisha Machado-Pereira and Jim Oatman, FSA, MAAA
Risk adjustment profoundly changes the economics of the Small group, Individual, and Medicare Advantage businesses. Our proprietary modeling has shown that this is not just a flattening of the margin curve by risk, age, and gender but a fundamental inversion of the drivers of profitability. Furthermore we have seen that granular and predictive analytics have the power to identify meaningful pockets of opportunity and to inform pragmatic actions that can optimize a payer’s book of business. We have seen a number of plans incorporate such insights into product and pricing decisions in the first quarter and into retention, acquisition and distribution tactics as they prepare for open enrollment. We have also seen considerable efforts to learn from MA experience. This session will provide insights on how risk adjustment will drive margin and lessons from actions to date.
Monisha Machado-Pereira is a Partner in the Healthcare Systems and Services (HSS) practice of McKinsey & Company. Since joining the Firm, Monisha has focused on serving clients in the healthcare space – large health plans, hospital systems, retail pharmacies, pharmaceutical, and medical products companies. Monisha leads the Medicare and Risk Adjustment Service Lines for the Firm. Her topics of expertise include: Product and network design for health plans, local market planning to guide health plan growth strategies, Medicare Stars diagnostic approach and predictive modelling, risk adjustment performance improvement, and collaboration strategies to drive value for the Retail consumer.
Jim Oatman is a Solution Partner and Leader of the McKinsey Actuarial team, which is a dedicated team of actuaries that help payers identify pragmatic actions to drive profitable growth. Jim has over 20 years of executive and actuarial leadership in individual health insurance. He was General Manager of the individual business unit at Anthem and the former Chief Actuary at Assurant. He is a Fellow of the Society of Actuaries (FSA). He has served as Chairperson of Individual Committee at the Americas Health Insurance Plans, and has served as the Co-Chairman Individual Medical Rate Filing Task Force of the American Academy of Actuaries.