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WellPoint’s advanced analytics application gives providers the insights they need to deliver better care more efficiently and at lower cost.

The health care industry is transforming in unprecedented ways, making it imperative for health plans to rethink how they do business. Beyond complying with new mandates imposed by the Affordable Care Act, plans need to respond to the decline of fee-for-service care and the arrival of game-changing technologies such as big data and mobile health. They also need to meet patients’ demands for affordability and first-rate customer service.

As part of its strategic response to this changing environment, WellPoint—one of the nation’s largest health plans and a Fortune 50 company—has developed an ambitious initiative to change its provider payment model. WellPoint’s strategy is described in-depth in MIT Sloan Management Review’s recent case study “Preparing Analytics for a Strategic Role.” In short, rather than paying physicians based on volume (procedures, visits, and admissions), it wants to pay them based on “value”—their ability to manage costs and improve patient outcomes and quality of care. The model could potentially reduce costs by 20 percent, resulting in billions of dollars in savings. Primary care physicians would receive a share of the savings, which WellPoint estimates could increase their earnings by 30 to 50 percent.

Analytics and reporting will be essential for giving physicians the actionable insights they need to achieve the value-based model’s goals. CIO Journal spoke with Arthur Fitts, a director at Deloitte Consulting LLP, and Rajeev Ronanki, a principal at Deloitte Consulting LLP, about how WellPoint used the Agile development method to overcome the challenges it faced in creating an advanced reporting application for physicians.

Why is technology so important to WellPoint’s strategic initiative?

Arthur Fitts: To shift to a value-based payment model, physicians need accurate, actionable, and timely data about patients—not just patient histories, but also predictive data to choose the right course of treatment. And to use the data effectively, they need to receive it in a format that allows them to quickly zero in on the information most relevant to improving outcomes and reducing costs. For instance, preemptively identifying patients likely to make avoidable emergency room visits or be readmitted to the hospital is especially important for reining in costs.

Rajeev Ronanki: WellPoint understood the importance of giving physicians the right information, but making it happen proved challenging. Physicians piloting WellPoint’s new payment model were receiving static reports about their patient populations, not dynamic reports that would allow them to rapidly pinpoint the most valuable data. WellPoint wanted to use a Web application to provide these dynamic reports. But the development project was struggling to deliver the application in time for the new payment model’s launch. Understanding user needs had been a major challenge throughout the development process. The project team didn’t have a clear understanding of the business requirements for the Web application. Recognizing what was at risk, the health plan changed course.

How did Agile help the team develop a reporting application that would deliver the actionable insights physicians needed?

Fitts: Agile’s collaborative and incremental approach was well-suited to helping the project team understand what end users—the physicians—really wanted from the dynamic reports and how they would apply the data to improve outcomes and reduce costs. The development team collaborated with physicians and business leaders to understand use cases and user stories. And, rather than relying on a full set of requirements delivered upfront, the team used an incremental approach to understand the needs of different user groups. This “user-down” approach helped to ensure that reports, dashboards, and analytics would provide physicians with the information they require to drive value.

How did the team need to work differently to apply Agile?

Ronanki: The team was accustomed to setting out the full sequence of steps it would follow for the project and sticking with this plan through testing and release. It wasn’t until the end of the process that the business could actually work with the finished product and request changes. To use Agile, the team needed to identify the toughest issues to address in the development project at the outset and figure how to attack those using a series of short, iterative steps. This approach enabled the team to collect feedback on requirements from users throughout the development process—which is much more effective than waiting until the final testing stage. One consequence was that business and IT collaboration rose to a level not previously experienced in the organization. Traditionalists initially resisted the new method, but putting it into practice allowed them to recognize the benefits.

What was the most effective approach the team used to understand physicians’ requirements for the reporting application?

Fitts: The team employed visualizations early and often in its Agile project to elicit user input on requirements. Presenting mockups of the Web application at meetings with physicians was remarkably valuable. Physicians shared their views on how the user interface should be designed, what data and filters they needed, and how they would actually use the application. Discussions like these gave the project team a much clearer picture of the critical business requirements and the data and other resources it needed to make available through the application. The release of the reporting application to physicians is scheduled for later this year, so Agile turned out to be the right approach for getting the development project on track.

How did the team foster leadership support for the development project as it unfolded?

Ronanki: As is common practice when using Agile, the executives overseeing the project participated in regular meetings—called “scrums”—to discuss progress and issues. The typical status reports weren’t necessary, because the leaders knew what was going on in greater detail than ever before, and they participated in finding solutions.