The Actuary Magazine

Managed Care 3.0 Case Studies


By Karen Shelton

August 2021

Of the many things that make America unique, one is its largely private health care system. Although the system is by no means perfect, the opportunity to innovate exists—unlike in other countries where national health systems are more rigid.

A thought leader in my organization (UnitedHealthcare) relocated to the United States in part because of such opportunities. He and his brother, a physician back in his home country, often discuss the challenges they face within their respective systems. One big difference: The opportunity to innovate is much more available in the United States.

To highlight and spur on U.S. health care innovation, the Society of Actuaries (SOA) and the Kaiser Family Foundation Initiative 18|11 team sponsored this Managed Care 3.0 (MC3.0) Case Studies strategic initiative. The name Initiative 18|11 refers to the fact that the United States spends 18 percent of its gross domestic product (GDP) on health care, compared to comparable countries spending just 11 percent of their GDP. The Initiative 18|11 team has explored cost drivers as well as potential solutions that address health care costs.

The SOA Health Section and the 18|11 team jointly sponsored this MC3.0 Case Studies initiative with a focus on specific innovations in U.S. health care that have the potential to positively impact cost, quality and equity of health care. Each specific innovation (i.e., case study) included in this series has demonstrated positive outcomes through scientific studies. They cover a wide swath of topics, including rural health care initiatives, health literacy, gene therapy funding mechanisms and provider reimbursement.

Health literacy

The complexity of our health care system makes it challenging for even the highly educated to navigate efficiently. To that end, two articles in this series focus on health literacy.

Member Advocacy as a Health Care Innovation by Mike Pacolay, FSA, MAAA

This article highlights Accolade’s approach of pairing a health care advocate with a member to assist them in navigating the health care system labyrinth. Aon, an independent consulting firm, did a controlled study across a 10,000-member life employer group and a 100,000-member employer group over one and three years, respectively. The study used a pairwise matching technique and demonstrated lower costs across both employers.

Addressing Inadequate Health Literacy by Melissa Chacko, FSA, EA, FCA, MAAA

This article focuses on MedEncentive, a company that developed a model to aid physicians in reinforcing care paths with their patients. This model arms the physician with basic materials for the patient to read, along with a follow-up quiz. The materials are written at a basic level and the quiz is fairly simple, so barriers are limited and concepts are reinforced. The Journal of Medical Internet Research performed a study over a five-year period (2013–2017) on an 1,800-member health plan of a nonprofit general hospital in a semi-rural community in the South Central United States. Results suggest that members participating in the MedEncentive program had improved adherence to care paths and lower health care costs.

Clinical Programs

The Management of Cardiometabolic Syndrome by Ian Duncan, Ph.D., FSA, CSPA, FCA, FCIA, FIA, MAAA

Newtopia, a health company that develops highly personalized disease prevention solutions, created a clinical program to address metabolic syndrome. The program leverages biometric data to develop a customized nutrition and activity plan, then pairs members with a personal coach and client care manager to achieve high engagement. In collaboration with Aetna, a randomized control trial was performed to evaluate program effectiveness. The results were published in the peer-reviewed Journal of Occupational and Environmental Medicine and show improved health and lower costs for those with metabolic syndrome.

Rural health care initiatives

Rural Health Care Case Studies by Elaine Corrough, FSA, MAAA

Populations in rural America face unique challenges with the health care system, from access to care to socioeconomic factors like low incomes and a high obesity rate. This article highlights several programs local health plans have implemented in collaboration with various community partners, including:

  • Food banks for diabetics who face food insecurity in central Pennsylvania
  • Purchasing alliance in rural Colorado
  • Sustainable funding models for community health workers in rural Appalachia
  • Neonatal abstinence program in Tennessee

payment models

Future of Gene Therapy Funding by Wendy Kwan, FSA, MAAA

Gene therapy drugs are an incredible innovation that go beyond simply managing diseases—they provide cures. Spinal muscular atrophy, a once-fatal disease, is now fully treatable with drugs like Zolgensma. With these blockbuster drugs, however, comes a high price tag that is often in the millions of dollars. The pipeline of gene therapy drugs is growing, and health plans and self-funded employer groups are faced with how to finance them. This article highlights two case studies performed by the Massachusetts Institute of Technology (MIT) on payer attitudes around awareness of these drugs and their financing. At the end, alternative funding mechanisms are discussed.

Value-based Risk Share by Roy Goldman, Ph.D., FSA, CERA, MAAA

Some of the highest quality, most cost-effective care is provided when the health plan payer partners with health care providers in developing payment models through aligned incentives, mutually agreed-upon targets and real-time reporting. Such a model has been implemented at Geisinger Health Plan (GHP) and has been continually refined over the years. Most recently, GHP contracted with Geisinger providers to share in the upside and downside risk for all GHP members in a service area, regardless of whether all members are using Geisinger providers and facilities.


Risk is and will be an inevitable factor in the transition to an increasingly value-based and data-driven health care system. Health care actuaries will have many opportunities to control and manage these risks. Going forward, key strategies will include:1

  • Develop the capabilities needed to create value. Effective contract and risk management will require organizations to draw upon the full range of value-driving capabilities, including performance improvement, business intelligence, predictive modeling, data reporting, clinical knowledge and risk management.
  • Experiment with payment and care delivery transformation in a risk-controlled environment. Take advantage of opportunities to gain experience with various current reforms to prepare for an almost certain intensification of purchaser demands for greater health care value.
  • Develop trusting relationships across all stakeholders. These relationships should support the coordination of care, sharing of data, innovation of benefit design and appropriate division of risk. Such efforts should improve population health and maintain the financial sustainability of the health care delivery system, all while being culturally relevant to the populations served.
  • Use robust independent research to validate results. Leveraging external experts who evaluate data using the latest in sound scientific research can add credibility to results, encourage broader adoption and identify areas for potential improvements.


From the bottom of my heart, thank you to the MC3.0 Case Study work group. First, thank you to Brandon Davis, who served as the secretary and kept us on track. And to the authors of the articles in this series—Melissa Chacko, Elaine Corrough, Ian Duncan, Roy Goldman, Wendy Kwan and Mike Pacolay—without your commitment, knowledge and collaboration, this would not have been possible. Rick Rush, you were an invaluable reviewer of many articles and a focused strategist in the finalization of the series.

Finally, the team wishes to thank the Health Section Council for its support throughout the production process, as well as the MC3.0 Steering Committee, which included Sarah Osborne, FSA, FCA, MAAA (Chair); 2020–2021 SOA President Roy Goldman, Ph.D., FSA, CERA, MAAA; Rick Gundling, CMA, FHFMA; and Matthew Rae, MHA, MPH; and the leadership of Initiative 18|11, Joan Barrett, FSA, MAAA; and Brian Pauley, FSA, MAAA. We also are grateful for the support of our SOA Staff Partner, Achilles Natsis, FSA, MAAA; SOA Section Specialist, Ladelia Berger; and Strategic Initiative Chair Wendy Kwan, FSA, MAAA.

Karen Shelton, FSA, MAAA, is vice president and actuary with National Accounts at UnitedHealthcare.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.


  1. The Healthcare Value Sourcebook, pp 51–60. Healthcare Financial Management Association, June 2015.

Member Advocacy as a Health Care Innovation

How improved transparency and guidance within a complex system can improve consumer health literacy
Read More

Addressing Inadequate Health Literacy

Contributing to the U.S. health care transformation through an innovative doctor-patient incented health literacy model initiative
Read More

The Management of Cardiometabolic Syndrome

Newtopia case study shows weight loss is a key factor
Read More

Rural Health Care Case Studies

A compelling cross-section of possible solutions to managed care challenges in rural America
Read More

Future of Gene Therapy Funding

Health actuaries must innovate to create new funding mechanisms to ensure health plan viability and affordability
Read More

Value-based Risk Share

The ultimate case study of how we can slow growth in medical costs while improving quality
Read More

Copyright © 2021 by the Society of Actuaries, Schaumburg, Illinois.

Share This