Every CCaH pro forma I’ve reviewed treats care coordination or wellness coordination (I’ll use these terms interchangeably) the same way: as a line item to be minimized. Staffing ratios get scrutinized. Coordinator caseloads get stretched. Someone on the finance committee inevitably asks whether the program really needs “that many” coordinators, framed exactly like a question about overhead because that’s exactly how it’s being modeled.
It’s the wrong model. And it’s costing these programs money, not saving it.
I like to think about care coordination tasks in terms of return on investment in reduced care costs later on and happy members who can refer future members today.
The Structure You’re Actually Working With
CCaH runs on fixed revenue and variable cost. The membership fee is locked in at enrollment, priced against actuarial assumptions about how much care a member will need over time. Most everything else including the actual services delivered, the actual claims paid is variable, and it’s the thing that determines whether the program hits margin or not. (It may also be a good argument for lower entrance fees and higher monthly fee structures)
More importantly, the part boards consistently overlook and miss altogether is care coordination doesn’t sit outside that equation as a cost adding to the variable side. It sits inside the mechanism that determines how expensive the variable side gets.
Membership fees and actuarial assumptions are fixed inputs. Coordination quality is the control variable and therefore care utilization cost is the output. Weak coordination doesn’t just fail to help; it removes the one lever standing between your actuarial assumption and a worse outcome than the one you priced for.
Predictable Utilization vs. Crisis-Driven Utilization
Most CCaH members use very little for years, then will need more as they age and as the program ages. It can catch your finance people off guard when they have been seeing the cash flow to suddenly seeing those expenses creep up drastically due to care costs. If you are providing quality care coordination we should be able to predict that utilization and reduce the more expensive AL and SNF care.
A member with proactive, relationship-based coordination tends to move through a fall, a diagnosis, a decline in mobility, on a planned trajectory: home modifications before the fall, not after; a care plan adjustment before the ER visit, not because of it. A member without that coordination tends to hit the system in crisis which tends to be the more expensive, less predictable version of events. The care coordinator can also put in place small amounts of home care services to prevent a fall or event that could lead to a higher level of care.
Same member. Same eventual care need. Wildly different cost profiles, driven almost entirely by whether someone was paying close enough attention to intervene early.
That’s the margin lever. Not fewer services or support up front to save on costs. This is where spending can save more in the future.
What the Evidence Actually Supports
This is where I’d push back on how the industry currently justifies coordination investment, because the evidence is more specific than “care coordination works.”
Broad, telephonic, transactional care coordination programs that focus on periodic check-in calls and light-touch case management do have a thin track record. Several large-scale programs built this way show null results: no meaningful reduction in cost or utilization.
Relationship-based, proactive, home-embedded models look different. PACE-style coordination and home-based early-detection programs show real, measurable impact on cost and utilization patterns.
The distinction matters more than the headline claim. If your board approves “care coordination” as a budget category and then staffs it like a call center, you should expect call-center results. In this scenario, you’ll have real data telling you coordination doesn’t work, when what actually happened is you didn’t build the version of it that does.
The Question Boards & Leadership Should Be Asking
Most finance committees ask: how do we minimize what we spend on coordination?
That’s a budget question, and it’s the wrong one. The question that actually protects margin is: how do we design coordination good enough to change utilization patterns and rates?
That’s a staffing question. A hiring-profile question. A caseload-design question. It has a real answer, and organizations that get it right are underwriting their way to better margins and it’s not by pricing more conservatively, but by controlling the thing pricing can’t control on its own.
Closing the Loop
A common misconception is the assumption that membership growth, not care management, is the primary financial lever. Growth fills the pipeline. Coordination determines what that pipeline costs you once it’s inside the program.
Boards and leadership that treat coordination as overhead are optimizing the wrong variable. The ones that treat it as the control mechanism for their entire actuarial model are the ones whose margins hold up when the pricing assumptions get tested.
But what is good or quality care coordination/wellness coordination in CCaH programs?
This question begs for more exploration to truly define what those standards look like. I am looking at establishing some of these standards through my work so that then we can examine the impact of care coordination on these programs. Every year our benchmarking shows remarkably low utilization or assisted living, memory care, and skilled nursing. Friends Life Care data has also shown similar findings when compared to general long-term care insurance policy holders. It will be important for our industry to work towards establishing standards and measuring outcomes for valid research to be conducted.