Provider Reform Impact and Stress-test Model (PRISM)

McKinsey's Provider Reform Implications Stress-test Model (PRISM) is a financial forecasting platform that integrates a broad array of data sources, including hospital financial data, MPACT county-level covered lives projections, and extensive legislative research, resulting in a tailor-made forecast offering for providers.

PRISM offers hospitals a long-range forecast, emphasizing how the Affordable Care Act (ACA) will impact provider's financials, patient mix, and ultimately their ability to deliver care in the future

  • Because PRISM is driven by facility-specific hospital data, it can provide high-resolution projections with great accuracy and reliability at the individual facility or system level
  • PRISM is also able to disaggregate the impact of reform into payor class and patient channel 'reform impact drivers'. This granularity enables hospitals to make key strategic decisions in anticipation of and in response to reform
  • The forecasting framework behind PRISM has been heavily road-tested in several hundred facility studies, and has been relied upon by many of the Nation's leading health systems

PRISM incorporates the best expertise from across the firm, leveraging millions of dollars of research and analytics investments

  • McKinsey's proprietary MPACT tool, which provides county-level coverage shifts at a resolution much greater than most state-based models
  • Projections informed by leading research from the McKinsey Center for US Health System Reform on utilization changes of the newly insured, providing a more accurate projection of future volume
  • Customized Exchange pricing as well as market-specific volume and price modeling from the McKinsey Advanced Healthcare Analytics team
  • PRISM is supported by a team of provider economics experts with a deep understanding of the industry, who bring expert-level Reform knowledge and insight when shaping and interpreting results

PRISM's unique combination of breadth and granularity extends its usability into a variety of contexts

  • Hospital strategic planning and financial forecasting tool (core application)
  • Exchange network simulation and contract negotiation analyses used in both the providers and payor setting
  • Hospital M&A can be informed of the impact of reform on future partners, either using hospital-owned data at advanced stages of due diligence, or the 'outside-in' forecast for initial valuations

Because healthcare reform will fuel major coverage shifts, expand eligibility, and impact how often and when consumers will seek care, hospitals need to consider how these shifts will impact utilization and margins at the facility level so they can position themselves for future growth. PRISM incorporates the firm's best thinking into a robust forecasting platform that helps payors and providers navigate this uncertainty.