These cases don’t fit neatly into traditional chronic, specialty, or high-cost care silos. Because most health plans don’t formally designate catastrophic diagnoses as a separate category of claims, they often go unmanaged simply because they don’t belong anywhere in a plan’s existing care management model.

As a result, they’re rarely flagged early or managed proactively. They typically emerge only after a high-cost inpatient stay, when the opportunity for early intervention and cost control has already passed. Even when identified, few plans have the specialized programs or expertise to manage these complex cases effectively.

The high cost of inaction
When catastrophic conditions aren’t treated as their own vertical, plans risk applying standard care or general case management models that lack the depth, coordination, and domain expertise required. Care unfolds in fragments, complex conditions are managed too late, and costs spiral.

A recent Paradigm report found that a single patient with a catastrophic diagnosis sees more than 60 different providers and has more than 100 medical and surgical encounters in the first year alone.

Without early intervention, coordinated care and alignment to the right specialty expertise, these can become some of the most expensive cases in a plan’s population.

Delayed or inadequate management leads to worsening health outcomes, avoidable complications, and significant financial strain for health plans. Poorly coordinated care can also compromise long‑term, sustainable recovery and waste valuable resources.

Each unmanaged case can exceed $500,000, and they collectively cost commercial payers $15 billion per year.

What health plans can do differently?
Catastrophic cases don’t have to be unpredictable or unmanageable. With more strategic care management, health plans can drive improved outcomes for members, reduce preventable complications, and capture meaningful savings.

The opportunity is clear: identify sooner, coordinate smarter and deploy expertise that matches the complexity of these cases. To do that, you’ll need to focus on three high-impact areas that consistently drive better results for catastrophic cases.

Recognize catastrophic diagnoses as a distinct category
Traditional care management models simply weren’t built for the level of complexity that catastrophic diagnoses produce.

To address these cases effectively, health plans must move beyond traditional silos and treat catastrophic diagnoses as a unique, high-impact segment with identifiable patterns and cost dynamics. This shift brings catastrophic care into the same strategic focus already applied to chronic conditions, specialty care, and other high-cost areas.

By treating catastrophic diagnoses as a defined category with recognizable trends and repeatable solutions, health plans can better anticipate needs, improve recovery trajectories, and gain far greater control over both costs and outcomes.

Invest in early identification and intervention
Care management programs that can mobilize quickly and intervene upstream foster better coordination and a more predictable recovery trajectory. Early identification and intervention remain one of the most effective ways to prevent costs from catastrophic cases from spiraling out of control.

To make this possible, health plans should leverage data analytics to spot at-risk members before costs escalate. That data can help identify where catastrophic diagnoses are clustering, pinpoint members with heightened vulnerability, and use proactive triggers and rapid-response care teams to intervene early.

Focus on specialized, multidisciplinary care
Catastrophic cases demand deep specialization and coordinated, multidisciplinary care that addresses the full spectrum of a patient’s needs — physical, behavioral, and social.

Effective care management enables continuous collaboration and care coordination among providers across disciplines and specialties, and ensures each phase of recovery transitions smoothly.

For health plans, that means building or partnering with interdisciplinary teams that have deeply specialized expertise in catastrophic diagnoses and the secondary conditions, comorbidities, and psychosocial barriers that commonly complicate recovery, ensuring the right specialists are available at the right time.

The high-impact opportunity hiding in plain sight
Catastrophic cases aren’t outliers. They’re a strategic vulnerability with outsized influence on cost, outcomes, and member experience. In a value-driven environment, this blind spot is no longer sustainable.

By bringing catastrophic diagnoses into the core of your care management strategy, you can anticipate needs earlier, deploy expertise more effectively, and reduce avoidable complications and costs.

A simple shift in categorization and investment in a specialized care management strategy can create measurable gains for both health plans and the members who depend on them.

Cathy Hartman is Chief Healthcare Solutions Officer for Paradigm.