Payers and providers march in lockstep to improve patient care and lower costs
Everybody’s talking about improving health outcomes, keeping people healthy and out of hospitals, lowering costs and expanding access to care. It is a tall order, and doctors and providers are concluding they need insurers to help them fulfill it. Insurers, meanwhile, don’t need convincing.
Payers and providers are collaborating in new ways to meet the so-called Triple Aim – improved health outcomes, lower medical costs and increased patient satisfaction. For example, in January, Cigna expanded its collaborative accountable care program with 10 new initiatives with physician groups in nine states. That same month, Aetna and Texas Health Resources announced an accountable care agreement in the Dallas-Fort Worth Metroplex.
Here’s the rationale: Providers tend to have episodic data on their patients. They know what happened to a patient when he or she came in for an office visit, for a hospital stay, or for some kind of post-hospital rehabilitation.
But payers have a longer-range view of that person. They know about most – or all – of the patient’s office visits, whether they are with primary care physicians or specialists. They know about medications, prescription refill habits, mental health issues, hospital admissions, home medical equipment, etc. If they can harness all that data and put it in the hands of someone who can actively work with patients to help them stay healthy, that’s a winning formula.
In many cases, insurers are forming ventures with providers, such as accountable care organizations, to provide cost-effective, high-quality care to a given population. In other cases, payers are outright acquiring providers. Conversely, hospitals and IDNs are starting or beefing up their own insurance arms.
“By teaming up with payers we can take a more comprehensive view of a patient’s healthcare,” says Karim Kaissi, corporate director of ACO operations, Texas HealthResources, Arlington, Texas. “Payers have a tremendous amount of data about patients’ health. By setting up an [accountable care organization], where providers and payers can share data, we can identity patients who are at higher risk in the future and send that data to physicians. The physicians can then better manage care and provide early intervention where appropriate to keep patients healthy and provide appropriate treatment at an earlier point. It is also an opportunity to align with the payers (and employers) toward shared goals of improved quality outcomes, better patient experience, and reduced cost.”
Healthcare reform
“What we’re seeing is the general trend of consolidation along all areas of the continuum of healthcare,” says Steven Berkowitz, MD, managing director, Navigant Healthcare. “We’re seeing hospitals continue to acquire physician practices, and insurance companies are doing the same.
“We might have seen a slight slowdown last year, when there were uncertainties” about the constitutionality of healthcare reform, he says. “Now that we’re past that point and we’ve had the re-election, we’ll see a lot more effort directed to implementation of healthcare reform.”
Consolidation brings with it profound changes for providers.
“One of the things that physicians will now have to deal with is going from simply delivering healthcare, to being part of an organization that is financing, managing and delivering healthcare,” says Berkowitz. “It’s a real shift. The same is true for the hospitals.
“Historically, hospitals have delivered care and done a very good job doing it. But now, as they partner with insurance vehicles and with physician groups, the entire enterprise – the whole system – will move into financing, managing and delivering care. Some healthcare systems have formed insurance companies, others are partnering with insurers. That’s an industrywide trend. But there are unique solutions in all markets, so there’s no one way to do it.”
Medical groups need to carefully assess their own needs and those of their community to see which option will work best for them, says Berkowitz. They need to consider the financial relationship they will have with the payer, as well as its organizational culture. So, medical group A might want to join forces with an insurance company, while group B might want to join the local hospital system, and group C might want to buy a hospital.
“To me, the really interesting thing is, this opens up the whole industry to innovative solutions.”
Regardless of how the relationship between provider and payer is structured, however, the medical group can expect its performance to be scrutinized by its new owner as well as the public at large, as outcomes data becomes publicly available, he says.
Cigna and ‘collaborative accountable care’
Health insurer Cigna is no stranger to healthcare provision, having operated its Cigna Medical Group in Arizona since 1982, when Connecticut General (CG) merged with INA to form Cigna. The Bloomfield, Conn.-based company recently expanded its “collaborative accountable care” program through 10 new initiatives with physician groups in nine states, including the company’s first collaborative accountable care organization, or CAC, in Florida, Indiana, Louisiana and South Carolina. With the addition of these initiatives, Cigna now has 52 such programs in 22 states covering nearly 510,000 customers. It intends to have 100 initiatives for 1 million customers in place by the end of 2014.
Collaborative accountable care is Cigna’s approach to accomplishing the same population health goals as accountable care organizations, or ACOs, according to the company. Its emphasis is on managing the health of high-risk individuals, including people with chronic health conditions, such as diabetes or heart disease. The programs are designed to help close gaps in care, such as missed health screenings or prescription refills, and to reduce unnecessary use of hospital emergency rooms, increase the number of preventive health visits and improve follow-up care for people transitioning from the hospital to home.
“The program is based on the concept of ‘aligned patients,’” says Mark Slitt, Cigna spokesman. “These are individuals who are enrolled in a Cigna health plan and get their medical care from the physician practice that participates in a CAC with Cigna.
“We share patient-specific and practice-specific data with the physician practice,” he continues. “There’s a care coordinator, usually a nurse, employed by the practice, who uses that information to outreach to patients and coordinate care, follow up with people who may have missed an important test or screening, didn’t refill a prescription, or who may be at risk for readmission after being discharged from the hospital.
“Care coordinators also work closely with Cigna case managers and refer patients to Cigna’s programs for chronic condition management or for help with stress management, weight loss, and quitting tobacco. It’s a much more collaborative relationship than a traditional one, and the practices are rewarded through higher payments if they meet targets for quality and cost improvements.”
Texas Health Resources
The accountable care agreement between Aetna and Texas Health Resources, which includes 25 acute-care and short-stay hospitals, features a payment model that will reward physicians for meeting quality, efficiency and patient satisfaction measures, including:
- The percentage of Aetna members who get recommended preventive care and screenings.
- Better management of patients with chronic conditions, such as diabetes.
- Reductions in avoidable hospital readmissions.
- Reductions in emergency room visits by improving primary care access hours.
It’s not the first time that Texas Health Resources has entered into a collaborative relationship with a payer, says Kaissi.
“The ACO models in which we participate encompass both inpatient and outpatient care for their populations, which are defined by the payer,” he says. “In the Pioneer PLUS ACO with North Texas Specialty Physicians, we provide both inpatient and outpatient care for Medicare patients. For the [Blue Cross Blue Shield] Texas and Aetna ACOs, we provide inpatient and outpatient care for the payers’ insured populations. The idea is to work together to manage a population across the continuum of care, as opposed to a focus on one episode of care, with the intent to improve and maintain long-term health and well-being.
“A good example is treatment for diabetes, an important underlying health factor for many patients,” he says. “When a patient is discharged from the hospital, whether or not the acute care episode involved diabetes, knowing through health records that the patient has diabetes will help the care team in its post-acute care.”
Independent Health
Last fall, Independent Health, Buffalo, N.Y., and 168 primary care doctors rolled out a new program, The Primary Connection, which they hope will change the way basic medical care is provided to more than 80,000 patients in the region. The Primary Connection was developed to build off the previous success of Independent Health’s Patient-Centered Medical Home pilot program and to design a more idealized healthcare delivery system, according to the payer.
Together, Independent Health and the doctors hope to improve communication among specialists and hospitals; use nurses to help coordinate services; share nutritionists, social workers and other personnel; measure the cost and outcomes of care; base some pay on meeting quality targets; and reimburse primary care doctors for work that often goes uncompensated, such as responding to calls and e-mails. Doctors’ practices must be certified as a medical home by the National Committee for Quality Assurance, and they must have an electronic medical record system. Independent Health is making plans to sell a health insurance plan linked to the new group.
“The entire delivery system is undergoing very dramatic change, at a pace we’ve never seen before, in just about every community,” says Thomas Foels, M.D., chief medical officer of Independent Health. “Where it hasn’t started, it will soon.” Physicians, hospitals and payers are all being asked to deliver higher quality, greater affordability and new service attributes for a defined population. “No one of these entities can do that by themselves.”
Although health plans can’t provide clinical care, they can bring other competencies, such as case management, disease management and utilization management, says Foels. They have a historical perspective on patients, and they have the ability to monitor people who aren’t receiving medical services at the moment.
Primary care practices – even those designated as medical homes – cannot carry the full weight of improving the quality of care while reducing costs. They need to collaborate with specialists and hospitals, as well as payers. The Independent Health program is intended to encourage that collaboration through what Foels calls an “upside shared savings opportunity.” Collaborating with specialists to eliminate avoidable hospital stays or diagnostic procedures isn’t quick or easy, he says. “In the old world, there was no recognition of the time and effort spent on those activities,” he says. “Now, in a shared service model, that saved expense can come back to [the physician].”
In many ways, the Independent Health program is designed to eliminate – or at least reduce – fee-for-service, says Foels. “It is an anchor around everyone’s neck.” The program does retain some fee-for-service aspects, particularly for those activities – such as preventive services – it wants to encourage. But much of the physicians’ compensation comes from risk-adjusted monthly payments, somewhat like a budget. “If they want to provide visit-based care, they can,” he says. “But if certain segments of their [patient population] can benefit from telephonic care, that’s great.”
As a facilitator, the health plan can design reimbursement plans, assist physician groups with hospital-alternative programs, provide hospitalists for inpatient stays, and provide data to physicians to help them identify opportunities to deliver lower-cost, higher-quality care, says Foels. And the health plan can wrap insurance products around high-performing networks.
The time is right for creative, collaborative programs, he says. “The affordability crisis is very apparent and acute. Maybe five years ago, physicians and even hospitals could be dismissive of it; I don’t think health plans ever were. Today, there’s a greater realization on the community and federal level – brought about by the recession, which was a big wakeup call – that we compete as a nation in a world economy, and one thing weighing down [U.S. companies] is a healthcare system that provides moderate quality for an extraordinarily high price.”
Challenges
Making new relationships between providers and payers deliver on the Triple Aim requires foresight and hard work.
Financing, managing and delivering healthcare are three separate areas of expertise, says Berkowitz. “The most important thing is to truly work as a system and to use all [participants’] expertise in the right way.” In those instances where providers and insurers have tried but failed to create integrated systems that coordinate care along the entire continuum, the failure often stems from the execution, not the concept itself. The proof lies in the success of such organizations as Kaiser Permanente, he says. “They’ve been successful for many, many years. It’s all in the ability to execute given a very complex set of situations.
“Insurance companies and medical groups working together can do a better job of managing cost and improving outcomes than either of the two working singularly in the system,” he says. “It’s a function of all parties working together, as opposed to each party for themselves.”
Suppliers should understand that the emphasis among providers for the next few years will be cost control, he continues. Providers have to reduce costs, yet at the same time demonstrate value in a competitive, transparent environment.
“The big winner is the patient,” says Berkowitz. “In the past, the patient didn’t know a hospital’s infection rate. They assumed it was good. Now our data is public, and consumers are making a choice based on their definition of value. Transparency will incentivize organizations to do the right thing for the patient.”
But some question whether the patient will in fact be able and willing to step up and take advantage of this new reality. Says Kaissi, “The major challenge is engaging patients in taking personal responsibility for their own health, be it changing habits or complying with medical advice. This is the least controllable factor from a provider perspective.”