Providing an excellent patient experience is tied more closely than ever to reimbursements.
This article first appeared in the July/August 2014 issue of HealthLeaders magazine.
It has always been a moral imperative for hospitals and health systems to provide a high-quality patient experience, but now that the Centers for Medicare & Medicaid Services is tying reimbursements to HCAHPS scores, it's becoming a financial priority, as well.
Through the Hospital Consumer Assessment of Healthcare Providers and Systems survey, patients rate their inpatient stay in 27 categories, ranging from communication with doctors and nurses to pain management to facility cleanliness and quietness. Based in part on these scores, hospitals can either lose or gain up to 1.5% of their Medicare payments in fiscal year 2015. CMS will up the ante over the next few years, with 2% of reimbursement dollars ultimately being at risk by fiscal year 2017.
With a growing amount of revenue at stake, hospital leaders are looking for strategies to improve the patient experience and boost their HCAHPS scores.
Focusing on culture
Oxnard, California-based St. John's Hospitals, a Dignity Health member with 330 licensed beds and a $350 million annual operating budget, has been intensely focused on improving patient satisfaction for the past three years.
In 2010 and 2011, St. John's HCAHPS scores ranked in the bottom quartile within Dignity Health. After seeing such disappointing results for two consecutive years, the leadership team set out to improve the patient experience—something CEO Laurie Harting says starts with the overall culture of the organization. Harting also serves as senior vice president of operations for Dignity Health's Southern California West service area.
"We've been really focused on developing a culture that lends itself to creating an excellent experience for patients," she says. "We also want it to be an excellent environment for our employees to work in every day and for our physicians to practice in."
In 2011, St. John's formed its Service Excellence Steering Committee and began doing daily leadership rounds where each clinical leadership member is assigned to visit specific patient rooms and report findings during daily leadership huddles. Rounding takes place between 9 a.m. and 11 a.m. every day, and no other meetings are allowed to be scheduled during that time.
"Bringing together the steering committee was the first step," Harting says. "We took specific steps to develop a culture where people knew they had the freedom to speak up, where they had the power to change things, and where leadership would listen."
Daily rounding leads to quick action to improve the patient experience and demonstrates to staff the level of importance St. John's leadership is placing on clinical quality, Harting says.
"After rounding, the team shares its findings and solves problems in real time. Then we go back to staff with immediate feedback on what is going to change. Employees are engaged because they know they can make a difference in the patient experience," she says. "Leadership has to model what we are emphasizing to the staff. I'm a nurse by background, and I know that anyone who goes through the educational requirements to become a clinical provider does so because they want to make a difference in patients' lives. We have to make sure we have the systems in place to support that."
Cathy Frontczak, St. John's chief nursing officer and vice president of patient services, says the leadership team also rounds on staff.
"When we started leadership rounds, we really primarily focused on the patient. One day, a nurse in the ICU asked me why I walked right past her every day and went directly to talk to the patient. That was an aha moment. Now we round not only on patients and families, but on staff as well," Frontczak says. "We can't expect them to be able to take exceptional care of our patients if we aren't taking care of them."
Keeping noise down
One area St. John's has zeroed in on to improve the patient experience is the noise level within its units. Harting says she saw firsthand what an impact noise can have on patients when her mother was recovering from emergency open-heart surgery 10 years ago.
"I spent hours with my mom and watched her get more and more depressed because of the noise. Because of that experience, noise has been my primary focus. I want to make sure our patients can go home faster and with less emotional distress than they would otherwise," she says.
St. John's recently began giving quiet kits to all its patients. Each kit includes earplugs, an eye mask, a "voices down, please" card, a notebook patients can use to jot down questions for their care team, lip balm, and Sudoku and crossword puzzles.
"These are things that can be used by the patient throughout the day," Frontczak says. "Patients may be bored or in pain, and these diversions can help alleviate pain or anxiety and can actually decrease pain and the need for pain medication. We have had such incredible feedback from patients and their families. Hospitals tend to be very busy places, and they are not always conducive to the patient getting a good night's sleep. Drowning out noise and light helps patients rest, which is important for healing."
Harting estimates that the quiet kits save St. John's about 8% compared to what it would cost to buy the items individually and deliver them separately when requested by patients. "We are really getting some bang for our buck," she says.
Measuring results
St. John's efforts to improve its HCAHPS scores have paid off significantly, Harting adds.
"We've made tremendous strides. The result is we have gone from the bottom quartile to the top quartile, and that doesn't just happen," she says. "It's been very rewarding. With any kind of change in culture, it takes years. The most impatient person in this whole organization is me, but I know to change a culture is a three- to five-year journey. We are now heavy into year three of this journey, and I can taste it. I can feel it. I can touch it."
While the financial benefits of improving the patient experience are harder to analyze than HCAHPS scores, Robert Wardwell, chief financial officer for Dignity Health Southern California West, says meaningful economic gains are also being made.
"It's not an easy calculation, but we certainly believe there is a return on investment," he says. "Our HCAHPS scores have soared, and from a value based purchasing aspect, we've done well. We have averted hundreds of thousands of dollars in losses by improving our value-based purchasing metrics."
Sharing data
One of the reasons St. John's has been able to make a noteworthy turnaround in its HCAHPS scores is that it regularly shares data with staff and patients, Frontczak says.
"We are very transparent with the data. That is very important for us," she says. "The results are posted in every department every month so staff can see how their unit is trending over time. Also, if you are a patient or a family member, you will see this patient experience information as well. Again, that lets staff know how important this is to us as an organization and how seriously we all need to take this."
David Hughes, chief financial officer at Greenville, North Carolina–based Vidant Health, a nine-hospital system with 1,488 beds and $1.6 billion in fiscal year 2013 operating revenue, agrees that when it comes to enhancing HCAHPS scores, being open with data is essential.
"You can't be afraid to share the data," he says. "Put it in an open place for patients and families to see. It will be a motivator for staff to say that if the scores are not what you want, then you are the folks with the ability to do something about it. … If we are embarrassed by the data, we are in control of it, and we can fix it."
Mark Rumans, MD, Vidant's chief medical officer, says receiving data from the HCAHPS survey as quickly as possible is another important factor in making patient care improvements.
"We switched to a phone survey instead of the mailed survey to get a faster response and a quicker turnaround," he says. "We now get the information back on a weekly refresh and are able to provide it in a more real-time fashion so the data is more operational and targets can be achieved more easily."
Incentivizing employees
To encourage its staff to focus on improving HCAHPS scores, Vidant has adjusted its incentive plan to include quality metrics.
"We are really trying to tie quality and finance together," Hughes says. "In the past, our employees had the ability to earn incentives strictly on meeting financial margins. We have split that in half so now half is based on HCAHPS scores and the other half is based on margins."
In total, employees can earn an extra $1,000 per year through the incentive program. "It isn't a percentage and it isn't a huge number, but it is enough to raise employees' eyebrows and get them to say, 'How can I help?' It also got us more disciplined about communicating with our employees on a regular basis. They use the information in their weekly huddles to ask how they can prevent problems from happening with the patients who are here today," Hughes says.
Listening to patients and board members
Learning from previous patient experiences and using that information to create better clinical methodologies is one of Vidant's biggest priorities. There are about 100 patient advisors throughout the system who participate in rounds and serve on process improvement teams, board committees, and quality committees.
"Having patient and family advisors on major committees has been pretty instrumental," Rumans says. "The patient stories are invaluable because they bring a personal perspective to the care we are delivering. Surveys are limited, and through the stories, the patients and families always bring aspects that are not measured on the survey."
Board support has also been key, Hughes says. "We've been led by the most engaged board I've seen related to patient experience and quality. We have patient advisors sitting on one of the board committees, and at every meeting we have a patient story. Every time, a board member will ask what we could have done better. Some stories are good, others are not good, and we have to ask where the gaps are in a patient hand-off or transition so we can make our processes the best possible. The board challenges us to deliver that."
Generating positive metrics
The work Vidant does to create a positive patient experience is evident in the metrics. All of the system's hospitals are in the top quartile on HCAHPS scores nationally, and several are in the top 10%. In addition to being a source of pride for the organization, these numbers help protect revenue, Hughes says. "We spend a lot of time on improving our processes to take care of patients throughout the whole continuum, and that has also helped us financially."
Regardless of its current success, Vidant will always strive to provide a better patient experience, Rumans adds.
"This is about constantly improving," he says. "There isn't a sense of satisfaction that we are in the top of the country so we can let it be. The patient experience is critically important, and we have to deliver high-quality medical care."
Survey respondents are under no illusion that consumers will benefit. Only 10% believe payer consolidation will result in lower consumer healthcare costs, and even fewer (8%) believe patients will receive a higher quality of care.
Senior-level healthcare industry stakeholders believe that consolidation in the payer space is likely to continue over the next ten years—and not to the benefit of consumers.
According to a recent survey conducted by Salt Lake City-based healthcare consulting firm Leavitt Partners, 60% of respondents say payer consolidation will increase even though the Department of Justice already considers most markets to be moderately or highly concentrated.
Survey respondents are mainly C-suite executives from healthcare provider organizations, payers, pharmaceutical and medical device companies, and academic settings.
Impact on Consumers Expected to Be Negative
While healthcare industry insiders agree that consolidation among insurers will continue over the next decade, they also indicate that this trend is unlikely to be good for consumers.
When asked what they expect to be the most likely consumer benefit, 49% of respondents said there will be little benefit at all. Additionally, 79% believe that consolidated payer markets generally will not result in lower product prices and 74% believe it will not generally be good for consumers.
"There is a recognition that consolidation is occurring as a byproduct of the Affordable Care Act, and we see that it is encouraging value in certain ways. It could be value as a benefit of better care coordination, a better understanding of where patients are and how to follow up with them… But when you get into the nuts and bolts of more value for the consumer, respondents are skeptical," says Douglas Hervey, a director at Leavitt Partners.
"The concern, I think, is that respondents believe [health plan] prices will go up. They don't necessarily believe that healthcare executives from Aetna, Cigna, and Humana would actually drop pricing… There is some question as to whether any money will be distributed back to the consumer."
Not only do survey respondents find it doubtful that consumers will receive a price break as a result of consolidation, 63% of respondents see higher priced health plans as the biggest consumer risk.
On a more positive note, 63% of respondents indicate that payer consolidation will generally lead to more accountable care. Hervey says industry experts may believe that as insurers become bigger, they will be better able to use data to control costs and influence providers to create better care delivery models.
"About two-thirds of respondents suggested consolidation will facilitate accountable care. Perhaps that is due to a better ability to aggregate lives, to have a better visibility of patient profiles, and a better opportunity to engage in more outreach and to streamline services," he says.
Despite the anticipated increase in accountable care, however, survey respondents do not expect that to translate into more affordable or better care for consumers. Only 10% say payer consolidation will result in lower consumer healthcare costs, while even fewer (8%) believe patients will receive a higher quality of care.
Several Factors Are Driving Consolidation Trend
There are several factors driving payer consolidation. Chief among them, according to survey respondents, is that consolidation can enhance negotiating leverage (45%) and reduce administrative costs (20%).
In addition, Hervey says, insurance companies are looking to broaden their portfolios and diversify risk.
"Plans are recognizing that by expanding their portfolio in the Medicare, Medicaid, and public exchange markets, they can gain diversification," he says.
Payers can also find more strength in numbers through consolidation. For example, Hervey says, Aetna has 1.25 million covered lives in its Medicare Advantage plans, while Humana has 3.2 million. If the merger of the two insurance giants is allowed to go through, they will usurp UnitedHealth as the leader in this market.
"By joining forces, Aetna and Humana can displace UnitedHealth, which currently has most lives," Hervey says. "The writing is on the wall that commercial plan growth isn't expected to be high, and I think a lot of plans are looking to find growth avenues. Medicare Advantage plans and other government plans are a good opportunity."
Hospital-Owned Plans Increase Consumer Choice
While the mergers of large insurance companies—such as Anthem and Cigna and Aetna and Humana—are typically expected by survey respondents to have a negative impact on competition and consumers overall, there may be a bright spot on the horizon.
As many hospitals and health systems jump into the fray with their own health plans, they are bringing more choice to consumers who might otherwise have very limited options, depending on their market.
The question that remains to be answered, Hervey says, is whether or not hospital-owned plans can create enough value to be sustainable in the long run.
"I think the entities that will be successful are the ones that figure out how to drive value, that have the characteristics and competencies necessary to do that," he says, adding that these plans have a lot going for them from the outset.
"Providers generally have strong brand recognition and trust. They have the ability to control patient and physician behavior, and they have the capital to take on risk."
Another core competency, Hervey says, is that provider-owned plans must have the ability to manage the risk once they own it.
"Can these providers really manage risk? That has been very difficult for businesses to do. There is a reason why a lot of payers' products have not been successful and why we have seen the failure of many CO-OP plans," he says.
"But, I know there are a lot of advocates that believe by aligning goals within a health system, a provider-sponsored plan can shift an organization to one that has a desire to keep people healthy and provide value."
A cofounder and board member of Physicians for a National Health Program, says "many patients will die because they can't get the preventive or primary care they need."
Senator Bernie Sanders has made it a cornerstone of his campaign.
In an editorial and proposal published recently in the American Journal of Public Health, 2,231 physicians called for a single-payer national health program to replace the current private insurance model of financing healthcare.
While the Patient Protection and Affordable Care Act has increased access to healthcare services for millions of people, many physicians still have grave concerns over patients' ability to get the care they need, says Steffie Woolhandler, MD, a co-author of the editorial and proposal.
Woolhandler is a cofounder and board member of Physicians for a National Health Program, a non-profit advocacy group that supports single-payer national insurance.
She is also a practicing primary care physician, a professor in the CUNY School of Public Health at Hunter College, an adjunct clinical professor at Albert Einstein College of Medicine, and lecturer in medicine at Harvard Medical School.
The ACA Has Not Done Enough
Physicians are supporting a single-payer system, Woolhandler says, because they know that "lives are literally at stake."
"I think doctors are seeing lots of patients who can't get the care they need despite improvements that have come from the ACA. There are still 26 million to 30 million uninsured people, depending on the source, and there is no prospect of that going down because the ACA is almost fully implemented.
Many patients will die because they can't get the preventive or primary care they need," she says.
"Doctors see this in their practice. They also see patients all the time who are underinsured. They have insurance but still can't afford the care they need… Many doctors feel the ACA has not solved the problems around access to care."
Among the main points outlined in the national health program are:
Patients could choose to go to any doctor and hospital.
Most hospitals and clinics would remain privately owned and operated, receiving a budget from the NHP to cover all operating costs.
Physicians could continue to practice on a fee-for-service basis, or receive salaries from group practices, hospitals or clinics.
The program would be paid for by combining current sources of government health spending into a single fund with modest new taxes that would be fully offset by reductions in premiums and out-of-pocket spending.
Co-pays and deductibles would be eliminated.
Having a single-payer system to cover all Americans for all medically necessary care would also ultimately cut the nation's healthcare spending by as much as $500 billion per year, Woodhandler says, because of reductions in administrative expenses.
"Once you have a single-payer system, you have to decide how much you are willing to spend. Our group would say, at least initially, to spend what we are spending now for the first few years to avoid disruption, but over time there would be huge administrative savings," she says.
The United States Isn't Canada
Critics of a single-payer healthcare system often cite problems such as long wait times when opposing the new approach to paying for care.
In a recent blog post, Sally C. Pipes, president, chief executive officer, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute, offers reasons why the United States should not move towards a single-payer system.
"Take Canada. As someone who was born there, I can tell you firsthand that Canada's single-payer health system is the last thing the United States needs. Canadians looking for treatment must wait for care, even if they're in desperate need. Alberta Health Services, for example, reports that 90% of patients who need back surgery have to wait up to almost nine months," she writes.
"The Fraser Institute, a Canadian think tank, calculates that residents of our northern neighbor have to wait an average of two months to get an MRI—and almost a year if they need orthopedic surgery. One in three is waiting to see a primary care doctor."
While Woolhandler acknowledges some of the issues faced by Canadians trying to access healthcare services, she says it relates mainly to the fact that Canada spends 40% less per capita on healthcare than does the United States.
"If we take their system and spend more, there don't have to be wait times. In most of western Europe there are no wait times, so it is not a necessary component of national health insurance. It is a function of how much money we are willing to spend," she says.
"If we want a very thrifty system, we will have wait times. If we want to spend the kind of money the U.S. has historically spent, there don't have to be wait times. I think we could have a 'Canada Deluxe' version where there is universal coverage but with higher levels of spending on high tech services and the like."
A 'Strictly Nonpartisan' Issue
The idea of a single-payer program has been a political hot potato for decades and has gained attention recently thanks to Bernie Sanders' call for what he refers to as "Medicare for All."
"Healthcare must be recognized as a right, not a privilege. Every man, woman, and child in our country should be able to access the healthcare they need regardless of their income. The only long-term solution to America's healthcare crisis is a single-payer national healthcare program," Sanders says on his website.
However, the new physicians' proposal is "strictly nonpartisan," says the Physicians for a National Health Program.
And while the organization welcomes support from high-profile politicians, it will continue to do its work regardless of which way the political winds may blow, Woolhandler says.
"Certainly having prominent public figures support a single-payer system is very helpful and something we welcome… Sanders is the main person now in the public sphere to support it, and it is obviously good for getting the word out and creating a public discussion and dialogue," she says.
"Our members are writing op-eds in newspapers, speaking at community meetings and grand round meetings. We're soliciting more physician signatures and working with large medical student organizations to work with the next generation of physicians to engage them in this project."
"Our strategy is to be as vocal as possible in as many forums as possible. People are very happy to hear from doctors about policy issues when they see the doctors are advocating for public health."
Value-based care is the direction providers must go; finding the right payer partners is the way to get there.
Healthcare providers, feeling strong pressure to shift away from fee-for-service and toward value-based care models, are asking commercial payers to step up.
As providers make the organizations shift, they need to partner with payers who are willing to design reimbursement structures that reward lower costs, higher quality, and better outcomes.
And while those sound like three goals payers would want to support, it can often be a challenge to find insurers willing to fund the kinds of innovative clinical models required to achieve them.
A Challenge to Find Partners
Senior leaders at St. John Health System in Tulsa, OK, have been working for years to partner with payers that want to enter into value-based reimbursement arrangements. But getting to this point hasn't been easy, says Ann Paul, president of Oklahoma Health Initiatives, the system's accountable care organization. St. John Health System is part of Ascension Health, the largest not-for-profit health system in the country.
"Our overall strategy as a health system is to move as much of our population as possible into value-based arrangements, and that is also a very important objective for Ascension Health," Paul says.
"In Tulsa, our primary service area has about 1.1 million residents, and we currently have about 100,000 patients who are in some kind of value-based arrangement right now. We have for years been moving down that path. In the last few years it has been difficult to get commercial payers to move with us in that direction."
Initially, the only payer St. John was able to strike a value-based deal with was CommunityCare, the insurance company it owns jointly with Saint Francis Health System.
Then, Medicare started to shift toward value and that opened the door for St. John to participate in two new models, Paul says: Comprehensive Primary Care Plus and the Medicare Shared Savings Program.
St. John formed its ACO in 2013 in order to take part in MSSP, which went into effect on January 1, 2014. "We had been eager to move in that direction and had been looking for opportunities," Paul says.
A New Value-Based Collaboration
With its ACO in place, St. John has been actively looking for additional payer partners with which to enter into value-based arrangements. To that end, the health system recently announced a new collaboration with Aetna in Tulsa County, called Aetna Whole Health St. John OKHI.
Members of the narrow network health plan product will have access to coordinated care at Tulsa-area St. John hospitals and more than 500 primary care physicians and specialist that are part of the system's ACO. The plan will be available to self-insured and fully insured businesses effective July 1, 2016, and to small businesses from October 1, 2016.
The collaboration represents a big step in the right direction for St. John, Paul says.
"Aetna is the first [commercial] payer outside of the one we own jointly to aggressively move in that direction. They have the same goals we have. They understand that healthcare is local, and they have been flexible and collaborative. These are all the things we liked when we started having the discussions with Aetna," she says.
The new association with Aetna also moves St. John towards its goal of caring for all its patients within clinical models that emphasize the same level of care coordination and targeting efforts towards those with multiple and chronic conditions, Paul adds.
"From the health system perspective, we want to treat all of our patients the same way. We don't want to have multiple ways that we have to interact with our patients. Aetna understands that they are working with an organization that is already going down this path towards value," she says.
"I think for us, the goal with the Aetna arrangement is getting into a product that complements what we are already doing with our own health plan. We obviously want to grow as an organization, but what we also want is to really target getting our patients into value-based arrangements so we can manage them more consistently."
More Data Improves Care
The collaboration with Aetna gives St. John more access to claims data to help it zero in on high-risk, high-cost patients, which is critical for lowering cost and improving outcomes, Paul says.
"The way Aetna does it is very similar to Medicare for the Shared Savings Program in that they periodically will share with us claims data for individuals who have enrolled in the Aetna Whole Health products and who are attributed to us," she says.
"The data gives us several different triggers we can look for, such as diagnosis, frequency of receiving ER care, [and] identifying patients with chronic conditions that should be seeing their primary care provider, but aren't."
The claims data is enhanced significantly by data St. Johns receives through its participation in a health information exchange with other area provider organizations. By having more real-time and retrospective data, Paul says, the health system is able to make big strides in its population health efforts.
"The problem with claims data is that it is after the fact… Our participation with the HIE gives us information on the front end, and on the back end, we are getting that valuable claims data."
With the HIE data, St. John knows that if a patient visits a different ER facility or is admitted to another hospital. It can then have a care manager make contact "to ensure they are getting the prescriptions they need, that they know how to take them, that they follow up with their primary care physician, and if they have any social needs, that we can follow up with them on that," Paul says.
Physician Support is Strong
As with any change, physician buy-in is important for the long-term success of the new collaboration. Aetna allowed St. John to pick the metrics by which physicians will be measured on quality and outcomes, which has helped to alleviate some anxiety and encourage support from the beginning, Paul says.
Because of Aetna's flexibility, she says, the health system was able to select targets that were already being measured, and, therefore, did not place any more stress on physicians who already face a "nightmare" when it comes to all the various metrics different payers use for calculating reimbursements.
"Physicians are excited about the Aetna arrangement… The fact that Aetna allowed us to select the measures to work with gained buy in. As we talked to all our physicians that have contracts through the ACO about the program. They view it is the direction we need to be going in, and Medicare is going in this direction as well," she says.
"Medicare has pushed up the timeline of moving physicians toward value-based arrangements and being measured on process and on quality outcomes. I think everyone really understands that this is the direction we have to go, so it is really a matter of finding the right partners to help take us there."
Observers are downplaying UnitedHealth's departure from the health insurance exchange market, saying the insurer has never been as heavily invested there as other large payers. But a health economist says "the math doesn't make sense," and suggests others will follow.
News this week that UnitedHealth is withdrawing from Kentucky's Obamacare marketplace came as no surprise.
Speculation that UnitedHealth, the nation's largest insurance company, might quit the health insurance exchange market started last November when UnitedHealth Group CEO said the company was reevaluating the long-term viability of its public exchange products.
On an earnings call last week, UnitedHealth Group CEO Stephen J. Hemsley announced that the insurance giant will pull out of most health insurance exchange markets for 2017 despite "strong revenue gains" across the enterprise that brought its first quarter 2016 revenues to $44.5 billion.
At that time, the company reported it had lost $425 million from health plans sold on the exchanges and said it was reconsidering its HIX strategy.
Next year, the insurer will quit at least 26 states.
In December, Hemsley defended the potential move by saying, "We could not sustain the eroding level of losses on our exchange products."
HIX Departure Comes Amid Revenue Growth
UnitedHealth's Q1 earnings grew 17% year over year to $1.81 per share, Hemsley reported on the call. Yet, the insurer has reached the decision to discontinue its PPACA exchange offerings in most states, he said.
"As you know, we have been evaluating public exchanges on a state-by-state basis. We have maintained our regular public dialog with you since November about the individual exchange market and how our own experience and performance have been unfavorable in these markets," he said.
"The smaller overall market size and shorter-term higher risk profile within this market segment continue to suggest we cannot broadly serve it on an effective and sustained basis. Next year we will remain in only a handful of states, and we will not carry financial exposure from exchanges into 2017. We continue to remain an advocate for more stable and sustainable approaches to serving this market and those who rely on it for care."
Some Industry Observers Downplay Impact
While this news is not shocking, it has caused a flurry of discussion among industry analysts about what it means for the future of the public exchanges.
The day before the earnings call, Kaiser Family Foundation released an analysis of the impact on various markets, which concluded that 29% of counties where UnitedHealth participates will be left with only one insurer offering exchange products. Additionally, another 29% of counties will now have two exchange insurers. Rural areas and southern states are likely to be hit the hardest.
The analysis doesn't initially sound like good news, but it goes on to say that the overall impact will be limited because UnitedHealth has not generally offered low-cost premiums and only represents 16% of all Marketplace enrollees. "As a result, the effect of a United withdrawal nationally would be modest," the report states.
Other industry onlookers have also downplayed UnitedHealth's HIX departure, saying the insurer has never been as invested in the public exchanges as other big players, such as Blue Cross Blue Shield, Anthem, and Aetna.
Unlike many other large carriers that have invested heavily in the kinds of population health management capabilities required for success in the public exchange arena, UnitedHealth has focused instead on other business lines, including its Optum division, which offers consulting services, population health and IT services, and pharmacy benefit management services.
"United, among all of the national payers, has pursued a different strategy from the start and was the least invested of the big plans in the exchange population and the least willing to take risk. I don't see it as a bellwether," says Harry Nelson, founder and managing partner at Los Angeles-based law firm Nelson Hardiman, LLP.
Not surprisingly, the Department of Health and Human Services also issued a statement minimizing the significance of UnitedHealth's decision.
"We have full confidence, based on data, that the marketplaces will continue to thrive for years ahead. The number of issuers per state has grown year-over-year," HHS spokesman Benjamin Wakana said in a statement. "The marketplace should be judged by the choices it offers consumers, not the decisions of any one issuer."
Others Say It's a Death Knell
But other observers believe UnitedHealth's withdrawal bodes ill for the future of the marketplaces.
"When a big player like United says they can't make it, there is a very simple reason. Insurance is all about pricing risk appropriately. The ACA has constrained the ability of insurers to price risk accurately," says R. Lawrence Van Horn, associate professor of management and executive director of health affairs at the Owen Graduate School of Management at Vanderbilt University in Nashville.
"That is a central tenet of being successful. It's not at all surprising to see that insurers are going to exit the market."
Because ACA regulations dictate that the highest risk health plan member can be charged no one more than 4.5 times for premiums as compared to the lowest risk health plan member, the economics are untenable, Van Horn says.
"The reality is that if you compare a strapping 22-year-old young man who is the model of fitness and health to a 64-year-old man who is morbidly obese, has comorbidities, and is diabetic, the expected cost difference is a lot more than 4.5 times," he says.
"But by law, insurers can't charge one person more than 4.5 times another. If insurers have to make enough money to cover a sick person, then they have to charge premiums that are really high to a healthy person."
Van Horn says he expects to see other big players exit the health insurance exchanges unless significant changes are implemented by the federal government.
"The math doesn't make sense. You can only ignore the economics and the math for so long. For the public exchanges to exist, there have to be fundamental changes to the mathematical underpinnings upon which they are predicated," he says. "Unless we do that, they won't continue to exist. You can't charge people unfair prices for products and expect them to buy them."
Competition among health plans forces them to fight for market share, which is good for members, says Greg Hoeg, vice president of U.S. insurance operations at J.D. Power.
Bad news for residents of 34 states where UnitedHealth Group is exiting the PPACA exchanges: Health plan member satisfaction is highest in areas of the country where there is more competition among carriers.
That's the main takeaway from the recent J.D. Power 2016 Member Health Plan Study. Nationally, member satisfaction with their health plans improved nine index points in the 2016 study, scoring a total of 688 on a 1,000-point scale. This uptick comes on the heels of a 10-point improvement in 2015.
Payers Improve Service to Gain Market Share
The increase in satisfaction that is demonstrated in the 2016 study is driven by improved performance across all factors, including in coverage and benefits (+12 points); information and communication (+11); and customer service (+10).
On a regional basis, the study finds that members indicate more satisfaction with cost (610 vs. 606), communication and information (646 vs. 641), and customer service (743 vs. 740) in competitive markets as compared to those dominated by a single carrier.
Competition among health plans forces them to fight for market share, which is good for members, says Greg Hoeg, vice president of U.S. insurance operations at J.D. Power.
"Where there is competition, there tends to be more customer satisfaction. What it comes down to is a greater awareness on the part of health insurers in general that they have to monitor customer satisfaction and be more responsive to it," Hoeg says.
"Some are turning to better communication with the explanation of benefits and notification of services, whether through traditional or electronic means. A large portion of carriers are also trying to make clear during the open enrollment period exactly what their plans offer because confusion on the part of consumers can lead to loss of satisfaction."
Satisfaction Improves After Taking a Dive
J.D. Power has conducted the study since 2007 to track member satisfaction among members of 135 health plans in 18 regions throughout the country. The study focuses on six key factors:
Coverage and benefits
Provider choice
Information and communication
Claims processing
Cost
Customer service
Member satisfaction dipped to its lowest point in 2014, due mainly to the implementation of the Patient Protection and Affordable Care Act and the introduction of the health insurance exchanges, Hoeg says.
"Since the passage of Obamacare, there was a bit of a drop off in customer satisfaction overall. Part of that was caused by trepidation because of the unknowns of some of the changes being caused by Obamacare," he says.
"Now people are getting more familiar with how things are working, and it's working more smoothly on the payer system. These things are bringing about greater satisfaction overall again."
"Where there is more competition, carriers have recognized that they can't just be focused on the cost side of the business. It has changed their focus to be more oriented on customer satisfaction as a pivot point," he says.
"People have trepidation because of the complexity of the offerings. I think many carriers are realizing this and are trying to adjust by simplifying their documentation."
Mega-Mergers Won't End Competition
There have been some major mergers within the health insurance industry, such as Blue Cross Blue Shield plans merging with other Blues plans and two separate proposals that would merge Aetna and Humana, and Anthem and Cigna.
While many industry experts have speculated that this may not bode well for consumers, Hoeg says that isn't necessarily the case. Because so many provider organizations are getting into the insurance business, he says, there should continue to be robust competition in many markets.
"We are seeing an increase in competition that is being driven by providers that are either buying or creating health insurance companies," he says.
"I think we will see the creation of more, smaller insurance companies that will facilitate greater competition, so I'm not sure the big mergers are an indication that we will have less competition. In the end, I think the winners will be the consumers."
Integrated Delivery Systems Top the Rankings
Health plans that are part of an integrated delivery system have an edge over other health plans, according to the study. Their overall member satisfaction score is 746, which is 63 points higher than nonintegrated plans.
These plans "are poised for success as healthcare and health insurance become more focused on member satisfaction," the study says.
Part of the reason for this, Hoeg says, is that payers have the potential to communicate better with providers when they are part of the same integrated system.
"Kaiser Permanente, for example, is a very large provider and also a large payer. They tend to have that kind of crossover effect, and I think it does get consumers to feel more comfortable with the payer aspect of healthcare," he says.
"Organizations are able to more fully integrate the two sets of activities so it is less confusing, and I think consumers see more in the way of convenience."
Still Room for Improvement
While a score of 688 out of 1,000 represents an increase in member satisfaction, it is not a stellar showing when compared to other industries, Hoeg says.
And although he says that is understandable given the major changes currently happening within healthcare, Hoeg expects to see payers continue their efforts to improve.
"[Buying a health plan] is not like buying a widget where if it doesn't work correctly the consumer might not be happy but it isn't life threatening. Where healthcare and insurance are concerned, it can have that effect, therefore, dissatisfaction becomes heightened and rightly so. Individuals want the best possible healthcare, and they want it in a way that doesn't put a burden on them. It's a very personal, very intimate type of service," he says.
"Now insurance companies are becoming more focused on the satisfaction of their clients. As a result, I would hope we will see increasing satisfaction overall that would continue for an extended period."
More data confirms it: States that have expanded Medicaid are experiencing increased savings. And states that have in place taxes on hospitals and health plans are seeing additional revenue.
The economic punch that comes from Medicaid expansion stems mainly from decreased state spending on programs for uninsured populations and tax revenue from healthcare providers and payers.
Data confirms it: States that have expanded Medicaid are experiencing increased savings and enhanced revenue, according to a study conducted by Los Angeles-based law firm Manatt, Phelps & Phillips and funded by the Robert Wood Johnson Foundation.
Examining the Direct Financial Impact
"We've done this study twice, in the beginning of 2015 and 2016. Our goal is to look at the direct impact of Medicaid expansion on state budgets to see if expansion produced savings and if it produced new revenue. We are not looking at income tax revenue. This is taxes on providers and health plans," says Deborah Bachrach, a partner at Manatt, Phelps & Phillips.
"The main takeaway is that in terms of economic impact, Medicaid expansion does produce savings—different states see different amounts—and it also produces additional revenue for states that have in place taxes on hospitals and health plans."
The additional tax revenue, Bachrach adds, comes as a result of more people having healthcare coverage and, therefore, receiving more services. It is not due to a higher tax rate.
"What happens is that as more insured individuals go into the hospital, there is more Medicaid revenue being generated without reassigning the tax rate. The same tax rate generates more revenue because there are more individuals receiving care," she says.
Reaping Substantial Savings
Researchers analyzed data for 12 states that expanded Medicaid, including Washington, D.C., to determine the revenue impact. Key study findings include:
California saved $250 million in spending on its low-income health program in 2015
Colorado saved $96 million in spending in 2015 on childless adults that are newly eligible for Medicaid
Kentucky saved $21 million on mental health services in 2015
Maryland saved nearly $14 million on uncompensated hospital care in 2015
Michigan saved $19 million on prison health services in 2015
Pennsylvania saved nearly $108 million in state spending in 2015 because of expansion
While savings vary by category and amount among the states, two areas that consistently show positive results, Bachrach says, are services for pregnant woman and people with mental health or substance abuse issues.
"If the state has expanded Medicaid, they are able to claim an enhanced matching rate for a portion or the entire duration of the pregnancy," she says. "For example, Arkansas reports that this has cut the cost of covering these women by about half."
When it comes to paying for services for people with mental health and substance abuse problems, Bachrach says, state coffers can also be helped tremendously by Medicaid expansion funding.
"Virtually every state uses some state dollars to provide services to uninsured individuals with mental health or substance abuse issues. With expanded Medicaid, almost all of these individuals can get Medicaid, so now Medicaid is paying for services and medications. Now states are receiving 90% to 95% of the costs in federal dollars for this population, which is particularly vulnerable and expensive. It's a powerful incentive to consider Medicaid expansion," she says.
Having more federal dollars to spend on treatment programs also means state funding can stretch a lot further, Bachrach says.
"Medicaid expansion becomes a critical tool in addressing the crisis. Right now states that have not expanded Medicaid have to come up with all state dollars because a huge percentage of these individuals do not have employer-sponsored insurance and are low-income. Think of how much further state dollars could go if there were also federal dollars available to cover these costs."
Encouraging Non-expansion States to Reconsider
Some state leaders have rejected Medicaid expansion with the common sentiment that it will be financially unsustainable when the federal funding level declines from 100% to 90% by 2020.
The study's data points should be cause for reconsideration, says Katherine Hempstead, director of coverage issues at the Robert Wood Johnson Foundation.
"We think it is extremely important to provide evidence to show how states are saving to help build the evidence case. Through these examples, we are trying to demonstrate that there is a strong fiscal and budgetary rationale for expansion, and leadership in states that have not yet expanded is a primary audience," Hempstead says.
"While the state share of payment for the expansion population will increase over the next few years, the federal government will still pay the great majority of the costs, and the state savings we have detailed will continue as well… And of course by not expanding, state leaders are essentially letting their residents' federal taxes be used to provide healthcare to residents of other states, with no benefits for themselves."
Additionally, Hempstead says, there are indirect financial benefits for states that expand Medicaid, such as job creation, a decreased need to use general fund dollars to provide healthcare services to low-income residents, and a dip in costs for addiction-related criminal justice activities.
"This evidence suggests that even above and beyond the great benefits to state residents who will gain access to healthcare, there are strong benefits to state government from expansion. For all of these reasons, Medicaid expansion is basically an offer that states should not refuse," she says.
Overcoming Political Opposition
Hempstead says she also hopes the study will be valuable to Republican leaders in non-expansion states who may be encouraged by the economics to push for expansion.
"It presents enough information so that it really seems like these states are leaving a lot of money on the table by not expanding Medicaid. It starts to overwhelm the political reasons for leaders who may not want to support the ACA or the [Obama] administration. At the end of the day, there are very serious budget pressures in most states, and this study will increase awareness of what these states are foregoing," Hempstead says.
"Not expanding Medicaid is really cutting off your nose to spite your face. It really is. But, I think it's hard for some of these leaders on the right who may want to do the right thing but are under a lot of political pressure and feel like they don't have any cover. We have to make the business case for these states to see the positive financial impact of expanding Medicaid."
Now that consumers have more choice when it comes to purchasing a health plan, it’s more important than ever for payers to attract and retain members, and help them forget “100 years of bad press about insurance companies.”
Customer fear and distrust of health insurance companies is a major stumbling block for payers who want to be seen as a partner in healthcare, says Jeff Rivkin, research director for payer IT strategies at IDC Health Insights and author of the new study, “IDC PlanScape: Customer Engagement Planning for Payers.”
“Since the rise of the ACA and the individual exchange market, there is a lot more soliciting going on. The employer-sponsored market has been reduced, and the exchange marketplaces have become a very large part of the marketing strategy for payers,” Rivkin says.
“But, if there have been 100 years of bad press about insurance companies around things like pre-existing conditions, the denying of claims, and people going bankrupt because of fights with their insurers, then there is an historic background that is still out there with a lot of people.”
In a recent conversation, Rivkin outlined three key ways payers can improve their customer engagement in this new era of health plan purchasing:
1. Roll Out a Retail Strategy
Payers can overcome consumer fear and hesitation by developing and executing a retail approach to service that consists of more proactive outreach, Rivkin says.
“I think traditionally, payers didn’t use the retail model of customer engagement as their benchmark. Their customer service tended to be reactive and claims-based… The number one thing [for payers to know] is that people are expecting a legitimate customer experience that is equivalent to a retail or finance industry experience from their health plan,” he says.
“The customer is not just thinking about insurance once a year at open enrollment anymore and is, hopefully, thinking of the health plan as a partner in their care. Customers are expecting a customer service and mobile technology experience that would be equivalent to a bank or retailer.”
Payers have warmed up to this idea and are now marketing to their members on a more consistent basis, Rivkin says, to try to build a year-round relationship.
“In the beginning, the average marketing budget for payers was only at open enrollment, and it would be tied to mass marketing, such as TV commercials. Then you wouldn’t see those commercials the rest of the year. Now, instead of just having an open-enrollment, renewal mindset, it is more of a continuous presence mindset that combines marketing with care coordination and member satisfaction.”
Insurance companies that don’t successfully satisfy consumer demand for a better service experience will pay the price when it comes to member enrollment, Rivkin says.
“With employer-sponsored plans, people had very little choice. Now with the availability of the exchange products, people can switch, and they will vote with their feet.”
2. Have Providers Deliver the Message
Insurers want their members to be engaged in their own health so that they will prevent, or at least manage, chronic and other conditions that can result in costly procedures, ER visits, and hospitalizations if left unchecked.
However, due to the lack of trust that exists between many consumers and their health plans, one solid strategy for payers, Rivkin says, is to use providers to deliver messages around wellness and prevention.
“When outreach is occurring and payers are trying to do genuinely good things like wellness programs, adoption and patient perception are much higher when the communication comes from the provider rather than the payer,” he says.
While patients may not realize it, Rivkin adds, payers and providers are becoming much more aligned in their efforts to engage patients in programs and treatment plans designed to improve outcomes and control costs.
“People don’t quite get that payers and providers are a lot closer than they used to be with provider-owned health plans, mergers across the board, and blended CO-OPS,” he says.
“Payers are trying to collaborate with providers to bend the cost curve, especially with high-risk populations, to try to get people to comply with their care plans… A more aware patient or member is usually a healthier patient or member. Everyone wins, especially in capitated models, if patients are healthy.”
3. Use Analytics Tools to Segment Members
As healthcare data analytics tools become more sophisticated and robust, payers should harness the information to target potentially at-risk and high-cost members with wellness and engagement messages, Rivkin says.
“Clinical data is being combined with claims data and that provides a nice pool of data to mine. It allows for segmentation on a continuous basis for patients and members being affected by chronic conditions,” he says.
This level of data sharing, however, brings with it some challenges around security, Rivkin says, noting that payers are “deathly afraid of a breach, as they should be.”
Additionally, he says, insurance companies need to be mindful of not being perceived by members as overstepping their bounds.
“A lot of clinical data is being combined with claims data so providers can provide better clinical care coordination, but payers have to be careful not to offend their members. When trying to have that continuous presence, as compared to only at open enrollment, insurers have to be careful not to cross that line,” he says.
“There is a very fine line between being an effective healthcare partner as your insurance company and being annoying, threatening, or offensive. You don’t ever want a member asking the question, ‘How did you know that about me?’”
A clinical repository of Medicaid patients' medical histories… "gives us a full 360-degree view of a patient's medical care, their medications, immunizations, tests, and procedures," says the University of Mississippi Medical Center's chief health information officer.
Provider organizations across the country are continuously searching for strategies to improve quality and outcomes while also lowering the cost of care.
For hospitals and health systems located in states that have not expanded Medicaid coverage, there is a particular need to focus on reining in costs and enhancing services for low-income populations.
Improving Access to Timely Data
That’s one of the major incentives behind the University of Mississippi Medical Center’s decision to work with the Mississippi Division of Medicaid on creating access to real-time data for Medicaid beneficiaries, says John Showalter, MD, UMMC’s chief health information officer.
Finding ways to treat the Medicaid population more effectively has been “at the forefront of our minds,” Showalter says. “We really wanted to work together since UMMC is DOM’s largest biller in the state. We’ve really been working together on population health strategies.”
Through a partnership with MedeAnalytics and Epic, UMMC and DOM have become the first health system and state Medicaid agency in the country to share real-time clinical data.
DOM began working on this initiative years ago and, in 2014, rolled out an enterprise master patient index and a single patient identifier. After analyzing and removing duplications from more than a decade of medical records, DOM and its vendor partners developed a unique longitudinal patient record for over 750,000 Medicaid and Children’s Health Insurance Program beneficiaries.
“After years of working with our technology partners to build a foundation consisting of an EMPI and clinical data repository, we can now instantly share patient summaries with external stakeholders, such as UMMC. This real-time access to beneficiary data will improve insight into beneficiary health trends, empower better care decisions and much more,” Rita Rutland, DOM deputy administrator of information technology management, said in a prepared statement.
Providing a More Complete Patient History
By having data that gives physicians a complete view of the patient’s medical history, Showalter says, UMMC will be in a better position to achieve its population health goals.
“The clinical repository… gives us a full 360-degree view of a patient’s medical care, their medications, immunizations, tests, and procedures,” he says.
“We believe that physicians who are armed with this data can make better decisions about care delivery and can help drive the triple aim” of creating a better patient experience, improving quality, and reducing the per capita cost of healthcare.
Prior to the launch of the real-time data system, UMMC physicians had access to a portal that housed patient information, but it was not user-friendly and, therefore, was not accessed very often, Showalter says. With the new system, the data is housed within UMMC’s electronic health record and all a physician needs to do is click on a tab that indicates more information is available on the patient.
“We wanted to go beyond our original version of the portal to create a much more intuitive tool,” Showalter says. “We have a list of tabs in the EHR, and a tab appears when Medicaid data is available.”
The physician can click on the tab to review the data and use it to make appropriate clinical decisions. Making the system easier to use has encouraged physicians to use the Medicaid information more frequently, Showalter says.
“The portal was not being accessed by providers as much as we would like,” he says. “The new tool drops directly into the physician’s workflow so they can see medication prescription fills right there, for example, and it has greatly increased their ability to use data to make better decisions.”
Physician Use of Data Skyrockets
It’s too soon to analyze the impact on care and costs, but Showalter says physicians are beginning to use the data in significant numbers even though UMMC is still in the training stage for the new system.
While the portal was accessed a few dozen times per month, physicians are already tapping into the new data repository about 3,500 times per week.
“Physicians are just deciding it’s a useful tool and using it on their own… We’re accessing data much, much more often,” Showalter says. “We are hearing very positive things from physicians, and the anecdotal reports are that they are using it. Someone is going in and looking at the data 3,500 times per week. That speaks volumes.”
UMMC’s immediate population health goals for the data include targeting areas such as ER visit rates, prescription fill rates, and the total cost of care, Showalter says. By being able to track patient’s real-time medical records across care sites, physicians and case managers will be in a much better position to identify patients with potential health risks and then intervene on their behalf.
“Generally speaking, after patients were discharged from the hospital or the specialist sent the patient back to the PCP, we had very little insight into whether the patient filled their prescriptions, saw their PCP for a follow-up visit, or followed immunization advice,” he says.
“For example, people with diabetes are supposed to have a pneumonia vaccine because there is a high risk of them getting pneumonia, so we want there to be 100% compliance. Now we have the ability to have case managers see who hasn’t gotten the vaccine and reach out to them to get them in to have the vaccine.”
Only the Beginning
Now that the hard work of launching the data repository has been done, DOM should be able to provide access to it for healthcare provider organizations across the state, thus improving care and lowing costs for this population on a broader scale, Showalter says.
“One of the most exciting things is how scalable this is for Medicaid. They can connect this to any EHR. Medicaid can now roll this out to almost any hospital in the state, and it won’t take nine months. It should only take weeks. We don’t want to just improve the health of the UMMC patient population, but the health of patients throughout the whole state,” he says.
“I think this level of multi-party involvement with health systems, vendors, and payers working together on common platforms is the kind of effort that it is going to take to make major leaps forward in population health.”
Unless senior leaders encourage a culture of cooperation, provider-owned health plans will have a relationship with the provider network that is just as acrimonious as that of any outside payer, says SelectHealth's CEO.
As the healthcare industry continues its steady march toward population health management models, health systems that own and operate a health plan may be at an advantage.
That's the message I've heard from senior leaders from some of the largest healthcare organizations around the country. Provider organizations that also have an insurance entity already own the risk for the health of their members and can benefit financially by reducing the overall cost of care.
Population health programs that are designed to provide more preventive services and assist patients with successfully managing chronic conditions ultimately result in lower revenue for health systems that still function in a primarily fee-for-service environment.
Organizations that also consist of a health plan, however, can commit to value-based reimbursement models that essentially move the money from right pocket to left pocket because what the provider side no longer generates in revenue, the payer side now saves in member claims.
Culture is Critical to Success
Yet, simply having a health plan as part of the organization is not enough to ensure financial success, says Patricia R. Richards, president and chief executive officer at SelectHealth, the insurance arm of Intermountain Healthcare based in Salt Lake City, UT.
Unless senior leaders encourage a culture of cooperation, provider-owned health plans will have a relationship with the provider network that is just as acrimonious as that of any outside payer and will not be as successful as possible in improving care and reducing costs, Richards says.
"By having an organization that is integrated and actually owns a health plan, it really sets the foundation for being able to have a single system that integrates the clinical work and the financing of healthcare. Having said that, though, it creates a foundation where it is possible to have collaboration. I've seen organizations where they have ownership, but they are just as adversarial as ever," she says.
Leaders need to make it a priority to create a culture based on communication, collaboration, and a focus on the organization's mission in order to yield the best clinical and financial results, Richards says.
"It helps if you are part of the same organization that has ownership of both sides, but it is more important that top leaders foster that culture. It is also very important that the governing board plays a role and sets the expectation that we are all in it together to work for the benefit of the community," she says.
"…You can have ownership without having true alignment and integration, so it is imperative to have a leadership philosophy that requires that people work together beyond what the organizational structure is… Having the ownership is very helpful, but alignment and vision are the more critical factors."
A History Rooted in Community Service
Benefitting the community has been one of Intermountain's central missions since its inception. The system was established in 1975 when The Church of Jesus Christ of Latter-day Saints donated its then 15-hospital system to the communities they served. Intermountain was formed as a secular not-for-profit organization to administer those hospitals. Today, it owns 22 hospitals and more than 185 clinics and employs about 1,400 multi-specialty physicians and caregivers.
"The fact that we are part of a not-for-profit health system—and the health plan is not-for-profit—means that we are committed to working with physicians groups, hospitals, the health plan, and employers to really improve care and the health of the community," Richards says.
"I think that is ultimately how we will be successful in population health. Unless you can really engage the participants, you will not be successful."
Working Toward System-wide Goals
As part of its efforts to engage stakeholders from across the organization, Intermountain has formed an operations council which consists of leaders from "virtually every operating area," Richards says.
Having this level of cohesion helps the health system set and meet goals and expectations and affirms the cultural philosophy that everyone is ultimately responsible for the organization's success.
"We meet monthly to address issues and to share data about performance. It's a good way to make sure we are all aligned," Richards says.
"Typically, organizations focus on financial goals… I would say Intermountain has done a great job of also setting system-wide clinical goals, patient satisfaction goals, goals around administrative efficiency, and also goals for community stewardship. All of our system leaders today have, at least at the enterprise level, a common set of goals. We look at these goals every month and see our performance against those goals. If we're off the goals, we work with our colleagues to see how we can get back on track."
Enhancing Standardization and Finding Efficiencies
Inspired in part by Brent James, MD, executive director of the Intermountain Institute for Health Care Delivery Research, the health system has long been dedicated to finding efficiencies to improve clinical models and make healthcare more affordable.
James has a national reputation for championing the standardization of clinical care through data collection and analysis and for using quality improvement tools to better understand the cause-and-effect relationships among various practice and environmental factors.
Bert Zimmerli, Intermountain's executive vice president and chief financial officer, has followed in James' footsteps in his approach to managing the organization's administration, Richards says.
"In his role as CFO, Bert has really adopted the same principles that every bit of our administrative work should add value and should be consistent and standardized," she says.
"When you think about the three biggest costs in a health system, it is staffing, information technology, and supply chain. Under Bert's leadership, the entire system has really standardized our operations of these three big costs of running a health system."
For example, Richards says, Intermountain has moved to a centralized billing process that has saved money and increased member satisfaction.
"Streamlining and automating billing is something our members enjoy. When the hospital statement is sent out, patients often get a SelectHealth explanation of benefits in the same envelope. Members love it. They see the hospital bill. They see the doctors' bill. They can see what SelectHealth has paid. This is literally saving us $100,000 a year in postage, and the members love it," she says.
"And we are going a step further to have the billing integrated into our electronic health record. Through the MyHealth site, our members can see their medical records, their lab tests, and their appointments, and can actually see their bill online so they don't have to get paper at all… We have all worked together to lower cost and improve service on the administrative side. It doesn't happen quickly. It takes time, trust, and communication."
Close Collaboration between Administrators and Physicians
Intermountain's senior administrators also work closely with clinical leaders to ensure both sides are aligned when it comes to meeting organizational goals.
For instance, Richards says, Intermountain has developed standardized care models for its most common procedures in clinical areas such as surgical, maternity, women and children's, and primary and preventive care.
"We all know what the optimal clinical standards are. This relates to the health plan because we also have clinicians and physician leaders, so we participate in the development of those programs… With health plan benefits, we try to mirror and match those clinical programs as closely as we can," she says.
"A great example is that we have system-wide standards for preventive care and screenings and the health plan covers that with no out-of-pocket cost to members. This approach helps us be very aligned across the organization."
