"The health system strategy is all about growing our business in this risk space where we are accountable for the whole patient rather than a single visit," says Daniel Styf.
Daniel Styf stepped into the role of senior vice president and chief executive officer of Memorial Hermann Health Plans in Houston on January 4. He comes from Atlanta where he most recently served as senior vice president and head of operations for Piedmont WellStar Health Plans.
I recently had the opportunity to speak with Styf about what he sees as his top priorities and goals as he takes on the challenge of heading up the insurance arm of the largest not-for-profit health system in Southeast Texas. The transcript of our conversation has been lightly edited.
HealthLeaders Media: As you begin this new role, where will you focus your energy?
Daniel Styf: The most important area of focus is helping organize all the resources that our health system has put together and needs to put together to be successful in the population health space. We have an incredibly successful Medicare ACO program. We have a health plan that has just experienced very good growth, which I can't take any credit for, having started on January 4.
The health system strategy is all about growing our business in this risk space where we are accountable for the whole patient rather than a single visit. The most important thing I'm focusing on this year is helping our health system build the capability it needs to be successful in this space.
HLM: How does having a health plan assist Memorial Hermann Health System with achieving its goals around population health and value-based care?
DS: Combining care and coverage allows Memorial Hermann to take more proactive steps to invest in the health of our community and provide better care for the members we serve. It's my belief, and the evidence points to this, that doctors and hospitals work better when they are focused on taking care of patients and not focused on following silly insurance rules.
We can talk to them directly because they are our colleagues and work with them on providing the resources they need.
We also think offering coverage directly to the Houston community allows us to cut out the financial middle man. When payers, like the federal government, are investing in patients' care for the year, we want to be as close to that as we can so that it becomes left pocket to right pocket.
HLM: As Memorial Hermann continues to take on more financial risk for the health of its patients, what role can you and the health plan play?
DS: Our health system is ahead in some areas and behind in others. This is an area where we are ahead. We have care coordinators and care managers embedded in our physicians' offices and this is a big reason why our Medicare Advantage program has been successful. I'm trying to make sure all of our contracts are in place with CMS or other carriers in the market to take on this risk so there is consistency.
I started my career in Detroit, worked in Atlanta, and now in Houston. This happens to be another place where [social] issues are getting in the way of good health and good care. Inside the care delivery systems around the country, there are people who understand the community resources that are out there to help patients through these types of challenges… My job isn't to come up with ways to connect patients with barriers to the resources they need. It's to enable the care delivery system to do that job on behalf of their patients.
The health plan can pay the salary of that person or those 10 people who are needed to create better health and better value. It's a win/win/win, as far as care, health, and finance.
For example, for patients with chronic illness, we can help our delivery system make investments they want to make in taking better care of these patients… [The health plan] is not necessarily going to hire care managers, care coordinators, and dieticians to work on behalf of those patients, but we can help fund those positions.
It's also about having the appropriate coding in place, which is really important in this space because every payer is paying our health system for the patient for the year and is looking at the risk of these patients, and in the end, it is important to have the coding that appropriately and accurately reflects that.
HLM: How helpful is it to have both the clinical data and the health plan data when working toward population health objectives?
DS: Having the data infrastructure to store claims information and care information that combines it all in a way that enables the care team to provide better care to members is critically important. This is a place where the health system has made tremendous investments. The system relies on the Cerner suite of tools, and it's a place where we have made considerable investments so we have a single database that incorporates claims and clinical data.
Take, for example, something like pharmacy fills. You would think a physician would want to know if the patient has filled a prescription. But almost everywhere in the country, the physician has no idea if it has been filled. And it turns out that this information really matters.
If the patient can't afford to take the medication but doesn't want to say that to the doctor during the appointment, they may take the prescription but not fill it. Maybe the doctor would give them a different prescription or decide on a different course of treatment if they knew the prescriptions weren't being filled.
This is something that can be learned from the health plan claims data. Because of the investments Memorial Hermann has made in IT and the storage of the information, physicians here can access that information.
HLM: Payers and providers typically have an adversarial relationship. How does owning a health plan allow Memorial Hermann to move beyond that acrimony in order to provide better care for patients?
DS: It's about trust and relationships. To the extent that a health plan is at war with physicians and hospitals and trying to win a unit price game, you can't ever have a conversation about taking better care of patients because you don't have that trust. To me, it's all about building trust.
I want to be able to direct resources to the delivery system. That is everything in this type of relationship. I think that is where the magic is in this type of integrated system. If you talk to any physician or clinician anywhere around the country what you will hear is that they are frustrated because they can't spend enough time with their patients and they can't spend enough resources on their patients. What we are doing is bringing those resources and those people together because we are building trust.
HLM: When you accepted this position, what made you feel that you would be able to have a positive impact on the organization?
DS: There are two things that convince me that I can make an impact. One is that the Memorial Hermann Health System is committed to the strategy of being accountable for patients' care. This is true from the board to the CEO to the senior executive team. This system is on the same page and committed to this work. That doesn't mean we understand everything we need to do, but we are committed to working to on it.
The second thing is we have a high-trust environment. The leaders in this system trust each other and are working together to try to achieve our strategic goals. Everyone is humble enough to say, 'I don't know everything we need to do, but let's work together on it.' That may not sound like a big thing, but, actually, it is really important. It is what sold me on this opportunity to make a difference.
Cardiac imaging payments are more than triple when a patient receives care at a hospital outpatient department instead of a physician office, roughly $2,100 versus $655, respectively, research shows, but quality was not studied.
Medicare payments for cardiac imaging, colonoscopy, and evaluation and management services are significantly higher when procedures are done in a hospital outpatient department as compared to an ambulatory surgical center or a physician office.
That is the upshot of a recent study conducted by Washington, D.C.-based healthcare consulting firm Avalere Health and funded by the Physicians Advocacy Institute.
Payments Higher for Primary and Follow-up Services
Avalere researchers compared Medicare payments for the three procedures to understand the impact of site of service on payment rates.
"The analysis piece itself looked at Medicare claims data to see payment rates for services across settings of care and episodes of care… We looked not at cost, but at payments," says Carrie Bullock, director of Avalere's reimbursement practice.
"In considering the results, there are two major takeaways. The first is that payment of services at HOPDs are highest among the care sites, which is entirely expected given everything we know about how Medicare pays for services in the hospital setting compared to ASCs and physician offices."
The second key point, Bullock says, is that there also tend to be higher rates of additional services during the episode of care when a patient is treated at an HOPD.
"Payments for services in the HOPD are higher for the primary service, and also for many related services during the episode examined. Thus, the higher payments often associated with a HOPD procedure are not limited to the primary procedure, but can extend to related services performed adjacent to the primary procedure analyzed," the report states.
"Second, many HOPD-related procedures tend to be followed by a higher rate of additional procedures in the HOPD setting compared to office-based procedures… Together, these findings suggest that when care is initiated in the typically higher-paying HOPD setting, the services that follow also result in higher spending relative to when care is initiated in the office setting."
While this difference in service mix may be attributable to factors such as severity of illness and the existence of chronic conditions and comorbidities, researchers used a risk-adjusted methodology when conducting the data analysis and still concluded that payment rates are substantially higher for HOPDs.
"Importantly, we did account for different primary and comorbid conditions for the people receiving the services because you can imagine that depending on what sort of health conditions the person has, particularly for services that occur both before and after services, payments would be affected in general by the severity of illness. We did account for the person's demographics and other acute and chronic conditions they had when they received services," says Ed Drozd, vice president of Avalere's data analytics practice.
Demonstrably Higher Costs
Even when adjusting for certain risk factors, the analysis shows a steep hike in Medicare payments to HOPDs for the three services studied. For example, cardiac imaging payments are more than triple when a patient receives care at a HOPD instead of a physician office, roughly $2,100 versus $655, respectively.
Further, for echocardiograms and colonoscopies, researchers examined a three-day window, including the day of procedure and one day before and after, and a 22-day window, including the day of the procedure and the seven days before and 14 days after.
The results were significant. For an echocardiogram, average payments are 217% higher in a HOPD for a three-day episode and 80% higher for a 22-day episode. Additionally, average payments are 35% higher for colonoscopies for a 22-day episode in a HOPD setting.
For evaluation and management services, researchers examined two profiles: E&M visits within seven days of hospitalization and E&M visits for new patients. For both, E&M visits that originate in an HOPD are associated with higher payments (22% and 29%, respectively).
Quality Not Considered in Study
While the study points to a significant payment differential between HOPDs and other care settings, it is important to note that the analysis does not factor in quality or outcomes.
"There are significant differences in payments at care sites that deliver services for essentially the same patients and that is what we were focused on. We don't get into the quality piece or the piece of whether the payment differential is justified," says Matthew Katz, a PAI board member and executive vice president and chief executive officer of the Connecticut State Medical Society.
"If, in fact, patients in the hospital setting were much sicker, were older, or had more comorbidities, then there obviously would be justification for the price differential to recognize that sicker, older patients would need more services. But, we were able to account for those types of things [with the risk-adjusted methodology] and did not find much difference. It raises a policy question as to whether the payment differential is justified. We cannot say one way or the other that the delivery of care was different or the outcomes were improved in one setting."
Hospitals Should Be Concerned About Revenues
While HOPDs have traditionally received higher payment rates than other care sites for the same procedures, Medicare is clamping down on this with its site-neutral payment policy, which is slated to go into effect on Jan. 1, 2017.
Under this policy, newly acquired HOPDs will receive the same payment as ambulatory surgery centers and stand-alone physician practices. Existing HOPDs will not be affected.
Harry Nelson, founder and managing partner at Los Angeles-based law firm Nelson Hardiman, LLP, says hospital administrators should be concerned about shrinking revenues as CMS continues its push toward value-based care.
"The report should serve as yet another warning sign for hospitals about declining revenues from outpatient services. The past few years have seen increasing proactivity from Medicare about suppressing hospital inpatient utilization in favor of lower cost care settings, and this study gives good reason to think that hospitals can expect similar things in the area of outpatient procedures," Nelson says.
In addition, he says, hospitals should also be concerned that patients with high-deductible health plans will become savvier about costs when making decisions about where to receive outpatient services.
"The trend of greater patient financial responsibility as well as greater price transparency tools will drive more market-oriented consumer behavior and greater price-shopping, which is good news for lower cost providers," he says.
"This is good news for everyone who wants to see more responsive market behavior from providers driving towards reduced cost."
Hospitals, however, should be worried, he says. "They have relied on lack of price transparency and are going to suffer unless and until they become price competitive."
Spectrum Health, a not-for-profit, integrated, managed care healthcare organization, is focused on redesigning care models to increase value. Its insurance arm has been key.
Priority Health, the insurance arm of Spectrum Health has been instrumental in improving outcomes, enhancing the patient experience, and lowering the cost of care, says Jay LaBine, MD, Priority's chief medical officer.
As a not-for-profit, integrated, managed care healthcare organization, the Grand Rapids, MI-based health system is focused on redesigning care models to increase value.
"It's a definite advantage for Spectrum to have a health plan. Our system strategy is to transform models of care, create exceptional value, and be a leader in new healthcare solutions. The health plan can help with all of those," he says.
Jay LaBine, MD
In a recent conversation, LaBine discussed three ways in which Priority Health is helping Spectrum transform its clinical models.
1.Focusing on Chronic Disease
A major area of focus for Spectrum, LaBine says, is finding more efficient and impactful ways to care for patients with chronic illness.
"When we think about how we can align the health plan and the delivery system around opportunities to transform care, we are thinking about what we can do to better manage patients with chronic diseases," he says. "The health plan and delivery system are aligned around chronic disease because we feel there is a lot of opportunity there."
Both Spectrum and Priority employ care managers to assist chronically ill patients with functions such as coordinating their care, scheduling follow-up visits, and managing medications. There are roughly 100 care managers in Spectrum Medical Group's primary care offices and about 60 working at the health plan doing mostly telephonic care coordination.
The challenge, LaBine says, is to keep the two sides of the organization from duplicating efforts with the same patients because that can cause confusion. Priority Health has worked to mitigate this issue over the last two years by designing a common care management system.
"There wasn't always good coordination so the same member/patient would be getting calls from both the physician's office and the health plan," he says. "We have been looking at ways that [Priority's] care managers can do their work and align that with the care delivery system. The delivery system has recognized that the care management leadership at the health plan has a lot of expertise and was highly involved in this process. Our leaders are now working within the delivery system," he says.
The health plan also uses its claims data to risk stratify patients and to focus on those who are the sickest.
"We use this information so that care managers at the point of care and at Priority Health can proactively reach out to those patients who have the most triggers, such as a patient with severe diabetes," LaBine says.
"From the health plan side, we can see that a patient who is not in control costs about twice as much as a person who is in control of their disease. We can also see that the health outcomes are better for a patient who is in control."
2.Designing a Care Model for Elderly Patients
Through its Medicare Advantage plan, Priority Health has members who have advanced chronic illness but are too frail and elderly to receive care in the traditional primary care office setting. The health plan has designed a care model to address this patient population, LaBine says.
"Working with our own delivery system, we designed a home-based care delivery model where we deploy a geriatrician, a nurse practitioner, a social worker, and a care manager to the patient's home to take care of advanced chronically ill patients," he says.
"That is a sweet spot to help both the health plan and the delivery system because these types of patients, when they come into the office for a visit, tend to be schedule busters because they are so sick."
Through its data analysis, Priority Health identified 1,135 patients who are good candidates for home-based care. By aggressively treating and monitoring these patients in their home, Spectrum has proactively reduced complications and hospitalizations while also saving money, LaBine says.
"[These patients] consumed $44.5 million every year in medical spend, so we said we could do this and provide better care while saving money. So far, we have saved about 20% on these patients," he says.
"It's the classic insurance cohort where 5% of people will drive 40% of the spend. We wanted to use what we knew from the data and from the clinical team to target the right people."
In addition to providing care in a more appropriate setting, the new model also assists frail elderly patients in other ways, LaBine adds.
"The home-based care model surrounds them with the resources they need and helps them from a medical standpoint, but also from the social determinants of health standpoint. We know that some of the frail elderly folks who want to stay in their homes are socially isolated. It's a clear example of how the health plan helped identify these patients and helped the delivery system to provide better care."
The home-based care model is also an example of economic alignment between Spectrum's providers and health plan, LaBine says, because it is made possible through funding from Priority Health.
"If the delivery system wanted to do this on their own, it would be a clear money loser because you can't be efficient enough in this model to do it on a fee-for-service basis," he says.
3. Developing Telemedicine Capabilities
As patients demand more convenience, health systems run the risk of losing patients with low-acuity conditions to retail care centers if they don't keep pace, LaBine says.
Last November, Spectrum launched MedNow, a virtual health service through which adult patients can access 24/7 care for minor illnesses such as cold, flu, ear ache, and sinus problems. The telemedicine service can also be used for specialty care, particularly for follow-up appointments with patients in rural areas.
Patients can download an app to their smartphone to contact MedNow. They are initially connected to a medical assistant and then to a clinician. "Within 10 to 15 minutes the patient is on a face-to-face, high-definition video call with a physician or nurse practitioner," LaBine says.
"From the delivery system side, they would be concerned that their patients would be lost to a different telehealth service or that their patients with low-acuity problems would go to CVS or Wal-Mart. This is a way for our delivery system to compete with that."
Priority Health was "instrumental" in pushing forward the development and implementation of the MedNow technology, LaBine says, because the health plan recognized a number of years ago that consumers were looking for this added convenience.
"We put in a code to actually pay for this service. The problem was that physicians in the delivery system were so busy taking care of their own patients that they didn't feel they had the time, energy, or bandwidth to start something like this because it's a big change," he says.
"The health plan was being constructively disruptive to push the delivery system to understand that you have to look at this because your patients and consumers are demanding this type of service. Our delivery system wasn't ready for this, but the health plan said, 'If you aren't going to do this, then we are going to do it.' It was a catalyst for making this change."
And while Priority Health has not yet quantified the direct impact on market share and revenue, LaBine says there is anecdotal evidence that suggests MedNow has been successful so far.
"We have been able to capture some people who are new to the system and retain the business of people who are in the system already but who may be traveling but still want to receive care from people they trust. There has been some market capture," he says.
"I think it is both an offensive and defensive strategy. We don't want patients going elsewhere because it's a more convenient care setting. We want to be able to provide that convenience to be competitive."
The collapse of a dozen health insurance co-ops and UnitedHealth's potential withdrawal will not be a major blow to the exchanges because none has been a big player in this market, research suggests.
Don't mourn for online marketplaces yet.
With the recent failure of 12 out of 23 health insurance cooperatives throughout the country and the possible exit of UnitedHealth Group from the Patient Protection and Affordable Care Act-created exchanges, there has been a lot of speculation lately about the future of the online marketplaces.
Impact of Fewer Plan Options Overstated
Funded by the Robert Wood Johnson Foundation, the report examines 81 of the most populated regions in the country to find which insurers offer the lowest-cost silver plans, which typically have the highest rates of enrollment among marketplace plans.
While the report's authors note general concerns related to HIX plan affordability and network adequacy, they find that the collapse of the co-ops and UnitedHealth's potential withdrawal will not be a major blow because none have been big players in this market.
"In this brief we look at the experience of co-ops and United, and we argue that they have not been major players in many markets and their exits will not be overly disruptive," the report states.
"Further, we provide evidence that health insurance markets are increasingly dominated by competition among Blue Cross-affiliated insurers, managed-care insurers that previously served the Medicaid population but are entering private markets under the ACA… and provider-sponsored insurers. We conclude that recent revelations regarding United and the co-ops are not significant threats to the marketplaces and the ACA in general."
Key report findings include:
Of the 81 rating regions studied, co-ops are active in more than a quarter of the regions (22) in 2016; while United operates in roughly 60% of the regions (48).
Co-ops are the lowest- or second-lowest-cost insurer of 14 out of the 81 rating regions studied. United is the lowest- or second-lowest-cost insurer in 15 out of the 81 regions.
Blue Cross and Medicaid managed care organizations are among the lowest-cost insurers in 34 and 44 of the 81 regions, respectively.
The report indicates that the absence of these health plan offerings on the exchanges will not be a disaster, as many observers have predicted, because other large insurance companies can fill the gap, says Katherine Hempstead, PhD, director of coverage issues at the Robert Wood Johnson Foundation.
"I think the piece makes a nice point that from the standpoint of sheer supply that the failure of some of the co-ops and a potential withdrawal from United is not catastrophic for the marketplace because in some areas, such as New York and other places, United, for example, didn't have a huge market share and is not one of the lower cost plans."
Instead, Hempstead says, the real concern is whether or not this is a bellwether for the future of the marketplaces.
In November, UnitedHealth, the nation's largest insurance company, reported that it had lost $425 million from health plans sold on the exchanges and had scaled back its marketing efforts for these products in 2016 while it reevaluates their viability. In December, UnitedHealth CEO Stephen Helmsley defended the potential move by saying, "We could not sustain the eroding level of losses on our exchange products."
Anthem—despite reporting better-than-expected-profits on Monday—and Humana have also recently expressed similar concerns regarding financial losses from their exchange products.
"Even if United withdraws, there are going to be other suppliers," Hempstead says. "I think the bigger question is whether these are like canaries in the coal mine. What if we have a situation where, ultimately, no one is willing to supply insurance at a price that people are willing to pay for it in these marketplaces? It brings up the questions of the overall stability of the markets."
Major Players Not Likely to Bail
While the co-ops were not able to course correct in time to retain their HIX offerings, many of the big insurance companies are making modifications that will enhance the chance of long-term viability for their exchange products, Hempstead says.
"I think the co-ops had problems due to unrealistic pricing and inexperience… They tried to have rock-bottom prices in all the markets and their pricing wasn't all that realistic," she says.
"I think there are adjustments being made that are going to make the marketplaces better for the carriers. They are making adjustments to their products to limit their financial exposure. They are making it a lot harder to get a broad network. Out-of-network benefits are becoming a lot less generous. Fewer plans have out-of-network benefits, and those that do are becoming skimpier. So the carriers are not as exposed to high cost run ups from utilization."
Hempstead also thinks it is unlikely that UnitedHealth will follow through on its threat to exit the exchanges.
Harry Nelson
"I feel like all the big carriers are going to want to be competitive in all the major markets, and I do think there is growth potential in the consumer markets," she says.
"I think it is a cry for help. [United is] asking the feds for accommodations… Some of the big carriers are saying to the feds that they need to regulate the marketplaces more tightly, otherwise sellers aren't going to be able to be in there, and I think CMS has heard that message and is making appropriate responses… I would be surprised if United pulls out."
UnitedHealth Never Very Committed to HIX
Even if UnitedHealth does ultimately decide to pull out of the exchanges for 2017, it is unlikely to be a death knell for the marketplaces, says Harry Nelson, founder and managing partner at Los Angeles-based law firm Nelson Hardiman, LLP.
Unlike many other large carriers that have invested heavily in the kinds of population health management capabilities required for success when serving low-income populations, UnitedHealth has taken another approach in recent years, Nelson says.
"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," Nelson says.
"I don't see it as a bellwether. Other plans seem to be much more invested, even if this market turns out to be a loss leader, within limits. It would be a much bigger deal to see one of the big invested plans exit, but I think it's way too early for that."
By analyzing claims data, Milwaukee-based Children's Hospital has measurably increased immunization rates and boosted care delivery and outcomes for some of the city's most vulnerable citizens.
By harnessing the data available through its Children's Community Health Plan—Milwaukee-based Children's Hospital is able identify at-risk patients and to roll out and test new models of care delivery to targeted populations.
Owning and operating a health plan is a significant advantage for a health system when it comes to achieving population health goals, says Robert Duncan, executive vice president, community services, at Children's Hospital of Wisconsin.
Robert Duncan
"The real opportunity with the health plan is that it goes beyond what a normal health system can see from a data standpoint. It gives a more detailed picture of members' claims and data than can be seen in an electronic health record. The data is very important," he says.
Identifying Key Patient Subgroups
Children's Community Health Plans' data is used to focus on three important patient groups for population health management: Those who are sick but rarely seek care, those who also seek care from other providers, and those who are not seeking care at all.
For example, Duncan says, patients with chronic health issues who are not receiving regular care, can be located through the claims data and encouraged to seek treatment.
"If two years ago, a plan member had a claim that shows they are diabetic and since that time they have not sought care, you can have a situation that from a population health standpoint you need to address. You need to see what is going on there and try to get that person into a preventive care program before they have a major episode," Duncan says.
Likewise, when patients receive care from other providers, health plan data can augment clinical information in the health system's EHR to give a more complete picture of their health status.
"We may have a child in the emergency department with asthma and through the health plan we can see that the child is also getting care at a local retail clinic or has been seen in another hospital's ED. If you just look at the electronic health record, you would see the child has not returned since their ED treatment and assume they must be doing well. The health plan data gives a different story," Duncan says.
Children's can also pinpoint plan members who are not seeking care at all, including wellness visits and preventive screenings, and reach out to them with targeted messaging, Duncan says. "This gives us an opportunity to manage populations in addressing those needs on the front end."
Tackling Population Health Goals
Along with aiding Children's with identifying these three subsets of patients, health plan data is also helping the system to achieve specific population health goals. In particular, Duncan says, the organization set out a few years ago to increase childhood immunization rates in its market.
"We decided that immunization is one of those things we wanted to tackle as a system. We used health plan data to find these kids and get them immunized whether or not it was in a traditional setting. We set up clinics in places where kids gather, such as schools, community centers, and churches. We had special clinics at the hospital," he says.
The results of Children's targeted efforts have been substantial, Duncan says. "What we saw was a significant increase in immunization rates for our city, and more importantly, our health plan member compliance rate is now the highest in our service area. It couldn't have happened without the utilization data."
Another important example of data being used to improve care delivery and outcomes is Children's partnership with the Wisconsin Department of Medicaid, through which the health system is providing services to children in foster care. The organization operates the state's largest foster care and adoption agencies.
"In the current structure, the data is compiled in three different departments at the state. With our partnership, now we are running everything through our health plan. Now with these children that we consider to be some of the most vulnerable kids out there, we are able to work with providers to develop and test models of comprehensive care organized around care coordination teams," Duncan says.
"In the past, the data was very fragmented, and we were not able to do this. Through this effort, children now have that care coordination team making sure they are getting the right care to improve their clinical and social outcomes."
Now in the third year of the partnership, Children's has the first-year data and is currently analyzing the second-year data to determine the results, which Duncan says look promising so far.
"We can see the spend is less than what was originally estimated. We can see the timeliness of getting to care is there, and other improvements that have come from this opportunity of being able to have a complete picture of the data coming through the health plan. We will hopefully create a model of care coordination around children in foster care that can be replicated across the country," he says.
Collaboration is Critical to Financial Success
Turning data into actionable information that advances Children's population health goals takes cooperation from both the payer and provider sides of the organization—something that is possible to achieve because everyone involved knows they are in it together as the healthcare industry moves toward value, Duncan says.
"[Children's Community Health Plan] is seen as a trusted partner within our own system. Our primary care physicians, specialty groups, and others understand that by working with us, it gives an opportunity to test different models of care and payment plans and to keep things within the system," he says.
And by working together to lower the cost of care and improve quality and outcomes, Children's can use its population health efforts to strengthen its financial standing, Duncan adds.
"[The health plan is] able to share utilization patterns with primary care groups in our system and get them risk-adjusted and timely data. They can then focus on areas like ED trends, well child visits, and office visit rates. It helps us to get our members appropriate care at the right time at the right price. It's a great opportunity in this day and age with managing populations," he says.
"The nice thing about it is that by having the payer and provider sides working together, the improvements we make are not lost to other insurers. From a consolidated financial standpoint, it stays within the system."
Fragmented clinical data, which tends to cause disjointed care, can be significantly augmented by data in health plan claims. At Parkland Health & Hospital System in Dallas, physicians are using claims data to increase quality and decrease costs.
A formerly underused tool that can elicit better outcomes and lower healthcare costs is being embraced by clinicians in Dallas.
At Parkland Health & Hospital System—a Dallas-based public health system that includes the 835-bed Parkland Hospital—health plan data is a key component to redesigning care to enhance outcomes, lower costs, and "improve the experience for the patient and for the provider," says Barry S. Lachman, MD, medical director of Parkland Community Health Plans.
Barry S. Lachman, MD
Parkland Community Health Plans is a Medicaid-managed care plan designed to connect adults and children to affordable healthcare through a patient-centered medical home model.
Figuring out how to harness data in meaningful ways will be critical to success for healthcare organizations as the industry continues to move toward value-based care and population health management strategies.
"Our perspective on our role is that we are here to benefit the health of the community. We are not just here to pay claims… We are here to address all of our communities' health needs," Lachman says.
1. Closes Information Gaps
Because the nation's healthcare system is so large and so complex, it is common for gaps in information to exist as patients move among providers. Fragmented clinical data, which tends to cause disjointed care, can be significantly augmented by health plan claims, says Donna Persaud, MD, Parkland's chief of pediatric population division.
"What I have learned in this role as we move to transformative care, is that what insurance does for a patient is it ties them with an identifying number such that utilization can be tracked, and that tells the story of their lives in terms of care coordination," she says.
"The health plan has claims data and that is all-inclusive of where the patient has been in the system. There are huge opportunities for what providers can do if they are aware of that information."
For example, Persaud says, physicians can use the additional data to gain a more complete picture of patients' utilization patterns and to better tailor care plans to meet their needs.
"This care redesign comes from learning from the data what you can do that will result in better outcomes. That increases quality and decreases costs," she says.
2. Identifies Social Barriers
Health plan data also provides a more complete picture of patients' lives outside of the healthcare system, including the social determinants that may make it difficult for them to follow a care plan to recover and manage their health, Lachman says.
"One of the big problems with data that you have in a health system is that data in an EHR is a mile deep and an inch wide. It doesn't tell you anything about what is going on in the patient's life or the rest of the healthcare space," he says.
"Providers are trying to provide care, but unless they specifically ask patients or the patient tells them, they have no idea [about the social issues that could be impacting their health]. Having a health plan with data provides a way of looking at the patient's total life."
Donna Persaud, MD
And without knowing what is happening with the patient beyond the four walls of the hospital or doctor's office, Lachman says, it can be impossible for a physician to help patients make significant gains with their health.
For instance, he says, when he participated in a community health walk through of a Dallas apartment building, he saw the kinds of environmental factors that physicians need to be aware of in order to coordinate the most impactful care and services for patients.
"I saw conditions in those apartments with the ceilings falling in and mold on the walls. Asthma is a major health issue, and we can throw all the asthma medicine in the world at the people who live in these apartments … but until we get to the root cause, we are just putting a Band-Aid on the problem, and we are wasting public money."
The claims data "tells the story" of patients' lives and is a critical part of being able to design successful care plans, Persaud agrees.
"What we are trying to aim for is designing care that is integrated into patients' lives and that is applicable to the way patients actually live. That is the way patients are going to get better and that costs will go down," she says.
"We are reorganizing and transforming what we do for patients because the social conditions around poverty, which affect food security, literacy levels, and transportation access, also affect their ability to receive care that is effective for them."
3. Aids Coordination With Other Agencies
When social issues are identified, Parkland's clinicians refer patients to outside social services organizations. Parkland is working more closely than ever with community agencies as a way of assisting patients in accessing the necessary resources to deal with social barriers.
Clinical and health plan data are important tools for knowing whether patients are actually receiving that social support, Persaud says.
"We are leveraging technology because that becomes big in this when we are looking for ways we can coordinate with other agencies… We use technology to look at what ways we can know that patients got those resources and know that these mechanisms that allow them to access other agencies are working to support them in their lives. [This enables us to] know that they are following through on the care we are recommending."
Although health systems have not always worked in such close association with social service agencies, Lachman says, a new sense of cooperation is emerging because the links between social determinants and good health are too strong to ignore.
"Having been involved in healthcare for the underserved for over 40 years, I have seen a gradual transformation of people realizing the importance of coordinating care," he says.
"I'm not quite sure we are at the tipping point, but we are sure getting there. I think the transformation was happening before the Affordable Care Act, but a number of things in the Affordable Care Act are really encouraging more collaboration and cooperation and have helped move us forward."
4. Provides Predictive Analytics
Along with Parkland's healthcare delivery network and health plan, the integrated system also includes the Parkland Center for Clinical Innovation, a non-profit research and development corporation that specializes in real-time predictive and surveillance analytics for healthcare.
PCCI uses Parkland's clinical and claims data to produce predictive analytics that allow providers to take a more sophisticated and evidence-based approach to care delivery.
"The trifecta of all that activity is beginning to provide important results for us and is now increasing our ability to reduce things like complications from chronic conditions, hospitalizations, and ED visits," Persaud says.
"One way we have used analytics is to predict risk scores for utilization and to determine who is going to end up in the ER or be hospitalized, who is the sickest, who is the most likely to have complications of their condition or instability… It allows the healthcare team to prioritize the resources around who will likely decline the most or have the worst outcomes or utilization issues."
Additionally, the analytics are an important resource for physicians to be able to identify patients whose health conditions and social barriers put them in the category of rising risk, Persaud adds.
"It also allows us to stratify everyone else and to straddle resources across the spectrum to prevent the movement of patients from low to high risk."
Ambitious objectives for a health plan are at the center of CHI's strategic vision for the future. Getting buy-in and support from its 4,000-plus physicians is "where the hard work resides," says one senior executive.
In July 2014, Englewood, CO-based healthcare giant Catholic Health Initiatives—which operates 105 hospitals in 19 states—rebranded its insurance arm as Prominence Health and set out on a mission to use its health plan products and services to support the organization's transition to value-based care delivery.
In addition to operating CHI's commercial and Medicare Advantage health insurance plans, Prominence's goals include aligning and coordinating the system's healthcare delivery networks, data analytics tools, and disease and care management services.
Juan Serrano
A Strategic Vision Based on Value
While these may be ambitious objectives for a health plan, they are at the center of CHI's strategic vision for the future. Prominence will serve as a "catalyst to position us as a broadly integrated health system," says Juan Serrano, president and CEO of Prominence Health and CHI's senior vice president for payer strategy and operations.
"I think at the board level our philosophy at CHI is to embrace and support the health plan business because it is relevant to what we believe is the new era of expectation that health systems will integrate care delivery with how healthcare is organized and purchased by employers and consumers," Serrano says.
"That confluence of healthcare delivery and the way customers and consumers purchase and utilize healthcare benefits and services is a critical part of what we think is going to drive the value proposition in the healthcare industry going forward."
To keep pace as healthcare shifts away from traditional fee-for-service payment structures, Serrano says, CHI must find ways to rein in costs while maintaining and improving quality and outcomes. Prominence Health, he says, is a linchpin of that approach.
"We wanted to adapt to take responsibility for the total cost of care. We are being asked by the federal government, state governments, insurance companies, other health plans, and consumer stakeholders to hold ourselves more accountable because what we do relates to their total costs," he says.
"We are escalating our understanding of what it means to integrate providers and a health plan, to operate that plan, and to organize a network and system of care. Along the way, we believe it will make us a better system partner for every stakeholder across the continuum."
Creating a Culture Shift
While there are many challenges involved with implementing such sweeping, organization-wide changes, Serrano says getting buy-in and support from CHI's 4,000-plus physicians is "where the hard work resides."
"It is not in operating a health system or a health plan. It is driving integration at the point of care delivery so we are really positively impacting the health of the individuals we serve and becoming accountable for the cost of care. That is the culture shift," he says.
Serrano is certainly not alone in his assessment. In HealthLeaders Media's recent Intelligence Report, "Physician Alignment: Today's Strategies Require Risk and Clinical Integration," 66% of respondents cited physician engagement as being one of their organization's top alignment objectives, and it is most frequently cited as being the most difficult objective to achieve (24%).
One key to success, Serrano says, will be to "break down the siloes" that commonly exist between providers and payers to align the entire organization around the concept of value.
"The hard work is in moving away from that idea that payers are there simply to pay for health services and providers are there only to provide care. We have to align the two in order to improve the health of our communities," he says.
"That will go a long way to developing our strategy over the next five to ten years, really teasing out how we can make that happen and doing it in a way that can be replicated throughout our markets."
Incenting a Change
Prominence Health is encouraging physician engagement through financial incentives, Serrano says, such as orthopedic bundled payments and other value-based reimbursement arrangements.
"There is most certainly a correlation between payment and the degree to which a provider in the system feels accountable at the very least for generating positive outcomes and falling within acceptable value ranges for performance parameters that are being reported out. That is augmented tremendously when they have some skin in the game," he says.
"The motivation for folks is sometimes altruistic, sometimes economic, and sometimes both, but the industry is moving in this direction as payers are demanding more accountability from providers."
Enhancing Value with Data
Using data to determine evidence-based best practices for patients across the care network is another way to align physicians with organizational goals and to create an environment centered on value, Serrano says.
"We are not only delivering data about an individual to a physician and hoping the physician will use it to improve the way they serve that individual, we are actually using the information to engage the health system collectively and to activate interventions across the continuum for the individual," he says.
"This involves the physician, the specialist, and the hospital if a hospitalization is needed and is also about organizing the rest of the care around the person."
Looking for Physician Champions
Although getting to the tipping point where the majority of physicians are on board with CHI's efforts to integrate its provider network and health plan may take a while, Serrano says the organization is starting by working with those who are open-minded about approaching their work differently.
"Like any large group of individuals who are contemplating change, we have some physicians who were ready before we even shored up our strategies and who have become champions for this type of population health work," he says.
"At the other end of the spectrum, there are those physicians who just are not predisposed to working in this manner and are not as receptive. We are working initially with those who more naturally gravitate toward this style of working."
Making steady progress in physician engagement will ultimately position CHI for success in a value-driven environment, Serrano adds.
"It's a journey we are on. Three years from now, we will have really moved the sentiment of physicians within the system toward one where they expect to work in this manner and to receive this kind of information and support."
As the healthcare industry moves toward reimbursement models that reward value, providers cannot ignore patients with mental health and substance abuse issues.
This article first appeared in the June 2015 issue of HealthLeadersmagazine.
Gregory Pagliuzza Jr.
Patients with behavioral health diagnoses present a particular challenge for health systems and hospitals that are trying to rein in the cost of care. Such patients tend to be heavy utilizers of expensive healthcare resources and have higher-than-average rates of emergency department visits, hospitalizations, and readmissions—all of which hospitals are trying to curb as they work to retain their margins under population health and risk-based payment models.
Some provider organizations are embracing this challenge and are implementing strategies to deliver more effective care to this subset of patients. As a result, they are improving care coordination and lowering costs.
'A financial imperative'
It's becoming "a financial imperative" for hospitals to find ways to provide behavioral health services that truly meet patients' needs, says Gregory Pagliuzza Jr., chief financial officer at UnityPoint Health-Trinity, a four-hospital, 584-licensed-bed integrated delivery system based in Rock Island, Illinois. The system is part of UnityPoint Health, headquartered in West Des Moines, Iowa.
"As the cost structure gets tighter, we have to manage patients with behavioral illnesses more effectively. The old model—where we outsource behavioral health patients elsewhere—is not going to work anymore. It's not going to be funded, and it's not going to be financially successful. As reimbursements get tighter and tighter, the reality is the model is going to have to change to be effective," Pagliuzza says.
In 2009 UnityPoint Health-Trinity began working with the state of Illinois on a three-year Donated Funds Initiative to reduce the utilization of services and readmission rates for patients who have both behavioral and medical diagnoses. The results were significant. Over a 10-quarter period, emergency department visits among this group dropped 50%, which reduced Medicaid payments by 65%. Additionally, psychiatric admissions dropped 54% in the same time frame, cutting payments by 73%.
David Deopere, PhD
"The final report of those 366 patients in the Donated Funds program showed they had a 54% reduction in psychiatric admissions and a 32% reduction in medical inpatient admissions, which saved $8.1 million, compared with our expenses of $675,000. It was really a profound program, and it speaks to achieving the best outcomes at the least possible expense and improving the quality of patients' lives," says David Deopere, PhD, president of Robert Young Center for Community Mental Health, an established and financially viable behavioral healthcare organization and Comprehensive Community Mental Health Center that is integrated within Trinity Regional Health System.
After that DFI program ended, UnityPoint Health-Trinity continued to fund its efforts to better manage the health of patients with behavioral health issues by becoming a coordinated care entity through Illinois's Medi-caid managed care program. As a CCE, the health system is working to increase the quality of care, lower costs, and improve population health outcomes.
"This focus on population health management is why behavioral health is coming into its own; we see what those comorbidities do to hospital admissions, ER utilization, and primary care office visits," Deopere says. "Health systems around the country are beginning to recognize this. … When you look at the data from anywhere around the U.S., you see the importance of managing behavioral health comorbidities with physical illnesses."
For example, Deopere says 72% of cardiac patients who are more than 65 years of age have depression and visit the emergency department 40%-50% more often than cardiac patients without depression. "Severely mentally ill patients are some of the highest utilizers of healthcare," he says.
Closing care gaps
One of the most effective interventions the system has implemented so far, Deopere says, is to conduct behavioral health screenings in its emergency department and primary care offices. The screening includes two questions each to monitor for depression and anxiety.
"We instituted these screenings in the ER because we were not, in fact, really consistently screening for PTSD, depression, and anxiety. We've known all along that having a behavioral health diagnosis leads to more ER use, but when you start getting into population health and capitation, it becomes even more important to deal with it effectively," he says.
In many of its primary care offices, UnityPoint Health-Trinity has embedded a behavioral therapist so that a patient whose screening indicates the existence of an underlying behavioral health issue can be immediately treated at the clinic. The system plans to expand this strategy as quickly as possible because it helps close the gap that often exists for behavioral health patients in the traditional primary care setting, Deopere says.
"We now have 13 practices that have a behavioral therapist who is colocated, and we need to find more therapists who are qualified to work in that environment. Our goal is to have a behavioral health therapist in every single primary care office. I think 15 years from now that will be the case in primary care offices across the country," Deopere says.
"The primary care docs are glad to have the support, because they aren't always comfortable dealing with behavioral health issues and they don't have the time. You can't deal with a behavioral health problem in five to eight minutes within the context of a primary care office visit."
Focusing on the patient
Vicki Zude, director of care coordination at the Robert Young Center for Community Mental Health, says that one reason the behavioral health therapists are making a big difference is that they are providing patient-centered care.
"You have to make it meaningful for patients. You have to develop a relationship and make sure it's patient-driven. Instead of saying, 'You are obese, and you need to lose this amount of weight,' you have to ask them what they want to be able to do. You then turn those into healthcare wellness goals," Zude says.
"There are a lot of techniques that go into this behind the scenes. We work on developing trust with the patient and on training staff to approach the patient with a motivational technique. We develop a wellness recovery action plan. None of these are simple things. They all take time, but they do work when they are done right."
These types of patient-focused behavioral health programs will become increasingly important, Pagliuzza adds. "If you start getting into population health and you start taking on more risk, you can't avoid this population. This group is very expensive, and they are high utilizers. What we are building here is a model that is going to work for patients."
Part of the care continuum
At Sandusky, Ohio-based Firelands Regional Medical Center—a 236-staffed-bed institution with more than $500 million in annual gross revenue—behavioral health has been woven into the care delivery network since 1985, when the leadership team at that time decided to provide a full continuum of care for all mentally ill and chemically dependent people. On average, Firelands serves 1,600 inpatients in its 34-bed psychiatric unit and 14,000 behavioral health outpatients annually in seven counties throughout the state.
"As a not-for-profit healthcare organization, we have always had a mission to treat everyone in our community, no matter what their health need is or what their ability to pay is. By having behavioral health as part of our continuum, it allows us to have a very profound impact on the health of this population," says Daniel J. Moncher, Firelands' executive vice president and chief financial officer.
"Behavioral health is another service line that we look at, and we need to be able to afford to provide those services. Fortunately, we've been able to do it with the benefit of grants."
Among those grants are two from the Substance Abuse Mental Health Services Administration, an agency within the U.S. Department of Health and Human Services. The grants are being used to fund screening programs in Firelands' emergency department and its primary care sites. Licensed clinicians screen for depression and substance abuse, provide some basic education on site, and refer the patient for either inpatient or outpatient treatment as appropriate.
Its three largest clinics also offer the Firelands Counseling and Recovery Services Plus program, which integrates primary care and behavioral health within one location. The care team includes a nurse practitioner, a care manager, and a health home specialist, who all work together to meet the needs of patients with serious mental illness and chronic healthcare conditions.
"What we are really doing here is bidirectional integration. We are extending ourselves to go into the hospital setting, and we are integrating behavioral health into our primary care settings. That has helped a great deal because we are constantly educating people. Every policy and procedure has been revised to make sure that at every junction we are talking to folks about issues like drug use, smoking, and controlling their blood pressure and their weight," says Marsha Mruk, vice president of Firelands' behavioral health department.
The program has driven down readmission rates. From 2013 to 2014, there was a 33% drop in medical re-admissions and a 5% drop in psychiatric readmissions within 30 days for patients participating in the integrated primary and behavioral health program.
Emergency department usage has also decreased. "In the first two years, we have decreased the ED use by this population by 28%," Mruk says, adding that reining in the utilization of expensive resources by this patient group is critical for healthcare organizations that are trying to succeed financially within population health payment structures.
"About 30% of our behavioral health outpatients are severely mentally ill, and they are the ones who are so costly. In relation to cost, medical costs for individuals with depression are 54% higher than for those without depression. They are 68% higher for those with anxiety."
Timely response
Firelands also offers emergency services through its 24-hour telephone hotline. This is another way to help people in crisis and to prevent them from using the emergency department unnecessarily, Mruk says. "If we hear from someone who is considering going to the ER, we will call to get them in to see their primary care doctor. We try real hard to steer them away from the ER."
In all of its primary care offices, Firelands has moved to having same-day access so that patients can be seen quickly when they are in need of services. This has helped Firelands cut its no-show rate for its behavioral health patients from nearly 60% to 20%, and has kept people from presenting in the emergency department for nonemergent conditions, Mruk says.
"If you are having an emotional problem, the clinic will have you come in that day. Now better than 75% of individuals we intake throughout the system are getting in the same day. For those who are not, there is generally a specific reason, which is usually that they choose not to come in the same day," she says.
Mruk says that in order to bend the cost curve on treating patients with mental health and substance abuse diagnoses and to thrive in a value-based reimbursement environment, hospitals must first acknowledge that they are in the behavioral health business whether they choose to be or not.
"When you look at incidence of mental illness in the U.S., some of the statistics are staggering: 43 million adults age 18 or older had a mental health issue last year. That is about 18% of all U.S. adults," she says. "Psychiatric care is very much a part of medical care and can't be divorced from it. About 5.5 million people go to the ED every year with mental illness. It represents 4% of all ED visits, so whether or not hospitals want to be in this business, they are."
Healthcare finance executives gathering this week for the fifth annual CFO Exchange have a lot on their minds, including the pace of the fee-for-value transition, positioning for population health management, and co-existing with retail clinics.
What's on the minds of healthcare CFOs? Nearly 50 hospital and health system finance leaders will meet at the Broadmoor Resort in Colorado Springs later this week for HealthLeaders Media's fifth annual CFO Exchange. At this invitation-only event, attendees will spend two days discussing the biggest financial challenges currently facing their organizations. I spoke with several attendees beforehand about their concerns.
1. The Transition to Value-Based Reimbursements
While most provider organizations still operate almost entirely in a fee-for-service payment environment, senior leaders know the shift to value is coming.
To be successful when the change does happen, Daniel J. Moncher, executive vice president and chief financial officer at Firelands Regional Medical Center in Sandusky, OH, says his organization is using data analytics tools now to "get educated" on where clinical improvements can be made, particularly around DRGs that are ripe for bundled payment models.
Richard Silveria
"What we are finding out is we seem to fare very well on the hospital side but not as well when the patient is discharged," Moncher says.
"We are trying to have a close association with the post-acute providers and reach out to local skilled nursing units and nursing homes to try to help us understand why those costs are higher than some of the benchmarks we are looking at."
Toledo, OH-based ProMedica is "uniquely set to take advantage of value-based reimbursements," says chief financial officer Alan Sattler, thanks in large part to its health plan.
"With our health plan, Paramount, we have already been managing that risk for nearly 30 years."
ProMedica will also use its clinically integrated delivery network, its accountable care organization, and its Medicare shared-savings programs to succeed in a value-based environment, Sattler says.
"Those areas are certainly part of what we are doing [to prepare for the shift to value], and we want to develop those in more robust ways."
2 .The Need for Population Health Strategies
New payment models will ultimately require providers to design and execute population health management programs that improve the health of their communities and bring down the overall cost of delivering care, says Richard Silveria, senior vice president, finance, and chief financial officer at Boston Medical Center.
"We are still fundamentally paid through fee-for-service. When someone is sick, we get paid to make them better. But population health is a different business and involves a different approach. The payment systems haven't really changed yet, but we can anticipate that this is where society is going," Silveria says.
"The hospital mandate is to get costs down and to produce consistent cost, quality, and outcomes and to use acute-care capacity as judiciously as possible."
Nick Barto, senior vice president at Englewood, CO-based Catholic Health Initiatives, says population health is a major area of focus for the 105-hospital healthcare giant.
In particular, CHI is working to increase patient access to care, Barto says. "We are spending a lot of time making sure we have the right assets in our markets, and we are moving to fill in gaps in our employed physicians, both on the primary care and specialty care sides. We are building clinically integrated networks that can deliver on the promise that we have with our payers and employer partners in terms of having access in place and having the capability of managing populations."
Nick Barto
Although Fireland's Moncher agrees that population health is a "key area for any healthcare provider," he says the biggest challenge is that it is impossible to know when reimbursements will catch up.
"The unknown for us is how long it will take before it impacts us financially. Will it be five years? Ten years? Regardless, it is our organizational responsibility to make sure we do our best to keep our communities healthy," he says.
3. The Culture Challenge
Trinity Medical Center in Birmingham, AL, is well-positioned for the shift toward value and population health management, says chief financial officer Julie Soekoro, because of the work its CEO and senior leadership team have already done to create the right organizational culture.
"We started on our journey to value six year ago, and it wasn't because of reimbursements. It was because we wanted to drive improvement in patient outcomes. Our CEO is very focused on patient care, patient experience, and patient outcomes. He has built a culture here for the last six years to support high quality, and interestingly enough, that is where value-based purchasing has gone," Soekoro says.
"Most people who go into healthcare really want to help people, but they have to have the tools and resources to do it. We have put into place accountability, timely interventions, and concurrent review processes, and we are measuring results."
Getting organizational culture right is "critically important," ProMedica's Sattler says. "You have got to get out there and talk to leaders, talk to employees, and talk to physicians. You need to constantly be helping the culture adjust and adapt to what is going on in the marketplace."
Having physician leaders "embedded in all aspects of the organization" is essential for creating an organization that will thrive as the healthcare industry evolves, he adds. Currently, about 18% of ProMedica's governance positions are held by physicians.
"It's very important to have physicians engaged at the governance and board level, at the leadership level, and as leaders of clinical teams. If you don't cover the gamut, then you won't fundamentally be able to move the culture."
4. Harnessing Technology to Meet Patient Demand
The next generation of patients will be more interested in virtual healthcare and less in bricks and mortar, says Mark Bogen, senior vice president, finance, and chief financial officer at South Nassau Communities Hospital in Oceanside, NY.
Patients will expect "more Internet and web-based data sent to and from smartphones, watches, and other smart devices," Bogen says.
"South Nassau is still in its infancy as it relates to this change in delivery modes but is planning a significant upgrade to its Internet and web-based content, apps, and the use of social media. We have hired in-house folks to help develop some of this and are working with other organizations to help develop this on our behalf."
ProMedica's Sattler says that as patients continue to assume more financial responsibility for their healthcare, consumerism will "skyrocket," and the need for technology-based convenience will grow.
"When patients and consumers take on a larger share of the healthcare spend, they will be more focused on what they are spending their money on, so we have to go to them instead of expecting them to come to us," he says.
"We are trying to augment everywhere we can with technology and let patients decide when they want to engage with us, whether it is at 2 a.m. or 2 p.m. There is a whole new generation that doesn't want to talk to you on the phone. They don't open their mail. We are doing a lot of things to create user-friendly formats for them."
For example, Sattler says, ProMedica has created a new patient billing statement that includes a QR code. "The patient can scan it to their mobile device, and they can make a payment from there. It's a very patient-oriented, user-driven statement."
Despite Boston Medical Center's position as a safety-net provider, Silveria also expects technology to play a major role in meeting patient demand in the future.
"People are becoming increasingly technology savvy. With e-commerce, people are doing their banking online, booking their travel online, reading Yelp and Twitter. These people … want convenient access to care and to be able to get prescriptions refilled with an email and receive telemedicine-type services. Going forward, I expect to see more healthcare tailored to smart phone apps."
Alan Sattler
5. Co-existing with Retail and Urgent Care Sites
Traditional healthcare organizations are being challenged in many markets around the country by the proliferation of retail and urgent care sites. Rather than regarding them as competition, hospital CFOs believe the best approach is to partner with them.
"We are not viewing them so much as having to fend them off. It's more a matter of figuring out how to align with them for better efficiency," says Trinity Medical Center's Soekoro.
"We are moving to a new hospital building that is a hop, skip, and a jump from a fairly busy urgent care center. We've been in discussions with them on how we can complement each other rather than compete. We're very happy to have that relationship without having to employ the primary care doctors."
CHI's Barto says these convenient care sites can relieve some of the need for primary care services that is being created by healthcare reform.
"They are a necessary part of what is going on with the expansion of coverage by absorbing some of the demand for primary care and lower-end care. That frees up our clinicians to take care of more acute or sicker patients. We can partner with them and work with them and tie that back into our own EHR and health system," he says.
Some level of competition with retail and urgent care sites is inevitable, and traditional health systems must learn how to go head-to-head. "If you do have to compete with them, you compete with them on customer service. We need to earn our patients' loyalty," Barto says. "You can still partner with these folks and compete with them at the same time. Ultimately, whoever has more capability to take care of customers and patients will be more successful."
Health systems can actually increase revenue in the value-based healthcare environment. Here are four keys: find meaningful ways to increase outpatient market share, strengthen key business lines, improve the organizational ability to take on risk, and bring physicians on board.
This article first appeared in the June 2015 issue of HealthLeaders magazine.
Major cost-containment efforts have been underway at most hospitals and health systems for years as organizations try to stay ahead of revenue pressures being caused by declining utilization rates and tightening reimbursements. But controlling expenses is just part of the equation when it comes to preserving or even growing margins. Revenue growth and sustainable business development strategies also are essential.
"With everything that is taking place through utilization reductions and reimbursement reductions in the inpatient portfolio, those organizations that are absent a growth strategy or some other business direction are going to find themselves in contraction mode," says Robert T. Braithwaite, president and CEO at Newport Beach, California–based Hoag Memorial Hospital Presbyterian, which operates 527 beds and had fiscal year 2014 net patient revenue of $779.6 million at its two hospitals.
Thriving in a value-based healthcare environment where payers increasingly are driving patient volume to low-cost care sites will require senior leaders to find meaningful ways to increase outpatient market share, strengthen key business lines, improve the organizational ability to take on risk, and bring physicians on board.
