Industries Healthcare

‘The right thing to do’

Health-care providers, insurers launch efforts to improve treatment and cut costs

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Print this page by Marjolijn Bijlefeld

Sometimes, doing the right thing can hurt you. At Roanoke-based Carilion Clinic, a lot of patients were coming to the emergency room with chest pains. So Carilion established a Chest Pain Center at its Carilion Roanoke Memorial Hospital, where experts in cardiac issues could test and diagnose patients more efficiently. The result? Many people who would have been hospitalized to rule out serious heart problems were treated at the Chest Pain Center and sent home.

“It’s better care for the community, and it’s the right thing to do,” says Don Lorton, Carilion Clinic CFO. Nonetheless, the change hurt Carilion’s bottom line. Fewer hospital admissions resulted in a loss of hundreds of thousands of dollars to the hospital.

Carilion’s example demonstrates the-chicken-or-the-egg dilemma of health-care reform. Many industry experts believe that, to lower costs but improve treatment, the delivery of health-care services and the system used to pay for those services have to change. The question is: Which group makes the first move, health-care providers or insurers? And can they get all the other stakeholders in the health-care system onboard?

“There’s not a lot of controversy about whether changing the delivery of health care is worthwhile. Everyone agrees,” says Doug Gray, executive director of the Virginia Association of Health Plans. “The challenges are getting the resources and exercising the discipline and rigor to show the results.”

Some insurers and health-care providers in Virginia are now trying new approaches. They have started programs — ranging from patient “medical homes” to reimbursement plans for people who work out at gyms — that could represent the future of the state’s health-care market. The initiatives are taking place at a time when health-care costs nationally are expected to grow 8.5 percent next year, according to a recent study by PricewaterhouseCoopers.

Carilion Clinic is on the forefront of change with its recently announced arrangement with insurer Aetna to create an accountable-care organization, or ACO. Generally speaking, ACOs combine doctors, hospitals and insurers into a network that is responsible for providing care to patients. Because they share responsibility for how healthy their patients are, they have a financial incentive to improve outcomes and avoid waste.

The Carilion-Aetna effort would offer an insurance plan under an ACO arrangement: Aetna would handle management of the insurance side, and subscribers would get their health-care services from Carilion’s hospital and doctor network in Southwest Virginia. Aetna would also manage a Medicare HMO that might eventually enter the Medicaid sector as well and manage a self-funded plan for Carilion employees. Lorton says the ACO plan could be in place by January, at least on a limited basis.

But the going might be slow, Lorton says. “It’s going to take a year or two before we have meaningful data and can figure out how to get more of our patient population through these programs.”

In other parts of the state, efforts are under way to develop health information organizations (HIOs), in which health-care providers in a community can immediately access key elements of patient information electronically. Richmond-based MedVirginia has one of the most robust systems, and others are developing.
For example, the Northern Virginia Regional Health Information Organization (NoVaRHIO), which started about four years ago, recently launched its first medication-history service in the Inova Alexandria Hospital emergency department. J.P. Auffret, vice chair of the HIO, says the initial plan was simply to have a pilot program, but “instead of building just an isolated pilot, GE Healthcare built a foundation for a full-fledged HIO.” When patients enter the hospital’s emergency department, they are asked to sign consent forms permitting access to their comprehensive medication list. This information helps ER doctors identify and treat problems, since patients may forget or be unable to list their medications. The HIO plans to expand to other hospitals, add more services and eventually include lab and radiology results.

Medical homes
Another health provider-based change is the trend toward the patient-centered medical home (PCMH). A hallmark of the PCMH concept is coordinating care for patients throughout a complex health-care system. This approach is being tried at Norfolk-based Sentara Healthcare. Dr. David Maizel, a family physician who is president of the Sentara Medical Group, says five of its primary-care practices have been fully redesigned as PCMHs, with six more in the pipeline. During the next 18 months, all 47 of the primary-care practices will be adopting this strategic focus, which aims to improve efficiency and reduce waste.

Maizel offers an example to explain the process. A patient goes to the hospital emergency room. Because many medical offices aren’t connected electronically to the ER, the patient’s physician often isn’t told about the episode. At PCMH practices, however, doctors receive an electronic list of their patients who were treated in the ER. The doctor or a staff member can call the patient, offering to set up a follow-up appointment recommended by the ER physician. “Instead of ER follow-up visits being passive, this is a more proactive, outreach-type activity,” Maizel says.

Inside the doctor’s office, the workflow has been changed, too. “We’ve redefined the roles each member of the staff plays,” Maizel says. “Often, doctors are doing tasks that members of the staff could do for them, so we’re defining roles, workflow and assignments to the people with the right skill sets.” Not only does it result in a more efficient practice, “it has stimulated a lot of job satisfaction as the staff is playing a more critical role and becomes a part of the care team.”

In July, a Sentara group practice received recognition through a program of the National Committee for Quality Assurance. “We are applying for the certification as we go through the redesign, but there’s no material advantage to getting the certification. It’s not being recognized by the insurance community yet,” Maizel says. That may change if health-care reform rules and insurers adopt ways to pay physicians for how well they do, rather than just what they do. “This isn’t about us getting paid more, but what we can do now to improve the patient experience and the quality of care in a cost-efficient way. Our hope is that down the road, payments will reward that,” Maizel says.

Payback for working out
In the meantime, there’s another reform effort going on, aimed at prevention and wellness.

Maryland-based UnitedHealthcare of the Mid-Atlantic has unveiled a program just for businesses with two to 99 employees. Stephen Reidy, vice president of the regional group, says that through UnitedHealthcare Wellness, the company will send at-home biometric screening kits to subscribers to check things such as body-mass index, cholesterol and glucose levels. The results will help screen patients who might be at risk for illnesses such as diabetes or heart disease. The data are also entered into an online health assessment and personal health record.

Health plan participants also can receive wellness coaching by phone. Those who use a gym 12 times a month can get a $20 monthly reimbursement on their premium. A number of national health clubs are participating, and members can nominate gyms to participate, too. The visits are recorded through a simple card swipe.

“The wellness program is an embedded program,” says Reidy. “It doesn’t cost the members any more. They just need to raise their hands and say, ‘I want this.’” The new initiative,  available in Virginia to businesses with fewer than 100 employees, was developed in Washington state as a way to provide more resources and education to employees of small businesses. Reidy says the incentives may help people adopt healthier lifestyles and better understand the benefits of their insurance plan.

UnitedHealthcare also is working on another health-education program called Health Care Lane. “We built a 10,000-square-foot city, an expo where people can walk through, stop at the storefronts and talk to two experts stationed there — pharmacists at the drugstore or fitness coaches at the gym, for example — and use touch screens to learn about issues.” The display has been set up in Northern Virginia and Richmond. A lively animated version can be found online at


Reducing premiums
Anthem Blue Cross/Blue Shield, Virginia’s largest private health insurer, has found a tremendous interest in wellness, too, says Kevin Reed, the Richmond-based company’s community health programs coordinator. Not only does it interest individuals, but also it’s attractive to employers, many of whom have pulled back on benefits in efforts to curb costs. “This is one way to show a continued commitment to employee morale,” he says. Wellness also is critical in maintaining a healthy population in the future. “The main drivers of health-care costs are tied to obesity, heart disease, diabetes and cancer — and a large driver of that is tobacco use. So wellness is the way to attack some of those larger issues.”

To address this trend, Reed or a wellness consultant meets with an employer interested in incorporating a wellness program. First, they ask questions to gauge how ready a business is to implement a plan and what that might be. They also analyze two years of claims reports for the covered employees and conduct a trend analysis “to find the hot-button triggers that drive cost,” Reed says. They work with the employers to make sure that employees know what’s covered in their plan — such as the online health assessment and advice functions on the Anthem website.

“Then we devise unique programming to address the group’s main concern. Maybe it’s marking walking paths around the property, changing the vending machine offerings or partnering with a third-party vendor, like a gym.” Anthem spokesman Scott Golden adds that the plans look very different depending on the employer. “A blue-collar manufacturing plant may have a wellness plan focused on smoking cessation and blood pressure control, while a law firm may be adding fitness trails.”

“We want to stabilize and reverse the premium trends,” says Reed. “Across Virginia as a whole, employees cost the employer about $13,000 [annually] for their illnesses. When you carve out the healthiest employees, it jumps to $54,000 per person. So about 1 percent of the employee base is driving 40 percent to 50 percent of the health-care costs. Through wellness initiatives, we try to blunt that curve.” One employer who has incorporated a wellness program saved about $30 per member per month, or 4 percent of its annual cost, in the second year of the program.

“Two factors drive participation: money and convenience,” says Reed. So the plans work to provide both. Anthem has incorporated a program like that for its own employees — who potentially can cut hundreds of dollars from an employee-and-spouse premium.

Here’s how it works. The employee takes an online health-risk assessment to understand key health measurement numbers, such as cholesterol and glucose. That’s $200. The worker’s spouse also takes the assessment, which is another $200 in savings. Anthem has a number of other programs, including ConditionCare (for patients with chronic conditions), Future Mom (for pregnant women) and two fitness challenges. “If you complete any one of those, it’s another $100 off. Certify that you’re tobacco-free or complete a smoking-cessation program, and it’s another $100,” Reed explains.

By emphasizing wellness now, the hope is that the employer saves money in the future. “With our disease management program, if we compare two people — one who is engaged with the program and one who is not — there’s a difference of 54 percent in the amount they cost the health plan and employer,” he says. “Any dollar you can save in premium costs, especially in a self-funded plan, is a direct contribution back to the net profitability to the company.”

There’s a sense of urgency to find ways to cut healt-care costs, but that doesn’t mean change will come quickly. That’s because there’s a lot of skepticism, too, and it will take time to find which approaches really work, and then persuade others to adopt them, says Carilion Clinic’s Lorton. “If you haven’t gotten a lot of people on board, you can push off from the dock, but you can’t paddle too aggressively.” 

Additional stories:

There’s got to be a better way
Annual free clinic is a lifeline

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