Clinical consequences drive the need for pharmacy integration

THE INTEGRATION OF pharmacy and medical data has gone a step further into the coordination of services. A whitepaper published in March 2009 by several pharmacy organizations attributes a new focus on collaboration to an uptick in clinical consequences and costs of medication misuse and non-adherence; a shift from acute to chronic care; the increasing role of pharmacists; and the growing number and complexity of medications.

“Coordinating pharmacy and medical benefits paints a total picture of compliance without a gap in data, and thus, impacts outcomes,” says Nita Stella, senior vice president, ActiveHealth Management, a care management company headquartered in New York City. “In addition, sharing information can increase medication safety and effectiveness by triggering alerts to flag drug-to-drug interactions, contraindicated drugs and non-compliance.”

Integration is an effective vehicle for identifying high-risk members and putting value-based benefit design into place. For example, an integrated system could identify high-risk members and lower copayments for those individuals or for an entire class of drugs, such as stains, to encourage compliance.

David Dross, leader of the managed pharmacy practice for Mercer Inc. in Houston, says that integration is easier if one vendor is managing both sides of the equation. While he believes that a carve-out pharmacy is willing to share its data, he says the medical vendor could be the “fly in the ointment” because there may be a fee attached to the provision of data.

The Clinical Pharmacy Cardiac Risk Service (CPCRS) at Kaiser Permanente Colorado combines KP HealthConnect, an electronic health record (EHR), with an electronic care registry, proactive patient outreach, wellness and medication management.

After high-risk patients for coronary artery disease are identified, they are referred to CPCRS. The program has served 21.000 patients since 1998.

“We are able to determine who has a cardiovascular event and deliver continuity of care cost-efficiently by integrating pharmacy and nursing teams with patients and their doctors and using technology and other tools to address problems,” says Jon Rasmussen, chief of clinical pharmacy, cardiovascular services. “Primary care physicians and cardiologists spend an inordinate amount of time with chronic care patients, so we’re looking for ways that pharmacists and nurses can relieve some of the burden. If these cardiac patients are managed consistently through collaboration, that frees up physicians to address acute issues.”

Results show the number of those meeting their LDL cholesterol goals increased from 26% to 73%, and screening for cholesterol rose from 55% to 97% during an average length of participation in the program of 2.3 years.

In addition, participants in the CPCRS program had an 88% reduced risk of dying from a cardiac-related cause when enrolled in the program within 90 days of a heart attack.

When members are close to release from the program, Kaiser Permanente rehabilitation nurses set up phone calls to discuss diet, exercise, depression, smoking cessation and medications. In a seamless process, Rasmussen says, after discharge, participants work closely with clinical pharmacists for long-term medication management.

Although the program has been successful by saving lives, reducing hospitalizations and recouping investment, it hasn’t been without its challenges. Among them have been getting clinicians to communicate via the EHR, developing multifunctional teams and making sure that “we target the right person with the right treatment at the right time,” he says.

THE FOUNDATION OF INTEGRATION

CIGNA is another insurer that relies on pharmacy to reduce medical costs through evidence-based medicine.

“Data sharing between the pharmacy benefit manager and the insurer is the foundation of integration,” says Claire Marie Burchill, vice president of strategy, product and marketing for CIGNA Pharmacy Management based in Bloomfield, Conn.

Many of CIGNA’s pharmacy programs demonstrate integration with the medical side with an emphasis on adherence. Although they are pharmacy-related, they have a large impact on medical cost reductions, such as emergency room visits and hospitalizations.

CIGNA’s Outcome Improvement Programs, which combine the use of prescriptions drugs, disease management and behavioral coaching, saw results in 2008:

• a 74% medication adherence rate led to 50% of those in the cholesterol program reaching their goals;
• a 78% decrease in LDL and the avoidance of 262 heart attacks annually saved $6.6 million;
• a 34% increase in use of drugs for treating asthma led to fewer emergency room visits and hospitalizations, cutting costs for participants by 50%;
• an adherence rate of 84% for diabetes drugs resulted in 13% fewer emergency room visits and 18% fewer hospitalizations; and
• a 35% increase in completion of depression treatment plans realized an 18% reduction in medical and behavioral healthcare costs.

Dovetailing with the program is CIGNA’s new CoachRx, an interactive Web site to enhance medication adherence with home delivery. A self-assessment helps members identify barriers to adherence and allows them to request daily reminders for self-care.

Those who need additional assistance can call toll-free for medication coaching sessions with a clinical pharmacist, who works with case managers. The coaching team will help find the most appropriate and cost-effective medications for a member, discuss possible side effects and reinforce the importance of taking prescribed medications as directed.

“In this way, we have used one intermediary to maximize health,” Burchill says.

To address high-cost drugs with the potential for side effects and infections, CIGNA offers TheraCare, a medication therapy management program targeting individuals using specialty injectable medications for 16 chronic conditions, such as multiple sclerosis.

“We still have a way to go in integrating pharmacy and medical benefits because the Rx benefit is administered in silos,” says Steve Mullenix, senior vice president of communications and industry relations for the National Council for Prescription Drug Programs (NCPDP). “Medicare Part D’s Medication Therapy Management Program is a step in the right direction, but we are still trying to buy drugs as inexpensively as possible without knowing the impact of the full picture. The right hand doesn’t know what the left hand is doing.”

For example, if a pharmacist dispenses a drug but it’s not refilled, that requires communication so that some action can be taken to encourage compliance.

Mullenix, whose organization focuses on developing consistent standards is concerned that without standardization, it will be difficult to create interoperability between proprietary systems.

“We are a proponent of a team approach to healthcare, including patients and pharmacists, who have become medication experts and need to be reimbursed for their guidance,” he says.

President’s Budget Would Allocate $900B to HHS, Extend Higher Federal Medicaid Payments for Six Months

President Obama’s proposed $3.8 trillion budget for 2011, would allocate $900 billion for HHS, including a six-month extension of enhanced federal Medicaid payments to states.

In addition to $818 billion in mandatory spending, almost all for Medicare and Medicaid, the departments’ discretionary budget would increase by $1.7 billion, to $82.8 billion.

Here are some major features:

Six-month extension of enhanced Medicaid match. Allocates $2.5 billion for a six-month extension, through June 2011, of the stimulus bill’s temporary enhancement of the federal Medicaid match. The money would be part of $290 billion in federal funds allocated for Medicaid.

Medicare and Medicaid fraud and abuse. Adds a $2 million increase for the Office of the Inspector General to $52 million. However, the office is expected to recoup $722 million in waste, fraud and abuse. The budget “places a renewed emphasis on preventing, detecting and recouping fraudulent, abusive and wasteful payments,” the White House stated.

Comparative effectiveness research. Allocates $286 million for the Agency for Health Research and Quality “to compare the effectiveness of different options, building on the expansion of this research” under the stimulus bill, the White House stated. “The dissemination of this research is expected to led to higher quality evidence based medicine, arming patients and physicians with the best available information to allow them to choose the medical option that will work best for them,” the White House added.

Health IT adoption. Invests $110 million to build momentum on healthcare IT adoption.

Rural healthcare. Allocates $79 million for rural healthcare. The money would be used “to strengthen regional and local partnerships among rural healthcare providers,” the White House stated.

NIH research budget. Increases the National Institutes of Health’s health research budget by $1 billion. However, this proposed increase actually falls short of the $36 billion allocated to NIH in fiscal 2010, which was enriched by the stimulus bill.

Community health centers. Earmarks $290 million for community health centers.

Providers for underserved areas. Allocates $169 million for the National Health Service Corps to support 8,500 healthcare professionals in underserved areas.

ASCs were not specifically mentioned in the president’s proposed budget for fiscal year 2011, which begins on Oct. 1.

Read the White House’s release on its proposed federal budget.

President Obama’s proposed $3.8 trillion budget for 2011, released Monday, would allocate $900 billion for HHS, including a six-month extension of enhanced federal Medicaid payments to states.

In addition to $818 billion in mandatory spending, almost all for Medicare and Medicaid, the departments’ discretionary budget would increase by $1.7 billion, to $82.8 billion.

Here are some major features:

Six-month extension of enhanced Medicaid match. Allocates $2.5 billion for a six-month extension, through June 2011, of the stimulus bill’s temporary enhancement of the federal Medicaid match. The money would be part of $290 billion in federal funds allocated for Medicaid.

Medicare and Medicaid fraud and abuse. Adds a $2 million increase for the Office of the Inspector General to $52 million. However, the office is expected to recoup $722 million in waste, fraud and abuse. The budget “places a renewed emphasis on preventing, detecting and recouping fraudulent, abusive and wasteful payments,” the White House stated.

Comparative effectiveness research. Allocates $286 million for the Agency for Health Research and Quality “to compare the effectiveness of different options, building on the expansion of this research” under the stimulus bill, the White House stated. “The dissemination of this research is expected to led to higher quality evidence based medicine, arming patients and physicians with the best available information to allow them to choose the medical option that will work best for them,” the White House added.

Health IT adoption. Invests $110 million to build momentum on healthcare IT adoption.

Rural healthcare. Allocates $79 million for rural healthcare. The money would be used “to strengthen regional and local partnerships among rural healthcare providers,” the White House stated.

NIH research budget. Increases the National Institutes of Health’s health research budget by $1 billion. However, this proposed increase actually falls short of the $36 billion allocated to NIH in fiscal 2010, which was enriched by the stimulus bill.

Community health centers. Earmarks $290 million for community health centers.

Providers for underserved areas. Allocates $169 million for the National Health Service Corps to support 8,500 healthcare professionals in underserved areas.

ASCs were not specifically mentioned in the president’s proposed budget for fiscal year 2011, which begins on Oct. 1.

Read the White House’s release on its proposed federal budget.

Congress still wrestling with cost control

One of the main criticisms of health reform legislation is that it does little to hold down outlays for services and products. In order the expand coverage without boosting federal government deficits, Congress is supposed to establish new programs and incentives to curb current and future spending, while promoting quality.

But analysts on all sides are skeptical that projected savings in the final legislation are accurate or realistic.

Almost half of some $400 billion in proposed cuts to the Medicare program would result from reductions in payments to providers, but those often get rescinded later by politicians seeking support from local medical organizations. Another portion of Medicare savings is slated to come from curbs on Medicare Advantage, which also has strong political support for providing more generous care at lower costs to seniors.

PROVIDER PAYMENTS GREW

Policymakers have a poor record in cutting Medicare spending. Even in a period of much slower growth in 2008 due to the economic recession, federal outlays continued to rise noticeably, particularly for Medicare. Payments to providers grew at a healthy pace, according to the actuaries at the Centers for Medicare and Medicaid Services, and increased enrollment in Medicare Advantage plans boosted outlays for that program.

The squeeze on state budgets also prompted Congress to approve a larger federal share of Medicaid costs to prevent reductions in state health care programs.

Besides the proposed reductions in Medicare spending, reform largely relies on a number of initiatives that promise more cost control is than likely to be realized:

• Impose an excise tax on high-priced insurance policies to discourage excess spending on “Cadillac” healthcare. There has been a lot of opposition to this from union workers who last month negotiated with the White House on a formula to tax high-end plans.
• Revise payment policies for doctors and hospitals to promote quality care over continued growth in volume of services. A number of pilot projects aim to encourage efforts by medical providers to keep patients healthy and out of hospitals, but the financial payoff of such approaches is far in the future.
• Provide more affordable private insurance policies through exchanges. The thinking is that more competition among insurers will yield lower-cost premiums for consumers and small businesses, but that will be hindered by a weak individual mandate that may not bring large numbers of young, healthy individuals into the pool.
• Develop more comparative effectiveness information to help health professionals and patients identify more effective—and cost-effective—treatments, another initiative likely to pay off only far in the future.
• Promote prevention, including vaccination and check-ups, to keep people out of hospitals and doctors’ offices. Again, initial costs will be higher than any savings.
• Establish a federal board to identify future Medicare savings that would be free from Congressional tinkering. Just how strong and effective this board will be remains to be seen.

At the same time, there’s nothing in the legislation to limit malpractice lawsuits, a strategy that many analysts believe would reduce costly defensive medicine and doctors’ costs. And there’s no longer a public plan, which advocates regarded as a way to drive down private insurance costs.

Jill Wechsler, a veteran reporter, has been covering Capitol Hill since 1994.

5 Steps to Creating a Balanced Pain Management Surgery Center

Pain management can be a profitable addition to a surgery center. However, due to the nature of the specialty, balance is essential to the success of pain management.

Mike Heifferon, Ph.D, MBA, chief operating officer, and Marie Masztak, RN, BEd, vice president of nursing, of Deca Health, a management, billing and development company specializing in interventional pain management services, provide the following five steps to creating a balanced pain management practice in your ASC.

What is a balanced pain management practice?
Mr. Heifferon says that a balanced practice is based upon four different relevant benchmarking standards — financial, patient, provider and staff perspectives. According to Mr. Heiffron, a high performing pain management practice will be in the 90th percentile on each of these areas in benchmarking surveys.

Each area measures different competencies of the practice. “The financial perspective comes from the point of view of collections and net income,” Mr. Heiffron says. “The patient perspective looks at patient satisfaction and outcomes. The provider perspective looks at the provider satisfaction and productivity. The staff perspective looks at the staff satisfaction and productivity.”

In order to keep track of how your pain management practice is performing, Mr. Heifferon suggests using metrics to measure areas like satisfaction and productivity at least monthly, if not daily or weekly. “The more frequently you measure the results, the more frequently you will be able to take action and improve performance,” he says.

Step one: Recruit good physicians
Dedicated, talented physicians are essential to any successful service line in an ASC. Because of increased scrutiny over procedure overuse and abuse, surgery centers need to ensure that their interventional pain physicians are qualified and dedicated to proper patient care. According to Mr. Heifferon, the Accreditation Association for Ambulatory Health Care requires that all physicians performing pain management at an ASC should be certified.

Mr. Heifferon and Ms. Masztak agree that pain management physicians should be board certified and/or fellowship trained. Other areas to consider are the physician’s experience with the procedures he or she will be performing and the percent of the physician’s new patients who will receive procedures according to evidence-based medicine.

Mr. Heifferon recommends bringing in physicians who want to be partners in the center or who are existing partners that aren’t making maximum use of the center. “Both parties have the same risk [in this scenario.] When the physician is not partnered with the center, they look at things, such as cost effectiveness, time off, etc., differently,” he says.

Another issue to keep in mind when bringing pain management physicians on board is the importance of separation of office practices from that of the ASC. According to Ms. Masztak, the Medicare (CMS) Guidelines require separation of the surgery center from the office in order for the surgery center to be accredited. Therefore, the physician can see patients in the office at designated times prior to or after the completion of procedures.

Step two: Meet with and educate referring physicians
Marketing is an essential tool to a surgery center’s success, and when it comes to interventional pain management, education is an essential part of marketing. Mr. Heifferon and Ms. Masztak suggest that ASCs should devote one full-time equivalent position (ideally, two part-time staffers) to marketing efforts.

Meeting with referring physicians is an important part of this step, according to Mr. Heifferon and Ms. Masztak. Representatives from the ASC should provide physicians with information regarding customer and physician satisfaction at the center as well as educational material on pain management and how it can enhance their patient’s care.

“It is important to demonstrate to new physicians that performing pain management procedures in the ASC allows them to collect a facility fee while providing high quality and safe services to their pain patients,” Mr. Heifferon says.

Ms. Masztak says, “One aspect of care that can enhance access for patients into pain management is by promoting a good working relationship between the physicians of the ASC and the neurologists/orthopedists to gain same day access by following preset guidelines for intervention — what we call Fast Track MD.  Another would be when patients have experienced a pain management intervention previously, they are able to fast track their own care by following set guidelines for expedited care — what we call Fast Track Patient.”

Another important step, according to Ms. Masztak, is to educate the community on pain management and chronic pain treatment. “You want to create awareness and to educate physicians (and community) on what the surgery center does and show that it is about helping, rather than ’stealing,’ patients,” she says.

Step three: Consider the patient’s experience
As pain management is a high-volume specialty, addressing the patient’s experience is essential to the service line’s success. “We set a patient satisfaction goal of 98 percent at our centers,” Mr. Heifferon says. “When centers have patient satisfaction scores in the 90s, that is still good, but it is important to ask what they consider an issue (such as no-show rates) and to continually improve.”

Prior to adding pain management to your ASC, Mr. Heifferon suggests looking at three areas — patient flow, wait time and time from admission to discharge. “You need to respect the patients time as much as your own,” he says. “Because of the nature of an ambulatory surgery (need for another person to drive/pick up patient, etc.) it is important to be able to give the patient a close approximation of the amount of time they will spend at the center.”

For this reason, ASCs need to ensure they will be able to handle the patient load and the quick turnover time needed for pain procedures, which are typically about 15 minutes in length. The short procedure times often mean patients will wait longer in prep and recovery than in the actual time it takes to perform the procedure. Therefore, efficiency is critical.

Physician output may also be affected by poor patient satisfaction, according to Mr. Heifferon and Ms. Masztak. “Poor patient outcomes can often result in a physician using pain management or the surgery center less,” Mr. Heifferon says. “You may not know this until you drill down to and examine trends on a physician level.”

Step four: Understand payor issues specific to pain management
Communication is essential to ensuring the ASC and physician are reimbursed properly for pain management procedures. “You need to check whether a patient’s insurance covers the pain management procedures and make sure the billing department is aware of co-pays or what current outstanding debt may be,” says Ms. Masztak. “Also, communicate with the patient to know whether insurance is covering the procedure and with the physician to make sure medical necessity is demonstrated.”

Mr. Heifferon says it is important to communicate any costs to the patient prior to the procedure.

Mr. Heifferon and Ms. Masztak offer the following advice for ensuring proper billing and reimbursement of pain management procedures in your surgery center:

• Know your billing guidelines per insurance carrier for pain management procedure.
• Make sure the physician’s and ASC’s charges match exactly.
• The correct levels must be billed, so it is important to know the difference between disc levels and in-between levels and have this clarified on the physician’s report as necessary.
• Know modifiers that pertain to the ASC and its procedures.
• Anesthesia is billed per insurance carrier guidelines, so be aware of what is and can be used for the procedure.

Step five: Offer profitable procedures
As with any service line offered in your ASC, providing the right mix of procedures is essential to success. It is essential that all procedures be verified for insurance coverage in the ASC prior to the physician performing the procedure.

The following eight procedures are identified by Mr. Heiffron and Ms. Masztak as the most common performed in a surgery center:

• SI steroid joint injection
• Cervical epidural steroid injection
• Lumbar epidural steroid injection
• Spinal Cord Stimulator Trials are done to evaluate whether this is the best mechanism to control chronic pain
• Cervical facet injection
• Lumbar facet injection
• Transforaminal epidural steroid injections and selective nerve blocks
• Radiofrequency ablation procedures. It is important to not that prior to adding RFA to a surgical center, proper cost and volume analysis is necessary. These units are expensive and if volume is not adequate, then a per case arrangement with the unit cost built into the supplies often can be arranged.

“With the constant downward pressure on professional reimbursement, interventional pain management physicians should be looking for alternative sources of income and for reductions in practice overhead expense. Participation in an ASC offers an opportunity for both,” says Mr. Heifferon.

Learn more about Deca Health.

The height of health IT

Even health insurance giant WellPoint—with more than 35 million members and arguably enough reach to change the system with sheer volume alone—is taking few chances on the future of healthcare delivery. Like most plans, it’s testing new programs with cautious optimism, while aiming for large-scale implementation.

Charles Kennedy, MD, WellPoint’s vice president for health information technology, has a vital role in the plan’s innovation because few initiatives these days can be accomplished without the backbone of health IT.

Specifically, WellPoint’s emerging Individual Health Record—a simultaneously patient-facing and physician-facing electronic record—is “almost an air traffic control system to manage disease,” according to Dr. Kennedy. It’s probably one of the most promising efforts to control costs among members with chronic conditions. Pulling claims and clinical data through complex algorithms to arrive at a functional health summary differentiates the Individual Health Record from the typical EMR system.

“If you’re a hospital or institution, you have a variety of clinical data sources that have information on the patients that you see,” he says. “If you haven’t deployed an interface engine or some way of pulling those various clinical data sources together, you’re late to the party, and you need to do that ASAP.”

With more than 20 years of experience comprised of clinical practice and health IT implementation, Dr. Kennedy began his career in internal medicine. When he was a resident at Highland General Hospital in Oakland, Calif., he noticed how the patients’ needs far outstripped the hospital’s resources, and that experience solidified his vision of where medical care and information should meet.

“We tried to treat each patient regardless of who they were or their ability to pay,” he says. “It had the unfortunate side effect that we never thought about cost. We only thought about what was right for a patient. But that created a system where people are actually being hurt because they can’t afford care. I began to realize that the very laudable and applaudable approach of not caring about cost—only the patient—is right, but that doesn’t mean you can become cost unconscious. Cost unconsciousness has its own set of bad outcomes. That’s what’s led me into thinking we need to be more efficient. We need health IT.”

Earlier this year, Dr. Kennedy was named by the Government Accountability Office as a member of the new Health Information Policy Committee, which was established by the American Recovery and Reinvestment Act. Serving a three-year term, he and other committee members are creating policy framework for the development and adoption of a nationwide health IT infrastructure, including standards for the exchange of patient information. The committee will also make recommendations for handing out the $38 billion in health IT funding earmarked in the reinvestment act.

WHAT ARE SOME OF THE HEALTH INFORMATION POLICY COMMITTEE’S GOALS?

A:We’re trying to make sure the Obama health reform strategy becomes real. What people don’t realize is the number of things the industry and the government agree on. For instance, the government invested $1.1 billion in comparative effectiveness research.

The stimulus bill has $38 billion in it for health IT, and we’re trying to help the government develop policies to spend that money wisely. Our function is to say, ‘How do we take this incredible resource that Congress and the President have given us, and how do we turn it into an investment that creates healthcare value for the whole country?’ It’s a massive undertaking.

Our first objective was to ensure that the money from the stimulus package paid out over five years created value. We asked ourselves where we wanted to be five years from now, and then we worked backwards from there.

Deploying computers is not the goal. Having physicians and patients use computers to create better care at a lower cost is the goal. To do that, we have to set the bar high for the care system. Not only must you use the computer, you must use it in a meaningful way for better care. These are the ‘meaningful use’ criteria that we’ve published.

If we distribute a substantial number of computers, and physicians don’t use them, we won’t be successful. We didn’t want to focus on technical measures. We created the meaningful use criteria, and every single one is clinical.

We want physicians to achieve a clinical result, and we want information technology and the money in the stimulus package to be a contributor to that improved clinical result. For instance, one of the criteria is to avoid 1 million heart attacks and strokes by 2015. Another is to make cardiac disease no longer the leading cause of death in the United States. Those are stretch goals. That is not something simple and trivial.

It would have been much easier to say, ‘Our goal is to make sure 90% of physicians have computers.’ But we consciously didn’t do that because we recognize that health IT is a tool and that other changes need to happen.

HOW WILL THE INDUSTRY ACTUALLY ACHIEVE MEANINGFUL USE AND OTHER MILESTONES?

A:The law is actually quite specific in defining what a qualified system is, and we have a subcommittee that’s identifying the actual entity—such as the Certification Commission for Healthcare Information Technology (CCHIT)—that will assess systems as to whether they qualify or not. The bigger challenge is data integration.

Everyone recognizes that healthcare is horribly fragmented, that there are silos of care. We know that there’s massive inefficiencies, and there are significant quality concerns because information is not shared as people move across silos.

The challenge with data integration is that we really haven’t figured out how to do it correctly. If you’re an integrated delivery system and you buy one EMR, that’s fine, and that works. But 70% of physicians practice in a community setting, solo and small group practice. You have this tremendous problem that all of these systems are different. They call things by different names, and they even capture different sets of data.

WELLPOINT HAS CREATED THE INDIVIDUAL HEALTH RECORD SYSTEM THAT USES ALGORITHMS. HOW WILL THAT MAKE A DIFFERENCE?

A:Algorithms, also known as decision support, are going to be the key to getting value out of these systems. Let’s say the federal government funds a comparative-effectiveness study that identifies a new drug is great for certain people. In today’s world, we know it can take up to 17 years for that to be commonly found in a physician’s paper record. With this approach, you can create an algorithm as soon as physicians or specialty societies have decided on certain best practices. Now you’ve created an infrastructure to get that message to every doctor, but only when there’s an appropriate situation for that rule to be applied. That will take that 17 years down to 17 days. That’s a huge advance.

Let’s say we have noticed that there’s a lot of inappropriate use of PET scans. In today’s world, a doctor would have to call us for preauthorization every single time he orders a PET scan. In the future, the algorithms will be running, and they will only alert the doctor if there’s an issue with a PET scan. Today, they call 100% of the time, and we generally approve the scan more than 90% of the time. Algorithms will take hassles, administrative costs and bureaucratic burdens out of the system.

The right kind of health IT allows us to use new knowledge from our outcomes research subsidiary [HealthCore] and any gaps in a member’s care identified by our informatics company [Resolution Health] in much more effective ways. The right kind of health IT allows these advances to be applied real time at the point of care while the doctor is treating the patient or helping the patient at home.

IS WELLPOINT’S INDIVIDUAL HEALTH RECORD WORKING? HOW IS IT ANY BETTER THAN OTHER EMRS OR PHRS?

A:We’ve run a pilot in Dayton, Ohio. The idea was not just to create interoperability—don’t just allow System A to talk to System B. When you connect systems together, what you create is just a data dumpster. It’s like putting a jigsaw puzzle on a physician’s desk.

That information has to be organized to just the summarized information that the doctor needs…You don’t take all of the information out of these various systems, you only take the information necessary for the ongoing management of the patient.

Many EMR implementations have failed to show value. About 30% of the time, physicians will actually turn them off because they are incredibly time-intensive and will reduce a physician’s productivity. That will hit them in the pocketbook. We’ve looked for solutions that wouldn’t be so intensive from a physician’s data-entry perspective and would do more sorting of information and presentation of information.

Physicians are not data generators. They’re data consumers. Their orders create significant amounts of data, but the physicians themselves usually just scribble a relatively brief note. The problem with many EMRs is they will require physicians to become data-entry clerks.

In Dayton, Ohio, we have a very significant market share. We’re Anthem Blue Cross Blue Shield of Ohio, and we also have a strong partnership with Kettering Hospital Network.

Kettering had already installed an application integration solution, so even though they had 120 different clinical sources, many of those clinical sources could be accessed through infrastructure they had already built. That made it easy for us to collect all of the clinical data out of their systems. We built feeds to the application from Anthem’s claims systems. We were able to get this application up and running in a little over three months, which is incredibly rapid. We made it available to the patient in the form of a PHR and to the doctor in the form of a CCHIT-certified EMR with e-prescribing.

When we looked at who was using the tool, we found that patients who had a higher illness burden actually made preferential use of the tool. For many of the tools we’ve deployed, the ‘worried well’ have been the type of people who used it, not the people with the chronic disease that we really need to reach.

We noticed the people who used the tool and had the higher illness burden, their cost increase year over year was actually less than the people who didn’t use the tool, even though those people who didn’t use the tool were healthier.

We built algorithms in the system that exactly correlated with various HEDIS measures and every time the doctor or the patient logged on, they could see their exact compliance. By giving the patients and the doctor the same information in a simple red light, yellow light, green light format with algorithms enabled us to see quality improvement scores of anywhere from 10% to almost 40%.

WHAT’S THE BUSINESS CASE FOR A HEALTH PLAN TO CREATE A SYSTEM LIKE THAT?

A: Our strategy is maximizing healthcare value, and healthcare information technology is really a tool to get you there. But it has to be the right kind of health information technology. It has to influence doctor’s decisions, and you have to present sufficient clinical data—not mountains of data but the key things the doctor needs to know so that you can influence his decision to do something that’s consistent with the evidence base, or to prescribe a drug that will cost the patient less but has the same likelihood of creating a good patient outcome.

If you look at why healthcare spending is out of control, it’s chronic disease, not health plan profits and not health plan administrative costs. We are seeing an explosion of chronic disease in this country, and chronic disease is managed largely by the patient at home. They’re managing their diabetes 99% of the time at their home, not in the physician’s office. If you don’t make your health IT solutions patient-centric and if they don’t address chronic disease, I don’t think that you’re going to get the kind of value that you want.

HOW ARE THE PHYSICIANS EMBRACING THE INDIVIDUAL HEALTH RECORD?

A:We have 300 physicians using the system now. We’re planning for a broader rollout to the greater Dayton area in 2010 to virtually all primary care physicians.

What we’re focusing on is chronic disease management, and there’s not huge debate about many of the things that need to be done to take care of these patients. That’s not the problem. The problem is actually getting it done. The physicians in general have been positive and are beginning to see how their lives could be easier.

We also added all of our pay-for-performance rules. We pay physicians more if they practice medicine consistent with the evidence base, and we took the existing measures and turned them into algorithms in the system. As long as the physician follows all the alerts, he can be sure that he’s going to maximize his pay for performance incentive. That’s convenient for the doctors because what they usually have to do is identify the patients who haven’t had certain interventions and then reach out and call them.

We’re just starting to incorporate our utilization management rules. If we can begin to move those algorithms to the point of care, then physicians might not have to call except for when there’s a real reason to discuss something, which might be 5% of the time.

DETERMINING THE EFFECTIVENESS OF TREATMENTS IN ORDER TO BUILD THE ALGORITHMS IS AN EXPENSIVE PROCESS. HOW CAN IT BE DONE?

A:This is the beauty of health information technology…if you bring it together in a repository that’s reflective of the patient’s clinical condition and how they’re being managed, you can begin to do database-driven studies rather than very expensive prospective clinical trials where you’re enrolling patients and following them over time. You can begin to do database driven studies that are a fraction of the cost. No, they’re not the gold standard, which will always be a randomized perspective-controlled clinical trial, but there’s a lot of information we’re going to be able to glean out of database-driven studies that are more observational and more retrospective.

BE A VISIONARY. WHAT DO YOU SEE AS THE POTENTIAL FOR HEALTH IT?

A: I hope that every time a patient needs information when they’re home or need to take care of their chronic disease or want to stay well, that they have that information at their fingertips, it’s actionable, and they don’t even have to think about it. If we can make it that easy—and there is a path to get there—we could actually fix the healthcare system.

Charles Kennedy, MD, has held strategic health IT positions with a variety of organizations. He also served as the medical director of a California health center in addition to other clinical service. He earned an MBA from Stanford University, an MD from the University of California at Los Angeles, and a bachelor’s degree in genetics from the University of California at Berkeley.
” Physicians are not data generators. They’re data consumers.”

Gastroenterology, Hepatology Societies Release Recommendations for Nonanesthesiologist-Administered Propofol for GI Endoscopy

In a joint statement by the American Association for the Study of Liver Diseases, the American College of Gastroenterology, the American Gastroenterological Association Institute and the American Society for Gastrointestinal Endoscopy, nonanesthesiologist-administered propofol (NAAP) for GI endoscopy can be safe if “administered by a team of individuals who have received training specific to the administration of propofol,” according to an AGA news release.

Propofol is an ultra-short-acting sedative agent with no analgesic properties, which, at subhypnotic doses, provides sedative and amnestic effects, according to the release. Currently, its use is advised by the FDA for use by trained anesthesia professionals, but its use has been expanded for use in procedural sedation, warranting the investigation into NAAP.

The four societies listed many benefits for the application of NAAP for GI procedures including an equivalent safety profile to that of “standard sedation,” greater efficacy in certain endoscopic procedures and cost-effectiveness.

The statement also includes the following training guidelines for NAAP for GI endoscopy:

• NAAP requires the acquisition of skills and abilities that are distinct and apart from those necessary for standard sedation. Training programs should provide didactic and practical, hands-on learning experiences.
• Individuals administering propofol should be proficient in the management of upper and lower airway complications, including manual techniques for re-establishing airway patency, use of oral and nasal airway devices, and proper bag-mask ventilation. Basic life support or advanced cardiac life support certification is required. Training with life-size manikins and/or human simulators improves the acquisition of these skills.
• Preceptorship (practical experience and training that is supervised by an expert such as an anesthesiologist or qualified endoscopist) is an important element of training for physicians and nursing personnel acquiring the skills to administer propofol.
• Capnography (a monitoring device that measures the concentration of carbon dioxide in exhaled air and displays a numerical readout and waveform tracing) reduces the occurrence of apnea and hypoxemia during ERCP/EUS and upper endoscopy/colonoscopy.

Read the entire Position statement: nonanesthesiologist administration of propofol for GI endoscopy (pdf).

Chile’s healthcare offers public and private plans

As healthcare legislation muddles through Congress, the United States could stand to learn a few lessons from Chile, such as its effective public/private partnership and guaranteed care for those with certain chronic diseases, as well as a growing emphasis on primary care and cost-effectiveness. The Academy for International Health Studies (AIHS) sponsored 50 executive delegates who traveled to Santiago, the capital city, this fall to observe the country’s health infrastructure.

Chile boasts life expectancy of 78 years, compared to that of the United States at 77.7 years of life expectancy. In just 15 years, the country has seen a 50% reduction in child mortality and can boast an insured population of more than 90%.

Unfortunately, 13.6% of Chile’s 16.9 million people—40% live in the Santiago metropolitan area—are impoverished, and 10.8% are plagued by unemployment. The Ministry of Health, however, reports that 98% of Chileans have drinkable water, 99.5% have electric lights and 89% have sanitary sewers.

MOST HAVE PUBLIC INSURANCE

The Ministry of Health is the governing body responsible for establishing health policies and for reinforcing their compliance. Under its auspices fall the public healthcare system (referred to as FONASA) and regulatory responsibility for private health insurers (referred to as ISAPREs).

The majority of the population (67%) is insured under FONASA, while 14.8% opt for insurance provided by ISAPREs. The remainder is covered by other private plans, and a fairly small percentage is uninsured. Healthcare is funded by a universal income tax deduction of at least 7% of every worker’s salary and supplemented by government to cover indigents and public health programs.

Beneficiaries in the public program are segmented into four classes based on income and subsidized accordingly. In addition, many private insurers encourage people to pay an amount above the 7% to upgrade their basic health plans.

FONASA is financed with 48% public funding, 32% individual financing and 18% copayment, while 70% of ISAPREs funding comes from individual financing and 30% from copayments. Unfortunately, the costs of caring for people don’t align with the number targeted or with risk. While the sectors equally receive 7% of wages, the public sector cares for about five times more people than the private sector. ISAPREs spend twice as much on members as FONASA does on its higher risk beneficiaries.

The public sector not only serves as the primary insurer, but also the largest healthcare provider. The state owns and operates two-thirds of inpatient capacity with 200 hospitals, 2.3 hospital beds per 1,000, and 1,000 ambulatory medical centers. FONASA covers 90% of those over 65 (11.5% of the total population in 2005, which is expected to grow to 28.2% by 2050). ISAPREs’ tightly regulated premiums are age/gender adjusted and therefore, premiums are higher for women and seniors, so seniors opt for FONASA.

Chile’s public insurance offers one plan at variable prices, while ISAPREs offer 13 plans, each of whose prices remain constant. Even if Chileans are covered under FONASA, they can access a private provider with a copayment tied to the amount of their income. A survey by the Ministry of Health shows there is overwhelming satisfaction with both the private (96.4%) and public (82.2%) healthcare systems in Chile.

DIGGING INTO REFORM

Spending 5.4% of gross national product, or about $689 per capita, on healthcare, Chile is still readjusting to a reform initiative that began in 2002. It is tackling objectives in phases.

Initial goals are to address inequities and disparities in healthcare, strengthen the focus on primary care, reduce waiting time in the public sector, introduce more competition into the ISAPREs market, improve efficiencies and care for the ever-growing senior population.

Among the new laws that are key to reform is what’s known as the AUGE Plan (in English: the plan for universal access with explicit guarantees). AUGE specifies four basic guarantees for healthcare concerns related to 56 defined health conditions, based on the highest burden of disease, effectiveness of treatments and highest cost. Guarantees include: access, timeliness, quality and financial protection. Twenty four more conditions are slated for inclusion next year.

In short, AUGE guarantees a basic, uniform benefit plan, which applies equally to beneficiaries of public and private insurers.

“If you are a supporter of Chile’s reforms, AUGE guarantees access and assures quality,” says Bruce Pollack, president of AIHS and MHE editorial advisor. “Detractors refer to the methodology as rationing.”

One delegate, Gabriel Hanna, president and CEO of DC Chartered Health Plan based in Washington, D.C., says he does not believe that there is any competition between the public and the private healthcare sectors in Chile.

“Those who can afford to buy private coverage will receive much better access—no waiting list—to a somewhat better delivery system. On the other hand, competition among private insurers seems to exist based on levels of care and price; however, with only 13 private insurers to serve the entire country, it appears to me that there is some competition, but it doesn’t appear to be fierce,” Hanna says.

Chile has a public plan covering the majority of lives, but it is not driving the private plans out of business, according to delegate Margaret Murray, CEO, Association for Community Affiliated Plans also in Washington, D.C.

Standards in Chile’s public sector need a bit of tweaking, however. Since many low income people can only opt for the public system, there is little incentive for high performance, quality and efficient management from providers. More than 1 million members are currently on a waiting list for AUGE services, including 117,000 surgeries as well as hundreds of thousands of medical appointments.

AIHS delegates had an opportunity to visit a pre-eminent 270-bed, for-profit hospital, Santiago’s premier tertiary care public hospital with 340 beds, and a 403-bed private hospital that also serves a significant proportion of public patients. Delegates observed the comparatively superior access, negligible waiting lists and private rooms that come with the private hospitals.

Another field trip took delegates to the 216-bed Clinica Las Condes, accredited by the Joint Commission International, which benefits from a 10-year affiliation with Johns Hopkins Medicine International and the institution’s expertise.

TECHNOLOGY LEAVES A PRINT

Many delegates agree that one of the most memorable discoveries was the innovative fingerprint technology used by all public and private providers to immediately verify eligibility and benefits.

The biometric identification system captures the impression of a patient’s fingerprint, which is then used as proof of identity. The technology can also generate electronic vouchers to cover specific medical exams, procedures, treatments and consults. It is not surprising that a California Silicon Valley company is responsible for the technology.

Clinica Davila also utilizes color-coded electronic boards in its outpatient and inpatient departments, which indicate the status of patients in the clinic. As one clinic physician put it, Chile falls somewhere between being a “developing and a developed country.”

“Chile’s healthcare system does an admirable job of providing reasonably good care at remarkably low cost,” Pollack says. “A national focus has been on public health and access while guaranteeing nearly universal coverage. The public/private interface works and works well. The public option is not the option of last resort, but rather the first choice for most Chileans.”

Mari Edlin is a frequent contributor to MANAGED HEALTHCARE EXECUTIVE and has traveled with AIHS on previous missions.

Mari Edlin
The delegation from the Academy for International Health Studies included executives from public and private U.S. health plans

AMD Alliance Intl sponsors video contest

In an effort to raise awareness about age-related macular degeneration (AMD), the AMD Alliance International (Toronto, Canada) is hosting a video contest with a $10,000 grand prize, the group said last month.

Video submissions should dramatize the “societal, psychological, and physiological effects of AMD,” the group said on its Web site. Videos will be judged on originality, creativity, effectiveness, production quality, and YouTube hits. Second place will receive $2,000 and third place will receive $1,000.

The contest is open until Feb. 28, 2010. Winners will be announced March 31, 2010.

For further details about the contest including rules, visit www.AMDAlliance.org/.

BCBS Massachusetts contributed $1.6 billion to state economy

An economic impact analysis found that Blue Cross Blue Shield of Massachusetts’ (BCBSMA) contributed nearly $1.6 billion to the Commonwealth’s economy.

Similarly, the Economic Impact Study, conducted by Tripp Umbach, found that BCBSMA contributed 5,856 jobs to the economy in positions that span the entire economic spectrum. The direct benefits reached across the commonwealth in 2008, including direct contributions of $5.2 million to more than 470 charitable organizations.

“BCBSMA felt it was important to conduct this study to track the company’s overall economic impact,” says Jay McQuaide, vice president of corporate communications for BCBSMA. “It is also important for members, customers and the community to have a better understanding of BCBSMA’s impact to the economic health and well-being of the region as a not-for-profit business.”

The impact is more than commercial, according to McQuaide. He says philanthropic efforts, tax dollars and investments in transformational initiatives make healthcare more affordable and accessible.

One of the most promising ways to slow the rise in healthcare costs is to improve quality, and the overuse, underuse and misuse of healthcare services.

“Research shows that approximately one-third of all healthcare spending is wasted on care that is medically unnecessary and potentially harmful,” he says. “By making investments in transformational initiatives that will help eliminate waste, duplication and inefficiency, the healthcare industry can work together to improve the quality and affordability of healthcare.

For example, the report singled out: $590 million in incentives to physicians and hospitals to improve quality and effectiveness; $60 million in community initiatives such as the Massachusetts eHealth Collaborative; and $9 million to collaborative efforts such as Healthcare Administrative Solutions Inc., a non-profit working to reduce administrative complexities.

Of note in the Economic Impact Study was that in addition to the $39 million BCBSMA paid in taxes to the federal government, the report found that despite BCBSMA’s not-for-profit status, the company contributed nearly $217 million in revenue to state government last year.

BCBSMA also created the Alternative Quality Contract, a provider contract model that combines two forms of payment: a global payment adjusted for health status, which increases annually in line with inflation; and performance incentives tied to measures of quality, effectiveness, and patient experience of care.

Quality Models

Five years ago, Aetna and several large employers confronted Virginia Mason Medical Center in Seattle over how much it was charging for treatment of migraine, severe acid reflux and narrowed aortic valves, and other conditions. Virginia Mason, a not-for-profit hospital system that employs about 400 salaried physicians, took the message to heart.

Working with the employers and Aetna, doctors and staff began to re-engineer care protocols. For example, the system ensured back pain patients same-day access to a physical therapist and physical medicine physician and sharply reduced medically unnecessary MRI tests and physical therapy visits. From 2004 to 2007, the changes yielded a 50% reduction in lost employee work days due to back pain, almost $2 million in cost savings and high patient satisfaction scores.

Following the overhaul, however, Virginia Mason’s spine clinic was losing revenue because of fewer billed tests and services. To offset the loss, Aetna boosted reimbursement for appropriate physical therapy sessions. With the higher payments and the greater volume of patients it could handle under the more efficient system, Virginia Mason covered its costs—while payers achieved a significant net savings.

President Obama and health policy experts have specifically touted integrated delivery systems, such as Virginia Mason, Geisinger Health System, the Mayo Clinic and others, as national models for innovation. Dartmouth University researchers have found, for instance, that Mayo spends one-third to one-half less than other top hospitals to care for similar patients with equal or better results.

Geisinger has gotten so much attention from politicians that it reportedly hosted tours for more than 70 visiting payers and providers last month.

Leaders of integrated delivery systems say the model won’t work just anywhere. It’s challenging to build a culture of high quality and low costs through contractual relationships. Independent delivery markets don’t have the dynamic of salaried doctors and instead must manage the powerful fee-for-service forces.

Robert S. Mecklenburg, MD, medical director of the Center for Health Care Solutions at Virginia Mason, says his system’s experience shows how health plans and employers can benefit from collaborating with an integrated hospital-physician group. But, he adds, moving away from fee-for-service to payment models that reward better patient outcomes, higher patient satisfaction and lower costs is key.

“[Innovative providers] want to be paid for value,” he says. “That’s very important in straightening out U.S. healthcare.”

Mayo Clinic CEO Dr. Denis Cortese describes integrated systems as having high levels of physician engagement, teamwork, connectivity and greater use of industrial efficiency and quality controls. All this is hard to achieve in contracted networks.

At the same time, experts say, non-integrated systems haven’t felt the pressure—or been given the financial incentive—to change because payers have been slow to revamp payment methods to encourage coordinated delivery. The current fee-for-service model simply rewards greater volume of services.

So far, Dr. Mecklenburg says, no health plans have agreed to pay Virginia Mason based on actual patient outcomes, except on a temporary experimental basis. He believes the system should realize a positive margin when it meets its quality targets.

“You won’t get system reform without changing the reimbursement dynamics,” says Andrew Webber, president of the National Business Coalition on Health in Washington, D.C. “I’m sure the leaders of integrated delivery systems are frustrated with the current payment system.”

ALIGNMENT OF INCENTIVES

At the state level, Massachusetts, with its individual mandate, now is eyeing a shift from fee for service to bundled payments to control spiraling costs.

In line with that, Blue Cross & Blue Shield of Massachusetts continues to leverage its Alternative Quality Contract with episode-based global payments, which pushes providers to work together on improving patient outcomes and cost-effectiveness, according to Jim Conway, senior vice president of the Institute for Healthcare Improvement in Cambridge.

The alternate contract sets specific outcome measures provider groups must achieve in managing patients with chronic conditions. For the first few years, provider groups won’t face financial penalties as long as they meet the process standards, but down the line, they’ll take a financial hit if they don’t meet the outcome targets.

“It took a while for the first hospital and physician group to sign up,” Conway says. “But now a lot of people are signing up because they see this as the direction the industry is going—away from fee for service to a system that takes care of overall global health.”

In other parts of the country, Blue Cross & Blue Shield of Minnesota also has started paying providers for care of the whole patient rather than for specific services, Conway says.

Self-insured employers are testing new reimbursement approaches as well.

Members of the Colorado Business Group on Health are paying providers additional reimbursement on top of fee-for-service payment to manage the care of diabetics and other patients with chronic conditions, according to Webber. They’re using a program developed by the Bridges to Excellence industry partnership. Similarly, the Employers Coalition on Health in Rockford, Ill., is experimenting with paying providers a bundled case rate for patients with chronic conditions, using the PROMETHEUS Payment System, of which Bridges to Excellence is the operational partner.

Webber says health plans and employers should offer financial incentives to patients to get their care from integrated systems, taking advantage of emerging value-based benefit designs.

“There will be opportunities to say to patients, ‘We’re willing to reduce your premium share if you’re willing to participate in more integrated, high-performance delivery systems,’” he says. “I think more and more consumers would be willing to join more closed-panel systems if they could reduce their premium share. Then we can reward high-performance providers in two ways: with payment differentials and with more patients.”

HOME TEAMS

Some health plans and employers around the country are working with provider organizations—and even small physician practices—to support the emerging patient-centered medical home model.

In the model, a primary care physician leads a team of allied health professionals to provide or facilitate each patient’s care needs, including self-care and prevention. The team uses data to proactively manage care for its entire patient population as well.

The Geisinger Health System in Pennsylvania and Group Health Cooperative, a Seattle nonprofit health plan that employs salaried doctors, have reported that their medical home pilots have reduced emergency room use and preventable hospital admissions, improved outcomes for chronic care patients and boosted patient satisfaction. They’re expanding the model to all primary care sites, but it’s costly to properly staff, train and equip practices to become effective medical homes. The practices must be adequately reimbursed to cover the extra patient management services and the forgone fees for service.

Health plans and Medicare have moved slowly on implementing the model, waiting to see evidence of cost savings and quality improvement.

“The medical home is a very important element, and we need to reward primary care doctors, because this can move us toward more integration of care,” Webber says.

Beyond the medical home initiative, Geisinger Health System has taken another step in aligning payment. The not-for-profit system, which includes three hospitals, a multispecialty group practice with 700 doctors and a health plan, is beginning to re-engineer care protocols, starting with coronary artery bypass surgery. Its payment methodology for the re-engineered services, called ProvenCare, bundles comprehensive care for the procedure at a fixed price, instead of piecemeal services and costs. Essentially, by bundling services and paying a flat rate, some risk is shifted to the provider, so it’s in the provider’s interest to deliver the best care, not more care.

Geisinger and its doctors identified 40 factors that produce the best outcomes for bypass operations and built a checklist that ensures those best practices are performed every time. Since its redesign went live early in 2006, Geisinger reports markedly improved patient outcomes for bypass surgery, including a 44% reduction in the 30-day readmission rate, a 21% reduction in patients with any complications, and a 55% reduction in re-operations for bleeding.

Geisinger similarly has redesigned care for hip replacement, interventional cardiology procedures, cataract surgery, obesity surgery and perinatal care.

Duane Davis, MD, chief medical officer of Geisinger Health Plan says Geisinger has gotten a “marketing buzz” out of ProvenCare. Employers like the fact they pay once for the product, just like for other goods and services. But surprisingly, no other health plans have taken Geisinger up on its ProvenCare guarantee deal, except for Geisinger’s own plan. Dr. Davis says he isn’t sure why that’s the case.

“That’s stupid,” says Jeff Goldsmith, a veteran industry forecaster based in Charlottesville, Va. “If a provider group is organized well enough to give you a guarantee they won’t have to readmit, I would rush to sign a contract like that. Maybe some attitudes need to change.”

Goldsmith says that health plans and provider organizations are leery about working together on global payment contracts because of the disastrous experiences with capitated contracts back in the 1990s. Many physician groups and hospitals formed joint ventures to accept these fixed-fee deals and suffered big losses. New structures aim to even out the economics with gainsharing.

WATER UNDER THE BRIDGE

However unfortunate, private practice is collapsing, and more hospitals are employing doctors and creating their own multispecialty, integrated delivery systems. That, Goldsmith says, will allow hospital systems to manage care with their employed doctors. Likewise, health plans may be ready to return to working with provider groups to manage their patient populations because current cost-control methods, such as external utilization review and patient cost-sharing, aren’t sufficient.

“I can’t tell you whether that mindset has changed and whether plans have decided they’ve run out of tricks and are ready to return to working with providers in a constructive way,” Goldsmith says.

Scott Armstrong, president of Group Health Cooperative, says, “our whole industry is in the process of trying to come up with an answer to how health plans can work with providers. How can [global payment] create alignment around common goals? We have to overwhelm the skepticism based on bad experiences in the past.”

Even beyond that, however, Geisinger’s Dr. Davis says it’s going to take time to make healthcare better and cheaper. While integrated systems like his offer important lessons, there are no “big bang” solutions. The primary care medical home is a good place for health plans to start aligning payment incentives for improved care.

“There’s a huge opportunity for the insurance industry to use its skill sets and work in partnership with the clinical side to coordinate very fragmented care,” he says. “If we don’t figure out how to do primary care and coordination better, in the long run, payers will lose anyway.”

While private-industry payers can work on reducing fragmentation, government-supported coverage continues to face budget challenges. As a result, even the highest quality, most efficient providers stand to lose further reimbursement as rates decline.

The Mayo Clinic announced early last month that its Rochester, Minn., clinic, which has treated patients from the Midwest and West, will only accept Medicaid beneficiaries from Minnesota and the four states that border it. Meanwhile, its Arizona location no longer accepts Medicare for patients seeking primary care at its Glendale facility after reviewing results from a two-year pilot project. Mayo leaders made the decisions to limit service based on the low payment rates in Medicare and Medicaid.

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