In­sur­ing mar­ket growth

Ex­ecs at large health in­sur­ers pur­sue in­no­va­tion as re­form rolls out

Modern Healthcare - - OPINIONS / COMMENTARY - —Andis Robeznieks

Pay­ment re­form is con­sid­ered one of the keys to trans­form­ing the health­care sys­tem from one that re­wards vol­ume to one that in­cen­tivizes value and qual­ity. Health in­sur­ers have stepped up and are us­ing their in­flu­ence to test th­ese new con­cepts.

Pay­ers have not been shy about fi­nanc­ing pilot and demon­stra­tion projects ex­per­i­ment­ing with re­im­burse­ment mod­els such as ac­count­able care or­ga­ni­za­tions, bun­dled pay­ments and per-mem­ber/per-month care-man­age­ment fees for pri­mary-care prac­tices op­er­at­ing as med­i­cal homes.

In­sur­ance com­pany ex­ec­u­tives filled three of the top 10 spots in this year’s 100 Most In­flu­en­tial Peo­ple in Health­care rank­ing, and six cracked the top 30.

Mark Ber­tolini fin­ished in the top 10 for the sec­ond time since be­com­ing chair­man and CEO of Aetna in 2011.

He says he wel­comes the op­por­tu­nity to fo­cus on trans­form­ing the health­care sys­tem.

“Only through rad­i­cal change can we ad­dress the health­care needs of peo­ple around the world and re­duce the strain that ris­ing health­care costs are plac­ing on the global econ­omy,” Ber­tolini said in an e- mail. “I truly be­lieve we have a once-in-al­ife­time op­por­tu­nity to im­prove qual­ity, con­trol costs and make health­care work for ev­ery­one.”

Some dis­cus­sions have been dif­fi­cult, Ber­tolini says. But he adds that open­ing minds to new ways of think­ing, try­ing new things and shar­ing re­sults are what will bring about an in­te­grated health sys­tem.

“We are cre­at­ing new con­ver­sa­tions about how health­care is de­liv­ered and paid for, and how to­day’s sys­tem of­ten gets in the way of

de­liv­er­ing the health­care peo­ple need when they need it at a cost they can af­ford,” says Ber­tolini, who ranks No. 6 this year af­ter mak­ing his de­but on the Most In­flu­en­tial last year at No. 2.

Dr. Eric Topol, di­rec­tor of the Scripps Trans­la­tional Science In­sti­tute in San Diego, ranks No. 90 on this year’s list. Mod­ern Health­care/Mod­ern Physi­cian read­ers and edi­tors named Topol No. 1 on its Most In­flu­en­tial Physi­cian Ex­ec­u­tives in Health­care in 2012 rank­ing as he ex­plored the pos­i­tive im­pacts of dis­rup­tion in health­care de­liv­ery in his best-sell­ing book, The Creative De­struc­tion of Medicine.

Ber­tolini says he is a be­liever in creative de­struc­tion the­ory. “Health in­sur­ers need to move be­yond the tra­di­tional role of ad­ju­di­cat­ing claims to a role that is more rel­e­vant and suited to the ex­per­tise we can con­trib­ute,” he says. “Our new de­liv­ery mod­els with some of the top health­care providers across the coun­try re­ori­ent the health sys­tem from vol­ume to value and mea­sure suc­cess by im­proved pa­tient health.”

The re­sults, he says, are not only bet­ter qual­ity and lower costs for pa­tients, but also more ful­fill­ing work for providers.

Pa­tri­cia Hem­ing­way Hall, pres­i­dent and CEO of Health Care Ser­vice Corp. (which in­cludes Blues plans for Illi­nois, New Mex­ico, Ok­la­homa and Texas) also notes that a new role for pay­ers is emerg­ing. “This is an ex­cit­ing time of great trans­for­ma­tion and never-be­fore-seen lev­els of col­lab­o­ra­tion be­tween the health in­sur­ance in­dus­try and providers of care,” Hem­ing­way Hall said in an e-mail. “Peo­ple are be­gin­ning to see us more as con­trib­u­tors to health­care rather than the old per­cep­tion that we were con­trol­ling health­care.”

HCSC has worked with Boe­ing Co. to em­bed nurses in med­i­cal groups to pro­vide co­or­di­nated care. It has part­nered with Ad­vo­cate Physi­cian Part­ners in Downers Grove, Ill., to cre­ate the largest ac­count­able care or­ga­ni­za­tion that par­tic­i­pated in Mod­ern Health­care’s an­nual ACO sur­vey, with 4,100 doc­tors pro­vid­ing care for about 553,000 pa­tients.

Hem­ing­way Hall, No. 23 on this year’s 100 Most In­flu­en­tial ros­ter, says HCSC is also com­mit­ted to com­pet­ing in health in­sur­ance mar­ket­places in ev­ery county of ev­ery state they do busi­ness.

“This is an op­por­tu­nity to pro­vide cov­er­age to those who un­til now have not had in­sur­ance, al­low­ing us the abil­ity to con­nect with th­ese in­di­vid­u­als and ex­pand our re­la­tion­ships,” she says. “This is both a busi­ness strat­egy and an­other way that we stay true to the pur­pose of our com­pany.”

Six elected of­fi­cials are in­cluded in this year’s 100 Most In­flu­en­tial Peo­ple in Health­care list, and it’s an even mix: three Democrats, three Repub­li­cans; three based in Wash­ing­ton, three based in the states; and three in the top half and three in the bot­tom half.

Two are en­thu­si­as­ti­cally em­brac­ing the Pa­tient Pro­tec­tion and Af­ford­able Care Act, one is an Oba­macare op­po­nent re­luc­tantly car­ry­ing out Med­i­caid ex­pan­sion, one is a sup­porter fret­ting that im­ple­men­ta­tion will turn out to be a “train wreck,” and two are fight­ing it all the way.

Not sur­pris­ingly, Pres­i­dent Barack Obama is near the top of Mod­ern Health­care’s Most In­flu­en­tial rank­ing at No. 3, but he re­mains one spot be­low Ore­gon Gov. John Kitzhaber, a Demo­crat, who fin­ished sec­ond. Kitzhaber is a for­mer emer­gency medicine doc­tor who topped the Mod­ern Health­care/Mod­ern Physi­cian rank­ing of the 50 Most In­flu­en­tial Physi­cian Ex­ec­u­tives in Health­care rank­ing ear­lier this year.

Aided by a $1.9 bil­lion fed­eral grant, Kitzhaber is man­ag­ing an over­haul of his state’s Med­i­caid pro­gram, which in­cludes the cre­ation of 15 co­or­di­nated-care or­ga­ni­za­tions (a 16th will be launched Sept. 1). He has tar­geted sav­ing the state $11 bil­lion over 10 years as a fi­nan­cial goal.

Kitzhaber’s star was tar­nished a bit by a May 2 New Eng­land Jour­nal of Medicine study that re­ported on the mixed re­sults of Ore­gon’s par­tial Med­i­caid ex­pan­sion from 2008 to 2010. Sup­port­ers pointed to the pos­i­tive re­sults, in­clud­ing in­creased rates of di­a­betes de­tec­tion. Op­po­nents noted that Med­i­caid cov­er­age did not have sig­nif­i­cant ef­fects on hy­per­ten­sion or high choles­terol treat­ment.

Kitzhaber says he could ar­gue the sam­ple was too small or the time pe­riod was too short, but says that the real find­ings were the short­com­ings in the de­liv­ery sys­tem. “There is tremen­dous ben­e­fit in hav­ing health in­sur­ance cov­er­age,” he says. “Giv­ing peo­ple ac­cess is im­por­tant—but giv­ing them ac­cess to the proper de­liv­ery model is what’s more im­por­tant.”

Jan Brewer, the Repub­li­can gover­nor of Arizona and an Oba­macare op­po­nent, made waves when she was seen point­ing a fin­ger in the pres­i­dent’s face when the two met on an air­port run­way early last year. She made head­lines again when she crafted a plan to take ad­van­tage of fed- er­ally funded Med­i­caid ex­pan­sion pro­vided for in the Af­ford­able Care Act. Med­i­caid ex­pan­sion was orig­i­nally go­ing to be manda­tory, but the U.S. Supreme Court, in its de­ci­sion up­hold­ing the law, ruled that it was up to the states to de­cide if they wanted to par­tic­i­pate.

“I think she looked at the data and looked at what would hap­pen if they didn’t ex­pand Med­i­caid,” says Dr. Dan Derk­sen, di­rec­tor of the Cen­ter for Ru­ral Health at the Univer­sity of Arizona in Tuc­son. “She built a coali­tion and moved this through and should be ba­si­cally com­mended for a job well done.”

Derk­sen says he’s at­tended Repub­li­can gov­er­nors meet­ings where at­ten­dees such as Louisiana Gov. Bobby Jin­dal (No. 70 in this year’s rank­ing) sound “like Win­ston Churchill,” vow­ing to fight im­ple­men­ta­tion at ev­ery step. Obama al­luded to com­ments like those in his weekly ad­dress Aug. 17: “A lot of Repub­li­cans seem to be­lieve that if they gum up the works and make this law fail, they’ll some­how be stick­ing it to me, but they’ll just be stick­ing it to you,” the pres­i­dent said.

In the GOP re­sponse, Rep. Shel­ley Moore Capito of West Vir­ginia, dis­agreed—and she used a re­mark by Se­nate Fi­nance Com­mit­tee Chair­man Max Bau­cus (D-Mont.)—to make her case. “The pres­i­dent claims this law is ‘work­ing the way it’s sup­posed to,’ but clearly it’s not,” Capito said. “Not when the ad­min­is­tra­tion is miss­ing dead­lines, is­su­ing waivers, and grant­ing delays hand over fist. Things have be­come so bad that the ad­min­is­tra­tion wants to rely on the ‘honor sys­tem’ to ver­ify who is el­i­gi­ble for sub­si­dies. Sen. Max Bau­cus was right about this law he help write: It’s a ‘train wreck.’ ”

Bau­cus, who made his eighth ap­pear­ance on the Most In­flu­en­tial list, plac­ing at No. 36, did not ac­tu­ally de­scribe the law that way. He said he was voic­ing his con­cerns to HHS Sec­re­tary Kath­leen Se­be­lius about pub­lic con­fu­sion over the law’s im­ple­men­ta­tion. “As you some­what know, Madam Sec­re­tary—I’m a bit Johnny One-Note on im­ple­men­ta­tion of the law, es­pe­cially with re­spect to signups and ex­changes, etc., and am very con­cerned not enough is be­ing done so far,” Bau­cus be­gan.

“I just tell you, I just see a huge train wreck com­ing down,” he said. “You and I have dis­cussed this many times and I don’t see any re­sults yet. What can you do to help all th­ese peo­ple around the coun­try go­ing, ‘What in the world do I do and ... how do I know what to do?’ ”

Not sur­pris­ingly, the lead­ers of health­care’s mega­hos­pi­tal sys­tems were once again well-rep­re­sented on Mod­ern Health­care’s an­nual rank­ing of 100 Most In­flu­en­tial Peo­ple in Health­care. But oth­ers, com­ing from sys­tems with more mod­est num­bers in their hos­pi­tal count, found new ways to grow their in­flu­ence with­out nec­es­sar­ily ex­pand­ing their foot­print.

Both Dr. John Nose­wor­thy, pres­i­dent and CEO of the Rochester, Minn.based Mayo Clinic Health Sys­tem, and Dr. De­los “Toby” Cos­grove, pres­i­dent and CEO of the Cleve­land Clinic Health Sys­tem, lead or­ga­ni­za­tions that take pride in be­ing physi­cian-led sys­tems that only use em­ployed physi­cians. And they say their or­ga­ni­za­tions are not play­ers in the merger-and-ac­qui­si­tion game.

“We’ve stayed away from merg­ers and ac­qui­si­tions,” Nose­wor­thy says of the 23-hos­pi­tal Mayo sys­tem. “Mayo doesn’t see how that would help us pro­vide bet­ter care.”

In­stead, Mayo has em­barked on a “sub­scrip­tion model” to share or­der sets, re­search break­throughs and sec­ond opin­ions. So far, the or­ga­ni­za­tion is do­ing this at about 20 sites. Nose­wor­thy ex­pects that num­ber to grow by 50% to 100% over the next few years. The fee is “pro­pri­etary,” he says, and based on the sub­scriber’s size and ex­pected use of ma­te­ri­als.

Nose­wor­thy, who ranks No. 15 on this year’s ros­ter of the Most In­flu­en­tial, says Mayo has ap­proached “groups that we re­spect” for par­tic­i­pa­tion. And Mayo has been ap­proached by or­ga­ni­za­tions “at risk for be­ing bought out” and look­ing for a com­pet­i­tive edge in their mar­kets, he says.

Cleve­land Clinic has en­tered into or is de­vel­op­ing a num­ber of clin­i­cal af­fil­i­a­tions with other or­ga­ni­za­tions. Th­ese in­clude a pop­u­la­tion-man­age­ment align­ment be­ing ne­go­ti­ated with the eight-hos­pi­tal, Toledo, Ohio-based ProMed­ica sys­tem; a car­di­ol­ogy and re­search af­fil­i­a­tion with nine-hos­pi­tal Med­Star Health, Columbia, Md.; and car­di­ol­ogy and on­col­ogy af­fil­i­a­tions with two-hos­pi­tal Ca­dence Health, Win­field, Ill.

In th­ese re­la­tion­ships, Cos­grove, ranked No. 16, says Cleve­land Clinic mon­i­tors qual­ity met­rics and takes re­spon­si­bil­ity for re­sults. The af­fil­i­a­tion that gar­nered the most at­ten­tion, how­ever, is the strate­gic al­liance the or­ga­ni­za­tion en­tered into with for-profit Com­mu­nity Health Sys­tems, a 132-hos­pi­tal pub­licly traded sys­tem, to im­prove car­dio­vas­cu­lar ser­vices, ad­vance telemedicine and re­duce sup­ply costs.

“It’s not that we bought them or they bought us,” Cos­grove says. “I liken it to we’re ‘go­ing steady.’ They won’t date an­other not-for-profit, and we won’t date other for-prof­its.”

Com­mu­nity has an­nounced merger plans with Health Man­age­ment As­so­ciates, Naples, Fla.

Dig­nity Health, a 37-hos­pi­tal not-for-profit based in San Fran­cisco, in re­cent years ex­panded its po­ten­tial for growth by chang­ing its name from Catholic Health­care West and drop­ping its for­mal con­nec­tion to the Ro­man Catholic Church. “Our val­ues have not changed, our mis­sion has not changed, but we did change our name,” says Lloyd Dean, pres­i­dent and CEO of Dig­nity, who is No. 34 on this year’s rank­ing. “We are us­ing our voice to strengthen co­or­di­na­tion of care in our com­mu­nity. We are one spoke on the wheel.”

Kaiser Per­ma­nente in­cludes the 32-hos­pi­tal Kaiser Foun­da­tion Hos­pi­tals sys­tem, more than 600 out­pa­tient fa­cil­i­ties and its long-run­ning health plan. But Chair­man Ge­orge Halvor­son says the most in­flu­en­tial num­ber in the Kaiser or­ga­ni­za­tion is “one”—as in one elec­tronic health-record sys­tem ac­ces­si­ble at ev­ery Kaiser lo­ca­tion. “If you have all the pieces, but not the data—you ba­si­cally have a set of un­con­nected care sites,” says Halvor­son, who is re­tir­ing at the end of this year and has made the Most In­flu­en­tial list for 11 con­sec­u­tive years. “We de­cided a decade ago to be en­tirely pa­per­less and to con­nect ev­ery sin­gle thing we did so it could elec­tron­i­cally flow from place to place.”

Arizona Gov. Jan Brewer had a high-pro­file en­counter with the pres­i­dent in Jan­uary 2012.

Com­mu­nity’s Smith, left, and Cleve­land Clinic’s Cos­grove formed an al­liance ear­lier this year.

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