Insuring market growth
Execs at large health insurers pursue innovation as reform rolls out
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.