Across the country, innovations in care delivery models at organizations of varying size and type are enhancing continuity of care, changing utilization patterns, and reducing costs.
Keys to success in undertaking clinical transformation initiatives include:
Almost every healthcare organization in America is working on clinical transformation—overhauling the delivery of patient care to succeed under value-based payment models.
Transformation means different things to different organizations, depending on the type of organization, market factors, and their current waypoint on the journey. But all healthcare organizations share the goal of improved patient outcomes delivered cost-effectively.
For Torrance, Calif.-based HealthCare Partners, LLC, which is one of the nation’s largest medical groups and has years of experience in risk-based contracts, clinical transformation means constantly fine-tuning a large portfolio of high-touch outpatient services and expanding its well-developed model of care coordination to more subsets of its patient population.
For Alliance Community Hospital, a stand-alone hospital in Alliance, Ohio, with no risk-based contracts (other than the self-insurance arrangement for its own employees), clinical transformation means creating a care coordinator network for patients experiencing significant social and economic barriers that affect their care, helping local employers increase primary care access to reduce emergency department (ED) use, and analyzing claims data for its own workforce to identify opportunities for improved care.
Both are using the concept of clinical transformation to achieve the same goal: providing high-value health care.
HealthCare Partners, a division of DaVita HealthCare Partners Inc., is far down the road of clinical transformation. “The move from volume to value is just part of the DNA of HealthCare Partners because we have been delivering value-based care for nearly two decades,” says Ted Halkias, the organization’s CFO.
HealthCare Partners manages and operates HealthCare Partners Medical Group in California along with organizations in Nevada, Florida, Arizona, and New Mexico. HealthCare Partners uses two delivery models: a staff model which comprises more than 1,200 employed primary care and specialty physicians, and its independent physician association model, which includes approximately 12,000 contracted primary care physicians and specialists. Together, the two models provide care to about 829,000 patients through capitation contracts and approximately 425,000 patients in fee-for-service arrangements.
Because HealthCare Partners functioned in a capitated environment for the majority of its patients for two decades, it developed a coordinated care model designed to produce good patient outcomes at the lowest possible cost. Two key measures of success: In 2012, Medicare beneficiaries served by HealthCare Partners had a 37 percent lower admission rate and a 21 percent lower all-cause readmission rate than Medicare fee-for-service beneficiaries nationally.
“One thing that is fundamental to our organization is our true belief in patient self-management skill sets,” says Chan Chuang, MD, chief clinical officer for HealthCare Partners. “Although we are here and available when patients need us, our primary role is to make sure that we educate our patients to watch out for themselves and know what to do when they have worsening symptoms. We enable a fundamental shift from episodic illness care to keeping patients healthy through various means and resources.”
The care coordination model starts with a physician “quarterback” for each patient and wrap-around services that target that patient’s individual needs.
“A patient with a chronic condition like heart failure will have a primary care physician, but also might be assigned a care manager or a disease case manager to help them with their care,” says Tyler Jung, MD, HealthCare Partners’ chief medical officer. “And patients may be assigned a social worker if there are elements of the patient’s social experience that need to be addressed.”
Beyond care management (provided by registered nurses for any patient who needs help with a treatment plan) and chronic care management (disease-specific education and support), HealthCare Partners provides a comprehensive care center for patients who are struggling with multiple chronic health conditions and house calls for homebound patients.
A hospitalist program focuses on inpatient care of the medical group’s patients, and post-discharge protocols reduce readmissions. The protocols include scheduling a physician visit within 48 hours of discharge, ensuring the patient’s diagnosis and care plan are received by the primary care physician, conducting medication reconciliation, and making sure follow-up appointments happen.
“All of those things prevent illnesses from exacerbating in that post-discharge setting, which is really the win,” Halkias says.
The care model is supported by a physician compensation model that is based not on the number of patients seen, but on high-quality outcomes, patient satisfaction, documentation, and the preventive care and continuity of care provided to patients.
In addition, extensive technology supports the physicians in coordinating multidisciplinary care. Clinicians, who have secure web-portal access to patients’ clinical information from any location, can track patients’ movement through HealthCare Partners’ system and set information related to patients’ prescriptions, allergies, lab and diagnostic reports, procedures, vital signs, immunizations, and referrals. The technology also prompts physicians to respond to any outstanding action items, such as a blood sugar test or referral for a colonoscopy. Meanwhile, an enterprise data warehouse of clinical and operational data allows analysis of the care delivered to the entire patient population.
“By having robust technology solutions, we can migrate patient data into disease registries so we can identify all of our patients with specific disease conditions, such as diabetes, congestive heart failure, and chronic obstructive pulmonary disease (COPD), and then ensure those patients are receiving the right clinical follow-up treatment and education,” Halkias says. “That’s been another big driver of improving clinical outcomes for our patients.”
The care coordination model proves its worth by changing utilization patterns for high-cost chronically ill patients. In its first two years, HealthCare Partners’ COPD management program increased primary care visits for its patient population by 30 percent and drug costs by only 3 percent. Total inpatient admissions fell by 30 percent during that period, while total bed days were reduced by 39 percent, total ED visits by 23 percent, and total cost of care by 34 percent.
Although HealthCare Partners had proven its coordinated care model worked with capitated contracts, the model got its first tryout in an accountable care organization (ACO) structure only recently: HealthCare Partners entered into an ACO contract with Anthem Blue Cross to provide care for about 55,000 fully insured PPO members in the Los Angeles area, starting in mid-2011.
In the first six months of 2013, the ACO generated savings of $4.7 million, relative to a comparison group. Although the PPO members had the choice to see any physician they wished, the ACO proved its ability to curtail utilization while improving patients’ health status.
Lessons learned include the following.
It’s everything, not one thing. The array of patient-support initiatives that HealthCare Partners has in place may seem daunting for organizations just beginning their population health management journey, but each initiative was created to meet a specific need. “Every single program has an incremental gain,” Chuang says.
Payer alignment is key. Healthcare organizations cannot afford to provide the continuum of services that HealthCare Partners offers without a payment model that supports it. Although HealthCare Partners has thrived with capitated contracts, other approaches that align payer and provider objectives, also can work, Halkias says.
“The crafting of an aligned methodology of paying for the care—and one that is aligned with population health care—is essential,” he says.
The most important factor is commitment. The value-oriented culture at HealthCare Partners stems from stable leadership that created a way to succeed in global-risk contracts during the many years that fee-for-service medicine dominated the healthcare industry. Reluctance to make the investments and process changes needed to support population health management may yield disappointment, Halkias says.
“We have seen groups who are currently in volume-based care who want to dabble in population management and improving the value of care, and I think they’re going to have trouble without proper commitment,” he says. “If the organization really wants to do population management, it has to be committed.”
Although several large medical groups share HealthCare Partners’ deep experience with value-based care delivery, the majority of U.S. hospitals are not as far along on the transformation journey.
Alliance Community Hospital, an independent 104-bed hospital with an attached 78-bed skilled nursing facility, does not yet have any risk-based contracts but is not waiting on insurers to press for change. “We recognize that the payers are going to pay us differently for our services in the future, but most of them are still coming to us with, ‘What’s your rate, and what are you willing to discount?’” says Stan Jonas, the hospital’s CEO. “We are trying to see if we can improve value for ourselves and our local businesses and concentrate on that.”
Jonas is motivated by the fact that Alliance Community Hospital, one of the largest employers in the community, self-funds the health insurance benefits for its employees and their dependents—and controlling that cost is essential to the hospital’s success. “Can we prove to ourselves, let alone our public, that we’re doing the best we can?” he says. “That’s what’s driving us now.”
Among the key features of the hospital’s push to improve the value of the care it delivers are the following.
Health coaches. Last year, Alliance Community Hospital began a health-coaching program using local university students interested in health careers.
“They are saving lives. They are keeping people out of the ED. They are reducing readmissions,” Jonas says.
The health coaches, all of whom receive college credit instead of wages, become part of a team that includes a physician medical director, a program director, a nurse coordinator, a pharmacist, a dietician, a social worker/counselor, and a hospital chaplain. Each coach is assigned one patient—a person who suffers from a chronic condition and who has challenges such as low income, a poor housing situation, lack of food, or other problems.
Among other skills, the coaches receive training on how to establish trusting relationships with patients so they can identify barriers to good health and help overcome the challenges. For example, an 83-year-old man with multiple chronic conditions was visiting the ED at least once a month—and had six hospitalizations in the previous year—when a health coach started working with him. The coach discovered that the man had relied on his wife to read on his behalf and, since her death, he had been unable to understand how to take his medications or follow physician instructions. “The health coach started helping him to learn to read. He since has made it to the fourth-grade level, and now, he can write out a grocery list for his caseworker,” Jonas says. “Since we’ve started to work with him, he hasn’t had an admission or an ED visit.”
Expanded access. When a large employer in the Alliance community observed that its employees had high rates of ED utilization, the hospital responded by opening an on-site clinic, staffed by a physician assistant, to increase access to primary care services.
“About 80 percent of their employees don’t have a primary care physician, so when they needed medical attention, typically they went to the ED,” Jonas says.
The on-site clinic, which is open two half-days a week, allows the physician assistant (who is supervised by a physician) to develop relationships with the workers and encourage them to be more proactive in taking care of their health and accessing care when they need it.
More recently, Alliance Community Hospital opened an after-hours and weekend clinic to further support employees, their families, and others in the community. It is open from 5 to 9 p.m. on weekdays and from 9 a.m. to 5 p.m. on weekends. Because the hospital is paid on a fee-for-service basis, that expanded access does not currently bring an ROI for the hospital, but Jonas knows that helping local employers thrive—and helping patients stay healthier—is the right investment.
“We hope to keep more and more of their employees out of the ED,” he says. “We are taking the long-term view. If they are spending less money on health care, their business will grow.”
Data into information. Alliance Community Hospital recently hired a predictive-risk analytics vendor to analyze insurance claims submitted by its employees and their dependents.
The analysis found that about 20 percent of its employees and their dependents are high-risk/high-cost—each racking up an average of $1,179 a month in healthcare costs—while 35 percent are high-risk/low-cost, accounting for an average of $58 per month in expenses.
One of the most useful findings: Nearly 40 percent of employees or dependents fall into a “hidden opportunity” category. Although their healthcare spending for the previous year was relatively low, each of them had a diagnosis code for a chronic condition and apparent gaps in care—for example, a patient diagnosed with diabetes but no claims for corresponding medication.
Jonas said a review of three years of claims data showed why the category is called “hidden opportunity.” “We saw that so many of our colleagues or their family members moved from ‘high-risk/low-utilizers’ to ‘high-risk/high-utilizers’ during that time,” he says. “How much could we have helped them if there were better ways of sharing health information between our colleagues and their physicians?”
Nearly two-thirds of Alliance Community Hospital’s workers receive care from two primary care practices, so the hospital is planning to share patient-specific data with physicians to help them proactively work with patients to manage their chronic illnesses effectively. (Because it is the employer, the hospital is prohibited from seeing patient-specific data itself.)
The analysis of claims data alone suggests that Alliance Community Hospital could save more than $850,000—or nearly 12 percent of its total healthcare spending—if patients with chronic conditions received more timely care management, physicians had cost data about the drugs they prescribe, and employees had cost information that allowed them to shop wisely for prescription medicines.
Lessons learned include the following.
Data only go so far. A small hospital where all members of the healthcare community know one another may have a built-in advantage over larger organizations. The Alliance Community Hospital executive team includes four physicians who have worked with hospital administrators for years. “Having a new analytics system or access to big data and all this comparative information isn’t as important as trusting relationships,” Jonas says. “Being able to decide how you are going to use the information and figuring out new processes is just as important as having the data.”
Collaboration counts. As hospital revenues continue to decline, partnering with other organizations on mutually beneficial programs is increasingly important. For example, the health coaching program provides a valuable training opportunity for students at nearby colleges without costing Alliance Community Hospital anything.
“There’s always a huge opportunity for more collaborations,” Jonas says. “When it comes to healthcare transformation, particularly as it relates to population health management, many other organizations are asking: ‘How are we going to do this? We may have to be part of a bigger healthcare system.’ We are taking the view that this may not be the case.”