MT Health Clinics Are Cost Effective, Not 'Free'

A Montana health clinic about to mark its one-year anniversary has already saved the state $1.5 million by making available primary care services to about 11,000 employees, their dependents, and pre-Medicare retired state employees. Members pay no out-of-pocket costs.

National Public Radio had an interesting piece this week about Montana's innovative and effective efforts to curb healthcare costs by opening "the nation's first clinic for free primary healthcare services to its state government employees."

In an otherwise commendable story, however, NPR makes the mistake of repeatedly calling the services provided at the clinic "free." These services are not "free." Nothing in healthcare is "free."

In fact, the price of the primary care services is baked into the health insurance premiums paid by state employees and their employer, the state of Montana. It is part of a conscious decision by the state to launch affordable alternatives to fee-for-service medicine. It is much more accurate to say that these clinics are proving to be cost effective. This is not pettifogging. This is an important distinction.

Russ Hill, the administrator overseeing the Helena clinic for Montana's Health Care and Benefits Division, was interviewed for the NPR piece. In a subsequent interview with me, however, he made it clear that he's never said the services were free.

"There is nothing free. You won't hear me use that word," Hill says. "What we say is that we have no out-of-pocket costs for our members. They can get their office visit with their primary care physician. Normally that is $15. Under our plan there is no copayment if you come into the health center. With our normal program we have co-insurance and deductible that applies to lab and X-rays, but we don't have any co-deductible for lab or X-ray [work] that is done at the health center, or ordered by a health center provider."

"We have a self-funded medical plan and that pays for claims and can also pay for the services at the health center," Hill says. As with most company-sponsored health plans, the cost of premiums for Montana state employees "depends upon what plan they are on and if they are an employee, with family or with spouse only. There are a variety of things."

With that distinction made clear, we can better appreciate the success of the Helena clinic. It's not a money-losing giveaway. It's a willful strategy that adds credence to the idea that providing easy access to affordable and proactive care is a proven way to actually curtail the rising costs of healthcare.

The Helena clinic will mark its one-year anniversary on Aug. 31, but it has already saved the state an estimated $1.5 million by making available primary care services such as health screenings, flu shots, and wellness counseling that are done by a contracted provider staff to about 11,000 employees, their dependents, and pre-Medicare retired state employees. Screenings and flu shots are also made available to Medicare-eligible retired state employees.

Hill says the $1.5 million figure was attained in a cost-effectiveness analysis that compared the per-patient per-visit cost in the clinic with the same number of services delivered in the private, fee-for-service environment.

The savings come, he says, "because we are able to deliver services without the mark up that has to happen in the private fee-for-service model."

This $1.5 million savings does not factor in the enhanced productivity from state employees who are less likely to call in sick or have other health-related issues, thanks to their improved health status. With that in mind, the savings could be much higher. "It is part of our plan to measure all of that," Hill says.

The initial success in Helena has prompted expansion plans. "We opened our first health center on Aug. 31, 2012. That was in Helena. We opened our second one on June 3, 2013, in Billings. We will probably have nine or 10 of them around the state where we have concentrations of state employees," he says. "It has met and actually exceeded all of our expectations."

NPR notes that the clinic is a first for state employees, but businesses have been using this model successfully for several years now. And Hill is quick to call the state's decision to set up the clinics "an employer solution, not a government solution."

"It's an important distinction because we are not opening this to all citizens. This is just for Montana employees who are members of our health plan," he says.

In addition to providing primary care services, the clinics also offer wellness coaches. "On staff we have a registered dietician, an exercise physiologist, a behavioral health coach, and a wellness nurse. Those people work with the clinical team to work with our patients who have chronic diseases or even potentially acute diseases," Hill says. And because employees aren't tagged with out-of-pocket co-pays every time they go to the clinic, Hill says they are more likely to follow the advice of the physicians and the wellness staff.

"One of the patients was found to have extreme diabetes. He was a walking sugar cube," Hill says. "He came in and said 'I am ready to change everything with my life. I am a smoker. I know I need to lose weight. I know I need to exercise more.' Our wellness coaches were able to work with him and develop a program. Rather than 'we are going to start this and you are going to get really sore in the first week trying to do all of this' they developed a year-long process for him to make lifestyle changes. That is a big difference for people to make a real lifestyle change."

It would be interesting to compare the cost effectiveness of Montana's clinics and their ilk with those of high-deductible plans – which are the exact opposite. Rather than encouraging enrollees to seek preventive and proactive medical care, high-deductible plans make access to care virtually unaffordable.

Low income wage-earners on high-deductible plans who have medical needs are forced to decide between a $100 urgent care visit (if they're lucky) and ignoring the problem with a hope for the best. It's a roll-the-dice strategy, but nothing good comes when people delay medical care because they can't afford it.

And it's a strategy that isn't gaining traction with Montana state employees. "We don't offer a high-deductible plan to our employees," Hill says. "We evaluate high-deductible plans every year and whether we want to go that route and at this point it has not been the route we need to go to manage our costs. We have found other ways to keep our costs under control."