New Collaboration in California Aims to Use Virtual Care to Reduce Costs, Boost Outcomes

Blue Shield of California and CalPERS are partnering with virtual care company Included Health to improve access to care for members, creating more opportunities to lower costs through better care management.

A unique collaboration in California is using virtual care to bring down healthcare costs for millions of Californians.

Blue Shield of California and CalPERS (California Public Employees’ Retirement System), a federal agency that manages pensions and health benefits for more than 1.5 million people, are teaming up with virtual care company Included Health to develop the virtual care strategy.

Included Health, which sells navigation and virtual care services mostly to self-insured employers and health plans, was chosen by CalPERS to be its population health management vendor. The partnership will provide ‘care case and disease management’ for complex care members and those who are going through a transformative moment in their lives.

Blue Shield of California’s big objective within this three-way partnership is to provide a cohesive underlying network that will support CalPERS objectives and put cost controls in place for its members

“We have over 80% of our primary care providers on pay-for-value arrangements,” said Tim Lieb, senior vice president of growth at Blue Shield of California.

Equity Through Virtuality

Dr. Ami Parekh, chief health officer of Included Health, says technology can not only aid in lowering healthcare disparities, but also create an engaging experience for members, all while lowering costs. Through an app on their smartphone, they can do anything from speaking with their clinician to checking their deductible.

“I wanted to see how technology could transform the patient experience,” said Parekh.“While we have used a lot of technology in healthcare, I don't think we’ve really pushed the limits on how transformative it can be from a member experience perspective, as well as from the outcomes it can deliver.”

“So one of the things we find with our clients and I think this will be true of CalPERS, is many patients just aren't engaging at all in primary care.” she said. “And what [this] allows, it just gets more people engaged in care.”

Parekh and Lieb agree that virtual care is often thought about too narrowly, but with the right implementation, it allows members to access care on their own time, and for many Californians who live in healthcare deserts, that’s a big deal.

The partnership won’t eliminate brick and mortar options, enabling members to choose which option suits them to connect with their care providers. Members who are more engaged in their primary care, they note, often need less urgent or emergency care, which in turn can lower care costs.

“And so, you can still go in person, but if we really are seeing greater use of primary care, we're seeing less emergency care,” says Lieb. “It's not a takeaway for any member, this is additive and that's the real positive. The virtual suddenly opens up that conduit to actually get care, whether that's during a lunch break or around the off hours.”

Lower Costs Through Higher Quality

The partnership with CalPERS aims to lower costs through higher quality care, both say. This includes how providers make treatment decisions.

“If you're seeing a high-quality orthopedic surgeon, they're not going to recommend surgery unless you really, really need it. That improves the quality and outcomes and decreases the total cost of care,” Parekh said.

Parekh said this is the huge driver to affordability with better outcomes and experiences, and CalPERS aims to build a model to help California with the sustainability of the investment in healthcare.

“The total cost of care and improved outcomes is actually the navigation piece and the population health management work, and we're going to supplement that with virtual to really get the best outcomes we can,” says Parekh.

“The more we can improve the quality, the more we can improve the outcomes.
That's what drives overall lower spend,” said Lieb.

Check out the full conversation on the HealthLeaders podcast.