3 Payer-Driven Strategies to Transform Care Models

Spectrum Health, a not-for-profit, integrated, managed care healthcare organization, is focused on redesigning care models to increase value. Its insurance arm has been key.

Priority Health, the insurance arm of Spectrum Health has been instrumental in improving outcomes, enhancing the patient experience, and lowering the cost of care, says Jay LaBine, MD, Priority's chief medical officer.

As a not-for-profit, integrated, managed care healthcare organization, the Grand Rapids, MI-based health system is focused on redesigning care models to increase value.

"It's a definite advantage for Spectrum to have a health plan. Our system strategy is to transform models of care, create exceptional value, and be a leader in new healthcare solutions. The health plan can help with all of those," he says.

In a recent conversation, LaBine discussed three ways in which Priority Health is helping Spectrum transform its clinical models.

1.Focusing on Chronic Disease

A major area of focus for Spectrum, LaBine says, is finding more efficient and impactful ways to care for patients with chronic illness.

"When we think about how we can align the health plan and the delivery system around opportunities to transform care, we are thinking about what we can do to better manage patients with chronic diseases," he says. "The health plan and delivery system are aligned around chronic disease because we feel there is a lot of opportunity there."

Both Spectrum and Priority employ care managers to assist chronically ill patients with functions such as coordinating their care, scheduling follow-up visits, and managing medications. There are roughly 100 care managers in Spectrum Medical Group's primary care offices and about 60 working at the health plan doing mostly telephonic care coordination.

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The challenge, LaBine says, is to keep the two sides of the organization from duplicating efforts with the same patients because that can cause confusion. Priority Health has worked to mitigate this issue over the last two years by designing a common care management system.

"There wasn't always good coordination so the same member/patient would be getting calls from both the physician's office and the health plan," he says. "We have been looking at ways that [Priority's] care managers can do their work and align that with the care delivery system. The delivery system has recognized that the care management leadership at the health plan has a lot of expertise and was highly involved in this process. Our leaders are now working within the delivery system," he says.

The health plan also uses its claims data to risk stratify patients and to focus on those who are the sickest.

"We use this information so that care managers at the point of care and at Priority Health can proactively reach out to those patients who have the most triggers, such as a patient with severe diabetes," LaBine says.

"From the health plan side, we can see that a patient who is not in control costs about twice as much as a person who is in control of their disease. We can also see that the health outcomes are better for a patient who is in control."

2.Designing a Care Model for Elderly Patients

Through its Medicare Advantage plan, Priority Health has members who have advanced chronic illness but are too frail and elderly to receive care in the traditional primary care office setting. The health plan has designed a care model to address this patient population, LaBine says.  

"Working with our own delivery system, we designed a home-based care delivery model where we deploy a geriatrician, a nurse practitioner, a social worker, and a care manager to the patient's home to take care of advanced chronically ill patients," he says.

"That is a sweet spot to help both the health plan and the delivery system because these types of patients, when they come into the office for a visit, tend to be schedule busters because they are so sick."

Through its data analysis, Priority Health identified 1,135 patients who are good candidates for home-based care. By aggressively treating and monitoring these patients in their home, Spectrum has proactively reduced complications and hospitalizations while also saving money, LaBine says.

"[These patients] consumed $44.5 million every year in medical spend, so we said we could do this and provide better care while saving money. So far, we have saved about 20% on these patients," he says.

"It's the classic insurance cohort where 5% of people will drive 40% of the spend. We wanted to use what we knew from the data and from the clinical team to target the right people."

In addition to providing care in a more appropriate setting, the new model also assists frail elderly patients in other ways, LaBine adds.

"The home-based care model surrounds them with the resources they need and helps them from a medical standpoint, but also from the social determinants of health standpoint. We know that some of the frail elderly folks who want to stay in their homes are socially isolated. It's a clear example of how the health plan helped identify these patients and helped the delivery system to provide better care."

The home-based care model is also an example of economic alignment between Spectrum's providers and health plan, LaBine says, because it is made possible through funding from Priority Health.

"If the delivery system wanted to do this on their own, it would be a clear money loser because you can't be efficient enough in this model to do it on a fee-for-service basis," he says.

3. Developing Telemedicine Capabilities

As patients demand more convenience, health systems run the risk of losing patients with low-acuity conditions to retail care centers if they don't keep pace, LaBine says.

Last November, Spectrum launched MedNow, a virtual health service through which adult patients can access 24/7 care for minor illnesses such as cold, flu, ear ache, and sinus problems. The telemedicine service can also be used for specialty care, particularly for follow-up appointments with patients in rural areas.

Patients can download an app to their smartphone to contact MedNow. They are initially connected to a medical assistant and then to a clinician. "Within 10 to 15 minutes the patient is on a face-to-face, high-definition video call with a physician or nurse practitioner," LaBine says.

"From the delivery system side, they would be concerned that their patients would be lost to a different telehealth service or that their patients with low-acuity problems would go to CVS or Wal-Mart. This is a way for our delivery system to compete with that."

Priority Health was "instrumental" in pushing forward the development and implementation of the MedNow technology, LaBine says, because the health plan recognized a number of years ago that consumers were looking for this added convenience.

"We put in a code to actually pay for this service. The problem was that physicians in the delivery system were so busy taking care of their own patients that they didn't feel they had the time, energy, or bandwidth to start something like this because it's a big change," he says.

"The health plan was being constructively disruptive to push the delivery system to understand that you have to look at this because your patients and consumers are demanding this type of service. Our delivery system wasn't ready for this, but the health plan said, 'If you aren't going to do this, then we are going to do it.' It was a catalyst for making this change."

And while Priority Health has not yet quantified the direct impact on market share and revenue, LaBine says there is anecdotal evidence that suggests MedNow has been successful so far.

"We have been able to capture some people who are new to the system and retain the business of people who are in the system already but who may be traveling but still want to receive care from people they trust. There has been some market capture," he says.

"I think it is both an offensive and defensive strategy. We don't want patients going elsewhere because it's a more convenient care setting. We want to be able to provide that convenience to be competitive."