Adapting to Population Health via Your Own Employees

Health systems are uniquely positioned to learn from both sides of the healthcare cost and quality equation. Start using that to your advantage.

Temple University Medical Center is not in the best of neighborhoods. It's in an urban area, North Philadelphia, with high crime and deep poverty. Temple doesn't want to be in an ivory patient tower, and it doesn't view treating the patients it sees from its home neighborhood as a burden.

But it does need to figure out how to better serve its community, says Larry Kaiser, MD, president and CEO of Temple Health, the 721-bed academic medical center's parent. That's especially true as fee-for-service reimbursement from the Medicare and Medicaid population begins to fade toward managed capitation.

"We are the de facto community hospital for north Philadelphia," Kaiser, also dean of the Temple University School of Medicine, says. Unsurprisingly, Temple Health serves a majority government payer mix, with Medicaid alone making up 41% of the mix.

Low Reimbursement Forces Value
The majority of state Medicaid programs are notoriously poor payers, so Kaiser argues that his health system has been under value-based reimbursement for some time, because it loses money on many of the services provided to Medicaid beneficiaries.

In last's column about capitation and consumerism, I  offered a couple of examples
of the many health systems that are taking advantage of their unique position as both a major employer and a healthcare provider to learn how they can better manage their own employee healthcare costs.

Kaiser long ago bought into that argument. But while his health system is trying to optimize operations for a value-based reimbursement model, and is working on interventions to limit admissions, the irony is that the health system is still largely paid under a fee-for-service methodology.

Academic medical centers, with their usual array of high-end specialty services, may continue to be relatively insulated from the shift toward value-based care, but Kaiser says that won't last forever, and Temple Health still faces a threat if it can't adapt its culture and ethos toward value.

"The other business we're in, as an AMC with high-end specialty care, is not quite as threatened. But I do worry about some of the efforts in the community where physicians are being incentivized in shared savings models to reduce their costs," Kaiser says. "I wonder whether people will be referred for specialty care as often as efforts focus on keeping costs at a minimum."

Kaiser can feel the tectonic shift in incentives coming, although not imminently.

Even now, there are a couple of huge exceptions to Temple Health's largely fee-for-service-based revenue mix. As a one-third owner of the 250,000 member Health Partners Plans, a nonprofit that offers Medicaid, Medicare, and Children's Health Insurance Program (CHIP) managed care plans, Temple and its co-owners, five other Philadelphia area hospitals and health systems, are in a unique position to influence a move toward capitation, Kaiser says.

He would like to do more to help speed the transition. As a provider, Temple Health also has or is in the process of negotiating capitated contracts with incentives based on quality and patient satisfaction with Cigna Healthspring in its market.

Problems with Consumerism
Consumerism is a big challenge going forward, says Kaiser. "People are looking for convenience."

For organizations that are academically focused, like Temple Health, that can be an issue, but not a critical one. Still, Kaiser is mindful of the inroads consumer-focused organizations like CVS Health and Walgreen's want to make in managing chronic disease.  

To try to hold its own against such competition, and as a move toward integrating more of the care continuum under its roof, Temple was first to market among the academics in the Philadelphia area with four branded urgent care clinics. Kaiser says people recognize the Temple "T," but location is a major concern on how those facilities perform financially, and the health system is "challenged" in the urgent care market, he says.
 
Like many other providers, Temple is focusing on its own employees to learn lessons about the levers employers can use to help employees meet their healthcare needs most efficiently. It uses a company called Accolade to help employees manage their healthcare benefits and needs.

The service is necessary as employees begin to bear more of the first-dollar costs of the healthcare they consume. Kaiser says the tools not only improve patient experience, but that the company's health assistants—called in when employees are at risk or already suffering from chronic disease—intervene to help patients improve their risk profiles. Accolade's health assistants are rewarded and incented by whether they form relationships of trust and whether they actually help improve outcomes.

"That's what we reward them on," says Alan Spiro, MD, chief medical officer and chief health assistant at Accolade. "The minute you have a health assistant who communicates that it's important for that client to save money, trust is destroyed. Because when they're sick, people aren't worried about saving their company money."

Spiro says that approach will ultimately save money as a side effect of helping patients access the care they need, not the care they might think they need.

For example, he contends that loneliness is one of the top reasons people come to the emergency room.

"Many of these people's admissions are not related to any specific disease, they're related to being isolated," he says. "In aggregate, helping avoid those admissions will save a lot of money. We decrease readmission rates by around 43% in certain populations because we pay attention to social and psychological issues that go along with illness that are not well addressed in insurance or health delivery systems."

Prepare for Capitated Contracts
Kaiser is pleased with the health system's results from its relationship with Accolade. But for him, part of the effort that is underappreciated is the downstream lessons and insights Temple Health can use from its own employees in planning for how health assistants and navigators like those Accolade uses help disrupt and change utilization patterns.

"From my perspective, we need to be prepared for capitated contracts, and part of the challenge is to provide care in most cost-efficient manner," he says. "We're not the most appropriate setting for many of the episodes of care confronted in the capitated population, and there's no question that centrality of care has shifted from inpatient setting not only to outpatient, but also to the home. Our intent is to promote wellness while at the same time hopefully reducing costs, so in that sense, we realize the biggest cost is an inpatient admission."

In healthcare, there are two ways to decrease costs. You can either decrease the unit price of a service, or you can decrease the number of services. Unit price is being addressed in a variety of ways, like value pricing that pushes unit prices down, and the increasing use of physician extenders.

Spiro says the kind of work that will reduce the amount of expensive services includes health advisors, wearables, coaching, and any number of interventions indicated by the data it has accumulated on its clients. But it has to come holistically or it won't work.

"If we want to decrease the volume of services in the long term, the best way is to decrease unnecessary services and increase necessary ones," says Spiro.

Part of that effort, even with Temple Health's own employees, is helping people understand when they should more appropriately visit urgent care as opposed to the emergency room, for example. 

"Part of this is an educational process and why we think working with Accolade has been particularly important," Kaiser says. "We're self-insured, so those costs go right to the bottom line. Accessing the right care is difficult even for people who work in healthcare."

Another benefit, says Kaiser, is the recognition that many employees of the health system as well as university employees don't use Temple Health.

"Many employees don't live in this area. Our network of primary care physicians is not necessarily where these people live, but it's been very helpful to have a source of guidance in making people aware they can get outstanding care within their own system."