A bill introduced by Rep. John P. Sarbanes (D-MD) would address the nation's primary care physician shortage by funding pilot programs for mid-career, retired, and retiring physicians to continue practicing medicine.
It's called the Primary Care Physician Reentry Act. It's sponsored by Rep. John P. Sarbanes, (D-MD), and there's plenty to like about it.
Essentially, the bill would address the nation's primary care physician shortage by funding pilot programs at medical schools, hospitals, and non-profit providers across the country. These demonstration programs would provide training, financial assistance, and streamlined reaccreditation processes for physicians wishing to re-enter the workforce.
In exchange, physicians who complete the re-entry program agree to provide primary care either full- or part-time for at least two years at community health centers, VA medical centers or school-based health centers.
What works in this legislation is the relatively light touch of the federal government. The bill addresses the need, identifies the objective, creates loose parameters, and provides funding. Providers are given leeway to design programs that they believe will be most effective.
The American Academy of Pediatrics, the American Association of Colleges of Osteopathic Medicine, the Federation of State Medical Boards, the American Osteopathic Association and the School-Based Health Alliance have provided endorsements.
The bill has been around since at least 2012, but hasn't done much in the highly partisan Congress. Rep. Sarbanes says he doesn't expect any action until a new Congress is sworn in next year, but he says he is building bipartisan support.
"I am not going to tell you that this is going to pass in the next six months; there is very little that is going to pass in the next six months," Sarbanes says. "But if you want pieces of legislation that can appeal to Republicans and Democrats here in the House this is definitely one of them."
"We will reintroduce it first thing in the next legislative session, so we are talking January or February. There are some touchstones we can point at to get people to pay attention to this. Not just the overall physician shortage, which I think folks are aware of, but, for example, this VA medical center scandal that we just had with the wait times."
Rep. Sarbanes spoke with me about this week about the bill. The following is an edited transcript.
HLM: What is the status of the bill?
JS: We introduced it in the last few days. We wanted to put it down as a marker again. We introduced it in the last Congress. We were encouraged that we were able to begin building bipartisan support for this. There are Republican colleagues of mine who expressed an interest and we are hoping that will continue and grow.
There is a general recognition from both sides of the aisle that, wherever people may be on the Affordable Care Act, there is a shortage of physicians out there, particularly in the primary care arena, and if we can find some nontraditional pipelines for bringing people to meet that shortage, then it's worth exploring.
HLM: Has the bill been scored for cost?
JS: I don't think we've gotten it scored yet. It is a relatively limited demonstration project. The idea is to see if this can work and if it does work then we can begin to invest more resources into it going forward.
The cost of that in relative terms will be pretty modest, which is why I think we can get interest even from those, and I include myself, who want to make sure that government is being efficient and fiscally responsible.
HLM: How much leeway will these pilot programs have?
JS: We expect to have them present a pretty comprehensive proposal for how to handle people who may be coming with different levels of expertise and training. So, it could be a pretty flexible design and one that is customized to the kind of practitioner who is interested in the re-entry opportunity.
We are going to learn both on the front end in terms of the best way to design the training to take full advantage of this pool of potential primary care physicians that can re-enter as well as learning from their actual deployment into these different environments where they can provide the care. It will be a fascinating project if we can get it on line.
HLM: What are the origins of this bill?
JS: There are different groups that come and meet with us on the Hill who represent primary care providers or clinics or other healthcare institutions that are equally focused on where these shortages are.
We began to hear about some physician re-entry programs that have been designed in a number of places across the country. We thought maybe we can come at this a little more systematically, look at the potential for federal resources to get behind this because you can really leverage a tremendous amount of resources on the back end of the investment.
HLM: Why did you include federal tort protections?
JS: You're talking about family medicine, internal medicine, OB/GYN, and in that arena, the issue of malpractice insurance is very salient. To be able to include that as a component of the proposal was critical and will be critical.
It's something that helps us build support across the aisle because when it comes to the malpractice debate, that can get pretty heated. We're trying to neutralize it with a mechanism by which the liability that these physicians would face can be addressed. It exists now. We just want to broaden it a little bit to cover these particular facilities and locations where they will be practicing.
HLM: It looks like you've created the rough frame and have left the details to the pilot projects.
JS: That's fair to say. We've got a certain amount of the structure set forth in our bill; mainly, who qualifies to set up these programs; who qualifies to participate in the programs; and where will these physicians who re-enter the practice be deployed?
But, we are looking forward to the kinds of proposals that come forward in terms of the specific design. In awarding the grants, I would anticipate that we'd want to experiment with a number of different approaches to see what works best when it comes time to take it to the next level we have some good data to look at.
HLM: What are the chances for this bill?
JS: There are things happening out there that allow us to bring this proposal in a compelling way, and it will be compelling to both Democrats and Republicans as we move forward. Let me be optimistic. I think we could get something like this passed in the next session of Congress.
A year after the healthcare reform law was implemented, HHS Secretary Sylvia M. Burwell says "the evidence points to a clear conclusion: The Affordable Care Act is working, and families, businesses, and taxpayers are better off as a result."
Sylvia Matthews Burwell
Secretary, Health and Human Services
An additional 77 health insurance issuers will offer plans on state and federal Marketplaces in 44 states next year, offsetting the 14 issuers that are "exiting" the Marketplaces, the Department of Health and Human Services said Tuesday.
"Today, we're able to announce that in 2015 there will be a 25% increase in the total number of issuers selling health insurance plans in the Marketplace," HHS Secretary Sylvia M. Burwell said Tuesday in a speech at the Brookings Institution.
"When you consider the law through the lens of affordability, access, and quality, the evidence points to a clear conclusion: The Affordable Care Act is working, and families, businesses, and taxpayers are better off as a result."
The HHS preliminary data, gleanedfrom 36 state-affiliated Federal Marketplaces and eight state-run Marketplaces, also found that:
Federal Marketplace states alone will have 248 issuers in 2015, 57 more than in 2014, a 30% net increase.
The eight state-based Marketplaces where data is already available will have a total of 67 issuers offering plans, six more than in 2014, a 10% net increase.
Four of the 36 states in the Federal Marketplace will have at least double the number of issuers they had in 2014.
In total, 36 states of the 44 will have at least one new issuer next year.
Ten plans on the Federal Marketplace and four plans on the state Marketplace are withdrawing.
HHS said the coverage expansion involves some of the nation's largest insurance companies that will be offering plans in more than one dozen new states.
Evidence suggests that the expanded coverage options will reduce premiums for consumers too. "Specifically, an increase of one issuer in a rating area is associated with a 4% decline in the second-lowest cost silver plan premium, on average," HHS said in a media release.
"There is already real evidence these plans are affordable," Burwell said. "Just last week, the Commonwealth Fund released a study showing that 70% of Americans with Marketplace insurance plans feel they can now afford care if they get sick, and a majority say their premiums are easy to afford."
What a Difference One Year Makes
Burwell used her 21-minute Brookings Institution speech to tout the PPACA's accomplishments in its first year of implementation, which came after the rollout debacle last fall had critics questioning the ability of the PPACA to meet critical metrics.
"Back in March, news reports suggested it would take 'something close to a miracle' to get to 6 million people," Burwell said. "Last week we announced that 7.3 million people signed up for Marketplace plans, paid their premiums, and accessed quality, affordable coverage."
"[Tuesday] we released another significant number: 8 million people enrolled in Medicaid or CHIP since the beginning of Open Enrollment – that's an increase of nearly 14% compared to average monthly signups before October 1st."
"In just one year, we've reduced the number of uninsured adults by 26%. Said another way, 10.3 million fewer adults are uninsured today than in 2013," she said. "I firmly believe this is the key measure we should all be looking at, because it represents historic progress on an issue that has eluded our country for more than a century. There isn't a business in America that wouldn't be ecstatic with this kind of growth."
Even with the apparent success of the program, polls show that the PPACA remains unpopular, and Republicans have said they will consider repealing the reforms if they gain control of Senate.
Burwell conceded that PPACA supporters "haven't done a very good job of explaining why middle-class families who already had insurance are better off."
"Many middle-class families have more money in their budgets because their insurance company is now required to spend at least 80% of their premium on their care, as opposed to things like marketing. Families have saved an average of $80—money they can put into their electric bill or back into their grocery budget," she said.
"Meanwhile, millions of seniors are saving billions of dollars on their prescription drugs as we phase out the donut hole. More than 8.2 million seniors have saved more than $11.5 billion since 2010.
"Ultimately, a healthier and more financially secure middle class is good for businesses, who benefit from a healthy workforce and consumers with more disposable income," she said.
4 Steps for the PPACA
Burwell said HHS will improve upon the ACA's successes and correct failures.
"Every business in America worth its salt learns from both what went right, and what went wrong," she says. "We're taking the same approach, and we have a four-part strategy for moving forward."
Those steps include:
Improving access and affordability through the Marketplace. That includes improving management systems, testing, security, and backend functionality.
Testing new models in Medicare and Medicaid to find cost-effective care options as the healthcare sector evolves from volume to value-base care delivery.
Bringing more states into the Medicaid expansion.
Helping consumers understand how to use their new coverage – including the role of prevention and wellness.
Burwell also made a plea for civility in what continues to be a charged partisan debate over the future of "Obamacare."
"As we work through these issues, I think we need a bit of a course correction in this country when it comes to how we talk about these issues, and it starts with collectively turning down the volume a bit," she said. "Surely, we'd all agree that the back-and-forth hasn't been particularly helpful to anyone—least of all the hardworking families who we all want to help."
Wake Forest Baptist Medical Center, WakeMed Health & Hospitals, and Vidant Health have no geographic overlap and are not in competition with one another, but the deal should enable them to attain benefits of scale while retaining their independence.
Three of the largest health systems in North Carolina have created a shared services operating company.
Donald Gintzig
President and CEO of WakeMed
Senior leaders at Vidant Health in Greenville, Wake Forest Baptist Medical Center in Winston-Salem, and WakeMed Health & Hospitals in Raleigh have announced jointly that the new organization, which has yet to be named, will allow the three systems to gain benefits of scale while enabling each system to maintain its independence.
"We have three very large successful organizations all committed to improving the health of their communities and all committed to remaining independent in service to their communities," said Donald Gintzig, president/CEO of WakeMed, who was reached for comment Friday.
"This model made the most sense for us trying to explore ways we can work together to improve quality within our healthcare systems and the communities and to help make healthcare more affordable."
"This gives us the ability to still focus on those aspects that are community focused while at the same time tying our efforts around that quality/affordability piece, and working on those things that make sense as we start to build it and evolve the organizational efforts going forward."
Gintzig said that the agreement was facilitated by the fact that the three health systems have no geographic overlap and are not in competition with one another.
The looser shared services model also means the deal will not be subject to rigorous anti-trust or stringent and lengthy regulatory review which is required for traditional mergers and acquisition. This "again makes it more effective in both the near- and the longer-term in pushing initiatives forward," Gintzig said.
"It in no way could be viewed as anticompetitive because our markets don't overlap, and that is one of the beauties of us partnering with these other two entities that are committed to remaining independent."
The model is designed in anticipation of healthcare reform, the decline in Medicare/Medicaid reimbursements, and the shift away from volume toward value. Gintzig says the model could adapt to support Accountable Care Organizations and population health initiatives through business and clinical efficiencies that include clinical protocols, supply chain, IT and infrastructure management.
"We are all three outstanding health systems and if we just move each other up to each other's best practice we will significantly improve quality in our region," he said. "As we improve the quality piece, we are able to drive value and it positions us well to be able to encourage and support the transition from predominantly healthcare to both a healthcare and a health world."
The company is formed as a separate limited liability company with a board made up of representatives from the three health systems. "There will be an operating committee and a governance committee along those lines," Gintzig says.
"It is going to start out small. Potentially it could grow, but it will have between five and 10 employees; some external who are brought in from the outside with the expertise to help lead this effort, and I am sure some internal."
Gintzig says the savings will come when the three systems leverage their market size and identify redundancies and efficiencies.
"Together we are well over $6 billion," he says. "Wake Forrest, Baptist, and Vidant are all affiliated with medical schools. We are a very large training site and a tertiary hospital that partners with University of North Carolina for educating and training physicians."
"We have the ability to partner together to bring some scale for group purchasing, the ability to come together to share services at some point for some back office requirements that may be needed both now and in the future. We all three are at various stages of implementing our electronic health record [systems] and we all use the same vendor for that, which is Epic."
For example, Gintzig says the three health systems could save considerable money by pooling resources on data storage and retrieval. "Instead of all three of us having to build redundant systems, maybe we build one and use it to support all three entities," he says.
Eventually, he believes, the model could be expanded to include other health systems, physicians' groups or lab companies.
"The options are significant to explore," he says. "Although, part of the reason that this was able to be agreed upon and analyzed in a short a period of time was through starting small enough. We were not trying to bring eight organizations, but three committed organizations all with a significant amount of expertise and scale in their areas."
Kaiser Foundation, Tufts, and Harvard Pilgrim dominate this year's list of the nation’s top health plans according to the National Committee for Quality Assurance.
In our April Intelligence Report, the top challenge cited by leaders for their primary care redesign efforts is to get patients engaged in their own care. HealthLeaders Media Council members discuss why this is so difficult, and what steps their organization is taking in this area.
This article first appeared in the November 2014 issue of HealthLeaders magazine.
Michael Schaffrinna, MD
Chief Medical Officer
Community Health of Central Washington
Yakima, WA
There are two pieces. One, patient engagement in their own health is challenged by provider use of the electronic health record, and second is the social determinants, such as financial resources and education, of the patient population.
We are a community health center, so the patients we care for tend to be more disadvantaged Medicare and Medicaid and indigent populations. We don't have necessarily the educational background or the fiscal resources to be able to engage in the way that people need. That would be the No. 1 barrier, just the social determinants. Otherwise, most people have access to smartphones and things like that, so using the portal to help them become more engaged in their healthcare is certainly available to the vast majority of folks.
The challenge there is providing information through our EHRs in a way that is easy to understand. Providers across the country are being forced to adapt to EHRs that are not necessarily making life easier for them. We adopted an EHR about two years ago now, and we are still trying to recover from that decision. It is like a road full of potholes, and we have to fill the potholes so that providers have more time to engage with the patients.
Sam J.W. Romeo, MD, MBA
CEO
Tower Health & Wellness Center
Turlock, CA
Patient engagement has always been a challenge, and typically the response is, people want to take a pill for a quick fix. Nobody wants to recognize that the majority of diabetes is based upon obesity and 75% of most of the chronic illnesses are based on lifestyle issues. That is the challenge. How do we adjust the lifestyle?
I don't think the medical profession has done a good job at all. I spent 25 years in academia, and I can assure you that the impact of the importance of wellness, prevention, and lifestyle issues is almost zero. There are economic pressures. You get paid for taking care of diseases, not people. And patient engagement requires that you begin to think about what motivates people. We are more than disease. We are body, mind, and spirit, and mind and spirit have been undervalued, underassessed, and undertreated. If you think about those two components that is oftentimes what defines the negative effects that impact the body.
The economic incentives are beginning to change, which is a positive. People taking care of people instead of disease, where providers can effectively become more involved with the care of patients with prevention, wellness and lifestyle issues are a positive direction. High-deductible health plans increases the responsibilities of people making decisions on their own and wellness and prevention as a priority, and that is an important piece.
Tricia Nguyen, MD
President
Texas Health Population Health, Education & Innovation Center
Arlington, TX
On the challenges of engagement: Healthcare is not as simple, especially if you are a patient with multiple comorbidities. That requires more knowledge and more things to do, and a lot of it relates to lifestyle modification, and it is hard to change behaviors. We are creatures of reactivity, and if you are not experiencing pain, you aren't going to do anything about it. But even then, if the medication controls their symptoms, they may feel there is no need to modify their lifestyle.
On strategies to promote engagement: It's really about whether we understand individual behavior and what motivates and inspires individuals to take action to improve their health. We have to look beyond just treating the physical medical condition and look at the other dimensions of health, such as mental, social, and financial health and how to motivate patients. We are addressing other dimensions of health to get at physical health through innovative, engaging outreach programs and other tools.
I believe in group intervention. The cliché “misery loves company” is true, and that is why group therapy works. Group functions work because of our competitive nature. Internally we always want to be at our best. And, if we saw that we weren't doing well against our peers, whether it is physicians or patients, it does get attention. But also there is that support structure to know that "I'm not alone. Someone else is going through this and this works for them, and maybe I should give it a go."
Don Beckstead, MD
Program Director
Altoona (PA.) Family Physicians
Why is it difficult? There are probably two major reasons. One is that some of the patients don't think that it is their primary responsibility. They feel it is my responsibility to “make them healthy.” That is just some, not everybody. There is a second contingent of people who are either too busy, too tired, too unmotivated or whatever it would be in order to follow directions.
It's not just insurance companies and the government, but the hospital systems in general that are being pressured on these quality measures, and they then are putting the pressure on the doctors and the medical staff to do all of these things. Of course we are trying to pass that along to the patients, because if they aren't willing to pitch in and help out, we aren't going to get the numbers we are all looking for.
We participate in a quality improvement initiative called Improving Performance in Practice. It is a collaborative of all of the family medicine residency programs in Pennsylvania.
The quality has improved. If you look at the percentage of our patients, the diabetics who had the hemoglobin A1Cs done in the past six months, those numbers are all better. The sad part is they are not getting better quickly or dramatically. But at least we are seeing statistically significant positive results, so it's enough of a reason to keep us going.
Many employers are looking at private exchanges not just as a way to just save money in the short-term, but as part of a long-term strategy to lower costs, says a PwC executive.
Growing numbers of larger employers are looking at private health insurance exchanges for their employees as a means of addressing rising regulatory requirements, providing more nuanced coverage options, and containing costs, according to PwC's Health Research Institute.
A PwC survey this summer of 1,200 employers across 35 different industries found that 32% of them are considering moving employees to private exchanges within the next three years.
Barbara Gniewek, principal at PwC's Human Resource Services practice, says the move by employers to adopt private exchanges will likely be a more drawn out and measured process than the recent rush to sign up eight million enrollees under the public exchanges that were created under the Patient Protection and Affordable Care Act.
"There is an incredible level of interest in private exchanges from large employers," Gniewek says. "If you go back about 12 years when consumer-driven healthcare and high deductible plans started to emerge in the market, most employers said they would never do it. Now we see in our survey that 44% of our employers are considering having only high deductible health plans."
Gniewek says many employers are looking at private exchanges not just as a way to just save money in the short-term, but to form a long-term strategic play at trying to bend the cost curve and creating a better experience for their employees.
"Some employers look at exchanges as a way of saving money and moved to defined contributions so they [could] control their costs on an ongoing basis, which they can do with or without an exchange," she says. "It's a way for them to put a stake in the ground and change the way they're doing things."
Switching employees to private exchanges will foist more of the decision-making onto employees. Gniewek says that's not unique to exchanges. Employees already have been taking on more of the cost of their care in traditional benefits plans but that exchanges will provide more benefits and price options that meet individualized needs and budgets.
"'Skin in the game' was happening anyhow. The difference with exchanges is there is a lot more transparency," she says. "Some exchanges have good tools in understanding which providers are more cost effective and have better outcomes as well. Giving employees more information to make them better consumers is a good thing. Without that just putting them into high-deductible plans you had this cost-shifting going on anyhow."
The growing interest in private exchanges comes as a new Kaiser Family Foundation/Health Research & Educational Trust 2014 Employer Health Benefits Survey shows that annual premiums for employer-sponsored family health coverage reached $16,834 this year, up 3% and continuing a recent trend of modest increases.
Workers on average paid $4,823 annually toward the cost of family coverage this year. Worker-only premiums averaged $6,025 this year, of which workers averaged $1,081 of the cost, according to the survey, which was published in Health Affairs.
In the longer term, the Kaiser/HRET survey and analysis found that premiums grew slower over the past five years than the preceding five years (26% vs. 34%) and well below the annual double-digit increases recorded in the late 1990s and early 2000s. These premium increases are roughly in line with this year's average annual 2.3% increase in workers' wages and a 2% increase in general inflation.
"The relatively slow growth in premiums this year is good news for employers and workers, though many workers now pay more when they get sick as deductibles continue to rise and skin-in-the-game insurance gradually becomes the norm," Foundation President and CEO Drew Altman said in prepared remarks.
In 2014, 80% of workers had an annual deductible, with the average at $1,217. Workers typically must pay this deductible before most services are covered by their health plans. Since 2009, the average deductible has risen 47% from $826, Kaiser/HRET reported.
"The deductibles for workers have crept higher over time, topping $1,200 on average this year," study lead author Gary Claxton said in prepared remarks. "Today, four in 10 covered workers face at least a $1,000 deductible, nearly double the share from just five years ago."
Gniewek says employees will be motivated and have the ability to find value and savings in the private exchanges, more than they would with a traditional one-size-fits-all package of benefits.
"Employers typically provide insurance for the average of the population. They try to offer a portfolio of benefits that meets the needs of everybody, but nobody is average. Everybody is different," she says.
"An exchange gives more options so people can buy what they want. Very often they will buy down. There is the savings that comes with people buying lesser coverage because they didn't need the level of coverage they had for whatever reasons."
"The savings also come from enhanced consumerism, the ability to have better-integrated wellness programs, and so all of the other things that employers are trying to do to engage their employees to become real consumers of healthcare, a lot of that can be facilitated through an exchange."
Cedars-Sinai, MemorialCare Health System, and UCLA Health are among the health systems that have joined with Anthem form an integrated healthcare network expected to challenge Kaiser Permanente's dominance in Southern California.
Anthem Blue Cross and seven health systems serving Los Angeles and Orange County, CA on Wednesday announced the creation of an integrated healthcare network called Anthem Blue Cross Vivity that is expected to challenge Kaiser Permanente's dominance in that market.
"Vivity is a very unique collaboration. This is the first time in the country than an insurer and seven competing top quality hospitals have completely aligned around maximizing health," Pam Kehaly, west region president for Anthem Blue Cross said on a webconference.
"The business model of old for hospitals has been to keep their beds full. Under the new model the eight of us are successful only when we keep people healthy and out of hospital beds."
The seven "founder" health system for Vivity are: Cedars-Sinai, Good Samaritan Hospital, Huntington Memorial Hospital, MemorialCare Health System, PIH Health, Torrance Memorial Medical Center, and UCLA Health. Senior executives from the seven systems joined Kehaly for the announcement.
Vivity, a limited liability company, gets its name from the Latin verb vivere; "to live." The plan will begin enrollment on Oct. 1, but only for companies with 50 employees or more, with coverage to begin on Jan. 1, 2015. CalPERS, the nation's second-largest purchaser of health benefits, has signed on to access Vivity within its Select HMO network in Los Angeles and Orange counties.
"We want to keep growth fairly controlled until we figure this out," Kehaly said. "At the point that we have all the basics down and we are doing this right, this group will talk about how we are going to expand the population and potentially even the geography. But we don't want to mess this up by overwhelming it with volume."
Profit Distribution
Under the business model, Anthem will collect premiums from enrollees, and use the money to pay for the cost of care and administration. "What's left over is put into a pool that is distributed amongst all of the founders," Kehaly said.
"The financing mechanism is, at the end of the day, the profit that is left over gets put back into the LLC and is distributed to all of folks standing up here."
Savings achieved through alignment, economies of scale, and eliminating waste and redundancies with the systems' 14 combined hospitals and more than 6,000 physicians will allow the plan to offer what Kehaly says are "premiums that will be lower than what exists in the market today."
To attract enrollees, Kehaly says Vivity has tried to simplify the benefits package for consumers. "We don't have deductibles where people get confused about what share they owe and what the insurance company is going to pay," she says.
"What is different is the actual experience once they're past the initial enrollment. The experience will be coordinated. We will wrap programs around this to create a patient-centered experience. We are all invested and coordinated to make sure that end-to-end care is managed and that we are to keep people out of the hospital through wellness programs and communications. The difference that an individual would see is a much more consumer-centric approach to managing health than they would in a standard benefits plan."
A Budding Rivalry with KP
With the announcement., media attention focused on the budding rivalry that Vivity creates with Kaiser Permanente, the dominant integrated care system in the region that controls more than one-third of the market.
Kaiser Permanente Senior Vice President Peter Andrade did not appear overly concerned by the prospect of a new player on the block
"So many California businesses people choose to offer Kaiser Permanente care and coverage to their employees and their families because we've figured out how to deliver the highest quality care, in the most seamless, integrated ways, at some of the most affordable rates available," Andrade said in prepared remarks. "The fact that our system is not just stitched together from existing parts, but has actually been built with this integration as the goal, will be difficult for others to copy."
"I'd say the same thing if I were sitting in his shoes," says Barry Arbuckle, CEO and president of MemorialCare Health System, the only Vivity system with a presence in Los Angeles and Orange counties.
Arbuckle, reached for comment Wednesday, says Vivity has attributes that would be hard to match. "Kaiser is a very good model, but I think we can be more nimble than what Kaiser might be," he said.
"Since we are bringing together organizations that in many cases have luminary physicians and providers, the market is going to say, 'So I can have Kaiser's good model and I can have access where I live and work.' Or, 'I can have hospitals and physicians who in many cases are the who's who in their field and for the same price point.'"
Arbuckle says physicians will be attracted to the diverse working models that Vivity offers.
"In our organization, we refer to it as wanting to meet the doctors where they are. It's not: 'You have to be employed. You have to follow this model,'" he says. "We all have integrated IPA physicians and integrated medical group physicians. These physicians are talking to each other now. It's an interesting series of opportunities in front of us."
Steve Valentine, president of The Camden Group, and LA-based national healthcare consulting firm, says Kaiser Permanente is "not going to be overly threatened."
"They will wait and see how this goes," he says. "We will certainly know by February or March because Vivity will be offered to CalPERS on Jan. 1. Then we will see how the enrollment goes and how much volume moved from Kaiser to Vivity."
Because it's a closed system, Kaiser enrollees generally don't access healthcare outside of the network, which means competitors can't access one-third of the market in the two county region.
"Now the systems that came together for Vivity are premier, well recognized, great reputation organizations," Valentine says. "They've teamed up with Anthem to offer what they've said is a no-deductible. You go see the doctor it doesn't cost money. Then they are saying their premium will be 10% below Kaiser. So it's good for consumers because it is now lower cost. And they removed a barrier to care by having these no deductibles going in."
Kehaly tried to downplay the rivalry with Kaiser. "This is not designed to go after Kaiser specifically. What we are recognizing is that the most effective delivery model is an integrated delivery model. The genesis of this initiative came from that recognition that we can reduce waste, improve quality of care, provide people access to the top facilities in the nation, frankly, and do that in an integrated way."
Arbuckle says he doesn't know what percentage of MemorialCare's patient volume will be made up of Vivity enrollees. "The answer to that question is something my board members want to hear as well," he said.
"It depends upon how the enrollment ramps up. We think this is going to work well together. We have the right people, the right systems, the right governance structure, but let's see how this thing goes before we try to get too big."
The gradual rebranding "is consistent with where we have been moving as an organization in the last two or three years as a single corporation delivering care in four states, and not [as] a confederacy of 19 hospitals," says the CEO of SSM Health Care.
What's in a word?
William P. Thompson
President and CEO of SSM Health Care
I wondered about that after SSM Health Care this month announced that it is changing its name to SSM Health at its 19 hospitals and more than 60 outpatient facilities in four Midwestern states.
At first blush, dropping "care" from a name brand doesn't seem like a big deal. That one little four-letter word, however, has become freighted in the healthcare industry. It has come to suggest, ever so subtly, that the services provided are reactive rather than proactive; that the focus is on delivering sick care instead of emphasizing health and prevention.
The rebranding will be gradual, starting at SSM Health hospitals in mid-Missouri and expanding from there. The process expected to be completed by 2016.
William P. Thompson, president and CEO of SSM Health Care, spoke with me about the name change, what prompted it, and what it signifies. The following is an edited transcript of our conversation.
HLM: What prompted this name change?
WPT: Like every other healthcare system we have been challenging ourselves as to what does the future of healthcare really mean. We've talked about this transition from volume to value.
We recognized about three or four years ago that we were going to have to transform ourselves from being strictly an acute-care, hospital-based, episodic care[-focused], sickness system to a system that was truly an integrated delivery network fully capable of assuming responsibility both clinically and financially for the health of the population.
We recognized that we were going to have to do a better job of connecting with patients and we were going to have to do a better job of assuming risk. We made significant investments in information systems, medical records systems, other infrastructure improvements. We made a significant investment last year to acquire the Dean Health System and Dean Health Plan and to add additional capabilities to our system.
We also had an interesting conversation with some fairly sophisticated healthcare purchasers, large employers and insurers, who told us we were one of the best kept secrets in our communities.
We looked at our various markets and had something like over 100 different names and logos and looks to our identity. When you looked at that, you realized we really are a best-kept secret because the exceptional things we are doing in one of our hospitals or facilities really wasn't transferring to the benefits of the others and we had to change that.
We also recognized that we had to prepare for a more retail- or consumer-oriented business orientation with the growth of high-deductible health plans, defined contributions health plans, and the emergence of public and private exchanges.
Individual people, patients, beneficiaries, customers are going to make more and more of the decisions as to where they were going to receive their care.
HLM: The name change will happen gradually over the next two years. Why not do it all at once?
WPT: It's the old joke: How do you eat an elephant? One bite at a time.
It is a matter of doing it well in one market and rolling it out to the next. We may find that we can speed up the process after we have done it a while, but it is a fairly substantial endeavor to change the signage on our facilities, and change the stationery, [and] all of the existing pieces that are out there.
A lot structural things have to be changed. There are a lot of communications, paid advertising, and other kinds of communications that we are going to have to do.
We also want to make sure we bring our employees along. Part of this transformation we are in is to be much more patient- [and] customer-centric than we have ever been in the past. So we are engaging our employees today in what will probably be a six-month process through a series of meetings and focus groups and conversations.
If you were the patient how would you want to be treated? What would be important to you? We have done a ton of research on branding and identity, but in the future we have to be able to deliver a physician visit virtually. We have to be able to open up some technological portals that allow patients to contact us through their smart phones or iPads, the ability to communicate through our patient portals that we haven't done in the past, recognizing patients want immediate access to a provider. How do we set up same day appointments?
How do we ensure that we have extended hours? How do we facilitate the admission of patients or facilitate a patient's visit in a clinic or office setting? Can we eliminate waiting times in the waiting rooms? Can we eliminated waiting in the exam room?
Those are the questions we are asking to ensure that we can deliver on this promise of "experience exceptional." We want to roll this out having fully engaged our employees and making sure they understand what we are trying to accomplish, but also solicit their help to assure that we can actually accomplish what we are promising.
HLM: What else will the rebranding involve?
WPT: The logo will change slightly. It will be very representative of what we have had traditionally. We are going to use the tagline of "experience exceptional." That will become part of the brand rollout. That is what we want to have a lot of conversations about.
What does that really mean in this new world of retail/consumer orientation where we have to be competitive in an environment where patients are going to act like—it's not the best analogy —people making value decisions about where they buy hamburgers?
They are going to make value decisions about where they buy healthcare and how they want that healthcare. Do they want it in a traditional face-to-face meeting? Do they want a telephone visit or a video visit? We have to be prepared to meet the patients where the patients are, not where we think they should be going, which is the tradition of healthcare.
HLM: Do you see any potential savings in this name change?
WPT: I don't know how much we could save, but the fact is we can now use a single promotional piece across our entire system with very minor changes. We can use some common advertising, common production of both print and television and other media ads, making it easier to transfer that across the entire system.
There are some significant [potential] savings, but that is consistent with where we have been moving as an organization in the last two or three years as a single corporation delivering care in four states, and not [as] a confederacy of 19 hospitals.
Health policy researchers at the University of North Carolina are building an interactive computer model to attempt to empirically answer questions about patients-per-physician ratios by region and by specialty.
It's real and it's happening right now, as a quick chat with a physician recruiter or most hospital executives in most parts of the country will verify.
The shortage is expected to intensify in the coming years as more physicians retire, the general population grows and grays, and more people get health insurance under the Patient Protection and Affordable Care Act.
Still, there is something clunky about these projections. They may accurately reflect gross patients-per-physician ratios. That's easy to identify and track. These ratios don't, however, account for the more intuitive, subtle way that healthcare providers make their localized adjustments to provide access to care in their service areas.
If there is a shortage of cardiologists, for example, to what degree will primary care physicians alleviate that shortage by taking on the more routine monitoring of cardiac patients? Along those lines, how do we determine how many nurse practitionersor physician assistants will step in to alleviate a shortage of primary care physicians?
I can't prove it, but from what I am hearing anecdotally, providers are already doing this informally on a patient-by-patient level in their service areas. When they see a need they find a way to meet it.
"We do it, but not officially," says Tim Putnam, CEO/President of Margaret Mary Health in Batesville, IN. "We look at what the specialist is doing that could be done by a family physician. Some specialists are seeing a lot of patients on maintenance that they really don't need to see."
Now health policy researchers are the University of North Carolina are building an interactive computer model to attempt to empirically answer those questions. Erin Fraher, team leader at UNC's Program on Health Workforce Research and Policy, says FutureDocs Forecasting Tool tries to factor in "plasticity."
"Past workforce models that have produced estimates of future shortages have said 'we are going to need X many primary care physicians or X many cardiologist or X many general surgeons.' That is not how healthcare is delivered on the front lines," Fraher says.
"We want to create a model that acknowledges that depending upon the community you are in and the models of care you have. For circulatory conditions you might use more internists and family physicians in a rural community and cardiologists in an urban community. Plasticity lets you think about who can deliver a set of services and allow different configurations in different communities for those services."
FutureDocs is granular to the level of Tertiary Service Areas so its usefulness might be limited for smaller hospitals that need greater local detail.
Erin Fraher
"If I were a health system or a hospital I would use this model to look at demand and what the workforce looks like, and using plasticity to see if I can use a less-expensive workforce. You can look at physician assistants and nurse practitioners in this model," she says.
"Look what happens when physicians retire and what if you increased physician (full-time equivalent) by 5%? Those seem like marginal changes, but in workforce models, two of the biggest drivers are FTEs and retirement. As a health system, just educating people about that could be a short-run way to solve a workforce shortage. The model allows you to educate yourself, your HR director, your local physician community, and your medical society or whomever you are collaborating with what the situation looks like under a set of scenarios and how it might change."
When plasticity is factored in, Fraher says, providers and hospital administrators might learn that the physician shortage, while real and immediate, is also manageable.
"Everyone is screaming 'physician shortage,' but most studies are written about national estimates," she says. "People love the big data numbers.'We are going to be short thousands of primary care physicians and thousands of specialists.'"
"FutureDocs has the ability to see that it may or may not be true depending upon the community you are in. In fact, overall, the model says the capacity of physicians to meet the demand for healthcare services is in balance and will continue to be in balance."
A bigger issue for local providers is not the national shortage of physicians, but the disparities in the numbers of physicians between different regions.
"Some places have severe shortages and other places actually look pretty good or even over capacity," Fraher says. "FutureDocs helps people see that your perception of this physician shortage depends upon where you are sitting geographically."
"Your demand for healthcare services for circulatory conditions are going to be much higher in Florida [where] you are going to have lower demand for OB/GYN. No brainer! This is a model that allows you to see those variations in utilization and surplus and shortage across communities."
"My hope," says Fraher, is that the model will provide a more nuanced picture that has been treated a bit more glibly at the national level."
Hospitals in states that have rejected expansion have seen flat or sagging admissions and little if any reduction in the numbers of uninsured and non-paying patients, while states with Medicaid expansion have seen the opposite, a PwC study finds.
Medicaid expansion under the Affordable Care Act has been in place less than one year, but it's already creating a gaping financial chasm between hospitals in states that accepted the expansion money and those that have rejected it, a PwC Health Research Institute analysis suggests.
The PWC study examined recent earnings data from the nation's five largest for-profit hospital companies that have a combined 538 hospitals in expansion and non-expansion states and found a stark contrast.
Hospitals in the 24 states that have rejected expansion continued to see flat or sagging admissions and little if any reduction in the numbers of uninsured and non-paying patients.
Hospitals in the 26 states and the District of Columbia that expanded their Medicaid coverage to include an additional 7.2 million people, and accepted the billions in federal dollars that accompanied it, saw a significant rise in Medicaid inpatient admission and a concurrent decline in self-pay and charity care.
"Surprise? That is a fair assessment. As we came up with this we were struck by some of the results," says Robert Valletta, US Health Services Leader for PWC. "At this point in time it appears that this is working the way that I think it was intended to work from a governmental perspective. So far, I think we should enjoy what we've found."
Specifically, PwC found that:
Dallas-based Tenet operates hospitals in five expansion states and saw uninsured and charity care admissions drop 46%, coupled with a 20.5% increase in Medicaid admissions. In the second quarter, Tenet saw a $78 million drop in unpaid care.
Franklin, TN-based Community Health Systems operates hospitals in 29 states, including 12 expansion states that account for just 23%, of CHS's overall revenue. However, those expansion state hospitals provided a major financial lift because self-pay emergency room visits fell 41%.
CHS has seen a corresponding 10.4% increase in Medicaid admissions through the first half of this year compared to the same period in 2013. The surge in new paying customers and reduction in uninsured patients, accounts for about $40 million to $45 million of CHS's earnings. CHS expects another $40 million benefit through the second half of 2014.
HCA Holdings revised its earnings outlook to account for better-than-expected revenue. The company hospitals in five expansion states saw Medicaid admissions grow 32% with a corresponding 48% drop in uninsured admissions through the first half of the year. Uninsured volume also declined 2% in non-expansion states.
LifePoint Hospitals operates in 20 states—seven of which expanded Medicaid. The health system saw second-quarter earnings of about $158.7 million, a 35.8% increase over the same span in 2013. Of that, LifePoint executives attribute about $13 million to the PPACA's coverage expansion. About 80% of LifePoint's newly-covered admissions came from Medicaid in the second quarter.
Pennsylvania-based Universal Health Services reported a 30% increase in second-quarter adjusted net income, to $155.6 million compared to $118.9 million during the same period a year ago.
Chip Kahn, president of the Federation of American Hospitals, says Medicaid expansion is doing what it was designed to do when hospitals agreed to support healthcare reform four years ago.
"If you look at the Congressional Budget Office numbers, this is what it was supposed to do, which is [to] allow these many uninsured Americans, most of them relatively low or very low income, to have access to healthcare. That's what's reflected here," Kahn says.
"It also reflects a level of both un-insurance and the pressures from that that hospitals have historically and particularly in the last few years been dealing with."
Although the PwC analysis examines the effect of the expansion on for-profit hospitals, Kahn says the Medicaid expansion money is benefitting the non-profit hospitals as well.
"This isn't a for-profit/non-profit issue," he said. "This is benefitting all of the patients who now have coverage and it is benefitting all of the hospitals in those states regarding the uninsured who previously couldn't pay for the care we provided, both for-profit and non-profit."
"In some states," he added, "public hospitals are seeing a tremendous shift because the people who are still coming to their hospitals so many of them now have coverage."
Although Medicaid's low reimbursements remain a point of contention with all providers, Kahn says many hospitals understand that half a loaf is better than nothing.
"They were coming into the hospital previously and frankly were unable to pay anything or if they were it was a pittance," he said. "Now, they have coverage like other Americans and yes, the payment amounts are significantly less than private payment for private coverage or for Medicare coverage. At the same time, it is compared to what?"
Valletta says hospitals understand that an "an absolute counter to the increase in Medicaid revenue is a reduction in the free care revenue, which is a direct increase to margins and revenues. So, clearly you'd rather have even a small amount of revenue than no revenue at all."
The PwC report avoids arguments for and against the Medicaid expansion. Valletta says it's fair to expect that these ongoing and pronounced disparities will stoke the pressure to expand Medicaid in non-expansion states.
"We are not passing judgment as to whether the states should or shouldn't. We are just stating the facts of what happened in those particular states where there was expansion and the direct contrast to those where there wasn't," he says.
"You can see that even within the large for-profit systems there was a distinct difference in their hospitals that are in expansion states versus not."
