With the increase in risk-based contracting, hospitals and health systems depend on leaders to develop measurements that will help keep patients out of high-cost care settings.
Leaders at hospitals and health systems with risk-based payer contracts are taking a crash course on postacute care.
Learning how to keep patients out of the hospital, where the highest-cost care happens, is critical to success under risk.
Here are four ways healthcare leaders are using data to help keep patients stable and out of the highest-cost care settings.
1.To Enable Course Correction
In helping to develop HM Home and Community Services, a division of Pittsburgh healthcare conglomerate Highmark Health, Brian Holzer, MD, saw his job in simple terms: Close gaps in postacute care.
The former president of the organization (he left in late May to become president of Kindred Healthcare's Kindred Innovations unit) says the best way to do that is through measurement of key metrics and collaboration with postacute care providers that allow course correction in the patient care journey at the earliest possible point.
HMHCS manages the interactions between those postacute companies and acute care facilities with the aim of holding postacute providers accountable for their performance in quality and cost control.
Its team closely monitors metrics such as SNF and home health readmission rates and SNF lengths of stay.
"Generically speaking, these are examples of the unit measures of quality, so we're looking at those trends, but as important on a weekly basis is how well the model is working for our ACO and health plan customers," says Holzer.
2.To Shorten the Data Lag
Holzer hungers for more data that is applicable to realtime scenarios.
"Healthcare, particularly postacute healthcare, suffers from lack of actionable data," he says, adding that, nationally, approximately 40% of patients admitted to the hospital recover in some sort of postacute care setting.
"The ability to keep tabs on that patient to see whether medical recommendations are taking place, or when patients are picked up by other healthcare pros would be very helpful in helping the postacute side make commitments to hospitals and insurers on gains in quality and efficiency," he says.
That would mean insights from realtime data that doesn't really exist yet.
"We need to have insights from data as they flow," he says. "We're not the only entity touching patients. We need earlier info on who's going home and will need services, so that hospitals can better educate the patient on options, build detailed care plans, and measure how those plans work out."
On that point, he'll get no disagreement with Daniel Varga, MD, chief clinical officer at Texas Health Resources based in Arlington, TX. He's basically accountable for all clinical operations in the health system, serving in a dyad management model with the chief operating officer.
3.To Take Out Costs
The first place to attack inefficiency is the inpatient side, Varga says, but Texas Health Resources wants to broaden its reach into the postacute experience, which requires different measures to help improve care coordination and efficiency and prevent gaps in care.
"We know we have to take a significant amount of cost out of our system while not sacrificing quality, reliability, safety, and the patient experience," he says.
"That requires an obsessive approach to outcomes, an elegant approach to process redesign, and compliance with that process."
Compliance with process redesign is especially important in both inpatient and outpatient environments. The system has built hospital operations improvement dashboard measures, in close to real time, that allow observation of hospital operational metrics such as labor requirements based on patient load, productivity, and cost center analysis.
"Those dashboards allow us to drill into process redesign compliance on a daily basis," he says.
"Another piece we look at is something brand-new for us: labor cost per adjusted patient day, discharge and productivity metrics, but essential to our daily analytics is reliable care blueprinting, which is our approach to high reliability in bedside operations."
The redesign of bedside care, which features process-level leading outcome indicators that populate in real time, helps evaluate compliance in time to make course corrections, Varga says.
Blueprinting helps him gauge compliance in, for example, fall risk, documentation, or assessments.
There are 20 leading process indicators to make sure the care redesign parameters are being followed, but more important, where there's compliance and where there isn't. Varga and his team can drill deeply into compliance—even by job title.
"We've tried to create a metrics stack that's valuable to the specific user," Varga says. "For example, if we're looking at the reliable care blueprint for sepsis, observed versus expected mortality is really not valuable to a frontline technician. But we know a key process metric is early identification, and in order to slip the alert, a certain set of vital signs needs to be obtained. Everyone has a stack that applies to them."
4.To Enable More Risk Taking
Those tools and others like them will be important on the outpatient side as well, as Texas Health Resources takes more revenue risk, such as with the rollout of its NextGen ACO.
With approximately 80,000 beneficiaries, the ACO will be on the hook for plus-or-minus 15% of about $1.1 billion in annual premiums, depending on how it does in improving outcomes for Medicare beneficiaries.
Coupled with its existing Medicare Advantage offerings, the health system will experience about $1.5 billion in premiums either in total risk or partial risk in 2017, says Varga.
With more healthcare services gravitating away from acute care, Varga says to unlock the value the health system creates by managing an entire episode of care, it must take more risk.
"The only way we unlock the value we create is to take more risk."
Hospitals and health systems that made preparations to participate in CMS's bundled payment programs are left in the lurch, but those who failed to prepare will be rewarded.
Want to see a battleship turn on a dime?
You're about to get your chance, because by proposing to cancel its mandatory cardiac and expanded joint replacement bundles, the Centers for Medicare & Medicaid Services expects many hospitals and health systems to do just that.
After months of preparation, hospitals and health systems must scale back their plans to participate in what were formerly mandatory bundled payment programs.
Some may be happy to do so, because they recognize the potential to undermine profitable service lines and will be glad to jettison the expense associated with preparing for an unfamiliar way of paying for complex medical care.
Moody's Investor's Service calls the decision a "credit positive" for most nonprofit hospitals.
But others that have expended time, effort, and investment into preparing will find many of those efforts wasted.
Nearly no one will say that they don't want to achieve more value-based reimbursement in healthcare, partly because it's obviously the right thing to do, but mainly because healthcare costs too much and isn't of high enough quality.
There are legitimate disagreements on how to achieve better value, however.
The idea behind mandatory bundles was that bundled payments for specified conditions would incentivize doctors, hospitals, and post-acute providers to make better, more economic decisions regarding patient care. Because low quality begets higher costs.
Bundled payments are more than an idea, though. Some forward-thinking organizations have been using them for years to cut costs and improve care quality. And many commercial plans aren't backing off from them.
Yes, the jury is still out on whether all forms of bundled payment work as they are intended, and whether doctors and hospitals need more flexibility or risk adjustment in the way bundles are constructed and administered, but we already know how fee-for-service affects care costs and quality.
That is, negatively.
Which is why Moody's sees the rollback of mandatory bundles as positive for hospitals and health systems.
"Most hospitals still receive payments from insurers based on volume of services," Moody's said in a press release. "Under a bundled payment program, hospitals would take financial risk for costs in excess of a fee paid by Medicare for all care provided from time of admission to 90 days post-discharge."
As a U.S. congressman, Health and Human Services Secretary Tom Price opposed the mandatory bundles.
Now, under his leadership and that of CMS Administrator Seema Verma, CMS has first delayed, then, as of Aug. 16, proposed to cancel or reduce, the three mandatory bundled payment programs that were set to roll out July 1, 2017.
First they delayed them until Oct. 1, 2017; then to Jan. 1, 2018. Now, when January rolls around, even the one CMS bundle program that remains, comprehensive joint replacement bundles, will be curtailed severely (reduced from 67 mandatory geographic areas to 34).
If the new administration has a problem with the method of injecting value into government healthcare purchasing, that's one thing.
But to do away with promising programs to add value without offering alternatives smacks of pandering to the healthcare lobby, and of opposing something just because it came out of a previous administration.
If nothing replaces the mandatory bundles—and nothing seems forthcoming—this decision extends protection of the sacred cow of fee-for-service healthcare and wastes the time and effort some forward-thinking organizations have already put into preparing for more value-based reimbursement.
Not a single individual will come out and say that they don't want value-based reimbursement.
But actions speak louder than words, and CMS's decision to pull back from mandatory bundled payment programs speaks very loudly about where this administration stands on value-based reimbursement at this juncture.
The health plan is "financially unsustainable," says the New York-based health system's CEO, thanks to the failure of Congress to correct regulatory flaws in the Affordable Care Act.
More than 125,000 New Yorkers will have to find a new health insurance provider after Northwell Health shuts down its CareConnect health plan over the next year.
Founded in 2013, CareConnect was seen as a cornerstone for the 22-hospital health system’s foray into so called population health, which is aimed at cutting healthcare expenditures by focusing interventions on groups of individuals.
And while Michael Dowling, the nonprofit’s president and CEO, says the health system will continue to aggressively seek out innovative ways of organizing care delivery to bring value to patients, payers and employers, health insurance won’t be among them.
He blamed broken promises by lawmakers and regulatory flaws, not poor management or unforeseen reimbursement challenges, for the decision.
“It has become increasingly clear that continuing the CareConnect health plan is financially unsustainable, given the failure of the federal government and Congress to correct regulatory flaws that have destabilized insurance markets and their refusal to honor promises of additional funding,” he said in a press release.
He claimed that CareConnect would have been profitable in the 2017 fiscal year if it had not been forced to pay $112 million into the Affordable Care Act’s risk adjustment pool, which amounted to about 44% of the health plan’s revenue from its small group health plan. Further, he claimed that CareConnect would have faced another risk adjustment payment of more than $100 million in 2018 based on its small group revenue.
Risk adjustment payments were designed to prevent health plans from “cherry picking” groups of healthy patients who are less expensive to cover.
But Northwell claims the formula that requires carriers with healthier customers to transfer money to carriers whose membership is less healthy is fundamentally flawed because smaller, “more innovative” insurers like CareConnect must subsidize larger competitors, who have longer and more in-depth medical histories on their customers than “start-ups” like CareConnect, which has been in business for less than four years.
“I greatly appreciate the positive steps taken by the New York State Department of Financial Services earlier this year to reduce the financial impact of the risk-adjustment program on CareConnect and other small insurers writing individual and small-group health policies,” said Dowling.
“However, the continuing uncertainty in Washington about the future of the ACA, intractable regulatory problems and the federal government’s broken promise of so-called `risk-corridor’ payments to insurers provide us with no viable path to profitability in the foreseeable future,” Mr. Dowling said.
One of Northwell’s primary goals in creating the health plan was to align the system’s clinical outcomes and performance with financial incentives that previously had accrued only to insurance companies.
CareConnect operations will continue over the next year as the company works to transfer policy holders to other health plans, while continuing to pay claims during the transition. Many of its more than 200 employees will continue to work during the transition, and Northwell says it will assist them in trying to find other suitable positions within the health system.
Established in 2013, CareConnect was the state’s first provider-owned insurance company. Behind only Pennsylvania at 1.9 million enrollees, and tied with Michigan, New York had 1.6 million people in provider-led health plans at the end of 2014.
In addition to daily rounding, top hospital and health system leaders use a variety of statistics to paint a picture of their organizations' financial and clinical health. Here are five tactics to avoid drowning in a sea of unstructured information.
An effective CEO has to strike a balance between overreliance on data and informal surveillance. Here are five tactics to avoid drowning in a sea of unstructured information.
1. Use What Works for You
For Nancy Howell Agee, more information is better in helping her synthesize a daily snapshot of the health of Carilion Clinic, the seven hospital, Roanoke, Virginia–based nonprofit where she is president and CEO.
For her daily use, she’s built a custom dashboard that shows med-surg scheduling statistics, census information in the ICU, pediatrics, and whether there are any "holes" in the OR schedule.
Admissions, obstetrics volume, volume at the cancer center, high-level imaging stats, and both inpatient and outpatient ED and OR volumes round out the picture. Although dozens of other related metrics are available, these give her a good sense of challenges that may need closer attention.
"I look at that twice a day, and most of our senior management team routinely looks at that," she says.
Marc Harrison, MD, president and CEO of 22-hospital nonprofit integrated delivery system Intermountain Healthcare based in Salt Lake City, says he pays more attention to certain metrics that are closely associated with customer service than clinical outcomes, at least on a daily basis.
"I’m more interested in access than just about anything, because we can’t make people better if they can’t get in to see us," he says.
He looks at waiting lists for outpatient clinics, outpatient wait times, call abandonment rates at the health system’s call centers, and the time taken and ease of getting a hospital transfer into the system’s tertiary and quaternary facilities.
2. Drill Down Occasionally
Agee can look more closely into all these metrics. One way to do that is to pay close attention to staffing and measuring daily visits to the health system’s 240 practice locations.
She pays special attention to a workforce report that measures whether the health system is staffing appropriately based on volume.
Harrison finds himself drawn to paying special attention to conversations happening among clinicians about best practices.
While that type of monitoring isn’t a metric exactly, he sees such diligence as essential to the health system’s attempt to drive value.
For example, the orthopedic program runs a weekly meeting in which surgeons from around the system make presentations to each other on best practices—based on their recent experience with patient cases.
"It’s kind of a group consult, but as a system leader, I’m less interested in the outcome of those conversations than whether the conversations are actually occurring," he says.
Harrison sees these meetings as a way both he and clinicians can learn about physician preference items, for example, or adequate volumes to justify offering sophisticated procedures in certain facilities, he says.
"This is a surrogate for population health and value," he says.
3. Don’t Overdo the Financials
Agee views financial metrics less frequently—monthly and quarterly—with her leadership team. They discuss whether the system is meeting its budget, how the payer mix is changing, or how clinician RVUs are trending.
They also spend time reviewing home health visits, urgent care health visits, and what kinds of cases are trending higher or lower in the OR. Other metrics, such as analyzing whether the health system is meeting, ahead of, or behind plan, by entity, also take place less frequently.
"That’s about a half-day meeting with senior execs," she says.
Harrison likes to pay close daily attention to hospital transfers because he says they speak to accessibility on the inpatient side, but he wants to understand the ROI behind the things the health system does. Somewhat surprisingly, that’s not always reflected in financial statistics.
For example, one area of innovation at Intermountain is its work on integration of behavioral health and clinical programs, which embeds mental health services in some of the system’s primary care clinics.
"We’re able to do that as a payer and provider," he says. "We spend $22 per patient per year and return $120 per patient per year in the form of better overall health and less ER visits."
Those kinds of metrics, in which it takes time and trial-and-error to make the connections to come up with an ROI, are important in a world where there is a race on to make use of predictive analytics, he says.
4. Share the Data
Sharing metrics among the leadership team can help make sure the organization’s bases are covered.
"We also have a close to real-time view of everything happening in all seven of our EDs, and we look at volume, work hours, holds, wait times, and left-without-being-seen,” says Agee.
Harrison is incorporating predictive analytics into his regular dashboard.
"Predictive analytics is trying to understand which patient needs an intensive approach and who needs a less intensive one to maintain their good health," he says. "That suite of metrics will be important in providing ultra-segmentation of a market."
Initially, that work will be algorithm-driven, but in the near future, Harrison says with machine learning and automation, healthcare can take advantage of what he calls a fourth industrial revolution.
"Each of us represents a couple thousand data points, and a supercomputer can compile our risks compared to a large population based on our characteristics," he says. "Then we can actually provide precision medicine—not for cancer or heart disease—but to keep people well."
5. Avoid Surprises
"Everything boils down to metrics, but I’m always cautious that they tell you a story but not the whole story," Agee says. "You also have to tune into what’s really happening to your patients and staff."
In other words, metrics are important but not sufficient.
"Taking the information and pressing back is important," she says. "Data is not the intelligence. What else do you need to know?"
For example, she says, recently, observation days jumped 20% across the organization. She followed up and asked why. The explanation was that it affected by a holiday and the two-midnight rule for inpatient status.
"Why would that suddenly change? We’d planned on that," she says. "I went with it, but as I was thinking more about it, they reran the statistics, found a mathematical error, and observation days weren’t up at all. That’s important because our work days and PTO are affected by this statistic."
Harrison believes surprises can be minimized by more closely linking clinical performance with financial performance by taking more risk in reimbursement. It’s a good way to force reliance on data and metrics, says Harrison, who estimates between 35% and 40% of the system’s reimbursement is currently at risk.
"Because we have a health plan [Select Health], we’re ahead of some other organizations. We’re learning, but eventually all healthcare systems have to get in the water and swim," he says.
Nonbinding letter of intent would will add 12 hospitals and numerous outpatient facilities to Ascension’s joint venture with Adventist Health System.
The nation’s largest Catholic health system is getting bigger if it completes an acquisition of Chicago’s Presence Health, detailed in a nonbinding letter of intent between the two organizations released today.
If the acquisition is completed, terms of which were not disclosed, the 12-hospital Presence Health will be added to AMITA Health, which is a Chicago-based joint venture between Ascension’s Alexian Brothers Health System, based in Arlington Heights, Illinois, and Adventist Midwest Health in Hinsdale. Adventist Midwest is part of Adventist Health System, a nine-state, 45-hospital health system based in Altamonte Springs, Florida.
All Presence Health facilities will join AMITA except Presence Life Connections, which would join Ascension Living, Ascension’s senior care subsidiary.
“Since we brought together Alexian Brothers Health System and Adventist Midwest Health to form AMITA Health two years ago, we’ve always looked for opportunities to add like-minded partners with similar values to our system,” said Mark Frey, president and chief executive officer of AMITA Health and senior vice president of Ascension Healthcare, in a press release. “Bringing Presence Health into Ascension and AMITA Health is a perfect fit and an exciting continuation of our commitment to increase access to quality healthcare in the many communities we serve.”
The press release noted that the acquisition would help Ascension manage the health of large populations more efficiently and effectively, although regulators, which still must achieve the deal, will weigh in on whether the combination would in fact result in more efficient and effective healthcare delivery in the areas affected.
Presence Health, the largest Catholic health system in Illinois, agreed to sell two hospitals to OSF Healthcare, an Illinois-based health system, earlier this month. A spokesman for Ascension did not immediately answer an emailed question about how the LOI with Ascension would affect the previously announced deal.
“We look forward to working together to engage in this joint effort to expand, and continue to deliver, quality care for our patients and residents, as well as provide additional clinical opportunities and patient care resources to all our physicians and associates.” said Michael Englehart, president and chief executive officer of Presence Health, which has been struggling financially, and reported $40 million in operating losses last year.
The Ascension press release promises that the transaction would lead to increased access to care, expand the system’s physician network and deepen sub-specialization capabilities, producing better value for patients. The LOI is expected to lead to a definitive agreement pending detailed legal and financial due diligence, along with regulatory and canonical approval.
The Ascension Healthcare division of Ascension currently operates 141 hospitals in 22 states.
There are ways to keep going it alone in the face of massive consolidation, says one health system's CEO. It's not a strategy, but a means to end, he says.
Afraid your hospital or health system can't compete because you lack size and scale?
A merger might help, but it's not the only possible answer to your problems. Freehold, NJ-based CentraState Healthcare System's top leader is certain it's not the best solution for his organization.
Consolidation continues to upend the acute and post-acute healthcare industry. In fact, in a recent HealthLeaders Media survey, some 87% of respondents said that their organization is exploring potential deals, completing deals already under way, or both.
But CentraState isn't among them, says John Gribbin, its president and CEO.
On a continuum basis, CentraState is already diversified. That's one of the potential selling points of an M&A deal.
Anchored by the 248-bed CentraState Medical Center in Freehold, NJ, the 2,300-employee organization also contains three senior care facilities—one assisted living, one skilled-nursing facility, and a continuing care retirement community.
It can be argued that CentraState may not possess the scale to compete with multifacility, multistate large health systems that can take advantage of a hub-and-spoke strategy for referrals. Nor may it be able to afford expensive interconnected IT systems.
But there ways other than mergers to achieve scale and collaboration, says Gribbin.
Means to an End
Gribbin insists that he and CentraState's board, which supports and encourages independence, are not dogmatic about it.
"Independence is not a strategy," he says. "It's a means to an end. The moment that ceases to be worthwhile is the moment we'll consider another way to achieve our mission."
Change is part of that strategy, he says, adding that healthcare in 2017 needs to be far more collaborative, not only with patients and family, but with other healthcare organizations. That's a big difference from previous generations.
"Our real strategy is scale and relevancy," he says.
And there are ways to create scale short of taking on all the legacy costs and "baggage," as Gribbin calls it, inherent in any merger.
"There's a lot of costs involved in merging… and while mergers work in some instances, they don't work in all, and in many communities, they are increasing costs to the consumer," he says.
In addition to the commonly stated goals of improving the community's health and wellness, patient costs are extremely important in fulfilling CentraState's mission, Gribbin argues.
Many mergers involve replacing hospitals and adding patient towers and high-cost equipment. That adds to their cost structure means they have to extract higher pricing, says Gribben.
"That's the vicious circle you find yourself in. I prefer to create scale in a different manner."
Focus on the Mission
Gribbin, who has led CentraState for 17 years, prefers to solve that challenge in part through a strong network of physicians unburdened by excessive administrative overhead.
He says the health system has to increasingly take on value-based contracting and financial risk. To be successful under such value-based reimbursement, partnerships with physicians are increasingly important, as is a redefinition of the relationship with the patient.
"We used to look at our relationship with the patient as a typical hospital stay," says Gribbin. "What we're preaching now is that hospital stay is a temporary interruption in our relationship. What happens before or after defines the relationship's success."
With its physician alliance and clinically integrated network in place, CentraState, unlike many hospitals, has been able to avoid, in large part, expensive physician practice acquisitions that can be a financial challenge.
"I've done it in the past, and may do it again, but we've tried to avoid it," he says. Instead, contracts define the relationships and incentives.
As an example of those relationships, CentraState partners with a major patient-centered medical home primary care practice on four performance and three utilization measures.
As a result of the shared savings generated in the first year, which came largely from hospital-based savings, the physicians in that group referred 59% of their patients to CentraState.
This year they've referred 71% of their patients to CentraState because of its low costs, which help drive financial reward for both parties under the contract.
"On one hand, we're keeping people appropriately out of acute care, but on the other hand, they're sending [more] people here. So we're experiencing higher but more appropriate volume. In this scenario, everyone wins," Gribbin says.
A New Deal with Physicians
In order to avoid the need to acquire physician practices, Gribbin says it helps to have a suite of services to offer them as a starting point.
"Most don't want to sell their practice, but they feel like they have to, he says. "If you give them the opportunity to stay independent, they'll take it."
Helping them with access to better revenue cycle management, malpractice insurance, and risk management, and helping them create the ability to enter into risk-based contracts is another big help with defining a new relationship based on shared goals with physicians that ultimately benefit the patient, he says.
Physicians can establish a relationship with CentraState through its independent practice association, or a physician hospital association, and avoid surrendering their autonomy, he says.
"The physicians got paid better, the payer saved money even including the bonus, the hospital won because it's high value care, and the patient's winning too," he says. "It's a microcosm of what we're trying to accomplish."
As a small organization, both Gribbin and the board worry about being frozen out of narrow networks. Much of the energy they've expended in being a low-cost organization is wasted, he says, if they can't get the big payers to include them in contracting.
"As long as the market isn't rigged against us, we're OK, because we're a high-value organization."
The new entity will complete the buyout of for-profit HCA after the failure of a previous deal between the Oklahoma health system and St. Louis-based nonprofit SSM Healthcare.
It seems the creation of a new nonprofit organization will finally result in a takeover of ownership and management of OU Medical System this fall, after almost a year of efforts to end management of the system under a joint operating agreement with HCA.
The new entity, OU Medicine Inc., a partnership between the University of Oklahoma and the University Hospitals Authority and Trust, a state agency, will buy out HCA after a previous deal with St. Louis-based nonprofit health system SSM Health fell through this spring. OU Medicine will buy out HCA, bringing the health system into closer collaboration with the University.
Jason Sanders, senior vice president and provost for OU Health Sciences Center, told the Norman Transcriptthat the new deal will bring the university to a closer working relationship with the health system, and that its educational affiliation and research affiliation will provide for growth.
HCA is the current manager and joint owner of OU Medical System hospitals and facilities, which include the flagship 680-bed OU Medical Center in Oklahoma City. Previous reports suggested the HCA buyout would cost $750 million, and be completed sometime this summer.
SSM Health had been expected to take over day-to-day operations at all of OU's medical systems, hospitals and clinic buildings, but the deal was scuttled for unspecified reasons. Unions with private Catholic healthcare organizations and large public health organizations have often been scuttled by failure to reach agreement on reproductive issues.
The two organizations said at the time that their cooperation would thenceforth be limited to a clinical collaboration between SSM Health's St. Anthony Hospital and Physicians Group and OU Medicine, but recent news offered no update on those plans.
The completion of the deal is still contingent on reviews by the attorney general’s office, a contingency review board and financing details. OU Medicine, unlike the university or the Health Sciences Center, will not receive state appropriations.
Integration and care coordination are key dissatisfiers for members of Medicare Advantage plans, and insurers are missing a huge opportunity for growth, says a J.D. Power study.
Although members are more satisfied overall with their Medicare Advantage plans in 2017, still only slightly more than half of members (54%) completely understand how their plan works, according to a newly released J.D. Power study on Medicare Advantage plans.
And even though enrollment has been growing steadily—more than 33% of all Medicare beneficiaries are now enrolled in Medicare Advantage--the study found that health plans are missing a significant pre-marketing opportunity for the over-60 age group, many of whom will transition to Medicare by age 65.
In fact, the proportion of the population age 65+ in the U.S. is projected to increase from 14% to 21% over the next 20 years, which represents an opportunity for plans to capture market share as more people become Medicare-eligible. However, the survey found that only 11% of members in the 60+ age cohort had received any communications from their health plan regarding moving from current coverage to a Medicare Advantage plan.
Among the 11% who have received premarketing contact from their health plan, overall satisfaction scores are 52 index points higher than among those who received no marketing contact (762 vs. 710, respectively, on a 1,000-point scale). Also, fewer members understand how their prescription drug coverage works than they did last year.
“Medicare Advantage plans represent a significant growth opportunity, but many health plans are not maximizing that potential,” said Valerie Monet, senior director of the insurance practice at J.D. Power, in a press release.
Member responses indicated that progress can be made in satisfaction levels in part by better coordination of care by health plans. Only 34% of members indicated that their plan was able to effectively help them with care coordination.
Another big factor in member satisfaction is the degree to which members see their doctor as a trusted partner in their medical care. Though health plans may have limited impact on this factor, the issue is related not so much to the soft skills of the clinician, but with assistance in navigating the myriad of healthcare providers involved in their care and managing the associated costs, suggesting a role for health plans.
Overall member satisfaction in 2017 held steady with an average score of 799, which is nine points higher than the same study found in 2016. This is the third year of the study for the global market research company, which is based on survey responses from 3,442 Medicare Advantage members from the 12 largest Medicare Advantage plans from around the country.
It measures satisfaction based on six factors (in order of importance): coverage and benefits (25%); customer service (19%); claims processing (15%); cost (14%); provider choice (14%); and information and communication (12%).
Kaiser Permanente ranks highest in Medicare Advantage member satisfaction for a third consecutive year, with a score of 852, which is 49 points higher than the second-ranked plan.
Kaiser outperforms all other plans across five of the six factors that comprise the overall satisfaction index. Highmark ranks second with a score of 803 and Humana ranks third with a score of 794.
The CEO of Banner UMC Phoenix is counting on a ground-up redesign of the academic medical center model—from the healthcare consumer's point of view.
The academic medical center may be an endangered species.
According to Steve Narang, MD, it's the healthcare business model most at risk for failure, because it's monolithic, highly complex, difficult to change, and expensive.
Narang should know, because he runs an academic medical center, specifically, Banner University Medical Center Phoenix. But they can be reformed, he insists.
As the medical center's CEO, he expects disruptive changes to the AMC model in the coming years. So instead of waiting for an emphasis on customer service and value-based principles to force radical change on the organization, Narang wants to help precipitate it.
Redesign and Restructuring
Redesign of its academic medical center business model is important to Banner Health, the 28-hospital, six-state health system, because it signed a 30-year affiliation with the University of Arizona College of Medicine. More than a billion dollars has been invested in three academic medical centers in Phoenix and Tucson.
Not only that, but Banner has had a rough go of things financially in recent times. It completed a restructuring that eliminated nearly 1% of its workforce, including senior management positions, at least in part due to losses from its insurance arm.
"Banner Good Samaritan was always a teaching hospital, but it was rebirthed as Banner University Medical Center so we could start from the beginning and engage physicians in helping in its redesign," says Narang.
A pediatrician by training who also has a master's degree in healthcare management, Narang says the traditional academic medical center structure, is outdated and too expensive in an era where payers, including patients, are seeking value.
In a traditional structure, built on the department model, with surgery, medicine, education and research as its main pillars, "often research and education tend to dominate. But customers don't come here saying, 'I need to see a department of surgery physician.'"
Instead, patients come or are referred because of a specific health issue or problem that the highly specialized AMC medical team is ideally suited to treat.
These patients may not know what type of treatment they need, so academic medical centers should stop forcing them to conform to a structure designed decades ago for the benefit of the institution.
The challenge now is how to make AMCs attractive to patients regardless of their acuity level.
The Institute Model
In order to improve their value to those who pay for healthcare, AMCs should adapt to what the consumer is looking for. Narang says what's been developed at Banner University Medical Center as the Institute Model can help patients navigate their way through an expensive and confusing experience.
For Banner, this means collapsing the structure of traditional academic medicine departments.
The design mantra is simple, if difficult to execute. "If the customer has a condition, let's develop a center for it," he says.
To facilitate that redesign and to make quality and reductions in cost the basis of change, he and his executive team began to hire data analysts and engineers more than a year ago.
In concert with physician leaders who are excited to redesign the system, those engineers and data analysts came up with 13 specialized-care institutes, each focused on specific health conditions, with multiple sub-specialty centers.
Each institute is made up of medical experts who deliver coordinated care that is focused on the individualized needs of each patient, and which allows patients and their families, ideally, to find all the care they need in one location:
We have been recruiting people from all over the country who believe academic medicine can thrive," he says. "The most important principle we've used is that it's redesign around the customer, but has to be physician-led."
While being a physician himself has made it easier to translate the vision to colleagues, he says he hasn't had to create a sense of urgency, because evidence of healthcare delivery undergoing transition and being disrupted is everywhere—just not usually in AMCs themselves.
"You see one system after another undergoing transition, and you can wait to be told, or you can lead it. You can create, innovate, and transform versus corporate healthcare telling physicians what to do," he says. "That's where we've gotten momentum. Not success, because it's early, but momentum."
The experience from the patient's point of view is that one patient touch point, in the form of a nurse navigator, will help design the patient's care pathway.
"The real magic isn't the fact it's all under one roof, it's that behind the scenes we're redesigning the model," says Narang.
Better, Cheaper, Faster
For example, at the Neuroscience Institute, doctors are heavily involved in planning the business strategy. "What are the top products we'll do better, cheaper, and faster than anyone else in the market?"
They came up with epilepsy, stroke, sleep medicine, and headache.
Each of the other institutes has come up with up to five areas of specialty that they are focusing on for the next two years as well, Narang says, based on what the customer needs. Banner's insurance network helps with data that supports those areas of emphasis, based on what services patients are choosing from outside its network.
The real challenge isn't unique to Banner or even academic medical centers in general, he says.
"We have to make healthcare more affordable. There's a role for AMCs because they're outstanding structures to solve complex problems, but they do it slowly and expensively. The institute model is just one substructure that takes the physicians under one roof and collapses the artificial, expensive silos."
The deal provides more non-emergency options for patients in a move aimed in part at cutting healthcare costs from ER visits and improving the care continuum.
Atlanta’s Piedmont Healthcare will formally take control of 27 retail clinics located in Walgreen’s stores across the Atlanta area this month as a deal struck in February is completed. The retail clinics will complement Piedmont Healthcare’s existing virtual care (Piedmont OnCall), primary care and urgent care nonemergency options. Piedmont Healthcare will operate and provide all clinical services at the health clinics, which will be rebranded as Piedmont QuickCare at Walgreen’s.
Piedmont CEO Kevin Brown says the new clinics will complement the health system’s existing primary care and urgent care network, and will operate seven days a week in most locations.
“Our goal is simple. To provide same-day access to high quality care close to home,” said Brown, in a press release.
Walgreen’s in recent years has been scaling back operational control of its in-store clinics, preferring to outsource management of the clinics to its hospital and health system partners. It announced a deal in early 2016 for its Chicago-area clinics with Advocate Health Care, the city’s largest hospital system, in which the health system took over ownership and management of the chain’s 56 in-store clinics. Before that, it did a similar deal in the Seattle area with Providence Health & Services.
As part of the agreement with Piedmont, Walgreens and Piedmont will form a collaborative council to share best practices and experiences that aim to improve patient care, quality and satisfaction while reducing healthcare costs. Unnecessary emergency department visits are a big cost driver for healthcare, and health systems will need to employ strategies to reduce such unnecessary visits under value-based reimbursement schemes if, as is anticipated, they eventually displace the more common fee-for-service reimbursement.
The new clinic agreement builds on an existing relationship between the two organizations that dates back to 2009, when Walgreen’s began operating the pharmacy at Piedmont Atlanta Hospital, the health system’s flagship.
