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Reform Law Intensifies Push To Better Coordinate Healthcare

Paresh Dave |
February 29, 2012 | 4:48 p.m. PST


Success would result in lower insurance costs for consumers

(Bush Library / Creative Commons)
(Bush Library / Creative Commons)
One of the worst things a 13-year-old girl who weighs 265 pounds could do is miss a doctor's appointment.

Had her doctor not had a special nurse to reach out to her when she didn't show up a few weeks ago, she could have easily fallen through the cracks until her poor health led to something as serious and expensive as hospitalization.

Fixing simple slip-ups like this could turn out to be one of the major tests of whether the 2010 healthcare overhaul succeeds in lowering spending on healthcare.

Doctors nationwide are rapidly bringing on extra nurses to closely monitor patients between visits and after hospital stays. The investment is suddenly worthwhile because the reform law calls for Medicare to give doctors a share of the savings that come from, for example, decreasing hospitalizations of diabetics by keeping their vitals in check. Private insurers have taken notice.

In the case of the 13-year-old from Illinois, a care manager for Advocate Health Care ended up meeting with her parents. She persuaded them to improve eating habits, outfitted them with  proper medical supplies and cheered as the family began going on short walks.

“The care managers really help patients understand the next steps that need to be taken for them to become active participants in their own healthcare,” said Sharon Rudnick, Advocate's senior vice president for outpatient care management.

This isn’t the first time reformers have tried to reduce hospital visits. But because of the healthcare law, providers now have a clear incentive. This year, Medicare will deliver better rates to care providers who score well on two dozen benchmarks. Intrigued by the possibility of savings, private insurers are experimenting with their own versions of the Medicare model.

Harold Luft, director of the Palo Alto Medical Foundation Research Institute, said taking on the new coordination challenge can cost primary-care physicians as much as seven figures initially to install electronic databases or hire spare nurses.

“But now if you follow my directions and my referrals, and if I make you happy by managing your anxiety, you won't go shopping around and the insurer and everyone has saved money,” Luft said.

Insurers, doctors and hospitals have never been very trusting of each other. So how can they start working in tandem in these so-called accountable care organizations?

Rudnick said understanding the patient-level successes that can be achieved will be instrumental.

How the care manager handled the overweight teenager's case matched perfectly with what Los Angeles County Health Services Director Mitchell Katz said he would expect from a tightly integrated system that spurs doctors to employ more care managers.

“In a more coordinated care environment, diabetics would be getting more education,” he said. “They would be figuring out what matters to help the patient monitor their glucose, cook better and control their eating habits.”

Rudnick said only a small number of patients reject the more proactive approach carried out by Advocate's 60 care managers. Each handles as many as 120 cases at a time. Physicians help sell the idea of care managers to patients.

“You trust your doc, so when your doctor says, 'Listen to Mary, she's looking out for you,' you will start to pay attention,” Rudnick said.

Luft said most patients will appreciate feeling “well attended to” and that paying nurses to make those extra phone calls will eventually pay off.

California's largest public sector pension system, CalPERS, reported saving more than $15 million in 2010 because the providers it partnered with did a better job of coordinating care.

Hill Physicians Group hired three care coordinators to work with CalPERS beneficiaries in the Sacramento region. One works with patients dealing with chronic pain, while the other two focus on smoothing the transition between hospital discharges and returns home.

“Essentially, they are ensuring the patients are able to care for themselves at home,” said Patti Landrum, the physician group's director of case management and medical review. “The nurses are in contact with them within a day of them returning home, sometimes even before they get in the door.”

The nurses address a 30-point script, which for example tells them to have the patient recite the doctor's orders regarding medication dosage and dietary restrictions. The follow-up continues as long as necessary.

The early success led CalPERS, Hill Physicians and the Catholic Healthcare West hospital chain to expand their partnership to the San Francisco region in 2011. Three new care coordinators were hired.

Each provider has access to other's health records database, further improving coordination. 

A discharge summary lands in the primary care doctor's office sometimes moments before a patient even leaves the hospital. The document explains what the patient should be doing to ensure they don't need to return. Before, it might have taken weeks for the doctor to even know a patient was hospitalized.

“The pressures we have now economically are forcing a more organized effort, and we're now seeing the fruits of that collaborative effort,” Landrum said.

The University of Southern California's three hospitals will be able to seamlessly pass health records between each other for the first time this coming spring. Soon after, that system will communicate with the computers at Methodist Hospital of Southern California as part of a partnership that also includes four Catholic Healthcare West hospitals.

The three-headed organization received a $300,000 start-up grant from Blue Shield of California.

Tarek Salaway, an executive administrator at Keck Hospital of USC, said the coordination should lower costs for USC employees.

At least 164 accountable care organizations had formed nationwide by September, according to study released in November by consulting firm Leavitt Partners.

Blue Shield of California's biggest obstacle has been demonstrating that it's interested in sharing risk, not shifting it.
“The arrangement between the partners is one where we are all at financial risk for meeting quality and cost targets,” said Kristen Miranda, Blue Shield's vice president for provider network management. “Since every partner has both upside and downside potential for healthcare expenditures, we are all incentivized to help each other.”

Katz said he would like to eliminate perverse incentives as much as introduce beneficial ones.

“I’m not convinced accountable care organizations are the most efficient way of getting to better care at lower costs, but the whole ACO movement has led to healthy discussion about how to coordinate care better,” he said. “The big task is addressing what does the patient need. The ACO models will succeed to the extent that they do that.”

In Illinois, Advocate is rewarded for meeting targets in quality, safety and service that it has agreed to with Blue Cross Blue Shield of Illinois. The provider has already managed to keep its expenses from rising as fast as those of its competitors, said Scott Sarran, the insurer's chief medical officer.

“It's always been about how do we split a fixed pie, not how do we bring new value to healthcare,” Sarran said.

Since no one can afford to fatten the pie, he said, “We're all going to be kind of in this middle space for several years while we evolve into a value-driven space.”

The middle ground worked out well for the overweight 13-year-old.

Rudnick explained in a statement, “The dad kept saying, 'Thank you!...thank you!…for helping my daughter because without your (initial) call I would have never realized what was going on'.”

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