Collaborative efforts can save money and improve care Kaiser Health News
January 6, 2012
HILLSBORO, Ore. — Peter Cady, who works 12-hour shifts on his
feet at Intel’s plant here, occasionally suffers severe lower
back spasms. But he nearly gave up seeking medical help because
in the weeks it took to get a doctor’s appointment and a referral
to physical therapy, the pain usually subsided.
These days, however, Cady is much happier with his care.
Rather than waiting to see a doctor, Cady and other patients with
routine back pain now see a physical therapist within 48 hours of
calling, compared with about 19 days previously, Intel says. They
complete their treatment in 21 days, compared with 52 days in the
past. The cost per patient has dropped 10 percent to 30 percent
due to fewer unnecessary doctor visits and diagnostic imaging
tests. And patients are more satisfied and return to work faster.
“It’s a real bureaucracy buster that gets you right straight to
someone who can take care of the problem,” says Cady, 47.
“Before, the doctor wasn’t helping me or explaining anything. But
the physical therapist educated me, gave me stretches and
exercises to do, and cleared it up.”
The change came about through an unusual collaboration between
Intel, two local health care systems, and a health insurer. Based
on that success, the partners have developed similar improvements
for hip, knee, shoulder and headache treatment. Intel and its
partners say the result has been $2 million in administrative
savings this year, from reduced costs for patient scheduling and
registration, for example.
The Hillsboro collaboration is one of a small but growing number
of voluntary partnerships around the country to tackle the twin
problems of unsatisfactory quality and rising health-care costs.
Similar programs are underway in Atlantic City, N.J.; Lewiston,
Maine; Muskegon, Mich.; Sacramento, Calif.; San Francisco and
Seattle. One is budding in Orlando.
All the efforts draw on quality improvement models developed in
manufacturing and other industries. Physicians and hospitals
share cost savings with the employers and insurers, and in some
cases share losses if savings targets aren’t met. Medicare has
launched a similar program under the 2010 health reform law aimed
at developing so-called accountable care organizations.
Tackling a cost crisis
Experts say employers, hospitals, physicians and health plans
increasingly are willing to work together because cost and
quality problems have reached crisis levels. The goal is to carve
out health-care spending that’s wasteful and doesn’t help
patients. Sometimes there’s an implicit threat that if a provider
or health plan doesn’t participate, the large employer will buy
health care from someone else.
“It all starts when leaders in a community say the current system
is not sustainable and we’ve got to find a different model,” says
Joe Damore, a vice president at Premier, a national alliance of
200 health systems focused on performance improvement. “Major
employers are jumping on board because they see it as an
opportunity to improve their employees’ health and reduce costs.”
Intel asked Providence Health & Services, Tuality Healthcare
and Cigna to collaborate in 2009 because its employee health
costs were rising by more than 10 percent a year, with costs
projected to hit $1 billion companywide. The Oregon Public
Employees’ Benefit Board recently joined the effort, having its
members participate in the redesigned Providence and Tuality care
models, sharing its data with the collaborative, and working with
the partners to come up with new ways of improving quality and
“Health care was the only area where we weren’t setting standards
and managing our suppliers,” says Patricia McDonald, an Intel
vice president who spearheaded the project. “Our employees were
waiting for care and the quality was questionable.”
In Atlantic City, Unite Here Health, a hotel workers’ union
health plan, persuaded AtlantiCare, a local health care system,
to open a special, jointly funded clinic in 2007 to provide
intensive outpatient care to high-cost patients with chronic
conditions such as diabetes, obesity and heart disease. The
program, which the union is replicating in Las Vegas, achieved
steep drops in patient smoking, blood pressure and diabetic blood
sugar levels, according to AtlantiCare. By keeping patients
healthier, it has reduced hospital admissions by 41 percent and
emergency department visits by 48 percent.
Collaboratives help physicians and hospital leaders see employers
and patients as customers whose expectations, such as rapid
access to care, must be met. “I practiced for 30 years without
knowing how long patients waited to see me,” says Dr. Robert
Mecklenburg, who led the development of a collaborative effort at
Virginia Mason Medical Center in Seattle, which started working
with Starbucks and other employers in 2004. After meeting with
employers, he adds, “you realize how important it is to see
patients when they need to be seen. Any wait is not OK.”
Roadblocks to collaboration
There are still many obstacles to such partnerships. It’s often
difficult to get traditional competitors and antagonists to
collaborate, including sharing proprietary medical and financial
data. Some employers are reluctant to get directly involved in
how health care is delivered. Critics warn about rationing of
care. And some physicians complain about interference with their
professional autonomy, although Mecklenburg says most come around
when they see better results for patients.
Perhaps the biggest roadblock is the predominant fee-for-service
system, which pays providers to deliver more services, rather
than better, more efficient care. Health-care payers, including
private insurers and Medicare, have been slow to change their
payment models to reward outcomes rather than volume of care.
That sometimes puts providers in the position of losing revenue
by doing the right thing for patients.
Dr. Donald Storey, who worked on the Seattle collaborative as an
Aetna medical director and now is a vice president at Premera
Blue Cross, blames insurers’ reluctance to change on their having
many different contracts with employers and providers. In
addition, not everyone wants a more efficient system. “One man’s
waste is another man’s income,” he says.
Some insurers have embraced collaboration. In Sacramento, Blue
Shield of California, Catholic Healthcare West and Hill
Physicians Medical Group have worked with CalPERS, the state
public employee benefit system, to redesign care after they
identified quality problems and high costs for 42,000 plan
Key areas were obesity-reduction surgery, hip and knee care,
hysterectomies, and preventable emergency department visits and
hospital readmissions. For example, Hill Physicians persuaded its
OB/GYNs to perform more minimally invasive hysterectomies, which
are safer and cheaper than open hysterectomies, when appropriate.
Catholic Healthcare West hospital staff worked closely with
patients on their medication instructions before discharge, to
make readmissions less likely.
Redesigning care through a collaborative is “not easy to do.
There’s a lot of investment of human resources, and we didn’t
know if it would work or not,” says John Wray, senior vice
president for managed care at Catholic Healthcare West. “But this
was something we thought was important to try to learn from.”
It worked. Hospital length of stay and readmissions both declined
15 percent in 2010. That helped save more than $20 million,
exceeding the $15.5 million target and allowing Blue Shield to
keep CalPERS’ premiums flat in Sacramento for 2011. The remaining
savings were split among the three partners, who would have lost
money if the target hadn’t been hit.
Now Blue Shield is working with its current partners and several
additional provider organizations to improve care for 26,000
members of the San Francisco public employee plan. It’s also
starting partnerships in January for 38,000 plan members in
California’s Orange and Stanislaus counties.
Mecklenburg hopes this partnership model will spread widely
across the country. “We are creating a marketplace based on
quality, where employers can use their purchasing power to bring
out the best in both providers and health plans,” he says. “But
up to now it hasn’t usually worked that way.”