September 10, 2012

Health care industry experiments with new payment, care models

Photo / Steve Laschever
Photo / Steve Laschever
Dr. Steven Schutzer helped craft an innovative bundled payment contract among several major health care organizations in the state including the Connecticut Joint Replacement Institute at St. Francis Hospital and insurer ConnectiCare.
Photo / Lisa Wilder
Dr. Amit Rastogi, president and CEO of PriMed, a 110-physician practice in Shelton, is leading his group of doctors through a transition into an accountable care organization (ACO). PriMed was one of 89 practices in the country to be chosen by the federal government to participate in a new ACO model that aims to improve care and reduce costs for Medicare patients.

A recent bundled payment contract hatched among three major players within Connecticut's health care industry could provide a sneak preview into the future of health care.

The Connecticut Joint Replacement Institute at St. Francis Hospital signed a contract with Farmington health insurer ConnectiCare, in which the medical providers will receive one, preset payment to provide a defined set of services for hip and knee replacement surgery.

The hospital, surgeons and anesthesiologists will be responsible for coordinating the entire episode of care for the patient from the time they walk into the hospital, have their surgery and get discharged. They will also monitor outcomes and other quality measures, and receive a set payment as reimbursement.

The payment model differs from the way health care services have traditionally been paid for where doctors and hospitals get reimbursed a fee for each service they provide.

The value-based contract is a relatively new phenomenon in Connecticut and represents a growing trend of health care innovation in the state.

Connecticut's health care industry is slowly becoming a petri dish for experimentation, with doctors, hospitals and insurers implementing new payment systems and care models that aim to improve care quality and lower costs.

To be sure, Connecticut is not on the leading edge of many initiatives being tried. In the land of steady habits, the Nutmeg State is not typically a trend setter. But as the industry faces increased pressure to become more efficient, health officials admit the traditional way of doing business is no longer viable.

Of course, whether or not any of these new methods are effective still remains a mystery.

"The jury is still out, but there is great hope and anticipation that these systems will improve care access and quality and also reduce costs," said Matthew Katz, CEO of the Connecticut State Medical Society.

Katz said he is seeing various new forms of health care models cropping up across the state, from medical homes and accountable care organizations to health neighborhoods, in which hospitals, physician practices, and social service organizations are joining under one umbrella to deliver coordinated care to a community of patients.

Regardless of the model, Katz said every system being experimented with has the same goals of care coordination, quality improvement, and cost reduction. Tying payments to quality outcomes is also important. Those priorities haven't always been effectively attacked by the industry, particularly in Connecticut where the health care system historically has been fragmented and stuck in a fee-for-service model, health officials say.

Even the medical society is in experimentation mode. In June, it and a statewide independent practice association of physicians were awarded $75.8 million in loans from the federal government to launch a new, non-profit, consumer-governed health insurance company in Connecticut.

The first of its kind entity, called HealthyCT, is expected to offer insurance products both on and off the state's health insurance exchange, and provide added competition for commercial insurers.

Even models that aren't necessarily new are evolving. Physician hospital organizations, which have existed in Connecticut for some time, are refocusing their missions on care coordination and better tracking of quality metrics, Katz said.

A recently formed physician hospital organization in the southwestern corner of the state, called St. Vincent's Health Partners, will allow the doctors and St. Vincent's Medical Center to jointly negotiate contracts with health insurance companies and work to better coordinate care and share patient data, said Thomas Raskauskas, CEO of St. Vincent's Health Partners.

Raskauskas said the goal is to allow participating primary care and specialist physicians to perform under new reimbursement models that will reward clinical integration and improved quality of care.

Accountable care organizations are probably the hottest trend in health care. They are essentially organizations formed by groups of doctors and other health care providers, including insurers and the federal government, that have agreed to work together to coordinate care for people, particularly Medicare patients.

In July, the U.S. Department of Health and Human Services unveiled a list of 89 new accountable care organizations, including Middletown's MPS ACO Physicians LLC and PriMed LLC of Shelton.

The accountable care organization contract will require the providers to take responsibility for the quality of care they provide to people with Medicare in return for the opportunity to share in savings realized through higher-quality, well-coordinated care.

Dr. Amit Rastogi, the president and CEO of PriMed, a 110-physician multispecialty group, said the new model isn't much different from what his organization has been doing since it was formed in 1996.

Rastogi said he had a vision for creating a coordinated care system more than a decade ago that focused on quality, patient satisfaction and cost efficiency. And one of the key ways to achieve that is through data collection and the sharing of patient information across the medical provider spectrum.

That means updating patient data like blood pressure and glucose levels, tracking it over a period of time, and sharing that information with other providers so that a patient's health history follows them along a continuum of care.

PriMed physicians also collect patient satisfaction data, that tracks wait times, and whether or not doctors properly followed-up with patients after a visit.

By paying closer attention to a patient's health history and making sure they keep up with medications, it can lead to significant costs savings. Studies show, for example, that if a patient with diabetes keeps their blood sugar levels under control, there is less chance they will develop costly heart diseases, kidney failure, or blindness, Rastogi said.

"If you are able to manage a subset of the population efficiently, there is savings involved," Rastogi said. "There is less chance for disease and you can keep patients out of the hospital."

It's not just the government leading the way on accountable care. Bloomfield insurer Cigna has been very active in that space with 32 accountable care organizations operating in 16 states. About 300,000 Cigna customers are aligned into one of those groups, and the company's goal is to have 100 such groups by 2014, said Wendy Sherry, Cigna's vice president for product development.

In Connecticut, Cigna has an accountable care contract arrangement with ProHealth Physicians that has the "triple aim" of achieving improved quality and patient satisfaction and lower medical costs. It also builds in accountability by rewarding physicians for results, Sherry said.

A key element of Cigna's program is the sharing of "gaps in care" data with a care coordinator at the physician practice. The care coordinator is employed by the practice, which is reimbursed an extra fee from Cigna, to contact patients to ensure that follow-up appointments are scheduled, prescriptions are filled or additional medical tests are completed.

"It's part of a value-based collaboration and reward programs," Sherry said. And while most accountable care organizations have been geared toward larger physician practices, Cigna is in the process of developing models for small practices with one to four doctors that will aim to target reducing readmission rates and emergency room visits, Sherry added.

For Connecticut hospitals, the focus has been less on making radical transformations then figuring out how to reorganize the delivery systems they operate in, said Stephen Frayne, senior vice president of health policy at the Connecticut Hospital Association.

Faced with financial challenges, it is difficult for hospitals to commit to new and unproven models of care that require significant organizational investment including talent, time and funding, Frayne said.

Instead, hospitals are partnering and purchasing physician practices to better align care coordination in order to reduce readmission rates and create better purchasing value. The trend toward larger, more interconnected hospital systems has also become the norm with the wave of mergers and affiliations that have hit the state over the past few years.

"The emphasis so far has been on how to organize the delivery systems in which they operate," Frayne said.

Of course there are still many unanswered questions about whether or not any of these new systems will work.

Quinnipiac University management professor Angela Mattie said moving to a system that establishes a strong continuum of care among doctors, hospitals, and long-term care facilities, and pays providers based on outcomes is a good thing. But Connecticut's health care system largely doesn't operate that way now, so the learning curve and growing pains could be significant.

"This is where we should be going," Mattie said. "But how this will all be implemented is anyone's guess. Connecticut has been slow to make the mark."

Mattie said one of her concerns is whether or not the state has the IT infrastructure in place to successfully implement models like accountable care organizations, which require data sharing to be successful.

"ACOs can't function without IT infrastructure," Mattie said. "You need systems that talk to each other from the physicians practice and hospital to the nursing home. These things don't happen overnight."

Sherry, the Cigna vice president, said it takes about two years before any measureable results can be achieved and some of the insurers ACOs have shown early successes.

Their pilot program with Dartmouth-Hitchcock in New Hampshire, for example, has led to a 10 percent improvement in that practice's overall closure rate for gaps in care compared to other physician practices in the market. Meanwhile Cigna Medical Group in Arizona has lowered average annual costs per patient by $336. Of the more than 30 accountable care organization pilots Cigna has in the pipelines, the majority of groups are achieving quality measure benchmarks, and about half are achieving both quality and cost reduction goals, Sherry said.

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