Trying to find a new way to pay for and deliver health care

One of the patients in Doug Arnold’s new medical network received care from 99 different health care providers in the past three years, costing Medicare $375,000.

And although that care might not have been optimal or cost-effective, from a financial perspective, no one in the health care system had an incentive to do things differently.

“In a case like that, this person or their family members are just left to deal with all these providers on an episodic, uncoordinated basis,” said Arnold, CEO of a Middletown-based group of doctors known as MPS ACO Physicians.

The group’s mission is to change that. It’s part of a broader effort to transform the way health care is paid for and delivered, to tamp down on the nation’s massive health care tab by making the disparate pieces of the health care system work together to avoid the gaps that threaten patients’ well-being. The goal is to build a system that will reward those who keep patients healthy and out of the hospital, rather than those who simply deliver more care.

Those involved say it has the potential to revolutionize health care. That is, if the details can be worked out.

“The incentives now are really to have teams of doctors and other providers … working together and sharing information to try to keep people as well as can be,” Arnold said. “There’ve never been incentives before to do that. I think it’s pretty revolutionary.”

MPS ACO Physicians is one of a handful of Connecticut-based medical networks known as Accountable Care Organizations, or ACOs, an initiative for Medicare patients created by the federal health reform law. Private insurers are pursuing similar concepts in contracts with medical providers.

Right now, health care runs on a fee-for-service basis. Doctors and other providers get paid for seeing a patient, administering a treatment or performing a procedure. They generally don’t get paid for talking to a patient on the phone or coordinating efforts with their patients’ other doctors.

The new models in Connecticut are still built on a fee-for-service system, for now, but allow providers to make additional money if they can contain the amount of money spent on their patients’ care while still meeting quality targets.

“We think that the fee-for-service core isn’t the right financial incentive, but it’s going to take some time for us to get away from it,” said Dr. Peter Bowers, the lead medical director in Connecticut for Anthem Blue Cross and Blue Shield. The insurer recently announced accountable care-type contracts with two major physician groups and anticipates having them with 25 percent to 30 percent of in-network primary care doctors by the end of the year.

Angela Mattie, chairwoman of Quinnipiac University’s department of healthcare management and organizational leadership, said the policies behind the new models are here to stay. But putting them into practice remains a challenge, she said.

“I think it’s going to be an evolving process,” she said. “I think we’re going to have a lot of false starts. We’re going to have a lot of good starts. We’re going to have a lot of innovators. We’re going to have a lot of failures. It’s not going to happen overnight.”

The implications are significant.

Some people worry the new payment structures could encourage providers to avoid caring for sicker patients or to offer less care.

The move toward “accountable care” is a major reason many physicians in private practice are looking to affiliate with larger practices or hospital systems, and why the larger organizations are looking to join forces with them.

And, if successful, the new models could mean fewer patients spending time in the hospital, potentially requiring one of the costliest and most powerful parts of the health care sector to rethink its business model.

‘The whole person’

Five years ago, Shelley Dietz needed help. Her father had Alzheimer’s, and when her mother got sick or went to the hospital, it would fall to Dietz to care for her father. He couldn’t be left alone, but Dietz worked full time, and she didn’t know what resources were available to help.

“I was in such need, and I was in the business,” said Dietz, a nurse who is now director of care coordination at The Hospital of Central Connecticut.

It would have helped to have someone in the doctor’s office who could coordinate the care and supports for her father and other patients. But Dietz said proposing it back then wouldn’t have gotten far. There was no way in the typical payment schemes to get compensated for the service.

Now, it’s a popular idea.

That’s because for health care providers to meet the aims of the new models — improving patients’ health while containing costs — they’re taking a more active approach to patient care. It means not just telling a diabetic patient what to eat, but following up by checking his blood sugar levels and, if they’re problematic, addressing the reasons why.

Dietz’s hospital is part of the ACO run by its parent company, Hartford HealthCare, which also includes Hartford Hospital, Windham Hospital and MidState Medical Center, and physician practices in Hartford HealthCare Medical Group.

Hartford HealthCare hired nurses to help patients with the most complex needs navigate the health care system. They can help patients learn about their conditions and watch out for issues that often sabotage health, like if a patient hasn’t filled a medication or doesn’t have a ride to a doctor visit. They can be on the look out for depression, which puts patients at risk for not taking medications or caring for their health, something Dietz said is a particular problem among older patients.

“Somebody has to oversee the whole person,” she said.

Get ready for more nagging

Patients whose doctors are part of an ACO-type arrangement will probably notice more reminders about taking care of themselves, particularly if they’re not in the best of health.

If you’re a Medicare patient of a doctor in St. Francis HealthCare Partners, for example, chances are you’ll be hearing from a care coordinator.

People with multiple chronic conditions, who represent about 5 percent of patients and 45 percent of expenses, will get intensive care coordination to help treat or manage their conditions, said Jess Kupec, president and CEO of St. Francis HealthCare Partners, a physician group partly owned by St. Francis Hopsital and Medical Center. The two organizations run an ACO.

For patients who are generally healthy, care coordinators will provide coaching focused on prevention, like automated telephone reminders that it’s time for a colonoscopy, with a follow-up call from a person if they don’t schedule one. Someone at risk for diabetes might sit down with a nurse “coach” to learn about risk factors and develop a plan of care that includes regular blood sugar monitoring and improved diet and exercise.

And patients who have single chronic diseases and are repeatedly hospitalized will get help from care coordinators focused on their conditions.

Those arrangements are for Medicare patients, but the St. Francis ACO has an agreement with Cigna for a similar model beginning in October, and is working on arrangements with other insurers to take effect Jan. 1.

Insurance companies have long had disease management programs for customers with certain conditions, but people involved in ACOs say it’s advantageous for care coordinators to be connected to a doctor’s office.

The first time the complex care coordinator in Arnold’s ACO talks to patients, they’re often leery, thinking she works for an insurance company. They’re more receptive when they learn she works with their doctors, Arnold said.

Bridging gaps in care

ProHealth Physicians, the state’s largest primary care group, is among the health care networks working to reduce preventable “readmissions” — cases in which patients discharged from the hospital end up back there within 30 days. Research suggests it costs billions of dollars a year, and the federal government has started penalizing hospitals with high rates of preventable readmissions.

ProHealth runs a Medicare ACO and has a similar arrangement with one private insurer while working on agreements with three others. The organization already made changes to the way it delivers care as part of becoming a patient-centered medical home, a model for delivering care that involves coordinating with other providers and relying heavily on electronic medical records to share information. The accountable care arrangements add a financial piece: Providers become responsible for both quality and cost of care, and are potentially eligible for money that could help pay for coordinating care.

Lapses in care are often the culprit when a patient ends up back in the hospital, said Dr. James Cox-Chapman, ProHealth’s chief medical officer. Patients getting out of the hospital are at risk for significant confusion about how to take care of themselves, particularly if their medications have been changed, but many aren’t in touch with a health care provider immediately after being sent home.

So ProHealth aims to reach out to all its patients leaving the hospital to make sure they know why they were admitted, what medications they should be taking, what signs and symptoms to watch for, and whom to call if there are problems. Patients are also to have a follow-up visit.

In many cases, they find problems, like a patient who should be getting home care but isn’t, or oxygen that hasn’t been ordered. The provider who called can help ensure those gaps get fixed.

Addressing those kinds of gaps is a key part of the new models. Anthem, for example, could tell a doctor that his patient with hypertension didn’t fill a medication, Bowers, the medical director, said, and that could lead the doctor to follow up and make sure any problems are addressed.

“Now the docs are doing the right counseling,” Bowers said, but no one gets the data to see whether the patient follows through.

Questions remain

The Medicare ACOs in Connecticut have three-year agreements. After that, the financial model is expected to be adjusted.

And there are other uncertainties. For one, who should be in charge of the networks? A key goal is to keep patients from needing higher-cost care, such as hospitalization. So is there a conflict if a hospital system is in charge of the model?

“If you are running a hospital today, one of the first things you do every day is look at your daily census report,” showing how many patients are in the hospital, said Kupec, from St. Francis HealthCare Partners. “From an ACO perspective, our joke is the only good census is a zero census, because our job is to keep people out of the hospital.”

In the St. Francis ACO, half of any payments received for saving money will go to the hospital, helping offset losses that could come if fewer patients end up hospitalized.

Ultimately, Kupec predicted, patients will increasingly be treated in less intensive settings, leaving hospitals with fewer but sicker patients.  

Dr. Patrick Carroll, medical director for Hartford HealthCare’s ACO, said some changes align with hospitals’ interests, such as focusing on reducing readmissions. But, like Kupec, he said he expects there to be broader changes in what hospitals do.

“Hospital systems probably have too many beds nationally, so eventually we’re going to probably re-examine the inpatient focus of hospitals,” he said. “They’re already doing this. They’re moving many of the services to the ambulatory settings. It’s a fundamental transformation of the health care system.”

Those running ACOs led by physician groups say there are advantages to having the models run by organizations other than hospitals.

“On the one hand, hospitals do have a much more expensive infrastructure to maintain,” said Cheryl Lescarbeau, ProHealth’s vice president of clinical performance and marketing. “On the other hand, they’ve got direct control over the highest-cost component of medical care. They’re very well positioned in some ways and in other ways they’re compromised because they do have that expense.”

Other people, particularly those who advocate for people with serious medical needs, worry that making health care providers responsible for the cost of patients’ care could give them incentives to deliver less care or avoid seeing patients with more complex needs.

And some people find the concept reminiscent of managed care from the 1990s, although those involved say there are differences, including the ability now to track patient outcomes and requirements that providers meet quality targets in addition to saving money.

The Yale New Haven Health Care System isn’t participating in any of the Medicare accountable care programs, but is exploring different payment and delivery system changes.

Dr. Robert Nordgren, Yale New Haven’s senior vice president and CEO of an affiliated group of providers called Northeast Medical Group, said it’s hard to predict which model will ultimately endure. But he said data from across the country suggest that health systems using accountable care models can slow the growth of health care costs or bring down spending. And that’s important, since there’s little money available to sustain continued growth in health spending.

“I think it’s difficult to say exactly what is payment going to look like” in the future, he said. “But I think that having a system that’s fully fee-for-service is going away.”

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