Spokane Journal of Business

Rewarding efficiency

Rockwood Clinic PS joins Premera effort to move away from fee-for-service approach

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Rewarding  efficiency
-—Staff photo by Chey Scott
Bill Akers says a shift to a payment-incentive model of reimbursing for health care could curb the rate of cost increases. Premera Blue Cross is expanding that model to include a total of 13 physician groups statewide.

As part of an effort to curb the rapidly increasing cost of health care, Mountlake Terrace, Wash.-based medical insurance provider Premera Blue Cross has expanded a new payment model it's developed, called global outcomes contracting, to include a total of 13 physician groups across the state.

Spokane-based Rockwood Clinic PS, the big Community Health Systems Inc.-owned specialty physician group, at the beginning of this year signed a multiyear agreement with Premera to test that new system here.

Rockwood executives say the majority of its patients here are insured through Premera.

Statewide, Premera has about 1.4 million enrollees, says company spokeswoman Amy Carter.

The health insurance provider created the global outcomes contracting payment model to encourage health-care providers to shift their focus to quality, evidence-based care rather than the traditional fee-for-service model. Both Rockwood and Premera agree that the latter payment model can lead medical providers to do more than might be necessary.

Bill Akers, vice president and Eastern Washington general manager for Premera, says, "Health care costs have been rising at an unsustainable rate, and one premise of this is to shift away from fee for service and have a payment-incentive model. Providers get rewarded for providing reduced cost, quality care to patients."

If, for example, Rockwood were to reduce its overall costs this year for its Premera-insured patients compared with costs it accrued the year earlier and compared with other physician groups across Washington, Premera would share some of those savings with Rockwood, Akers says.

"It's not incentivized to do more things to create revenue," he says.

He adds that the new payment model doesn't penalize participating health care providers should they not achieve any cost savings.

"We haven't put them at a financial risk through this model, but they might have to work harder for the same amount of revenue they had the previous year if there aren't savings," he says.

For the past two years, Akers says Premera has tested its new quality-incentive payment model with two Western Washington clinics and has seen enough positive results to support its decision to expand the model.

Premera reports that last year, overall health-care costs for its patients cared for by The Everett Clinic, in Everett, Wash., and The Polyclinic, in Seattle, were between 3 percent and 5 percent lower than for other Premera patients in the same area who see a regular physician. Those results took into consideration differences in health between patients, such as patients with a chronic condition that requires more frequent medical office visits, Premera says.

The reduction in health costs realized last year through Premera's global outcomes contracting model for The Everett Clinic was $1.2 million, and The Polyclinic had $2 million in savings, Carter says.

Premera didn't disclose the percentage of those savings that it shared with each of those clinics.

Rockwood Clinic CEO Dr. Craig Whiting says he's optimistic about the potential results from the specialty clinic's participation in the new payment model.

"There have been efforts for 15 years to reinvent the health-care payment model," Whiting says. "With the economic downswing and the passage of the Affordable Care Act, the dialogue has heated up significantly. You can't turn off one payment model and move to another ... this is a first step in that process."

Whiting says that in addition to analyzing and measuring the overall cost of care for Rockwood's Premera-insured patients, the new payment model also considers several quality-focused metrics. Throughout this year, using data provided by Premera, Rockwood's medical professionals will closely monitor several groups of patients who have been diagnosed with chronic conditions such as diabetes, asthma, coronary artery disease, and chronic depression.

Whiting says patients in those groups usually are more costly to care for compared with other patient groups. He says that if Rockwood's providers are able to better manage those patients' care through more preventive measures, that decrease in the cost of medical services for them likely will have a bigger overall impact on Rockwood's reimbursement rate from Premera.

He adds that by better managing chronic conditions through regular exams and medication usage, patients are less likely to visit the emergency room for what could have been a preventable medical event.

"Outcomes-based reimbursement helps us recognize that we need to take responsibility so the patient knows what we're asking them to do," Whiting says.

Premera's Akers says one reason the insurance provider has identified a number of specific patient groups and characteristics to monitor as part of the new payment method is because not every health-care provider has similar patient populations.

"We recognize that not every group has the same kinds of patients, providers, or opportunities for improvement," Akers says. "For example, some practices have a very high usage of generic prescriptions, and others are not as high in that area where they could manage costs and still maintain quality. Every practice has their own opportunities, and in some cases it's managing patients with chronic diseases to benefit more from a quality-of-life standpoint, and these are also costlier patients."

Akers says that even though clinics such as Rockwood are honing in on several specific patient groups to find ways to increase the quality of those patients' care while also decreasing costs, the global outcomes contracting payment model involves scrutinizing the medical cost of all Premera-insured patients with that provider.

"It's not just, 'if we can manage diabetes better, we can split the savings across the entire population,'" he says. "It has to be on a larger, global population."

Whiting says one way Rockwood is trying to ensure patients are taking an active role in managing their health, and in turn helping prevent emergency medical visits or episodes, is providing each patient with a clinical summary of their medical appointment visits.

"On that (summary), it says what problems were discussed, what was recommended for them to do, any tests that were recommended, and any medications or potential side effects," Whiting says.

Additionally, he says Rockwood has designated health coaches, usually registered nurses or medical assistants, who monitor specific patient databases to ensure those patients are coming in for routine medical visits, tests, and any follow-up appointments that may have been ordered by a physician.

"The health coaches also get reports from Premera, and if a patient has had six emergency room visits in a month, they will look at the patient's chart to see what for, and they'll call the patient" and let him or her know that Rockwood offers same-day urgent care appointments for less-serious medical issues, he says.

As part of Premera's new reimbursement model, each participating clinic will receive regular reports and statistics for its patients who are insured by Premera.

Ken Bryan, Rockwood's business office director, says, "Premera is giving us data we didn't have. Before, we wouldn't know if someone went to the ER five times, but we'll have that data so we'll know now we need to figure out a new way of getting to that patient."

Adds Whiting, "We will know what we are very good at or need to improve in."

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