Director, Marketing and Product Development
Jennifer Austin joined The Alliance in mid-2019, leading the team in managing marketing efforts, including brand strategy, paid advertising, publication relations, social media, and website development.
Before joining The Alliance, Jennifer worked at a number of companies in Chicago and Madison focusing on marketing and strategy development for hospitals and health systems, including Advocate Healthcare (now Advocate Aurora Health), Augusta University Health, and HCA Healthcare.
Jennifer has a master’s degree in Global Marketing, Communications and Advertising from Emerson College and a bachelor’s degree in Art and English from The University of Iowa.
The Alliance hosted their 30th Fall Symposium & Annual Meeting on Thursday, Oct. 1 as on online event. This article recaps the keynote speakers in the latter half of the event, but you can re-watch the event in its entirety here.
Employers Are The Key To Unlocking Better Prices
The Alliance invited Chris Whaley, Policy Researcher at RAND Corporation, to discuss the recently released results of their Hospital Price Transparency Study. The study examines the costs that employers pay for hospital prices, benchmarked against Medicare across the United States.
Chris started off his presentation by displaying the sheer magnitude of employer-sponsored health coverage. “Employers cover half of Americans – or 160 million people – with $1.2 trillion in total health care costs in 2018, and $480 billion of that was hospital costs.”
Then he reviewed what we already know about health care: the prices paid by employers are rising much more rapidly than Medicare and Medicaid, and employees are paying more for health care every year, while wages have remained relatively the same.
“These rising health care costs place a tremendous amount of pressure on employers and their populations. This is especially true during the COVID-19 pandemic,” Chris said. In fact, it’s likely that Americans will spend one out of every five dollars on health care in 2021.
Key Takeaways from RAND Corp Study
After level-setting, he delved into the data by showing that commercial prices relative to Medicare have increased from 224% in 2016 to 247% in 2018. In other words, employers are paying 2.5 times more for the same inpatient and outpatient services at hospitals than Medicare – and that disparity continues to grow at a compounded interest rate 5.1% annually.
Next, he showed that, relative to Medicare, commercial prices, facility prices, and professional prices all vary widely across states, within states, and within hospital systems in those states. For example, Wisconsin ranks 3rd highest in professional prices and pays nearly 350% more in that category, while Illinois pays just under 200% more for those same professional services.
More importantly, he showed that there was no correlation between the differences in hospital pricing and “low” government reimbursement for Medicare – what health systems refer to as “uncompensated care” – to account for the variation of prices.
In terms of quality, Chris explained that while there are many high-value hospitals across the country, there’s no real evidence to suggest that safety and quality are commensurate with price. “All the outcomes that health care purchasers value, such as patient convenience and hospital reputation do not show a clear link between hospital price and quality/safety.”
How Employers Can Use RAND Corp Study
“The wide variation in prices for hospital care presents a really important savings opportunity for employers. Employers can use innovations and benefit plan design strategies to save money and get more value for what they’re paying. But employers need to do a better job in demanding transparent information on prices.” Chris went on to say that when employers have transparent information about prices, they can benchmark those prices and demand change from hospital networks.
Chris admitted employers could use some help from state and federal policymakers in that arena: “70% of hospitals are in non-competitive, dominated markets, so if there’s only one or two hospitals in your market it can be tough to demand fairer prices as a smaller employer.”
Despite those obstacles, Chris outlined a few pieces of regulatory reforms employers can push for to improve prices in the future:
An all-payer claims database that highlights the variation in prices.
Policies that promote competition and eliminate gag clauses.
Limits on out-of-network charges and surprise billing.
All-payer or global budget programs (also known as Total Cost-of-Care Contracting).
Enroll in RAND 4.0.
Driving High-Value Health Care at The Alliance
The next portion of the Symposium was a presentation by leadership at The Alliance, Melina Kambitsi, Ph.D., and Kyle Monroe, who used the four core drivers of high-value health care to explain how employers who work with The Alliance can work on combating the high prices the RAND study illustrated.
Kyle began by stating simply, “The Alliance believes health care prices should be simple, predictable, and transparent; simple for purchasers and consumers to understand and easy to compare rates from different provider organizations, predictable for costs for services, and transparent with accessible cost and quality information for purchasers.”
Reference-Based Contracting by The Alliance
He went on to say that some organizations are already trying to discredit the RAND study, “They say this is impossible: that benchmarking to Medicare is inappropriate, or Medicare’s methodology is flawed, or that providers will never agree to something like this. Let me be very clear, anyone who says it isn’t possible or that it can’t be done is flat out wrong.”
Why? The Alliance is already doing it with Reference-Based Contracting; more than 80% of our contracts are repriced using referenced-based contracts benchmarked to Medicare. “Using a percentage of Medicare resets the starting point for pricing from billed charge to something with a rational base rate, plus discounts and adjustments.”
Total Cost-of-Care Contracting
Kyle then explained that Reference-Based Contracting – what we’re doing now – leads us to Total Cost-of-Care Contracting – what we’re moving towards. “Medicare-based agreements are a good start, but they are not the end goal. Total-Cost Contracting, also known as global payments, transfers [more of] the financial risk to the providers.”
This method could provide subscription-based fixed payments for patients and force providers to allocate a budget for services, so if they go over budget, that money would come out of the provider’s pocket, not the employer’s. It would also provide robust and transparent data and analytics, more intimate relationships with provider organizations, and incorporate actionable quality data.
The Growth of Smarter Networks℠
Kyle shifted the focus of his presentation to Smarter Networks by The Alliance. “Our membership is growing so our network has to grow, and we don’t just grow the network for growth’s sake, we only add providers that add value for our members.”
The Alliance designed Smarter Networks as a platform to align incentives for all stakeholders and provide innovative plan design. Employees want options to go to high-quality providers and pay as little as they can, employees and plan sponsors want the best outcomes for the lowest price, and providers want to work with employers. Our networks promote those high-value providers.
The Alliance Premier Network
He then displayed how the latest offering by The Alliance, The Premier Network, is unique in that it reduces costs, removes barriers to care, and promotes high-quality care. “We were able to negotiate rates for providers in the Premier Network that were 15-30% lower than The Alliance Comprehensive Network.”
The Premier Network is a customizable multi-level benefit plan for employers that incentivizes patients to choose high-value providers without limiting their choice.
Melina joined the discussion to explain how tiering in the Premier Network may work using a current member’s network design:
Tier 1 – Non-emergent schedulable procedures and on-site clinic with preferred providers.
Tier 2 – Specialty care and emergency care with secondary preferred providers.
Tier 3 – Wrap Network with other health systems.
Tier 4 – Out-of-Network reference-based pricing with AMPS (another new offering to negotiate with those providers that may be outside The Comprehensive Network by The Alliance)
Achieving Advanced Primary Care
In addition to all the expanding network and new product offerings, Melina talked about the importance of Advanced Primary Care for employers. “We know that care starts at the primary care physician’s office. We also know that over 80% of patients with chronic physicians see their primary care doctor multiple times per year. And because primary care is the least expensive care, the PCP visit has become the most important type of care.”
However, Melina explained that misaligned incentives, lack of behavioral health integration, and lack of appropriate referrals at the primary care level drive up costs, compromise the effectiveness of care, and reduce patient satisfaction. She then went on to explain the characteristics of Advanced Primary Care and how it combats those issues:
Enhanced Access for Patients
More physician-patient time, enhanced scope of services, more immediate care availability, and availability outside of clinic operation hours
Care teams avoid test orders not linked to evidence and change management. Standing orders and protocols for patients with chronic disease management.
Risk-Stratified Care Management
Each patient receives care based on their unique needs: extended office visits, care manager guidance, monitoring, and tracking, phone check-ups, etc.
Primary care team that engages in outreach, including chronic care condition management; coordination of care; and ensuring patient understanding of medications, orders, adherence expectations, etc.
Careful selection of specialists – clinicians use a narrow list whom they trust and remain in constant contact as treatment plans develop.
Organizational Infrastructure & Backbone
Analytical and reporting capabilities, EMRs, coordination and communication with other providers, payers, and continuous staff improvement and training.
Behavioral Health Integration
Using patient records, care teams can identify patients who may need outreach to assess behavioral health needs through multiple methods of connection.
Rewarding care management team based on quality of care – care quality, patient experience, resource use and referrals – not volume of care. This global payment methodology differs from traditional primary care, which uses fee-for-service payments and third-party payers.
Fewer referrals outside of the primary care ecosystem.
2020 Health Transformation Awards
The Alliance ended the event with their 30th anniversary video and the announcement of the 2020 Health Transformation Award Winners. The Alliance will be providing additional, in-depth articles outlining the success of each HTA winner in the coming months. The intent is to share employer-specific strategies in achieving high-value health care and to promote them to our membership so other employers will gain an opportunity to emulate their successes. Here were this year’s winners:
WHIO (Wisconsin Health Information Organization)
Traci Rothenburger, Clinic Manager at Nordic PrivateCare
Matt Ohrt, Director of Benefits/HR at Merrill Steel
Tena Hoag, CFO at Advanced Laser
To watch the event in its entirety, please click here.
In our third and final Direct Primary Care webinar installment, our own Melina Kambitsi, PhD., hosted Proactive MD’s executive vice president of direct care services, Justin Leigh, to discuss what makes Direct Primary Care so impactful.
During the second portion of the webinar, The Alliance brought back three employer-members from our previous webinar to answer more questions from their fellow members. A big thanks to Dan Ludwig of Brakebush Brothers, Tena Hoag of Advanced Laser, and Jake Nolin of Rice Lake Weighing Systems, for rejoining us.
You can view the webinar in full here.
What is Advanced Primary Care?
Melina started the webinar by explaining that, as the voice of self-funded employers, The Alliance remains focused on providing High-Value Health Care to its members using our four core drivers: Transparency, Payment Reform, Benefit Plan Design, and Provider Network Design. High-Value Health Care happens when individuals have access to higher-quality care that costs less, and The Alliance believes the best way to achieve it is by implementing cost and quality strategies at the source – the primary care level.
In fact, as Melina explained, “Over 80% of patients with chronic conditions access primary care, making it the most prevalent type of office visit. It is also the most affordable type of service [for the patient] and least expensive [for the employer].
However, within our current health care system, traditional primary care has missed the mark due to, in Melina’s words, “Misaligned payment incentives, lack of behavioral health integration, and lack of appropriate referrals – to potentially inappropriate testing, but also to specialists who drive up costs – and compromise both the effectiveness of care and patient satisfaction.”
Enter Advanced Primary Care, an elevated standard of primary care that’s measured by improved health outcomes for patients, lowered total health spend for employers and employees, and achievement towards higher levels of patient satisfaction and activation.
Through our research over the past year-and-a-half, speaking with brokers, consultants , our employers, and the National Alliance of Healthcare Purchaser Coalitions – the broad umbrella organization of all coalitions in the country We have identified the key characteristics of Advanced Primary Care.” Those nine characteristics are outlined below:
Enhanced Access for Patients
More physician-patient time and an enhanced scope of services, more immediate care availability, and availability outside of clinic operation hours.
Care teams avoid test orders not linked to evidence and change management; standing orders and protocols for patients with chronic disease management.
Risk-Stratified Care Management
Each patient receives care based on their unique needs; extended office visits, care manager guidance, monitoring and tracking, phone check-ups, etc.
Advanced primary care teams engage in outreach, including chronic care condition management, coordination of care, and ensuring patient understanding of medications, orders, adherence expectations, etc.
Careful selection of specialists – clinicians use a narrow list whom they trust and remain in constant contact as treatment plans develop.
Organizational Infrastructure & Backbone
Provides analytical and reporting capabilities, complete Electronic Medical Records (EMR’s), coordination and communication with other providers, payers, and continuous staff improvement and training.
Behavioral Health Integration
Using patient records, care teams can identify patients who may need outreach to assess behavioral health needs through multiple methods of connection, supporting patients through ongoing treatments.
Realigned Payment Methods
Rewarding care management team based on quality of care – care quality, patient experience, resource use and referrals – instead of volume of care (fee-for-service).
Advanced primary care produces fewer referrals outside of the clinic (less than 10%).
Why Direct Primary Care?
Because, according to Melina, “Direct primary care improves patient health and lowers the total cost of health care. Our expectation is that the total cost of healthcare will be lowered by about 15%.”
And how does this innovative primary care model work? It is patient-centered care for the whole family and is a membership-based model, so there’s no insurance required and pricing is transparent. Instead of aiming to generate the more specialty care, our direct primary care system exists to generate more health.
In other words, direct primary care emphasizes developing and maintaining a trusting patient-physician relationship while utilizing an alternative payment method that greatly improves access to high-quality care with a flat, affordable membership fee.
Proactive MD Partnership & The Patient Promise
Melina then turned it over to Justin Leigh to talk about Proactive MD, a primary care organization that’s been in the value-based primary care business for about 10 years and operates 60 locations.
“Our core philosophy is centered around our patient promise and using a direct primary care approach,” Justin continued. “Our physicians are seeing no more than 10-12 patients per day, and a lot of the issues with health care – primary care specifically – can be tied to volume. So by simply solving for the volume issue, and giving physicians more time with their patients, they can do a lot more for them.”
True Patient Advocacy & Accurate Navigation
However, Justin said that it’s not just about time spent with patients, but the ease of access that’s important for patients, too. “We can deliver same-day appointments over 99% of the time and our average wait time is below five minutes.” This increase in access, availability, and physician-patient time, when combined with the elimination of co-pays, creates a high-value model with high levels of patient satisfaction.
He explained the importance of high patient satisfaction for employers when it comes to benefit plan design. “By offering employees unlimited access to high-quality care without the traditional hassles, it becomes a great enhancement to their employee benefit offering.”
Experienced Data Analysis for Better ROI
Proactive MD’s direct primary care solution is all about data – which The Alliance knows and understands well – so both organizations are a good fit for one another. “On the back end, we’ve been servicing larger self-funded clients for about a decade now, so we have a fantastic data science team that works in collaboration with The Alliance to do all our claims analysis and reporting,” Justin said. “By risk stratifying across the entire population, we can start to engage in true population health measures; we can do targeted outreach, condition-specific outreach, and we can customize what that outreach effort might look like.”
“Clients who are interested in a direct primary care clinic model want to see a return on investment. They love the idea of enhancing their employee benefits, but they need to see savings. That’s why we stand behind strong performance guarantees and have designed pricing models that eliminate a lot of the risk associated with a clinical strategy – but the ability to release as little as possible into specialty care is what truly drives savings.”
The Total Health Solution
Melina rejoined the conversation to state how The Alliance has developed a solution that can work for all employers.
“Our offering doesn’t have an Alliance box around it; we are open to all employers – self-funded, all–insured, and even individuals – that want to participate. Of course, the employer pays a per–member per–month fee instead of a bill for each service. We provide clinic usage reporting to the employers and also the brokers, and more importantly, help the care team to identify the high-value providers with as close to a real-time data integration as possible.”
Lately, many of our self-funding members have expressed interest in starting an on-site clinic or joining a shared-site clinic that delivers Direct Primary Care. After all, Direct Primary Care has become an increasingly hot topic during the pandemic due to its monthly, per-patient payment method that lowers overall costs, and the emphasis it places on increased primary care access – like same-day appointments and telehealth services.
The increased attention towards Direct Primary Care clinics has also grown since The Alliance announced the opening of our own Sun Prairie clinic in fall 2020. Given this, we want to provide our members with information to address any questions they may have, and who better to answer them than fellow employers of The Alliance cooperative? Dan Ludwig of Brakebush Brothers, Inc., Tena Hoag of Advanced Laser, and Jake Nolin of Rice Lake Weighing Systems, all graciously accepted our invitation to share their successes in establishing or joining clinics of their own.
“Why did you start an on-site clinic?”
Jake Nolin: We had an ongoing health center strategy we’d been discussing for years, but what ultimately pushed us was facing down a 30% renewal increase – the equivalent of an additional $2 million per year – five years ago. We’re now 3.5 years into our clinic, and our health center is the focal point of our health strategy – it links everything together from being self-insured to benefit plan design, to steerage all the way down to contracted care, which we receive through The Alliance.
Tena Hoag: We felt like we were being taken advantage of and we knew we could provide primary care for less by opening our own clinic.
Dan Ludwig: We were also, year after year, facing double-digit premium increases while fully insured, so in 2014 we took control of it as part of a self-funded platform. Prior to 2017, we provided a musculoskeletal injury prevention program and that had great success. We thought, “if we can have success providing on-site services for soft-tissue injuries we can probably have additional success looking at primary care.” So we expanded our services to provide those on-site in 2016.
How did you get past any internal hurdles of moving to a self-funded clinic?
Dan: The biggest internal hurdle is obviously assuming the cost, but with the substantial increases we’d experienced and the new ones we were facing, our leadership was ripe for change. They recognized we couldn’t continue to do things the way we were. The cost of the clinic compared to the expected return made the ‘sell’ a lot easier.
Tena: Our ownership wanted to take care of the employees, and some felt that going down the on-site clinic path was “getting up in people’s business” and that’s certainly not who we were. So there was some difficulty selling that internally, but we knew the cultural shift would be a multi-year buy-in.
Jake: Our internal hurdle at the time was our President. We’re privately held and have a passion for taking care of our employees. He wanted something approximating old-fashioned health care where your provider knew you and spent more than 10 minutes with you. Getting a commitment for five or more years is a big commitment – it’s a big investment of money and time to put a clinic together. You need to be committed. If your CEO is a one-and-done type and won’t follow through after a bad year, and pulls the plug at the one-year mark, don’t even bother. It has to be seen as a long-term investment.
“How did you choose your provider/partner?”
Jake: That’s been a journey for us. We interviewed a number of different 3rd party providers and started with CareHere. They had 300 clinics around the country. We assumed that bigger was better. As it turned out, that didn’t work well for us because we wanted to do things like childhood immunizations and other things weren’t under their boilerplate. Last year we went to NeoPath Health out of Minneapolis, and they’re much smaller regionally as a 3rd party clinic provider. They have 10 sites in Minnesota. They understand us and listen to us when we say “we want to do this in our health center” and they want to make it happen. It’s been like a night-and-day difference.
Dan: Our original partner was handed the business because we had a long-term relationship with them from our wellness program. After about a year we discovered they had somewhat of a boilerplate of “this is what we offer in a clinic” and we wanted to be able to offer other things to our employees. I would encourage anyone going into a clinic is asking what they offer when developing your RFP, and ask if they’re comfortable with offering a particular service in your clinic. We selected ProactiveMD on March 1st, which is an interesting timeline because COVID-19 hit right as they were taking over. There’s been a very steep learning curve and we’ve gotten to know each other very quickly due to the pandemic. Overall, it’s been very positive.
Tena: 2-3 years ago, when we started down this path – we’re a small employer – we had about 100 employees and 65 of them were on our health plan. We didn’t have all the same options as our larger local businesses, so we interviewed some independent operations, but with our size and with our limited budget, we ultimately ended up in a shared-site clinic situation. In total, three local businesses that opened our clinic together. It’s a very different model, but that underscores the fact that you do have power – regardless of your size – you just need to find like-minded people to help take advantage.
“Are you being billed as fee-for-service or one monthly fee that includes all monthly visits, or PEPM (Per employee, per month) payment methods?”
Dan: Ours is a set monthly fee that covers the vast majority of services. Things that would be additional are higher-cost labs and some prescription drugs – everything else is 100% covered. All employees, regardless of whether or not they take our coverage, and all covered spouses and dependents can use our clinic. Our goal is to have everything free at the clinic. We do have about 10% of employees who choose an HDHP and the IRS gets their say to decide what we’re allowed to give for free, but we keep those costs as low as humanly possible.
Tena: Our shared-site situation is a bit different. The group shares a certain number of hours per week for the various services the clinic offers. We are often charged for our share of hours whether we actually use them or not. Excess capacity hours are split by a prearranged percentage that our group originally agreed upon.
Jake: Our clinic is private to our employees and family members on our “Take Control of Your Health” plan. There’s zero charge for anything at our health center. From prescriptions to procedures to wellness visits and referrals, nothing has a cost and it’s all pass-through, which means we pay an administrative fee and all costs are transparent and passed through to us. They pay them, and we reimburse them. We pay for everything down to the internet and salaries of six full-time employees.
How did you onboard different vendors?
Jake: It’s kind of like onboarding a new staff member. It’s really important for them to understand your goals; they have to understand the benefits. For all of our providers, they have all come from large health care systems so they understand how those systems work and how our systems are different, so we just had to explain our system and what we wanted to achieve. We had to ask them how they refer. And it’s important for them to understand our tiered plan design, so if they refer someone to tier one that person pays nothing, but if they refer to tier two or three, they are economically impacting our plan and our members. It took a lot of education, they don’t just pick up the plan design, and all the partners and lingo on the first go-round, but I remind them about it every quarter and align with them on a regular basis, and they’ve become subject matter experts.
We also use a Care Navigation Firm called Alithius in conjunction with The Alliance’s data, who is also well connected with our on-site clinic. All of our referrals go through Alithius and they provide different options for Tiers 1-3, both 1 and 2 are both provided through The Alliance and tier 3 is our old PPO plan, so Alithius is helping us with consumer education, and telling employees their options and they will direct them to a good decision whether it’s location or provider system that matters to them, they can have the information that they need to make a good decision. Well over 95% of our members are choosing Tiers 1-2 but Tier 3 accounts for 65% of our spend.
Tena: Ultimately, we did not end up going with an independent operation, we are actually with a health system. It has worked out well for us so far. They’ve been very receptive to the vast majority of everything we’ve brought to them. We’ve found out to just ask. Just ask. Ask them how they can help us help our employees. There were a fair amount of bumps and bruises in the beginning but that has pretty well settled out. There are a lot more details that folks maybe don’t realize matter. It’s quite a process, it’s a journey, and I don’t think we’ll never be done making tweaks and improvements, but the important thing is to find someone who has flexibility and a willingness to be in it for the right reasons.
Tena, you have a shared-site clinic, so how did you all get together to create the clinic?
Tena: We had some local people to help make us smarter faster, we’ll call them circles of influence, and if your inquisitive and innovative connections start happening from there. That’s how I was introduced to a lot of different providers. This may sound simple, but we’ve found that the other businesses, by simply being involved in our community and attending chamber events or attending speaker meetings, you meet others who care about the same things that you care about. Then it grows from there. We connected with Spectrum industries and found out we were researching the same things at the same time, and we started a friendly relationship. Then when we were ultimately vetting out providers, another business in our area, Great Northern, was looking to add to their Chippewa Falls location as well. I’m very pleased with the businesses we’ve been able to partner with so far.
What services do you offer at your clinic?
Jake: Our clinic is actually a near-site clinic, and It’s about a mile from our facility. We bought a dental office that was available and retrofitted it into a 3200 square-foot clinic. We wanted everyone to have access to it, and it was also a timing thing – we didn’t have a lot of available space on our campus and we wanted to do it the right way. We didn’t want to shove people in a closet or a trailer, and in hindsight it’s worked out tremendously well; it gives people a sense of privacy when they get help and it keeps family from visiting employees while they’re at work. I like it and we think it’s worth a few minutes of inconvenience.
As far as our services go, we do primary care, acute care (stitches and getting particulates out of the eye), and chronic disease is a very big thing. When we went through the COVID-19 lull we went from 85% to 35% utilization. We used that time to do a lot of telephonic contact with people who have chronic diseases because wellness is huge for us. Even if an employee has just one appointment a year and it’s a physical, we reward them for it. We have a 125-drug formulary dispensary in our clinic, so lots of prescriptions can be picked up at no cost. We’re fortunate to have an NP and an MD who will both do in-office procedures. They’ll do injections, remove skin tags, things that would cost thousands at Marshfield or Mayo, and obviously they do referrals for medical and mental health. We do pre-employment drug screens and physicals, but we do not do Op-med. or workers comp. That’s separate.
Tena: We have a PA who does all our normal primary care things. We also offer physical therapy which has become one of the most popular facets of the entire program. He does work both at the clinic as well as on-site. We just wove behavioral health into the contract in 2020, so now it’s really a one-stop shop for any physical or mental needs.
Dan: Medically we offer primary care, urgent care, chronic disease management, labs, an on-site dispensary, and a robust muscular-skeletal program; they’re out in the plant looking at things from an ergonomic standpoint and doing employee surveys, looking for problem areas, and seeing if it’s an environmental issue or individual anomaly and trying to catch it early on before it progresses into something more severe. Of course, they do other things like physical therapy and rehab when we have an actual injury. We also bring an on-site orthopedic surgeon once a month who can do pre- and post-op consultations and injections. We just started with mental health at the beginning of the year, and it took off more so than we expected. It didn’t take long before people were utilizing that. We have a chaplaincy program here as well. We have on-site mammograms which is a mobile service, and we have at-home sleep study devices we can send people home with as well. We have a wide range of services we can keep in-house and last year we started doing on-site imaging with x-rays and ultrasounds with a mobile van who responds quite quickly to urgent care situations – oftentimes in an hour. And when you consider the alternative to driving 20 minutes to the nearest ER and waiting in the waiting room, sometimes it’s actually faster.
How is your clinic connected to local providers?
Dan: We tell people if they have an existing relationship, that they don’t need to drop their doctor to use ours. They can use us within whatever fashion you’re comfortable with. If they only want to use us for urgent care? That’s fine. It comes down to individual choice. You have some people that use us as their medical home and some people that have been with their doctor for X number of years and really like them.
Jake: Almost everybody has migrated to our health center because we have a female DMP and a male MD. In relationship to the community, we have an imaging partner and PT partner that The Alliance assumed the contracts for, and that’s remained very strong. They do direct referrals. We are in a community within Marshfield and Mayo territory, and in the beginning they were very difficult in getting files transferred and recognizing us as a legitimate medical provider, but we’ve seemingly worked through that.
Through this experience what do you think your savings have been to overall health care spend?
Jake: I would say over 3.5 years we’re approaching 10 million dollars in savings. We have not had an employee contribution increase in five years. All our savings include the costs of the clinic. I would estimate that every dollar we spend on the clinic we get two back, which is pretty substantial.
Tena: I can’t give you a long-term estimate in what we’re catching and preventing from happening. But I can say our savings are roughly $5,000 a month in terms of what our care is at the clinic vs. what it would be somewhere else. And keep in mind our total spend is less than a million dollars. The thing that makes me happiest about that, is that’s $60,000 that’s not coming out of the pocketbooks of our employees and that makes us feel good.
Dan: That’s been one of our struggles figuring out what exactly what is our total savings? Some of it’s easy, but the unnecessary fee-for-service referrals that we no longer have has been difficult to capture in terms of calculating savings. We’re preventing things. We have some conservative estimates, but one thing that’s very clear is we’ve experienced a savings every year since opening a clinic – even including the costs to run it. It’s about a 2-to-1 ratio in clinic costs which is substantial.
The Alliance hosted Dr. Kayur Patel of Proactive M.D. and Dr. David Usher, M.D., of ReforMedicine, for our first of a three-part series on Direct Primary Care June 8.
Missed the webinar? You can view it here.
What is Direct Primary Care?
Direct Primary Care is an innovative primary care model that emphasizes developing and maintaining a trusting patient-physician relationship while utilizing an alternative payment method that greatly improves access to high-quality care with a flat, affordable membership fee. It significantly differs from traditional primary care, which uses fee-for-service payments and third-party payers.
Employers are growing to identify the benefits of Direct Primary Care for their plan participants and their healthcare expenditure, and are adopting this model by utilizing an on-site, near-site, or shared-site clinic. In fact, in response to the ever-increasing demand for this model of care, The Alliance is launching a Direct Primary Care clinic for employers. Under this model, employers will only pay for the plan participants who access the health center.
Increased Time and Trust for Better Health
Direct Primary Care places an emphasis on length and frequency of contact between patient and primary doctor. “There is no substitute for time spent with patients – building trust takes time,” said Dr. Usher. By increasing the time patients spend with their primary physicians, a trusting relationship develops, which enables a more fluid and seamless flow of information between the patient and provider.
Practicing under this model, the physician inherently understands the patient and can make smarter recommendations and referrals. As Dr. Patel explained, “If the physician and patient spend more time together, they will intuitively make better choices for the patient and provide more complete care.”
Primary Care Directs Total Health
In today’s complicated health care world there’s a significant amount of specialty care and referrals, and there needs to be someone directing and managing each part of that care. Dr. Patel explained that direct primary care acts as that link and likened the primary care doctor to the quarterback of a football team.
“The quarterback has to be the family [doctor] who has the ability to navigate all the various specialty care, and soon as the patient is seen by the specialist, the primary care doctor needs to reprocess that information and figure out what the next move is going to be,” he said. In other words, the primary care doctor is the key to total health for a patient.
More Preventative Care = Less Emergency Care
More importantly, because the physician is more in-sync with their patient, they’re now better able to direct focus on preventative care, which can negate the need for expensive ER and urgent care visits, multiple and unnecessary tests and referrals to costly specialists.
“If we more appropriately direct care and manage preventative care,” Dr. Patel elaborated, “we will reduce the higher-complexity, higher-cost care – like surgeries and ER visits – to less-complex, less-expensive physicals and medications.”
Better Access for Patients
Additionally, patients have more convenient ways to access care in a Direct Primary Care model, like 24/7 telehealth services and same-day appointments. Some Direct Primary Care clinics feature expanded services, like on-site MRIs and prescription fulfillment, which increases convenience and reduces costs. As Dr. Patel explained it, “Access to care is critical in terms of offered value.” said Dr. Patel.
More Effective Payment Methods
Direct Primary Care providers pay for care on a per-member, per-month basis, as opposed to the traditional fee-for-service model. This reformed payment methodology rewards providers for quality of care, placing an emphasis on value over volume. There are no inflated costs due to third-party or fee-for-service billing because patients pay for their care directly to the physician. Most Direct Primary Care memberships/subscriptions cost less than the average cell phone bill, often for as little as $70/month.
“I want to have more time with my patients,” Dr. Usher said plainly, “In the traditional health care world, you make more money with two 15-minute appointments than a single 30-minute appointment. That’s why we moved into a Direct Primary Care model.”
Dr. Usher went on to explain that primary care is undervalued in traditional medicine due to the reimbursement structure in the fee-for-service model. “Primary care is often used as a referral engine to bigger, more expensive health systems,” he said. “For patients, this year’s charges become next year’s premiums – even with good insurance.”
In fact, general deductibles have increased eight times faster than wage increases, and premiums have increased every year since 2008. These costs are causing patients to ignore symptoms and forego treatment on manageable symptoms until they become, what Dr. Usher referred to as, “medically homeless.” Ultimately, those patients will end up seeking costly emergency treatment when things get worse.
Patients and Employers Prefer DPC
However, the Direct Primary Care model combats those traditional health care inefficiencies by providing patients with:
Better access to providers
Deeper, trusting relationships with primary physicians
Address root causes to health problems (not just symptoms)
Produce fewer referrals and expensive tests
Better work and lifestyles providers
As for employers, in addition to paying a simple monthly, per-member fee, they also experience reduced absenteeism due to happier and healthier workforces.
Dr. Usher ended his presentation by explaining that by moving to the Direct Primary Care model, his patient satisfaction has skyrocketed: “This model is highly popular with patients who really enjoy the access to health care and more specifically, the lower costs.”
In Dr. Patel’s closing remarks, he expressed that a good health plan heavily incentivizes direct-contracted primary care, and that employers need to take action for widespread acceptance. “As employers, you can make an impact as the largest purchaser of health insurance,” he concluded.
For more information on our new Sun Prairie clinic or to learn what it takes to start your own on-site clinic, please contact your Account Executive or reach out to Business Development.
In late April, The Alliance hosted their first Employer Town Hall. The e-conference roundtable was intended to provide a place for employers to share solutions and discuss the impact that COVID-19 has had on business operations.
In addition to a panel of leaders from The Alliance on the call, we hosted two employer-presenters to lead the discussion and help facilitate conversation: Jim Sheeran, Sr. Director, Total Rewards at Molson Coors Beverage Company and Diana Clark, Benefits Manager at Promega Corporation.
Both of our presenter’s organizations have initiated a COVID-19 task force, and in order to remain flexible and respond to changes quickly, Jim said meetings occur daily. “Our task force meets every morning, and every day at 4:00pm we have a leadership meeting which provides quick input from HR. We have an immediate feedback loop with union leaders which frames how we work as a task force.”
Adapting to the “New Normal”
Our presenters shared what tactics their businesses use to screen and test employees for COVID-19 and how they changed workstations, and even shifts in some cases.
For example, Diana said Promega’s normal operations occur in two shifts during a 5-day work week, and now they’re operating as a 3-shift, 7-day work week employer. This has been helpful in keeping production up-and-running while reducing the number of employees working to create the necessary separation that the CDC requires. She also said that taking simple measures like using painter’s tape to display separation requirements is successful in keeping coworkers safely spaced apart.
Diana explained how they double-checked their benefit plan to ensure that telehealth was offered to their employees: “Physician visits were excluded in a telehealth setting due to the wording in our contract, so we reached out to the TPA to update the communication.”
Molson Coors Beverage Company is a multi-national corporation who is well-equipped to deal with challenging operational situations, yet due to unprecedented conditions, Jim explained they’re reacting and trying new things like everybody else.
“We put in temperature checks that were no-touch, but they didn’t work well because we didn’t take into account the heat from the employee’s environment,” he added, “People call in sick to our hotline for work. If someone called in Monday and Tuesday because they weren’t feeling well but came in on Wednesday and called in sick again on Thursday, we should’ve flagged them as high-risk patients and not had them come to work.”
Diana said her team has initiated random exposure drills to help educate managers how be prepared. “We can run them through what a situation would look like if a specific employee were to get sick and how severe it would be in terms of potentially infecting other people. The drills help point out to managers the importance of following company procedures. “
Whether you want healthy employees to come to work or don’t want high-risk individuals showing up for their shift, Jim said incentivizing employees works, and it’s important to carefully think through incentives in order to not pay employees too much or too little. His organization gave a substantial pay-bump to their front-line workers and offered a “high-risk leave of absence” to employees.
Diana offered several useful learnings through her experience over the past two months:
Figure out what symptoms require separation from other people
Screening for coughing, fever, and shortness of breath has been successful in catching a few cases.
Know newer symptoms
COVID-19 can manifest itself as the flu, a sinus infection, or with headaches and body aches.
Develop an assessment and update it frequently.
Promega uses their Human Resource Business Partner team to help triage patients; they have a chief medical officer, an RN, and six other officials who clearly communicate to symptomatic patients to not go to work and call their manager instead.
Overall, Diana said their biggest goal is to keep people off campus if they are symptomatic. With the aid of their Medical Director, they’ve developed a protocol to call affected employees and ask them a series of questions to further determine their risk level. “We really stay in contact with our employee population. We’ve compiled a symptom checker that can be accessed through the patient’s computer or phone, and depending on how they answer, they’re either cleared for work or HR reaches out to them with next steps.”
Navigating furloughs was also part of the discussion, and Promega has been creative in shifting job responsibilities to eliminate the need to furlough. For example, they have a large staff of cafeteria workers who are now contributing to the manufacturing/operations side of the business. “It’s been amazing to see people step up. They want to help and be utilized,” Diana said.
Keeping Employees Safe (And Sane)
As far as supporting remote workforces, she offered a few tips: “Our physical therapists are now doing tele-consults, helping people with lower back pain, setting up their home workstations, etc.”
Knowing its importance, both organizations offer mental health resources through telehealth. “We have an emotional-social mental health team that helps boost our Employee Assistance Program (counseling,) which helps spot people with addiction and depression. Creating check-ins and virtual lunches have been critical for our remote employees,” said Diana.
Communication is Key
Both Jim and Diana also agreed that it’s not enough to ensure your employees are safe – they need to feel safe, too. By communicating protocols, posting flyers, and making constant announcements and reminders, employees will be more at ease about coming into work. Here are some ideas:
Use painter’s tape to direct employees to stay six feet apart
Use visual cues like signs to help facilitate proper safety, like washing your hands often and properly, coughing into a tissue, and wiping down frequently touched areas
Implement special visitation rules that include a screening and questionnaire
Jim and Diana agreed that things are changing quickly, and employers need to be willing to adapt to those changes; both of their companies follow all CDC guidelines and are continually watching for new state-specific mandates.
Stay tuned for our next Employer Town Hall, subscribe to our newsletter to stay up-to-date on upcoming learning opportunities, and watch for details on our upcoming webinar series about Direct Primary Care and how it can help your business.
The Alliance is a purchaser of health care services on behalf of our employers. That means that The Alliance is not a typical payer or insurance plan but understanding what health insurance plans are doing is essential to continuing to learn and grow to help our employer-members. Attending the AHIP (America's Health Insurance Plans) Consumer Experience and Digital Health Forum involved a lot of discussion around transparency, benefit plan design, and payment reform – what we consider to be the core drivers that employers can use influence in high-value health care. And most exciting of all, one of AHIP’s panelists, Martin Makary, MD, MPH, said the very thing we know to be true. Employers may be the biggest driver in creating change within health care.
Data was a major theme at the conference. Not just for consumers, who want access to their own health data, but also for doctors and employers to have greater access to claims data. Farzad Mostashari, MD, ScM talked about how claims data could help predict patient outcomes by analyzing medical errors and oversights. He suggested that there isn’t greater availability to this data because people are okay with the status quo, quoting Upton Sinclair. “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” Salaries depend on keeping data hidden, so it remains unavailable to those that might benefit from it most.
Dr. Mostashari believes, in the end, that all the worries about price transparency will have the same outcome as the transparency around clinical data. “It will be fine.” Every other industry that has gotten more transparency has seen more innovation, so he thinks it will improve health care.
In addition to the transparency around cost related to health systems, there was also a session about the role physicians play in health care transparency. Martin Makary, MD, MPH, presumes that there needs to be greater availability of quality data with measures beyond just complications. He has been focusing on the appropriateness of care and billing quality. Both Dr. Makary and Reed V. Tuckson, MS, FACP agreed that there should be a standardization of quality measures, so doctors are measured similarly and know the expectations.
They also talked about how doctors can help change patient behavior. “Access to data is not enough. Data alone doesn’t change behavior,” Dr. Tuckson said. He feels that physicians need to understand people’s decision-making and beliefs about health better. He wants to work with health plans to get data on how to be more consumer-centric. This topic isn’t covered in medical school, and Dr. Tuckson said there needs to be medical education around how to change people’s behaviors.
Dr. Makary also believes employers have the biggest ability to drive high-value care through steerage and by owning independent primary care clinics. He mentioned large employers, like Walmart, and I chimed in that we have small employers doing that great work as well. And that those are just two strategies The Alliance is working with employers to implement to drive high-value health care.
For more information on the strategies that our employers have implemented around high-value health care, and tips for self-funding, read The Alliance case studies. To learn more about how The Alliance works with employers to make health care more affordable, contact our Business Development team. Members and their advisors who want to learn more about our four core drivers are encouraged to contact the Member Service Team.
More About How Employers Can Change Health Care
Guide employees with our employer-specific and customizable Smarter HealthSM analysis
Learn How to Guide your Employees to High-Value Health Care
Learn How you can influence health policy with The Alliance
Wisconsin Can Save $394 Million by Steering Patients to High-Value Health Care
Read case studies about employer-members who made a difference with self-funding
One of the best things about being part of an employer cooperative is watching employers learn from and with each other. Attending the National Alliance 2019 Annual Forum took that to the next level by gathering health care purchasing coalitions together to discuss new ideas and share best practices. The National Alliance 2019 Annual Forum, held November 11 – 13 in Washington, D.C., hosted about 40 health care purchasing coalitions from across the country, along with a number of vendors and partners.
The Fight For Transparency
The biggest takeaway from the forum is that most coalitions have the same focus that The Alliance does. The four core drivers – transparency, payment reform, benefit plan design, and provider network design – were discussed throughout the three-day event. The RAND Study, in particular, was presented as a helpful tool in the fight for transparency. The coalitions that have price information around how much hospitals are paid relative to Medicare are taking it to the negotiation table to get more affordable health care. The negotiations are not just for the employers, but for their employees too since households in the bottom 20 percent of income spent 26.8 percent of their income on health care in 2016, according to Health Affairs.
Payment Reform That Fits The Bill
Payment reform was also a hot topic discussed, in particular, surprise billing. The Economic Alliance of Michigan discussed surprise billing legislation that would limit out-of-network care providers from collecting only 125 percent of what Medicare pays for care in Michigan. Hospital associations are in support of a fix for surprise billing but do not want to agree to 125 percent of Medicare, according to one article. While this is being discussed at the federal level, individual states are trying to pass legislation until a federal law can be passed to resolve the issue.
One session, which included speaker A. Mark Fendrick, MD and Director of the University of Michigan Center for Value-Based Insurance Design, explored benefit plan design to eliminate low-value care and incentivize high-value care. Frendrick said that the employer sector is the right one to figure out health care because they’ve figured to spend money more efficiently in every other area. He believes that patients should have little to no out-of-pocket cost for high-value health care. Fendrick and a multi-stakeholder task force identified overused services that could be reduced with little to no harm to patients. Those services included vitamin D screenings, PSA screenings in men 70+, diagnostic testing and imaging before low-risk surgery, and exchanging branded drugs for generic drugs when they are available. When looking at those services, The Washington Health Alliance used the Health Waste Calculator to identify over $92 million in unnecessary pre-op testing alone that could be eliminated based on the recommendations. The conclusion being that increased cost-sharing on low-value services reduces health care spend and allows for increased spend on high-value services.
Network Design Based On Value
Provider network design was also a highlight of the event as General Motors’ Sheila Savageau, U.S. health care leader for global compensation and benefits, spoke about their unique partnership with Henry Ford Health Systems. They created a narrow network with concierge services. In doing this, they have reduced employee health care costs and improved service. The integrated health care delivery system shares cost savings and pays based on value. Henry Ford needs to hit a financial budget and will be held accountable for hitting essential quality, cost, and utilization of services metrics agreed upon with General Motors. Savageau ended her session by saying, “Employers need each other to really make a difference [in health care].” And The Alliance couldn’t agree more.
To learn more about how The Alliance works with employers to make health care more affordable, contact our Business Development team. Members and their advisors who want to learn more about our four core drivers are encouraged to contact the Member Service Team. And to learn more about why our member, Brakebush Brothers, Inc., won the 2019 Employer/Purchaser Excellence Award by the National Alliance of Healthcare Purchaser Coalitions alongside The Walt Disney Company this year read the case study on how they had lower per member health benefit costs in 2018 than in 2014.
Health Care Transparency for Employers
Learn about The Alliance Roadmap to High Value Care: Provider Network Design, Payment Reform and Transparency
Read the case study on our member, Brakebush Brothers
Visit the National Alliance of Healthcare Purchaser Coalitions website