Payer CEOs outline 3 keys to high-value, low-cost healthcare

Better integrated care, improved population health and enhanced consumer engagement are the three keys to a high-value, low-cost healthcare system, three chief executives from major insurers said Thursday during the AHIP Institute 2012 in Salt Lake City.

"These are three things that we must do to succeed, to shape and build the future and build upon what we've achieved in the past," Sam Nussbaum, executive vice president of clinical health policy and chief medical officer at WellPoint, told conference attendees.

"There are so many opportunities, and it's really a matter of figuring out how we can execute to the changes that will start having an impact in a lot of different places," Group Health CEO Scott Armstrong said.

"We have a single responsibility to move forward and fundamentally alter the system," Health Net CEO Jay Gellert said. "Working together with providers, other public and private payers and patients, we can actually make this system something that America can be incredibly proud of in all three areas--cost, quality and access."

Integrated care
By completely redesigning its entire primary care system, Group Health, for example, has seen care quality skyrocket, member satisfaction improve, utilization decrease and costs drop. "We've achieved some pretty terrific results," Armstrong said.

Among the changes the insurer took include changing appointment schedules, investing in new roles for team members and offering more provider visits by email and phone than in-person.

Group Health also has focused on acute care services by changing how it manages patient care at hospitals and the transitions out of hospitals. As a result, Group Health is saving almost $50 million annually on a relatively small population of patients, improving the quality of care and reducing hospital readmissions.

"These are the kinds of innovations that we need to be thinking about," Armstrong said.

Integrating care better, however, isn't just about acquiring physician practices or working with hospital systems; it's about aligning incentives differently, shaking up traditional care models so that we get better outcomes and getting beyond a system that focuses on those who are sick today, Nussbaum said.

"It's about doing more with less. It's about being more proficient and precise with our own resources and getting better, more effective results for patients."

Nussbaum stressed that integrated care involves nurses, pharmacists and others on care teams, all working together to achieve a common goal. WellPoint's recent purchase of CareMore, which provides care for 15 percent of Medicare Advantage beneficiaries who account for 75 percent of costs, is an example of successfully integrated care, according to Nussbaum.

"Every aspect of care in this model is designed to improve coordination of care, health and safety outcomes," Nussbaum said, which have led to hospitalization rates that are 24 percent below average, hospital stays that are 38 percent shorter and 60 percent fewer amputations among patients with diabetes.

Consumer engagement
Another key element moving forward in healthcare is focusing on the consumer experience. Consumers want the same experience in healthcare that they have in other segments, including easy access to information, services and technology.

"It's about reinventing how the health plan can shape the consumer interaction in the delivery system to make the consumer a much more informed partner in their own healthcare" Nussbaum said.

About 20 percent of WellPoint's business comes directly from relationships with consumers, and the company forecasts that individual business will grow to about 50 percent by 2015. So meeting consumers' expectations "is more important than ever," he added. WellPoint has been incorporating new elements, including retail strategies, mobile chats with care nurses and virtual video visits with doctors.

Group Health, meanwhile, seeks to influence results by actively engaging members so they become more accountable.

"We know that outcomes are better and costs are lower when patients are actively engaged," Armstrong said. Therefore, Group Health is experimenting with benefit designs that create strong incentives for members to do the right thing.

Population health
The third element to improve the healthcare system is improving population health.

"We have to be stewards of public health," Nussbaum said. "And most importantly, we must take on the very vexing problems of childhood obesity, inactivity and other behaviors that are driving poor health."

Of WellPoint's 35 million members, 1 percent drives 28 percent of costs, and 5 percent drives 54 percent of costs, Nussbaum said. To stem those costs, payers must develop "very capable programs to deal with chronic illnesses and better manage complications." Otherwise, we will just have a "continuously growing population that is seeing coming attractions of ill health, diabetes, heart failure and further expenditures without productivity."

To help improve population health and motivate members to own their healthcare, Group Health created a plan in Washington state that pays its members $10 to go to one of its primary care clinics and $20 to fill out a health risk assessment tool. It also lowered copays for preventive health and increased copays for emergency room use.

"The results are pretty spectacular," Armstrong said, adding that the insurer has seen an 18 percent drop in the first year in emergency room utilization alone.

Gellert addressed the issue of population health by comparing the smoking and obesity epidemics.

"We have the lowest smoking rates in the developed world, and we have the highest obesity rates because we didn't intervene in the same way in both cases. When are we going to be finally be honest with ourselves? We must do thinking that's outside of the box if we're going to finally deal with obesity problem," he said.

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