Hospitals that keep Iowans healthy get rewards

Iowa's leading health insurer says it's starting to see results from a major effort to reward hospitals and clinics for keeping patients well instead of just treating them when they're sick.

Wellmark Blue Cross and Blue Shield is announcing today that its Accountable Care Organizations have saved $12 million in the past two years. The organizations are arrangements that pay hospitals and clinics more if they reduce health care costs by preventing patients from becoming so ill that they need intense and expensive care.

The new type of contracts are meant to replace the traditional way of financing health care, in which doctors and hospitals are rewarded for providing more and more care, whether it improves patients' health or not.

Wellmark, which dominates Iowa's health insurance market, said the initial five health care systems that signed such contracts with it are all receiving financial rewards. The systems are Mercy Medical Center-Des Moines; Unity­Point Health, based in Des Moines; Genesis Health System, based in the Quad Cities; Wheaton Franciscan Healthcare, whose Iowa operations are based in Waterloo; and a collaboration between Mercy-Cedar Rapids and the University of Iowa Hospitals in Iowa City.

ACOs have sprung up around the country in the past couple of years, partly because of incentives in the Affordable Care Act. Many of the health systems that have signed such contracts with Wellmark have also signed them with the government health plans Medicare and Medicaid, plus other private insurance companies.

The Wellmark ACO contracts cover about 358,000 Iowans, most of whom bought their own insurance policies or obtained coverage via small employers. Wellmark said that among those people, hospital admissions were reduced nearly 12 percent, hospital re-admissions were reduced by 7 percent and emergency room visits were reduced by nearly 11 percent.

The $12 million in savings represented less than 2 percent of the $734 million in overall care provided to the 358,000 patients in 2012 and 2013, Wellmark said. But the company said the savings are a start.

Mike Fay, Wellmark's vice president of health networks, said much of the success in Iowa has been due to clinic staff members encouraging patients to come in for checkups before medical issues become severe.

For example, he said, a patient who is coaxed into a clinic for a physical exam might mention to a doctor that she's started having headaches. The doctor might then determine the patient is having early versions of migraine headaches, and start treating her for them. That could prevent her from showing up in an emergency room, he said.

Fay said some clinic staff members also are using electronic medical records to find patients who often are going to the emergency room for relatively minor problems. The clinic staffers are calling those patients to determine why they're going to the hospital and to discuss more convenient and less expensive ways to obtain treatment.

Fay emphasized that the health care providers can't obtain rewards for simply holding down the amount of care provided. They also have to meet quality goals, such as making sure that children come in for checkups and that adults receive mammograms and colonoscopies when needed. The insurer also checks to see if people with chronic conditions, such as diabetes, are seen regularly. So far, Wellmark has paid out more to the hospital systems than the insurer has saved, because the insurer is rewarding quality care improvements, Fay said.

Dr. David Swieskowski, a Mercy vice president overseeing his company's ACO efforts, said Mercy received an extra Wellmark payment of $3.7 million for its 2013 care of about 25,000 patients.

Mercy's successes included such things as increasing the number of patients receiving timely colonoscopies to check for signs of colon cancer. Swieskowski said the main thing Mercy did to improve that score was to add two specialized doctors so patients could get right in for the procedure. "The wait essentially disappeared," he said.

Earlier this year, Mercy leaders expressed disappointment that they did not receive rewards for participating in an ACO contract with Medicare, the giant government program for seniors. They said they narrowly missed 2013 targets for that contract, which cost them millions of dollars in rewards they had expected. That was one of the main reasons Mercy cited for having to cut more than 100 positions, either through attrition or layoffs. However, Swieskowski said last week that Mercy remains committed to the idea of ACOs, including those from Wellmark and Medicare.

Even with the Wellmark payment, Mercy will not be breaking even on the insurer's ACO arrangement, Swieskowski said. The hospital system had to hire people, including "health coaches," to coax patients into taking steps to avoid becoming seriously ill. The system also is out money that it would have collected from having some of those people require hospitalization.

Hospital leaders see ACOs as part of the way health care will be financed in the future, Swieskowski said. They don't have a choice to remain in the old way of payment for every service a doctor could order. "It's better to get something than nothing," he said of the ACO award.

Aric Sharp, a Unity­Point vice president, said his statewide system received $8.6 million for care of about 140,000 patients under its Wellmark ACO contract for 2012 and 2013. He said his organization's efforts include having morning team meetings at clinics to go over the appointments for the day and to consider what preventive tests or advice would help each patient stay well.

"Those types of things lead to better-quality outcomes," he said.

Sharp agreed with Swieskowski that the ACO payments to the health care systems are unlikely to make up financially for the decline in use of hospital services and the increased staffing costs for clinics. But he said such arrangements are clearly the future of health care.

"We're taking a real long-term view on this," he said. "We're doing this because it's the right thing to do."

Many ACO contracts, including Wellmark's, say that in the future, the hospitals will not only gain money if they achieve their cost-savings goals, they'll have to pay money back into the system if they fall below expectations. Proponents hope the carrot-and-stick approach will continue to drive efficiencies.

Should consumers be confident that the new arrangements will hold the line on health care cost increases? Sharp said that's the hope, but it's too soon to say how dramatic the effect will be. "We have a lot of work to do," he said.

BY THE NUMBERS

• Five health care systems ini­tially signed the Wellmark contracts, all of which will receive awards.

• 358,000 Iowans are covered by the Wellmark contracts.

• $12 million was saved over two years by the Wellmark Blue Cross and Blue Shield Accountable Care Organizations. This represents about 12 percent of the total cost of care for 358,000 Iowans covered.