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Innovations in Preventing and Managing Chronic Conditions: What's Working in the Real World?

Conference Transcript
April 8, 2009


Welcome and Overview

Paul Ginsburg, president, HSC bio

Panel One: What’s Working in Employer Health and Wellness Programs?

Moderator: Paul Ginsburg


• D.W. Edington, Ph.D., Professor and Director of the Universit of Michigan Health Management Research Center bio  • Slides

• Amy Schultz, M.D., M.P.H., Director of Prevention and Community Health, Allegiance Health bio • Slides

Panel Two: What’s Working in Chronic Care Management?

Moderator: Paul Ginsburg


• L. Allen Dobson, Jr., M.D., Chairman, North Carolina Community Care Networks bio  • Slides

• Janet Tomcavage, R.N., M.S.N., Vice President or Health Services, Geisinger Health Plan bio • Slides

• Stephen E. Saunders, M.D., M.P.H., Chief Medical Officer, APS Healthcare bio • Slides


Paul Ginsburg: Good morning. I’m Paul Ginsburg, president of the Center for Studying Health System Change. And for those not familiar with us, we’re an independent, nonpartisan research organization funded in part by the Robert Wood Johnson Foundation and affiliated with Mathematica Policy Research. And I want to thank all of you for joining us.

This is the second of a series of four conferences on significant health policy topics, and it’s sponsored by three organizations, the Pharmaceutical Research and Manufacturers of America, DMAA: The Care Continuum Alliance and the American College of Preventative Medicine.

Now, the arrangement with these organizations is that we jointly choose the topics and then HSC is left to choose the speakers and run the conferences. The conference today is called "Innovations in Preventing and Managing Chronic Conditions: What’s Working in the Real World?," and it’s a follow up to the first conference. which was about the causes, prevalence, cost and consequences of chronic conditions. And in your folder, there’s an HSC Issue Brief that summarizes in as substantive way as possible the first conference. And, you know, if you miss things in this conference, there will be an Issue Brief summarizing the substance of this one. And the two main takeaways from the first conference were that getting people to change unhealthy behaviors, such as smoking, lack of exercise, diet, is extremely difficult, and improving the care of people with chronic conditions, especially their self-management skills, is critical.

And a new HSC study related to this topic was released last week tracking the prevalence of chronic conditions, and it shows that they are continuing to increase. In 2007, when the survey was fielded, 39 percent of the working-age population had at least one chronic condition, such as diabetes, and this is up significantly from 35 percent in our 2003 survey and 34 percent in our 2001 survey.

Likewise, when it came to obesity, the proportion of working-age Americans classified as obese grew from 25 percent in 2003 to 29 percent in 2007. Yet, we have a health care system that remains focused on episodic acute care and pays too little attention to helping people change unhealthy behaviors and improving the care of people with chronic conditions. So today we’re going to devote some time to discussing employer wellness and prevention strategies, which are fast becoming a standard feature of employer-based health benefits, in the hopes of learning what approaches are paying off and which ones are dead ends.

Likewise, coordinating care for patients with chronic conditions is a challenge in the fragmented U.S. health care system. And we’re going to hear how some providers and payers are re-engineering care delivery for patients with chronic conditions.

We have two panels; our first panel includes Dr. Dee Edington, director of the University of Michigan Health Research Management Center, and Dr. Amy Schultz, director of Prevention and Community Health at Allegiance Health, in Jackson, Michigan. And they’re going to give us an overview of employer wellness and prevention strategies. Dr. Edington.

D.W. Edington: Thanks, Paul. I’m going to have fun talking as fast as I can talk. And they tell me 20 minutes, but, you know, that never works, so we’ll see. Okay. Some of you have heard me talk before, and if you heard me talk, you heard me talk, I only have one talk-it’s much easier to find a new audience than a new talk. So I’ll just walk around and - I irritate people also. I prefer to say challenge, but irritation is fine. It’s part of my personality now, I can’t even change it.

I work for companies, like Andy Webber’s group [National Business Coalition on Health], all the companies around the country, and Gary Lindsay’s group - Partnership for Prevention. There are so many things going on in organizations. Companies are going out of business because we don’t pay attention to healthy people. Our whole country, as we all know, just waits for sickness, and then a lot of people make a lot of money. So nobody cares about health except for individuals themselves, and they don’t even care because they think, you know, it’s not going to happen to me.

And companies are the only ones that really benefit from healthy people, nobody else cares-we figured that out quite a while ago. So everything we do is about - got some people already. I’m not going to feel good going back to Detroit unless all of you are irritated, so let me know. This is our building right in the middle of campus, University of Michigan campus, and that’s my office up there in the front. I have an IV line and a catheter to take care of the coffee so I don’t have to leave the desk -it works. Usually companies that we work with, and we’ve worked with some of them for 20 years, some of them for a little less, but we crack people over time, and those companies are telling us there’s no time left. Some of them are going out of business and some of them are shipping jobs overseas to avoid the cost of sickness.

Companies are the only ones in this country who have money. The government doesn’t have any money, you just get money from companies and people, and you think you’re paying for something. The only ones who are paying are the companies.

So today I want to talk about mission, this change of strategy, change of strategy from health and disability to a business strategy. This has to be a business strategy . By the way, you’ve got two pages up there you picked up on the way in, that tells everything I’m going to say about it, and the book has everything else. You can go have a donut if you like and come back and hear Amy, because you’ve got it all there. And then I’m going to talk about the natural - well, you can’t do anything until you understand the natural flow of Americans as they go through their life. We spent 10 of our 30 years looking at that; what’s the natural flow? If you do nothing, what happens to Americans? And I’ll show you some of the data.

In the business case, health is an economic strategy. Health as a health strategy is dead, you know, we’ve given up on that, nobody cares. Companies care about economics and high performance, that’s what they care about. So we’ve got to do something to keep them in business, because if companies go bad, what happens to America? It’s a bad deal.

And then the last one, I’ll talk about the solutions, how can we support this culture of health, then Amy is going to talk about what she’s done in Jackson, Michigan, which is wonderful.

The mission is changing the conversation from health care to health as a serious economic strategy. Most people in America think about health-I’m not sick, I’m not in the hospital, and so I’m healthy, so why do I want wellness, they don’t, they haven’t taken it, because you’ve taught them that all you have to do is worry about being sick, that’s where most people make money. Medications, hospitals, nurses, they make money when people get sick, so why do they care about wellness? Everyone is on that continuum some place. Where do you want to be on that continuum, on the left side or the right side, the blue or the red, okay, that’s one question.

The second question, which line do you want to be on, the blue or the red. Colors are chosen very strategically, Go Blue! The third question, who’s the leader that’s going to get you where you want to go and which line do you want to be on, who’s the leader? You’re your own leader. No one else is leading - if you believe those three things, if you answered I want to be to the left, on the blue, I want to be on the blue lines, and I’m a leader, we’re done, that’s all we have to do with Americans.

Three hundred million of them understand those three questions, and then they do it themselves. Behavior change, I don’t think it works, stop doing it the way we’re doing it, that should irritate some people, even the President, behavior change. Are you kidding me? We’ve been trying it for 30 years, it hasn’t worked. Do we weigh any less than we did 30 years ago? Are we exercising more than we did 30 years ago? Do we have fewer diabetics than we did 30 years ago? The answer is no, no, no. What’s wrong with this picture? A University of Michigan picture taken from an overpass, that’s a big biomedical sciences building, they think something great is going to happen there, they’re just chasing the money here in Washington, they have somebody out here every day, and for money.

In over 40 years, seven, eight, ten people get tenure and then you’ll pay for them the rest of their lives. Maybe, just maybe they’ll go from their raised life expectancy, from 78.8 to 78.9. If that tenth of a year is winter in Michigan, to hell with it, you know.

But we can change life expectancy in three years, within five years if we get serious about this. We have a 97 to three ratio now, 97 to one ratio in the stimulus bill. I mean 199 to one, 99.5 to .5. We need to get that to 75, 80, 85 to 15 maybe. All right. I’m feeling better as I go. The current health care strategy, wait for sickness, then go get treatment, that’s the current strategy, we all know that, no one is hiding anything. In quality terms, that means we wait for defects and try to fix the defects, that’s quality. You wait for defects and try to - we tried that in safety.

I was just at the major safety conference yesterday, they are the leading - they know how to fix safety, they fix safety, instead of waiting for accidents, they fix the systems that led to the defects.

Quality and our quality products, American. So we finally fix the system that lead to the defects. Health care, we still wait for defects and then try to fix the defects and pay a lot of money.

It’s an economic disadvantage, the way health care is going to companies. We’ve economically disadvantaged our companies in world-wide competition with health care. Everyone is on one of those three lines. We got that, we had 2 million people in a data base. We look for - if you’re more than $5,000 medical spending in one quarter, we put you on the red line and go back in our data base 12 quarters and forward 12 quarters back, that’s the natural flow of a heart attack or a serious medical problem. The yellow line is between $500 and $5,000, the green line is not even $500.

Which line do you want to be on, red line, yellow line, or green line? Green, right, equals Michigan State, I graduated from Michigan State, so I wear green and white underwear, but I work at Michigan. Green, green for dollars. Put the leader that’s going to get you on that green line.

The 80/20 rule is right, it’s always right every day, every year, every minute, but you can’t make a business strategy on the 80/20 rule, you know. Twenty percent of people count for 80 percent of the dollars, why not? Based on that line, you should - from that curve, you can - why is that a very bad strategy? Think about it, it’s true, the problem is you never - you can’t get up to who’s the 20 percent because they change day to day. Who’s at that peak? By the time you know them, they’re already passed the peak, they’re down there, there’s another group up there. So it’s a moving - you’re moving through time. You’ve got to follow people over time. So junk that rule. You can always tell - here’s what companies are worried about, medical, drug, absenteeism, disability, workers comp, that’s what companies - you’re putting companies - putting companies out of business because of those costs, and then some expert benefits guy comes in and the company says, well, what’s driving those costs, so some expert benefits guy comes in and says: "It’s an interesting question, I’ll go back and run some numbers."

Then they go back, have a beer and a cigarette, come back with an old report and say the answer is disease. Well, you asked a trivial question, you got a trivial answer. Of course, it’s disease, and that’s the way America’s been living, that’s what we’ve been doing.

A lot of people make a lot of money and charge it to companies, and they have to increase the cost of their services, they get uncompetitive world-wide. America is going broke, those companies are going broke. America, in Washington, they just print more money, I guess, maybe that’s one way to do it. You know - Einstein, I want to meet him some day, hopefully not soon. What does Einstein say about this? If you’ve got a bad situation, you think the same level of thinking that got you into that is going to get you out of it, no. You’ve got to come up with a new way, a new model of thinking. More doctors, more nurses, more hospitals will not get us out of this problem. More access, more affordable health care will not get us out of the problem, it only will increase the problem. It’s the right thing to do, but it will not get us out of this cost problem.

Let’s follow Einstein’s thinking. Here’s estimated risk factors. Paul talked about estimated chronic disease, and I took some of those slides out because they only gave me 20 minutes and I’m going to take maybe 30.

Body weight, stress, seat belt use, that’s happening in American businesses every day. Fourteen percent have none of those risks. Here’s a cost implication. If you’re low risk by age group, that’s what your cost is. If you don’t participate, you don’t know what your risk factors are there, if you’re medium risk, like zero, one, or two risks, I mean three or four risks - low risk is zero, one or two, three risks and four risks are medium risk, and high risk are five or more. Which bar do you want to be on, which color, blue? As age goes up, costs go up, as risks go up, costs go up. You can’t do anything about age, what can you do something about? Risk factors, there’s a relationship.

Today 64 percent of this population is probably low risk, unless you lie, you may, that’s okay, it’s up to you. Ten percent are high risk, and three percent - that’s today. In three years, if you do nothing, 61 percent will be low risk. As Americans live their lives, what can you do with those data? Well, that’s something - like CDC would send us - hyperventilate from some of their data, because they don’t follow people, you don’t know what happened.

Yeah, we’ve got more low-risk people, we don’t know why, so follow the people. Seventy-seven percent of the people today, in this room, 77 percent of you are low risk and you’ll still be low risk in three years. The rest of you will migrate some place else.

And, by the way, what does America do for those champions? What do you do for - what do you do for the absolute champions in America, low risk, low cost? You don’t do anything. We do not do anything for those people. Why is that? My feeling is, follow the money. Who makes money on sickness? Who makes money on health? A lot of people make money on sickness, no one makes money on health. A huge difference between health and health care. The whole focus in America is health care, the real focus should be, in my opinion, health.

Some people got better over three years, some people got worse, that’s the natural flow of Americans, to mark off change, that’s what we do. We have 39 people in our research center, all funded by corporations, $5 million a year funding by various corporations, we study people and how they move, how they change, that’s the natural flow.

What’s your strategy now? If your strategy is to get to low-risk population, what’s your strategy got? A couple of strategies. You could do your whole strategy off of that.

Here are the secret numbers. Low-risk people have to be driven to 75 to 80 percent of the population that’s below risk in your company or your community, and you have to get to 85 percent of people staying low risk over time, those are the numbers. Amy is very close to those numbers already at Allegiance Health in Jackson. Crown Equipment is very close to those numbers in New Bremen, Ohio. We’re getting close to champion companies. Here’s another slide. One million people on that red line, that’s the age and cost. As age goes up, costs go up. And we say, well, you get old, you know, aging is hell, it’s going to be expensive and bad things do happen. Yeah, you can believe that, but you don’t need to believe that, we’re just led to believe that, we’re led to expect high cost.

The green line is a percent of the population at high risk-three or more risk factors. That green line precedes the red line by ten years. Maybe, I’m just saying maybe, Einstein has a point here. Maybe there’s something else driving cost rather than age and disease, maybe it’s risk factors.

So the second section, the business case, engage the total population to get the total value. Individual behavior change is a good idea, but it doesn’t work. You can’t change enough people. We can’t just look at health care cost; for the company, the total value is what I showed you before. The total value is drugs, health, medical, disability, workers comp. Well, this is different - what we do at complex systems versus medical is reductionism. Health risks associated with disease and cost, here’s low-risk people on the - risk factors on the right, less age on the bottom, and then - is percent with disease. Here are the low-risk people. If you’re less than 45, about 2 percent - 3 percent of you have one of the five diseases-heart disease, diabetes, cancer, bronchitis, emphysema. That’s the percentage of your cohort who have those diseases.

Here are the medium-risk people, here are the high-risk people. Which bar do you want to be on, who’s in charge, the same thing. Can’t change their age, but you can change risk factors, or just do nothing and you’ll flow to high risk, and you’ll flow to high probability of disease.

Here’s the excess cost - excess risk. I can do this for every outcome measure. We’ve published 160 peer-reviewed publications on this, we know this works. That’s the excess - the excess cost due to excess risk, that’s just medical.

Here’s - the business case for a company. Forty-one percent of all short-term disability dollars are related to excess risk. Twenty-four percent of workers comp, 29 percent of absence, 38 percent of medical - 36 percent of all those costs in that company relate to excess risk. Remember this, companies are worried about this, and we said the medical field was happy as hell with disease, they’ll treat disease. They don’t want to move beyond that, they’re not interested in moving beyond that. But now we’re showing that risk factors may lead to disease and lead to high costs independently of disease sometimes.

Now, the health promotion people are happy. They’ve got it all wrong, too. Health promotion in the way we’re implementing it is not health promotion, it’s risk reduction, it’s not health promotion. They’re just worried about if they take the old medical model and apply it to risk, that’s why they make money, the new centers.

You think Weight Watchers wants you to lose weight? What do they want you to do, for life, they want you as a member for life, you should buy food, yeah, they want somebody to lose weight to get on television, you know. No, their economic model is keeping people engaged. A good idea.

Don’t get worse, I have slides on this. Amy is going to show this slide because Allegiance was one of the first ones that - every one of our companies can show that. My advice to Americans is, just don’t get worse, just stop getting worse, because we know the natural flow is to get worse, so stop getting worse. I don’t care where you are. I never tell anyone to exercise, never tell anyone to lose weight, let them figure it out themselves, just don’t get worse, and it happens that they do, they figure it out. And so if you don’t get worse, you go there, that green line, dotted line, and then the red line stays at CPI, and Amy will show you that. Every one of our companies looks like that.

Economics, I always say - disease, here’s the health promotion people, and now where do the high-risk people come from, where do they come from? They weren’t born that way. They come from the natural flow of Americans, the low-risk people, there’s the secret - that’s the secret.

Sixty percent of the people are low risk, and you do nothing for them, you just wait for bad things to happen. They go from low risk to high risk to disease to high cost. Where’s the investment? Where’s the investment, America?

Evidence-based solutions, what’s working? Innovative health in the culture, in quality terms, now, go back to quality terms, now we’re fixing the systems that lead to the defects, that’s what this is about, that’s what zero trends is about. How do you fix the systems that lead to those defects? Remember this line? So we’re very good at that in sickness, we take care, you know, of sickness. So sickness we spend a lot of money in reducing - we’ve got to reduce - that was a bad deal to go in the hospital sometimes, get the wrong knee done, then they want to get paid for the second knee. We’ve got to put some hospitals out of business, absolutely put them out of business. I think that’s the second step. The first step is to help them get better, but the second step is, put them out of business, put some doctors out of business.

No company would ever keep a supplier whose costs have been going - sky rocketing three times CPI and no better quality. Those suppliers would have been gone so fast, they never - we used to think doctors were smart, we know better now.

And we need corroborations. And then on the disease management, we’ve got to stay on protocol and then don’t get worse. That’s all disease management does, is help you not get worse, so you don’t go back into the hospital, that’s what disease management does. Some people think you can save some money on that, I don’t know, I’m not sure about that yet. I was absolutely sure it didn’t save money, but now I’m questioning it. Over on wellness, keep the healthy people healthy and don’t get worse, that’s the wellness model, opposite of the medical model. Just don’t get worse and keep the healthy people healthy, that’s your strategy, that’s total population management, you’ve got everybody involved.

Where’s the economic strategy? You’re going to develop an economic strategy, you know, economics is interesting in this country right now. You’re going to develop a strategy around that, what are you going to do, put more money into the same-old, same-old strategies that haven’t worked for 60 years, or are you going to come up with a new model?

Integrated health - we used to think health management, lifestyle change, healthier people, and we measured all those things, that didn’t work. Health promotion really hasn’t worked because, why? If you try to change a person or provide something where people can change, then where do they go? Even if they did change for a day, which is about as long as they change, where do they go?

You know, I was with General Electric trainers - one of the trainers said something that really stuck with me-if you take a changed person, you can’t put a changed person back into the same environment because what happens? They go right back. So we’ve given up this model to some extent, we’ve added this model. The reason behavior change hasn’t worked, because we got too fast blaming individual - blaming the victims. We have high health care cost because you’re too fat, you don’t exercise, you drink too much, so lose some weight, start exercising, and don’t drink so much, see you next year, you know, that didn’t work.

So we’ve got to think about the culture, and here’s how we do it. The first part of the culture, senior leadership, and whether this is in the companies-large companies, small companies-whether it’s in communities, whether it’s in states, whether it’s in the federal government, somebody has to say here’s the vision for health and high performance in our organizations, real vision, and they have to make that vision very clear.

They have to be committed to a healthy culture, they have to connect vision to the strategy. What’s the strategy of our company? The strategy of our company is not healthy people, the strategy of our company is to make a profit-because it has to be connected to profit-and then engage leadership in the vision. Everybody in leadership has to be engaged in this, everyone. If you’re not engaged, then go find another job, because we’re going to have a healthy and productive organization. Because I don’t think any company in the world will be successful going forward without healthy, productive people. Because if you don’t do it, somebody else in the world will do it. We’re finding that every company knows the competition is just not in the U.S. borders, we all know that, competition is world-wide.

Second, operations, senior leadership can’t do it, they’re just part of the overhead, so they just do it and then they turn it over to, you know, they can’t take you from good to great, they can take it from great to good with a couple of bad decisions, we’re seeing a lot of examples of that recently. But how do we do it?

So they turn it over to operations leadership to do it. Operations leadership, they have to get the culture in line with the vision, so they have to think about engaging everyone, they have to think in branding, so everybody knows what you’re doing, integrate policies, everything into the culture. The culture has to be supportive of that vision. They have to talk to all the managers, talk to all the people, say here’s why we’re doing it, because this is survival. The companies I work for, we’re into survival. It’s not a matter of just waiting this out like another recession, this is different. Then you turn over to self-leadership and help employees not get worse, that’s the goal, help people not get worse. The healthy people stay healthy. Provide improvement maintenance strategy - provide those - provide the behavior change strategies - if you get the culture right. If you don’t get the culture right, don’t do behavior change, it’s a waste of time.

Reward positive behavior, we know what’s sustainable is what’s rewarded. So if Amy is doing everything perfect, it looks like she is, and I’m doing everything not perfect, which I look like I’m not, and you don’t reward Amy any differently than you reward me, there’s not going to be any behavior change, there’s not going to be sustainability to that, you’ve got to reward positive behavior, everyone knows that.

Set the incentives for healthy choices. Re-enforce every touch point, every e-mail. Every time the CEO has a chance to talk, they talk about our healthy culture, the economic club, the Chamber of Commerce, wherever, they’re cheerleaders. Quality assurance -- it’s a quality program, not a health program, health is irrelevant, it’s a quality program. Integrate all the resources. The idea here in quality assurance is, how do we measure things, are we making progress toward a vision, are we making progress toward the culture, are we making progress to our self-leaders, are we making progress toward rewarding positive behavior, that’s what quality assurance is. It feeds back - it’s a six sigma type of thing.

The last slides. Federal government, you can provide incentives to companies to help with better products. For example, Campbell Soup, I was with the CEO in Canada. What they did is-his son told him, this Campbell Soup, it’s terrible, bad stuff-so the son wouldn’t even eat the product, that got his attention. So they did some talking, it didn’t take them overnight, but then they started to reduce the salt, started to make some progress toward healthier products, can’t do it overnight.

Every company can improve their products in a healthier way, every company. Let’s give them some incentive to do that, the federal government. State governments provide incentives for companies and communities to move toward healthy cultures, healthy cultures in the communities, because if the company changes and then people go back into the community, which is unhealthy, it’ll destroy that, too, so you need that community change, as well.

Local communities, coalitions of stakeholders, Healthy Chicago is a good example, what they’re doing there. James Galloway, the Assistant Surgeon General, came to our conference and talked about that. Jackson was just written up a page and a half in the New York Times about what they’re doing in the community, making a healthier community for people.

Employers follow the five pillars and move from just a do-nothing company to a champion company. Individuals stop getting worse. Stop getting worse is the first step toward becoming a self leader. That’s as fast as I can talk and I’m not sure how long I talked. Thank you very much.

Paul Ginsburg: Thank you. Now we’ll go to Dr. Amy Schultz.

Amy Schultz: I always like following up Dee when I talk because I learn something new every time - doctors aren’t very smart. I’m Amy Schultz, I’m the director of Prevention and Community Health at Allegiance Health, and I’m here just to share with you some of our experiences implementing health improvement strategies in the work place. We’ve been working with Dee for over eight years now, so hopefully we have some insights that I can share with you about what we’ve learned.

So I’m just going to talk about some steps that we’ve taken, what our challenges have been, how we’ve addressed them, and then what some of our key takeaways are.

I’m going to skip through this background stuff pretty quickly just so we can make sure we get to the meat and the results section. But Allegiance Health is a community hospital in southeast Michigan, just down the road from Dee’s house, and we have a service area of about 270,000 population. Our community is largely industrial with regard to employers, and a lot of them are small manufacturers that are, or were, auto suppliers.

Our community also has traditionally poor health status, so we benchmark poorly when compared to the state and the nation overall, and we see that as a reason for higher health care costs in our community. But the real impetus for our initiative was the year 1999, when our employers saw rate increases from the local health plan of about 40 percent, and they turned around and said, you know, this is not sustainable for us, we can’t afford to keep paying these types of increases and still offer coverage to our employees, and so, you know, we saw that as, well, we’re going to have to drop coverage.

The uninsured population within our community would increase, that’s leads to worsening health status, and then higher health care costs, and we’re just in a vicious cycle.

So we recognize the health system as a community, that we had a choice. There’s a short term fix, where we can just start shifting that cost along that - continue and feed that cycle, or we can look at addressing the long term problem, which is the health status in our community.

And that’s where the health improvement organization was born. And I’m not going to spend a lot of time talking about this whole concept because it’s a community-driven initiative that has a lot more components to it than just the employer-based aspect, which is what I’m going to focus on today, but I just wanted to give you the context that this employer-based strategy is within a larger initiative that is community-wide. Our goals for the employer-based piece of it, though, were to build a community health management program. And when I say community, I mean that the vision was never to limit this to the employees of the health system themselves, but to engage in the broader community and other employers in the initiative.

Our focus was on employers and getting them to recognize the opportunity they have to impact and influence the health of their employees and how that is connected to the success of their business.

And then also on the employees, getting them to recognize the responsibility they have for their health in the choices that they make. We also wanted to look at the population level and get some metrics to assess what our risks were and track our progress over time. And then ultimately our goals were to, obviously, improve health and decrease the cost of care in our community.

So the strategy we elected for employer based is health and productivity management. And basically what that means is, all of the services and data related to the health of an employee that would impact their work performance. And as you mentioned, this isn’t just looking at health care costs, but also looking at productivity as an outcome. I’m going to frame - as I talk about our program, I’m going to frame it in these components, which are recognized components of health and productivity management programs. And essentially what they say is, you need to know up front what you want to achieve in order to be able to track whether you’ve succeeded in the end.

You need to be able to adopt a strategy that’s going to engage and activate the population around health change, and doing that in this framework, it talks about health, education and programming, and I’ll talk about that a little bit more. And then you need to support those changes through tools and resources and a healthy environment, and then you need to, obviously, evaluate and see what impact you’ve had.

So our program is called It’s Your Life, and obviously, that focuses on the activation of the individual and the personal accountability for health. We did start with screening and benchmarking ourselves. We were really looking at a few different areas. We were looking at participation, we were looking at risk changes, and we were looking at cost changes. So to initially benchmark our risks, we did have our population complete a health risk appraisal. We’ve used Dr. Edington’s health risk appraisal all along. We also added to that a screening component, where we got some more objective measurements of height, weight, blood pressure and cholesterol, to be able to track over time. And this is just a snapshot of our initial risk assessment.

You can see we had about 1,000 employees participate in this. This is out of over 3,000 employees that we have within our organization, so you can see our first year, we did have a small portion of the population participating. But we have significant cardiovascular related risks in our population and a pretty high proportion of overweight.

With regard to Dee’s metric, we had about 48 percent of our population in that low-risk category. So when you look at his other data, we’re actually a sicker than average population, even though we are health care workers, we have as many, if not more, health risks than an average company when we started out.

When we looked at what our costs were doing prior to implementation, you can see down at the bottom right on that slide, we had about 70 percent of our population in this low-cost category. A year later, after doing nothing, there was about 53 percent of our population in that category. So we could see that our population was marching up that trend of higher and higher cost. So the strategy we put into place, I talked about health education and programming, and I used health education loosely because our health education programs are not traditional directive education programs, where we tell people, this is what you should do. We’re really geared at how do you activate the individual in that process, and I’ll talk about how our model does that a little bit more.

Our model is also focused on the total population. We really subscribe to Dee’s philosophy about keeping healthy people healthy, really focusing in on that low-risk population and how we can help them maintain and improve their health rather than always fishing those people back out of high-risk categories. So our strategy is to reach the entire population, and we don’t target our high-risk employees.

We have a health coaching model, and we employ health advocates or health coaches who are assigned certain employees within our population, so everyone gets a health advocate, they get the same health advocate all the time to help build that rapport and the accountability. We try to do all of our - all of our sessions are one-on-one, and we try to do them in person as much as we possibly can to, again, build that relationship and accountability factor. And our coaches use a motivational interviewing style, so as I mentioned, traditional health education would say, "don’t you think you ought to," and the style we try to use is, "what would make you want to," so trying to engage the employees in the conversations around their health risks and health changes.

Our coach assessments focus on review of risks compared with targets. We talk about where people are in their readiness to change, help them set goals, identify barriers, lots of referrals to other resources, providing a lot of support, and helping them evaluate progress and reset goals as needed.

We did have some standard health education components when we started our program, a lot of online or hard copy education models. We have Weight Watchers on site, as well as our new weight management program. And we do have tobacco treatment services available to all of our employees at no cost.

So some of the environment factors, I’m not going to talk about why we focus on environment, because I think Dee did that very eloquently when he said that, you know, you don’t want to sabotage those wins, so you work with somebody to help them make changes in their lifestyle and then shoot yourself in the foot by putting them in a system where it doesn’t support those changes. So we tried to do this by, first of all, really making our messaging visible so that every employee knew that the health of our employees was as important as anything else we did in this organization, and our CEO is very good at communicating that very consistently.

We do have a smoke-free campus policy and are looking at additional smoke free work day policies. We did change our cafeteria options to increase the healthy choices and also provide rewards for people who made them.

We do have on-site fitness facilities and our organization subsidizes the cost of that for employees. We’ve changed the structure of our meetings to have healthier food options, as well as wellness exercise breaks in those longer sessions.

When we originally looked at this, we tried to integrate it with our benefits as much as we could, and we did this by providing a credit to employees toward the purchase of their health insurance if they participated. It amounted to about $200 a year. That line item on their paycheck, though, wasn’t very transparent to folks, so we ended up changing it to putting money on a - put cash on a gift card, which people really like. Our program is really linked with a lot of other services in the area because we know that we can’t do everything. We are not trying to replace primary care or relationships with primary care, we really mean to augment it by what we’re able to do to re-enforce those healthy lifestyle messages.

We work very heavily with our employee assistance programs. Our coaches very often recognize stress or depression that is very connected to people’s physical health ailments or physical health ailments that are then causing depression, stress, mental health, emotional health problems. So we do end up doing a lot of referrals to our EAP program, and then, obviously, some of these other community resources.

Some of the challenges we saw within the first couple of years of rolling this out is that we had high participation rates. After a few years, we were about 70 percent of our population participating in any given year. But we recognize that we weren’t reaching everyone, and that even the people we were reaching, we weren’t necessarily reaching them all equally, meaning we could get some easy wins with people who are already engaged, but those people who weren’t, we had to go further, we had to look at more intensive activities to help them develop discrepancy in where they were versus where they wanted to be.

When we did that, though, we also needed to recognize that, although we saw problems across the population, there wasn’t a way to deliver on those or to address those universally, because each individual had different needs for how they wanted those addressed, so we needed to really be targeted, but also very customized in the way we developed our interventions.

And one solution to this was development of our health track focus, which is a much more intensive component to add to our health risk appraisals and coaching that would help support some of these people who are in maybe a little bit earlier stages of change.

So we kept our coaching model, we developed some more targeted health track for education-again, using education loosely-and then we also added some requirements around preventive service acquisition so that participants would be expected to comply with age and gender specific recommendations around screening, like mammography, colon cancer, or disease specific screening, so if they had diabetes, hemoglobin, A1C’s. I’m just going to show you a couple examples of our health track programs which are really directed at engaging people in health changes. And this is a smoking cessation track, so those people who have chosen to focus on smoking cessation will meet with their health advocate, they’ll complete some standard health education material just to make sure they have the information they need, and then they will have an interaction with a tobacco behavioral specialist.

So the idea being that those people who are ready to quit might have very different interactions with their specialist than those people who aren’t. So the person who isn’t ready to set a quit date might have a conversation about, well, what is it you like about smoking and what is it that you don’t like about smoking versus the person who’s ready to set a quit date, who would be talking about, well, relapse prevention, how are we going to make sure that we don’t have triggers that set you back.

So we really want to reach the people where they’re at. Our weight track is a really good example of how we need to customize this to the population, because we have a lot of people in our population who want to focus on a healthy weight, but some people might be ready to take off and start exercising and some people might just be thinking about it. And so we have exercise support groups so that people can get together with their peers if they want to exercise. And we have a program that has no exercise in it, so it is a program where we assess people’s baseline fitness and then help them talk about where they are versus where they want to be.

We do have a new incentive structure that supports this program, the changes and intensity of our program. And what we did was, added to the $190, a premium differential on health insurance. So those people who do participate in the program pay one level, and those people who do not, pay an additional 20 percent of the employee-only total premium, which adds up to about $1,200 per person per year, and is, obviously, a very big incentive for our population.

When we made that change, we also added the stipulation for spouses. So if a spouse is covered on our plan, then the expectation is that they would also participate in order to receive that lower premium rate. So some of our outcomes, in the last couple years since we made those incentive changes, we have seen our participation steadily increase, and we’ve maintained at about 95 percent of our benefit eligible population participating on any given year. We’ve seen pretty significant risk changes, as well. This is a really busy slide, but basically those categories at the top show the risk factors. The percentages in the columns show the percent of the population who has that specific risk.

So you can see, for example, for physical activity when we started the program, about 30 percent of people were not exercising at all. And then we’ve decreased a lot of those risks pretty significant.

When you look at our total overall risks at the bottom there, as I mentioned, when we started, we were about 48 percent of the population in the low-risk category. With the latest data of 2008, we’re up to 63 percent. So rather than following the natural flow, where we would expect to lose people out of that population year after year, we’ve grown that population pretty significantly, which is we’re on our way to achieving that cultural change when we hit the point where most of our people are in that category.

I’m going to skip over a few of these other results because I want to get to the cost piece. This slide basically shows that those people who are on that green line are those that have maintained or improved their health over the course of the years in the program, and their costs are increasing about $100 per person per year. The people on the yellow line are those whose health risks have worsened over the course of the program, and their costs are increasing at about $600 a year.

So basically we see that as an opportunity savings of $500 per person per year for keeping people on that green line. So this is where Dee says just don’t get worse. If you just can stay on that line, your costs will increase at a much lower rate than the people whose health risks continue to worsen.

As we look forward, we’re really focusing on keeping ourselves linked with our behavioral health counterparts. We want to look at additional self-management options, so again, really building those self leaders, and we’re looking at the program - which is a chronic disease self-management model in which the people lead their own group, so rather than us coming and teaching and us facilitating, then they can do that themselves. And just listening to our population, we had, you know, a nurse tell us, you need to change your reward policies here, because we met some customer satisfaction goals, and the senior leadership was serving us cake on the unit as part of a celebration, and we don’t want to see that anymore, because we’re trying really hard to focus on healthy weight. So we really want to listen to them and have them tell us, you know, we need the healthy environment piece.

I’m not going to spend time on these slides, but I do want to, again, re-enforce that this initiative directed at our employees is not meant to be in isolation. We do have a whole community initiative going on, and part of that is working with other employers like we’ve worked with our own employees, which we have been doing for years and years, but also just trying to raise awareness within our business leadership in the community to recognize the linkage between health and its impact on the success of their organization. So we’re really trying to galvanize our leadership around that in the community.

So some of our key takeaways really - I think I’ve talked about most of these, but looking at what you want to achieve up front, being able to say what it is that you want to move, if it’s risk, if it’s cost, and then being able to adjust your program to be able to do that. So we saw that some of our risks weren’t changing, we looked at some certain populations, and we needed to make some changes to our program to be able to do that. To recognize that these are population-based approaches, so we’re working within a whole employer population, but that change is individual, and so each person that makes the change - makes the decision to make a change does it in their own way, for their own reasons.

So there is no one-size-fits-all approach when you’re talking about programming, that you have to recognize that it’s an individual motivation driven thing.

We really see this as a partnership between the employer and the employees. The employer can bring tools to the table, but they do not have a magic pill and they can’t make it easy - they can’t make behavior change easy, which is what was mentioned at the introduction, is that behavior change is hard, changing health risk is hard.

We can provide a culture that supports it, we can provide tools, but the employee must be committed to the process for it to work, it has to be self led. The same thing with incentives; I’ve heard a lot of talk about incentives either way. What we really found is that the money gets people to the table. We’re not paying people to change their health risk, we’re paying people to get them to the table. They have to be engaged for the health risk to happen, and that’s our opportunity to get to them, to help them identify where they’re at and where they want to be. And, obviously, this is a long-term solution. So when we got into this, we did not see this as a quick fix, there is no overnight solution, we knew it was a long-term commitment to changing the culture of our organization, and then, ultimately, we’re looking at the community. So I’m happy to take questions.

Paul Ginsburg: I’m going to start off by asking a few questions. I want to begin by posing some questions to the panelists, and then we’ll ask the audience to come up to the microphones and ask their own questions. What I was struck by listening to both of you is that this approach sounds quite distinct from what I usually hear has been happening with employers in the last two to three years. I mean I would say - and this is based on our - the site visits that HSC does, that all of the employers have gotten the religion, that it’s going to be important to them to improve the wellness of their employees, but somehow I think when it comes down to doing things, they say, oh, well, I’m going to go to my insurance plan and say what kind of things can you give me, you know, health risk assessments, or you know, this kind of program, and what you’re talking about seemed very distinct, much more likely to work. So I’d like to pose to either or both of you as to what - how could you explain the characteristics of the employers that are doing things more along your model and other models that are serious? You know, how can you predict who’s going to take this up?

D.W. Edington: I think Amy has the best example of her CEO, but I think that’s the characteristic of which company is going to make it. It’s not the benefit director, it’s not the HR director necessarily, it’s the senior leadership director, the chairman, or the CEO. If you don’t get them involved, in my opinion, I think you should go next door and look for somebody else.

But this is, as Paul said, this is a major shift in approach, and I think that’s what we’re promoting here, and Amy has got a great example of that. So I think it takes the senior leadership to make that decision, and then they have to then engage the whole company. They have to come up with a very clear vision, and we saw it at Dow, although Dow started with Cathy Baase and worked up to the CEO, the CEO is very involved. Pitney Bowes, the CEO is very involved, Mike Critelli. So we’ve seen that happen in a lot of places, and it takes the senior leadership, serious business strategy, not a health strategy, serious business strategy.

Paul Ginsburg: Yes, Amy.

Amy Schultz: Yes; I think I would just reiterate that. The employers that we’ve worked with in our community, we really need - the ones that we know will do this seriously and sustainably are the ones that recognize this not as an expense that gets added to their benefit plan, but as an investment in their human capital.

So the people that can see that this is going to pay off, because we’re creating a healthy workforce, and the benefits that a healthy workforce is going to provide to us are greater than any expense line that this is - so if they get it, then we see that it’s going to be successful.

D.W. Edington: To tell you one more thing, I think Amy’s point is a good one there, that this is - I think this is too important to be connected to benefits, it’s too important. This is core business, core business for healthy, high- performing people. So how will you do that? It has to be core business. It’s not a benefit, this is part of the deal.

Paul Ginsburg: Which actually brings me - let me follow this up, you know. If the focus is, if you really need to get the CEO engaged, and I recall, this is before HSC, but stories about the recession in the early 1990s, which was a fairly serious one, not by today’s standards, but by post-war standards, it was, and company profitability had really taken a hit. The anecdotes I would hear is that the CEOs - or the C suite - got involved in health benefits at that point, because they saw that what they’re spending for health benefits, you know, exceeded their profits.

So the question is, what’s the process that leads CEOs to get involved? I totally agree, it’s consistent with everything I’ve seen, is that benefit managers don’t initiate this.

D.W. Edington: Right; well, I think the problem with - we got insurance. Now, insurance is a group that should be killed. Insurance companies, it’s an entitlement program, and you’re just taking money and it takes money from companies, you keep some for yourself, and you pay the providers. Well, companies have driven insurance companies out of business, they should, and what comes out of that are health plans. So companies are saying, look, just paying for sickness didn’t get us any place, that’s a bad deal for America. It’s a bad deal for America, when hospitals are the biggest employer in the community. It’s a bad deal for the state of Michigan when health care is your greatest employer in Michigan adding the most jobs, that’s a bad deal for America.

So companies say we’re tired of that, we want to now pay for helping our people stay healthy. If you do that, Mr. Insurance Company, Ms. Insurance Company, we will now become a - you will now become a health plan. Health plans are a good deal. The insurance company should be gone.

Paul Ginsburg: Actually, I don’t want to put you on the spot, Andy, but you know a lot of employers, and do you have a perspective on, you know, what leads a CEO to pursue a serious wellness campaign?

Andrew Webber: No, I agree with the comments up here, you know, Dee is right. If a CEO does not see this as a core business strategy and just leaves it to the health benefits people to manage (off mic) I don’t think we’ll be successful in building the culture of health that both Dee and Amy have talked about. Now, having said that, and in listening to - in this environment, I think, in a way, it becomes harder given everything else that CEOs are dealing with right now, given this economic downturn, to sort of convince CEOs to make that long-term investment. So what we’re hearing from our coalitions and their individual employers, it’s harder for the champions within companies to make that argument to the C-suite right now. So just to sort of put a caveat on our enthusiasm here in terms of the current economic picture.

Paul Ginsburg: Do you have a sense, Andy, as to, you know, thinking analytically about, of the C suites that did get engaged in this, could you have predicted which, you know, which companies would be the leaders in this area, or is it companies that are the leaders in everything?

Andrew Webber: Well, I’d be interested in Dee’s perspective on that, because he’s been dealing with a lot. I don’t think there is any - I think it’s more an individual than it is an industry type, or that there’s any general trend that more companies within this certain industry sort of get it and are making an investment. I think it has more to do with the personality, the interest level, the personal experience almost of the C-suite. And also, you know, Dee mentioned Cathy Baase, you know, within Dow Chemical. I think having a sort of health champion within a company that can really educate the C-suite about the importance of this as a core business strategy, and then, by the way, as Cathy Baase always talks about, then is held accountable after the C-suite buys into the strategy. I mean she’s incentivized to improve the health status of Dow Chemical employees world-wide.

So I’d also like to say that some of it is influenced by that champion, and it tends to be more I think a corporate medical director person, someone that understands, health and health care than it is an HR benefits person.

D.W. Edington: Well, definitely take the HR benefit people out of the picture, although that’s not always true. I just say that to irritate some of the benefit people in here. I think Andy has got it right, of course, and Amy has a great example, that it takes the CEO, the personality of the CEO to make this happen.

I know two major companies, Fortune 10 companies, who the CEO was so frustrated by the benefits, they took it away from them, they took the health care away from the benefit and HR people and did it themselves. They’ve got to do that. And the big companies, I’m more familiar with the manufacturing companies. Manufacturing companies are more threatened right now in the last ten years, their margin is so low, you know, so the financial services company got into it, but they got such great margins, and now I know why they had great margins, but the manufacturing got very interested.

I’ll be interested in Amy’s position, because she works with a lot of small businesses, and that’s what we’re trying to take our data, down to small businesses, because that’s where the people are. But, Amy, the companies in Jackson, which ones got involved?

Amy Schultz: Well, we do have some experience with this on our local level, of trying to work with different companies and engage them in this. And what we’re working on as a strategy right now is sort of a CEO to CEO model that we stole from the Partnership for Prevention, and they’re national, leading by example, and have some of our local CEO’s who are really engaged in this holding sessions and sort of enticing their - the people who are on their address book to come and listen and, you know, have Dee come and talk with them about the connection and the impact on their business that health has, and sort of try to, you know, get it galvanizing for us about this and sort of evangelize people into realizing that this is the fact of things, and it is an investment, it is not an expense, and so people, even small employers that have been participating in this that have always thought, well, how am I going to ever see any benefit from this, because I’m community rated on my insurance, and so it doesn’t really matter, I’m still going to have to pay these rates whether my employees are healthy or not to get them to recognize the impact of productivity that healthy workers have on your company.

And so we really try to engage people through a lot of networking, and sort of people that didn’t necessarily consider this have now started coming around and doing things.

We do have some employers that have started down this path and realize that the philosophy of their company doesn’t support it. So we had one large employer who basically had signed on the dotted line and then said, you know what, we can’t, because we’re always going to pay for 100 percent of our employee’s premiums, and unless we can really make a shift to recognizing the employee’s accountability and responsibility in this, then this program is never going to work in our workforce. So we definitely see that it has a lot to do with the buy in to that philosophy at the top.

Paul Ginsburg: Thank you. I’ve been swamped with questions, so if I don’t ask yours, it probably is because I didn’t get to it to read it. But the ones I’ve scanned, there’s a theme that keeps coming through, and this question kind of captures it. Thinking of Dr. Edington’s comments that healthy people must be rewarded, how does Allegiance Health reward those who already are exercising and are at their ideal weight, et cetera?

Amy Schultz: Since our program is built on a total population model, the people who participate in the program are rewarded not based on outcome, so whether they’re able to achieve a certain weight or a certain cholesterol level or a non-smoking status, but they’re rewarded for engaging in the process of either focusing on their health and maintaining it or making risk reductions. So basically, the rewards are there for both populations, and those people who have more to focus on probably have more to do to achieve their rewards, and those people who are on the maintenance phase, who are still expected to engage in all of the activities, but at a different level. So they may be talking about how to train for marathons while somebody else may be talking about how to integrate ten minutes of exercise into their daily routine.

Paul Ginsburg: Thank you; Dee.

D.W. Edington: Yes; I’ll just reiterate what Amy said. I think if you participate, we will help pay for your health care costs; if you don’t participate, you pay for your health care costs. And so it’s a choice, they can pay for all their health care costs or we’ll pay for them. And so you usually get 100 percent participation, that’s a good way to start. But if you don’t make it, then you make some money on the deal.

But I think companies that I’m advising going that way, that is the way that it has to go, because this is a serious strategy. You know, if they don’t show up for work, they don’t have a job, so you know, you’ve got your choice, show up for work or don’t show up for work, so you participate in these programs or you don’t participate in the programs. It has to be a serious business strategy, and this has to get through to people that there’s a new game in town, there are new rules.

Paul Ginsburg: Yes, a question, yes.

Linda Flowers: Linda Flowers, AARP, and this is a question for Amy. You mentioned government subsidies and how you felt there was a need for both federal and state subsidies, or incentives, as you called them. I was wondering if you could talk about if there’s really a business case, and in many cases, return on investment, why is there a need for government subsidies, and if you still feel there is a need, how do you think they should be structured?

Amy Schultz: Well, I think that was Dee’s slide. But I guess my standpoint would be to create champions. So, yes, there is individual motivation from a company standpoint to do this, from a cost perspective, but I think we need to create champions.

D.W. Edington: I think the incentives from the federal government and state governments are for the culture, and so the federal government I think can give, an example I used, is to give companies incentives to create healthier products, and show what the product is, and show how it works, and let’s track it to make sure that it’s working. And state governments can help healthy communities maintain that healthy community. So I think the companies don’t necessarily need direct help from the government, I don’t think they want it most of the time, I advise them not to take help from the government, they can do it on their own, so they need to do it on their own.

But I think that the government can help greatly in the culture in changing the businesses by giving them positive incentives to make the changes in their food products or safety, whatever it is that they’re making.

Paul Ginsburg: I’ve got a quick question before I go to the next person standing there. What’s been the reaction of unions to this approach?

D.W. Edington: Well, we work a lot with unions, and at one time you couldn’t even ask about smoking or drinking or so forth, anything about it. That was in ’88, when we first started, 1988. Now the unions are right on board, especially with in the Detroit area, and Ford is working very closely with UAW, and the VEBA, and I think they’re going to start to understand, because the unions are finding that this - they’re going to start paying for things, and when you start using your own money, you have a little different view of the world. So I think this is really - this is - the whole thing is a union philosophy, it’s people helping people, that’s what this is about, that’s what unions are about, brothers and sisters helping each other.

So they’re going to get it, and they’re getting it very rapidly, and they understand now that this is - we’re all helping each other, how do we help each other live a better life, a better company, a better community?

Paul Ginsburg: Are there some cases where the union actually takes the initiative and goes to the employer and says we want to do this?

D.W. Edington: Not a lot of those yet that I know of, but I’m sure there are some out there.

Paul Ginsburg: Yes; sir.

Steve Forstenzer: Hi; a question, it’s based on a comment that Amy made, but it’s for both of you anyhow. My name is Steve Forstenzer, I’m with the Maryland Health Care Commission. In an insurance company, we’re an industry that buys its insurance on the general market, then you run into that community rating problem. But many of the large employers, and beginning even in the middle-sized ones, are self-insured. If you’re self-insured, I can see how you get the dollar value back immediately, because Blue Cross is sitting on your money, but it’s your money. But if you’re a smaller company, Blue Cross is not sitting on your money, they’re sitting on their money, and how can you get - the final cost, if you’re saving in health care, is reducing your premium, and the question is, how can you negotiate to reduce the premium if you’re not an ERISA company?

Amy Schultz: Well, we want everybody to do it, so the premiums go down, that’s what we’re looking at in Jackson is, okay, let’s get everybody to do this so that we can all recognize the benefits of it. But that’s why we’ve talked to employers, too, the smaller employers, about what the other benefits are. So if you’re not going to see the immediate health care cost reduction, are you going to see immediate increases.

A lot of estimates say that the savings related to productivity increases through health are even greater than the actual health care cost savings themselves, so that there’s a huge advantage to having a healthy workforce and people being able to come to work and people being healthy when they’re at work and what they’re able to do while they’re there. So we definitely recognize that to get to that premium reduction, we have to have either a mass effect or you have to be self-insured. so that you can realize it initially. So we also talk to employers about those other benefits.

D.W. Edington: I think that’s right. To shift the cost from the health care cost issue to what’s the total value of health to the organization, I think that’s really the key to that. And then getting to a healthier community, then you get to the community rating, so it pays off in that way, too.

Paul Ginsburg: Yeah; sir, the last question.

Brandon Morris: Brandon Morris from Chicago, I’m a health care consultant, this is for Amy. You, I think very appropriately, pointed to the issue of engagement that triggers kind of a self-management process, it sort of internalizes the health improvement and health care use factors. Do you, number one, do you try to measure how the infrastructure that you’ve built influences engagement, number one; and second, do you use the, what’s now called the intrinsic coaching model for your coaching?

Amy Schultz: We don’t use intrinsic coaching, the branded model, but we do use similar - it is a similar philosophy, so we are - our coaches are trained in motivational interviewing, they’re trained in all the basic competencies to do that. We also assess motivation to change as part of our programming, so along with the actual - the more objectives are risk assessments that we do. We do more subjective, so where were you when you started this program as far as on your continuum - feeling like changing, and then where are you at the end, so that we can start to get an idea.

We’re not expecting everyone to lose weight this year or stop smoking this year. We’re expecting them to engage in a process that will hopefully move them closer to that goal in the long run.

Brandon Morris: Thank you.

D.W. Edington: Just, in general, one general comment to finish it up. People have talked about ROIs, and first of all, I don’t believe any ROI study, so throw all those out. They all come up with three, so I’ll just call it three and forget it, because they’re so biased. So I think you have to look at the natural flow, you know, how do you compare to the natural flow is really what the issue is, and I think that’s absolutely critical. And the time course, we used to think this was a long-term investment, this can be done in two to three years. I mean you can get results right away, so let’s forget about it being a short term and long term, this is a short-term and a mid-term and a long-term strategy, it’s all of them, and we’ve just got to get off our tails. We should have done it five years ago, but now is better than five years from now, so thanks.

Paul Ginsburg: We could probably keep going for another half an hour, but that just shows that these people did a great job in presenting. Thank you. Let’s take a break.

Panel Two

Paul Ginsburg: Now we are going to shift from maintaining low-risk status to a better understanding of what happens to the people who do get sick, who do get chronic diseases and to focus on re-engineering the delivery of care to get better outcomes for those with chronic disease.

Our first speaker is Dr. Allen Dobson, and he is chairman of the North Carolina Community Care Networks and a former director of the North Carolina Medicaid Program. He is going to walk us through Community Care of North Carolina, a program designed to improve the care of Medicaid patients while controlling costs.

Then we will hear from Janet Tomcavage, who is vice president of health services at Geisinger Health Plan in Danville, Pennsylvania, and she is going to provide us with an overview of Geisinger’s ProvenHealth Navigator, which is the medical home program for patients with chronic conditions.

And, last, we’ll hear from Dr. Stephen Saunders who is the chief medical officer at APS Healthcare and a former Medical Director of the Illinois Department of Healthcare and Family Services. APS Healthcare contracts with 43 Medicaid programs to improve care for enrollees, and Dr. Saunders is going to provide us with overviews of two efforts, one in Wyoming and the other in Missouri, designed to engage providers to improve chronic care for Medicaid patients.

Let’s start with Dr. Dobson.

Allen Dobson: Thanks, Paul, and it’s a pleasure to be here.

I will tell you it’s an exciting time in health care, and I think my takeaway from hearing a lot of the dialogue is that the debate has shifted now, as we heard earlier, to the patients and wellness and, really, engagement of patients. And then the other part that’s really necessary is system reform which is really looking at the health care system at a local level and redesigning it for sustainability.

I think you’ll start seeing, if you listen to some of the talks this morning and elsewhere in the health care debate, that there are some themes that are emerging. And so, my talk is just one example of the public sector getting involved in helping drive system changes and what that can mean for the health care debate.

Community Care, well, let me just start out. I mean we don’t have a health care system. It’s a health care enterprise. It’s everything but a system when it’s really applied at the local level. I think we know that it doesn’t respond to typical market forces. It’s volume-driven.

We seem to be somewhat inconsistent in our expectations. Despite a lot of the work, HIT alone is not going to solve the problem unless we get core system change locally. We really have trouble politically rebalancing the system by having winners and losers and taking money from one group and giving it to another and shifting that.

So I think really where we need to go is about controlling the growth of the system. But beyond that, and this is a real important message, I think that we have to take savings and reinvest it. You can’t take savings and take them away. We have to take savings and invest in prevention and invest in things that will be lasting.

I think we’re beginning to understand that the primary care system, and when I say primary care system that is besides just a primary care physician. The primary care system which involves a lot of community resources must be handled differently than our current health care system, and it’s vitally important to sustainability of health care reform. I think the role of government, and probably industry now as you’re seeing with a lot of the industries getting involved in this debate, need to be more directive at what this health care system needs to look like versus sitting back and hoping it will reform itself and just paying the bill.

This is pretty simple, and you learn this in Medicaid: Eligibility and benefits plus the rate you pay plus utilization equals total cost. The problem is we’ve never figured out how to get the system to work on utilization and come up with a sustainable formula.

What we did in North Carolina and why we started Community Care -- it started about a decade ago, again, under cost pressures -- was that we had to figure out a way to help manage our Medicaid program. We were mainly a rural state and we had low managed care or health plan penetration at that time. We did have an old PCCM model, and so we had pretty good access to primary care. So we wanted to come up with something that would be responsive to the state in a delivery system model that would help us manage the program.

When we went to the communities, we found what is the case in almost every health care system these days except for the high-functioning ones that are like Geisinger and some of the Intermountains and some of the folks who have really done some of the pioneering work around controlling costs and quality, that we didn’t have any real coordination at the local level, providers were just fragmented, and, worse yet, is that we had created all these silo programs in the public sector that didn’t really contribute to the overall health of the community.

Our goal was to basically be able to improve care for the Medicaid population and create networks that would be responsive to the state in managing an entire population, not just a small sliver, and really look at this primary care system medical home model.

What it does, our program is pretty simple. We basically are a convener of the health care system in response to a payer, which is the state. We wanted a medical home model, and we wanted to create networks and put resources back into the community to manage populations, hopefully to be able to get spillover -- so, the Medicaid program in the state being a driver of health reform because we clearly knew that if we could somehow get the health system to reform itself and be responsive, then some of the strategies would spill over to other populations, and we may actually see a downstream effect.

We started as pilots, and they were all over the place and also understanding the Medicaid program is the sickest of the sick and the poorest of the poor, so that’s kind of the wrong time to really be intervening. That’s the 80-20 rule you’re talking about.

The best way to intervene in a Medicaid patient is before they become a Medicaid patient. If you really look at the population, you’re talking about a disabled Medicaid patient is almost always uninsured before they come on Medicaid, and, as certainly, the dually eligible are Medicare patients who are not poor yet from their health care conditions. You really have to understand that these are the same patients, they are not siloed. Getting into the community and creating something that works is really important.

We created these networks that focused on quality utilization and cost-effectiveness. We now have 3,500 primary care physicians, a little over 1,200 medical homes. We’re actually managing now a million recipients of SCHIP and Medicaid.

We have now focused on the highest cost patients because the legislature wants us to go save money, but that’s the important part. Once you save money, you have to reinvest it. This is what it looks like, and so we’ve got our state somewhat organized into regional health care systems.

The value of what we’ve done is because we have great integrated health care systems: Duke’s, Carolina’s health care system, where I work, UNC’s, some of our biggest institutions.

However, our state still has rural areas. So we have what we call virtual health care integrated systems. We have created these not-for-profit networks that work as an integrated system that allow us to put resources in. They are not-for- profit.

All the providers, including safety nets, can be members, and we put money to the medical home and to the networks. Each network then has a medical director, a clinical coordinator, a steering committee, case managers, clinical pharmacists who help manage total populations. And, as we increase activities and increase our work in other populations, we increase the network fees. The medical homes have the typical attributes that you’re hearing about in medical homes.

Really, our innovation is about creating a health system change and a statewide health system change. I think probably the most important part of my message is that you can take something like this to scale.

We give the medical homes and the communities the resources, and we include as many of the resources we have. So, if you are in a rural area, you may have a doctor and a pharmacist and a public health department as your entire health care system -- that’s it -- and maybe a safety net hospital, maybe not, depending on the county.

In Charlotte, you have lots of health care resources, and the problem is different. It’s not how to get resources to the community. It is how you make them all work together in a coherent fashion for a population.

We started looking at chronic disease because we thought in an old model, as you’ve heard, that’s where we would get savings. But what we clearly have found is that’s really tough. I mean we really need to look at full populations. So our statewide efforts are around asthma, diabetes, pharmacy management, dental screening, ER, case management for high-cost congestive heart failure.

As you’ll see in a minute, we really moved away from disease management type protocols to really looking at populations who have multiple co-morbid conditions because that’s really the population we’re looking at.

We allow our networks flexibility to really go in and look at their own needs and create change, and this is a list of some of them including new network projects around the disabled, integrating mental health into the system which is a huge problem with multiple chronic diseases, better prescribing, group visits and now looking at the Medicare population as well.

If you look at Ed Wagner’s work, and I’ll just walk through some of this, the stuff that we think we have. We’re not there yet, but we do have medical homes. So that’s been a huge patient satisfier, giving them a place. It’s not a gatekeeper. It’s a value-added place.

We do use teams. They may be virtual or they may be within the practice, but they are there for the patients and the physicians to improve care.

We use evidence-based treatment. We haven’t really been able to move toward patient self-management yet. We do provide systematic follow-up and planned encounters because we have that resource built into the community, and we have increased our management of high-risk patients and identifying those and coordinating. But we’re a long way to go on registries and EMR.

So, again, we’re in a rudimentary stage of a statewide effort even though we’ve been going eight or nine years. You’ll see the results have been significant.

What makes it work? We focus on the patient, not a siloed payer type.

Our biggest problem is when we get the organization organized, because we’re the Medicaid agency and moving into other payers, the communities want to treat all patients the same. The problem with having multiple payers is getting that to work in a local community.

Helping physicians improve care, and I’ll tell you about some of the strategies we’re doing to go back into the communities to help them bring everyone, all the care up at a local level.

Using clinical best practice, local community-based management which is physician-led and in this public-private partnership. And I’ll say this is the state agency, but the principles of this work regardless who the payer is, whether it’s a health plan or a government or even ERISA industry. I mean this is trying to move the health care system to be more responsive.

We’ve gotten some fairly good results in our counties, going back and looking. We have 14 counties all working on different things at different times. So it’s a resource nightmare. But, overall, Mercer has been hired by our legislature to say what have you saved in lowering the health care spend for our Medicaid agencies, and it’s significant. The lesson learned here is small things taken to scale equal big dollars.

Again, I think our legislature has been extremely smart because they have allowed reinvestment of some of these savings. It’s not taking money out of the system. It is lowering the rate of growth. Every year, they’ll ask us to do more things, and they’ll put more resources into Community Care. So it’s a gradually improving and expanding program.

Now to chronic disease, when we really looked at our patients who were the neediest, which is our disabled population, this is what we found in Medicaid. We took 30,000 patients. This was our pilot. They took a lot of medicines. They had multiple co-morbid diseases and, particularly, mental health. This is probably under-representative because we don’t code and screen for mental health disorders like we should, and congestive heart failure was the second leading cause of hospitalizations.

We actually found that a third of our patients, when readmitted within 30 days, went to a different hospital than their original hospital. It’s just we have a fragmented system. So going into the community and identifying the patients and actually just trying to close the loops generated $53 million in the first year.

This isn’t really improving care. This is just getting the system not to let people fall through the cracks. You can imagine the savings if we would go upstream and prevent some of the movement across lines.

I think we have been in the news quite a bit recently just because the state government is taking a proactive stance in reforming health care.

Our next steps are going back in and helping our actual medical homes, putting infrastructure in to really do good disease management and chronic illness care by putting these teams together, and we’re using our AHEC system, not building another resource. We’re using our Area Health Education Centers program, which has been typically lectures in a lecture hall, people in seats listening to lectures. We’re actually having them and paying them to go into the practices to help them reform. We’re partnering with other community agencies, and we’re hoping to invest in clinical information systems.

I’ll just mention that we are looking at Medicare as a next population, besides, to manage. But, ultimately, the goal is to improve the delivery system such that employers benefit as well because, again, it’s the same doctors, the same hospital and the same delivery systems regardless of the payer type. And, quite frankly, a lot of the employees who work in companies have kids who are on SCHIP and potentially on Medicaid and have parents who are on Medicare. So we have to look at this.

So, when I say it’s really about the delivery system, it’s the same as it is about the patients and their behaviors and the communities and their health and the delivery system for all payers. I really think that’s the key for sustainability.

My time is just about up.

Again, I think our key visions are this:

It’s managed, not regulated.

It is a clinical program, not a financing mechanism.

It’s a public-private partnership -- so it’s a different relationship with the provider communities and the payer than we’ve had for the last decade -- versus a contractual agreement. It becomes a shared accountability for the cost and quality of a program.

What’s in it for the providers? Well, in Medicaid, in budget years like this year, we didn’t get our fees cut. Tell me another state that is facing $2 billion of deficit that hasn’t had to have their fees on the chopping block. So I think that’s the win in it.

It’s community-based. It’s quality in a system, and it’s really looking about improving quality, not lowering rates.

It does take time. I don’t think it’s long-term as we heard earlier, but it is 18 to 24 months which doesn’t work well in government budgeting because your control group is last year’s budget. That’s about as much as they’ll give you.

You have to reinvest part of the savings, and investment in community programs will reduce the overall cost of medical costs for all patients. So I applaud industry, who is getting involved in this, but we have to fix the delivery system, and physician leadership is essential.

If you want to know more, there’s our Web site.

I appreciate the opportunity to be a part of this dialogue. Thanks.


Paul Ginsburg: Now we’ll hear from Janet Tomcavage.

Janet Tomcavage: Okay. Thank you.

I want to talk just a little bit for a couple minutes this morning around Geisinger’s approach to medical homes. We started about three years ago, just looking, as we’ve heard the other speakers today talk about, really looking for opportunity to change, and we realized very quickly that it does really require a large system change. Because we’re part of an integrated system, we felt that we had some opportunity to really get all the players at the same table. So there is some advantage to being part of this integrated system and just high level.

Geisinger is a clinic where there’s primary care and specialty care spread across 42 counties or so in central-northeastern Pennsylvania, a very rural area. We have three acute care hospitals, and then we have a health plan. The health plan contracts with many hospitals, not just with the Geisinger hospitals.

There are some challenges. Even though we’re part of an integrated system, most of our patients still go to non-Geisinger hospitals, and we need to manage through most of the community hospitals. So it does give us what I think is insight into the larger system of health care.

What we see is really a partnership as we’ve heard. This is really not just a payer-led strategy. We have been sitting, quite honestly, at the table consistently with providers and with other components of the health care system. I have been spearheading this strategy, and so I’ve been in it from the ground-up, and it’s been very much a work in progress in really trying to define the different parties’ roles and really what the opportunities are. We’re just, I think, scraping the surface, quite honestly.

What we’re trying to do is really take what the health plan does well or a health plan does well and move it out to the community and move it where the practice is, move it where patients are instead of keeping it centrally located, which has been the typical approach to disease management, case management in the past. We think that that’s some of the reason for our success.

We started with primary care because we really think that is the hub, but we learned very quickly, as we just heard, that primary care is larger than the primary care providers who are in that site. It really is the community. It’s the hospitals. It’s the employers. It’s everyone that makes up, really, that community system.

At the end of the day, I was challenged that we needed to demonstrate a program that was sustainable and that brought value. And so, we chose to go with a Medicare population and chronic care and the most complex because we felt if we made a change there and we saw some savings, that we could reinvest those savings into strategies that may not bring about as significant and immediate return, but we could invest in the future and drive programs such as we heard about earlier this morning. We have seen that, and we have seen it fairly early on and have expanded pretty aggressively because of that.

We also felt that someone needs to take charge and to really drive or to be that kind of value vehicle and really drive change.

The objectives at the start of this program were really pretty basic:

One, we wanted to maximize. We wanted to kind of drive the triple aim which is really patient experience, quality and efficiency. We need to pay for this. Health plans do not have more money to reinvest and to pay for more things. We need to get something at the end of the day, and we need to be able to reinvest that.

We also wanted to take primary care from, really, a transaction focus -- patient after patient after patient, 40 patients a day -- to really a model of population management and looking for value and outcomes in their population.

And then we wanted to kind of drive quality and efficiency across the spectrum of care and not just in primary care.

As you can see, we’ve been pretty aggressive in our rollout. We started in January of 2007 with basically three pilot sites, about 3,000 Medicare lives and about 1,000 commercial lives. As of now, we have 25 sites, about 35,000 Medicare lives and just recently, over the last year, rolled in commercial in a more aggressive manner.

We have really five core components of our program, and we very much have founded the approach on the patients that are medical home concept -- chronic care, Ed Wagner -- but we also feel we have a few other components that really are driving this program as well.

Patient-centered primary care, I don’t think I have to stand up here and talk. There certainly has been a lot of information out there over the last several years, but I’ll talk a little bit about some of the core components of our program.

We very much believe in the patient in the center. Everybody says that, but it’s very difficult to make happen. It doesn’t happen overnight. It doesn’t happen intuitively. People think they’re doing it. Primary care providers will say, Janet, this is what I’m doing, when in fact we’re not.

We’re not open 24 hours a day. We don’t have patients who can just walk in. Docs have schedules. Offices have schedules. ERs are full. Hospital beds are full. So it’s not around patient-centeredness, but we’re trying to drive it that way and particularly in this population really get the families much more engaged and active in the approach to care for their loved ones.

We have redesigned the primary care into a more physician-led but team-based care. This is not just what the provider wants to do, but it’s really what the team wants to do on behalf of the patient.

We have sat down with each site. When we go in, we do a baseline assessment, and we really look at where the gaps are as the team sees it, not just as the providers in the site see it.

And, we interview patients as well. We just recently did another focus group to look at where they think the gaps in care are even as we continue to move forward with our strategies around medical home.

We have looked to identify populations within their practice. It was pretty amazing that most sites had no clue of who their practice of Medicare patients were at their site. They didn’t know who was assigned to their panel or not assigned on any given day. They really had no clue about the penetration of access or what patients didn’t come in on a regular basis or what percent of patients they were really even serving on a regular basis.

So, again, taking health plan data from a central repository and moving it out to the practice was very enlightening to the practice. While, at first, they didn’t know how to look at data and they didn’t know what they were looking at, it’s been a learning adventure for them. Now, actually, providers remind me when I’m slow on data. It’s been a nice transition for them.

We have looked at access, open access, same day access, urgent access and really looked at opportunities to enhance that based on what the particular patient or family member needs, whether that’s electronically through a secure Web portal for patients and their families or whether it’s telephonically or whether it’s in the office.

We try and assume responsibility for the patient out of the primary care office 24 hour a day, 7 days a week, regardless of where they happen to be. So, if they are in a nursing home, the primary care team knows it and are managing the patient through, even if the provider is not the direct provider of care.

Most of the hospitals in our organizations or in our area are going to a hospitalist type approach. We still have some providers who do inpatient but really making sure that we’re aware of where those patients are, and, while we’re not providing the direct care, we are influencing the care.

We also built on a lot of work that the clinics and the primary care sites had already started around chronic disease. We do have an EMR in most of our sites, which has been a great facilitator.

But I started this program in a small community practice with five docs who had no EHR, and they did beautifully their first two years, and they’re continuing to do well. So it does not require an EHR, and I’m not here to debate the EHR. I do think it has strong value, but you can make system change without an EHR, and you can see outcomes.

The second component is what we call integration population management, certainly not new term, but really understanding the population. The very first thing we do is we go in with a profile of their membership, their patients, and really sit down side by side with each provider and look at their panel of patients. We risk-rank it for them. We use some predictive modeling tools that the health plan has.

This particular tool is one of the most interesting things to the provider sites. They look for their profile. Now they’re looking to see if that profile is improving, if their patients who were higher risk are moving down, and so it has really generated a lot of conversation at our monthly site meetings.

We really try and look for primary prevention opportunities, how well are we doing at getting the full population in for care. Is Mrs. Smith, who is 65, is she coming on a regular basis? Does she have access when she needs it?

And, not just those complex chronic care folks who need and drive a lot of attention because that’s what we’ve found when we first get into sites is that they were getting the complex patients in on a fairly regular basis. Who they were not getting in were the low risk and the folks who were doing fairly well.

We pushed case management out to the primary care sites, so all of our sites have a case manager sitting in that site. Some sites have more than one case manager, depending on the total population at a practice site. Those nurses, while hired by the health plan and paid for by the health plan, actually are seen as team members in the clinic. It’s been a very easy transition for the site, and most of the providers would stand up here, I’m sure, today and say that they would now be lost without their case managers there.

Disease management, we still do disease management. We have formed teams of roving nurses who actually circuit geographically based sites and set up a Diabetes Day or an Asthma Day or a Chronic Lung Day depending on, again, the population needs at those sites. So we don’t have a nurse who is full-time at each practice, but they integrate and move around.

We have implemented some remote monitoring particularly around heart failure. We have Bluetooth scales in patients’ homes that automatically transmit daily weights back to a central repository, and the nurse gets alerted if the patient’s weight has gone up or if they’ve responded positive on any interactive voice response calls.

And then, we’ve really pushed pharmacy out to the primary care site as well. An easy tool such as identifying Medicare patients who are going to hit the donut hole or the coverage gap, proactively out to the site, so we identify patients each quarter who are going to hit the hole next quarter and really move those out to the sites and try and identify some opportunities for transitioning from a more expensive brand over to generic. We’ll start to look for pharmacy indigent programs to move some coverage opportunities for patients.

The providers have really appreciated that. They always felt like patients stopped their meds and ended up going to the ER more. Our data don’t seem to indicate that, which is not the norm I think across the nation. So I think providers were a little bit surprised by that, but they have enjoyed kind of understanding when their patients are going to hit the donut hole.

Just a highlight around the case managers because I do think that the case management function has been a driver of early success in our program and is what is allowing us to expand rather rapidly. As I mentioned, we do have a case manager embedded into the clinic. We put a case manager or we assign a case manager per about 800 Medicare lives. It’s a pretty hefty ratio, but when we’ve tried to go higher we lose our effectiveness.

So we have one case manager per about 800 Medicare, assuming that there’s about 15 to 20 percent of the Medicare population that needs high-risk case management. We thought it was 10 to 15. We found it’s more like 15 to 20.

Our case managers can comfortably manage about 125 to 150 patients. When we have gotten higher case loads, they start to lose their effectiveness. They tell you that pretty quickly, and the numbers supported that pretty quickly as well particularly when we started earlier on and had a rapid ramp-up, and we lost some case manager by moving from one site to another. We saw readmissions go back up, and we saw some drop-off in follow up that we thought was making a difference.

These case managers are assigned to the highest risk, as I mentioned, and they really provide direct-line access. The sites put in direct phone lines to the case manager, so patients and their families now have a direct phone line to the case manager. They don’t have to go through the normal call system.

The case managers’ function is really kind of the champion of the team, connecting them to the provider, connecting to the community. We know every church that offers services and transportation, and we know what resources are available in the community to help patients. The case managers really do provide that community link as well as coordinating some services for the complex.

They also oversee the telemonitoring and the reactions or responses that come out of telemonitoring and really try and keep the provider aware of where that patient is, 24-7.

Another component that we’re still really getting our feet wet is what we call the value care systems, and this is the component of going beyond the walls of primary care and really understanding ER and the hospitals in the community and the home health agencies in the community and the nursing homes and the community resources.

So we sit down with the site, and we decide which home health agency they have the best service from and they like to partner with, and then we go out. One of my regional managers and the case manager will go out and form some partnerships with those home health agencies or those local nursing homes so that they get to know the team that’s going to be working with them around their patient population.

This has served us well. Home health agencies are looking to partner. They like the idea that they have a better connection to the provider at the site, and they link up very nicely with the case managers.

ERs are now starting to pick up the phone and call us when a patient comes to the ER and they can see, particularly a Geisinger ER, where they can see it flagged that the patient is in case management. They now know that there is a safety net, that they could send somebody home that they might have admitted in the past because they weren’t sure what was going to happen post that ER visit. So it really has started to enhance the connectivity and the communication out to the primary care site.

Quality outcomes, again, I mentioned that we built on the quality program that a lot of our clinics had already started. Obviously, a lot of these are around the typical ones that I think folks are familiar with -- diabetes, heart disease, hypertension, heart failure -- and, more recently, really trying to promote some attention around preventive strategies and, again, a lot wrapped around the HEDIS strategies.

And, finally, we did start this program very clearly recognizing that we needed to pay primary care differently. If we were going to expect to open up their doors, extend their hours potentially, double-book patients when they needed to be seen, we wanted to pay them differently, and so we did. Their fee-for- service model stayed in place. The P4P payment that we already had in place for quality strategies stayed in place.

What we did above and beyond was to actually push stipends out to the sites, proactively, to support infrastructure change. Remember, I talked about a direct phone line into the case managers. We didn’t want any barriers to keep the practice from being able to make the change that they needed. So we put dollars to the primary care providers up front and to the practice itself, and then we built a model around an incentive program that was based on efficiency but rewarded based on quality.

What I mean by that is we really came up with several quality indicators. These are some of the quality indicators that we included in our last year’s, 2008’s, approach. What we wanted to see is improvement in what they call their Diabetes Bundle which is a series of nine, all or none, metrics around diabetes. So they don’t get credit if they don’t get all nine metrics.

As you can see, it’s woefully low -- 10 percent of patients getting all 9 metrics. But that means not smoking, BMI less than 30, LDL less than 100, A1C less than 7. So they have to hit all nine metrics or they don’t hit the bundle.

But you can see we’re seeing nice improvements. Phase One was our first 3 sites early on. Phase Two was an additional nine or ten sites, and you can see the movement from baseline year to the end of the year. So we’re pretty happy that we’re driving quality.

Preventive care, coronary disease -- we wanted to see patients being seen in the primary care more often, not less often. So we actually measured primary care visits, were they going up.

One of the other goals was to get every post-discharge patient that was discharged from the hospital or nursing home back in front of primary care within seven days. We measured that, and that is one of their quality metrics.

And then, we really tried to drive some further intervention around nursing homes. I don’t know about you folks, but about one in three of our patients go back to acute care. They go to a nursing home. So it’s a huge quality issue for us that we’re trying to tackle.

We are supporting NCQA certification, and we actually just finalized a patient satisfaction tool specific to medical home, and we’re implementing as we speak.

Some of the outcomes that we’ve seen have been pretty early, and so the advantage is that we can then support continued rollout.

Our clear opportunity has been evident in inpatient admissions. We’ve seen about a 20 percent decrease in inpatient admissions pretty early on. The red line is our Phase One sites, and, as you can see, we’re sustaining that through the full second year. We’re now two full years underway. So we’ve seen a nice improvement.

Obviously, days are down because admissions are down.

Readmissions are one of the earliest things that we saw. Our first phase sites had a horrible readmission rate of about 19 percent, so 1 in 5 Medicare patients going back to acute care. We were able to drive that down pretty significantly in our first year.

We had a little bit of a relapse the second year. We lost a case manager at that site. So, as I mentioned, it’s easy to get off the task if you don’t stay focused.

I’m happy to report that that readmission rate is coming back down. As you can see in our Phase Two sites, we’re down about 20 percent on readmission. Some sites are down 50 percent on readmissions, depending on where they started as well.

We also are seeing some population-specific opportunities around certain populations. COPD and heart failure have been two conditions that we have focused on pretty specifically, and these are all-cause COPD. So any patient with COPD, all-cause admissions are down about 14 percent over the last 2 years.

Same thing with diabetes -- diabetes admissions or all admissions for patients with diabetes are down around 12 percent and heart failure, about 14 percent as well.

And then, medical expense, which at the end of the day what my CFO wants to know about is, are we spending less so that we can take those savings and reinvest them back in further expansion.

The red was our Phase One sites. So you can see in the first year we saw about a 7 percent delta in total medical expense. That expense is back up this year, but it’s really not utilization driven. It was some contracts. Because it’s a fairly small population, it was some contract changes with one particular hospital where those patients happened to go. So we suspect that that will flatten out now that we’ve had that initial bump-up.

But you can see we’re starting to show about a 4 to 5 percent delta in the rest of our sites, which is a much larger population, and we think that that’s taking us in the right direction.

These are just four of our sites that have been up and operational. These are four of my best sites. It shows you where you really have the fully activated team, provider driving what the opportunity is. In these 4 sites, readmissions are down about 53 percent. These are 30-day readmissions. Overall admissions, about 25 percent. So there’s really significant opportunity to be had if you have the right system in place and the right engaged team.

What have we learned along the way? It’s hard work, I will tell you that. There’s a lot of hours. You need to stay focused, and you need somebody who is driving it.

Sites get caught up in the everyday world of taking care of patients. A nurse calls in sick, and it just can throw their day off. So we’ve really had to stay focused.

Providers don’t think this way in terms of population management. Practices don’t think this way. So really, again, moving health plan functions out to primary care has worked for us.

It does require a champion at the site. We have found that our sites that are most successful, it’s because the physician leadership at that site gets it and wants to be part of driving a new system change.

Transitions of care from hospital to home offer a huge opportunity. Just, I can’t emphasize enough. That was our early win. We’ve just implemented nine or ten more sites this fall, and within the first quarter we’ve seen, again, about a 20 percent drop in readmissions. So there is an early win.

I would argue that a readmission is about quality and it’s about cost savings, and that’s good for our health care system.

Patients with very complex conditions really need very close management through every system of care. We also feel that really one of the true successes has been moving that case management support out to primary care.

Our sites don’t have RNs anymore. I don’t know about primary care sites in the rest of your areas, but a lot of clinics have downsized or down-resourced, if you will, just to manage to budget. We’re lucky if we have LPNs in primary care sites, and so having an RN-based case manager who brings a level of expertise that the clinics have not had has just been remarkable. I think if we tried to take these case managers away, we might have a revolt in some of our sites.

Just some cautions, we have invested heavily in this program. The health plan has done well in Medicare, and so we took those savings proactively and pushed them out to the clinics. We bet that we could make a change in Medicare management, and we think we’ve won on that bet. We are seeing an opportunity. We’re seeing change. We’re seeing excitement building within primary care again. Folks that never would have answered my phone call are now answering my phone calls when I call.

The thing, though, that we have focused on is the whole population. We don’t report metrics based on a subset of case-managed patients. It’s all population. So, whether case managers are touching these patients or not, it’s population-based. We think that’s important.

We admit that our savings have come from managing the sickest. We know we need to manage everybody in the population, but the savings that we’ve generated now we can invest. We’ve expanded our wellness team from a team of one to a team of ten, and so we are reinvesting those opportunities out to employer groups and to our membership.

Now, some would argue that we are not in the most efficient market to begin with and we have nowhere to go but get better. So I’ll just put that as a caveat out there.

We do believe firmly that Medicare offers more obvious opportunities than commercial, but our early site that had commercial did well actually. They had zero readmissions, and we’re seeing that carry through in the second year. We’re now going to have some data, hopefully soon, on commercial.

We’re constantly challenged: Well, that’s great, Janet. You’re part of an integrated system. How do you do that in the real world?

Well, we do have five primary care sites that are not Geisinger sites. The door has been very open for us to sit at the table with those provider sites as well. We’ve actually in some cases had better engagement with our non-Geisinger sites than we’ve had with our own sites. Go figure. But there is opportunity there.

I think, however, you need to pick the right sites. You need to get sites and providers who are really engaged and who do get that bigger picture and are committed to looking differently at managing their population.

And, it does require an investment on the payer side, and it needs data. It’s very much data-driven so that people can see their progress and their outcomes and respond to that and adjust their practice based on the need.

We have several sites who we have not touched ER, and we know we need to work on ER. So the fact that we have data that we can share with them, they can put interventions in place to really drive better outcomes around ER.

Then, just finally, I don’t think you need the EHR. It certainly makes life easier, but there are good old ways to use paper and still get the same outcomes.

Thank you.

Paul Ginsburg: Now we’ll hear from Stephen Saunders.

Stephen Saunders: It’s a pleasure to be here this morning. Of course, I have the dubious distinction of being the last presenter on the panel, so I’ll try to be as brief as I can.

I’m the Chief Medical Officer of APS Healthcare. This slide here is really sort of our commercial. I don’t want to focus too much time on it, but we’re a company that is involved in total health management, as well as behavioral health management.

What I’m going to talk about today is total health management or Medicaid health management programs. As you can see on the right side of that slide there, we’re active in Wyoming, Georgia, Vermont, Missouri, Oregon and California. I’m going to talk about two of those sites -- that is Missouri and Wyoming -- as an example in my discussion here today.

What I’m going to talk about is total health management or disease management. We like to call it total health management.

I think disease management, as you all know, kind of started off pretty much as health coaching where you have a nurse usually mostly by telephonic intervention. You may have a nurse in a remote center that talks to high-risk patients, and that was the gist of disease management. It usually focused on four or five of the so-called big chronic diseases: asthma, heart failure, cardiovascular disease, COPD and so on.

I think the evolution of disease management is more into a total health management approach, and that’s the kind of approach that we would like to take.

I’m going to talk about Medicaid as a discrete population. So, in my talk here, I’m going to have a couple slides that discuss some of the unique characteristics of Medicaid, and then I’m going to go into the two programs that we mentioned, which is Wyoming and Missouri, a small state and a larger state.

For those of you that aren’t familiar with Medicaid, just be aware that most of the recipients in Medicaid are, of course, children. But, luckily -- and I’m a pediatrician, so I can say that -- luckily, most children are healthy and they actually are not very expensive. Although the vast majority of recipients in Medicaid are kids, that’s not the major cost driver in Medicaid.

The major cost driver is the aged, blind and disabled adult population. These are a group of adults that have a high prevalence of chronic disease and a high prevalence of mental health and serious mental illness issues. So that’s really where a lot of states have focused their so-called disease management or total health management in Medicaid.

Also, many states in Medicaid have enrolled their recipients in managed care, but oftentimes the folks that are enrolled in managed care are the children and the parents of those children, whereas the folks that are in the aged, blind and disabled or the disabled adult population are often in the fee-for-service system which is unmanaged.

So that’s the area that I’m talking about here today. That is adults in the Medicaid program that are in the aged, blind and disabled category and in fee for service.

I think you obviously have to focus on sort of a total health management approach, and I’ll talk about that. But what I really want to focus on today is how you support the providers because, as I said, traditional DM is really focused on the member or the patient in providing health education and health coaching and so on. That’s important. I think it’s necessary, but not sufficient to really get good results.

What we try to do is work with the providers as well as working with the members and work with the providers to help identify gaps in care, gaps in medication management, gaps in laboratory managements -- gaps in care. That can be done by providing feedback and information back to providers in terms of patient profiles and other kinds of mechanisms, and I’ll talk about those.

We work with the patients or the members to help assist the provider in helping their patients access local resources because, as we all know, physicians are busy. They haven’t got time to deal with this. If they can have someone that can help them, a nurse, a health coach that can help get those patients off to the other services they need, that can be very helpful.

Obviously, we need to work with the member to address self-care issues, and we need to help try and coordinate across the health care team. We use an innovative technology which is called Care Connections, which is basically we make available to the providers the electronic record that our health coaches use. So the providers can see the care plans that the nurses have worked on with the member. But, more importantly, in addition to seeing the care plans they can also see all of the medication that that member is on.

What we find often in Medicaid, unfortunately, is sometimes you have more than one prescriber or multiple prescribers for the same patient, and Dr. A doesn’t know that Dr. B is prescribing even sometimes the same drug or the same class of drugs. That kind of information will be very helpful for providers, so we provide that.

Health care is local. Instead of having a cadre of health coaches and nurses in a call center in Omaha, Nebraska, trying to serve all of these states, we put the health coaches in the state. Some of them do telephonic health coaching. But, as I’ll describe, in Missouri about a third of the staff are actually outsourced in qualified health centers, hospitals, community mental health centers and that sort of thing where we can actually get closer to the member.

Then, lastly, you have to focus on population issues.

This slide is just to point out that in Medicaid, in the disabled adult population in Medicaid, serious mental illness is a big issue. Unless your disease management or total health management program addresses mental illness in a Medicaid population, you’ve lost the boat. So you just can’t focus on heart failure or diabetes without paying attention to SMI.

As you can see -- these are actually data from Missouri -- almost 40 percent of that aged, blind and disabled population have a serious mental illness, and that group accounts for almost 60 percent of the cost. So it’s a big driver.

Now these folks may have schizophrenia and diabetes or whatever, but this is a big issue in Medicaid and needs to be addressed.

The other issue that is a big issue in Medicaid is, of course, overuse of the emergency room. These are some data using an algorithm from New York University, that is an algorithm to look at what proportion of ER utilization is preventable. You can see here how it kind of plays out. These are data from a Medicaid program, and you can see that a good proportion of ER visits from the Medicaid population are preventable.

This breaks them out into non-emergency. Those are the folks that show up that didn’t need to go to the ER at all. They had a cold for a week, and they show up at 3:00 in the morning. Those that have been in the ER know that happens all too frequently. That is the 43,000.

The 50,000 is a group of folks that probably should have been seen, that needed to be seen maybe within 12 hours but could be seen in a primary care site. Maybe that’s a urinary tract infection, something like that.

The blue group, the 24,000, are folks that needed to be seen in the ER that night or that day, maybe an asthmatic attack, but if they had been better managed in a primary care site, that could have been avoided.

So there’s a lot of opportunity in ER reduction. Of course, I think, as some of the other folks have mentioned, the ER is the gateway of getting into the hospital. That ends in hospitalizations.

Okay, Wyoming, a small state, a rural state, of course. We began in 2005. This is a total population approach. It’s all 54,000 Medicaid beneficiaries. Those of us that have worked in the Medicaid program in a large state, say: 54,000? That’s like in one county or something.

But anyway, that’s Wyoming. Wyoming is a rural state. There aren’t many providers. There aren’t many folks on Medicaid. It’s aged, blind and disabled and the children and adults. As I said here, it’s a total population approach. So no matter what condition they have, they’re part of this program.

Of course, as with any disease management or total health management program, you stratify the patients or the members -- high, medium and low -- and, of course, the health coaches focus on the highest risk because that’s where the most payoff is. You can see that of that 54,000, about 8,000 are in the higher risk group and about 500 are in a very, very high risk group that need much more intensive case management kind of work.

They also focus on pregnancy, mental health, medical home facilitation, and they also have a pay for participation program to engage providers in this program.

This slide is kind of a busy slide. I’m not sure I’ll go over it all, but it just kind of lists some of the benefits to the participant in the Wyoming program and benefits for the provider in the Wyoming program.

Basically, the health coach is working both with the provider and with the participant. This program also has provider liaison staff that go out and work with the providers. As part of the program, there’s a pay for participation component of the program.

Well, actually there’s two parts. There is a provider support aspect or decision support part which is sort of the left side of that slide, where there are reminders sent out to providers that say this patient needs a mammogram, this patient needs a hemoglobin A1C, this patient needs X, Y and Z. So there are decision support reminders to providers because they are busy, they’re in their practice, and they need reminders and so on.

On the right-hand side, in Wyoming, actually it’s a pay for participation. The first part, they actually pay the providers to get engaged with the health coach’s care plan. If they do that, they can bill $50 the first time and then $25 thereafter. So it’s an add-on, basically, to their normal fee-for-service reimbursement. It’s an incentive to participate, for the doctor to participate in this program.

Then the lower part of that slide that’s hard to read, there are a number of other codes that they’ll pay if the doctor gets involved with foot exams and smoking cessation and so on. There is additional reimbursement from the Medicaid agency in Wyoming for these programs.

Does it work? Well, this is also kind of a busy slide, but I think there’s a take-home message here. This is looking at the change in these variables that you see on the left-hand side over two years. Across the bottom is the percent improvement, and you can see the bars go across from 0 to 80 percent improvement.

On the left-hand side, it’s kind of broken down by various diseases, and you can read these for yourself. Some of these metrics, I have to admit, are self-reported. I, personally, am not 100 percent sure I believe all self-reported metrics. So some of the larger gains here like the 70 percent gain in reduction in BMI, I’m not sure I believe that. But anyway, that is what has been reported by the members.

But some of the metrics on here are pharmacy-related metrics. So you see increases in ACEs for heart failure patients. You see increases in appropriate medication utilization for asthmatics. Those are real numbers. They’re in the range of 10 to 20 percent, which I think is probably believable, and that’s the kind of results I think you can get with this kind of program in this kind of way.

This is looking at some of the stuff we’ve heard about before in terms of sort of the bottom line. Were there reductions in ER? Were there reductions in admissions, readmissions and so on?

You can see all these metrics are looking pretty good. These are data that actually looks kind of similar to the data that you showed from Geisinger and some of the data that I think we saw from North Carolina.

The bottom line for Wyoming is they saved $30 million over 2 years. That may not sound like a lot of money, but remember Wyoming is a small state.

As I think you mentioned before, this is to help states not do the draconian things that they might do otherwise like cut eligibility or cut rates. They can, in fact, improve quality and make some money or save some money.

Missouri is a little bit larger state, obviously. In Missouri, this program began in 2007. We have about 300,000 members in the program, and it includes the aged, blind and disabled. There are also some kids in this program, some high-risk kids, but most of the focus is on the aged, blind and disabled.

As it says here, the covered conditions, it kind of lists sort of a common list of chronic diseases. But since this program started, they have actually expanded the program to be more of a total health management program. Like the program in Wyoming, there’s a health and wellness component for all the members, more of disease management for the higher-risk members and then a more intensive approach for the very high-risk members, and, once again, mental health and medical home and pay for performance.

We work with the physicians to provide information. As I indicated before, the physicians have access to that electronic network, that Care Connections network where they can actually see the care plan that the health coach has been involved in. They can get involved with the care plan. They can make recommendations to change the care plan or say we want the nurse to focus on X, Y or Z. They can see all the claims data, so they can see the pharmacy data. They can also see the admissions or other providers that may be serving that patient and so on.

We work in this program to get patients assigned to a medical home, and then we provide feedback to those providers in terms of how they’re doing, in terms of their performance, in terms of the management of these chronic diseases.

Here’s an example of the pay for performance program in Missouri. This is kind of a combination of pay for participation and pay for performance.

The first thing on the left is pay for participation. So, just like I said in Wyoming, the State of Missouri will pay the providers if they get engaged with the care plan. There is this electronic care plan that they have access to. If they go into the system and read it and basically sign off that they’ve read it, they’ll get paid extra as a pay for participation to participate in the program.

Now, obviously, I suppose they could game the system and barely just click it off, but obviously the intent is to get them engaged in the system. The very first step, actually, is to get them engaged.

The second part on the right-hand side is really the pay for performance piece, and this is a listing of a number of very standard metrics for heart failure and diabetes and so on, where if 70 percent of his Medicaid panel or her Medicaid panel achieves this metric, then they get paid for it.

You see that it says 5 percent. In other words, there is a pool of money available to each provider. That pool is about $5,000. Of course, they can earn all of the $5,000 or a portion of the $5,000, depending on how many of these metrics they actually hit on their Medicaid beneficiaries.

So, basically, a pay for participation and a pay for performance.

Does it work? This is a slide very much like the slide that I showed you from Wyoming, although it’s a little bit different. It’s comparing the blue bars, and virtually all of these are claims-based metrics. I think there’s more reliability in some of these.

There’s good news and bad news in this slide. If you look at the blue line, those are the members enrolled in this program. The pink bars are folks that are also on Medicaid.

I didn’t mention before, there are two parts of the State of Missouri that are not covered by this program. One in the northwest corner and one in the southern part by Springfield, Missouri, are not part of this program and are in a fee for service, non-managed environment. So that is the comparison group here, Medicaid beneficiaries that have these same conditions but yet are not in this program. That’s the purple or pink line, whatever it is.

The good news here is that the adult members in the program are doing better than the folks that are not in the program which are also on Medicaid.

The bad news is if you look at the blue lines, they are not where we want to be. They’re not at 100 percent. They’re at 40 percent, 50 percent, 60 percent, 70 percent. So there’s a lot of opportunity here, I think is the bottom line.

Does it work? Well, in Missouri, we have looked at ER utilization, inpatient utilization, and, as you can see, you are seeing reductions in both ER utilization and inpatient utilization, comparing a pre and post kind of a trend line approach. So we can see exactly what was the utilization before the program started for this population and then what’s the utilization after the program started.

I think it’s easier to see on this graph here. This is actually looking at the PMPM or the cost, but those other ER metrics and hospitalization measures that I mentioned were calculated in the same method, developing a trend line on what the issues were before the program started. That’s the first part of the line there, before that vertical line in the middle.

The program started in April 2007. The data before April 2007 is prior to the program. The yellow line after April of 2007 is what happened with those members that were actually engaged in the program. Then, of course, the pink line is if you projected the trend going on up.

A lot of these Medicaid programs actually calculate cost savings by saying how did you change the trend? Remember, health care costs continue to go up.

So the question is did you move that line down? You can see here that the yellow line is clearly below the pink line, which is the trend line. If you translate that into dollars, it’s about a 7 to 8 percent reduction in total costs. For Missouri, that comes out to be about $150 million. So the State of Missouri was happy with this.

This has been analyzed by outside sources just as the data in Wyoming was analyzed by Mercer, and these numbers kind of stand up.

I think the bottom line here is that these sorts of programs can work when targeted at the high-risk members. They can work in a Medicaid population. They can work in a statewide fashion where you actually have sort of a centralized total health management kind of approach, working with health coaches, working with the providers.

You, obviously, need to have the medical home linkage as it says here.

You need to provide analytic tools to the provider, so they can make better decisions. Provide them information, like I said -- a list of your diabetics that haven’t had a hemoglobin A1C, a list of the patients that are not following your prescription, here’s the other doctors that are writing scripts for your patients, that kind of thing.

Making these tools available for better decision making at the provider level. As I said, we have the electronic connection that we can actually provide information back to the provider electronically, so they can actually see it in their office.

We have the health coaches that are both telephonic and community-based that can actually work with the member and make sure that the member is following the recommendations of the provider.

And then, of course, you will need to develop your payment incentives to be in line with what you want to happen. So what these states have done is they continue to pay the provider on a fee-for-service basis as they always have. Unfortunately, those who know Medicaid, sometimes the fee for service reimbursement is not quite as high as it should be, but they continue to do that. Then, on top of that, they provide this pay for performance and incentives that you can see, or pay for participation, over and above that.

In the case of Missouri, every month they can bill that additional $25 per member if they actually get engaged with the care plan. That is almost like an additional PMPM, if you will, for the provider.

So there are really three components then. There is the fee for service, there’s the Per Member Per Month sort of care management fee, if you will, for the provider and then, thirdly, a pay for performance that actually rewards providers that provide higher quality care.

I think that’s my last slide, so thank you very much.

Paul Ginsburg: We have time for questions. If people have questions on cards, please pass them to the aisles. Also, you can come up to the microphones.

I’m going to start us off with a question that I think is relevant to all three speakers, which is that two have focused on medical homes. The medical home, on the one hand, is a delivery innovation. But, on the other hand, it’s also a payment mechanism.

The question is in dealing with only one payer, whether it’s the Medicaid program, the state or the Geisinger health plan, how limited are you in engaging physicians to create the infrastructure for medical home?

L. Allen Dobson: In North Carolina, when you deal with Medicaid, I think you have heard, it’s mainly women and children as far as the volume of patients. We have almost universal acceptance of providers signing up for Medicaid. But when you look at active engagement in the Community Care program, pediatricians are far above the largest number who are actively engaged because we have the biggest part of their practice, followed by family physicians, internists.

One of the reasons we have looked to potentially moving to Medicare is that when you look at the aged, blind and disabled you have 25 Medicaid patients who are high cost, who belong to an internal medicine practice, and you go in there and say, doc, I’d like you to be part of this program for your 2,500 patients, it’s really hard to get that movement.

So it is important I think, clinically, to get some coalescing of the public payers in single strategy. Even though the regulatory part of Medicare and Medicaid is so different, when you are talking about the outcome at the local level I think there are some synergies that can be built in both programs that will get that engagement.

Janet Tomcavage: Yes, I agree. I mean that was one of the first conversations that we had with clinics is this is going to be a subset of our clinic, and we want to convert our clinic to our approach to all of our payers. We were able to do it because probably 30 percent of most of our sites had Geisinger membership, GHP membership. So we could help drive that.

And then, we were part of the P4P demonstration project for fee-for-service Medicare. We rolled those Medicare patients in. Now you’re talking 50 or 60 percent of a particular practice. So we were able to see some influence.

In our non-Geisinger sites, however, it is a small subset. But now what we have are providers who are going to other payers and saying, hey, I want to get paid the same way for your patients like we’re getting with the health plan. So it is going to require a coming-together.

Stephen Saunders: I 100 percent agree.

I guess one of the issues for states that I am sure you would agree from a state’s perspective, what some of our prior states had, is that of course Medicare is paid for by the federal government and the state contribution in most states is actually very, very low or sometimes almost nonexistent because the Medicaid rate is usually much lower than the Medicare rate. And so, the incentive for states to actually get engaged in a total health management or disease management or medical home initiative for Medicare patients, that financial incentive is not there.

You’re right, though. To get the engagement of the doctor, the more of their panel that is in part of the program, the better it is.

Paul Ginsburg: A question there.

QUESTIONER: I’m Bill Hudock from the Center for Mental Health Services. I was wondering if you could speak just a bit about the costs involved with transitioning to this approach. One would think, obviously, if you’re going to be providing enhanced cost for pay for participation, for pay for performance, that the money has to come from somewhere. The savings, obviously, will trail the costs that you need to make.

Could you speak to how you were able to quantify that, how you were able to get support for it and how you were able to finance the transition? Thank you.

Allen Dobson: In North Carolina, we started initially with, actually, external funds outside of the state government -- grant funds -- to start the PMPM payments. But once we were able to start showing savings, the state was willing to put that into their state plan, which becomes again the reinvestment.

I think the problematic part in state government or in the federal government is the notion of cost neutrality and across a biennium or a budget year. It requires an investment in this biennium for a payout in the next biennium. So I think that’s part of it.

When you mentioned mental health, I think it’s extremely important. What we found in disabled, not only was there this co-morbid condition, but you have seen the national data that people with serious mental illness die earlier. It’s not from their mental illness. It’s because we have this fragmented system, and they don’t get basic medical care.

We actually did co-location grants. Well, the thought was we need to get mental health providers into the medical system to screen better. Well, what we found when we got everyone together was that probably a bigger need was to get the primary care and medical people over into the mental health arena to try to provide some access. So that’s a work in progress, but that’s clearly necessary to make the system work well.

Stephen Saunders: I would just add in terms of the mental health issue, the slide that I showed was actually looking at folks with serious mental illness -- schizophrenia, bipolar, that kind of thing. But we shouldn’t ignore the issues of depression. Depression doesn’t always get characterized as a SMI or serious mental illness, but it’s very prevalent, and there’s lots of data to show that a depressed diabetic, you can’t treat their diabetes until you treat their depression.

A big part of these programs that we do and lots of people do is to actually better identify folks that are not in the mental health system but yet are depressed and could be managed by the primary care provider if you provide that primary care provider some assistance with the diagnosis but also with the various management issues. So you need to address the depression as well as the chronic medical issue.

Allen Dobson: Yes, I would echo that. One of the policy changes we made was that we actually allowed reimbursement for the basic mental health screening at the primary care site and actually paid for that. Part of our initial thought with the collocation grants to get collocated mental health providers was to provide at least a level of treatment at the primary care site before they got moved over to the public sector, which is already overcrowded and doesn’t function well -- so try to create some sort of synergy between those two.

Paul Ginsburg: I have a question here for Janet. If Congress reduces or eliminates the current overpayments to Medicare Advantage Plans, how would that affect your chronic care coordination programs?

Janet Tomcavage: Well, the question is probably not if. The question is when. Actually, that’s why in 2006 I was challenged to think differently about how we were going to manage medical expense. We knew that the likelihood was that payments were going to start decreasing. So, fortunately, we had a CEO who recognized that and said we need to do things differently.

Our belief is that we need to manage costs effectively, and if we can do that, then we will be okay with reduced premium payments. That’s what is driving a lot of our strategy is how do we effectively manage this population but do it in the most efficient manner, drive quality and drive value. So that’s the whole purpose of this program is to really be better suited and situated when Congress does change the payment.

Paul Ginsburg: Actually, I have a question I wrote down as some of you were speaking. Given the enthusiasm for the medical home model, as it has been implemented in these areas, it’s very much on the congressional agenda for Medicare. How should the federal government go about this if it wants to promote use of medical homes?

Janet Tomcavage: Well, personally, I think that we need to continue to focus on efficiency. Efficiency and quality are not two separate things. You don’t have to sacrifice quality to get efficiency, but we have a lot of inefficiency in our health care system. So we need to move and reward and pay for efficient health care, whether it be hospitals, whether it be physicians, all components of the system.

We don’t have that level of accountability in health care now. As the folks said this morning, we pay providers whether they do a good job or a bad job. We pay hospitals if they allow readmissions because they have sent people home poorly prepared from the hospital, and we pay them.

We need to continue to drive efficiency, and efficiency needs to be in the statement at the end of the day because if we don’t drive efficiency we’re not going to sustain this model.

Paul Ginsburg: Janet, maybe I should interpret what your answer was is that the government needs to think much more broadly about payments.

Janet Tomcavage: Absolutely.

Paul Ginsburg: Rather than just identifying this little segment of it.

Janet Tomcavage: Yes.

Allen Dobson: I would agree. I think Congress really needs to look carefully because, if you listen, there’s a common thread that runs through. You have integrated health care system working through a Medicare Advantage Plan, you have a state government who is doing something, and then you have an organization that does business as a contract, but the clinical part that works at the local level is the same.

So my advice to Congress would be that they need to give CMS the flexibility to allow multiple models to reach the same end. Why I’m saying that is because I think the model works within a Medicare Advantage Plan. It works within a state-directed system. It even works in a commercial market.

If Congress would give CMS the regulatory flexibility to say to a managed care plan or Medicare Advantage Plan: If you build this model, you may maintain a higher rate than those who don’t.

The same with the state, and I think there is a discussion about accountable care organizations. So you say to an integrated health care system: If you build these components in, we will enter into a different arrangement.

The problem is CMS doesn’t have the regulatory flexibility to go outside a very narrow box and actually proactively manage the program. So I think there needs to be some regulatory flexibility for CMS to enter into different agreements, and we need to approach it from not only the managed care end, Medicare Advantage Plans, but from a North Carolina model that’s maybe not a managed care. I think they both work. They just need to be driven to the middle.

Paul Ginsburg: Alwyn?

Alwyn Cassil: Hi. Alwyn Cassil with the Center for Studying Health System Change, and I want to follow up on this thread about payment. This is D.C., and winners and losers matter.

Janet, looking at all of the results of these projects, driving down readmissions and admissions of hospitals is kind of the end goal. I’m curious how your hospitals respond to this decline in business, so to speak, and what’s in it for them? And, moving beyond an integrated delivery system where you can shift things back and forth and cross-subsidize, how do you get the hospitals to take ownership for preventing those readmissions?

Janet Tomcavage: For the next step.

You actually bring up a topic that we’re discussing as we speak because we’ve had two smaller hospitals in our network who have been directly impacted by a 30 percent reduction in admissions, and they are now telling their ER to admit anyone who walks, drives, shows up for coffee into their ER. Seriously, we’ve had to go have conversations around that.

In our big hospital, because we are a quaternary facility, there’s potential for backfill. So my CEO says: Go at it, Janet. Reduce those chronic care admissions because I have plenty of folks to put in behind those doors. In fact, they’re better paying patients.

So, community hospitals, I think there are going to be less hospitals at the end of the day, and I think hospitals need to start looking at outpatient opportunities and how do they drive themselves from an inpatient acute care facility to extending services in a different format.

I think we need to drive physicians to think differently -- so, hospitalist -- to be thinking about more urgent care kind of approaches that are out into the community, more directly linked with community resources.

Nurses need to be retrained from an inpatient model to an outpatient kind of ambulatory model.

So those are some very real steps that I think need to happen pretty quickly in the process.

Allen Dobson: I would agree. I think how to defend this kind of thing with your hospital association. I think that clearly the most problematic place are some of the rural safety net hospitals who are on the margins anyway. In a system approach, you’re talking about decreased growth of need for new hospital beds. Except in these areas, some of these hospitals who only survive because -- they may not need to be a hospital at all. Those are the problematic areas.

Janet Tomcavage: Right, right.

Allen Dobson: Overall, in a state plan, you’re talking about decreasing the need for building more beds and decreasing, in our state, CON. So it’s a manageable thing if it occurs over several years for a hospital because they can plan for that. It’s a lot easier on their bottom line than cutting their rates, I can assure you.

So having the hospitals at the table on this is extremely important because it’s really planning a business strategy that is sustainable for the hospitals as well as the state or the community.

Paul Ginsburg: One last question, sir.

QUESTIONER: Steve Forstenzer, again.

You mentioned the co-morbidity with mental illness and chronic care. How do we address that if the funding isn’t folded into the same system?

As a follow-on for the other totally forgotten population, if you have a stroke, when does the rehab kick in and how does the chronic care model maintain physical rehabilitation to maximum function?
Stephen Saunders: Your first question was really more about how to get the community mental health system to work with the physical health system which, as I think has been pointed out before, is a significant challenge.

Certainly, one approach that I think does work is one I mentioned before, and I know in my prior life we actually were able to do this in the State of Illinois. That is, basically, try and get the mental health system and these health coaches and/or the physical health system to actually co-staff patients. So they’re actually sharing information which then you have to get past all the HIPAA issues and all that stuff, but let’s assume you got that settled.

Then they actually talk about these high-risk patients and say: How can we co-manage? I can take care of the behavioral health issues. Can you take care of the diabetes and the heart failure and vice-versa?

And get those folks talking at the local level. It’s one thing to talk at the state level, but you need to get Agency A talking to Agency B, that kind of approach. I think more of a local-driven approach is the only answer to get those two systems to work together in addition to the issue that we already heard about, which is collocating mental health folks in clinics and vice-versa, which I think is a good approach. But this is another approach.

Allen Dobson: And I think you touched on funding, adequate funding. Clearly, at a state level, when you’re talking about Medicaid programs, the notion of taking something with the money that you save and reinvesting it, I think we had the experience when we started reverting money out of the continuation budget of our state. We had the fortunate ability to redirect some of that into mental health which was extremely important in our state at the time. Much of it went to school teachers’ and state employees’ raises, and it didn’t stay in the health sector, but that’s important.

I think at the local level when you talk about rehab and other things. I think getting the right policy decisions at the state level related to getting people involved. When you get that dialogue and that collaboration at the local/regional health system level, where you talk about a seamless care of patients versus the silos we have, it makes the political argument at the state capitol a lot easier for policy and hopefully, ultimately, at the federal level around policy that makes a difference in moving the bar forward.

Paul Ginsburg: Well, our time is up, and I think we’ve had a great conference. I want to thank all the panelists. I’m glad that we brought people in from outside the Beltway to learn about things really going on.

* * * * *

Panelist Bios

L.Allen Dobson, Jr., M.D. - North Carolina Community Care Networks

L. Allen Dobson, Jr., M.D., F.A.A.F.P., is the chairman of the North Carolina Community Care Networks. He also serves as vice president for clinical practice development for Carolinas Healthcare System and president of Cabarrus Family Medicine. Dobson has long been actively involved in health policy on the state and national level. He was an early leader and developer of the Community Care of North Carolina Medicaid managed care program, which recently received the Annie E. Casey award for innovations in government, presented by the Harvard Kennedy School of Government. Dobson also served as assistant secretary of the North Carolina Department of Health and Human Services, where he lead the health divisions and served as the state Medicaid director. He has been the recipient of several awards, including the North Carolina Family Physician of the Year and the Life Time Achievement Award from the North Carolina Academy of Family Practice, the Harvey Estes Community Service Award from the North Carolina Medical Society and the National Public Health Award from the American Academy of Family Physicians. Dobson earned his medical degree from the Bowman Gray School of Medicine at Wake Forest University and completed his residency in family medicine at East Carolina University, where he served as chief resident.

D. W. Edington, Ph.D. - University of Michigan Health Management Research Center

D.W. Edington is the director of the Health Management Research Center, a professor in the School of Kinesiology and a research scientist in the School of Public Health at the University of Michigan. Trained in mathematics, kinesiology and biochemistry, Edington is the author or co-author of more than 500 articles, presentations and several books. His teaching and research focus on the relationship between healthy lifestyles, vitality and quality of life, as they benefit both individuals and organizations. He is specifically interested in how individual health promotion, worksite wellness activities and programs within organizations impact health care cost containment, productivity and human resource development. Edington earned his doctorate from Michigan State University and a master’s degree from Florida State University.

Paul B. Ginsburg, Ph.D. - Center for Studying Health System Change

Paul Ginsburg, Ph.D., a nationally known economist and health policy expert, is president of HSC, a nonpartisan policy research organization in Washington, D.C., funded in part by the Robert Wood Johnson Foundation. Ginsburg is a noted speaker and commentator on changes taking place in the health care system. His recent research topics have included cost trends and drivers, Medicare physician and hospital payment policy, consumer-directed health care, the future of employer-based health insurance, and competition in health care. In 2008, for the sixth time, Ginsburg was named by Modern Healthcare as one of "The 100 Most Powerful People in Healthcare." He received the first annual Health Services Research Impact Award from AcademyHealth, the professional association for health policy researchers and analysts. He is a founding member of the National Academy of Social Insurance, a public trustee of the American Academy of Ophthalmology and served two elected terms on the board of AcademyHealth. Before founding HSC, Ginsburg was the executive director of the Physician Payment Review Commission (PPRC), created by Congress to provide nonpartisan advice about Medicare and Medicaid payment issues. Under his leadership, the PPRC developed the Medicare physician payment reform proposal that was enacted by Congress in 1989. Ginsburg previously worked for the RAND Corp. and the Congressional Budget Office. He earned his doctorate in economics from Harvard University.

Stephen E. Saunders, M.D. - APS Healthcare

Stephen Saunders, M.D., is chief medical officer at APS Healthcare, where he oversees company-wide quality improvement activities, guides clinical product development and provides insight to APS medical directors and physicians. He has more than 30 years of experience in managing public health and Medicaid programs. Prior to joining APS, Saunders was medical director at the Illinois Department of Healthcare and Family Services, where he provided medical direction for Medicaid and other public programs and acted as physician-provider liaison. He developed and implemented statewide disease management and care coordination projects focusing on the physical and mental health for 220,000 participants and established a comprehensive primary care case management ("medical home") program for 1.7 million Medicaid beneficiaries. He is a fellow of the American Academy of Pediatrics and past president of the Illinois chapter. He currently serves on the Long-Term and Chronic Care Steering Committee of the National Academy for State Health Policy and also is past president of the Association of Maternal and Child Health Programs. Saunders earned a master’s degree in public health from the Harvard School of Public Health and a medical degree from the University of California at Irvine School of Medicine.

Amy Schultz, M.D., M.P.H. - Allegiance Heath

Amy Schultz, M.D., M.P.H., is director of Allegiance Health’s Department of Prevention and Community Health, where she coordinates a variety of programs, including the development and evaluation of community health activities for the Health Improvement Organization (HIO) Committee, facilitation of the Jackson Community Health Assessment, and oversight of Allegiance Health’s Faith Community Nursing Partnership, Community Projects Fund, Tobacco Treatment Services and Wellness Center. She also directs It’s Your Life Services, a line of health and productivity management programs for local employers. In addition, Schultz provides leadership to the Evidence Based Medicine Committee, the Jackson County Prenatal Task Force and the HIO Coordinating Council. She also serves as liaison to the University of Michigan Health Management Research Center and the University of Michigan Prevention Research Center. Schultz earned her master’s from the University of Michigan School of Public Health and her medical degree from the Medical College of Ohio. She completed an internship in Pediatrics at Columbus Children’s Hospital, Columbus, Ohio, and a preventive medicine residency at the University of Michigan.

Janet Tomcavage, R.N., M.S.N. - Geisinger Health Plan

Janet Tomcavage, R.N., M.S.N., is vice president of health services at Geisinger Health Plan in Danville, Penn. In this role, she is responsible for the administrative oversight of health services including medical management, appeals and grievances, quality improvement, clinical reporting, accreditation, medical homes, disease/case management and wellness. Tomcavage has worked for more than 20 years in the specialty of diabetes management, developing a comprehensive diabetes self-management education program and specialized care management programs for insulin pump therapy and high-risk pregnancy. More recently, her work has focused on the development and implementation of enhanced medical management strategies, including medical homes, disease management and case management interventions that optimize quality and efficiency outcomes. She earned her bachelor’s of science in nursing from Bloomsburg State University and her master’s degree from Misericordia University. Tomcavage has held certifications as a certified diabetes educator and advanced practice for diabetes management. She has co-authored several articles on diabetes management and disease management and has lectured nationally on diabetes management, disease and case management, medical homes and other medical management strategies.


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The Center for Studying Health System Change Ceased operation on Dec. 31, 2013.