Carol Inc. and Minneapolis Employers
Carol Inc. is a company led by executives who have heavily influenced the consumer directed healthcare market. CEO Tony Miller formerly was the leader of Definity, which was the first consumer directed health plan product company founded in Minneapolis in 1997. This company started the market moving in the direction of more employee decision-making and financial responsibility. The business model became mainstream fairly quickly and Definity was sold to United HealthCare several years later as United's major consumer directed offering.
Taking the consumer concept to a new level Carol has been experimenting with the concept of a medical mall. A process where employees of companies or any individual can go to the Carol website and shop for “care packages” involving certain conditions. Initially, these conditions were simple such as the package for sore throat. The “package” includes a visit for the condition such as a sore throat, the cost of any testing, such as a rapid strep test, and the cost of any medication required, such as penicillin. The description of the specific condition and the price the provider is willing to accept is posted on the mall.
Recently, the concept of the mall has changed to focus on more complex packages of care, which are designed more specifically for employers needs. These are called value health opportunities. Four of these value health opportunities have been developed for three major Minneapolis employer groups. The four conditions chosen include asthma care, chronic back pain, coronary artery disease and Type 2 diabetes. This employer group has 6,337 Type 2 diabetic patients in their employee population. This is a very high cost group of employees, which is the reason the employers are willing to try a different type of intervention.
In the Twin Cities, the process of value health development started by recruiting employers to participate and this is the model described. (You could envision a provider led or even a health plan led value health initiative). The employers must represent a large enough number of patients to get the attention of the provider community. Conditions for value health development are selected by employers based on their priorities. Then, a set of measures is established for how the employer will judge success. These include: cost and frequency of treatment, quality outcomes, utilization, and resource use. In addition provider contract complexity is considered and, finally, making the offering appealing to the consumer. The platform for delivery is then developed which includes the clinical processes required for delivery of the service, the cost of that delivery, and the administrative process necessary to track patients who sign up for the value health package. The next step is an RFP (request for proposal), which is sent to providers to decide if they are going to participate. Carol helps providers to establish rates for the value health packages while at the same time working with employers to decide minimum funding levels for the packages. This minimum funding is the amount the employers are willing to pay the provider for an episode of treatment defined by the value health packages. Finally, there is promotion of the value health package through an electronic mall that is created for the employees. This is accomplished on the intranet of each employer's web site fully customized to the individual employer.
What does this mean for the providers of this care? They must be able and willing to prospectively price the package. In the diabetic patient example, the provider will put together a set of clinical services that may include physician visits, diabetic nurse and dietician visits, and medication management, including consultations with a pharmacist. In addition, there might be a flu shot, group-teaching classes, and e-visits with the provider. This all rolls up into a price the provider is willing to accept. The employer then reviews this and determines what they are willing to pay for this set of services. In some cases, they may elect to pay for the entire set of services, in others only certain services. The difference is born by the patient. For example, a provider might make home dietician visits part of their package. Although a visit with the dietician is important, a home visit might be considered a luxury and need to be paid for by the employee.
Nine different provider organizations are participating in this initiative. Some hesitation exists in the provider community for two reasons. The first is that they are already taking care of many of these patients. Designing an entirely new process and figuring out how to administer it is added cost with potentially no net gain (i.e. no market share increase at least to start, no efficiency savings in redesigned care delivery, etc.). The second is that this is a pilot and so the number of “covered lives” does not encompass the entire population of the Twin Cities and is limited to the three Fortune 500 employer participants and of those it remains to be seen how many employees will sign up for the value health packages. The same basic issue exists as above, small numbers and very costly to administer. It's important to recognize that providers accounting systems are not set up to administer care across a continuum. The finance systems are designed to measure hospital care or clinic care or imaging not all those customer experiences rolled into one. That's why this approach is expensive to administer because the provider needs to have two finance systems, one for the old world and a separate one for this new world.
From the employer perspective, if employees sign up for the value health package they know the employee is getting the appropriate care for their condition and that there will be an assessment of each patient from a quality and cost standpoint to determine if this set of interventions is working. Examples of these success measures include compliance with ICSI (Institute for Clinical Systems Improvement) guidelines, comparison performance on the Minnesota community measures, and tracking of resource utilization.
The common theme that is again recognized in the Carol example is that of population health management. This is an attempt to identify a high-cost population of employees and aim specific interventions at them one at a time. In so doing, both the employee and the provider are held accountable for improvement in cost and quality. So will it work? 2009 will be the pilot phase for this concept in Minneapolis. There is also pilot work going on in Seattle. Whether this specific design is the answer isn't known, but one thing is encouraging: there are a small group of forward thinking employers who resolve to continue to push the market toward a different and better way to incent the best quality and cost in healthcare delivery.