Mutual Benefits: Hospitals and employers see a strong business case for developing wellness partnerships.

Trustee 05.21.2012

By John Morrissey
COVER STORY: Hospitals and employers see a strong business case for developing wellness partnerships.

When hospitals and employers form wellness partnerships, everybody wins

The business of wellness is going well for 802-bed Mercy Medical Center, a health care system across three campuses in Des Moines, Iowa, that reaches into the surrounding metropolitan area every day to combat rising health costs while making employers’ workforces healthier — and Mercy providers busier

A concentrated program of health risk assessments and screenings for medical problems, followed by intensive coaching of better health habits year-round, has helped hundreds of employers stem the rate of increase in their employee premiums. At the same time, an emphasis on preventive diligence has resulted in millions of dollars in new business flowing back to Mercy hospitals and associated physician practices.
In Louisiana, the Franciscan Missionaries of Our Lady Health System rolled out a similar wellness push just to get its own 10,000 employees to take better care of themselves and, thereby, bring workforce health costs under control at its hospitals in Baton Rouge, Monroe and Lafayette. After total health plan expense decreased 13 percent in 2011, due in part to a 21-percent reduction in medical claims, the health system took its success story to other employers and signed up a dozen company clients in six months.

Smaller organizations also are ramping up for employer partnerships. Lessons learned from internal wellness and prevention efforts at 83-bed Logansport (Ind.) Memorial Hospital eight years ago have been applied during the past four years to 15 employer clients including school districts and city and county governments in central Indiana, plus non-competing hospitals seeking to do the same thing in their areas.

At the intersection of two market forces gathering momentum — payment formulas that reward health status improvement, and cost-reduction efforts among employers — mutual objectives around easing people’s medical ills have driven home the logic of partnerships between providers and area employers.
“Close to 100 percent of employers now understand that the health of their employees is a major driver of their medical claims costs, and that they need to be doing everything they can to help their employees choose a healthier lifestyle,” says Helen Darling, president and CEO of the National Business Group on Health. For hospital organizations, it’s the cue to come running with a well-thought-out wellness plan.

“You get to impact the individuals where they spend 75 percent of their time, and that’s at the workplace,” says Alan McCloskey, an insurance broker in Logansport and key player in Centric, the name for Logansport Memorial’s health and wellness program for employers.

But the process of taking preventive health services out to contracted clients is often outside the comfort zone and core competency of health care-delivery organizations, experts warn. Hospitals “sometimes think they have something to offer [employers], as a product or a service, but I think they learn pretty quickly that their business is more health care and not necessarily health,” Darling says. “So, as a consequence, they frequently have a lot to learn about the difference.”

“The hospital has to treat proactive care like a business; it’s not reactive, it’s totally different,” McCloskey says. “You have to take the mindset that’s historically been in all health care facilities, and you have to turn that around.”

Merging Two Business Cases
The business objectives of a health and wellness program are challenging: to simultaneously save money for an employer and make money for a health care organization.

By identifying and aggressively working with employees dealing with costly conditions, hospitals not only collect fees for such services, but also increase an employer’s use of diagnostic and treatment services. Mercy Medical Center’s health screenings in the latest fiscal year referred more than $3 million in business just to its orthopedic program, says Amy Ziegler, employer relations specialist. In Logansport, a business that had been purchasing about $150,000 in hospital services increased that to $600,000 over a three-year period through prevention efforts, physicals, risk assessments and targeted coaching, says hospital CEO David Ameen. Overall, the number of services is up 15 percent for all Centric clients.

Despite these expenses, employers’ overall health costs either go down or increase at a much lower rate, according to organizations that are successfully operating these programs. For example, at Mainstream Living, a 500-employee company actively engaged since 2006 in Mercy’s workforce health initiative, the rate of increase for annual premiums declined more than 18 percentage points over five years, to just a 1.4 percent increase in 2012, the lowest renewal increase in the company’s history.

Part of the infrastructure necessary to support wellness programs already should be in place in a hospital system’s inpatient, outpatient and ancillary facilities, where clinical professionals can be enlisted in a strategy to intervene early in employees’ identified problems. But a completely new outreach and follow-up capability also has to be developed, designed to entice the average worker into learning about the specific risks to his or her health and then offer a course of action to reduce the risk factors over multiple years.

Health risk assessments are not new. That’s when someone answers a series of questions about medical problems, illness symptoms, exercise, diet habits and the like, and sometimes recommendations for improving health are issued. Biometric screenings for certain conditions, such as hypertension, high blood sugar and high cholesterol levels, also are done routinely by hospitals, physicians, health plans and others. But offering those services without any follow-up accomplishes just half the job.

“Health and wellness is one of those things that has to be ongoing; it just can’t be a one-and-done thing,” says Vicki Dallman-Papke, director of wellness programs at ProHealth Care, a two-hospital system in suburban Milwaukee that currently serves nearly 30 area employers. “Anybody could go in and screen and leave. But we don’t leave. We’re here to stay, and we’re here to help. We’re here for life.”

ProHealth Care learned from its own experience of providing screening and health education services to employers for more than 20 years, with hit-and-miss outcomes, says Dallman-Papke. “The employee would get the results, but there was not a lot of intervention.” In 2005, the hospital system hired an outside firm, Aegis Health Group, to develop “a more strategic, well-thought-out process.” Aegis also helps operate the Mercy workforce initiative in Des Moines.

Multidisciplinary Support
By now, it’s been drummed into trustees’ heads that 15 to 20 percent of a given population is responsible for a majority of health care costs because of underlying chronic conditions or active illnesses, much of which can be prevented or controlled by intensive intervention, education and lifestyle changes. These are the same points that have to be hammered home to employers in a wellness program.

Once employees complete a health risk assessment and they go through health screenings, a picture develops of certain problems to target, Logansport’s Ameen says. Employees exhibiting the most risk factors get the most attention, including regular phone calls or visits from specially trained nurses and other clinicians.
“The one-on-one coaching is what works,” Ameen says, contrasting that with less-intensive wellness services offered by some health care organizations and health plans. “It’s one thing to get a computerized phone call from an insurance company saying, ‘We know you’re diabetic, there’s education available, go online and do it,’ but it’s another thing to have a quarterly meeting with your health coach where you set goals and they follow up with you.”

For coaching as well as screenings and education sessions, Mercy uses staff nurses, exercise physiologists, social workers and others from programs as varied as cardiac care and weight-loss nutrition, Ziegler says. “That’s really the way a program like this should be set up — you use your internal resources, because we have them; every hospital has them.” Besides the time investment of staff, Mercy pays about $250,000 a year to Aegis.

To succeed with internal resources, hospitals have to demonstrate solid backing for the program, starting with the CEO, says Debora Glennon, Aegis marketing director. “If it does not truly have the support across the hospital, with a beachhead in the executive suite, it’s not going to be successful because the balance of the hospital is not willing to step in.” Ziegler says she has that support: “Everybody knows it’s just part of what Mercy does, and they do willingly go out and do these [duties].” With 215 program clients as of April, up from 10 in December 2005, she has screenings to staff every day.

Building the System
The clinical services of a hospital organization will have to be ready to provide preventive and ongoing care for employees who need it, says ProHealth’s Dallman-Papke. Providers may have assembled all the pieces — acute care, chronic care, home health, primary care, rehabilitation — “but the key is, can you bring them together in a comprehensive, continuity-care model that can be taken to employees?”

That means an ability of the outpatient side to carry out and carry on the goals established in the field, especially in primary care. “We’ve had a very, very aggressive push in the last five years to make prevention [activities] available, to make sure people were connected to a primary care physician, that they had an annual exam,” says Dallman-Papke. Employees with findings that require follow-up will be asked which primary care physician they want to be filled in; if an employee doesn’t have one, wellness staffers help set them up with a ProHealth Care physician, she says.

“There’s actually a surprising number of people who don’t have a primary care doctor,” says Kristine Schroeder, ProHealth Care’s employer relations specialist. “I hear a lot of people say, ‘Well, if anything happens, I go to urgent care.'”

Wellness programs are an opportunity for physicians to see as many as 80 percent of their patient panel on a regular basis instead of the usual 25 percent a year who come in prompted by a medical complaint, McCloskey says. Logansport Memorial also employs all its physicians, says Ameen, “so if we can encourage employers to use primary care, it’s good for us volume-wise.” Employees who report that they have no regular doctor will be required to find one if they want to be in the program, adds McCloskey.

With outpatient revenue already three times that of inpatient, the employer push “feeds into our business lines of prevention and wellness,” says Ameen. “It’s also [a way to] produce some loyalty for when they do get those acute episodes of chronic disease.”

Provider organizations may have to build a competency to deal with employees who already have serious health problems. At San Luis Valley Regional Medical Center in Alamosa, Colo., which is gearing up for an employer wellness program after three years of developing it for the hospital’s employees, management is exploring a model for people needing complicated care, says CEO Russ Johnson. It would address the 15 to 20 percent “who may have multiple chronic conditions, who need to be aggressively or certainly actively managed” and require “an interdisciplinary team that the patient sees every single month,” Johnson says.

Internal Proof of Concept
Hospital organizations that build up a capacity for keeping employees out of medical hot water still face that nagging uncertainty that a program “that intuitively looks like it makes perfect sense” may not get a company’s employees to participate, says Johnson. “It really is a culture change and an embracing of a new idea around an individual’s relationship to their health care and their health plan.”

As large employers in their own right, providers typically start internally. “You have to have your own house in order first,” says Dallman-Papke of ProHealth Care, where a three-year “road test” of health risk appraisals, education and data generation set it up for replicating it externally. All new Aegis Health Group clients during the past three years have implemented internally first, says its president, Pearson Talbert. That includes four-hospital Baptist Health System based in Birmingham, Ala., which will present at a Healthcare Financial Management Association conference in June on how it saved $1.6 million annually on employee health costs after getting nearly 90 percent of its workforce to participate.

San Luis Valley also worked through the process with its employees during the past three years as a client of Centric and is taking over the program itself this year as it prepares to sell the idea to area employers. The flagship Centric health care organization, Logansport Memorial, still draws from its track record to sell the service to new prospects, Ameen says.

“Every time I go out and talk to another employer, they want to know what we’re doing,” he says. “They say, ‘How do you know this works?’ Well, here’s our data, this is how it works. I’m not selling a bill of goods, I’m selling some history that we have.” McCloskey says Logansport is down about 15 percent per employee per month in health costs over the past five years, notable given that “in this marketplace it’s OK to be the same as you were last year — that’s still a success, because we’re an aging population.”

At Franciscan Missionaries of Our Lady Health System, the launch in November 2010 resulted in plenty of improvements in quality-of-care measures, a $2.7 million reduction in inpatient hospitalization, and a reduction in the number of people stratified as high risk from 11 percent in 2009 to 6 percent in 2011, says Stephanie Mills, M.D., program director of a newly formed separate subsidiary called Healthy Lives.

Besides the hospital itself, most boards of health systems have representation from prominent local businesses that also could supply starting points for a hospital-employer partnership, says Aegis’ Talbert. “If there are business leaders on the board, that’s a great place to start a conversation about health and wellness in the community. And it will echo out from there. I see hospital clients beginning to work with churches and other large collection points of people.”

The upshot is that developing the skills and reaping the benefits of these kinds of programs internally is a natural way to put into practice the new concepts in care that health reform likely will require of all providers, says Johnson. “If an organization is to begin going at risk in a new delivery system model and a new payment model, what better place to begin learning how to manage that risk and effectively work with covered lives than with your own employee base.”

John Morrissey is a freelance writer in Mount Prospect, Ill

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