In Sickness and in Health

ExecutiveInsight 03.21.2013

By Becky Barney-Villano

Since the days of medicine men and the founding of the nation’s first infirmaries, our healthcare system has focused on fixing what ails us. The traditional fee-for-service environment reinforced this philosophy of care, and hospitals have spent billions over the years on acquiring new diagnostic and treatment technologies that heal the sick and the injured.

As we have known for years, the fee-for-service model is unsustainable. Incremental measures to reign in skyrocketing healthcare costs – DRGs, capitation, and bundled payments to name just a few – pale in comparison to the Patient Protection and Affordable Care Act (PPACA), which established a new health care delivery model: the accountable care organization (ACO). Instead of paying for episodic care, ACOs challenge hospitals and physicians to keep patients out of the hospital and as healthy as possible. While the concept of population health management may be relatively new or re-gaining popularity depending upon whom you ask, some progressive hospitals have been broadening their role from providers of sick care to promoters of better health for several years. Their strategy has been to go to where the patients are: medium to large sized businesses in their service area. With a track record of delivering quantifiable health improvement and lower overall costs, these hospitals are ahead of the curve in adopting a population health model that yields big dividends on the P&L statement.

Bon Secours Health System in Virginia has built relationships with more than 40 local employers that began with the collection of health-risk data on 4,500 individuals. The health system contracted with Aegis Health Group in Nashville to help them manage their employer outreach. Aegis aggregated the data by worksite, enabling Bon Secours to introduce risk factor-management programs that addressed obesity, hypertension, tobacco use, high cholesterol and more. In just two years, one employer-partner has seen the incidence of obesity decrease by 4.5 percent, hypertension/pre-hypertension decrease by 19 percent, and desirable HDL increase by 13 percent among its workers. Another employer was able to maintain its level of healthcare costs with no increases, for the first time ever.

“Our programs are making quantifiable improvements in the health of workers at our partners’ worksites,” notes Leigh Bernard, Bon Secours’ chief of staff. “The data speaks for itself, and that’s why our local employers have continued their ongoing partnership with Bon Secours.” There are benefits for the health system as well. Bon Secours held a month-long mammogram event for another employer through which nearly 100 women received screenings and nine were referred for further testing which resulted in a net revenue gain for the hospital. Bon Secours credits its employer outreach program with a growth in market share and a return on investment of 18 percent after taking out expenses for the program.

ProHealth Care, a two-hospital system in Milwaukee, currently works with nearly 30 area employers. When one of its employer-partners, Generac Power Systems, first engaged ProHealth to manage its wellness program, Generac offered no preventive services. With the robust wellness services ProHealth brought to its worksites, Generac’s healthcare costs now amount to less than five percent per year, per employee – 31 percent below the national average.

“It’s important to look at each company’s particular needs and develop health and wellness programs that benefit each unique workforce,” says Vicki Dallmann-Papke, director of wellness programs at ProHealth Care. In return, ProHealth has seen bottom line benefits to its population health program as well. In the first 21 months, the program increased the hospital’s net revenues by nearly $1.5 million, and by another $1.3 million in the following 12 months. Even more impressive is the level of integration ProHealth Care and Generac have reached in their healthcare transactions. Generac’s health plan pays ProHealth Care directly instead of through individual patient accounts for lab tests, co-payments and healthcare related charges. It is essentially a system with one receivables account, instead of 1,200 patient accounts.

Bon Secours and ProHealth Care have clearly been able to reach a large number of local consumers through their employer partnerships, improve population health and measurably benefit the hospitals’ bottom lines. Although hospitals will always need to accommodate the sickest patients needing intensive inpatient care, these health systems have demonstrated that there is also a central role for them to play in creating healthier communities. Given the Affordable Care Act’s focus on prevention, this is exactly the role hospital executives should be looking to play in 2013 and beyond.

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