New health care model pays off
In a health care industry moving from the fee-for-service payment model, collaboration both saves and pays, a major health plan insurer in the metropolitan area and one of Westchester County”™s largest physician groups have found.
Westmed Medical Group and UnitedHealthcare realized approximately $2 million in cost savings on patients”™ health insurance claims in the first year of their partnership in an Accountable Care Organization. Of that total, Westmed received a bonus of nearly $1 million from the insurance company by reducing practice variation, decreasing duplications in care and promoting the proper setting for care, the ACO partners recently announced.
A key initiative of the Affordable Care Act, ACOs are voluntary groups of doctors, hospitals and other care providers joined with private insurers or the federal government to provide coordinated care that measurably improves quality of care for patients and reduces health care costs. Westmed last year also formed ACOs with Cigna Corp. and, for the 12,000 Medicare patients treated by the multispecialty practice group”™s approximately 260 physicians, with the federal Centers for Medicare and Medicaid Services.
The Westmed and UnitedHealthcare collaboration in its first year included about 13,000 Westchester residents covered under an Oxford Health fully insured commercial plan. Dr. Simeon Schwartz, founding president and CEO of Westmed, said the savings amounted to 3 percent to 4 percent of projected health care costs for those patients.
A third partner in the ACO formed in mid-2012, Optum, a technology-based health services business in Eden Prairie, Minn., provides analytical tools and software applications used by Westmed physicians to measure their performance on quality care for patients ”“ including both prevention and treatment of disease ”“ as well as patient satisfaction and reduction of medical costs. Regularly updated reports allow doctors to collaborate across specialties to making decisions on a patient”™s medical care.
In the new ACOs being formed across the country, “It”™s much more of a partner relationship rather than an adversarial relationship between the insurers and providers,” said Dr. Barney Newman, medical director at Westmed Medical Group.
“When that happens, everybody wins,” said Michael McGuire, CEO of UnitedHealthcare of New York and New Jersey. He and Newman spoke at a November press briefing on the ACO results by Westmed and UnitedHealthcare executives at Westmed”™s Purchase headquarters.
In the transition from traditional fee-for-service health care delivery to a value-based system that rewards physicians for better quality and efficiency of patient care, “We have an advantage up front in that we”™re already a successful integrated provider,” Schwartz said.
Westmed”™s one-stop outpatient centers or “polyclinics” in Westchester have been so successful that the physician group in 2011 formed a management services company, Westmed Practice Partners Inc., to export and apply its business model for other health care providers. The company in January opened an outpatient center in Brooklyn Heights for physicians affiliated with Mount Sinai Medical Center and recently announced a partnership with Montefiore Medical Center to manage an outpatient center that Simone Healthcare Development Group plans to build in the Riverdale section of the Bronx.
“Westmed had a lot of good things going on,” said Schwartz. “The partnership (with UnitedHealthcare) let us take it to the next level.”
The insurer in the ACO shared patient claims data with Westmed, a significant departure from a system in which physicians, hospitals and insurers have operated in “concentric universes of health care,” said Schwartz. He said claims data about prescriptions provided by the insurer were “very important” in the coordinated care effort. Westmed has seen significant improvement in patients taking their prescription medications.
While reducing costs, the ACO program improved on nine of 10 health quality metrics and showed increased patient satisfaction with care received.
Schwartz and McGuire said the most significant savings were in hospital utilization by patients. “The lack of hospital readmissions was a big factor in our hospital savings,” said Schwartz. Having built an extensive transitional care program for patients released from hospitals, Westmed has a readmission rate that is well below the national average, he said.
With the new health care reimbursement model, said Schwartz, “The feds have defined it much more succinctly: If I paid you to take care of a person once, why should I pay you to take care of a person a second time?”
The ACO partners said employers are now trying to decide whether to move into narrower health plan provider networks to limit their premium costs. High-quality providers are “the kind of providers they will want to see in those narrower networks,” said Schwartz.
At UnitedHealthcare, “That”™s what we see coming, those narrower networks,” McGuire said. “There”™s a lot of conversation.”
Westmed, a physician-owned business, plans to reinvest its $1 million bonus in ongoing technology enhancements to further improve its practice. The ACO partners said they will expand the program to measure more health care metrics and increase the number of patients in the program. Persons in Westchester covered under United Healthcare fully insured plans will be included in the coming year.