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Vol 27 No 1
| Date: August 16, 2012
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Greetings!
This past month, I was able to attend both of the annual conferences that are devoted to on-site clinics. I participated in each, and I was honored to be among the many fine speakers that presented case studies and ideas regarding on-site programming. These conferences are a great way to network and to discover the trends that are emerging in the continued development of workplace health programming.
One of the most notable observations I experienced was the increasing interest of hospitals and hospital systems in directly engaging the employer. A second equally important theme pointed out by many of the speakers was the movement of programs beyond the provision of workplace care into the realm of population management.
A couple of speakers reflected on issues and challenges with vendors. Sometimes, the best information is not presented at the podium. For example, one trend that was being discussed at the break between presentations is the challenge of switching vendors. This comes in a couple of different forms - not always a client choosing to move on, but a vendor choosing a different class of clients. We now have multiple reports of vendors that have declined to renew their contracts in areas where, in the opinion of the vendor, the margins just don't make sense, the recruiting challenges are too tough, or the client is too demanding.
Who can blame a vendor for playing a little game of Gin Rummy with clients - picking up a good client or two and dropping a couple that are marginal? This is okay, as long as it is painless and the process allows the employer to transition in an orderly and efficient fashion. However, achieving that smooth transition is still an issue for vendors and their employer-clients. Simply stated, most contracts favor the vendor in these scenarios.
What is the answer? Establish transition standards. Protect any information in the data bases. Assure the ability to transfer software licenses and leases. Remove any restrictive covenants relating to hired employees (including providers).
Contracted services should continue because the relationship is a "win-win" for the employer, the vendor, and the beneficiaries.
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| Montana Inks the Deal with CareHere Despite Sour Grapes | | |
The governor of Montana executed the deal to manage clinics for state employees with CareHere for a reported cost of something in the range of $500,000 as reported in the Billings Gazette.
We reported on this earlier but the news is that this contract process prevailed even though the CareHere bid was apparently higher than a bid by a coalition of local providers. This demonstrates that the RFPs do not always score price over programming or local providers over those that can demonstrate experience.
The CareHere decision was opposed by GOP state legislators which probably means that the governor is a Democrat. They wanted to "slow things down" and give everyone an opportunity to "buy-in." This follows another axiom that we often repeat: "The move to an onsite program is largely irreversible." Once on-site services are deployed, they become an important part of the benefit programming; taking something away later is much harder than giving it to begin with.
There is a lot here to read if you enjoy reviewing the finer points of RFPs and scoring and the things that happen attributable to those who come in at second place. There is a lot at stake, and my guess is that local providers researching on-site programming will be sobered by the actions of the Montana executive branch, especially if CareHere is successful in the management of these clinic sites in the future.
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Notre Dame Initiates On-site Care
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Last newsletter, it was Purdue and CHS. This time, congratulations go to Take Care and Notre Dame. At this rate, we will need a newsletter section that just deals with colleges and places of higher education. You can read the Take Care announcement or the University brochure to get some of the background. You will note that the health center has limited hours on "Saturday game days."
If you want to delve into the process a little, go to the Kaiser Health story and see why they think this is important. Hint -- it has to do with the nature of Notre Dame, its religious sponsorship, and limitations on what can be dispensed at the Walgreen's pharmacy that is connected to the Take Care site.
Our opinion is that these university-based programs are pivotal because the university is generally a major employer, and it has a pretty thoughtful process for managing benefits. They can be state run or privately sponsored, they can have unions and associations, and they will have lots of stakeholders in the decision-making mix. And, there is seldom a CEO (like a Quadracci, or a Perdue, or a Rosen) that just "makes it all happen."
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Healthstat Acquires LivingWell Health Solutions
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Consolidation is not new in this field, and the most recent combination is Healthstat and LivingWell. This acquisition increases the base of Healthstat some 15%, which they claim brings them to a level that makes them the largest provider of on-site health services. (Their claim, not mine.) You can read their press release and decide for yourself. Their release says "leading," but in other quotes that we found on the Web, they are called the "largest." Who knows? By any measure, they have 300-plus sites, and that is pretty impressive.
Management of this type of process can be a challenge, especially when both organizations seemed to be growing in their own independent directions. New scale and size does not always result in new efficiencies, but each of these firms knows the traits of the other and they should be able to combine the best of each to come up with a solid product offering.
When firms merge, employers have to ask themselves if this is not the time to call in their account rep for a review of contract terms. Does an employer contract just automatically move from one vendor to another? (The answer is that it depends upon whether the contract was designed to be "assignable.") If there was an RFP and the resulting firm that buys the book of business (by acquiring the other vendor) was not the one chosen originally, what was the value of the original RFP?
This industry is poised for more consolidation and acquisitions. The question is whether the self-funded employers who are sponsoring these vendors are ready to have their contracts traded in the merger marketplace.
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MFN? AWP? ACO? RRTM? AEI?
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By now, everyone knows what an ACO is - accountable care organization. It is an acronym that describes something that will be impacting all of us in many predictable and unpredictable ways. There are a couple of others that I used in the title that may not be as familiar - MFN is "most favored nation" and AWP is "any willing provider." (I know that many readers will be quick to comment that AWP also means "average wholesale price," but anyone who has been around pharma pricing for any period of time knows that this is a fable, or some kind of misnomer, and that there is no such thing. Different column!)
This past week, the MFN clause that Blue Cross / Blue Shield has used consistently in their contracts to lock hospitals and health care systems into a "best price only for our customers" mode was challenged with the result that future contracts requiring MFN will need to be reviewed by the Insurance Commissioner before they can be ratified. An excellent academic treatment of the MFN impact on contracting, including the legal ramifications was done by Doherty.
"Any willing provider" implies that a price that is established in a market place can be matched by any provider willing to accept that price, and the payer must allow the consumer to elect that provider for services. In other words, if there is a contract that is focused on channeling patients to one specific orthopedic group for an established, pre-negotiated price, then any orthopedic group can participate. If you want an economic assessment, there is an excellent article that was done by Hellinger and published in Health Affairs.
I would add a couple of other terms that I will offer and define - one is "accessibility effectiveness index" and the other is "referral results tracer map." For the "AEI," I have to give a nod to Gallup and Healthways, who publish access indices that reference not only health care but essentials like clean water. My accessibility effectiveness index addresses a couple of simple questions: First, can your beneficiaries get an appointment with a specialist in a timely fashion? Second, does the specialist coordinate care in any meaningful (effective) way with the primary care provider? If you do not know the answers, there is something missing in your on-site programming.
As to the issue of the RRTM (referral results tracer mapping), the concept is simply one of knowing how your PCPs (primary care providers) are moving your patients along a path from initial diagnosis to final treatment. Of course, this includes hospital care and rehabilitation. Most employers and HR people will answer that our TPA or the insurance company that is managing the network for the beneficiaries has some sort of a list, or a booklet, or a Web site. This means no one is keeping track, and there is no real management of the employee population beyond the primary care event. Do you have any sense of where the admissions in your beneficiary population will end up? Is there any tracking of care from the primary care event, or patient-initiated access, to results?
If your firm has developed an on-site clinic, it has spent a lot of time and money on the physical facility, as well as the choice and installation of the staff and infrastructure (whether it was done on your own or through a vendor). If there is not any medical management to go along with the workplace intersection of patients and providers, the program is not going to achieve the results that the employer and the beneficiary population deserve.
MFN pricing and AWP stipulations are designed to frustrate firms and health care managers who want to use AEI and RRTM since they do not foster precision in planned patient steerage. Now, to the last acronym - the ACO. These are organizations that are supposed to move patients in a coordinated and efficient fashion from event-to-event with guaranteed results and pricing. Self-funded employers should begin the hunt for an ACO that can complement their own employee populations and their needs.
All this is way beyond figuring out if the clinic should be open to cover the second shift and whether you use PAs or NPs. This is where the truly successful programs are headed to continue to achieve results.
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For assistance with your on-site clinic questions and support, we list a variety of resources on that site, and we welcome your suggestions.
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Follow Global Media Dynamics and the World Congress for their upcoming on-site clinic programs. They will both have winter meetings in warm climates, and they will (again) each engage some of the best in the business to tell their stories. Take a look at the conferences and contacts in our banner and consider joining NAWHC and trying a couple of the other conferences that relate to health care in general. The Harvard session with Ray Fabius should be really interesting. If you want true insight into the state of the ROI conundrum as it pertains to the on-site adventure, you should be reading Ray's article that he did in collaboration with Bruce Sherman, M.D.
We don't get into politics, but NAWHC is about to on our behalf. I can make some predictions that will impact on-site programming based upon what I see coming up in November: If the Democrats prevail, get ready for more health care confusion; if the Republicans win, get ready for more health care confusion. The confusion will be of a different sort in each case, but the issues are clear -- you will pay more as a self-funded firm for health care and your employees will also pay more. There will be challenges with access at every level, and the cost-shifting is only going to get worse.
NAWHC is launching a lobbying effort on behalf of the on-site industry to address the issue of taxation or surcharges on what has been labeled "premium" or "rich" health care benefits offered by corporations. These plans, under the new health care act, will now have to be quantified to define their value, but the good thing is that this means full employment for actuaries.
Republican, Democrat, or Independent -- there are issues that you can love and hate in the new health care reform legislation. Larry Boress, the NAWHC Executive Director, is going to try to fix a couple of them on behalf of all of us who are involved with workplace programming.
Sincerely,
Mike La Penna
The La Penna Group, Inc.
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