HealthSourceRI — Three Years and Counting

Health care has been in a state of very rapid evolution for the last three years, sparked into mutation by the comet strike of the Affordable Healthcare Act (AHA, aka ObamaCare). Each year, we try to connect with the leading healthcare organizations that affect our lives in RI and surrounding areas, and find out what’s new and how people can navigate the maze of modern health science.

There are a couple of themes that emerged from our investigations this year – here’s the good, the bad and the unhealthy.

Let’s start with the health exchange. HealthSourceRI, the RI exchange, had a few major changes this year. Their “launch period,” which was funded largely by federal dollars, is drawing to a close. That means a shift from federal dollars to a “self-sustaining” model. The annual budget has gone from $50 million to about $30 million, and is expected to go to $11 million next year. One supervisor at the phone center told us, “We have no idea if there’s anyone who’s allowed to talk to the press. There have been a lot of people let go here, and a lot of change.” But we were able to connect with spokesperson Maria Tocco and acting director Zachary Sherman, and asked about the budget reductions. “That’s actually according to plan,” says Sherman, “A lot of the original budget was to establish awareness and to build the infrastructure and technology. Once that’s complete, our budget will need to maintain that.” The web and technology element is forecast for completion in June. HealthSource has had to step back some of its activities – its walk-in centers have been closed, and the call in hours are a lot more restricted than in past years. Average hold time the week before this issue was 28 minutes and 26 seconds.

But most of the millions of dollars being trimmed won’t directly impact people using the exchange. The HealthSourceRI corporate offices have moved to a less-expansive, state-owned building. The marketing budget achieved its goal of greater awareness – and the number of uninsured Rhode Islanders has correspondingly dropped from 11% when the exchange started to 5% last year. “Our goal is 3%,” says Sherman. So the rush of newbies signing up should be mostly over. That’s part of why the average length of a support call is down to about 20 minutes, from over 45 minutes two years ago. The other reason is that the website is purportedly working better, with few mysterious glitches that eat up support time. Finally, “We instituted automatic renewals this year. Last year we were one of the only states to have active renewal.” This year’s passive renewal means that if you’re not changing anything (and paying your bills), your insurance will roll over for the year into the same plan, which streamlined HealthSource’s process considerably.

The other big change for the exchange is that it aims to become completely self-sufficient in 2018. That’s good news, since the federal support is going away and the state budget is beleaguered at best. How does the exchange produce income and become self-supporting? “The insurance providers pay 3.5% of their insurance premiums back to support the exchange,” says Sherman. That cost might manifest in higher premiums, but the exchange has also enabled competition between plans – Neighborhood, United and Blue Cross all offer options through the exchange now, and there are rumors that Tufts may be entering RI soon (Tufts did not respond to requests for comment). Before the exchange, only Blue Cross offered individual plans. The hope is that the competition will keep prices down.

The 3.5% payment by insurers to HealthSourceRI happens whether you sign up through the exchange or directly with the insurance company – and the insurance companies are prohibited from offering different prices through the exchange and independently. So that bit of financing doesn’t have a direct impact on you. Since tax benefits only kick in if you go through the exchange, it seems like a no-brainer to do that if you’re getting individual insurance. Remember also that if your individual income is below $16,000 or your family income is below $30,000, you qualify for free care.

And speaking of taxes, the penalty for not having health insurance, instituted two years ago with the beginning of the Affordable Care Act, has doubled this year – you’ll pay a whopping $695, plus or minus whatever magic your accountant can summon, if you have no health insurance this year.

To be insured by February first, you need to sign up and pay through the exchange by January 23. The deadline for open enrollment overall is January 31 – you need to be in the system by then, and pay by February 23, if you want to begin insurance by March 1.

Device-ive ness
The effects of ObamaCare industry-wide are still working themselves out. One hard-hit sector is the medical device field. The quest to pay for universal health care has meant a number of other sources of taxation, including many embedded in other parts of the healthcare industry.

Alan Schinazi, an RI-based consultant who works with medical device manufacturers, notes that although the tax on medical devices is 2.3%, which seems small, it’s levied on gross sales, so it can become a huge percentage of profits (79% was reported for one manufacturer, Signus Medical in Minnesota, as reported by Forbes). Unlike pharmaceuticals, which are produced by gigantic mega corporations (by and large), devices are usually created by mid-sized start-ups (then marketed and distributed through behemoths). So for many of these businesses, who place big bets on devices, two-thirds of which never produce returns, that additional tax has pushed the gauge from “worth it” to “not so much.” “Layoffs in the medical device industry from this tax are measured in the 10s of thousands,” says Shinazi. Bills are in the works on the national stage to repeal or change this tax, but for the moment the device market may slow some of the rapid growth that was taking place over the last decade.

Greater Focus on Primary Care
Another significant change that’s been happening in health care locally over the last few years is an increased emphasis on primary care, and more of a team approach to it.

My personal primary care physician (PCP) retired last year. I received a letter letting me know, and suggesting that by the time of my next annual check up, I’d be assigned a new PCP. When I called recently to request an appointment, I was told the practice hadn’t been able to replace my old doc, but that I should come in anyway for an appointment with a nurse practitioner. Did I need to find a new doctor? No, they assured me. It’s part of the new way primary care is being offered.

There’s a shortage of primary care physicians right now – especially in RI, but it’s also happening nationwide. New MDs are going into more lucrative specialties rather than primary care. But the system as a whole is identifying a greater focus on primary care as a big part of the secret to keeping people healthier. And that means teams provide that primary care while making the most efficient use possible of their PCPs.

“A lot of times, after you’ve seen a specialist, there’s a diagnosis and we know what needs to happen,” says Ken Correia, PharmD, clinical pharmacist at Anchor Medical Associates, with offices in Providence, Warwick, East Greenwich and Lincoln. Ken refused to be interviewed until after we’d discussed my own health status. Then he explained how the new teams work – and why a pharmacist was even at a doctor’s office.

If you have a chronic condition, you don’t need to return to the specialist, who’s expensive and doesn’t have a lot of time, unless something about your situation changes for the worse. So a nurse practitioner can handle my physical, and if there’s anything that worries her she can consult with the right expert – whether it’s a pharmacist or a physician, they’re both right down the hall.

“My position is fully funded by Blue Cross … So we don’t have to worry about billing for office visits. We — clinical pharmacists, special educators for specific chronic illnesses like diabetes, and physician’s assistants — have time and resources to do follow-up and provide education,” says Correia.

“We are mirroring systems set up in other practices. It’s a model that has been in play for decades in other parts of the country. Chronic disease management can take a lot of time that physicians don’t have. One of the earliest studies was the Ashville project, in North Carolina, which was in the early ‘90s,” Correia says. “If you tell me you’re sick, I’m going to send you to the doctor. But if you want to talk about your meds or chronic disease management, we’ll come up with a shared plan. And there’s proof that patients who are actively involved in that process get better care, have lower costs and tend to be more satisfied.”

“We’re definitely placing a lot of emphasis on primary care teams,” agrees Assistant Vice President Stacy Paterno of Blue Cross / Blue Shield of Rhode Island, “It’s easier for members to get care that is coordinated and focused on keeping them and their families healthy. We just got the results from a 5-year study assessing our shift in focus toward prevention and strong primary care,” she says, citing a 15% lower hospitalization rate among members working with primary care teams compared to those who weren’t. The team approach includes looping in an on-site pharmacist like Correia early in the process, so that he can share his expertise in prescription-heavy situations. And it includes using electronic medical records to allow the primary care physician to “play quarterback” in planning out your care. A few years ago, I was sent to a specialist. When I got back to my PCP, he asked, “So what did he say?” That wouldn’t happen today – my PCP would already know.

One interesting side effect of the move toward “pay per performance” away from “pay per service” or “per visit” is that it’s unclear what will happen to the really bad patients who don’t listen to their physician teams. When improving patients generate rewards for a practice, time spent on someone who won’t help improve him or herself becomes time wasted. Will this affect care for those individuals? Will a practice be able to “fire” a bad patient? Time will tell.

CharterCARE, one of the three big healthcare networks in RI, encompassing Fatima Hospital, Roger Williams Medical Center and St. Joseph’s Hospital, among others, is also reshaping its emphasis toward primary care and prevention. CharterCARE was purchased in 2014 by California-based Prospect Medical Holdings, which has been managing physician practices in other parts of the country for 20 years.

“We have a different focus from your normal for-profit medical center,” says CEO Lester Schindel. “We work to engage physicians in providing alternative methods of healthcare… We can reduce the cost of care by improving access – before patients get badly ill – and providing better care. It’s a triple aim: lower cost, more access and better care.” It’s when patients get seriously sick that health systems rack up big bills. “And unnecessary tests and procedures can be avoided when primary care is more closely involved. It also helps to head off problems early by getting patients in to see their doctor quickly. Sometimes the patient gets sicker while care is being planned. The real way to control costs is by giving physicians the tools to do a better job at managing the care that’s being given to the patient. Physicians are incented to keep their patients healthy.

“There are chronic illnesses and conditions that can be addressed to keep people healthy. The biggest one, of course, is obesity. Then there are other issues like smoking and conditions like pulmonary disease and diabetes. We set up clinics to address patients with chronic illness. That’s the strength of a population health management program.”

This redirection in emphasis on primary care has been happening anyway. In what way is it a side effect of the AHA? Schindel explains, “The Affordable Care Act gives more people insurance. A lot of them never had primary care physicians before – all they could do was access emergency rooms as opposed to getting the right level of care. If you have a bad cold and you show up in an emergency room, you’re going to rack up a bill that’s five times what it would have cost to go see a doctor.” Now that insurers are responsible for that trip to the ER, there’s more incentive to get patients to the doctor instead – and to get them there earlier.

CharterCARE recently reached an agreement to provide a new managed care approach to a Medicaid population as a pilot program. “We’ll be assigned 8 to 10 thousand Medicaid patients and be entirely responsible for the continuum of care provided to those patients. That puts the onus on us and our physicians to improve outcomes and show the state that by implementing our population health management we can effectively reduce costs and improve care. We have a financial incentive to keep them healthy.”

Health care continues to be a roiling cauldron of change on every level. But if a system can be developed where everyone involved has an incentive to keep Rhode Islanders healthy and save money doing it, there might be a win-win down the line. Meanwhile, let the experiments continue.