Saving Healthcare

Costs are soaring, so many experts say the solution is to turn financial incentives upside down

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Quality Standards

But for quality payments to work, Raethel says, providers need standards – metrics they can use to measure their performance. To help provide that data, HMSA has sponsored an initiative called Advanced Hospital Care (AHC), a partnership with all the major local hospitals and with the Premier healthcare alliance, a national cooperative of hundreds of hospitals and healthcare systems that is establishing quality standards.

“They’ve been working for the last half-dozen years to develop a program around quality, safety and efficiency,” Raethel says. “By partnering with Premier, instead of having to come up with our own programs, we get metrics designed by hospitals around the country.”

Participation is a two-way street. “As a member, you agree to share all your results with the cooperative,” Raethel says. “That data is transparent, so you get to see what the other hospitals are doing, and they get to see how you’re doing. Transparency is a powerful motivator.”

HMSA believes access to such data will change how Hawaii’s hospitals operate. By joining AHC, Hawaii’s hospitals have committed to improving their performance on the Premier standards. Each hospital compares its performance with peers around the country. That’s important in Hawaii, where a big trauma hospital like Queens, doesn’t have local peers.

“Now,” Raethel says, “if Queens is working on a particular metric and, for whatever reason, isn’t doing so well, they can look at similar hospitals that are doing well and see how they’re doing it.”

HMSA also provides quality data to physicians and medical practices. Last year, they launched HBI Online, a web service that lets healthcare providers measure their performance against clinical quality indicators. For example, HBI Online allows doctors to easily see how many of their diabetic patients have had eye exams.


HMSA isn’t the first healthcare organization in Hawaii to embrace PCMH. “We’ve believed in this concept for a long time,” says Geoffrey Sewell, executive medical director at Kaiser. “It’s a core value at Kaiser.”

In fact, Kaiser is a national leader in PCMH. For example, it pioneered the widespread use of electronic medical records, a key PCMH strategy. Nationally, Kaiser was an early intensive user of quality measures to improve care in its hospitals and clinics, using its own database to track performance at every level.

“For example,” Sewell says, “we can tell how a group practice is doing compared to other group practices. Then, we can click down into the individual members of that practice. We can see the doctors, the medical assistants, the nurses. We can see who’s completing the things that need to get done. And we can assist them when they set critical targets.”

Ultimately, the program tracks every critical performance measure, comparing everything in a medical practice or a clinic or a hospital with national averages. “Our goal is to be in the top 10 percent,” Sewell says.

But Sewell understands the challenges facing the rest of the healthcare industry. Whereas Kaiser doctors are paid a salary, most other doctors are compensated for each service. “They get paid in RVUs – relative value units,” Sewell explains. “Every medical procedure, from an office consultation to brain surgery, they all have a certain number of RVUs applied to them. So, while you might get paid a little more for hitting quality targets, they still pay you fee-for-service for most of your time. That’s what sets us apart: We pay folks a salary, then we monitor performance.”

Sewell applauds HMSA’s efforts, but he has concerns. “This is exactly where things should be going,” he says. “The question is, what’s the transitional state? And who survives the transition? That’s the real challenge. At Kaiser, we’re lucky in that we have a huge IT department, so we have experienced people who can come into the clinic to train staff. I don’t know how private practice doctors would do that. I suppose they would have to hire someone to come in and do that.”

Sewell notes that HMSA has supported physicians’ move to electronic medical records, a critical step in the new healthcare model, and one required by the federal Affordable Care Act. Even so, he believes many doctors, particularly older ones, will balk.

“I know HMSA has programs where they help fund it.” Sewell says. “That helps, but I think it’s still a financial challenge, especially for independent doctors. People in group practices may have an easier time managing that. But even for them, down the road, how are they going to go from the current system?”

Dr. Brijit "Brit" Reis, a pediatrician with Castle Health Group,
uses a system called HBI Online to track the other services
her patients are using to maintain their health.
Photo: Courtesy of Brijit Reis

It’s a concern shared by many physicians, says Darryl Kurozawa, associate medical director at Kaiser. “I was in private practice for about 10 years before I joined Kaiser, so I have a lot friends still out there. I can tell you, there’s a core of doctors out there who are just going to retire. Doing all the quality measures required is just too much work, which probably means hiring staff. If they just have a few years left in their practice, they’re going to give up.”

Vermont’s model

There are several state healthcare systems that might serve as good models for HMSA and Hawaii. One is the Vermont Blueprint for Health.

The first legislation establishing Vermont’s program passed in 2011, and already Blueprint for Health has grown into a statewide program embracing 79 practices, 359 physicians and 353,333 patients.

One of its key features is a collection of organizations called community health teams. Healthcare payers such as Medicare fund CHTs on a per-patient, per-month basis, just as in the PCMH model, and they’re designed to serve as a utility for all the medical homes in their district. Each CHT contains specialists selected to complement the work done by the primary-care providers, possibly including nurse coordinators, social workers, nutrition specialists, community health workers and public health specialists.

The Vermont system relies on data management. Treatment protocols and other medical standards are managed in a central registry. Reimbursement information is extracted from a multi-payer claims database. Patient histories are stored in a chart registry. Performance and quality measures are gleaned from national scoring data. Public health information resides in a public health registry. All this data allows healthcare providers to better track and coordinate care for their patients.

Proponents say the practical effect is that patients now receive their care where and when they need it instead of in an emergency room visit, which is often ten times as expensive. This isn’t an abstract form of savings; it’s the whole intent of the program.

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