“For decades, healthcare has been obsessed with reducing costs. It’s a worthwhile endeavor, but perhaps not the way we have gone about it. That’s because much of the focus has been on requiring physicians to make the necessary changes and, in many cases, blaming them for exorbitant prices.
The truth is that the metrics, computer systems, and compliance requirements that primary care physicians are expected to implement take time away from caring for patients. And even when they achieve the desired benchmarks, these professionals are not paid enough to provide real incentives or to cover the cost of work they have done.
That is why I spearheaded two plans to raise provider reimbursements and to create integrated-service teams at FamilyCare Health Plans. These initiatives have enabled us to improve the levels of service and outcomes for both our physicians and our customers.
“The nature of our integrated-service teams is actually an extension of our internal environment, which focuses on interpersonal interactions and our long-term philosophy that happy employees take better care of customers.”
You Get What You Pay For
Medicaid reimbursement to providers is approximately 50 percent of what commercial plans pay, but that is grossly underpaying time-based providers, like primary-care physicians. In the long term, it also results in Medicaid patients (97 percent of FamilyCare’s business) receiving about the half the time and attention from providers, as well as less access to care, compared to non-Medicaid patients.
Based on long-established studies showing that a robust primary-care network lowers costs, we raised reimbursement to Medicaid providers to improve the resulting statistics, making us the first insurer in the country to match payments provided by commercial carriers.
We did this without setting aside additional funds because we assumed that greater access to primary care would reduce referrals to specialists, additional testing, and emergency department visits. Since it was implemented in 2014, we don’t yet have specific numbers, but it appears that those improvements have, in fact, occurred. So, the net cost of raising reimbursements is close to zero.
What’s Good For the Goose
One of the primary characteristics of coordinated care is the integration of all care disciplines to produce better outcomes. We decided that if providers were expected to integrate their practices that we should do the same. We eliminated the silos of a traditional corporate-insurance structure that typically includes separate departments for every aspect of coverage and reimbursement.
In addition to being inefficient, the old structure made all interactions transactional and impersonal. For Medicaid patients, who often have increased needs and find it difficult to navigate such complex systems, this was particularly detrimental.
It is interesting to note that developing integrated-service teams turned out to be more difficult than raising reimbursement rates because there was some internal resistance from those who believed that, from a practical point of view, a complete restructuring was impossible. However, by cross-training a solid core of professionals who welcomed the challenge, we have succeeded in creating a “high-relational environment” for providers and patients alike.
As a result, our member satisfaction rates are over 85 percent, and provider satisfaction is close to 90 percent. Our teams know patients and providers’ staff members by name, so they now provide ongoing support and service to people that they’ve gotten to know. All issues get taken care of in a single phone call instead of multiple referrals to different departments. And since we are now more efficient, we save physicians money because their office staff doesn’t waste time with us trying to work out administrative issues. Creating less hassle for them is almost as important as raising their reimbursement rates.
A High Relationship Culture
The nature of our integrated service teams is actually an extension of our internal environment, which focuses on interpersonal interactions and our long-term philosophy that happy employees take better care of customers. This includes monthly meetings with line staff to get their perspectives on what we’re doing and what they feel could be done better.
Everything we do has an interpersonal underpinning and contributes to our high relationship culture, which includes guidelines that call for addressing both personnel and customer issues within twenty-four hours. All of these elements translate into better relationships and interactions both internally and externally.
Building For the Future
One of my most unexpected efforts to help strengthen the foundation of primary care grew out of a conversation over coffee with Larry Mullins, the CEO of Samaritan Health Services in Corvallis, Oregon. By the time we finished our coffee, we had mapped out a new approach to training physicians, and three years later we admitted the first class to the College of Osteopathic Medicine of the Pacific. That class graduated in 2015.
One of the goals of the school is to reduce the cost of a medical education. When students graduate without huge debt, there’s less pressure for them to leave primary care for more lucrative specialties so they can pay off their loans faster.
I am always looking for better ways to serve customers and to set standards that other insurers might follow. But after thirty years, one principle I keep coming back to is that if you listen to your customers and take care of their issues, the rest of your business will take care of itself.”
Photo by Polara Studio