What’s the Business Plan for Serving the Poor?

by joeflower on September 25, 2012

(From the American Hospital Association’s H&HN Daily, September 25, 2012)

Doing more with less. Doing the most for the least.

Seems like the biggest magic trick ever. It’s invisible, people don’t seem to even notice you’re doing it. You do it every day. And every day it gets harder to pull it off. It’s called “serving the underserved.” Helping the poorest, the least reimbursable, the homeless, the undocumented, often the least educated, least compliant, most addicted. Doing it with fewer resources year over year. Doing it in a climate in which the elderly, the poor, even the children of the poor have increasingly become political and cultural punching bags — with you and your institution caught in the middle.

Despite the reform, the tide of the helpless will continue to grow, and the resources to help them will shrink. How will you manage it? You cannot manage the future of your institution without a good answer to that question.

There is an answer, but it doesn’t lie in cutting back, in spreading the same resources more and more thinly. The answer lies in changing the question from How do I scrape by one more year? to How do I own this? How do we get really good at this? What would it look like if we were to become best in the world at this? How do we “make a living” at this?

The answers are paradoxes, but they are happening now. Let’s talk.

Value Analysis of Serving the Poor

Any business plan that does not somehow pay its way is not sustainable and will continually sap the vitality of the whole institution. So we need a value analysis of the business of serving the poor. As with any business plan, the questions are How do you take in more money? and How do you cut costs?

The problem arises from trying to stuff the poor and underserved into our one traditionally dominant business model: acute care that is insurance-supported, incident-based, fee-for-service, paying for one doctor seeing one patient at a time. This business model simply doesn’t work when the clients have no insurance or not enough (so there are no fees), when there are not enough doctors to go around, and when their real problems are mostly not acute but chronic and behavioral.

“Think outside the box.” That’s the cliché. A cliché is a metaphor that is so dead its fingers have long since stopped twitching. So let’s not use it as a metaphor. We’ll use it literally here: Think outside the box — and the box is the hospital, with its four walls, foundation and roof, its special ventilation system, multimillion-dollar machines and bacteria-resistant floors. Think outside that box because it’s a very expensive box. Most of the core drivers of any good business plan for dealing with the poor and underserved drive the problem out of that box, drive the care out of the hospital, out of the ED and the surgical suites, and drive it upstream, earlier in the disease process, into the neighborhoods, convalescent homes and community centers, into the patient’s home and family.

At the same time, many of the specific business models drive both the cost and the income off the hospital balance sheet and into some larger risk-bearing structure. Many health care executives shrink from taking on risk, especially for these poorer, harder-to-manage populations. But if they are showing up in your ED and on your balance sheet, you are already at risk for them.

First, we must realize that we need to change the business model. Then we must realize that we are looking not for a single substitute for the traditional business model, but layered multiple business models, even in the same region and institution.

Who These People Are

To serve the underserved better and more profitably, first we have to be clear that “the underserved” is not one mass group, so we can’t serve them best with a single business model. I can think of at least five discernible groups of people, cases and services needed here:

Uninsured primary care: These are just ordinary folks who need basic care. Cheap and easy to provide, such basic care can prevent many problems that would put people in more expensive categories. This group calls for good triage at the ED to cull primary clinic cases (flu and strep and scraped knees) from the real ED cases. Even more, it calls for a strong, cheap or free primary care structure to make sure they never need to show up at the ED.

Behavioral problems: The number one underlying reason many people show up in the ED is that it is the one place it is guaranteed someone will pay attention to them. They are lonely, depressed, neurotic, psychotic, suicidal, paranoid, hallucinating, having a panic attack, whatever. Robert Frost once defined “home” as the place where, when you go there, they have to take you in. Many folks do not have a psychological or spiritual home — and there you are. Triaging such folks and providing them with real behavioral care, even long-term care, usually costs significantly less than checking them out and stabilizing them every time they show up in the ED.

Problem users: These are people who are using your facility for their own ends — most typically drug addicts who know that if they claim the right symptoms and give the right answers to the right questions, they can get their opioids and other scheduled drugs, either to take or to sell. What is called for are vigorous methods of bio-identification, such as iris scans, coupled with regional health information exchanges, to out anyone who is gaming the system for addictive drugs. These methods should be tied to serious “lean” process work to arm your ED professionals with the legal backing, guidelines and teamwork necessary to quickly and accurately triage out and turn away such patients, rather than simply getting rid of them by giving them what they want.

Frequent patients: When someone shows up in your ED (or any EDs in the region) 10 times in a year, it’s not because they are getting hit by buses and falling off ski lifts. They are suffering from unmanaged chronic disease. Almost all of these ED visits and the consequent surgeries and hospital stays can be avoided by better preventive and maintenance care, which is far less expensive.

Uninsured big cases: These are uninsured or underinsured people with cancer; accident victims; or expensive and difficult to treat, resource-consuming patients. The big cases cost money. There are not any easy ways around that, and you shouldn’t try to duck them or dump them, because they are not just lines on a balance sheet; they are humans. Your job is to get them the care they need — and then to find the funding necessary.

Good Ideas Abound

There are Medicaid at-risk contractors in this country who drive down utilization by a simple fiendish trick: They provide all the promised services, but at the most inconvenient places possible (far from bus lines, with the well baby care across the city from the OB or the ophthalmologist), with severely restricted hours and additional mazes of forms to fill out (and opportunities to tell the patient that they have to come back another time to get it right) and on and on. I am not sure how people who design such programs survive. One would think they would be eaten up in their sleep from an overwhelming sense of simple human shame.

More importantly, such designed inconvenience saves money only for the contractor, not for the health care system or the local and state governments, since these patients’ untreated problems do not go away; they simply show up in worse form later, in your ED.

The most fruitful ideas go in the opposite direction: Choose how much or how conveniently to treat different populations based not on how much they would make you if treated fee-for-service, but on how much they would cost you if you are at risk for the outcomes. This means that the more problems a patient has, the more you want to be their friend and partner in their care, the earlier you want to get to them, the more help you want to give them — whether they want it or not. If they are going to cost you money that could be better used to treat others, then driving down that cost is your problem.

First focus: Provide credible, convenient, affordable first-line clinic care for the most vulnerable populations, regardless of their ability to pay. Establish your own free clinics in partnership with doctors in your area. Partner with existing free clinics, providing them with funding, volunteers, paid staff, in-kind help or space to work. Find ways to help federally qualified community health centers in your area.

A large fraction of inappropriate and preventable ED visits and ambulance rides originate in convalescent homes with little or no onsite medical staff. In many towns (an example of which Ian Morrison detailed in a May 2012 column for the American Hospital Association’s H&HN Daily), these can constitute the great majority of all EMT use in a town.

Many of these patients are poor “dual eligibles” (covered by Medicare and Medicaid). Every time a resident feels dizzy or short of breath or is otherwise out of sorts, the standing policy is that the convalescent home staff simply dials 911 and ships the resident off to the ED. This practice not only costs vast amounts and overburdens local government, it’s bad for the patient’s health. At the same time, people who run convalescent homes often complain that they get no cooperation from the hospital at all, that dialing 911 is the only way to get the residents any medical attention.

A smart health system on an outcomes-based risk contract would do two things. First it would “forward-base” nurse practitioners in the convalescent homes from which they receive the most ED visits to triage patients’ problems on the spot and give them minimal treatment when that is all that is necessary, or to route them to treatment at the appropriate level of acuity. Second, it would establish or engage smart disease management programs with all of these patients.

The “smart” part is important. There are studies purporting to show that disease management does not save money. What they actually show is that so-called “disease management” programs conducted over the phone using scripts are worse than useless. Smart programs that use actual trained human beings in trusted face-to-face relationships with the patients, the patients’ caregivers and their doctors save a lot of money.

“Nurse-Family Partnerships” have existed in a number of places across the country for decades, usually funded by state and local governments. Nurses in NFPs aggressively seek out young pregnant women in the community for special help and fundamental education.

How fundamental? One article about a similar program was headlined, “Don’t put Mountain Dew in a baby bottle.” A recent long-term study showed that, over time, such programs reduce abuse, neglect, poisonings and accidents by half — problems that would end up in your ED. Counting those results as well as drops in arrests and other problems with both the children (up to age 18) and the mothers, the programs actually save governments considerable money. In fact, the return on investment (ROI) is 570 percent — every dollar a state or local government invests returns nearly $6 in savings.

Despite this high ROI, Nurse Family Partnerships have continually struggled to find funding. In the Next Health Care, in which health systems are often at risk for the health of populations, a smart health system would make a business out of it, finding a way to recoup some of that ROI.

Targeting the Sickest

In any population you serve, the top 5 percent of users of health care resources use half of all the resources. At any given moment most of those are in the grip of some powerful disease or have had some accident; they will die or get better soon, and will not be in that category next year. But 31 percent will still be there; they are mostly people with multiple, poorly managed chronic conditions.

The end of the tail is even steeper: The top 1 percent use 20 percent of all health care resources, and 14 percent of these are in that category year after year. If they are uninsured, or insured in a way that does not really compensate for all their care (such as Medicaid), you are in effect at risk for all the high-acuity care that their chronic conditions precipitate. If instead you put yourself at risk for their health by taking on a risk contract from the state for their Medicaid care (for example), you can actually profit from giving them far better care and attention.

You can form special case units specifically charged with caring for such customers. Call them Camden teams, after Jeffrey Brenner’s justly celebrated Camden Coalition of Health Care Providers, which showed that they could reduce the hospitalization costs of the “worst” patients by more than half by giving them constant attention. After years of trying, they finally won the right to some small portion of the tens of millions of dollars they were saving the state.

Other health systems, such as Spectrum Health of Grand Rapids, Mich., and AtlantiCare in Atlantic City, N.J., have established special clinics for these targeted populations of heavy users. Harvard’s Partners HealthCare is among the other systems piloting special at-risk programs for the heaviest users.

Using New Technologies

Cell phones, smart phones, tablets, apps — we tend to think of each new technology as it arises as the perquisite of high-end, tech-savvy users. Yet every communications ability has a far greater effect on the lives of poor people with fewer options. The Health 2.0 world burgeons with new devices and apps for connecting people with providers, bringing patients information and helping them help themselves.

Such devices can be expensive, and poor people may not be able to afford them, but consider this: If you are at risk for a population, preventing one unnecessary visit to the ED may save hundreds of dollars in costs; preventing several visits and hospitalization can save tens of thousands. Getting needy people networked with your organization may save you money, even if it means giving them smart phones or dedicated communication devices linked to your system.

The types of devices are rapidly proliferating. To take just one surprising example: The underserved are notorious for non-adherence, and the lack of adherence to drug regimens costs the system vast sums. The costs for HIV/AIDS, for instance, a disease that can be completely controlled with antiretrovirals, rise by an average of $30,000 per year per patient when the patient does not faithfully take the antiretrovirals. The antiretrovirals regimen has to be adjusted to fit the patient, but often patients just give up on them because of side effects, and multiple admissions and death can result.

Multidrug-resistant tuberculosis is completely curable, but the complete cycle of drugs must be taken. The only real solution up to now has been “directly observed therapy” (DOT) — the patient comes in, or the nurse goes to the patient, just to watch him or her take the pill.

The technology now being tested by the School of Public Health at the University of California, San Diego, is “wirelessly observed therapy” (WOT). The patient wears a patch. The pill contains a tiny, inexpensive, organic transmitter; when it is swallowed, it sends the patch a little pulse. Next time the patient’s cell phone is turned on and nearby, the patch tells an app on the cell phone, which then transmits the information to whomever the patient has selected, whether a friend, a caregiver or your nurse. If it’s your nurse, the nurse can track scores of patients and contact those (or the caregivers of those) from whom they have seen no pulse today.

New Sources of Funding

We can’t just give up and try to live off the crumbs that we are given by the present constricted climate. The key to finding new funding lies in the wastefulness of the current system: Failing to deal with the uninsured and underserved costs the health care system and its payers significantly more than doing it right. This waste turns into a cost not just for the programs dedicated to the poor and underserved, but for all payers, even private payers and employers. The payers include federal, state and local governments.

Master the methods and put together the infrastructure for doing it right, and put yourself in the risk position to profit from driving down the costs of this wasteful underservice. You should be able to attract risk contracts from those who pay for these populations directly (such as state and local governments). You should even be able to get some participation from businesses and health plans whose costs are indirectly affected by the added costs of not dealing smartly with underserved populations.

All health systems are in one way or another already at risk for the health and health costs of underserved populations. The Patient Protection and Affordable Care Act, when fully implemented, will cover the costs of some of those populations, but you will still be at risk for others. Health systems will be much better off if they stop being in denial of the problem, turn their chaotic at-risk situation into planned at-risk business models, and figure out how to turn the bottom line black on serving the underserved.

 

{ 3 comments… read them below or add one }

BobbyG September 30, 2012 at 10:03 am

Your seemingly encyclopedic knowledge aside, you also come across to me as the most charitable of thinkers out there.

Notwithstanding that you are right, both in economic and moral terms, regrettably, “serving the underserved” is viewed on some quarters (no need to name names) as “serving the undeserved.”

When I finally move to the Bay Area, one thing I plan on doing is helping out at the Glide clinic, and seeing what Doc Gurley has for me to do as well..

BTW, you’re probably already seen this, but

http://www.rwjf.org/en/about-rwjf/program-areas/quality-equality/strategy.html

Sensei.

Rick Brush October 3, 2012 at 8:44 am

Yes! Follow the current payment systems and incentives and it’s easy to see why nearly all of the country’s $2.7 trillion annual health care spend goes to downstream treatment. Yet there’s a real business case to be made for upstream prevention. Change the business case and we can change the money-flow.

We are beginning to see more interest in something we’ve called “Health Impact Bonds,” which provide funding for prevention in exchange for a share of future health care cost savings. Bond investors pay for proven programs that reduce illness, ED visits and hospitalizations (e.g., the “Camden teams” you describe), and government and private payers who benefit from lower costs repay investors only if the programs are successful. See http://collectivehealth.wordpress.com/2012/09/25/transformational-financing-requires-a-business-case/.

This could be one way for health providers to “make a living” serving the underserved.

Bill Barberg November 9, 2012 at 9:55 am

I hope you’re OK with me promoting this blog on LinkedIn and other sites. I think you nail it on the head. This is an issue we’re working to help hospitals and communities with, and I applaud your clarity.

Our upcoming Webinar is one of several that will share many practical tips and technologies to be successful in implementing a strategic business plan to address these populations. If you liked this article, I think you’ll really value this free Webinar:
http://insightformation.com/reduce-30-day-readmissions-through-collective-impact-heres-how/

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