November 1, 2011

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Article

Healthcare

Allison Johnson

November 1, 2011

HOWARD: Two different things have been borne out of that scenario. One is concierge service, physician programs, where physicians will contract with larger employers and offer their services to the employees on a regular basis. Any time, night or day, that physician is available to employees via phone call, email and text.

The second thing is onsite wellness clinics that are popping up among large employers that want a small clinic set up where a physician can provide care to all the employees in that company and their dependents.

HURST: I agree this is a growing trend. Traditionally, it’s been with the larger employers, greater than maybe 2,000 employees. Onsite clinics were initially put in place for a matter of convenience. It was nice to be able to provide a central location for those employees who just had a sore throat and wanted to get access to care and go back to work, or whatever condition or symptom they were experiencing.

In the marketplace now, we’re consulting with clients and working with onsite clinical organizations, getting down to employers as small as 200. We’re currently working on a new model with an employer of 200 employees, and they are actually taking care of 70 percent of the primary care for the employees and their dependents for half the cost of what they would pay in the traditional market.

HASBROUCK: This is a value versus volume change in payment, because it’s paying for a population versus paying for each widget that comes through. So it’s an example of payment reform.

A quick comment about if the mandate goes through and more people start to come in. I’m presenting this in a two-sided way. I’m on the board of the high-risk pool, which we’ve had for 18 years to help protect the individual market, and that’s been supported by some state taxpayer funds. The medical loss ratio on that population is very steady over time, about 150 percent. So now we’ve taken on the federally mandated high-risk pool. Individual mandate is on that same board, and we have about a year’s worth of experience on that.

So there’s no waiting period, there’s no pre-existing conditions. In this non-mandated frame, people can apply for insurance when their house is on fire, so to speak. The medical loss ratio for that population so far is about 750 percent. In terms of burden of illness, it’s a little bit more than the high-risk pool, from an actuarial perspective. But just the fact that it’s so freely accessible when you’re already sick—it’s just been interesting to watch that pool play out.

During the economic crisis, the university medical school’s funding was cut so they lost 20 education slots. So we have 20 fewer physicians coming through the pipeline even now.

WIRTHLIN: In 2008, the school of medicine was hit by a double-whammy where funds that the school and the state relied on that came through a Medicaid match were discontinued, so that was a loss of $10 million. That was in addition to the other cuts that came as part of the state’s need to reduce budgets. So we do have 20 seats lost.

The state has been in an impossible situation. There just have not been the revenues to replace those funds. And we do need to increase the class size, we need to expand it.

But there’s another issue that you may not be as aware of related to physician workforce that is equally as critical, and that is the residency slots. We need to expand the number of residency slots we have in this state, and that’s a federal issue. In 1997, the federal government put a cap on all residency slots, meaning you couldn’t receive any federal funds for training more residents over and above your cap. You could go ahead and educate more residents, but you would have to fully fund that residency training through the clinical revenue.

At the federal level, there has been a move to expand residency slots. There’s legislation that would expand residency slots by 50 percent. This is really important because what we found is that students tend to stay and practice medicine where they do their residency.

SANPEI: When we talk about shortfalls of $200 million or $500 million, usually we’re not taking the amount of dollars we’re giving to the healthcare community today and reducing it by that much. What we’re talking about is the differential between the amount of dollars that we’re currently providing to the healthcare community and the expected dollars that are needed given the increase in Medicaid and the trajectory of cost growth that we’ve been on.

So the goal of the state is to curb that cost trajectory and get it something closer to CPI. Imagine that: healthcare being reimbursed at CPI. But we’re trying to get it closer to those levels. What it requires is a collaborative effort. Providers are going to have to figure out ways to do all the things we’ve been talking about: onsite clinics and shared opportunities. Physicians, as well as patients and employers—everybody’s got to feel like they’re part of this and moving collectively towards a solution.

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