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CareMore has Found a Winning Business Model in Population Health Management

June 18, 2013
by Rajiv Leventhal
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Case study at HFMA annual conference reveals a model that has improved care and lowered costs
From L:R - Zachary Hafner, Scott Mancuso, M.D., Brendan Baker

To better manage all aspects of health from wellness to complex care, healthcare organizations are increasing their focus on raising the quality of care, improving care coordination across all care settings, and applying this approach over a much longer period than that of a single episode of care.

And that is an approach that ties into healthcare moving from a volume to value-based model, as the value market will grow from $232 billion to $3.7 trillion by 2025, said Zachary Hafner, principal at consulting firm Oliver Wyman, who along with two CareMore executives, spoke to an engaged crowd on June 17 at the Healthcare Financial Management Association’s (HFMA) annual conference in Orlando, Fla.  “Very few people are buying healthcare based on value today, but if you look 10 years ahead, 70 percent or so will be. The old model won’t work anymore,” he said.

Creating winning business model in population health management can be challenging, but Hafner feels that CareMore, a Cerritos, Calif.-based Medicare healthcare company that provides the Medicare Advantage plan to its members in California, Nevada, Arizona, New York, and Virginia, is “a true shining example for successful population health management.”

CareMore, which was acquired by WellPoint, one of the nation’s largest health insurers, in 2011 for $800 million, has developed a clinical model that promotes wellness, has expertise in multiple chronic disease management, and uses a reimbursement model that includes pay for performance incentives.

CareMore’s intent is to focus on the frail and ill (the 20 percent who drive 60 percent of the healthcare cost), address the complex problems of aging through innovative health care approaches, and protect the precious financial resources of seniors and the Medicare program by managing chronic disease, frailty, and end-of-life care.

Once seniors enroll in CareMore, they are encouraged to have a one-hour “Healthy Start” visit at a CareMore Care Center with a medical assistant and nurse practitioner.CareMore members are encouraged to maintain relationships with their primary care providers (PCPs), with the Care Center providing enhanced wrap-around care when needed, said Brendan Baker, CareMore’s chief financial officer.

For example, one-third of CareMore’s members are diabetics, so programs have been set up at the CareMore Care Center, a one-shop stop for patients. “We bring those [diabetic] patients in to teach them how to take insulin. Then, they’ll be brought back in for observation purposes.  They will be put on a training diet with an exercise program (all CareMore patients have access to a free gym membership with personalized coaching). We provide them with education and information for controlling blood sugar along with diabetes support groups, nutritional education and counseling,”

The team also includes behavioral health professionals and extensivists who visit members in the hospital, but also provide pre-operative and post-hospital care. In addition, extensivists provide ongoing support for members with complex chronic conditions that require frequent evaluation and follow-up from a multidisciplinary team. A customized electronic health record system with dashboard clinical summaries simplifies communication between CareMore team members and community PCPs, said Baker.

And according to Scott Mancuso, M.D., senior medical officer at CareMore, the care managers at CareMore don’t just “check boxes on a computer screen, but instead, they dig.” They check up with patients at their homes, asking questions they already know the answers to, just to make sure the patient knows as well. “They also keep close communication with family members,” Mancuso said, adding that CareMore even drives special care patients to and from the center. “What’s more costly, a $50 car ride or a hospital visit?” Mancuso asked.

And the results at CareMore are impressive. Their readmission rates are approximately 12 percent (within 30 days of discharge), with its population in Phoenix as low as 6 percent, compared to the overall Medicare population, at 20 percent. “Does this mean we have better doctors?” asked Mancuso. “Perhaps, but it’s more about our model.”

This has also led to reduced hospitalization for 56 percent of CareMore’s congestive heart failure (CHF) patients. CareMore’s lower rate of spending is partly due to their patients having fewer hospital bed days as well.

“The problem with the old model is that patients with serious conditions are seeing so many doctors,” said Mancuso. This leads to poorly managed and redundant care, which, in turn, increases cost and death rate. “But at CareMore, we’ll tell those specialists that we will call you if we need you, and that greatly lowers costs. And if we do need them, we call them on their cell phones and tell them exactly what is going on and what the patient needs. We don’t use doctor’s notes for that.”

Hafner said he gets a lot of questions about the economics behind the costs of creating a model like CareMore’s. “I respond by saying that it’s an opportunity to make money. Over the last decade, innovators have invented and refined new care models for every patient population across the country. They have two things in common: 25 percent better outcomes and 20 percent lower costs. And their stories have richly informed our roadmap, helping us understand that change is already underway.”