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At Memorial Hermann, a Bold Push into the Provider-Sponsored Health Plan World

November 6, 2016
by Mark Hagland
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Neil Kennish of Memorial Hermann Health System discusses his organization’s PSHP
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In the early and mid-1990s, the leaders of many U.S. hospital systems plunged headlong into developing provider-sponsored health plans (PSHPs), with decidedly mixed results. While a relatively small number of those health plans did well and were maintained in the decades that have followed, many others floundered. Among the reasons that so many failed: a lack of alignment between the sponsoring hospital systems and their physicians; an inability to fully align the incentives of any health plan to optimize utilization with the incentives of nearly all hospitals back then to maximize inpatient utilization; a lack of strong, visionary leadership; awkward governance and management structures; and core deficits both in terms of the data and information systems needed to support and facilitate PSHP operations, and the data analytics capabilities, both technological and human, to facilitate the optimization of PSHP processes.

A lot has changed since then, of course. And with the intense push on the part of the federal, state, and private purchasers of healthcare to force improved cost control and enhanced patient outcomes; and with tremendously improved data, information systems, and data analytics tools, the landscape is profoundly different now for the leaders of patient care organizations.

One organization that has made a success of the provider-sponsored health plan proposition so far has been the Houston-based Memorial Hermann Health System, which has a health plan with over 75,000 members. The health plan was created back in 2011, when the health system bought a preferred provider organization (PPO). Since then, the growth of the health plan has been strong, with individual and group commercial plan offerings, as well as Medicare Advantage.

Separately, Memorial Hermann leaders have also been boasting about the fact that the Memorial Hermann Accountable Care Organization (MHACO) has been ranked as the top-performing ACO for three years running, in the Shared Savings Program (MSSP), sponsored by the Centers for Medicare and Medicaid Services (CMS), through the Medicare program. In three years of participation in the program, according to Memorial Hermann officials, the MHACO has generated a total savings of nearly $200 million. As a Memorial Hermann spokesman noted, the success of ACOs is particularly important in Texas—a state whose government has rejected Medicaid program expansion under the Affordable Care Act (ACA), and where, according to the U.S. Census Bureau, nearly 10 percent of Harris County (the largest county in Texas) residents currently are over the age of 65; what’s more, the spokesman noted, by 2050, nearly one in five Texans will be senior citizens. The MSSP ACO is run through the provider organization, not the health plan; but the same kinds of efforts to provide care management and leverage data to improve outcomes are evolving forward in parallel at the health plan and at the ACO.

Meanwhile, as an integrated health system, Memorial Hermann is the largest not-for-profit health system in Southeast Texas. The system, with more than 24,000 employees, serves Southeast Texas and the Greater Houston community.  Memorial Hermann’s 14 hospitals include four hospitals in the Texas Medical Center, a hospital for children, a rehabilitation hospital and an orthopedic and spine hospital; nine suburban hospitals; and a second rehabilitation hospital in Katy.


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Recently, Neil Kennish, an associate vice president at Memorial Hermann Health System who helps manage the Memorial Health System Health Plan, spoke with Healthcare Informatics Editor-in-Chief Mark Hagland regarding Memorial Hermann’s progress in this area. Below are excerpts from that interview.

How many members are in the Memorial Hermann Health Plan?

As of today, we’re at about 75,000 members.

And which insurance products do you offer?

We offer individual and group commercial and Medicare Advantage plans.

What proportion of each?

Over 90 percent of our membership is in our commercial plan.

How long has your plan been in existence?

It’s been an interesting journey. Memorial Hermann acquired our PPO license back in 2011. And we’ve been quietly trying to grow our book of business until 2014, when we started to get more aggressive. I took over Sales and Marketing in the fall of 2014, and we were at about 45,000 members, and we’re at 75,000 members.

What have been the biggest challenges and opportunities as a provider-sponsored plan in the Houston market?

First and foremost, provider-sponsored plans are limited by the health system behind them. And even though we’re the leader in our market as a provider, we’re at about 25 percent. And if you take an average group, the disruption factor could be 60-80 percent, as far having to find new providers. So the challenge is making the network robust enough so that people won’t feel limited, but also of value in terms of price point. In contrast, with direct-to-consumer, whether individual or Medicare Advantage, it’s easier to convince people. With a group, the administrator of that group plan is having to decide for a bunch of people.

Are there some broad tensions in the strategic goals between the plan and the health system?

I wouldn’t say there are tensions; I would say it involves striking a balance. And the health system is trying to migrate away from fee for service and towards a population health-driven system. And that’s one of the reasons they’ve gotten involved in a health plan. That’s an underpinning strategy for all provider-sponsored plans.

How is that working in relations between the plan and the physicians?

Houston is pretty much a zero-dollar premium market—the monthly Medicare Advantage plan is zero dollars; the Medicare Advantage plan is not collecting a premium from members. You’re just getting the care delivery that you would get from CMS. In contrast, with commercial, members are paying hundreds of dollars a month to the health plan. So on the commercial side, it’s a lot easier, because both parties can benefit. On Medicare Advantage, there’s not that upfront revenue you can get. But you can focus on satisfaction. So from a revenue standpoint, the health plan just doesn’t get that upfront premium revenue.

What has the physician satisfaction or interaction been like, with the health plan?

On the whole, it’s been very favorable. Whether they’re employed by the health system or not, they’ve been pleased. It creates a tighter integration between care delivery and the health plan; it’s all one family working together.

What kinds of data are you providing to physicians on their clinical and financial outcomes?

There are HIPAA restrictions about what we can and cannot share with providers, so we have to walk a very fine line in terms of what can be shared outside the walls of the health plan. And if we see something on our side, we may not be able to share the specific data, but if we have an issue around, say, a high preponderance of diabetics, we can convene a meeting with the physician organization to say, alright, let’s figure out if we can put together a program for the physicians. And we’re all in the same building, and it’s easy to get together. There are limitations over what we can share; there are times when we can share direct feeds, but that’s situational, and we always adhere to HIPAA concerns and rules and regulations.

What kinds of care management, disease management, and population health management programs do you have?

We’re in the process as a plan of trying to integrate care management across the health system and health plan. That integration project is in its early stages, but that’s a really unique thing that Memorial Hermann is trying to do is to centralize care management for the health system, provider organization, and health plan; previously, we had care managers within all three organizations, but not coordinated. And by trying to centralize that within one unit, we can do a much better job on that, and we’re starting down that path now.

What do you expect your growth will be in terms of membership in the next year or two?

Our next milestone would be to surpass 100,000 members. And on the individual side in 2016, we went from fewer than 200 members to over 8,000; that’s phenomenal growth. And part of that was due to the technology platform we established—an online enrollment system that would allow for self-service enrollment, in less than 20 minutes. And then on the Medicare Advantage side, we’re two years into it, and 2017 will be our third year, and we got over 5,5000 MA members in our plan within two years—so whether under 65 in the ACA plans or over 65 in our Medicare Advantage plans. And I would add that the technology piece is what’s a game-changer as far as enrollment. I think the industry is really starting to rally round online tools and platforms, to engage with members. And ultimately, having a truly integrated online platform that members can access and enroll in, and make changes to their plans in—that’s a real opportunity to leverage technology.

At the Memorial Hermann Health Plan, are you connected to the health system’s MSSP ACO?

The ACO is a core component in our network, but it rolls up through our provider organization.

What do healthcare IT leaders on the provider side need to know, as their organizations consider developing a provider-sponsored plan?

The point of technology is to make life easier, right? And to CIOs whose organizations are considering provider-sponsored plans, making sure that the infrastructure is in place and is scalable, is important. We had added 4,5000 members in two years, and a lot of that base was employees. Meanwhile, our outside membership, non-employees, more than doubled. So you have to make sure that the technology infrastructure is scalable, to take advantage for growth. I used to work at Cigna before I joined Memorial Hermann, and there’s truly a niche out there to truly come in and have a meaningful impact on a local market. And with Aetna acquiring Humana and Anthem acquiring Cigna, you’re talking about a few big players, and having regional players being viable, is even more important than it ever was.

Is there anything else you’d like to add?

I think that the one other piece of advice that I would give to people with plans in early stages, is that the branding piece is really important. And arguably, our best asset at Memorial Hermann is our brand. And when they announced the plan, they branded it MHealth, for Memorial Hermann, but the market didn’t really understand that. So we rebranded it around Memorial Hermann, and we’re Memorial Hermann Health Plan, and that made sense. So, it meant leveraging the strength of the brand. And the provider-sponsored health plans that are doing well tie everything together in a consistent way under one unified brand.


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NCQA Moves Into the Population Health Sphere With Two New Programs

December 10, 2018
by Mark Hagland, Editor-in-Chief
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The NCQA announced on Monday that it was expanding its reach to encompass the measurement of population health management programs

The NCQA (National Committee for Quality Assurance), the Washington, D.C.-based not-for-profit organization best known for its managed health plan quality measurement work, announced on Dec. 10 that it was expanding its reach to encompass the population health movement, through two new programs. In a press release released on Monday afternoon, the NCQA announced that, “As part of its mission to improve the quality of health care, the National Committee for Quality Assurance (NCQA) is launching two new programs. Population Health Program Accreditation assesses how an organization applies population health concepts to programs for a defined population. Population Health Management Prevalidation reviews health IT solutions to determine their ability to support population health management functions.”

“The Population Health Management Programs suite moves us into greater alignment with the focus on person-centered population health management,” said Margaret E. O’Kane, NCQA’s president, in a statement in the press release. “Not only does it add value to existing quality improvement efforts, it also demonstrates an organization’s highest level of commitment to improving the quality of care that meets people’s needs.”

As the press release noted, “The Population Health Program Accreditation standards provide a framework for organizations to align with evidence-based care, become more efficient and better at managing complex needs. This helps keep individuals healthier by controlling risks and preventing unnecessary costs. The program evaluates organizations in: data integration; population assessment; population segmentation; targeted interventions; practitioner support; measurement and quality improvement.”

Further, the press release notes that organizations that apply for accreditation can “improve person-centered care… improve operational efficiency… support contracting needs… [and] provide added value.”

Meanwhile, “Population Health Management Prevalidation evaluates health IT systems and identifies functionality that supports or meets NCQA standards for population health management. Prevalidation increases a program’s value to NCQA-Accredited organizations and assures current and potential customers that health IT solutions support their goals. The program evaluates solutions on up to four areas: data integration; population assessment; segmentation; case management systems.”



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At the D.C. Department of Health Care Finance, Digging into Data Issues to Collaborate Across Healthcare

November 22, 2018
by Mark Hagland, Editor-in-Chief
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The D.C. Department of Health Care of Finance’s Kerda DeHaan shares her perspectives on data management for healthcare collaboration

Collaboration is taking place more and more across different types of healthcare entities these days—not only between hospitals and health insurers, for example, but also very much between local government entities on the one hand, and both providers (hospitals and physicians) and managed Medicaid plans, as well.

Among those government agencies moving forward to engage more fully with providers and provider organizations is the District of Columbia Department of Health Care Finance (DHCF), which is working across numerous lines in order to improve both the care management and cost profiles of care delivery for Medicaid recipients in Washington, D.C.

The work that Kerda DeHaan, a management analyst with the D.C. Department of Health Care, is helping to lead with colleagues in her area is ongoing, and involves multiple elements, including data management, project management, and health information exchange. DeHaan spoke recently with Healthcare Informatics Editor-in-Chief Mark Hagland regarding this ongoing work. Below are excerpts from that interview.

You’re involved in a number of data management-related types of work right now, correct?

Yes. Among other things, we’re in the midst of building our Medicaid data warehouse; we’ve been going through the independent validation and verification (IVV) process with CMS [the federal Centers for Medicare and Medicaid Services]. We’ve been working with HealthEC, incorporating all of our Medicaid claims data into their platform. So we are creating endless reports.


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Kerda DeHaan

We track utilization, cost, we track on the managed health plan side the capitation payments we pay them versus MLR [medical loss ratio data]; our fraud and abuse team has been making great use of it. They’ve identified $8 million in costs from beneficiaries no longer in the District of Columbia, but who’ve remained on our rolls. And for the reconciliation of our payments, we can use the data warehouse for our payments. Previously, we’d have to get a report from the MMIS [Medicaid management information system] vendor, in order to [match and verify data]. With HealthEC, we’ve got a 3D analytics platform that we’re using, and we’ve saved money in identifying the beneficiaries who should not be on the rolls, and improved the time it takes for us to process payments, and we can now more closely track MCO [managed care organization] payments—the capitation payments.

That involves a very high volume of healthcare payments, correct?

Yes. For every beneficiary, we pay the managed care organizations a certain amount of money every month to handle the care for that beneficiary. We’ve got 190,000 people covered. And the MCOs report to us what the provider payments were, on a monthly basis. Now we can track better what the MCOs are spending to pay the providers. The dashboard makes it much easier to track those payments. It’s improved our overall functioning.

We have over 250,000 between managed care and FFS. Managed care 190,000, FFS, around 60,000. We also manage the Alliance population—that’s another program that the district has for individuals who are legal non-citizen residents.

What are the underlying functional challenges in this area of data management?

Before we’d implemented the data warehouse, we had to rely on our data analysis and research division to run all the reports for us. We’d have to put in a data request and hope for results within a week. This allows anyone in the agency to run their own reports and get access to data. And they’re really backed up: they do both internal and external data reports. And so you could be waiting for a while, especially during the time of the year when we have budget questions; and anything the director might want would be their top priority.

So now, the concern is, having everyone understand what they’re seeing, and looking at the data in the same way, and standardizing what they’re meaning; before, we couldn’t even get access.

Has budget been an issue?

So far, budget has not been an issue; I know the warehouse cost more than originally anticipated; but we haven’t had any constraints so far.

What are the lessons learned so far in going through a process like this?

One big lesson was that, in the beginning, we didn’t really understand the scope of what really needed to happen. So it was underfunded initially just because there wasn’t a clear understanding of how to accomplish this project. So the first lesson would be, to do more analysis upfront, to really understand the requirements. But in a lot of cases, we feel the pressure to move ahead.

Second, you really need strong project management from the outset. There was a time when we didn’t have the appropriate resources applied to this. And, just as when you’re building a house, one thing needs to happen before another, we were trying to do too many things simultaneously at the time.

Ultimately, where is this going for your organization in the next few years?

What we’re hoping is that this would be incorporated into our health information exchange. We have a separate project for that, utilizing the claims data in our warehouse to share it with providers. We’d like to improve on that, so there’s sharing between what’s in the electronic health record, and claims. So there’s an effort to access the EHR [electronic health record] data, especially from the FQHCs [federally qualified health centers] that we work closely with, and expanding out from there. The data warehouse is quite capable of ingesting that information. Some paperwork has to be worked through, to facilitate that. And then, ultimately, helping providers see their own performance. So as we move towards more value-based arrangements—and we already have P4P with some of the MCOs, FQHCs, and nursing homes—they’ll be able to track their own performance, and see what we’re seeing, all in real time. So that’s the long-term goal.

With regard to pulling EHR information from the FQHCs, have there been some process issues involved?

Yes, absolutely. There have been quite a few process issues in general, and sometimes, it comes down to other organizations requiring us to help them procure whatever systems they might need to connect to us, which we’re not against doing, but those things take time. And then there’s the ownership piece: can we trust the data? But for the most part, especially with the FHQCs and some of our sister agencies, we’re getting to the point where everyone sees it as a win-wing, and there’s enough of a consensus in order to move forward.

What might CIOs and CMIOs think about, around all this, especially around the potential for collaboration with government agencies like yours?

Ideally, we’d like for hospitals to partner with us and our managed care organizations in solving some of these issues in healthcare, including the cost of emergency department care, and so on. That would be the biggest thing. Right now, and this is not a secret, a couple of our hospital systems in the District are hoping to hold out for better contracts with our managed care organizations, and 80 percent of our beneficiaries are served by those MCOs. So we’d like to understand that we’re trying to help folks who need care, and not focus so much on the revenues involved. We’re over 96-percent insured now in the District. So there’s probably enough to go around, so we’d love for them to move forward with us collaboratively. And we have to ponder whether we should encourage the development and participation in ACOs, including among our FQHCs. Things have to be seen as helping our beneficiaries.

What does the future of data management for population health and care management, look like to you, in the next several years?

For us in the District, the future is going to be not only a robust warehouse that includes claims information, vital records information, and EHR data, but also, more connectivity with our community partners, and forming more of a robust referral network, so that if one agency sees someone who has a problem, say, with housing, they can immediately send the referral, seamlessly through the system, to get care. We’re looking at it as very inter-connected. You can develop a pretty good snapshot, based on a variety of sources.

The social determinants of health are clearly a big element in all this; and you’re already focused on those, obviously.

Yes, we are very focused on those; we’re just very limited in terms of our access to that data. We’re working with our human services and public health agencies, to improve access. And I should mention a big initiative within the Department of Health Care Finance: we have two health home programs, one for people with serious mental illness issues, the other with chronic conditions. The Department of Behavioral Health manages the first, and the Department of Health Care Finance, my agency, DC Medicaid, manages the second. You have to have three or more chronic conditions in order to qualify.

We have partnerships with 12 providers, in those, mostly FQHCs, a few community providers, and a couple of hospital systems. We’ve been using another module from HealthEC for those programs. We need to get permission to have external users to come in; but at that point, they’d be able to capture a lot of the social determinants as well. We feel we’re a bit closer to the providers, in that sense, since they work closely with the beneficiaries. And we’ve got a technical assistance grant to help them understand how to incorporate this kind of care management into their practice, to move into a value-based planning mode. That’s a big effort. We’re just now developing our performance measures on that, to see how we’ve been doing. It’s been live for about a year. It’s called MyHealth GPS, Guiding Patients to Services. And we’re using the HealthEC Care Manager Module, which we call the Care Coordination Navigation Program; it’s a case management system. Also, we do plan to expand that to incorporate medication therapy management. We have a pharmacist on board who will be using part of that care management module to manage his side of things.



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