While many organizations are struggling with just one piece of integration-either clinical or financial-HealthPartners seems to have every piece of the pie.

Aligning clinical and financial incentives across hospital, physicians, and payers has helped Bloomington, Minn.-based HealthPartners achieve a number of important benchmarks:

  • Ninety-eight percent positive patient satisfaction ratings
  • Total cost of care 10 percent below the statewide average
  • Improved physician satisfaction-up from the 25th to the 82nd percentile-based on an American Medical Group Association survey
  • Improved clinical productivity-up from the 33rd to the 63rd percentile-based on Medical Group Management Association standards
  • High performance in 10 of 12 primary quality measures in 2010

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Granted, in the race toward integration, HealthPartners is in the unique position of having many major players under one roof. As a health plan, HealthPartners covers more than 1.3 million lives in five Midwestern states with the largest contract network in Minnesota, with more than 15,000 physicians. As a delivery system, HealthPartners employs about 800 physicians (and 150 midlevel providers) via HealthPartners and Stillwater Medical Group, which include 70 medical clinics around Minneapolis-St. Paul. The health system also has a 454-bed teaching hospital.

However, there's another vital reason why HealthPartners is in rare air when it comes to clinical and financial integration: The IHI Triple Aim.

Launched by the Institute for Healthcare Improvement (IHI), the Triple Aim is the simultaneous pursuit of three goals:

  • Improving the experience of care
  • Improving the health of populations
  • Reducing per capita costs of health care

HealthPartners has adopted the Triple Aim as its vision and uses it in setting strategic goals and objectives. Leaders say the Triple Aim creates a cultural alignment, in which the hospital, physicians, medical group administrators, and payers are working on the same goals.

"It's a more holistic way of looking at care, and it really gets at value," says Nancy McClure, senior vice president, HealthPartners Medical Group and Clinics.

Tracking the Cost of Care

To achieve the last goal of the Triple Aim-reducing per capita costs for health care-HealthPartners actively compares and analyzes total cost of care among provider groups. For nearly a decade, HealthPartners has used the total cost index (TCI) for evaluating the costs of caring for a population, including inpatient and outpatient facility costs, physician care, medications, and other ancillary costs, such as lab tests and X-rays. HealthPartners has taken an additional step to make this information useful to providers by complementing the TCI with a total care resource use index (RUI). This approach isolates opportunities to improve price and resource use.

Clinics' and hospitals' TCI performance in the HealthPartners network is translated for consumers using a ranking of one to four dollar signs. One or two dollar signs mean performance is relatively better than the network average, and three to four dollar signs mean performance is relatively higher than the network average. These ratings, which are updated annually, are posted on HealthPartners.com so members can compare the overall cost of care at one clinic or hospital with another. Dollar rankings are always displayed with quality ratings of one to four stars. HealthPartners makes the information available in advance to providers and offers reports and consultations to support its improvement efforts.

For primary care, the TCI is calculated by dividing a provider's illness burden-adjusted total cost of care, per member per month (PMPM), by that of the peer group or network average. "We feel that TCI is what relates closest to PMPM premium costs," says McClure. "If we aren't able to show an impact on the total cost of care, we don't think we're credible to the market."

Specialty TCIs for cardiology, otolaryngology, obstetrics/gynecology, and orthopedics are based on a method using episode treatment groups, which pool together similar illnesses, such as chronic bronchitis.

Several factors are considered in the analysis:

  • Illness burden adjustment: This takes into account the illness burden of the population. HealthPartners uses Adjusted Clinical Groups software developed by Johns Hopkins University.
  • Case-mix adjustment: This takes into account the severity of cases treated by a provider.
  • Outliers: For primary care TCI, a $100,000 claim cost truncation limit is applied. For specialty TCI, very low and very high costs are excluded. For hospital stays, outliers are determined by length of stay.
  • Attribution: Cost ratings are calculated for the hospital or the medical group in which a provider practices. They are not specific to the individual physician or provider.

McClure concedes that many individual physicians might not understand the TCI measure. "In a group practice setting, our physicians and administrators analyze performance at the system level. We don't just hand the data to the individual doctor and expect them to figure out what to do with it," she says. "We spend much more time at the macro level translating the data into high-leverage strategies that will make an impact."

One example of a macro-level project: HealthPartners recently introduced a radiology decision-support tool online and embedded in the group's electronic medical record. The tool "rates" high-tech diagnostic tests on its utility. If a physician orders a low-utility test, it offers evidence-based alternatives. The tool was developed by HealthPartners and then shared with the entire network. In its first full year of operation, the program reduced the number of unnecessary high-tech images by 7,000 and cut costs by $6.6 million over what would have been spent without the program.

As an organization, HealthPartners aims for a low-margin target, between 2 and 3 percent, says McClure. By keeping a low-margin target, the system has more control managing its fee schedule, which has a significant impact on containing the total cost of care, she adds, because unit price is a large driver of total cost.

Improving Quality

HealthPartners' strategic roadmap, known as Partners for Better Health Goals 2014, reflects the Triple Aim and focuses on three areas: health quality, patient experience, and affordability.

These goals, which are set deliberately high, address the health of the community, not just patients and members. In addition, reducing disparities in health care is an organizational priority, and HealthPartners was able to decrease the gap in breast cancer screening rates between woman who are white and of color from 12.4 percent to 5.4 percent. HealthPartners also publicly reports clinical results that show how individual medical groups measure up on key care processes and outcomes.

Tying MD Compensation to Aligned Goals

To help ensure physician collaboration in achieving Triple Aim goals, HealthPartners uses a pay-for-performance approach.

For its employed medical group, HealthPartners uses the following compensation structure: About 85 percent of primary care physicians' compensation is based on production, while 15 percent is based on Triple Aim measures, such as metrics related to quality, patient experience, and total cost of care.

"We are also testing new models that will better support phone and e-care, as well as care coordination," says McClure.

HealthPartners also uses Triple Aim goals to create pay-for-performance programs with its contracted network of aligned-but not employed-physicians. In 2011, two-thirds of members receive care from a provider group with a Triple Aim agreement (including total cost of care). The model includes a target, with withholds and shared savings tied to total cost, quality, and experience goals.

Contracting with Other Payers

Since the late 1990s, HealthPartners Medical Group has been multipayer, with the HealthPartners plan accounting for about 65 percent of revenue.

"Our goal is to have alignment among our various payer contracts," says Tricia Mason Dege, vice president, finance and planning. "We focus on measures that are used by Minnesota Community Measurement, our state's measurement collaborative among plans and medical groups."

Having alignment means that doctors and care teams can focus on key areas without needing to delve into the details of what different payers may focus on. Only a few administrators know exactly how much money might be tied to an initiative. "We do that intentionally to avoid confusion," says Mason Dege. "We really want providers to be focused on key measures, regardless of the dollars that are attached."

Mason Dege adds that the finance department has become a clearinghouse for knowledge on withholds and incentives that are available from payers. "That is becoming a bigger and bigger job, as payers are moving away from payment based on RVUs (relative value units) or some other form of straight, widget payment based on everything you do," she says.

Unlike a quality metric like optimal diabetes, the methodology for a measure like TCI is not the same for each payer. "We take on the role of understanding and validating that methodology," says Mason Dege. "If there are nuances that will make that easier or more difficult to hit, we can help the organization understand how that might be different from payer to payer."

Lessons Learned from Integration

When trying to align physicians with broader organization goals, McClure and Mason Dege offer this advice for other organizations:

  • To redesign care, physicians and administrators need to work together to create a culture that is aligned with the Triple Aim.
  • Use an electronic medical record, but don't expect it to do everything needed to redesign care. It can support care design, but it can't drive it.
  • Encourage groups to use the TCI measure at the practice level to help identify waste in operations. Besides managing quality, they should review operations to manage price.
  • Recognize that unit price and TCI will likely be important in future delivery models, such as accountable care organizations.
  • When it comes to creating behavior change, making data transparent is a key strategy that is overlooked. It can be as much of a driver as compensation.

Interviewed for this article:

Nancy McClure is senior vice president, HealthPartners Medical Group and Clinics, Bloomington, Minn. (nancy.a.mcclure@healthpartners.com).

Tricia Mason Dege is vice president of finance and planning, HealthPartners, Bloomington, Minn. (tricia.l.dege@healthpartners.com).

This article originated from a presentation by McClure and The Chartis Group, LLC, Chicago, at the American College of Healthcare Executives meeting in March 2011.

Publication Date: Monday, August 29, 2011