Scott MacStravic, PhD
Back in the late 1960s, when I worked at the American Rehabilitation Foundation, its prime mover and medical director, Paul Ellwood, was already forging the foundation for what became the “Health Maintenance Organization” model, which received federal government approval and support by the Nixon administration in the early 1970s. The “HMO” originally meant “Health Management Organization,” but this sounded a bit too controlling to some, and it was changed to “maintenance” at the last minute.
The original idea really meant that the health of populations should be managed as well as maintained, with major savings to third-party payors coming from reductions in the incidence and prevalence of disease and injury. Instead, when HMOs got going, they ended up mainly looking for savings through the far simpler device of paying providers less for treating the disease and injury already available. Lip service was paid to prevention and wellness, but even this became less of a focus over time, presumably because its payoff was both uncertain an in the future, where HMOs wanted certain savings right now.
But here we are in the 21st century, forty years later, and revisiting the “health management” idea once again. Actually the idea has been used in practice by many employers, in the form of “worksite wellness” programs addressing overall health and disease/injury prevention since for at least a few decades. And it has been used by insurers, mainly in the form of chronic disease management, since this proactive approach pays off fairly quickly and often in dramatic terms, such as the often 30-50% reduction in medical care costs among well-managed CHF patients.
Gradually, these two ends of the health management continuum are moving toward each other, as employers recognize the full benefits of addressing the “total health” of their employees, and insurers, even CMS’s Medicare and Medicaid programs, recognize the same benefits with respect to their beneficiaries. Commercial insurers are joining in as their employer clients demand it, or when the insurers see competitive advantages in including employee health management in their health plans, or offering it as a separate source of revenue.
Healthcare organizations, after devoting almost all their efforts and gaining almost all their revenue from sickness care have also begun looking at health management, as both a mission and a margin investment. Many offer modest prevention efforts as “community benefit” proof of their worthiness for charitable tax exemptions. Others operate programs of proactive management of frail populations to deliver a combination of patient benefits and financial performance improvements by reducing the numbers of unprofitable patients they serve. And others operate disease management programs as mission investments, despite not being able to generate enough revenue to make them self-sustaining.
But in an interesting example of going back to the past for a new idea, Gilliard Health Services, a two-facility rural hospital system headquartered in Montgomery, Alabama, is pursuing the development of a “Rural Health Improvement Model” (RHIM) that envisions precisely what HMOs were originally intended to be. It calls for operation under a “pay-for-performance” arrangement, where “performance” means measurably improving the health of the population served and reducing the costs of sickness care for that population. [G. McKenzie “The Rural Health Improvement Model (RHIM): A Prescription for Pay for Performance (Version 5)” Gilliard Health Services June 2006 (gmckenzie@medicalpropertiestrust.com)]
The RHIM is based on its author’s conclusion: “…that if hospitals want to be successful over the long-term they need to expand their mission to become responsible for the health status of their service area population…,” and that: “Taking responsibility for and being successful at health status maintenance and improvement appears to be a more timeless reason for existence…” It anticipates taking on; “…the proactive responsibility for taking care of healthy people and the intervention in an individual’s health management and improvement…”.
The model proposes the merger of three or four of the hospitals currently serving a rural population of 35-40,000 people in a large area about one hour’s drive from Mobile, Alabama, and working with local Federally Qualified Health Clinics, as well as the private physician community. Its major innovation would be the formation and operation of a Health Improvement Department, staffed by enough Health Improvement Professionals to serve the population, with a preliminary estimate of roughly 500 people per professional. These professionals would be personal health manager/coaches for their charges, and work on whatever mix of diseases, risks, and other health challenges each presents.
Clearly, any attempt at significant healthcare reform will have to engage all the stakeholders in the “system” in order to work. The RHIM approach at least does that, and thanks to a relatively small number of stakeholders, may represent a “natural experiment” that the rest of the country can look at for ideas on what does and doesn’t work. At a minimum, it should be interesting to watch a small rural area test a “solution” that could not possibly be agreed to and implemented so easily in the major urban areas to which we normally look for solutions to major problems.
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