Purchasing High Performance Archive

Purchasing High Performance is a bulletin for employers and others interested in promoting value in health care. It is produced in partnership with the National Business Coalition on Health.

  • March 25, 2011 Issue
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Boeing’s Nurse Case Managers Cut Per Capita Costs by 20 Percent

By Brian Schilling

Doug McLaren has been an engineer and business analyst in Boeing's commercial aircraft division for the past 31 years. It's a job he enjoys and is good at, but for the past 20 years, he's also taken on an unwanted second job: managing a chronic pulmonary disease. The illness, he says, is well-controlled, but a constant burden and worry just the same.

"It's tough to stay on top of all the various things I'm supposed to being doing to stay well," McLaren said. "It's hard on me, but also on my wife, who hadn't really planned on having to comanage my condition on a day-to-day basis, along with raising our children and growing her own career."

Three years ago, McLaren's wife got a welcome reprieve. In 2007, McLaren enrolled in a Boeing pilot program called the Intensive Outpatient Care Program (IOCP), which was the aircraft manufacturer's unique variant of the much-talked-about patient-centered medical home (PCMH). The central idea of the medical home is to match each patient with a single doctor and nurse who are responsible for engaging the patient in his or her care, improving access to primary care, tracking patient progress on a mutually agreed-upon care plan, and coordinating care among various practitioners.

In McLaren's case, the nurse was Connie Horton, on staff at Virginia Mason Medical Center in downtown Seattle. For Horton, the work of managing McLaren and about 100 other patients' health was among the most rewarding of her career. "This was a great program," she said. "After a year of intensively managing people through the IOCP program, we started to see many getting healthier, getting more engaged in their care, taking better care of themselves. People's risk factors went way down."

McLaren agrees. "She did a wonderful job," he said. "For two years I didn't have to stress out about my health every day and I still never missed a test or an appointment. She was always there reminding me of what I needed to do. It helped my wife and I become more confident in my treatment program, which made a real difference in my health and peace of mind."

Boeing's Approach
The Boeing pilot, which began in 2007, was the brainchild of Dr. Arnold Milstein, chief physician and consultant for benefits consulting firm Mercer. Milstein had been working with the California Health Care Foundation on a customized medical home model exclusively serving high-cost, high-risk individuals. The group was targeted because, as Milstein noted, "the sickest 20 percent of patients tend to account for about 80 percent of most employer's total health care tab."

Milstein brought the model to Boeing and won immediate support from management for a small-scale pilot program. The program was launched in February 2007 in the Seattle–Puget region, where Boeing has a high concentration of employees. Regence Blue Shield of Washington and three area physician groups (Virginia Mason, the Everett Clinic, and Valley Medical Center) agreed to partner with Boeing to launch the pilot.

Milstein worked with staff at Regence to use predictive modeling software to identify high-risk, high-cost patients who might be right for the effort. But the first real challenge was getting those employees or dependents to enroll.

"The key for us was to make the transition to the IOCP program as seamless as possible for patients," said Theresa Helle, manager of health care quality and efficiency initiatives at Boeing. "We intentionally selected medical groups that already had a high number of Boeing employees to partner with us so that no one had to switch doctors. We wanted to preserve the existing primary care relationship and make it easy for people to say yes."

Ultimately 740 employees and dependents enrolled. Patients were connected to a care team that included a dedicated nurse care manager like Horton. The patient's introduction to the program included a comprehensive intake interview, physical exam, and in some cases, biometric testing to get a clearer picture of each patient's health. "Testing on the front end helps us match patients with programs and services that can help them lead healthier lives," said Milstein. "Knowing what your health challenges are and then acting on them is what makes the whole program work."

Based on the results of the interviews, exams, and testing, care teams developed customized care plans in partnership with each of the enrolled patients. With that foundation in place, the challenge of making the care plans come to life was turned over to the nurse care managers. Nurses were charged with making frequent contact with patients—by e-mail, phone, or in person. The goal was for all patient to be "touched" one or more times a month, depending on their condition, to make sure they were following the agreed-upon care plan, getting needed tests, eating right, sleeping, and exercising. Teams met daily to review patient interactions and modify treatment plans as necessary. Meanwhile, Mercer, Renaissance Health (a consulting firm that supported Mercer), Boeing, Regence, and clinic staff met quarterly to share important observations, refine approaches to engaging patients, and learn from each other.

As a result, Boeing made a number of mid-course adjustments to the program during its two-year run. Most notably, case management teams refocused on the importance of addressing behavioral health issues among enrollees.

"There is an enormous amount of stress associated with having a chronic illness and we found that we needed to address that and other issues in order to really get patients on track to better self management," explained Helle. "You've really got to treat the whole patient to make an effort like this worthwhile."

Helle noted many of the patients enrolled in the program had some sort of behavioral health issue, including stress related to their medical condition.

In a patient-centered medical home:

  • a care team coordinates all of a patient's care;
  • revised payment systems reward primary care and care coordination;
  • patients (and their families) are encouraged to become actively involved in the care process;
  • advanced clinical information systems help reduce errors and expand physicians' access to critical information and guidelines;
  • open scheduling and e-mail access streamline communication between doctor and patient; and
  • care is culturally sensitive.

Results
According to Helle, results of the effort were better than expected. Even after accounting for the additional fees paid to participating clinics, the IOCP program reduced per-patient costs by about 20 percent, primarily due to a reduction in emergency room visits and hospitalizations.

Milstein thinks that broadly adopting a similar approach to high-cost, high risk patients might ultimately reduce U.S. per capita health care spending by more than 30 percent. But, at this point, he's thrilled that the pilot has validated the model and shown a positive return on investment. Helle is also pleased, because avoiding hospitalizations and emergency room visits means that "people have a better quality of life—they're healthier and at work more consistently. Everybody wins."

Other measures of IOCP program participants reinforce Helle's point that the initiative has benefits beyond simply cutting per-patient costs. These results include:

  • participants' physical functioning scores improved 15 percent;
  • mental functioning scores improved 16 percent; and
  • patient-reported missed work days declined by over 56 percent.

Compensation Issues
The IOCP program and others represent more work for participating clinics than the business-as-usual model of care. For starters, care managers like Horton were dedicated full-time to managing enrollees in the IOCP program. Horton managed about 100 such patients, but others managed twice as many. Participating clinics were required to do more reporting on a regular basis and physicians and other staff met regularly to discuss IOCP–enrolled patients, all of which took time and effort.

To compensate practices, Boeing paid each clinic a monthly per-patient fee that varied depending on the severity of illness of the enrolled patients and the number of members in the program. The fee was intended to cover the cost of the nurse case manager.

Going forward, though, Milstein believes that a per-patient per-month fee might not provide sufficient motivation to really engage practices in the model. "A medical home fee is important to get things started, but nationally we're moving toward a shared-savings model that assures savings for payers and consumers," he says.

Under such an arrangement, a participating practice would be paid some portion of the difference between expected costs and actual costs (assuming quality measures also improve). Such arrangements are attractive to group practices because any resulting payments are 100 percent margin. "Under a shared-savings plan, practices get partially paid for care that was made unnecessary because they did a good job of managing the patient," said Milstein. "So the employer is really paying the practice with money they didn't have to spend elsewhere, the practice is getting paid for care they didn't have to provide, and the patient is healthier. It's a hard model not to like, although not all hospitals and ER physicians might agree."

Lessons for Other Employers
  • Focus first on the dedicated case managers. Give special consideration to the design and implementation of this function, it's a critical element.
  • Work through a coalition or other collaborative effort involving more than one employer. You need critical mass for enrollment.
  • Consider a shared-savings model as part of the compensation for participating practices.
  • Don't underestimate the importance of addressing behavioral health issues for enrolled patients.
  • Focus on the high-cost, high-risk population and consider expanding eligibility later.
  • Ensure strong leadership commitment among participating groups.

Focusing on High-Cost Patients
Dozens of PCMH pilot projects are under way across the country and initial results show fairly consistently that they improve care. But according to Milstein, the jury is still out on whether medical homes not exclusively focused on older or sicker patients will reduce per-capita health spending. It's not hard to see why—for a healthy person, it may not be cost-effective to introduce a more labor-intensive model of care coordination when there's little or no care to coordinate.

High-cost, chronically ill patients are another matter. It is widely understood that when such patients have their conditions poorly managed, they are much more expensive to treat. On the other hand, well-controlled diabetes generally does not lead to amputations or blindness, well-controlled asthma does not land people in the emergency room, and patients with well-managed heart disease are far less likely to have a heart attack.

The Boeing effort focused on the "sickest 15 percent," according to Milstein, but there's no magic number. More experience with medical home programs will determine where they can be most cost effective.

Future Plans
The Boeing IOCP effort ended in July 2009, but the company is working to replicate it on a broader basis in collaboration with other purchasers and health plans. Efforts are underway to assess expansion opportunities in the St. Louis and southern California markets where Boeing has a high concentration of employees. Regence began expanding the effort in Seattle in November 2010.

Expansion of the effort is probably limited to markets where there are willing employers with enough high-cost, high-risk patients to support it. Engaging medical groups is also a real issue, as the medical home care model places high demands on staff time. "It wouldn't really make sense for a practice to participate if they only had a few patients who might enroll," explained Helle. "Ideally, we think you need at least 200 patients supported by a dedicated nurse case manager to make real financial and operational sense."

For patients like Boeing's McLaren, though, the benefits of the program have nothing to do with return on investment. In the months since the program ended, McLaren has tried to maintain the improved treatment that Horton helped him achieve, but has delayed routine check-ups and other appointments. "When you're feeling reasonably good and are really busy with the rest of life, it's easy to let your personal needs slip to a lower priority," he said. "I really liked having someone to help keep me on track. I can't wait for the program to start up again."


Resources:
To read more about Boeing's Intensive Outpatient Care Program initiative, see NBCH's Value-Based Purchasing Guide. The guide includes additional case studies documenting the impact of value-based strategies on improving care and controlling costs, as well as advice for firms just getting started with value-based purchasing.

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