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Transforming Care: How Unions Act as a Force for Change in Health Care Delivery and Payment

Transforming Care: Reporting on Health System Improvement

In Focus: How Unions Act as a Force for Change in Health Care Delivery and Payment

brooklyn health clinic

Unionized workers typically bargain for a package of wages and health benefits — giving them a vested interest in containing health care costs. And some union members have more than just skin in the game; they also have a seat at the table when it comes to deciding on their health benefits. In this issue, we look at efforts led by unions and their partnering employers to curb the costs of health benefits by making primary care more accessible, promoting evidence-based care, and leveraging market power to curb escalating prices for prescription drugs.

As spending on health insurance benefits continues to outpace productivity gains, more and more employers are shifting costs onto their employees in the form of higher premium contributions, deductibles, and copayments. A recent Commonwealth Fund report found the most rapid increase in the “underinsured” rate — a measure assessing when people’s out-of-pocket health care costs are high relative to their income — since the Affordable Care Act occurred among Americans with employer-sponsored coverage, rising from 17 percent in 2010 to 28 percent in 2018.

In this issue of Transforming Care, we explore how a subset of the U.S. workforce, unionized labor, is partnering with employers to reduce health care costs. We explore strategies unions and employers have developed that go beyond cost-shifting to address the root causes of rising costs, including insufficient focus on prevention and primary care, poor care coordination and management of chronic conditions, inattention to evidence-based care, and escalating prices for prescription drugs and medical services.

Unions and Health Care: Leveraging a Workforce to Change Care Delivery 

One of every 10 workers in the U.S. belongs to a union. Unions often bargain for or directly administer health care benefits on behalf of members. Perhaps as a result, unionized workers are more likely to have health benefits than nonunion workers; indeed, for careers like teaching, generous health and pension benefit packages are what entice people into fields where salaries are relatively modest.

Still, unions and their employers have been feeling the pinch of rising health care costs. In Contra Costa County in Northern California, for example, the per member per hour cost for the health benefits for one group of unionized workers is $17.41 — not only more than the state minimum wage but also an increase of 91 percent since 2004, according to Sara Flocks, policy coordinator for the California Labor Federation. “Health care is sucking up anything that could go toward an increase in take-home pay,” she says.

In recent years, America’s Agenda, an alliance of labor unions, businesses, health care providers, insurers, and pharmaceutical companies, has brokered partnerships between unions and employers interested in controlling spending on health benefits by changing how members receive their care. Many efforts focus on creating what the organization calls next-generation primary care. “For us, the issue of health care delivery reform isn’t ideological. It’s an engineering issue,” says Mark Blum, its executive director. “We need to redesign care delivery to address the cost drivers and promote smarter delivery design.”

Other efforts are led by union health plans, such as UNITE HERE HEALTH, an America’s Agenda member and Taft-Hartley plan covering 230,000 people (110,000 union members and their dependents). Taft-Hartley plans are paid for through trust funds established through collective bargaining between unions and a group of employers to provide health coverage for a large pool of unionized workers. In addition to managing benefits, UNITE HERE HEALTH provides resources to improve health outcomes. The fund has for example trained union members to lead workshops for their coworkers to help them learn how to better manage their chronic conditions.

Next-Generation Primary Care

Several unions have looked to the model of direct primary care, in which patients pay physicians a retainer that gives them access to most primary care services. The unions rely on capitated payments, financial incentives, or directly hire their own clinicians to establish clinics that can offer expanded hours, longer visits, and additional services, like health coaches. The New York Hotel and Motel Trades Council, which includes 33,000 unionized maids, bellhops, and other hotel workers, together with a coalition of their employers, the Hotel Association of New York City, have for seven decades operated clinics that provide this kind of advanced access and convenience. Each of the health centers (three in Manhattan, one in Brooklyn and one in Queens) charges no copayments for services and offers primary, behavioral health, specialty, optical, and dental care under one roof.

The newest facility, Brooklyn Health Center, which opened in 2017, uses technology and smart design to achieve efficiencies. Patients go directly to treatment rooms, where video screens greet them and display their medical records. Clinicians work in a shared space according to pods organized by disease state or population: primary care clinicians, endocrinologists, ophthalmologists, and podiatrists help those with diabetes, for example, while ob-gyns, pediatricians, and family practitioners treat pregnant women, kids, and families. The layout has proved more efficient for providers as well as patients — in a trial of it, physicians were able to see 3.5 patients per hour compared to 2.7 per hour with a layout that didn’t facilitate communication. “Everything is teed up for the clinicians; everybody is working in this communicative space; they don’t have to spend time looking for another doctor, tracking down paperwork or lab results,” says Robert Greenspan, M.D., CEO of New York Hotel and Motel Trades Council and the Hotel Association of New York City Employee Benefit Funds.

Brooklyn Health Center

The Brooklyn Health Center, run by the New York Hotel and Motel Trades Council and the Hotel Association of New York City Employee Benefit Funds, is designed to facilitate communication among clinicians, who mirror union members’ diverse cultural backgrounds. About 90,000 people (union members, dependents, and retirees) have access to the health centers in the New York City area. Photo credit: The New York Hotel Trades Council and the Hotel Association of New York City Employee Benefit Funds.

This approach has kept the costs of providing care and wellness services to about $13,000 per family a year. Typical costs can be double that in New York, according to Blum. Some of the savings arise from low utilization of emergency departments (even though members have only a $5 copayment for using them), Greenspan says.  The union also achieves savings by negotiating directly with pharmaceutical companies to purchase drugs, with discounts based on an agreement to offer a single drug in each class. The drugs are dispensed from on-site pharmacies that enable the health centers to track medication compliance and relay information to clinicians and care coordinators.

Spreading the Next-Generation Primary Care Model

This approach has spread beyond New York and the hotel industry. In 2015, a local chapter of the United Food and Commercial Workers (UFCW) union partnered with JBS, a large meat processor, to open primary care clinics for members working in Iowa, Minnesota, Nebraska, Pennsylvania, and Texas facilities. Mark Lauritsen, UFCW Food Processing, Packing and Manufacturing division director, pitched the clinics to JBS as a way to attract and retain workers, in addition to controlling costs. Meat processing can be difficult and dangerous, and employers compete for workers in a tight labor market.

The clinics offer extended hours and same- or next-day appointments and there are no copayments for most services. Both have been key to attracting patients as JBS employees are often reluctant to take time off to go to the doctor, since missing a shift means losing wages, according to Cliff Robertson, M.D., M.B.A., CEO of the Nebraska/Southwest Iowa Division of Catholic Health Initiatives, which staffs the clinics. “We and the employer offered education to help people understand we’re here for them, it’s free, and it’s not a bad thing if you have a medical problem and are coming to us,” he says. “Your employer wants you to be healthy.”

In Nebraska, the approach has reduced health care spending by between 5 percent and 15 percent annually, mainly by encouraging people to visit the clinics rather than urgent care centers or emergency departments, Robertson says. (The savings to date may be lower than in New York’s clinics because the clinics are newer, and because they do not offer specialist care or negotiate pharmacy prices.) These savings have meant salary increases for workers, according to Lauritsen. “Six or seven years ago the hourly wage increases would be 50 cents at ratification. We just finished a round of negotiations. The increases ranged from $1.10 to $3.85,” he says.  

UFCW has also partnered with Cargill, the largest privately held company in the U.S. in terms of revenue, to establish primary care centers for workers at the company’s Texas and Colorado meat processing plants.

The success of clinics prompted some of the nation’s largest unions, the United Autoworkers and UFCW, to create their own company, known as SolidaritUS Health, to spread the model. It now runs clinics for employees of Spirit AeroSystems, which makes airplane fuselages in Kansas, Oklahoma, and North Carolina.

We wanted to reform primary care so that patients aren’t being jockeyed around a complicated system of specialists and hospitals and other providers and could have, in a word, concierge care.

Former Congressman Dick Gephardt Chairman and cofounder of SolidaritUS Health

Patients can make same-day or after-hours appointments, pay no copayments or deductibles, and call or video chat with their physicians. Notably, both unionized workers and Spirit managers attend the clinics and serve together on a health committee to make decisions about services — making clear that the clinics are not just cost-cutting gambits, says former Congressman Dick Gephardt, chairman and cofounder of SolidaritUS Health and a board member of both Spirit AeroSystems and America’s Agenda. “If we can make this work in Oklahoma, we will seek to expand it elsewhere,” Gephardt says. “There is great demand for better access to care and a meaningful relationship with your doctor.”

Offering Choices

Unions and their employers have taken many tacks to discourage people from using emergency departments as their usual source of care. In 2017 in Las Vegas, the Culinary Health Fund, a Taft-Hartley plan managed in collaboration with nearly all of the strip’s major hotels, opened a health center offering primary care, dental and vision services, and a pharmacy for 130,000 union members and their dependents. The Culinary Health Fund’s size has also enabled it to contract with a range of specialists — including cardiologists, radiologists, and behavioral health providers — to provide care to members through capitated arrangements. 

The new health center includes an urgent care clinic that is open 24/7 and staffed with board-certified emergency medicine physicians — a key part of its strategy to engage people in care. “People want to get care when they want it,” says Kathy Silver, president of the Culinary Health Fund. “And this is a 24-hour town, and many of our members have unusual work schedules, so it’s not always easy for them to make appointments.” Since opening the urgent care clinic two years ago, emergency department use among plan members has dropped about 15 percent. “Often what will happen is that members will come in to urgent care for a routine matter,” says Silver. “Urgent care staff will help them make an appointment with a primary care clinician and tell them how important it is to establish that relationship.” 

Plans leaders have learned it is important to give members options. Eight years ago, the Culinary Health Fund worked with Iora Health to set up a dedicated clinic to offer primary care, health coaching, and additional supports for union members who accrued high costs because of their complex and/or unmanaged conditions. The fund invited about 6,000 members to join, but only 1,000 did so, perhaps because they didn’t want to have to change doctors. “Even though we made it easy as possible, with walk-ins and no copayments, people didn’t gravitate to it,” says Silver. “When we built our new center, we put a focus on giving people the ability to have episodic care. Of course, our end goal is to have everyone develop a relationship with a primary care physician, but we recognize that can take time and education.”

Promoting Evidence-Based Care

The local union of the International Brotherhood of Electrical Workers (IBEW) in San Diego has been able to control health benefit costs by steering its 7,000 members and dependents toward appropriate, evidence-based treatment. Nearly all (about 98 percent) of members have opted into the plan’s preferred provider organization, which selects clinicians based on publicly available performance measures, including data on rates of health care acquired–infections and C-sections.

Union members also have access to the “Best Doctors” service from Teladoc Health, which uses data analysis and medical experts to review diagnoses and treatment plans for complex cases. Ken Stuart, administrative manager for IBEW’s Health and Welfare Trust, calls it “the greatest single cost-containment program to the benefit of both the plan and participant.”  

Best Doctors’ services range from answering medical questions about surgeries and recommending local specialists to performing a full review of someone’s medical records, lab results and imaging, and recommended treatment using teams of medical experts. When reviewing cases where surgery has been recommended, the experts recommend treatment that avoids surgery 38 percent of the time. Overall, 45 percent of diagnoses and 79 percent of treatment plans are modified or changed after review. 

At IBEW, any covered participant can use these services, free of charge. And anyone planning to undergo certain elective procedures — those for which Best Doctors’ reviews have frequently led to different diagnoses or recommendations — has all of their out-of-pocket costs waived, no matter how they choose to proceed, if they agree to a review beforehand. “If they undergo the review process, that procedure won’t cost them a penny,” says Stuart. “The idea is to get it right. We are not looking to pay the least. We want to pay a reasonable amount for optimal outcomes.” Best Doctors’ expert oversight of diagnoses and recommended treatment plans have generated a four-to-one return, primarily from reductions in the number of unnecessary, avoidable, or duplicative medical procedures, according to Stuart.

Controlling Pharmacy Costs

In New Jersey, public-sector unions — the state chapter of the Communication Workers of America, which includes telecommunications workers, media professionals, social service workers, and others employed by state and local governments and the New Jersey Education Association — have been working with the state to find ways to control costs of health care for more than 750,000 union members. 

In addition to creating primary care clinics along the lines of those in New York, Las Vegas, and elsewhere, the partnership has sought to reduce the costs of providing prescription drugs. “Prescription drug costs were going up by double digits every year,” says Hetty Rosenstein, New Jersey director of the Communication Workers of America. “And you couldn’t even track what was causing it.” With guidance from America’s Agenda, the unions persuaded the state to implement a “reverse auction” for pharmacy benefits: instead of receiving proposals from pharmacy benefit managers (PBMs), each with its own complex and often opaque pricing scheme that can make comparisons difficult, the state invited PBMs to bid for its business in real time in an online auction, similar to eBay.

The auction, which relied on Truveris software, forced PBMs to clearly define their drug formularies and compete with each other on price, enabling the state to secure a PBM contract that came in 10 percent below projections. In 2018, New Jersey announced it will save $1.5 billion over three years, with further savings possible due to the software’s real-time audits of pharmacy claims, which can flag errors and overcharges. New Jersey Governor Phil Murphy is looking to expand this approach to Medicaid, according to Rosenstein.


Unions’ experiences in partnering with their employers to control health care costs offer lessons for other employers, health plans, and the broader health care system.

Health care services need to be offered how, when, and where people want them. This is particularly important for those who do not have flexibility in their work schedules. “If you are a teacher, bus driver, secretary, or a custodian in school, when you have a doctor’s appointment typically you have to take the day off,” says Kevin Kelleher, director of research and economic services at the New Jersey Education Association, the teachers’ union. Having convenient locations, after-hours visits, telemedicine, or other easy ways to reach your doctor are key to engaging people, he says.

The success of these union-led solutions has to do with the fact that the employer has a highly motivated and well-organized partner to mobilize. You can't just change care delivery, you also have to mobilize patients to engage in the transformed care model.

Mark Blum Executive Director of America’s Agenda

It takes time to build trusting relationships between patients and their clinicians. Union members tend to stay in their jobs for years. “We may know their grandparents and have delivered their parents,” says Greenspan of patients at New York City’s Hotel Trades Council and Hotel Association of New York City health centers, where clinicians leverage long-term relationships to encourage behavior changes. Its newest facility, Brooklyn Health Center, seeks to promote wellness by offering free fitness and cooking classes, for example. To date, they’ve had success in encouraging people to quit smoking — achieving high quit rates (39.7% of smokers had stopped at 6 months; 30.2% were no longer smoking at 18 months). “We put patients’ smoking status on the banner of their electronic health records,” says Greenspan. “Then doctors, dentists, therapists, and pharmacists encourage smokers to try tobacco cessation programs in a variety of ways. If we’re going to try to change behavior, 20 minutes with your doctor is not going to do it.”

Partnerships among employers, and with health care providers, are needed to make impactful changes in the health insurance marketplace. The efforts that have gained most traction to date have involved unions pooling their members and working with several different employers across an industry — generating the critical mass to gain leverage.

In some regions, unions’ efforts to reform health care delivery and payment have been embraced by partners outside of the unionized sector. In Kentucky, for example, an effort initiated by the United Auto Workers and Ford Motor Company has brought on board health plans, other employers, health care organizations, pharmaceutical companies, government agencies, and research organizations. The Kentuckiana Health Collaborative is using performance measurement to drive improvements in preventive care and chronic disease management and has been working to align employers around common value-based purchasing efforts, as well as convening community conversations about issues like the opioid epidemic, for example.

While union-led efforts to control health care costs have increased access to care and reduced health care utilization, it remains to be seen whether they will improve workers’ health in the long run. But it’s better than protracted labor disputes, says Ivana Krajcinovic, senior director of healthcare delivery at UNITE HERE HEALTH. “A lot of the time in collective bargaining, parties are struggling to find another 25 cents that will just go to pay for health benefits,” she says. “Trying to improve access to care and teach people how to manage their health can be a win–win: if you can improve quality you can drive down costs.”

Editorial Board, March 2019

Special thanks to Editorial Advisory Board member Mark Zezza for his help with this issue.

Anne-Marie J. Audet, M.D., M.Sc., senior medical officer, The Quality Institute, United Hospital Fund

Eric Coleman, M.D., M.P.H., professor of medicine, University of Colorado

Michael Chernew, Ph.D., professor of health policy, Harvard Medical School

Marshall Chin, M.D., M.P.H., professor of healthcare ethics, University of Chicago

Don Goldmann, M.D., chief medical and scientific officer, Institute for Healthcare Improvement

Laura Gottlieb, M.D., M.P.H., assistant professor of family and community medicine, University of California, San Francisco, School of Medicine

Carole Roan Gresenz, Ph.D., senior economist, Rand Corp.

Thomas Hartman, vice president, IPRO

Clemens Hong, M.D., M.P.H., medical director of community health improvement, Los Angeles County Department of Health Services

Lauren Murray, director of consumer engagement and community outreach, National Partnership for Women & Families

Kathleen Nolan, managing principal, Health Management Associates

J. Nwando Olayiwola, M.D., M.P.H., associate professor of family and community medicine, UCSF School of Medicine

James Pelegano, M.D., M.S., assistant professor of healthcare quality and safety, Thomas Jefferson University

Harold Pincus, M.D., professor of psychiatry, Columbia University

Chris Queram, M.A., president and CEO, Wisconsin Collaborative for Healthcare Quality

Sara Rosenbaum, J.D., professor of health policy, George Washington University

Michael Rothman, director of quality and operations support, The Permanente Medical Group

Stephen Somers, Ph.D., president and CEO of Center for Health Care Strategies

Mark A. Zezza, director of policy and research, NYS Health Foundation

Publications of Note: January–March 2019

Patient Engagement Linked to Lower Health Care Spending on High-Risk Patients

A study focusing on the degree to which changes in the Patient Activation Measure (PAM) — a tool for measuring a patient’s confidence in managing his or her health — influence health care spending found the tool is predictive of health care costs among high-risk patients. The study found an increase in one PAM level was associated with 8.3 percent lower follow-up costs. The study relied on data from a Center for Medicare and Medicaid Innovation–funded intervention used by three medical groups to improve patient activation and care coordination among high-risk patients. The measure assigns patients to one of four levels on a continuum that ranges from very passive to very proactive. Ann Lindsay et al., “Patient Activation Changes as a Potential Signal for Changes in Health Care Costs: Cohort Study of US High-Cost Patients,” Journal of General Internal Medicine 33, no. 12 (Dec. 2018): 2106–12.

Promoting Better Coordination Through New CMS Billing Codes

A commentary in the Journal of the American Medical Association proposes strategies for ensuring new fee-for-service billing codes introduced by the Centers for Medicare and Medicaid Services to reimburse for virtual care (e.g., e-consults, remote physiologic monitoring, and video and image review) promote coordinated care. Among the strategies, Medicare should develop and refine separate payments for services that promote coordination to create a roadmap for other payers, which account for the majority of payments to most clinicians. Medicare could also consider removing copays that could be an impediment for some patients. Joshua M. Liao, Amol S. Navathe, and Matthew J. Press, “Medicare’s Approach to Paying for Services That Promote Coordinated Care,” Journal of the American Medical Association 321, no. 2 (Jan. 15, 2019):147–48.

High Utilizers of Health Care Services Also High Users of Public Services in Minnesota

A study of service use patterns among newly insured Medicaid members in Hennepin County, Minn., quantified their engagement in four public sectors (health care, human services, housing, and criminal justice) and, using clustering techniques, produced six utilization archetypes. They are: a low-contact class (33.9%) that had little involvement in any public sector; a primary care class (26.3%) that had moderate, stable health care utilization; a health and human services class (15.3%) that had high rates of health care and cash assistance utilization; a minimal criminal history class (11.0%) that had less serious criminal justice involvement; a cross-sector class (7.8%) that had elevated emergency department use, involvement in all four sectors, and the highest prevalence of behavioral health conditions; and an extensive criminal history class (5.7%) that had serious criminal justice involvement. The three most expensive classes (health and human services, cross-sector, and extensive criminal history) had the highest rates of behavioral health conditions. Together, they comprised 29 percent of enrollees and 70 percent of total public costs. The authors conclude that Medicaid expansion enrollees with behavioral health conditions deserve special attention because of the potential to reduce spending across public sectors by coordinating their services and better addressing their needs. Peter J. Bodurtha et al., “Identification of Cross-Sector Service Utilization Patterns Among Urban Medicaid Expansion Enrollees,” Medical Care 57, no. 2 (Feb. 2019): 123–30.

Challenges to Implementing the Behavioral Health Home Model Include Engaging PCPs

Staff who established behavioral health homes within community mental health programs in Maryland reported facing a number of barriers, including difficulty engaging primary care providers in care coordination. Other challenges included difficulty juggling the goals of population health management and direct clinical care. The authors conclude that to improve health outcomes for individuals with serious mental illnesses, multiple strategies are needed, including formalized treatment protocols, training for staff, changes to financing mechanisms, and health information technology improvements. Gail L. Daumit et al., “Care Coordination and Population Health Management Strategies and Challenges in a Behavioral Health Home Model,” Medical Care 57, no. 1 (Jan. 2019): 79–84.

Mandatory Bundled Payment Program for Joint Replacement Reduces Spending Modestly

An evaluation of Medicare’s bundled payment program for hip and knee replacements found in the first two years the program produced a modest reduction in spending per episode without an increase in rates of complications. Hospitals involved in the Comprehensive Care for Joint Replacement program receive bonuses or pay penalties based on spending during the hospitalization and in the 90 days after discharge. The reduction was driven largely by a 5.9 percent relative decrease in the percentage of episodes in which patients were discharged to post–acute care facilities. The program did not have a significant effect on the composite rate of complications or on the percentage of joint-replacement procedures performed among high-risk patients. Michael L. Barnett et al., “Two-Year Evaluation of Mandatory Bundled Payments for Joint Replacement,” New England Journal of Medicine 380, no. 3 (Jan. 2019): 252–62.

Medical Homes Improve Quality of Care for People with Multiple Chronic Conditions

A study examining the association between medical home enrollment and receipt of recommended care for Medicaid beneficiaries with multiple chronic conditions found enrollment in patient-centered medical homes (PCMHs) was associated with an increased likelihood of receiving eight recommended mental and physical health services, including hemoglobin A1c testing for persons with diabetes, lipid profiles for persons with diabetes and/or hyperlipidemia, and psychotherapy for persons with major depression or schizophrenia. PCMH enrollment was also associated with overuse of short-acting medications among beneficiaries with asthma. Karen E. Swietek et al., “Do Medical Homes Improve Quality of Care for Persons with Multiple Chronic Conditions?Health Services Research 53, no. 6 (Dec. 2018): 4667–81.

Subgroups of High-Cost Adult Patients Identified

A study that sought to define recognizable subgroups of high-cost patients based on clinical conditions and describe their survival and future spending identified seven clinically distinct subgroups of patients. These included patients with end-stage renal disease (12% of the high-cost population), cardiopulmonary conditions (17%), diabetes with multiple comorbidities (8%), acute illness superimposed on chronic conditions (11%), conditions requiring highly specialized care (14%), neurologic and catastrophic conditions (5%), and patients with few comorbidities (the largest class, 33%). Over four years of follow-up, 31 percent of the patients died, and survival in the classes ranged from 43 percent to 88 percent. Spending regressed to the mean in all classes except the end-stage renal disease and diabetes with multiple comorbidities groups. The study was based on data on 2.7 million adult patients in a large integrated delivery system. Anna C. Davis et al., “Segmentation of High-Cost Adults in an Integrated Healthcare System Based on Empirical Clustering of Acute and Chronic Conditions,” Journal of General Internal Medicine 33, no. 12 (Dec. 2018): 2171–79.

Mental Illness and Substance Use Remain Primary Drivers of Acute Hospitalization of the Homeless

A study of patterns of acute illness among homeless individuals in three states (Massachusetts, Florida, and California) found from 2007 to 2013, hospitalizations increased (from 294 to 420 hospitalizations per 1,000 homeless residents in Massachusetts, from 161 to 240 per 1,000 in Florida, and from 133 to 164 per 1,000 in California). Homeless patients were on average 46 years of age, often male (76.1%), white (62%), and either uninsured (41.9%) or insured by Medicaid (31.7%). Compared with hospitalizations among people who were not homeless, hospitalizations for the homeless were more frequently for mental illness and substance use disorder (52% vs. 18%). Homeless patients also had lower in-hospital mortality rates (0.9% vs. 1.2% for non-homeless patients), longer mean length of stay (6.5 vs. 5.9 days), and lower mean costs per day ($1,535 vs. $1,834). The authors suggest policy efforts address barriers to the use of ambulatory care services, and behavioral health services in particular, to help reduce acute care use and improve the long-term health of homeless individuals. Rishi J. Wadhera et al., “Trends, Causes, and Outcomes of Hospitalizations for Homeless Individuals,” Medical Care 57, no. 1 (Jan. 2019): 21–27.

Proposal for Protecting CMS Payments for Primary Care

The author of a commentary in the New England Journal of Medicine suggests ways of ensuring the Centers for Medicare and Medicaid Services’ methods for valuing evaluation and management services do not unfairly penalize primary care providers and favor specialists. The problem the author seeks to address stems in part from the Congressional requirement that increases in payment for work associated with new technologies and procedures be offset with reductions in payment elsewhere to achieve budget neutrality. One solution would be to balance spending on primary care and specialty care services separately. B. E. Landon, “A Step Toward Protecting Payments for Primary Care,” New England Journal of Medicine 380, no. 6 (Feb. 7, 2019): 507–10.

Persistently High-Cost Medicare Patients Younger, More Likely to be Minorities and/or Dual Eligibles

A study that sought to identify the characteristics and spending patterns of Medicare beneficiaries who remained persistently high-cost over time (i.e., in the top 10 percent of spending each year) found on average that persistently high-cost patients were younger, more likely to be members of racial/ethnic minority groups, eligible for Medicare based on having end-stage renal disease, and dually eligible for Medicaid, compared with transiently and never high-cost patients. The study also found 28.1 percent of high-cost fee-for-service beneficiaries remained so over three years. Persistently high-cost patients had greater relative spending on outpatient care and medications while very little of the spending was related to preventable hospitalizations. Jose F. Figueroa, Xiner Zhou, and Ashish K. Jha, “Characteristics and Spending Patterns of Persistently of High-Cost Medicare Patients,” Health Affairs 38, no. 1 (Jan. 2019): 107–14.

Economic Deprivation Linked to Poor Control of Chronic Conditions

A study assessing the relationship between a composite measure of neighborhood disadvantage — the Area Deprivation Index (ADI) — and control of blood pressure, diabetes, and cholesterol in the Medicare Advantage population found the ADI to be a strong, independent predictor of diabetes and cholesterol control and a moderate predictor of blood pressure control. Compared with enrollees residing in the least disadvantaged neighborhoods, enrollees in the most disadvantaged neighborhoods were 5 percentage points less likely to have controlled blood pressure, 6.9 percentage points less likely to have controlled diabetes, and 9.9 percentage points less likely to have controlled cholesterol. Shayla N. M. Durfey et al., “Neighborhood Disadvantage and Chronic Disease Management,” Health Services Research 54, no. 1.2 (Feb. 2019): 206–16.

Evidence Base Suggests Digital Health Companies Are Having Little Impact on High-Need, High-Cost Conditions

A review of peer-reviewed publications describing the products and services of the 20 top-funded, private digital health companies in the U.S. found these publications focused on only a small number of companies, many of which specialized in artificial intelligence and big data. Few studies involved high-need populations or measured the impact of interventions on outcomes, cost, or access to care. The authors recommend fostering an environment that encourages the development of evidence-based, high-impact products for high-need populations. Kyan Safavi et al., “Top-Funded Digital Health Companies and Their Impact on High-Burden, High-Cost Conditions,” Health Affairs 38, no. 1 (Jan. 2019): 115–23.

Publication Details



Martha Hostetter, Consulting Writer and Editor, Pear Tree Communications

[email protected]


Martha Hostetter and Sarah Klein, “In Focus: How Unions Act as a Force for Change in Health Care Delivery and Payment,” Transforming Care (newsletter), Mar. 21, 2019.

Q&A: Steering Employees Toward Higher-Value Care

In parts of the U.S., unions are leveraging health benefit designs and trusted relationships with members to promote healthy behaviors and steer people toward higher-value providers and treatments. Transforming Care spoke to three leaders in the field about what others can learn from these efforts.

Mark Blum headshot

Mark Blum is executive director of America’s Agenda, a coalition of labor unions, businesses, health care providers, insurers, and pharmaceutical companies that facilitates partnerships between employers and unions interested in promoting reform of the health care delivery system.


Ivana Krajcinovic headshot

Ivana Krajcinovic is senior director of health care delivery at UNITE HERE HEALTH, a health plan with some 110,000 union members and their dependents (covering 230,000 lives in all). Krajcinovic helps oversee the plan’s health benefit design and efforts to promote wellness through chronic disease management and care coordination programs.


Ken Stuart Headshot

Ken Stuart is administrative manager of the health plan for the International Brotherhood of Electrical Workers’ local union in San Diego. This union represents 3,000 members in the construction trade and their dependents. For more than 40 years Stuart has focused on cost-containment strategies for unions and self-insured employers. 

Transforming Care: Through America’s Agenda, unions have begun partnering with businesses as well as health care providers and other industry representatives to improve care delivery and reduce costs. What was the impetus for the unions founding the organization?

Mark Blum: I think a lot of them were tired of acrimonious zero-sum bargaining over health benefits and wages. We know most strikes over the last three decades — in fact almost every major strike — has been over the issue of rising health costs, a problem that’s actually not resolvable at the bargaining table because neither side created the problem. By finding ways to control costs and improve care, it becomes a negotiation over the creation and sharing of savings. It’s constructive.

Transforming Care: In addition to enhancing access to primary care, one of the strategies unions are pursuing is educating their members about how to navigate the health care system and be more cost-conscious. What’s working and what’s not?

Ken Stuart: We have one advantage in that union members in many cases know exactly what health insurance costs because it is paid for through allocations from their wage increases. Most people working for a single employer don’t know the total spend on health insurance. They just know what their payroll deduction is. We try to educate members about value by looking at the quality of care. The problem is people in general have little way of knowing which providers are providing the most appropriate or high-quality care, and it’s hard to get their attention when we offer them that information. The most significant tool we have is plan design, which we use to influence the decisions participants are going to make. We lowered the copay for instance for the highest-rated health system locally. In just six months, we saw the utilization of the system among our members had increased by 40 percent. We have had less success with educational campaigns about quality of care. We just can’t get people to read the material we send them.

Transforming Care: What are some of the other health benefit design changes you’ve made?

Ken Stuart: We use a company called HEAL, which provides in-home physician visits within two hours. We put this out as a $5 copay. It’s not only for homebound people. It could be a mother with young kids who doesn’t want to bundle everyone up to sit in a doctor’s office or urgent care. A physician comes to your house, with a phlebotomist who can take fluids. They can do a physical exam or take out stitches. It’s mundane things. It’s the same cost to the union as an office visit, but we know if you’re going to a doctor’s office or urgent care, they might do more than the office visit.

Transforming Care: What strategies does UNITE HERE HEALTH employ to educate members about navigating the health care system?

Ivana Krajcinovic: We leverage the trust members have in their unions. We can send our staff into an employee cafeteria and people know we don’t have an incentive to do anything but what is best for them. We’re much more effective since we’re not an insurance company that they suspect is only doing this for their shareholders. We can communicate the benefits of having a narrower network of providers, for example. In Boston, the union actually held a vote of its membership about narrowing its network to control costs, which eliminated a well-known academic medical center. People came out, they listened to presentations, and then they voted to do it. There aren’t many insurance companies or employers who do that kind of thing.

The other thing I would say is there’s an assumption that immigrants or the working poor can’t navigate the system. We just have to spend the time to do it. We prefer to communicate in person, often training worker leaders to talk to their coworkers about things like plan changes and the importance of having a primary care physician. We’ve developed what we call “paper points” — sets of cards that look like simple PowerPoint presentations that allow worker leaders to educate their coworkers anytime, anywhere.

Transforming Care: Do you think some of the programs unions are trialing will be taken up in other sectors?

Ken Stuart: I would hope so, but I’m always amazed by how reluctant employers and health plans are to change health benefits, plan design, and provider networks to promote use of higher-quality care or more favorable pricing. Locally, we have a hard time getting health plans to question hospital billing even when prices are out of whack because they need to keep health systems and providers in their networks to be competitive. I think employers need to take more control. We participate in the California Purchasers Health Care Coalition, which brings public- and private-sector employers and unions together to share best practices for promoting high-value care for employees.

Publication Details



Martha Hostetter, Consulting Writer and Editor, Pear Tree Communications

[email protected]


Martha Hostetter and Sarah Klein, “Q&A with Mark Blum, Ivana Krajcinovic, and Ken Stuart: Steering Employees Toward Higher-Value Care,” Transforming Care (newsletter), Mar. 21, 2019.

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