Douglas Forrester, president of Integrity Health, values the discussion the Affordable Care Act has generated about healthcare in the United States. “The good thing about the ACA is that it has focused a whole lot of attention on healthcare, delivery structures, and costs,” he says.
And, on a personal level, he is not worried about the law causing problems for his business. “Our model is one that fits squarely within where the federal government is trying to go with Obamacare,” he says. Integrity Health creates health plans for employers, based around a dedicated health center that becomes the hub of all medical care.
In New Jersey, Forrester says, this discussion about healthcare has been exponentially intensified by the passage of Chapter 78, which requires all public sector employees to contribute a certain percentage of their health costs. The law was passed in spring, 2011, and has been phased in. “Now it is really showing up in the paychecks of employees, and it has caused a huge shift of attention to try to find care that is affordable,” he says.
“One of the good things about Chapter 78 is that it has brought employees into the decision-making process about what kinds of health plans they want to have,” Forrester continues. “In the past, it was ‘We will negotiate coverage and you have to pay.’ Now that there are hefty price tags, they have skin in the game, and that is forcing reconsideration of a lot of these plans, which I think is great.”
For Forrester, what is missing from the Affordable Care Act is that it hasn’t opened up the black box of claims data held by the insurance companies. “It is the lack of transparency in the industry that has crippled it and led to dysfunction that has generated pressure for reform,” he says. “I think the future of healthcare has to be found in required transparency of both financial and claims data and contractual relationships that exist among healthcare systems and providers, and Obamacare doesn’t address that satisfactorily in my opinion.”
If he had had the power, Forrester says he would have come up with a different solution. “If I were president and wanted to do something, I would have just mandated that all claim data be available to the payers of the claim,” he says. “It’s this secrecy of what the liabilities really are that make it difficult for people to determine what the expenses really are. I think we have overreached and gotten into a real swamp.”
If indeed a new era in healthcare is to take hold, Forrester envisions three descriptors that must characterize it:
Accountable and transparent. Forrester notes how again and again reporters have thrown themselves into the task of trying to figure out the actual costs for certain health services, say in the wake of a parent’s heart attack or premature death, and they consistently fail. “They try to find out why healthcare costs are several hundred thousand dollars, and they can’t do it,” he says.
The reason is that costs are hidden. “One of biggest issues, in my opinion — and brokers and carriers will try to persuade you otherwise — the issue most important to me is the data; if you don’t have healthcare data, you cannot manage your healthcare costs,” Forrester says.
Which leads to his next point — that the only hope businesses have of getting real data is with a self-insured plan because a standard plan is a product of an insurance company that is not obligated to supply data. Forrester’s advice is that any business or other institution above 400 to 500 employees should not be fully insured, but rather self-insured. “Then you can get your data, assess your own liabilities, structure a plan in the best way for employees and employer, and save money,” he says. The result is a much higher level of transparency about the economics of care.
Personal. For Forrester, personal engagement is a powerful tool in accomplishing healthcare goals such as changing behavior patterns, involving people in preventative wellness, and facilitating people doing what they are supposed to do medically. Compliance, for example, is a big problem — just because a physician writes a prescription doesn’t mean that a person will take the medication.
Counter to the prevalent scenario in which doctors have to run as many patients as possible through a practice to cover overhead costs, Forrester’s company creates self-insured employer plans whose hubs are comprehensive health centers that offer personalized care.
Integrity Health’s first partnership health center, for Toms River Schools, is an example, Forrester says. The center is onsite with primary care doctors and nurses as well as fitness and wellness counselors. Services at the center, which also include some pharmacy, an off-site laboratory, chiropractic services, and an x-ray machine, are free for school district employees. The medical services are what would be found at any family or internal medicine practice.
But why would a highly qualified doctor would want to work in a partnership health center? “A lot of doctors and nurses want to do what they went to school to be trained to do — they want to be medical professionals. When they have to horse around with the bureaucracy of medical care, they would be quite happy to give that up so they can practice medicine,” Forrester says.
In fact, he adds, this is part of the sales pitch many hospital systems are using with practices they buy up to create a different type of medical home model — we will buy your practice and we will handle all the back office stuff. There is a proviso, however, that all the doctor’s patients must be referred to the hospital, something that Forrester sees as a conflict of interest. He says, “All hospitals are good at something but no hospital is good at everything.”
Affordable Finding ways to lower costs is critical, and what Forrester has learned from the success of his Integrity Health model is simple. “It is the personal nature of care that actually lowers the cost of care,” he says.
Forrester notes that affordability, accountability, and personal care are actually linked and support each other if done correctly. One path to doing this effectively is by creating “medical homes” for patients. As defined on the website of the Patient-Centered Primary Care Collaborative, “the medical home is best described as a model or philosophy of primary care that is patient-centered, comprehensive, team-based, coordinated, accessible, and focused on quality and safety.”
Forrester explains why things have to change in the healthcare system and ponders the role that medical homes should play. “The only real way to lower healthcare costs is by producing better health outcomes,” he says. “All the discussion of big networks and big discounts upon which the industry is built has a certain role to play, but the problem is that neither of those things have anything to do with health.”
The best way to produce better healthcare outcomes, he continues, is to lower the need for expensive healthcare. The idea is that when a patient visits a doctor, the doctor provides “the best outcome solution for whatever needs to be treated.” This is counter to what often happens now, where the sickest people see the most doctors, sometimes dozens, and, Forrester says, the doctors don’t even communicate with one another. Rather than going back to see the doctor again and again, he continues, “You are one and done; you go into a doctor who knows what he is doing and fixes you; one and done is a reference to the best outcome solution for whatever needs to be treated.”
If we measure all the care that swirls around, it is often counterproductive and inefficient. The solution? “Connecting people with the most competent doctors and nurse practitioners as quickly as possible and making referrals on the same basis — best practice referrals — and coordinating that care,” Forrester says.
For him, in-network discounts are of marginal importance. “Just because you are in-network doesn’t mean you are particularly good,” he says.
Much of what Forrester sees as positive in healthcare is happening today in the Integrity Health’s clinic — the medical home at the center of his business, where a personal approach reigns. “What happens is that once you are able to influence people, you earn their confidence, and you have metrics by which to evaluate providers, tremendous things can happen in terms of better outcomes — you start to change behavior patterns, lifestyle patterns, and catch things earlier because people have an environment where they feel comfortable,” he says.
Medical homes come in different flavors. For example, a number of insurance carriers have created a type of medical home — a specialized, contractual relationship with primary care practices. The doctors refer data back to the insurance companies, which then make referrals to specialists.
Some hospital systems are buying up various practices to create a medical home whose reach would extend through all of a person’s healthcare needs, from primary care to specialists to hospitals.
Somewhat similar to medical homes are accountable care organizations, Forrester says, in which either insurance payers or the federal government reimburse according to certain standards of health outcomes. “An accountable care organization is based on the principle that there is a risk assumed by the accountable care organization to produce certain healthcare outcomes,” Forrester says.
Forrester likens these accountable care organizations to health maintenance organizations, or HMOs, as they were originally conceived, and he suggests that accountable care organizations may suffer similar problems — even though HMOs were based on fee for service, with no financial penalty if something didn’t really work.
An HMO was paid a fixed amount per family, couple, or individual, and the HMO had to provide all medical care, but problems arose that eventually led to the demise of many HMOs. One was that if the care was not good, then more care was required, and the HMO would go bankrupt. Or, because an HMO was not well managed, it would begin to cut costs by deferring or denying care, and people would start to complain about the quality of care. Or, if the HMO did not adhere to well-defined protocols, then doctors did what they wanted in terms of ordering tests and services, and the HMO couldn’t support the level of care and would go bankrupt.
The medical home that Integrity Health has developed for Toms River Schools, now has three years of data that prove the efficacy of the model, which is pushing Forrester’s business to the next level. “We are in a heavy marketing phase, because we have a compelling case to make; without data, you can say, ‘It sounds good,’; with data, you have to say, ‘Wow.’ I think Toms River Schools has the best healthcare program in New Jersey bar none, in terms of high quality and lower cost for coverage provided.”
Business is revving up for Integrity Health. The Coatesville, Pennsylvania, school district, is on board, and Forrester is expecting two more clients and maybe more by the end of the year. In January his firm initiated a relationship with Marsh & McLennan, the largest benefit consulting and brokerage company in this country and the world, and is now marketing pretty heavily through them.
“The public sector — towns, school districts, counties — are a good focus for us,” Forrester says. These entities have historically been fully insured, which means that they buy black-box policies from brokers and insurance carriers, where the costs are hidden, and he can offer them instead a less expensive, self-insured plan, which gives them access to all healthcare costs. They do, however, need two types of insurance to cover extreme cases: one is stop loss insurance, which protects against the costly individual catastrophe case, like giving birth to seriously premature twins; the second is aggregate stop loss insurance, which puts a cap on the plan’s liability for the whole group in case, say, everybody gets sick in one year (which hardly ever happens). Self-insurance plus stop loss is far less expensive than being fully insured, Forrester says.
Comparing Integrity’s results to those of the state’s health benefits plan, which Forrester says probably represents the best of the standard model and has the largest risk pool, big networks, and big discounts, Integrity Health came out ahead. “We are at a point now where, in the case of Toms River, for the same plan designs and identical coverage, we can produce over the next 36 months savings in excess of $10 million,” he says. The Toms River plan covers 5,600 people, and, he adds, its population is, from an actuarial perspective of age and the existence of a suspected cancer cluster, a difficult one to produce low costs for.
Forrester attributes the positive results for Toms River Schools not to better discounts, but to the functioning of the medical home. “The health center produces a powerful influence with regard to connecting people quickly with best-practice providers and coordinates care among those providers,” he says.
Integrity Health’s model, Forrester says, brings employers back into proper relationship with the healthcare plan, where it can be used as a management tool in terms of cost control.
Forrester, who earned a master of divinity at the Princeton Theological Seminary and who ran as the Republican candidate for the Senate in 2002 (losing to Frank Lautenberg), knows first hand the trials of dealing with health insurance. When one of his three children had to fight a critical illness, even he was so overwhelmed by the paperwork he had to hire a professional to help.
Integrity Health, 103 Carnegie Center, Suite 323, Princeton 08540; 609-606-7000. Doug Forrester, president.