The Healthcare Breakdown No. 057 - Breaking down insurance networks and contracting; bonus! Real examples

Brought to you by crazy pills

What we’re breaking down: The health insurance network

Why it matters: Because its essence is actually pretty simple, giving way to opportunities for better care, cost, and access all around

Read time: All Too Well, Taylor’s Version from the Vault

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Ever feel like you’re taking crazy pills?

And no, not like when you are debating with your spouse about whether you actually talked about the plans you allegedly forgot about.

No, like when you stare into the unabashed eyes of an employer who is like we need to go with a BUCAH cartel plan.

In fact, I feel like I am on a crazy IV drip because I have no idea why we need the likes of the carriers in the first place. Yes, yes. They take on and pool risk, blah blah blah.

They also do a whole lot of terrible things in the name of profit maximization and I cannot seem to find any particular value they do bring. Only that which they extract.

Hence, the crazy.

Anyways. This episode is not about that. It’s a little too easy to take shots at insurance companies these days. Instead, I am going to go into something that’s pretty cool. Something that will hopefully do two things:

1. Show you that insurance in principle isn’t all that complicated.

2. Show you an example of partnering with insurance companies that can be a boon for private, independent practice with a real example.

First up, at it’s core, let’s talk about what insurance is. You know the history of health insurance, since you have been with me since the beginning and never miss an episode. If for some reason that isn’t the case, which there’s no way that’s possible, you can refresh yourself here.

So, in the beginning it was a way to make more steady money for hospitals and it gave teachers access at a reasonable price to a single health system. The teachers paid a monthly amount, then got the discounted access.

Cool.

If we break that down, what’s happened? A group of people had a contract with a hospital to pay it a certain amount for a defined set of services.

That. Is. Literally. It.

Here’s a picture if you’re more into that sort of thing:

You can come for me all you want and yell about actuarial things, risk modeling, pools, and all the stuff. But at it’s core, it’s a person or organization contracting with healthcare organizations to provide care at a certain price for a certain set of services.

Hooray, insurance.

So the question is, why do we think it has to be so darned complicated?

Well the money of course. It’s always about the money.

Great, money.

Fun fact. Employers spend about $1T a year on healthcare. The rest of the $4.8T comes out of our pockets, Medicare, Medicaid, and Tricare. What’s really fun is that we fund those programs and so it all comes out of our pockets.

I digress though. The point is employers can very simply choose to contract directly with healthcare organizations just like insurance companies do on their behalf. The best part is no middlemen taking way too much money out of the value chain.

Like DeSoto Memorial Hospital, which saved 54% of it’s healthcare spend and saw $1.2M drop straight to the bottom line. Imagine the rural hospitals we could save with these plans and this savings.

Or a 150-year old local pharmacy that saved $40,000 a year with an employer built health plan. Imagine the local independent pharmacies we could save.

Just common sense contracting and solutions we know that work.

Speaking of things that work, now that you know health insurance is actually pretty simple, here’s how one private independent practice is taking the principles to heart to help improve access for patients.

Gwinnett Clinic was started in 1983 by Dr. J.J. and Meena Shah. In better words than I could have written: It is an independent, locally owned, multi-specialty medical group with seventeen (17) locations throughout northeast Atlanta. Gwinnett Clinic was among the first practices in the nation to offer same-day and walk-in visits and direct scheduling with in-house specialists as well as onsite imaging, laboratory, physical therapy, and pharmacy services. In addition to primary care, family medicine and internal medicine, GC offers specialty care including allergy and asthma, lifestyle medicine, obesity medicine, neurology, and orthopedic surgery. Gwinnett Clinic patients avoid urgent care and emergency room costs by having easy access to doctors they know and trust in a comprehensive care model. Having served over 500,000 patients, Gwinnett Clinic consistently performs in the top quartile nationwide in cost and quality metrics.

Here's where I stole that marvelous introduction.

Now, Gwinnett Clinic under the leadership of Dr. Deep Shah is partnering directly with Ambetter. Ambetter is a health plan brought to you by Peach State, which is brought to you by Centene.

While there is no love lost between Centene and I, although I am quite sure not a single person who works there knows who I am, there is something to be derived and replicated from this partnership.

First, a boon for private, independent practice. Independence is getting harder and harder. But look at Gwinnett Clinic. 41 years, 17 locations. PRIMARY CARE!

Ya, it’s possible. And we need it.

Because I don’t know if you caught the last part…. But, “Gwinnett Clinic consistently performs in the top quartile nationwide in cost and quality metrics.”

In fact, here’s a graph showing that:

What you are looking at is CMS data showing that Gwinnett Clinic outperforms all of Georgia and the same zip code in terms of cost.

Let’s go back to the principle, insurance is just a contract between two entities for a certain set of services. Centene has now contracted with Gwinnett Clinic to offer a health plan which has the clinic as the cornerstone.

It’s called Ambetter Health Gwinnett Clinic Select. And if you live in Gwinnett County Georgia in need of an exchange plan, it’s there. Outside of the clinic, the plan includes Piedmont health system for hospital care.

But good thing Gwinnett Clinic does a darn good job keeping people out of the hospital.

The plan comes in Silver and Gold, just like Simone Biles’ necklaces from Paris. The economics on the patient side are a bit of a moving target since this is an exchange plan, but here are the Silver and Gold rates for a median family in the county.

Household size: 3
Household income: $84,000
Applicant: Male, 37, non-smoker

Silver

Premium: $448.51
Deductible: $5,000
Fam deductible: $10,000
Max out-of-pocket: $8,000

Gold

Premium: $469.76
Deductible: $1,500
Fam deductible: $3,000
Max out-of-pocket: $7,800

Here’s the specs on Gold and Silver if you are curious.

Before I go on, let’s not get it twisted, I am not out here promoting health insurance plans. I am trying to show what’s possible out there with the current system. And the independent physicians and practices can pull a set up right to the table and get some sh… stuff done.

And in Dr. Shah’s words:

"Taking care of our patients - many of whom are friends, neighbors, and community partners - is a singular privilege…. Primary care is the foundation of our practice, and we will continue to expand access to care that leads to superior outcomes. This is the type of creativity we will need to help patients and local businesses find value when they go to the Marketplace.”

An incredible clinic contracts with a health plan to agree on pricing for a specific set of services.

That’s all we are talking about here. Dr. Shah has found a way using the mechanisms of our traditional system to create a product expanding access to members of the community to receive higher quality care.

And it shows, along with what the folks like Carl Schuessler (DeSoto Memorial) and Cristy Gupton (Moose Pharmacy) have done with Mitigate Partners for employers.

This is basically just a really long, rambly intro email.

Just like you don’t need to listen to all the ivory tower health system administrators going on about how complicated health system finance is, you don’t need to buy into the cliché that health insurance is too complicated.

A contract and a network.

Now, go have another.

See you next time, planet earth.