Tuesday, March 31, 2009

Health plans, costs - CIGNA to Turn Health Plan Market Costs Upside Down?

In a March 30, 2009 The Health Care Blog, “Will CIGNA Remake the Health Plan Marketplace?”, Brian Kepper, prominent health care analyst from Jacksonville, Florida, asserts that CIGNA may turn the health plan market upside down and capture major market share from competing plans.

How?

By helping employer clients set up worksite clinics to radically reduce health care costs by having services delivered by primary care physicians to employees at the worksite in a medical home environment.

CIGNA, says Klepper, will do this by installing worksite clinics. In 2008, CIGNA opened clinics of its own in 4 Eastern locations. In 2009, CIGNA will encourage employer clients with 1,000 or more employees to set up worksite clinics.

Riding the Rising Worksite Clinic Tide

These clinics, says Klepper, are already growing at an “astonishing rate.” About one-third of Fortune companies with 1,000 or more employees already have clinics in place, and by the end of 2010, one third-more will have them installed.
Furthermore, these clinics will work in other worksites with 150 or so employees – school systems, universities, community colleges, unions, city and country governments, business parks, manufacturers, or service organizations.

How Clinics Lower Costs

These clinics lower costs in four major ways.

•They exchange higher health costs for routine outpatient care for much lower costs inside the clinic.

•They provide face-to-face management of patients with chronic disease, who consume 70% of a typical population’s health costs.


•They allow the primary care physician inside the clinic to select and collaborate with pre-selected specialists outside the clinic who provide expensive outpatient and inpatient care.

•They integrate personal care with occupational health – workers compensation, human resource testing for employement and drugs, retention and recruitment, and productivivity(absentism and presenteeism).

The clinics accomplish this cost lowering by.

•Having a salaried primary care doctor on site who is able to concentrate on delivering care rather than being distracted by practice business issues.

•Removing the usual cost barriers to care – time off and travels to access care off-site, unpredictable outpatient lab, x-ray and imaging costs, and highly priced prescriptions. Most clinics provide free generic drugs or brand name drugs at cost.


•By using onsite EMR systems containing best practice information.

•By deploying databases that direct primary care physicians to pre-selected specialists who achieve optimum results at reasonable fees.

A Conversation with CIGNA Medical Director

After a conversation with Jeff Kang, MD, CIGNA’s Chief Medical Officer, Klepper says,

“Dr. Kang confirmed that CIGNA will aggressively pursue its onsite clinic effort, that they do see primary care and medical homes as keys to creating improvements, and that they have many plans in these and other areas. He emphasized that primary care was only one of many efforts.”

“The proof will be in the results, of course. It is more than possible that other major plans are headed in equally innovative directions.”

“But, so far CIGNA appears to be sincere, focused and far ahead of other plans in creating very powerful model of health care delivery that does actually head the lessons of the last 20 years.”

"If they, or any health plan with similar aspirations, succeed, they will take the market and change the way American health plans operate.”

Hurdles and Opportunities


The hurdles to the CIGNA strategy are self-evident – shortages of primary care doctors, reluctance of many independent doctors who prefer autonomy to become corporate employees, the fact that small business employ 90% of Americans - but the opportunities are there too – primary care doctors seeking security, the chance to focus on care, and higher pay (most clinics pay primary care doctors at 30% above market rates; improved care at significant cost reductions, desperation of employers to lower costs, satisfy workers, improve their health and productivity, and to retain and reinforces their loyalties to their employers.

Summary

For CIGNA worksite clinics offer an opportunity,

to slash costs for their employer client community,

to capture greater health plan market share,

to facilitate convenient cost effective care,

and to work with employers in a spirit of unity.

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