Can free advice on care lower health costs?

Plymouth-based OptumHealth thinks helping consumers make good choices on big medical procedures will save costs.

Janet Imig's voice is the one that comes over the phone at the worst possible time. She calls her patients when they've been diagnosed with rare and deadly diseases that can be treated only with a bone marrow transplant.

It's her job to help them make the choice that could determine whether they live or die: where to go for treatment.

"It's not like going to Jiffy Lube," she said. "This is life threatening."

A soft-hearted, 65-year-old nurse who works the phone from her home office in suburban Chicago, Imig is the unlikely face of the latest great idea for fixing American health care -- consumer choice.

With a vast database of medical information at her fingertips, she is testing the premise that patients can make smart choices about quality even when confronted with overwhelming, high-risk medical decisions.

In theory, the collective power of those informed consumers will drive up quality and drive down costs, just as it has done in industries from autos to mutual funds.

"That is the health care debate," said Rob Webb, head of the Care Solutions division at OptumHealth, the Plymouth-based company that employs Imig. "Can this be a consumer driven economy?"

To test that question, OptumHealth and a variety of competitors are compiling sophisticated report cards that rate hospitals and medical centers by critical measures such as staff expertise, patient mortality, outcomes and cost.

Their reach is huge and growing. OptumHealth alone serves some 40 million health plan members and managed 5,000 transplants last year. The national Blue Cross and Blue Shield Association, with a similar strategy, covers 100 million people.

Their conclusion so far: Given a choice and guided by an expert like Imig, patients generally will head for the highest-quality center, even if it turns out to be far from home, friends and family.

"The people who use it should end up with better care," said Judith Hibbard, a professor at the University of Oregon who studies consumer choice in health care. "That should influence the market and motivate providers to improve -- or drive poor performers out of the marketplace."

The concept, however, has plenty of skeptics, especially among those being graded. They question whether health plans can make valid quality distinctions and whether consumers should trust an insurance company for medical advice. OptumHealth is owned by UnitedHealth Group of Minnetonka, the nation's biggest health insurer.

"It needs a lot of scrutiny," said Dr. William Payne, head of the organ transplant program at University of Minnesota Medical Center, Fairview.

The first phone call

The 350 care management nurses at OptumHealth operate a lot like air traffic controllers as they each juggle dozens of complex medical cases every day. Most people don't even know they exist -- until they or someone they love falls gravely ill.

The first call Imig made to Shannon and Mike Kluver, of Granite Falls, came last February. Doctors at the University of Minnesota had just told them their 10-year-old son, Tyler, had a rare and potentially fatal brain disease called adrenoleukodystrophy (ALD). He needed a bone marrow transplant. If he didn't get it soon, it would be too late.

Tyler could have gone to any one of seven U.S. hospitals that specialize in bone marrow transplants for ALD. All have earned a spot on OptumHealth's list of 110 Centers of Excellence for bone marrow and organ transplants.

Imig saw immediately that Tyler was already in the best place. The University of Minnesota is a pioneer in bone marrow transplants for ALD. It does about 20 transplants a year for ALD and other similar diseases. Best of all, it is close to Granite Falls.

Mike Kluver said he and his brother confirmed all that with their own Internet searches. "There are only two places in the world that know the most," he said. "That's either the U of M or a place in Paris, France.''

Had the Kluvers' choice not been so obvious, Imig would have stepped in. She would have walked them through the data on mortality rates, complications, recovery time and post-transplant care at both hospitals. She would have urged them to use the program's travel benefits, which pay for travel to the best Center of Excellence.

When a family chooses one of OptumHealth's Centers of Excellence, the savings can be huge. Optum negotiates a discount of up to 46 percent in exchange for including a center in its network. It estimates additional savings of 15 to 20 percent because better care reduces complications and follow-up care. Total possible savings: some 60 percent.

Ultimately, however, the choice is still up to the patient.

"Most of the time patients don't want to leave their home, their church friends and neighbors," Imig said. But precise medical data is persuasive, she added. "Some don't realize that there is a difference in care from facility to facility. I want them to be able to live another 20 years."

Tyler had his transplant last March. His older brother was his donor, and Tyler is slowly improving. The disease left him with vision and hearing problems that could be permanent, Mike Kluver said. But compared with other children and other families, Kluver said, "we feel fortunate.''

Voting with their feet

Whether companies like OptumHealth can improve American health care depends on two things: Will consumers really choose the best hospitals when given the choice? Can hospitals improve quality and control costs in exchange for access to patients?

OptumHealth claims success on both counts.

When Webb came to the company six years ago, about 45 percent of the patients assigned to its care management system chose one of its Centers of Excellence. Today, that figure is 90 percent.

Blue Cross and Blue Shield of Minnesota, which uses a similar system, sees the same pattern.

Hospitals, too, seem to be adapting. Recently, Webb said, the Mayo Clinic was added to OptumHealth's network for transplants, but only after it agreed to discount its prices in exchange for the volume of patients OptumHealth could provide. The deal means that millions of additional patients can have surgery at Mayo, and it created more competition among transplant centers.

"It shifted the markets,'' Webb said. "It broke up regional monopolies.''

That kind of dealmaking shifts the market in other ways, as well. Mayo, Abbott Northwestern and the University Medical Center all perform heart transplants in Minnesota. But at this point Abbott is not included in OptumHealth's network because it doesn't do enough of the procedures. Abbott is now hiring more surgeons to increase its volume and offer new surgical techniques, officials there said.

Free market philosophy

To Rob Webb, consumer power in health care is a natural extension of the free market. In recent years, he points out, the financial services industry became much more competitive as investors found new tools to track mutual funds and compare investments. Webb should know: He came to OptumHealth after a career in finance, where he used to vet bond firms for a financial services company.

Conflict of interest?

While doctors, hospitals and policy experts all agree consumers need better information, many question whether companies like OptumHealth are the ones to provide it.

They say there is an inherent conflict of interest when the company paying the doctor bills also decides which doctors are best. To extend Webb's metaphor about financial services, they say health-care consumers need an independent body like the Securities and Exchange Commission (SEC) to police the data.

"We are all uncertain about how they make internal decisions,'' said Dr. Daniel Weisdorf, head of the University of Minnesota's bone marrow transplant program.

For one thing, the vast data banks they use to rate hospitals, built largely from insurance claims, are proprietary. OptumHealth, for example, declined to provide its quality data on bone marrow transplant programs in Minnesota and elsewhere for this story.

"The data is not perfect, and it can be misleading," said Dr. Charles Rosen, head of the liver transplant program at Mayo. "Some factors are not taken into consideration."

Some say small programs, such as Abbott's, are unfairly penalized for being small no matter how good they are.

Moreover, OptumHealth itself -- whose revenues in 2007 increased 13 percent to $579 million -- adds another layer of cost to health care. "We should never forget the fact that they are in the middle," Payne said of the university organ transplant program. "It all comes out of the payer's pocket."

What's clear is that the people paying the nation's health care bill -- employers, taxpayers, insurance companies -- are demanding more transparency.

The trend "is growing explosively," said Don Berwick, director of the Institute for Health Care Improvement in Cambridge, Mass., and the grandfather of the transparency movement in medicine. OptumHealth and other insurers are compiling report cards for everything from cancer treatment to congestive heart failure to joint replacements.

"You can bet we are investing big time in many more transparency initiatives," said Dr. David Plocher, medical director at Blue Cross.

The movement remains in its adolescence and consumers find the amount of data overwhelming and confusing, Berwick said. At this point its greatest effect is on health care's collective ego, he said. Transparency works mainly because no one wants to look bad under the bright light of public scrutiny.

But, Berwick added, the insurance industry may be onto something by rating the most complex and expensive procedures first. Consumers may be more interested in using quality data when facing a life-saving treatment such as a transplant than when weighing something routine such as a flu shot.

"If that's true, the whole thing could make sense," he said.

But that also requires an expert guide like Imig to walk patients through highly sophisticated medical information, said Hibbard, the Oregon professor, who also sits on United Health Group's physician advisory board. That's very labor intensive, she said.

Webb sees the natural forces of the free market as inevitable. "Higher quality translates into lower costs,'' he said. If it didn't, he added, "we'd be out of business.''

At least for now, his job is to provide all the players with what they need. Patients want quality. Medical centers want customers. Health plans want lower costs.

"We have to balance all three,'' he said.

Just like the SEC.

Josephine Marcotty • 612-673-7394

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