If health care executives had no idea how the market was going to evolve four years ago as federal health care reform kicked in, one of the smartest things to do is what Park Nicollet did, and that’s merge with HealthPartners.
The strategy behind this deal, announced in 2012, wasn’t just about becoming bigger and having every medical service under one roof. It was about Park Nicollet joining up with a company like HealthPartners that had an insurance business, too. That certainly seemed like a key advantage as the reforms of the Affordable Care Act kicked in.
And the deal worked well, so well that not long ago HealthPartners CEO Mary Brainerd agreed it was a good time to discuss how it’s going. What she couldn’t have fully anticipated, though, was that before the meeting could take place, Donald Trump would win the presidential election.
Now the ACA could be going overboard, with no firm notion yet on what’s most likely to replace it or even if huge government programs like Medicare will still exist in the form they are now.
The merger, however, makes as much sense in November 2016 as it did in 2012, particularly because HealthPartners kept a focus on holding down the growth in the total cost of care. No matter what happens next, Brainerd said, “I can’t imagine an environment where delivering more affordable health care isn’t the right thing to do.”
The merger of Park Nicollet into Bloomington-based HealthPartners maybe resembled a straightforward corporate acquisition, but the deal was also a sign of the times in Minnesota’s nonprofit health care sector. Providers and health insurers everywhere in the country in 2011 and 2012 had to be thinking about how to prepare for implementation of the Affordable Care Act.
While most of that sprawling legislation was about reshaping the health insurance market rather than how patients were treated by doctors and hospitals, the act contained provisions that looked like they could lead to fundamental changes in the way health care got paid for, in turn changing what doctors and hospitals did.
Suddenly a new term grew very popular, the so-called accountable care organization. It meant big providers would get paid based on how healthy they kept their patients rather than on how many checkups and medical procedures they did.
There was more than one reason for doing a merger, of course. But for a diversified health care provider like Park Nicollet, it made a lot of sense to link arms with a health plan company like HealthPartners if doctors and clinic systems had to assume more of the financial risk for keeping people healthy.
Now that we’re a few years into the implementation, however, only the health care trade press still writes about the potential of accountable care organizations. Everybody else is writing about insurance rates going through the roof in the individual health insurance market.
To Brainerd, this looks more like one more sign of the far bigger problem of how costly health care is. She remembers when the complaint she heard most from consumers was about bad service, like a long wait time to see a doctor.
“The most frequent thing I hear now from patients is ‘I can’t afford it,’ ” she said, with episodes like patients who are mad they had to pay for a medical test when the results showed there wasn’t a problem. They had a big deductible to pay on their insurance plan, and the test cost a lot.
Among the many reasons health care cost increases have accelerated lately, Brainerd said, are higher prices for specialty drugs, surging orthopedic procedures as baby boomers age “and just a little more money going to the doctors.”
The goal at HealthPartners is keeping the total cost of care — that’s means both price per service and utilization — growing slower than in the overall market. After the merger with Park Nicollet was completed in January 2013, its total cost of care was a bit more than the market average but has been steadily inching down ever since.
The total cost for the HealthPartners clinic system, meanwhile, has been flat while the results from HealthPartners’ Stillwater Medical Group have been increasing. All three have higher costs now than HealthPartners’ goal of 90 percent of the market average, Brainerd said, “but we are making progress.”
Brainerd also shared a presentation slide on “affordability strategies.” Many of the initiatives listed on this very busy slide were expected to save as little as $100,000, in an organization that hoped to save up to $102.5 million. No one or two brilliant ideas, clearly, will bring down the growth rate in health care costs very much.
One of Brainerd’s convictions is that no health care organization can talk about affordability if it doesn’t also deliver high-quality care. There are initiatives that can meet both of these goals at the same time, of course. One recent example is beginning to screen for postpartum depression in a pediatrician’s office, as a new mom is far more likely to visit a pediatrician with her new baby than her own doctor.
Like other Minnesota health care executives this year, Brainerd sounded frustrated that the costs in the individual health insurance market have caused 2017 insurance rates to skyrocket, in part as changes wrought by the ACA ended effective programs here in Minnesota. “We had some more things at risk because we had more things that were working,” she said. “Texas had nothing.”
Now that national health care policy is up in the air again, some changes that would make the most sense to her don’t seem much closer to becoming reality than they did eight years ago.
She described how one of her physicians continues to express frustration that simple consumer technologies like an iPhone can’t be more widely used to monitor and consult with patients with chronic conditions, rather than asking them to keep coming into a clinic.
The problem, of course, is that providers still have a hard time figuring out the right way to get paid for the value of innovative smartphone monitoring but know exactly how to send a bill to an insurer for an office exam.
“Repeal, replace, modify it, I don’t care what they call it,” she said, of federal health care policy, “just so long as we start figuring some things out.”