Clayton-based Centene reaps millions cutting government health costs [St. Louis Post-Dispatch]
By Jim Doyle, St. Louis Post-Dispatch | |
McClatchy-Tribune Information Services |
Their proprietary database, known internally as Centelligence, helps them predict the likelihood that a patient will, for instance, develop diabetes or asthma. And they can drill into individual patients' records to pinpoint causes.
Like bond traders poring over rates and yields,
"We're forecasters," said
Outside of
Centene and its competitors, which include
Federal and state agencies already spend about
As the nation's fourth-largest
Most of the company's work focuses on the families of low-income single mothers. But Centene and its competitors are advancing into one of the highest-cost areas of health care: serving the aged, the blind and the disabled poor, including those who qualify for both
Neidorff, 69, says
"This country doesn't have endless dollars. Our job is to provide higher quality care at the lowest possible price," Neirdorf said. "We go to states and ask to take on their sickest populations."
MANAGED
As tax revenue falls and health care costs soar, state
Instead, many states have privatized management, paying fixed per-patient rates and letting companies assume the risk of rising
In the 1970s, "health maintenance organizations" were vilified for scrimping on employer-provided care. Centene and other companies seem to be earning better marks in the realm of government care.
That may owe partly to closer management of the managers. Federal and state regulators increasingly demand that
"In the procurement process, simply getting to the bottom line number is not enough," Fried said. "The states consider much more -- everything from foot and eye exams for diabetics to flu vaccines and customer service standards."
It's a fierce industry, marked by intense lobbying, bid protests and litigation over state contracts, and federal investigations. But Centene appears to have avoided some of its competitors' missteps. For example:
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In the last decade, Centene has moved aggressively into several new states including
Both revenue and profit have steadily climbed, with Centene in 2011 posting revenue of
Those gains have transformed Centene into one of the region's most successful companies, with about 5,300 employees nationwide, including more than 900 in the
Centene continues to grow and diversify. About one-quarter of its revenue comes from specialty markets, including the sale of individual health insurance and long-term care plans, as well as behavioral care and vision care.
"My job is moving the rocks off the road," said Neidorff, whose annual compensation package in 2010 totaled
PRIMING THE PUMP
It takes money to make money. In the case of state contractors, that money gets distributed to politicians and community causes that can help land the public contracts that fuel corporate growth. Centene occupies an inherently political realm, and it embraces that reality by doling out hundreds of thousands of dollars annually in campaign donations. It spends with equal vigor on gifts to nonprofit groups in the states it serves or seeks to serve.
In
About 425,000 people are enrolled in
In
The company also gives liberally to nonprofit groups in its target markets.
"We are big believers in corporate social responsibility and being active in the markets that we serve," Hunter said. "And that includes giving back."
Centene also has paved the way for contracts through relationships with smaller, minority-owned businesses that can put a competitive bid over the top.
Centene came under scrutiny recently because one of its affiliated businesses, the embattled
In late December, SynCare's owner, former Centene executive
Amid public outcry over SynCare's failures, Centene officials sought to play down its relationship with the company. Neirdorf said Centene supported DeKemper's activities in
"Not everything you try works," Neidorff said.
THE COST CUTTERS
Contributions and connections can kick open doors to state contracts, but it takes a solid track record to keep them open. Founded in 1984, Centene has proved to be an innovator. Its subsidiary CeltiCare gained experience as the only for-profit, publicly traded company to participate in
Centene survives and thrives on data management and analysis. The company's dashboard displays a host of predictive modeling algorithms, analyzing medical, behavioral health, pharmacy claims, and laboratory test data to help identify high-risk patients before they need multiple high-cost procedures.
Its network of providers tries to reduce costly use of emergency rooms by encouraging patients to see primary care physicians, take their medications, go to their followup appointments and pursue healthy lifestyles. About one-fifth of
About 20 percent of
Centene runs 24/7 telephone help programs such as "Nurse Wise" to urge patients to adhere to their medication schedules and to visit primary care physicians rather than the emergency room. Some high-risk patients are provided with cellphones so that health care providers can keep in contact. The average emergency room visit costs about
"It's not about withholding care, but ensuring that care is in the right setting," Neidorff said. "We spend money on preventative care."
The firm's "Start Smart" program for healthy babies identifies women at high risk for premature births. For the past several years, women in
Centene has encouraged physicians to prescribe a cheap version of the drug, which is made by specialty pharmacies, and helped physicians procure it at low rates.
But some critics have questioned the drug's safety and efficacy. In approving a brand name version of the drug, Makena, the
So far, Centene appears to be winning its gamble that the drug's benefits outweigh its risks -- preventing dangerous and costly premature births.
At the firm's
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