Kalispell schools move forward with off-site clinic

Nov. 16--Print Article

Approximately 550 Kalispell Public Schools employees currently on the district's self-funded health insurance plan, their dependents and retirees will have another option for their primary care at a potential savings.

The district has entered into a five-year agreement to open a CareHere clinic on at 340 W. Center St. in Kalispell in an effort to control costs. The move follows extensive research and discussion by the district, its insurance consultants Scott Haas and Eric Davis, in addition to school board financial and health insurance committees.

The recommendation was approved 7-1 by trustees on Tuesday, with trustee Amy waller dissenting, requesting more time to review the topic following information presented by Kalispell Regional Healthcare Chief Strategy Officer Jason Spring.

Since the district entered into a multiple-year contract, CareHere will waive an initial set-up fee estimated at $35,464, based on a primary-care center with two exam rooms, according to its proposal submitted in September. Morrison-Maierle will provide architect and engineering services to remodel the West Center Street location, which previously housed a vision clinic. The district has the option to pull out of the contract at any time with 90 days notice.

Ongoing costs to the district includes a $15 administrative fee per employee. The insurance premiums employees pay, which also include a district contribution as an employee benefit, will go toward covering annual costs, which CareHere estimates at $334,113 in the first year.

When asked where the money will come from, Director of Business Services and Operations Gwyn Andersen said there are some options once actual numbers are calculated, including borrowing from the district's interlocal fund or absorbing it through employee health-insurance premiums.

CareHere provided a cost and savings analysis showing a net savings of $207,298 in the first year, dependent on at least 2,280 patient visits. Getting people to use the clinic will be the next challenge, according to Andersen and district Human Resources Director Tracy Scott.

"Yes, these are estimates, it's going to depend on utilization," Andersen said. "We're going to need our people to use the clinic in order to make this work."

"The first year we'd like to get to 80% utilization rate," Scott said. "We want to get them participating in preventative health care."

The district thinks participation can be accomplished through a zero copay for clinic visits for insurance members enrolled in the district's "managed care plan," whereas its currently a $30 copay. Patients also may make appointments online 24/7, which may also interest staff who are not currently on a district insurance plan. The district employs a total of 750 people.

"We look at primary care as a huge enhancement in beginning to get control over chronic illness and to get preventative services to members," Haas said. "But doing so through an on-site clinic model eliminates the out-of-pocket expense to the member."

CareHere is a Tennessee-based company that partners with employers to provide medical services to their employees by providing administrative services and hiring medical professionals to operate clinics and maintain medical records in compliance with the Health Insurance Portability and Accountability Act, according to the company. The company manages more than 200 health and wellness centers in 22 states including Montana Health Centers that serve state employees. This track record is what appealed to school board chairman Lance Isaak.

Examples of medical services covered at CareHere clinics are acute conditions such as a sore throat, cough, sinus and sprains, for example; chronic illness evaluation and management such as diabetes or high cholesterol; lab testing; physicals and other routine care.

There's also a focus on preventative care, which is where savings may be realized when patients engage in healthy habits and seek medical attention before an issue worsens.

Reaching this point has not been easy. Insurance, health care and associated costs to employees has been a topic in the district since it went to a self-funded insurance plan that was approved by the school board to mitigate rate increases in 2013. The self-funded insurance plan is currently at a deficit of approximately $725,000, according to Andersen, due in part to high claims. The district floated a loan to cover the deficit in 2017 to be repaid when it's in the black. Andersen said the fund was on track to be in black last year until a high claim, "blew it out of the water."

"We lost money again last year. The flip side is we can raise premiums, but we don't want to raise them constantly," she said, noting that even with the deficit, going to a self-funded insurance model was better for staff who would have been paying significantly higher insurance premiums.

"We're really trying to control costs," Andersen said. And that is done through preventative care and early treatment or diagnosis, Haas added.

The decision to go with CareHere means about 6% of total costs that would go to Kalispell Regional will go to CareHere instead, Scott said.

Before the board voted, Spring made the case for the district to seek out a primary health-care clinic through KRH, which he said already has an available clinic building and staff.

"When I actually looked at it [CareHere proposal] we've already beat them in price because we were including a clinic in ours," Spring said, which may have offset a $25 administrative fee per employee.

Spring noted there have been thorny and challenging issues discussed among district staff -- Andersen and Scott expressed that frustration -- but he also noted the positive parts of the partnership such as KRH behavioral health and athletic trainer employees who work with students.

"We've made a commitment to our communities to try and address health-care costs, and most importantly, a consistent health-care delivery system," Spring said, later adding, "For us it's not a revenue thing but it's the coordination of care" between primary care providers and the hospital. "We've worked really hard to create a system where we can coordinate care," such as acquiring North Valley Hospital, for example.

Spring claimed KRH didn't hear much feedback from its initial proposal in February and said a presentation to the district health insurance committee with more details in March was poorly attended. He also expressed disappointment in learning that the CareHere clinic was an action item the day before the board meeting.

"We were disappointed that we've been through this process for some time and the communication kind of failed at the end," Spring said. "We would love to be your partner in primary care. We would love to help deliver this in a community way that works for everybody. We've invested a lot in primary care. Somebody said something about making a profit in primary care -- you don't make a profit in primary care. That's just part of what we do for the community. That's not where profit's made in the health care system."

Trustees provided some input before voting.

"It comes down to two things -- " trustee Mike Merchant said after getting clarification on the district's portion of costs. "...no copay and not having to wait for an appointment. Everything else, when all the dust settles in my mind, those are the two takeaways."

Isaak and trustee Ursula Wilde reiterated the problem with the rising self-insurance deficit.

The issue of competitive rates also surfaced during Tuesday's discussion.

Reporter Hilary Matheson may be reached at 758-4431 or [email protected].

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