R.I. doctors' group saves $15.3 million by partnering with insurers, focusing on 'quality, not quanity'

Oct. 24--Rhode Island's largest group of primary care doctors has enjoyed so much success embracing a new model of care -- one that is being touted by experts as a way to help cure the ills of America's health system -- that it's now ranked among the best in the nation.

On Friday, Coastal Medical announced that its new approach -- getting paid by insurers for how effectively it cares for its patients, not simply by billing for doctor's visits and procedures -- resulted in $15.3 million in savings in 2014. Those savings are shared roughly evenly with Coastal's insurers.

One of them, the federal government, has just ranked Coastal among the top 1 percent of so-called "accountable care organizations" in its three-year-old Medicare Shared Savings Program. Out of 333 other medical groups that have joined the program and transformed their practices, Coastal was number three in the nation on 33 quality measures.

"At a time when rising costs of health care have become such an important challenge for our state and for our nation, this is an accomplishment that is worth examining carefully, to consider what can be learned from Coastal's experience in 2014," Dr. Al Kurose, CEO and president of Coastal, told a gathering of health leaders at the Providence Hilton.

Noteworthy among them was Donald Berwick, former head of the U.S. Centers for Medicare and Medicaid Services and president emeritus and senior fellow at the Institute for Healthcare Improvement in Cambridge, Mass. Berwick was a guest speaker along with Sen. Sheldon Whitehouse and the heads of the three private insurers -- Blue Cross and Blue Shield of RI, United Healthcare and Tufts Health Plan -- that have entered into shared payment agreements with Coastal.

About 60 health officials -- including physicians, insurers and government regulators -- turned out to hear about Coastal's experience and to discuss the trend toward paying for "quality, not quantity," as its proponents like to say.

It's a model that has been put into practice only in the last few years and only by a limited number of medical groups, leaving some skeptics unconvinced that it can curb the soaring cost of health care while improving care.

But Kurose says Coastal's experience has been overwhelmingly positive, even resulting in the creation of 150 new positions to better manage the care of patients.

Since its founding in 1995, Coastal, which is owned and governed by physicians, has grown to 119 doctors and advanced practitioners at 20 sites across Rhode Island. It cares for 120,000 patients.

Today, three-quarters of its patients fall under shared savings contracts that insurers have struck with Coastal, beginning in 2012 with Blue Cross and Medicare.

It has taken a genuine transformation for Coastal to adapt to the new model, Kurose said. It's all about pro-actively managing the health of patients, especially those with diabetes, heart disease and other conditions who are at risk of costly hospitalizations and emergency room visits.

That involves coordinating the care of patients as they go between primary care doctors and specialists and as they transition between hospitals, nursing homes and rehabilitation facilities.

To do all of that has meant hiring additional staff -- pharmacists to oversee the timely filling of prescriptions, nurse care managers to support patients managing chronic illnesses and case workers to go to hospitals, nursing homes and residences to check on the well-being of patients.

To discourage patients from going to emergency rooms or clinics, the medical group established its Coastal 365 facility, which is open every day of the year, with evening and holiday hours, for sick visits for adults. A Coastal-wide electronic medical records system allows patients care to be tracked and for patient data to be analyzed and reported to insurers.

"We believe you have to spend more to save," said Kurose.

Medicare is convinced of Coastal's success, which is why the Rhode Island medical group is among the roughly one-third of ACOs that qualified for shared savings payments. Those savings were shared with employees in the form of bonuses equal to about a weekly paycheck that were hand delivered by Coastal's executive team.

Also, the amount that Coastal received was enhanced by its performance on 33 quality measures. These relate to patient satisfaction with care, rates of readmissions to hospitals for recurring illness, management of high risk patients and preventative health efforts such as cancer screenings and vaccinations.

From 2011, before it launched its ACOs, until 2014, when the latest data was collected, Coastal saw its total costs drop 9 percent, hospital admissions plunge 28 percent, ER visits decrease 18 percent and readmissions fall 14 percent.

Meanwhile, 88 percent of female Blue Cross patients had mammograms, 80 percent of United Healthcare patients due for colonoscopies underwent the procedure and fewer than 10 percent of Medicare had diabetes deemed to be "out of control."

"The data we have in hand -- 'the numbers,' if you will -- tell a clear and compelling story," said Kurose. "It's a story about progressive excellence in quality of care -- and a new and better experience of care for patients. It's also a story about partnership with payers ... each of whom have worked with us to improve quality, offer new services, and lower the total cost of care. And it's also an exciting story about jobs creation and workforce development in Rhode Island."

"We can look back and say this really did work," said Kurose.

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