New Partnerships with Managed Care

MCOs and EDs can work collaboratively on developing product lines and services.

Are you looking to expand market share in a rapidly changing managed care environment? Want to know how to market your emergency department to local MCOs?

Why not get the information straight from the horse’s mouth?

Free from the economic incentives and disincentives of the fee-for-service environment, large staff-model HMOs have long been on the front lines of developing new protocols for cost-effective patient care and efficient health care delivery, and that information can be valuable to community EDs looking for innovative solutions in a managed care environment, says Roy Farrell, MD, FACEP, chief of the urgent care clinic and a practicing emergency physician in the ED at Group Health Central Hospital in Seattle, WA, a hospital owned by the staff-model HMO, Group Health Cooperative of Puget Sound.

"I think community EDs can look to settings like ours, where we are part of the organization, and see how we have evolved and look at possible models of what they can offer local MCOs in their communities," he says.

In traditional fee-for-service settings, billing mechanisms and third-party payment mechanisms have often served as obstacles to finding the highest quality and most efficient means of providing health care, particularly in the emergency department, Farrell believes.

"Emergency docs can do a lot more for patients than has traditionally been the case," he says.

"I think the main question ED directors need to ask themselves is, what really is the value that has been added for the patient coming through the ED, and why would the managed care organization want their patients to come through your ED?"

There are three main areas where he believes emergency departments can expand their services to offer MCOs and their members quality care more efficiently and at a lower cost.

Expand the number of procedures and services performed. In their delivery system, Group Health found it was more efficient to have the ED physicians perform the admission history and physical on patients who are being admitted and also have them write the admission orders, says Farrell.

"There is no one who is better able to dictate the admission history and physical than the doctor who has just spent three hours with the patient, talked to the family, talked to the paramedic at the scene, and described the living situation," says Farrell. "I’ve reviewed all the old records, got lab, ECG, and x-ray data that I have just obtained, and I have, maybe, talked to the patient’s caregivers and family. There is no specialist anywhere who can do a better job with an admission H&P than I can, and to have some doc who is on call come in from home to do something I am better suited to do, and I am there on duty, makes no sense at all."

The same goes for writing the admission orders, he contends. It requires a different level of service than many ED physicians are used to, however.

"It is not just a 10-minute evaluation and then, ‘This patient is an obvious admission, send him upstairs,’" Farell explains. "It requires a really thorough workup and evaluation of the patient, and that is the service that’s evolved in our MCO in the emergency department."

The ED physicians at Group Health also perform some services and procedures normally performed by other departments in many hospitals.

"In our department, for example, we do all the suction curretages for miscarriages," he says. "If a patient comes in bleeding and cramping and our obstetrician is doing a C-section or in the operating room doing a delivery, for that patient to lie around in the ED in pain, bleeding and cramping, until the GYN can get down there, makes no sense whatsoever."

That procedure is one that is taught to residents in their first year and is simple for them to do in the ED, says Farrell.

They also perform closed reduction of orthopedic injuries.

"We never call an orthopedic surgeon to reduce a closed fracture in our emergency department," he says. "If we call the orthopedic surgeon it is because it’s a fracture that can’t be reduced closed and needs to be operated on. This allows our orthopedic surgeon to remain in his or her office, or to be in the operating room while they are on call, or to get a good night’s sleep, so they can be in the operating room the next day."

Find alternatives to hospital admission. If the ED physicians are allowed to invest a little more time and resources in patients presenting in the department, they can have a dramatic impact on an MCO’s inpatient hospital days by finding alternative dispositions for patients that require extended care but not necessarily a hospital admission.

At Group Health, ED staff help arrange admissions to skilled nursing facilities (SNFs) in lieu of hospital admissions, set up home health services, or arrange direct admission to a SNF or nursing home depending on the individual needs of the patient, says Farrell.

"A good example of a patient that can be admitted to a SNF is a Level 1 CVA, where the patient needs physical therapy but not the services of a full hospital," he says. "Another example is a COPD patient who is stable but unable to return home."

Pneumonia patients who are stable can receive IV antibiotics at home, rather than be admitted, he continues. The pharmacy department and infectious disease specialists at the hospital will train the patient or patient’s family to administer the IV antibiotics, or the department can arrange a home health visit by a nurse.

The hospital and department have established criteria for admission to the hospital and criteria for alternative dispositions for each of the possible presenting conditions, says Farrell.Once a physician determines a patient meets certain criteria, support staff, such as medical social workers, get to work setting up an alternative admission.

Many of these dispositions are what happens after a patient gets admitted to the hospital anyway, he states. It just usually takes a day or two longer to get the SNF admission arranged or the home health visit scheduled. "That day or two, if the per diem is $1000 per day, that mounts up for managed care organizations. It’s a different level of service (than is typically required in the ED) but, again, you are looking at what the services are that we can add to the care of the patient in the ED."

Open a clinical decision unit (CDU) or rapid treatment unit. "The idea is to have a place attached to the ED where a patient can go and be intensively diagnosed and treated for up to 24 hours and you really need that kind of capacity if you are going to do some of the other stuff well," says Farrell. "Some of the dispositions to nursing homes take a while."

Many conditions, typically asthma exacerbations, kidney stones, CHF, minor strokes, or overdoses, can be managed in a CDU over a period of 6-8 hours that would ordinarily require a one or two-day hospital stay, says Farrell. "It is a tremendous tool for a managed care organization to have access to."

Developing services to meet managed care needs

Working cooperatively with managed care requires setting up a good, safe meeting with the plan’s representatives to talk about how your department can help make their delivery system more efficient, says Farrell.

"It requires that your emergency group be open, be willing to consider things differently, be willing to staff differently," he says. "If you are going to be a player in a managed care environment you have to figure out how you can add value to that patient coming through your department. If you can provide that service, you are going to be there as a vital part of that managed care organization. If you refuse to provide that service, or don’t anticipate that the service could be provided in a supportive way, they will figure out another way to provide the service."

Whatever solution the MCO comes up with, it will be revenue that could have been coming through the ED, and probably should have from a practical standpoint, Farrell notes.

An example in Texas: What MCOs bring to the table

If an emergency group can offer the MCO the services it needs, the MCO may then be willing to go a step beyond just the traditional contracting relationship and enter into a partnership that allows the group to share resources and profits with the plan.

Kaiser Permanente in Texas recently entered into negotiations with Dallas-based Questcare, an emergency group that has the contract to provide emergency services at all 13 Columbia hospitals in the Dallas-Fort Worth area.

"The goal for us here is to contract with Questcare for a variety of emergency services, including emergency department care as well as other options, such as CDU care or rapid treatment unit care for patients who need dispositions beyond the emergency department," says David Yoon, MD, FACEP, a Kaiser-Permanente emergency physician and executive who is negotiating the deal with Questcare. "What is being discovered in managed care everywhere, is that the managed care organization does best if it cooperates on an ongoing basis with the physician provider group so that the goals of the managed care organization get met."

Kaiser hopes to develop mutually agreeable practice patterns that will allow Questcare to share in some of the managed care incentives along the lines of reimbursement, he adds.

With it’s contracts at all of the Columbia hospitals in the Dallas area, Questcare has the market penetration to offer Kaiser "one-stop shopping" for emergency services, says Robert Andelman, MD, FACEP, Director of Medical Systems Development for Questcare, and formerly Associate Regional Director of Emergency Services for Kaiser-Permanente in Ohio.

"We have the product lines that we can offer them, and we are willing to take risk pool, although the actual economic agreement has yet to be worked out," Andelman says. "We understand and feel very comfortable, particularly since we have a history with them, of looking at a risk agreement. They will be looking for quality assurance and utilization management and we are more than willing to look at that."

Andelman’s background with Kaiser in Ohio gave him ample experience in designing product lines that fit emergency medicine in a managed care environment.

In Kaiser’s Cleveland ED, all unscheduled care came through one door, urgent care or emergent care, he says. When patients presented, they were triaged and sent either to the main ED or to an adjoining urgent care center depending on their needs. The department also had a contiguous CDU.

The Ohio ED was able to demonstrate that it could treat urgent care patients in its clinic at a lower cost than the private physician’s office, he says.

Kaiser’s informatics system also enabled the physicians to deliver a higher level of service, he says. "We were able to pull up all of the patient records (on computer), my physicians could make very specific determinations on disposition—this patient could go home, this patient should come in to the hospital, the patient could come in to the CDU."

Andelman, formerly the chairman of the American College of Emergency Physicians’ section on short-term observation services and the upcoming chair of the managed care section, echoes Farrell’s sentiments with regard to the need for EDs to expand their breadth of services.

"You know, if we truncate ourselves down to only taking care of emergencies, we are going to be out of business," he says.

The negotiations with Kaiser go beyond just an economic agreement, he states.

Both Kaiser and Questcare physicians are working on practice guidelines, but there will not be protocols specifically for Kaiser patients.

"I am looking to get practice guidelines that will be appropriate for everyone, of which Kaiser will agree are appropriate for their patients," he says. "They will all be based on scientific data, state-of-the-art understanding of the disease entity."

A key piece of the agreement will be getting Questcare the appropriate patient information that will allow them to make informed disposition decisions about Kaiser patients, says Yoon.

Once the deal has been settled, Questcare physicians will essentially be able to function as a surrogate in the ED for the primary care physicians at Permanente Medical Association of Texas, the physician organization of Kaiser Permanente’s care program.

The clinical data on Kaiser patients coupled with the already agreed-upon practice parameters should eliminate calls for authorization for Kaiser patients in the Columbia hospitals’ ED, says Andelman.

Andelman believes his prior position in a managed care plan allowed him a unique vantage point in negotiations on behalf of Questcare.

"Having been with Kaiser, I know what they are looking for and what their problems are," he says. "If you have a background in managed care you know what the problems and advantages are of managed care."