Jill Sederstrom

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	When it comes to infant mortality, the United States continues to report higher rates than other countries. But new efforts by states, health plans and providers aim to lower infant mortality, improve birth outcomes and reduce costs to the healthcare system.

	According to the Central Intelligence Agency's World Fact 

, the United States has approximately 5.90 deaths per 1,000 births each year, earning it the 174th ranking in infant mortality rates. Comparatively, the United Kingdom is ranked 189th and Japan is 223rd with a rate of 2.17 deaths per 1,000 each year.

	The Centers for Disease Control and Prevention defines infant mortality as the death of a baby before his or her first birthday. The National Center for Health Statistics reported that in 2010, 57% of all infant deaths in the United States could be attributed to serious birth defects, babies born too small or too early, sudden infant death syndrome, maternal complications during pregnancy or injury.

	Comparisons to other countries birth rates can be difficult because evaluation depends on the data's accuracy. In addition, a bulletin from the World Health Organization (WHO) noted that European countries often use different practices for stillbirth and live birth registration, and some countries only register live births after the infant has been alive for a specified period. The United States, however, uses the WHO’s definition of live birth that registers anything that breathes or shows evidence of life.

	But despite these difficulties in comparing countries, healthcare experts agree that the United States still has room for improvement.

	Infant mortality, preterm births and high-risk pregnancies can have costly implications for the healthcare system. According to the March of Dimes, preterm births cost the United States at least $26.2 billion in 2005, or approximately $51,600 for every premature infant born that year. In addition, it reports that the average first-year medical cost to care for premature infants is approximately 10 times higher than the average cost for full-term infants ($32,325 versus $3,325, respectively).

	According to the National Center for Health Statistics, in 2010 there were 325,563 babies born with a low birth weight-less than 2,500 grams, or approximately 5 pounds, 8 ounces.

	To combat infant mortality rates and low birth weights, health plans are turning to programs that offer education, early intervention, assessment and case management services. The goal of these programming efforts is to improve the overall health of mom and baby by increasing average birth weights, preventing preterm labor and encouraging healthy habits before, during and after pregnancy.

	"We look at helping deliver healthy babies as helping deliver healthy members," says Janet Johnson-Yosgott, Health Net's manager of health promotion.

	In January, Health Net teamed with a vended partner to expand its healthy pregnancy program to include obstetric risk assessment and education. The program includes an initial assessment to identify high-risk participants, a follow-up assessment midway through the pregnancy and 24-hour access to a "BabyLine" staffed with experienced perinatal nurses.

	While women with healthy pregnancies and no signs of high-risk conditions are placed in a healthy pregnancy program, Health Net also offers case management services for those members with high-risk obstetrical conditions. Coordinators work to create care plans for these high-risk individuals that incorporate goals, support and periodic assessment.

	"There's much more customized education and problem solving," Johnson-Yosgott says, adding that the health plan also works collaboratively with providers to ensure everyone is on the same page.

	To encourage participation in the programs, Health Net provides the services at no-cost and promotes its benefits through annual mailings and by improving provider awareness.

	Centene, a health plan that provides managed care services to government sponsored programs including Medicaid, has found that one of the biggest challenges to promoting healthy pregnancies is early identification. It has reported that 21.5% of pregnant women in its health plans are not enrolled until the third trimester.

	"We felt that there really was a  problem where many of these women on Medicaid were coming in late to the system," says Mary Mason, MD, senior vice president and chief medical officer at Centene.

	The company knows from their data that they need about 90 days during a pregnancy to make a difference, so they've developed a comprehensive pregnancy notification system that uses proprietary algorithms to maximize early identification and triage patients to the right level of case management. Their efforts include a  standardized form which not only identifies a pregnancy but also identifies possible risk factors. The form can be filled out by the member, physician or health plan. To encourage participation in the pregnancy identification, Centene offers incentives to each group for reporting a pregnancy.

	One critical aspect of the program, according to Dr. Mason, was to change the culture within the health plan so that everyone, not just medical management staff, understood it was their responsibility to identify a pregnancy, including health coaches, call center staff or other employees who interact with members.

	"It's amazing how many women we’re able to catch right now," she says.

	In addition to early identification, the company's Smart Start for your Baby Program includes wellness and disease management, case management and care coordination for pregnant mothers and extends from preconception to the first year or two after birth.

	Centene has found that there was a decreased likelihood of a low birth weight event for those who participated in the program compared to those who didn't, which has translated to some significant cost savings for the health plan, not only for costs initially associated with caring for a premature baby but also for costs during the first few years of life.

	The plan estimates that it saved more than $43.4 million from 2009 to 2011 in prevented NICU days and additional costs for low birth weight babies. While the program carries a cost of $75 per pregnancy, it has been found to save $3,354 per pregnancy.

	"The cost savings on this is tremendous," Dr. Mason says.

	In addition to case management and care coordination, the company has taken a hands-on approach to education, even writing and co-writing parental books on topics such as the first year of care for a baby, the mother's recovery or dad's parenting role. Teams decided to produce the resources after discovering that many of the books available at local book stores did not address issues women who have limited financial resources.

	"We try to take our materials and make them something that's relevant and engaging," Dr. Mason says.

	States across the country are also joining in on the discussion. The National Governors Association (NGA) is leading the Learning Network on Improving Birth Outcomes, an effort to help states develop, align and implement policies and initiatives to improve birth outcomes.

	The NGA plans to conduct three different rounds of the network, with four states participating in each round. During the learning network, which is currently in its second round, NGA convenes in-state sessions where states can choose to either hold a session for senior-level officials to talk in frank terms about the issues surrounding infant mortality in their state or open the discussion to community stakeholders. Participating states also get the opportunity to speak with other state leaders to benchmark.

	"They often find the same obstacles, so it's nice to talk through how they can overcome them," says Krista Drobac, director of the health division for NGA. 

	According to Drobac, one of the advantages of the program is that it ensures that the governor's office in each selected state will be part of the discussion, an often essential ingredient to moving initiatives beyond public health departments.

	"When we come to a state we require that the governor's office has got to be there. The senior leadership has got to be there," she says.

	While the second round is just beginning, Drobac says there were some valuable take-aways from the completed first round. One observation was the need for good, quality data to be able to trigger the appropriate interventions. States also saw the need for personalized case management in the home as much as possible; eliminating voluntary inductions before the 39-week mark of a pregnancy; and making sure incentives are properly aligned in reimbursement structures.

	Aligning incentives will be an ongoing challenge for health plans.

Jill Sederstrom is a freelance writer based in Kansas City

Articles

Japan and the UK outrank the United States in infant mortality measures

Plans, NGA examine infant mortality

 Many states are still weighing whether they will expand Medicaid eligibility through the Patient Protection and Affordable Care Act (PPACA), however, experts say plans must prepare for a new patient group with distinct characteristics. 

A recent report from researchers at the Urban Institute estimates that nearly 15.1 million uninsured adults stand to gain coverage through the PPACA's Medicaid expansion.  

"Mostly you are going to see folks who have not had coverage for an extended period of time, so they may not be used to the system and may need additional help, especially at the beginning, navigating the system," says Tim Sweeney, director of health policy for the Georgia Budget & Policy Institute. 

Sweeney adds that many newly eligible individuals may have only been receiving healthcare services through the emergency room, so increasing awareness about less costly sites of care will be essential. 

From the health plan perspective, Marianne Udow-Phillips, director of the Center for Healthcare Research & Transformation at the University of Michigan, says she believes the Medicaid expansions will be advantageous for the market.  

Plans serving the Medicaid population will benefit from the significant growth in the amount of eligible participants, she says, but cost shifting could ease up as well.  

"We would expect uncompensated care costs to go down, and therefore the cost on the private side should go down, and therefore premiums for people who are currently covered under private health plans could go down as well," she says. 

If states don't expand Medicaid eligibility,  Sweeney says health plans and the entire health system could be impacted, in part because of a reduction of Medicare Disproportionate Share Hospital payments. 

"Safety net hospitals in particular will see significant uncompensated care without the expansion and that cost has to get shifted somewhere," he says.  

As states continue their own financial analyses, Udow-Phillips says health plans need to make their voices heard and begin preparing for the new potential patient population. 

"From a health plan standpoint and a community stand point, the planning needs to occur now," she says. 

If states choose to take advantage of federal dollars and expand their programs, one concern is whether there will be enough primary care physicians willing to see Medicaid recipients. To combat this, PPACA dictates that in 2013 and 2014 primary care providers who see Medicaid patients will be reimbursed at Medicare rates for certain services.  

"I see lots of health plans promoting that higher rate now to try to get doctors into their networks because they are anticipating the expansion of coverage and want to have more providers to care for that population," Udow-Phillips says. 

Health plans, she says, should also start thinking about the whole continuum of care. For instance, the Center for Healthcare Research & Transformation is working with one health plan to employ social workers to reduce overall costs. 

Even without a Medicaid expansion, according to the Urban Institute analysis, Medicaid participation will increase among those already eligible for Medicaid coverage. 

"Under health reform, the enrollment and eligibility process for Medicaid is significantly simplified," Udow-Phillips says.  

Reduction in uncompensated care benefits insurers

Expect Medicaid expansion to relieve some cost shifting

A large health insurer in Hawaii is taking an aggressive step away from the traditional fee-for-service delivery system. Hawaii Medical Service Association (HMSA), a Blue Cross and Blue Shield organization, and Hawaii Pacific Health (HPH), an integrated health system, are forming a new statewide population health management model. 

The model directly links more than 50% of HPH's future payment rate increases to specific measures to improve quality, mitigate costs and improve access. For the physician network and the four system hospitals, it's a shared-savings and shared-losses arrangement. 

The agreement, which will be implemented in 2014, is based on the premise that higher quality care will produce some short-term cost savings but will ultimately improve health and yield long-term savings. HPH plans to meet certain quality standards by outlining best practices for diagnostic services, for example. 

Michael A. Gold, president and chief operating officer at HMSA, says the agreement, which covers 701,000 HMSA members, includes specific measurements that are generally tied to Healthcare Effectiveness Data and Information Set (HEDIS) measures as well as generally accepted quality outcomes for hospitals. While the outcomes and payment rates are clearly defined as part of the arrangement, Gold says how HPH reaches those goals will be up to the provider and physicians.  

"What we are interested in is not so much how they achieved that care management for the patient, but the results that they get," he says.   

The organizations completed a detailed nine-month planning process to clearly define the agreement and how success will be measured. To show their commitment to the new model, HPH and HMSA have entered into a five-year contract with mutual benefits and shared risk. 

"When we are talking about management of chronic diseases, management of a diabetes patient, we have to know exactly how that's defined, what it looks like and how we mutually consider success against that goal," Vara says. 

HPH will now be reimbursed for care-management services that HMSA had previously administered, which translates to an estimated 90% growth in preventive care and chronic management services for HPH.  

The arrangement will place significant responsibility on HPH as a provider, but Vara says he believes the system has the infrastructure in place to achieve the defined outcomes. 

HPH plans to meet the quality demands by using a technology infrastructure that centers on an electronic medical record system that includes a patient portal to help facilitate communication between physicians and patients. Vara says if primary care physicians are able to communicate with their patients through emails and telephone calls as a possible alternative to an office visit, they will be able to expand access to those patients who need to be seen by a physician in the office. 

"If we are truly going to be intent about decreasing the rate of emergency room utilization, the fact is, while it's more costly care it's also a revenue driver," Vara says. "We have to be certain that we are going to be financially viable in the future." 

A large health insurer in Hawaii is taking an aggressive step away from the traditional fee-for-service delivery system.

Hawaiian plan adopts shared-risk model

 More employers are interested in exploring direct contracting arrangements with providers, according to healthcare experts. The trend could cause some concern for commercial payers because they would essentially be cut out of the equation. 

New survey data released from Oliver Wyman Health & Life Sciences Practice found that nearly 40% of more than 1,300 employers surveyed say they would be interested in contracting directly with provider organizations for a value-based network. 

Andrew Webber, president and chief executive officer of the National Business Coalition on Health, says he has seen a willingness among employers to seek out alternate coverage options.  

To stay competitive in an environment where employers are doing provider-contracting workarounds, health plans will need to improve their efforts in population health management to better meet the needs of employers. 

"The enlightened healthcare plans are thinking about their own relationships-contractual relationships with accountable care organizations or physician practices that have certain infrastructure-and building that into their plan designs that they offer employers," he says.   

Webber says failures in the traditional healthcare delivery system have forced employers to focus on prevention and chronic care management themselves by investing in their own health and wellness programs and counseling services. 

"Employers have built a whole industry around the gaps in the delivery system, which now might change if the more traditional provider community builds that capacity," he says. 

Providers are drawn to direct contracting because it allows them to gain access to the purchaser directly and can eliminate the costs of contracting with a traditional payer.  

"They are able to offer some of that back to the employers as a discount," says Jay Sultan, general manager for payment reforms at the TriZetto Group.  

Gary Rost, executive director of the Savannah Business Group, a business coalition that purchases healthcare services for 28 self-funded employers, says the coalition has been contracting directly with providers since 1986. 

"None of our members use a commercial carrier," he says. "We are truly independent, direct to the providers, so every one of our companies is an independent health plan, and they hire a third-party administrator to handle all the claims and adjudication." 

To be successful, Rost believes employer groups need to be located in a small geographic area or represent a sizeable portion of the community's commercial population to gain the necessary clout to negotiate agreements. 

Steering beneficiaries toward using in-network providers is also essential, according to Rost, who says the Savannah Business Group has an in-network access rate of 98%. 

Webber says employers interested in direct-contracting relationships will be seeking providers that have established a proactive approach to patient management, have fully invested in electronic medical records and have the infrastructure and organizational capacity to manage populations.  

"They are looking for providers who are willing to go at-risk," he says.  

Sultan says the type of risk a provider assumes drives the arrangement. In bundled payment agreements, providers typically only accept technical risk, but in capitated risk arrangements, providers may be accepting incident risk as well.  

"The technical risk is what providers are good at managing, the incident risk is where it's much harder for providers to be successful," Sultan says. 

Providers could be opening themselves up to unintended risk in direct contracting agreements, especially if they fail to consider legal issues, administrative requirements or population size. Such risk-management is a core capability for traditional commercial payers.  

Sultan says providers might be too quick to dismiss the role of an experienced payer organization when considering whether to enter direct agreements. For example, payers have access to comprehensive claims data that offers a longitudinal view of the patient rarely available to providers. 

Providers will also need utilization management tools to be able to successfully manage patient costs. Even so, payers might still be contracted to assist in administrative functions.  

More employers are interested in exploring direct contracting arrangements with providers, according to healthcare experts.

Employers consider direct contracts, sidestepping traditional payers

 Healthcare experts are weary of repeating the mantra that the current healthcare delivery system is broken and unsustainable. They say a move away from the fee-for-service payment model can't happen too soon. 

Further, the move away from fee for service should be coupled with greater reimbursement for primary care physicians, more consumer engagement and more effective treatment of chronic conditions. It's necessary to shift to an outcomes-based delivery model.  

"The trend in healthcare costs right now is simply not sustainable," says Robert Zirkelbach, spokesman for America's Health Insurance Plans and vice president of strategic communications. "Consumers and employers can't keep up with the rising costs of coverage, and healthcare costs are eating up a larger and larger share of federal and state budgets, which is crowding out other urgent national priorities." 

A recent analysis by the Healthcare Industry Group of the firm Alvarez & Marsal in New York found that the current healthcare system is focused on revenue maximization and reimbursement and fails to pay sufficient attention to patient outcomes. 

David Gruber, MD, director of research in Alvarez & Marsal's Health Industry Group, says the report also highlights inefficiencies and ineffectiveness already built into the current delivery system including a complex reimbursement structure, oligopolistic price competition, high pharmaceutical drug prices and a broken pricing structure. 

"The Medicare, Medicaid and commercial insurers price to the existing system, and if the existing system is inefficient, we just price relative to that-as opposed to potentially looking for disruptive transformation, or doing things better, which could potentially result in very significant cost savings," he says. 

To  move toward a more outcomes-based delivery model, Gruber says there needs to be greater focus on and resources devoted to chronic disease management and a shift from transactional orientation to relationship-based care. 

He believes this can be done by improving reimbursement for primary care physicians to allow for longer visits to address complex disease management, increasing reimbursement of Web-enabled tools such as telehealth, carving in behavioral health with primary care, increasing transparency in prices, and extending the medical home reimbursement model.  

"The insurance companies are not perceived very well by many consumers, and they are viewed as a barrier to care as opposed to a supporter of care and a facilitator of care. There opportunities to do that in a more relationship-oriented manner," Gruber says. "There needs to be a lot more investment made in understanding the consumer and how you engage a consumer."  

The current pricing system is complex and confusing for consumers, which Gruber says can be a barrier to consumer engagement in their own health. 

One of the biggest changes necessary to achieve a sustainable healthcare delivery system, according to Gruber and Zirkelbach, is moving away from the fee-for-service payment model toward more capitation and value-based arrangements.  

"What's really encouraging is there are numerous partnerships among health plans and their provider partners to change payment models and to start rewarding and paying for quality and value," Zirkelbach says. "These can take a number of forms whether it's ACO type models, the patient centered medical home or bundled payments. All of these types of initiatives are all different ways of trying out the same goal, which is moving away from fee for service and rewarding and paying for quality and value."  

Gruber says he believes the key is capitation in a care coordination and collaborative system that is led by primary care physicians. 

Health plans can foster value and quality, according to Zirkelbach, by providing real-time, accurate and comprehensive data to providers about their patient populations and assisting in better care coordination. 

Gruber says health plans need to act now to pilot new approaches to care delivery and adopt new technology before employers decide to go direct to providers who are forming their own insurance companies or move toward insurance exchanges. New exchange models are emerging for employers to consider.  

"The question is what will be the role of the insurance company going forward? Are they going to have a major role with the major employers?" he says. "If they want to have that role, they are going to have to enhance the value proposition." 

Healthcare experts say a move away from the fee-for-service payment model can't happen too soon.

Pricing must move beyond context of existing market

Four-tier formularies have emerged as one method to control the rising costs associated with specialty pharmaceuticals, but it's not yet clear whether this approach will be applied to formularies in the government-defined essential benefit package. The coverage package will set the minimum offerings required for health plan products sold through state insurance exchanges.  

"I think it's really premature at this point to speculate on what's going to be in that essential benefits package," says Judith Cahill, CEBS, executive director of the Academy of Managed Care Pharmacy.  

Cost sharing for specialty pharmaceuticals is a complex issue with no clear answers on how payers can balance access with utilization management, according to experts. According to Avalere Health, 85% of Medicare Part D plans currently have a specialty tier. 

"Employers and the federal  government have to come up with a different criteria for coverage and for utilization, and cost sharing has to be at an affordable level," he says. "The real issue is, do you really need the specialty drug or not?" 

While most employers require coinsurance, in which patients pay a percentage of the costly specialty drugs, Cohen says this strategy may be unrealistic. Many specialty medications have such high prices that even a percentage of the cost could be unaffordable and discourage members from getting treatment. According to the Kaiser Family Foundation, lawmakers in a dozen states are considering eliminating specialty tiers-presumably to protect access.  

Cohen suggests that accountable care organizations or state boards setting up healthcare exchanges instead include a coverage category specifically for specialty health benefits, beyond the medical benefits and traditional pharmacy benefits. And it would be about more than just biologic drugs. 

"I would put certain drugs and certain diagnostic tests in that benefit," he says. "I'd have certain copayments for each, and I'd have certain prior authorization criteria. I think that's the next wave." 

Four-tier formularies have emerged as one method to control the rising costs associated with specialty pharmaceuticals.