How a ‘mini-Optum’ saved $85 million in three years by emphasizing primary care

• A Texas provider group garnered 50% of the $85 million in healthcare cost savings it achieved over three years.
• A key to the group’s performance was establishing close primary care relationships.
• The group also uses “virtually narrowed” networks to steer patients to other healthcare providers with which it has ties.

A quickly growing clinically integrated network (CIN) in the Dallas area has identified the key ingredients to a “secret sauce” care delivery model that improved clinical outcomes and cut healthcare spending by $85 million.

Catalyst Health Network, a 600-provider network that started in the Dallas area and is looking to expand statewide, has designed a care delivery approach based on the idea that the primary care provider (PCP) relationship with the patient is the key to improving quality and reducing costs.

But unlike many payment models offered by commercial health plans, Medicare and Medicaid, Catalyst leverages the PCP-patient relationship by taking away duties from clinicians and allowing them more time to talk with patients. The CIN added 100 clinical support personnel, including assigning each clinician a pharmacist, care coordinator and case manager.

“The way we change behaviors is our relationships,” said Christopher Crow, MD, president of Catalyst. “We think the best way in healthcare is with your primary care physician.”

He described his organization’s approach this week at the Value Based Health Care Congress in Washington, D.C.

How the approach improves care delivery

The clinician-led teams create a “virtual exam room” that follows patients throughout the year and is one of the “secret sauce” ingredients of the organization, Crow said.

Crow, views Catalyst almost as a mini-Optum, the massive, insurer-owned network of physicians. Catalyst operates a Medicare accountable care organization and has PPO employer contracts, Medicare Advantage (MA) contracts and value-based contracts with employers, which altogether cover 1 million enrollees. The value-based contracts are the mechanisms through which Catalyst has cut $85 million in spending over three years, and the practice organization kept 50% of those savings.

The organization’s savings came despite its presence in a majority PPO market. The group does not take on risk in its regular PPO-type plans.

“But more and more we’re helping change benefit designs for many companies, large and small, around PCP assignment, similar to the kind of success you can have around MA,” Crow said.

Additional keys to improving value

Other “secret sauce” elements identified by Crow included:

Provider relations. The organization uses provider-relationship teams to regularly meet with its physicians and their support staff to create the mentality that the practices and the overall organization are an interdependent team.

 “You start to get that relationship that can be very synergistic with these PCPs,” Crow said.

Provider steering. In a market with 90 hospitals and 90 surgery centers, Catalyst has sought to provide employer plans with cost predictability by steering patients through the PPO plans’ “virtually narrowed” networks, which rely on incentives to steer enrollees.

Catalyst’s network of referral entities shares information through a “lightly connected” data-sharing mechanism to manage its 4,500 weekly referrals, allowing the network to track where patients go.

“Amazon takes better care of tracking our toothbrushes than we do of tracking our most sick patients; it’s ridiculous,” Crow said about the importance of tracking when patients are seen and what occurs. “You have to be able to track this kind of thing to actually do any kind of risk contracting.”

Medication adherence. Identifying true rates of medication adherence drives “tremendous clinical quality, which leads to lower costs,” Crow said. The group uses 14 pharmacists and twice as many pharmacy technicians to centrally fill prescriptions, which are tracked via pill pack technology. Also, the organization avoids 90-day prescriptions and aims to talk monthly to patients who have been prescribed medications.

Providing 90-day medication supplies is “awesome from an operational efficiency [perspective] if you’re the pharmacy, but it’s not good medicine,” Crow said.

Results include an 8% improvement in cancer screenings and an A1c reduction from 9.99 to 7.55 in a cohort of 150 UnitedHealthcare enrollees with uncontrolled diabetes.

“It was really all-around care coordination and medication adherence,” Crow said. “It was to create a relationship that is an extension of the physician and the patient — the physician hands off the relationship to the care team, [there’s] a trusted relationship with their pharmacist, and they make this happen.”