How do you care for childless adults caught up in the chaos of poverty who don't qualify for Medicaid? In Minnesota, prior to June 1, 2010, you signed them up for General Assistance Medical Care. This program covered patients who in many states are uninsured.
However, all that changed last summer. GAMC was defunded and the state of Minnesota replaced the program with a Coordinated Care Delivery System. CCDS is an annualized block grant of $72 million from the state to four Twin City hospitals—capitation in its purest form. Seventeen hospitals were invited by the state to participate, 13 declined. Hennepin County Medical Center, a 471-bed academic trauma center in Minneapolis, was one of the four that said yes. The program funded about 30 cents on the dollar from the previous year's reimbursement for the same patients.
The purpose of this column is not to rehash the problems associated with CCDS—of which there are many—but rather to share with you the opportunity HCMC found in the midst of the upheaval.
Our initial estimate was that HCMC would lose $42 million annually under the CCDS program, compared to a loss of $6 million in 2009 under the GAMC plan. As we studied our patients, we found that they seemed to fall into three categories. Tiers 1 and 2, representing low utilization of services and low admissions, accounted for 93% of the patients and 70% of the costs. Tier 3, defined as three or more admissions in the past 12 months, represented only 7% percent of the patients but 30% of the estimated costs. If we could find better ways to take care of these very sick Tier 3 patients, we could improve their lives, bend the cost curve and begin to mitigate our financial risk.
Our strategy, therefore, revolved around the Tier 3 population, the sickest of the sick. They suffer from addiction, unmanaged medical issues and severe and persistent mental health problems. They were often homeless. In light of (not despite of) these facts, we decided to invest an additional $1.2 million based on an untested return on investment of “lose less.” We applied those funds to build what we call an Ambulatory I.C.U.
Our Ambulatory I.C.U. is staffed by a dedicated team of physicians, pharmacists, registered nurses, nurse practitioners, care navigators and others. Pain, mental health and addiction physicians were made available to support the core clinic work. Vital community services such as home health, housing and homeless advocates, county mental health and others were enlisted to help.
Once patients are admitted into the Ambulatory I.C.U., their care is aggressively managed. Contact is made weekly. Transportation is assured. Provider phone numbers are given out with instructions to call if they have questions. Patients who miss visits are tracked down. Medications are cataloged and managed. Patients who show up in the emergency room are retrieved back to the clinic. If the patient is admitted, clinic staff members coordinate with inpatient providers to ensure a smooth handoff back to primary care.
In short, our Ambulatory I.C.U. wraps desperately needed services around these vulnerable patients and improves their health while keeping them out of the hospital.
The results have been dramatic. In the final six months of 2010, we cut hospitalization rates for this Tier 3 population by 42% and emergency room visits by 38%. Not surprisingly, we increased primary-care encounters by 349%. Preliminary estimates show the cost of care fell 19%. We still lost a lot of money on CCDS, but we proved we could enhance the lives of sick patients at a significantly lower cost.
The governor has announced CCDS will be replaced by an expansion of Medicaid. This represents some badly needed financial relief. However, the financial incentives to reduce admissions and emergency room use go away in a fee-for-service world. The next big challenge for our Ambulatory I.C.U. won't be how best to care for patients, but rather how to continue to grow and innovate as we wait for accountable care organizations and payment reform to catch up.
Timothy Harlin is chief operating officer of Hennepin County Medical Center, Minneapolis.