SSM Health and Paladina Health have created a joint venture to launch a direct-to-employer primary-care service to St. Louis businesses, the organizations announced Thursday.
Under the model, employers will pay a flat fee for each employee's primary-care services. That will give workers access to a personal physician without co-pays and other out-of-pocket costs, including in-house pharmacy and lab services.
"With the continually rising cost of health care in the U.S., SSM Health is committed to finding new and innovative ways to make high-quality health care services affordable and sustainable," Carter Dredge, chief transformation officer for SSM Health, said in prepared remarks.
The new company expects to open its first St. Louis-area clinic by year-end, and it will be available to businesses in early 2020. The new care model, bolstered by Paladina's data-driven, direct-to-employer primary-care model with quality-based incentives and SSM's acute-care infrastructure, will also be offered to SSM Health employees and their dependents covered by SSM Health's health plan.
Each clinic will be staffed by a family practice physician and medical assistant who aim to provide a one-stop shop for healthcare services. Providers will spend an average of 30 to 45 minutes with each patient, patients will have around-the-clock access via phone or email, and they will be able to book same- or next-day appointments, the organizations said.
Primary and preventive care is a cornerstone of modern healthcare. Without it, untreated illnesses get worse and care costs more.
Health systems and employees have been trying to boost access and give consumers incentives to visit the doctor more regularly, but physician shortages, long wait times and rising out-of-pocket costs have stood in their way.
Total annual per-person spending for those with employer-sponsored plans increased 16.7% from 2013 to 2017, rising from an average of $4,834 in 2013 to $5,641 in 2017, according to Health Care Cost Institute data. That is an average annual increase of 3.9% compared to the 3.1% average for gross domestic product.
That $5,641 is the highest mark since HCCI began reporting this data in 2009, and employees are shouldering more of those costs with the rise of high-deductible health plans.
"An estimated 75% of health care costs are due to chronic conditions, so helping patients better manage their health leads not only to better health—but also to lower costs," Dr. Don Tran, president of SSM Health Medical Group in St. Louis, said in prepared remarks. "In this model, physicians have smaller panel sizes so they can more holistically manage their patient's healthcare needs—developing relationships and care plans that ensure their long-term health and well-being."
The two organizations will share ownership in the new joint venture, with Denver-based Paladina Health directing operations. The new company will explore expanding to other communities outside the St. Louis area, although it declined to specify how many clinics it aims to open and how revenue will be split.
SSM, a 23-hospital not-for-profit integrated system based in St. Louis, reported an operating income of $11.2 million on operating revenue of $7.56 billion in 2018, down from $30.8 million of operating income on $6.5 billion of operating revenue in 2017. Discounting its one-time impairment loss on its assets in 2018, SSM netted $124 million of operating income.