Sutter Health's CEO wants to find a better way to care for the thousands of people each month who qualify for Medicare.
Nearly 7 million Californians were eligible for Medicare in August, according to the Centers for Medicare and Medicaid Services — an increase of more than 150,000 compared with last year. About half are choosing Medicare Advantage plans, which often offer a broader range of benefits than traditional Medicare, such as dental, vision and hearing coverage. A growing number of providers are dropping out of Medicare Advantage networks, however, citing frequent claim denials and insufficient reimbursement rates.
Related: Why Medicare Advantage plans are losing more providers
Given the growing Medicare population and the program's financial constraints, providers and Medicare Advantage plans need to limit spending and better coordinate care by managing risk and shifting away from fee-for-service payment models, said Warner Thomas, CEO of Sacramento, California-based Sutter.
In an interview, Thomas said Sutter is trying to better align with Medicare Advantage carriers, along with expanding its outpatient network and boosting inpatient capacity. The interview has been edited for length and clarity.
How can providers manage the growing Medicare and Medicare Advantage populations?
We have to be better at managing risk in Medicare and in Medicare Advantage. You're better off getting upstream getting better at managing risk [through Medicare Advantage] than just being in a fee-for-service model.
We have relationships with several Medicare Advantage plans where we’re looking to strengthen complex case management, segment primary care, build better infrastructure and improve data analytics.
This is a core competency we need to keep building to be effective long-term.
There’s an opportunity to partner with insurance companies. We need insurers to lean in and work with health systems and providers, and not just deny claims and deny care, but really lean in and work together to take better care of their members — our patients — in a more integrated strategic relationship. In some cases that happens well. In some cases there's not the right partnership there.
Do you have any examples of the partnerships you're developing?
We're in discussions with some of our Medicare Advantage plans here in California. They’re in the infancy stages. These are new muscles for health systems and insurers.
It can be done, but it takes new ways to look at things and collaboration on both sides. The rationale behind it is to do a better job taking care of people, align the incentives and try to get the insurer and the health system working together and not against each other.
How is Sutter expanding its outpatient network?
Last year, we hired 732 physicians and clinicians. This year, we’ll be adding somewhere around 850 physicians and clinicians. To bring those folks in, you need new locations. We approved $822 million of expansion in 2023. We're working on phase two of our ambulatory expansion because we continue to see significant demand for services. We operate about 40 ambulatory surgery centers in California. We see the opportunity to expand more, both organically and potentially by acquisition.
We are looking to build somewhere between 25 and 30 new urgent cares across Northern California to reduce the pressure on primary care, improve access to care and allow people to go to urgent care versus going to higher-cost emergency department settings.
How's the integration going with Sansum Clinic, the Santa Barbara-based outpatient provider?
The integration has gone well.
We have helped the group add between 30 and 40 physicians and clinicians over the past year. But we have more work to do. We have not completed the Epic transition yet, but that is in our work plan. We are on our way to helping expand access in the Santa Barbara area. We helped expand the ambulatory surgery center there and are looking at new locations to help Sansum grow.
How is Sutter trying to boost its inpatient capacity?
Hospital capacity in Northern California is very challenged.
We have seen a reduction in our length of stay, which is the equivalent of adding about 100 new beds across our organization. Transitioning people to the home in a safe and convenient way has really helped to build that efficiency. We're also trying increase the capabilities of our smaller, more rural facilities so we can care for more people locally, keep them at home and not have to transfer them to a higher level of care.
We’re also building new hospital capacity in a couple of our facilities in San Francisco. We will expand hospital capacity in the coming years as well.
How are you trying to grow medical education?
We laid out a plan last year to grow from about 220 to close to 1,000 spots in our graduate medical education programs. Health systems need to reach out and be partners with our educational institutions to help expand that pipeline.
