Oct 14 2015 | Thought Leadership | By

Blog: A CEO’s Reflection: Why the Lumeris Collaborative Model Works for Providers, Patients and Payers

Essence Healthcare – World Class in Medicare Advantage Plans

Essence Healthcare, Lumeris’ pioneer client, has just received an extraordinary rating from the Centers for Medicare and Medicaid Services (CMS), 5-Stars, for the quality of services it delivers to its Medicare Advantage (MA) members, placing it in the 98th percentile of all MA plans. I congratulate my colleagues at Essence Healthcare for this monumental achievement.

For eight years, I’ve had the distinct honor to work with the physicians, Medicare beneficiaries, and the clinical, administrative and technology staff that support one of our country’s most effective and powerful models of care. CMS’ acknowledgement of the exemplary quality outcomes that this model produces should be a source of great pride in their accomplishments and encouragement to continue their work to improve the U.S. healthcare system. The hallmarks of this model, known as the Lumeris Collaborative Model, are complete information transparency, aligned incentives, extraordinary care coordination and powerful technologies that drive unprecedented levels of collaboration and behavior change among all participants in the healthcare supply chain, including physicians, consumers, hospitals, health plans, ancillary providers and regulators. When this experiment was launched over a decade ago in St. Louis, the inspiration of a handful of physicians who wanted to restore and invigorate the doctor/patient relationship with a commitment to shared accountability ignited a flame of innovation that is now spreading across the country.

They observed that the noble cause of government-sponsored healthcare for our deserving and vulnerable population of seniors, launched as part of the Johnson Administration’s Great Society in 1965, had devolved into a fragmented, unmanaged delivery system with rampant escalating costs with little improvement in clinical outcomes for patients. Attempts by the government to implement price controls and limit the type of services eligible for reimbursement fueled an explosion of destructive innovation designed to circumvent these efforts, including rapid growth in unnecessary and inefficiently delivered services, excess administrative costs, inflated prices, missed prevention opportunities and fraud. Confidence in Medicare was falling while costs skyrocketed. Addressing the problem through adversarial managed care models where providers and plans fought each other over reimbursement served no one well and put patients in harm’s way of inevitable conflicts. There had to be a better way.

The complex world we have constructed for delivering healthcare to our citizens is fraught with unintended consequences when radical change is introduced quickly. The physicians who launched Essence Healthcare relied on a simple premise that significant improvements would come from getting providers, payers and consumers on the same side of the table, all pulling in the one direction—to do what’s best for the patient. It required a new implementation of an old idea—population health, an approach to health that aims to improve the health of an entire human population. Through a systematic accountability for the health of a group or population, physicians could take a much more strategic view, get off the hamster wheel of fee-for-service healthcare and focus on delivering a great experience with better outcomes for the only population a patient cares about—the population of ONE.

When we partnered with these physicians to build Essence Healthcare, we committed to a strategy called the Triple Aim +1™. The Triple Aim +1™ was designed to deliver better health outcomes with lower costs and improved patient satisfaction, but the game changer we added was the “Plus One”—higher physician satisfaction. We then bundled all the competencies required to deliver these wonderful outcomes in a solution that we call a Population Health Services Organization (PHSO), a unique combination of people, processes, methodologies and technology.

Our strategy was to infuse collaboration between the health plan and physicians with a virtual integrated delivery network. When we aligned the interests of everyone in the healthcare delivery supply chain, we began to achieve extraordinary clinical and financial outcomes.

My colleague Richard Jones, the CEO of Essence Healthcare, said it well: “Historically, when healthcare organizations focus on improving quality, they expect costs to increase. In our case, we improved quality while lowering costs for both patients and providers.”

Three Key Learnings to Transform Healthcare

1. Quality improvements are completely compatible with better financial outcomes.

Few organizations who have attempted the Triple Aim +1™ have come close to achieving Lumeris’ results, and we are pleased our results have been validated independently. An Essence Healthcare provider, verified by a third-party actuary, lowered costs an average of 2.5 percent annually over a three-year period compared to projected annual cost increases of 3.7 to 4 percent. This resulted in a 17 percent improvement in medical cost during the same period.

In another example, also validated by a third party, four years of claims were studied, comparing Medicare fee-for-service against the Lumeris approach. The results showed 30 percent lower costs and 18 percent fewer readmissions for populations using the Lumeris Collaborative Model.

2. Physician engagement is absolutely central to managing quality and cost.

The Lumeris Collaborative Model includes a playbook focused on the behaviors and interactions that are required under this new model of care delivery. This proven playbook has transformed how physicians deliver care, from the moment they walk into their office, to how they interact with their care teams, to how they work with patients and caregivers.

3. The Lumeris Collaborative Model is transferable and scalable to others.

The model allows all participants in the healthcare supply chain to remain independent. By unlocking powerful information, aligning incentives and providing seamless workflows between all the supply chain participants, including patients, the model creates what we call a virtual integrated delivery network. It is not necessary for a single organization to own health plans, hospitals and employ physicians to produce exceptional financial and clinical outcomes. If an organization already does or wants to vertically integrate and own the supply chain, the model works great for them as well. The Lumeris Collaborative Model focuses on payers, physicians and patients working together, rather than separately. It’s a team approach, with the patient at the center. When physicians perform better under these contractual relationships, they receive greater rewards from the payer. And, payers are able to save money on healthcare by safely and effectively sharing financial and clinical risk for care with the physicians and hospitals providing the care. The Lumeris Collaborative Model can be easily implemented in any geography, for any population, to help any healthcare organization achieve results like Essence Healthcare.

After many years of testing and calibrating, the excellence within the Lumeris Collaborative Model is proven, scalable and transportable. Lumeris is honored to have worked with payers and providers all over the country to develop our industry’s best performing population health solution.

If you are committed to delivering these kinds of guaranteed results to your populations and feel you need help or would just like to better understand how the Lumeris Collaborative Model works and whether a PHSO is right for you, contact us. We would love to meet you and share what we have learned.


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