A High-Performance Clinic

The Sumner Clinic is not much to look at from the outside. It is located in a strip shopping center on a busy street in the small town of Gallatin, Tennessee, about thirty miles northeast of Nashville. The clinic is managed by a general internist, Dr. Sid King. When I entered for my meeting with King, I was greeted by a trim, smartly dressed senior sitting in a rocking chair near the front door of an expansive room. She was one among a group of patients who volunteer as greeters at the clinic. Inside, the Sumner Clinic did not look like any doctor’s office I had ever seen. It was not posh, but it was spacious with a large waiting room simply decorated. The floors were linoleum, the walls accented with faux wood. Two computer terminals and several telephones for the patients’ use were scattered among rocking chairs and upholstered chairs. A patient in a wheelchair could easily navigate the room, and one senior in a wheelchair was logging on to her email account. There was a fireplace open on two sides in the middle of the room. On the right of the waiting room was an open kitchen with a long dining table where two elderly African American women were in deep conversation. The next room adjacent to the kitchen was set up like a classroom. The clinic’s nurse and a dietician teach the patients healthy cooking and healthy eating in the kitchen and the classroom. On the left was the ever present check-in counter, not enclosed in glass, but open. The staff often came into the waiting room to greet the patients by name.

The only patients cared for by the Sumner Clinic’s twelve internists at the time of my visit were 1,200 Medicare patients who signed up with a Medicare Advantage Plan offered by HealthSpring, a Nashville-based managed care organization. Seniors enroll in such plans because they do not bear the expense of purchasing a Medicare supplemental policy (which pays for the twenty percent of outpatient services not covered by Medicare) and also because their co-payments and deductibles are lower than fee-for-service Medicare. Medicare pays HealthSpring, and HealthSpring pays the doctors and hospitals, keeping any remainder as profit. Republicans hoped that this program would eventually result in cost savings to Medicare from better coordination of care by the private sector, but in order to get insurers interested they had to pay them twelve percent more than traditional fee-for-service rates. Judging from the Sumner Clinic, their hope was not in vain. What happens in this clinic is remarkable.

Dr. James Geraughty, who is chief quality officer for HealthSpring, told me about the Sumner Clinic when I visited his company’s Nashville offices. HealthSpring had enlisted the Sumner Medical Group to care for its Medicare Advantage patients in the Gallatin area. Geraughty explained to me that their target was to take care of Medicare patients for about eighty-two percent of what Medicare paid, though for most practices the number was closer to eighty-seven percent. The remaining eighteen percent is available to pay company overhead and profit, typically distributed as ten percent for operations and eight percent profit. Medicare pays insurers based upon the severity of illness of a Medicare patient, so there is little reason for any insurer to hustle healthy Medicare patients in order to improve earnings.

Geraughty had hired a nearby firm that specializes in management of chronic diseases to keep HealthSpring’s patients out of the hospital by improving their medical management. This firm’s nurses would phone Sumner Clinic’s patients and ask why they had missed an appointment, inquire into their compliance with a dietary recommendation, or tell them how to change their medications. When I interviewed Sid King in his Gallatin clinic, he said that he had objected to this practice because it interfered with his management and that the patients did not pay much attention to a call from an insurance company’s nurses anyway.

King and Geraughty struck a deal. King said that if HealthSpring would pay his medical practice what they were paying the disease management company, Sumner Clinic would take over the job and do it better. King wanted HealthSpring to provide the salary for a nurse to coordinate care. Herb Fritch, HealthSpring’s CEO, had to be convinced, because at the start of the experiment the cost to the company for the care of Sumner Clinic’s patients was on the high end of the figure that would still leave a profit margin for HealthSpring. No one thought that the cost of a nurse’s salary would save money, but they all figured it would improve care.

So the doctors at Sumner Clinic brought a nurse practitioner into their practice that educated the patients, coordinated their care, and ordered tests that were needed according to a standard protocol.

This collaboration and the creation of standing orders and management protocols were the keys to what happened over the next six months. Variation in practice among the doctors decreased, their practice of medicine improved, and the patients’ compliance with their medical care got better.

HealthSpring’s standard arrangement for doctors in its managed care plans is to pay the doctors a bonus of twenty percent more than Medicare fee-for-service payment if doctors reach ninety percent compliance with twenty-five measures of quality for care of diabetes, heart failure, and lung failure. By contrast traditional Medicare’s performance bonus is 1.5 percent above usual fee-for-service payments, hardly enough to justify the record keeping the program entails.

HealthSpring’s quality measures are not just whether a medication or test is ordered, but also whether outcomes improve--for instance, whether the blood glucose of a diabetic or the high blood pressure of a cardiac patient is reduced. Patient satisfaction is measured with questions like, “Do you understand your disease?” and “Did you have a good experience?” If patients do not keep their appointments, practices are dinged for low quality the same as if the doctors failed to order a medication for a patient who comes to clinic. King told me that each time his group sees a patient, a big sheet of paper on top of the chart placed there by the clinic’s nurse-coordinator tells the doctor what tests are missing and lists any big problems.

The benchmarks of quality used by the Sumner Clinic are:

Reduction of preventable hospitalizations and emergency room visits
Control of high blood pressure
Control of high blood glucose
Control of high blood cholesterol.
A group of 18 tests and treatments for heart failure, lung failure, and heart disease.

The best processes used to achieve those benchmarks are:

An average of 40 minutes with a patient
Coordination/education—nurse and pharmacist collaborators
Available 24/7
Standard management protocols
Clinic is first point of contact with medical system
Ninety percent completion of 18 tests, procedures, and treatments for heart failure, heart disease, lung disease, and diabetes.

The regulations of Medicare Advantage permit an insurer to share savings with doctors up to a limit after a specified amount is returned to the federal government. A generous share of any savings must be offered to the patients in increased benefits or decreased payments. King told me that for a primary care doctor to make an income of $150,000 per year at traditional Medicare fee-for-service rates requires seeing forty or more patients a day, permitting only a few minutes with each patient. King and Geraughty both said it was impossible to expect a doctor to know whether a patient had received all the tests that were needed, much less to educate any patient, in a rushed fifteen minute visit. The current payment policy of generalists produces a frantic schedule and is probably the reason why only fifty percent of patients get recommended care when they go to the doctor.

As a result of the actions of the nurse-coordinator and the use of standing orders and management protocols, quality measures in the practice shifted from the usual figures of fifty percent compliance to nearly ninety percent. Emergency room visits decreased twenty-three percent and hospital admissions decreased sixteen percent but with increased spending on tests, imaging, and rehabilitation.

Within six months of implementing this program, HealthSpring was spending only seventy-seven percent of what Medicare paid HealthSpring for Sumner Clinic’s patients, down from eighty-seven percent at the start of the experiment. The savings were from decreased hospitalizations and emergency room visits. Sid King said that he told Geraughty, “Don’t get excited by this. It cannot work.” Six months later the total medical cost to HealthSpring of Sumner clinic’s patients fell to sixty-nine percent of Medicare payments where it has stabilized for the last two years.

The advantage to the patients was that some of the savings are required by law to be passed back to the patients in the form of increased benefits or lower premiums. The patients also received demonstrably better health care than they otherwise would have. The advantage to the doctors is better income and the satisfaction of practicing high-quality medicine. The advantage to HealthSpring is a profit margin. The lesson for the Medicare program is that by allowing doctors to share in the savings from efficient practice, a lot of money can be saved---enough to lower Medicare’s cost and still pay doctors better

I cannot answer the question of whether insurers would still manage such programs if Medicare paid one-hundred percent of fee-for-service Medicare rather than paying 112 percent on average. But at a cost near sixty-nine percent of Medicare payment, the experiment means that some money spent on managing such a program might substantially reduce the overall spending for some of Medicare’s highest cost patients, those with chronic diseases.

All this was done with paper records. Only after it was clear that the numbers were stable did HealthSpring build out the clinic and install electronic medical records.

Sid King told me, “Now I can spend whatever time I need with the patients because I see twenty a day rather than forty.”

I asked Jim Geraughty what the key was to a practice that could accomplish such things. He said, “A doctor has to get it. It’s all about physician leadership.” Geraughty also told me that he was hesitant to enter any shared savings arrangement with a medical practice in the absence of verifiable measures of quality practice. I understood why—it would be too easy for doctors to free up money for insurers and themselves by cutting corners on care rather than by improving management. This reputation, sometimes deserved, sometimes not, led to the demise of HMOs.

The Sumner Clinic’s numbers surprised Dr. Geraughty, Dr. King, and Mr. Fritch, but I was not so surprised. I think primary care doctors in the US have gotten so beaten down that they have no idea what they can do if given the chance.

They had better be given the chance to be paid in a new way. I have been told by doctors from Utah to California that primary care practices are closing to new Medicare patients. As Jim Geraughty put it, “Everyone in primary care is trying to get out of Medicare.”