Scott Kirschner is the director of benefits strategy for Iron Mountain, a Boston-based records management and data backup firm. At Convergence he will discuss how the company has been working with providers, payers, and point-of-care solution providers to improve benefits offerings, lower out-of-pocket healthcare costs, and improve outcomes for employees and their beneficiaries.
This is the latest in a series of interviews that Chilmark Research is conducting with Convergence speakers prior to the event. The interview has been lightly edited for grammar and clarity.
Why is it important for the healthcare industry to take the emergence of payer-provider convergence seriously? What do you see in your work that makes this important to you?
I’m not the typical benefits leader at a large corporation. I attend and speak at a lot of conferences. I also sit on the advisory boards for Cigna, Aetna, Bswift, and Livongo, plus the Board of Trustees of the New England Quality Care Alliance, one of the largest accountable care organization in Massachusetts. I’ve met a lot of my peers at various large employers, leadership at health plans and leaders in the provider community.
Most of my HR/Benefit peers are corporate benefits lifers, having been in those positions their entire careers, and they take a different tack. I spent 14 years in big-firm consulting and then six years in strong, regional middle-market brokerage, which is certainly a different setting, and prior to that I was in a pure HMO world and got to see the payer side.
It’s also a bit of a family business. My father was a flight surgeon in the Air Force and commanded base hospitals, retiring after 26 years. Soon after his retirement, he was tapped to lead Arizona’s Medicaid agency, the Arizona Health Care Cost Containment System (AHCCCS).
From that diverse perspective, I’ve seen many of the issues that has evolved over time from a perspective on how these things converge. We have a very siloed system of both insurance and healthcare delivery. You have employer plan sponsors who pay the bills, and we cover the majority of Americans under 65. You have employers being advised by consultants and brokers as well as health plans, and it’s rare that the people footing the bills actually meet, talk, and understand where healthcare providers are coming from. They may know people, but not necessarily in a formal setting.
Employers are starting to sponsor things that fall into the realm of healthcare delivery. And providers are becoming big believers in VBC and moving away from FFS, as they are being measured on the care they deliver, the quality of that care, and the outcomes.
Are you prioritizing convergence of data ingestion, analytics, care management, or patient engagement? Which of these key area(s) are you focused on?
I started at Iron Mountain in January 2013. My predecessors had been tactical, short-term thinkers focused on the next renewal. That’s how many of my peers operate. Based on our demographics, we have lot of people who have worked for us for a long time, who are going to be on our plan year after and year. We’re just getting older. We really need to take the long-term perspective.
We built a data warehouse and started to look at things, such as how many people with chronic conditions have been on our plan for multiple yeas. We pay five figures in claims for these people, year in and year out. Traditional disease management from a health plan is antiquated – it only works for some people. And even for our health plan’s overly generous definition of engagement, it gets lower and lower every year.
You need to do a lot of things, and there is no one “silver bullet” solution to solve everything – a lot of it is related to the delivery of care. We started with basic wellness concepts. Wellness is one of those things that can start really well but, over time, you get diminishing returns. It acts like a portal. It’s early education. The next step is advancing that knowledge, and not all wellness programs do that.
What types of technology solutions are most critical for your organization to pursue initiatives relative to convergence?
We have been early adopter of some point-of-care solutions. We were the seventh customer of Livongo, and now I sit on its customer advisory board. Before, patients might have gone out and found a good diabetic service or solution – or if an endocrinologist was being proactive, managing populations on risk, he or she might say to patients, “You have diabetes. If you go into this program, it will help you manage your condition.”
Some providers have been customers of Livongo for the patients they are at risk for, but it has been the employers driving adoption. They have data that can be shared through the EMR. It’s high-tech, high-touch, 24-7 support from diabetic health coaches, and it’s data-driven.
We were an early adopter of Omada Health as well. The Diabetes Prevention Program (DPP) is proven; it’s been run by nurses or at the YMCA since the early 2000’s, but you had to go somewhere to be in the program. Omada made it digital. Iron Mountain has 8,600 employees in 44 states. You take a city, we’re there, but there are cities where we only have 20-30 employees. How are we going roll out the DPP? It’s arguably impossible. With digital solutions, we can roll out for a slice of it.
Another initiative is Evive Health. It’s an early stage company that can aggregate data from numerous sources, create a personal profile, and then leverage technology to engage patients. A person loads their app, and they use push notifications to drive behaviors. They’re also connected to EMRs. If you get a new diagnosis of a condition with multiple treatment options, shortly after your office visit, you can get a recommendation on your phone: “Call this service now. They can walk through your treatment options.” These services have been around for a while, but usage is low, because people forget about them. Patients can now become more actively involved in their care, and it’s coming from the employer. Also means that providers may be able to better work with patients if they are getting better information about how to use urgent care vs. doc’s office, how to use generics vs. brands.
I also see an uptick of interest in onsite health clinics. There’s starting to be a decrease in the minimum number of employees a company needs to have to operate something like that – even a kiosk with a video conference. There’s also interest among employers in Iora Heath and One Medical as they begin to embrace concierge physician services.
Convergence and value-based care are closely linked. What will it take for the industry to accelerate the shift toward value-based care?
Employers are starting to sponsor things that fall into the realm of healthcare delivery. And providers are becoming big believers in VBC and moving away from FFS, as they are being measured on the care they deliver, the quality of that care, and the outcomes.
We are firmly embracing high-performance provider networks. We are even changing health plan administrators next year because our current administrator has been lagging here. In 2018, 76% of our employees will have opportunity to enter high-performance network (compared to 32% today), and all the savings will go back to the employee.
For example, our most generous health plan is an exclusive provider organization (EPO) design, a self-insured HMO with low out of pocket costs when a patient gets care. An employee covering a family on that will save almost $3,300 next year. Since 71% of our workforce is hourly with an average salary of $38,600 before overtime, that’s real money.
We project we can drive 5,000 to 6,500 of our total covered lives into the high-performance network. We’re telling those providers, “We’re going to drive the patients to you. We have a willingness to go along with the terms and conditions of your contracts, to pay performance bonuses. We’ll do that.”
What is driving this more: public or private payers? How much interest do you see in this as a mandatory vs. voluntary process?
A lot of employers think health plans are working in your best interest. Making this statement in a room of physicians would elicit laughter. Health plans, in a lot of ways, look out for themselves first. They’re conflicted, because they feel they’re being measured on how big and robust their networks are, but also being tasked with controlling this beast. Plus, a lot of what happens in a health plan is incremental and bureaucratic, and they’re wedded to a lot of old ways of doing things. They idea that they exist to purely serve the needs of their employer customers, it’s not true. They have to do a lot to appease docs and hospitals.
What I see happening is more progressive and thoughtful employers circumventing this in various ways. Disney is by far the biggest employer in the Orlando market, with 70,000 employees, and I’m good friends with my peer there. The organization finally said, “We’re going directly to providers, and this is how we want to work with you. If you don’t want to play ball, you can’t see Disney people.”
Our consultants, Mercer, have started localized efforts to combine employers to go direct to providers in their markets. “If we can usually agree on quality improvement targets, we’ll designate you our preferred provider in that market.” In metro NY, Mercer has pulled together about 12 employers, leveraging the strength of 400,000 people, talking directly with providers on shared quality improvement initiatives. We’re talking directly to leadership at the hospital, saying, “If you can work with us toward meeting these quality goals, the cost will follow.” There’s a lot more interest in starting to talk to providers directly.
