The Quiet Health-Care Revolution

While legislators talk about “bending the cost curve,” one company serving Medicare patients has discovered how to provide better care at lower cost—with wireless scales, free transportation, regular toenail trimmings, and doctors who put the patient first.

Ellen, an 82-year-old widow, lives in Anaheim, California. One Wednesday morning last year, she got on her scale, as she does every morning. One hundred and forty-six pounds—wasn’t that a little high? Ellen felt vaguely troubled as she poured herself a bowl of oat bran.

Half an hour later, the phone rang. It was Sandra at the clinic. She too was concerned about Ellen’s weight, which had jumped three pounds since the previous day. Sandra knew this because Ellen’s scale had transmitted its reading to the clinic over a wireless connection.

Given that Ellen had a history of congestive heart failure, a three-pound weight gain in 24 hours was a potentially dangerous development, a sign of possible fluid buildup in the lungs and increasing pressure on an already stressed heart. Sandra wanted her to come in for an immediate visit: the clinic would provide a car to pick her up and bring her back home. Ellen’s treatment began that very morning and continued for two weeks until she was out of danger. Had the warning signs not been noticed and addressed so quickly, she might easily have suffered a long, painful, and expensive hospitalization.

Dan, a retired letter carrier, is a patient at a clinic in the same system. At 87, he is decidedly frail, his once-sturdy legs now weak and unsteady. He is a classic candidate for a fall of the kind that has injured many of his friends, in some cases leading to weeks in the hospital and months of rehab. The elderly are prone to falls for many obvious reasons, including weak limbs, impaired vision, and medication side effects. But Dan’s doctors knew that some less obvious causes included shag carpets and long, untrimmed toenails. Because of this, they’d sent someone from the clinic to visit Dan’s apartment and make sure that his daughter replaced the 1980s-vintage carpets with low-pile rugs. Dan also visits the clinic regularly for light muscle-training sessions and periodic toenail clipping. Due to these preventive measures, Dan and his fellow clinic patients are one-fifth as likely as comparable patients elsewhere to suffer falls.

Joe, a 79-year-old diabetic, cut his foot when he banged it against a door. When it didn’t heal after a couple of days, he limped into the office of his family physician. After glancing at the cut, his doctor immediately sent Joe to a clinic in the same system as those that treated Ellen and Dan. For diabetics, even small cuts can be a serious matter: untended, they can become infected and contribute to an alarmingly high rate of amputation.

At the clinic, a nurse practitioner cleaned and dressed the wound, and told Joe she wanted to see him there in two days so she could inspect and treat it again—and two days after that, and two days after that, until it was fully healed. The clinic would arrange for transportation if needed. Thanks to the steady, regular care, Joe’s foot healed without any infection or threat of amputation.

Ellen, Dan, and Joe are all real people, though their names have been changed. The clinics that serve them are all affiliated with CareMore, a company based in Cerritos, California, that operates 26 care centers across the Southwest, serving more than 50,000 Medicare Advantage patients. Those numbers are likely to grow, perhaps dramatically, in the next few years: in August, CareMore was acquired by the insurer and health-services provider WellPoint, which serves 70 million people nationwide directly or through subsidiaries, and has plans to expand the CareMore model.

CareMore, through its unique approach to caring for the elderly, is routinely achieving patient outcomes that other providers can only dream about: a hospitalization rate 24 percent below average; hospital stays 38 percent shorter; an amputation rate among diabetics 60 percent lower than average. Perhaps most remarkable of all, these improved outcomes have come without increased total cost. Though they may seem expensive, CareMore’s “upstream” interventions—the wireless scales, the free rides to medical appointments, etc.—save money in the long run by preventing vastly more costly “downstream” outcomes such as hospitalizations and surgeries. As a result, CareMore’s overall member costs are actually 18 percent below the industry average.

In addition to policies designed to extend health-care benefits to more than 30 million previously uninsured Americans, the Affordable Care Act, which President Obama signed into law in 2010, contains a host of provisions aimed at lowering overall health-care costs and improving quality of care at the same time. These provisions include the adoption of electronic medical records, programs to increase at-home care and preventive care, the development of evidence-based protocols to improve quality, disincentives for unnecessary rehospitalizations, and other measures, many of them focused on Medicare, which is a primary driver of increasing costs.

The central idea that quality can be improved while costs are being reduced has been met with varying degrees of hope and skepticism. Yet many of the provisions called for have been standard operating practice at CareMore for years. And the company’s success to date suggests that such efforts to “bend the curve,” achieving better outcomes at a lower cost, may be more plausible than they sound. The implications for the future of Medicare—and the nation’s fiscal health—may be substantial.

The CareMore story begins almost two decades ago, with a man named Sheldon Zinberg, a gastroenterologist who was deeply concerned about the changing economics of health care in Southern California. There, as in other U.S. markets, health-maintenance organizations, or HMOs, had come to dominate the landscape. The theory behind HMOs was attractive: “managed care” was supposed to coordinate and guide treatments in order to maximize both patient wellbeing and economic sustainability. But under pressure from corporate health-insurance sponsors and government agencies (as well as investors seeking profits), HMOs increasingly focused on reducing costs by any means necessary—including short-term fixes that often led to worse patient outcomes and, in the long run, even higher medical expenses. Patients were suffering, doctors were getting squeezed, and costs, after falling for a time, were soon spiraling upward again.

Zinberg was alarmed. Back in the 1960s, he’d founded a large internal-medicine practice that had grown to include some 20 physicians in a range of specialties, from cardiology and oncology to rheumatology and nephrology. But by the late 1980s, with a small number of HMOs growing more dominant, referrals were dwindling and restrictions on services were multiplying. Zinberg and his colleagues were forced to spend ever more time on the phone with “benefits coordinators,” whose main job seemed to be finding reasons to deny coverage.

Already in his late 50s, Zinberg could have simply retired and walked away from the problem, as many of his colleagues were doing. Instead, he made a different decision. Zinberg had long been mulling the elements of a coordinated-care system that would be centered on reducing hassles and improving outcomes for patients rather than simply cutting costs. He began to envision a health-care organization in which teams of doctors, nurses, therapists, trainers, and other professionals worked together, continually sharing information and insights about their mutual clients and providing whatever services were needed to keep those clients in the best possible physical and mental health.

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