By Nonprofit Finance Fund
Nonprofit Finance Fund spoke with Greenville Health System and Caffeinated Capital about the Community Paramedicine Pay for Performance Project. You can read more about the project here. This blog is part of an interview series with selected project partners from our Social Innovation Fund Transaction Structuring Competition.
Tell us about the genesis of this Pay for Success project. What was the original impetus? How were the stakeholders who have been moving the project forward brought together?
Greenville Health System’s (GHS) vision is to transform health care for the benefit of the people and the communities we serve. Our focus is keeping patients healthy and out of the hospital by providing care in community settings. This is consistent with a larger trend in health care that is moving away from a fee-for-service model, in which patients and insurance companies pay providers for each stitch and shot, to a value-based care model, in which payments are tied to overall improvements in health. In order to support this transition to a more patient-centered and outcomes-based model of care, we often rely on philanthropic partners for grant funding. Although our philanthropic partners have been extremely helpful, grants, by their very nature, are not designed to provide a sustainable source of funding. We therefore need to look beyond traditional philanthropy in order to finance the expansion of our successful pilot programs and interventions.
GHS first became interested in Pay for Success (PFS) in 2014 when Joe Blake, our Vice President of Legal Affairs and General Counsel, heard about the social impact bond (SIB) financing model and wondered whether it might complement our philanthropic fundraising. Joe reached out to Steve Goldberg of Caffeinated Capital to learn more about SIBs after reading his blog. After looking at the broader PFS and SIB intermediary marketplace, GHS decided to work with Steve because his “Scale Finance” model focused on scaling evidence-based programs to respond to unmet population needs. We contracted with Caffeinated Capital in September 2014 to broadly explore the feasibility of PFS to scale several of our programs. These were programs that GHS had been developing with grant funding, which could potentially use PFS funding to achieve a larger scale over a longer period of time than grant funding allows.
After exploring feasibility for these different interventions, NFF’s transaction structuring competition helped us narrow the focus of our PFS work. We decided to pursue project development and deal structuring for our community paramedicine (CP) program for several reasons. First, our CP program is evidence-based. For many years, there have been a number of similar programs around the country that have been successful in expanding care and reducing costs, and this has drawn favorable attention from federal and state regulators as well as funders. Second, the BlueCross BlueShield of South Carolina Foundation provided a three-year grant that allowed GHS and Greenville County EMS to start a pilot project similar to CP, so we had a good idea how the program would work in Greenville. Third, CP could improve health outcomes for several underserved populations, including high-risk patients with chronic conditions who are frequent users of emergency medical services (EMS) and the emergency room (ER) for non-emergent conditions. Fourth, the savings potential looked favorable for PFS financing, given the significant cost differential between sending a community paramedic out for a scheduled visit to a patient’s home, versus having that person call 911 and go to the ER in an ambulance.
In developing our project, we’ve worked with several GHS departments and partners, including Accountable Communities, the Emergency Department, the Office of Sponsored Programs, the Care Coordination Institute, Greenville County EMS, and Oconee County EMS. We’ve also engaged several health care insurers who could act as back-end payors for a PFS project.
There are several layers of innovation in this project including the proposed intervention, community paramedicine, and the goal of engaging health care insurers as back-end payors for the provision of services outside of traditional health care settings. Can you tell us a bit more about the community paramedicine model, and how this project appeals to health care insurers?
Community paramedicine is an emerging field that expands access to health care for underserved and rural communities. These programs train EMS workers to provide primary and preventative care to individuals who would not otherwise have access to such services. Not only does community paramedicine improve community health, it also reduces costly and unnecessary ER visits. According to a 2010 study by the RAND Corporation, between 14 and 27 percent of all ER visits are for non-urgent care that could take place in a different setting, such as a doctor's office, after-hours clinic or retail clinic, with the result of potential cost savings of $4.4 billion annually. Community paramedicine helps address this gap by providing an alternative to emergency room care for non-urgent cases, which benefits care providers, insurers, and patients alike.
Several successful community paramedicine programs across the country, such as MedStar and WakeMed, have proven that this model does indeed work to both expand care and realize significant cost savings. Based on evidence of CP’s effectiveness, GHS and Greenville County EMS are currently collaborating on our first community paramedicine program to serve the chronically ill and uninsured members of our community who are high-utilizers of emergency room services. The pilot started in February 2015 with funding from the BlueCross BlueShield of South Carolina Foundation. We’re excited to say that our first community paramedic just finished his online training and is beginning his clinical site rotations.
PFS financing is a logical fit for community paramedicine projects, particularly in light of the Affordable Care Act (ACA). This is because the ACA seeks to improve health outcomes and patient satisfaction while reducing the cost of care, and the community paramedicine model offers the health management infrastructure to support these worthy goals. We think that community paramedicine is a great way to manage high-risk, high-cost patients in a community setting.
As health systems, providers, and insurers continue to adapt to the new environment of health care delivery under the ACA, we believe that community paramedicine can be a powerful tool that any payor, accountable care organization, or health system could implement to manage the health and care of their insured patients. Our hope is that payors will see the value in the model, so our project aims to engage three health insurers as payors: Greenville Health System, an employer with almost 23,000 insured lives; BlueChoice Medicaid, a local Medicaid managed care organization; and MyHealth First Network, a clinically-integrated network of providers that spans across 11 counties. Our CP program could provide a model for other jurisdictions around the country who are interested in adopting the CP model as a way of realizing cost savings while investing in the health of their communities.
As you know, the road to launching a PFS project is a long one! Can you share with us what the biggest challenge to date has been? How are you and your partners approaching this challenge?
As health care continues to evolve, providers and health systems are focused on providing the right care in the right place at the right time. A more interdisciplinary, comprehensive, and customized approach to care is key to improving the health of the patient populations and communities we serve. We know that social determinants and factors play a major role in health outcomes, so we have to design interventions that support unique individual and community needs and reduce barriers to care.
With that said, most population health management efforts and interventions are not reimbursed by insurers. Using an approach that engages health insurers as back-end payors made sense to everyone we engaged during our early exploration of PFS, given that community paramedicine has the potential to be a cost-effective alternative to emergency care. In the long term, we hope that insurers will see the value of CP and include it in their reimbursement schedules. But in order for this to happen, the model must demonstrate that it can reduce costs and improve health outcomes for priority target populations.
We now have three payors working with us to evaluate claims and emergency medical record data to identify high-risk patients in their existing networks. Partnering with these three payors to design this program creates an additional set of challenges on top of those faced by a PFS project with just one payor. This is because each insurer serves a population with different needs and characteristics. For example, the population of a Medicaid plan that primarily serves women and children will be very different from a Medicare plan that serves individuals over the age of 65. Working with three different payors will require three different care models and financial models in order to meet the needs of each insurance plan’s unique patient populations.
As a critical step toward finalizing the design of our PFS project, we have to analyze payor claims and electronic medical record data; if we are not able to risk-stratify patients to identify the opportunities for improvement within each patient population, the intervention will not work. GHS is well-positioned to engage in this level of analysis because we are a large self-insured employer with around 23,000 covered lives that spends an average of $2.2 million a week to provide health benefits to our employees and their dependents. We do this type of analysis with our own employer plan and for other employers in the community. And because GHS is a potential payor for this PFS project, we are committed to evaluating the use of the community paramedicine intervention to meet the needs of our plan members.
GHS is lucky to have in-house capacity for this critical analysis in our business intelligence department, along with a partnership with the Care Coordination Institute (CCI). CCI is a research entity with a mission to improve patient outcomes by supporting the translation of research into evidence-based practices in healthcare delivery. The analysis done with CCI will help us finalize the economic and program delivery models specific to each potential payor, and will also inform the evaluation design. We have also been working closely with Collective Health, the program evaluator, to ensure that the data that we analyze with CCI is appropriate for use in the evaluation.