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Breaking down Marshfield Clinic's do-it-yourself approach to payer, provider collaboration

Running its own health plan has allowed this Wisconsin system to design a homemade value-based reimbursement model.

Henry Powderly, Editor-in-Chief

The Marshfield Clinic Marshfield Campus (handout)The Marshfield Clinic Marshfield Campus (handout)

Aligning insurers, physicians and healthcare providers can lead to better care and lower costs. But executives from Wisconsin's Marshfield Clinic Health System have found that the easiest way to manage that is to do it all themselves.

Consider this, Marshfield's accountable care organization has been able to lower costs by 14 percent, but since those savings are below benchmarks from the Center for Medicare and Medicaid Services, Marshfield has seen no incentives for its performance.

"There is more incentive for us to transition that fee-for-service business to our own health plan," said Marshfield Chief Financial Officer Gordon Edwards at a panel Sunday at the Healthcare Financial Management's Annual National Institute in Las Vegas.

In many ways, that's what Marshfield has done. By managing its own health plan, Security Health Plan of Wisconsin, the provider has been able to create its own version of value-based reimbursement that rewards physicians for quality, clean coding and cost maintenance while saving money at the organizational level.


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While the system started as a large group practice about 100 years ago, Marshfield Clinic has grown into an integrated system that combines practices, three ambulatory surgery and two small hospitals and its health plan that offers products ranging from narrow networks to managed Medicare.

The value pool

Marshfield's own value-based payment program includes some conditions favored by similar private and government-sponsored initiatives. Of course, the quality of care, measured by CMS star ratings, weighs heavily on the program. However, Marshfield Clinic also measures coding productivity and cost management as well.

The plan runs what it calls a "value pool," an account set aside for reimbursing its own facilities and physicians that pay out based on performance in those three areas: cost management, coding and quality, said Mark LePage, Marshfield's chief medical officer.

And while the performance affects physician pay, LePage said Marshfield also gives a portion of the value pool as incentives to the physician support staff, which play a major role in the quality of care as well. Physicians and staff can actually track their performance on several data dashboards created by Marshfield.

The plan

Security Health Plan serves 220,000 people, execs said, and it's the system's ability to play a role in the care coordination that is paying off. For example, LePage said being able to manage the dental benefits of its population allows them to play a greater role in making sure patients are seeking out dental care before they experience costly dental emergencies. Good dental health also helps prevent other health conditions, like kidney disease and diabetes.

Marshfield is taking a similar approach with behavioral health care, linking a payment model with care to better serve patients and the system's bottom line.

"When you have multiple touch points from an integrated system, and patients are also members, that is where the best care is being achieved," said Marshfield Chief Executive Office Julie Brussow.

That's also where the costs savings come. Controlling patients across the continuum of care allows Marshfield to manage the process right down to referral process, she said. For example, the system can see when physicians are referring patients to specialists or ambulatory providers not part of the Marshfield system and try to change that referral pattern.

The hospital plan

According to Edwards, it may seem counterintuitive for a system that leans so heavily on cost efficient ambulatory care to invest in more hospitals. But that's what they are doing because running their own hospital is far more financially efficient than contracting with other providers, he said.

"Hospitals have been tone deaf," he said, pointing to high costs and what he said are few instances where hospital invest their large profits back into the communities. "It has become cheaper to own our own hospitals then it is to purchase those services from local providers."

Marshfield is looking to either acquire or build new hospitals. It has already announced that it will purchase St. Joseph's Hospital in Marshfield from Ascension, and Edwards said it has plans to build another hospital as well.

Twitter: @HenryPowderly
Contact the author: henry.powderly@himssmedia.com

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