Replicating the healthcare model of Grand Junction

Can other communities copy the Grand Junction model of low-cost, high-quality, near-universal healthcare?

Some doctors in this Colorado city of just over 53,000 say yes, others no. But clearly, some parts could be replicated elsewhere.

The House of Representatives has included in its version of healthcare reform a provision allowing the creation of nonprofit, consumer-operated insurance cooperatives as an alternative to the ballyhooed and cursed public option.

“This says they want to create a potential place in the world for systems like (this),” says Dr. Michael Pramenko, a leading advocate who practices with Primary Care Partners in Grand Junction. “It says that if you don’t like the public option, and want another way, here is your opportunity.”

Key to the Grand Junction plan is coordination among providers, says Len Nichols, an economist who is director of health policy for the New America Foundation in Washington, D.C. and a supporter of the reform bill.

By working together, providers in Grand Junction and the surrounding area emphasize primary care and prevention. They cover nearly everyone. They conduct peer reviews to see if doctors generally choose proven treatments. They also have made less expensive hospice care an attractive and popular option for the end of life.

Nichols says the Mesa County model “absolutely” can be replicated if a community can agree on a common vision of accountable, low-cost care for all.

Dr. Elliott Fisher, co-director of the influential Dartmouth Atlas of Health Care, agrees. “The question, I think, is whether there is physician leadership in other areas that would and could take it on.”

Pramenko says the beauty of the co-op is that the community can make its own rules. That lowers the tension in the public vs. private health-care debate, he asserts.

“If government makes the law that says doctors have to do this, they will get resistant,” he says. “But if it’s home-grown and if we make the rules together and we’re all in this together, there’s much more buy-in by the local physicians.”

Is it just healthier people?

Some critics see little to replicate. Blogger Daniel Gilden says Grand Junction’s costs are low only because it has an unusually healthy population, with low rates of obesity, diabetes and other major illnesses.

Grand Junction residents may be a bit healthier than the national average, but “its health system also keeps them healthier than other systems would,” Nichols counters.

Is it luck? Or is Grand Junction’s emphasis on prevention keeping its citizens from contracting major chronic illnesses, which are the biggest drivers of healthcare costs?

Grand Junction has few poor people, who typically have worse health, Gilden argues.

But in most of the United States, poor people have trouble finding doctors to take Medicaid’s low rates. So one factor in their poor health is poor healthcare. In contrast, Grand Junction provides health care and preventive services to nearly all its low-income residents. So is that driving down the rate of expensive chronic disease?

There are arguments on both sides, and no clear answer.

Darene Schroeder, a Grand Junction nurse who has worked in far less healthy areas of the country, thinks that who lives there plays a huge role in the area’s low cost of healthcare.

“While health care can be improved in terms of lifestyle, at least 50 percent is genetic,” she said.

Pramenko counters that Mesa County’s care system should receive partial credit for the low rates of diabetes and complications. Providers worked together to cover everyone, to emphasize prevention, to provide good transition care, thus keeping down hospital readmissions down.

In any case, the data in Grand Junction shows that reducing major chronic illness and their complications are a major factor in cutting cost.

Cindy Sovine, a political consultant for the Colorado State Association of Health Underwriters, says the debate in Congress over health care reform should be considering that. They’re “doing nothing to increase the health of the population.”

Sovine called for discounts for patients who take care of themselves. Employers should get discounts on premiums for putting gyms in offices. “We need to realize that we have an aging population. With our current lifestyle trends, we’re seeing increases in diabetes and heart disease. Insurance costs are going to go nowhere but up.”

Her association has written proposed legislation to allow insurers in Colorado to reduce premiums if a customer loses weight, she said.

“We need a societal change in thinking,” Sovine said. “Away from how come insurance companies can’t lower prices to what we are doing as a society to change the focus on sick care to a focus on improving the health of our population.”

Standard treatments

Another way Grand Junction keeps patients healthier and also saves money is “to have guidelines in terms of treating common problems, such as lower back pain,” said Dr. Susan Hemley.

Over the years, doctors developed a protocol: The primary-care doctor treats the back pain in appropriate low-cost ways, and will “only send the patient to a specialist if they see red flags,” said Hemley, who is a neurosurgeon and one of those specialists. “If there’s more than the normal amount of pain, or if the pain lasts a very long time, then it’s probably time for the patient to see a specialist.”

She knows she could make more money elsewhere, but “I – and my colleagues, too – we’re not interested in making an extra buck by seeing an extra patient. I can’t imagine scheduling surgeries I don’t believe in doing just to make more money,” she said.

But Grand Junction has built this into its system as well. Hemley and other surgeons with the Center for Brain and Spine Surgery are on salary at St. Mary’s Hospital, not paid by the surgery.

The boon of reducing unnecessary tests and procedures can’t be overstated, say Grand Junction doctors.

There has never been any hard connection between the size of the reimbursement and the effectiveness of the procedure, Pramenko maintains. “Reimbursement should be going in the direction of effectiveness.”

Healthcare reform needs to include incentives for better continuing medical education on what needs to be referred to a specialist and what doesn’t, say advocates. Is an MRI needed or not? Who needs surgery and who doesn’t?

Or is it rationing?

Critics: Won’t work elsewhere

Another factor in the Grand Junction system is peer review, not of individual cases, but of physicians who heavily use expensive or unproven tests and treatments.

Dr. James Schroeder, a pediatric cardiologist in Grand Junction, called this rationing in a letter last summer to the Grand Junction Free Press.

“Is your doctor advocating for you, or for the insurance company? Are you being steered away from costlier options solely due to cost? The (barely) unspoken message is that you have a duty to die cheaply in order to save money for everybody else,” he wrote.

Schroeder, who prefers a free-market approach to health care, says the Grand Junction model can’t be replicated elsewhere. He says its cost numbers are low for the dying because its sickest patients leave for care in bigger cities.

He also argues that the isolated small city has little competition among hospitals and specialists – and that cannot be replicated in a major metro area.

“Those same reasons are exactly why the Grand Junction model will not serve well as a useful model for national health care,” Schroeder wrote in a second letter this summer.

“But that won’t stop some from trying to jam the ugly stepsister’s foot into Cinderella’s slipper.”

Primary care key

Experts have argued that American medicine would be better off with more primary care doctors and fewer specialists. Nationally, 68 percent of U.S. physicians are specialists.

In Grand Junction, 58 percent of its 229 doctors are specialists, and Pramenko says it needs 28 more generalists to work well.

“If you have four cardiologists in town and you only need two, how many cardiac tests do you think are going to be done?” More, Pramenko says.

Dr. Thomas Bodenheimer, author of a recent New England Journal of Medicine article, found that half of the internal medicine students nationwide in 1998 planned to be generalists -- but only 20 percent did so.

The cause was noted even by President Barack Obama: “The costs of medical education are so high that people feel that they’ve got to specialize.” New doctors typically owe more than $140,000 in loans when they graduate.

Dr. David West of Grand Junction said specialists earn two to four times as much per year as primary care physicians -- and that’s too much. By contrast, in Mesa County, specialists are hired to think and so give up income to benefit their patients, their community and the family doctors, he said.

West said doctors “are paid too much for procedures – surgeries, radiology studies, chemotherapy, endoscopy and diagnostic tests – and far less for bedside and office care to patients.”

Specialist’s view

Dr. George Shanks, a retired surgeon in Grand Junction, said he and his fellow specialists probably earned 20 to 30 percent less due to the accountable care system, but that was enough.

“We had decided a long time ago that we were there to take care of the people of the Western Slope,” he said. “The people who had the idea of making more than what was appropriate were sort of told to leave.”

He credits that philosophy for the lower costs.

“I’d basically spend one day a month fighting with the family physicians over who would get the money,” he said. “It wasn’t all lovey-dovey, there were negotiations in all of this. But we all got along well.”

The system can be replicated, Shanks said, because there are plenty of physicians who would rather work in a system that takes care of everyone, than make an extra $100,000 a year.

But will the Grand junction model work with for-profits?

Pramenko is skeptical. In Grand Junction, 40 percent of the market is controlled by one nonprofit, Rocky Mountain Health Plans. It is an essential part of the system of covering everyone, with a focus on increasing quality and controlling costs.

The for-profit system “says we are going to do everything we can to drive shareholder profits,” Pramenko notes. “The other says we’re going to do everything we can to control costs, deliver good care and get more people into the system,” even if they have pre-existing conditions.

“To me, it’s diametrically opposed,” Pramenko says.

But economist Nichols thinks for-profit insurers can be part of it. “Some for-profits operate with enlightened self-interest, while some non-profits behave at least as aggressively as some of the for-profits,” he said. “The distinction between the two in many places is artificial.”

Insurance spokeswoman Sovine says the state’s for-profit health insurers only average a 4 percent profit margin, so they’re not the problem.

“The ultimate reality is that cost is cost, whoever is paying the bill. And those costs are fixed – durable medical equipment, technology and reimbursement go up every day,” she said.

“Our margins aren’t driving premiums up,” Sovine said. “It’s people eating at McDonald’s more and walking less.

“I would argue that having profits gets people to be more innovative,” she said. She said for-profit insurers share the goal of “reducing costs and increasing the health of our customers – to reduce utilization in the long run.”

Sovine praised the Mesa County model, saying collaboration is the key to its success.

“But it becomes much more complicated in larger metro areas like Denver where there is an over-saturation of hospitals. They have three Level-One emergency rooms in the metro area – that’s more than is necessary for the entire state.”

Statewide, “none of the players talk to each other,” and that does tend to drive up costs, she said.

In Grand Junction, “there is one major payer and one major hospital,” she said. “It’s an excellent model to look at, but it’s not realistic to say, ‘Pick it up and slap it on Denver and expect it to take.’”

“The idea that by eliminating for-profit insurers life would get better is shortsighted and a bit naïve,” Sovine said. “Insurance companies aren’t going anywhere.”

FTC opposition

Not everyone thinks that cooperation is good.

Ten years ago the Grand Junction doctors spent $500,000 fighting the Federal Trade Commission, which charged them with antitrust violations because their association included 85 percent of the doctors in the county and was in a position to fix prices.

The doctors argued that their cost reviews and quality-assurance programs amounted to a clinical integration that made their practices legal.

In the end, the FTC dropped its demand that the association reduce its membership, and the association agreed to an order governing its contracting practices, according to Family Practice Management magazine.

“Ultimately, the FTC recognized that, far from being a sinister conspiracy, the relationship between the IPA and (RMHP) had fostered, cost-effective, innovative health care,” the IPA’s attorney, Mark Horoschak, said at the time.

Colorado’s two U.S. senators are trying to get some relief for physicians’ groups from FTC rules, Nichols said. And recently in Maryland, the FTC backed off challenging a similar alliance, admitting it could bring efficiencies.

Meanwhile, on the other side of the Continental Divide, in Weld County, Colo., health leaders are currently looking into trying the co-op approach. “All they need is a few incentives to say, ‘let’s do it,’” Pramenko said.

“We need to understand that there are limited dollars, otherwise this beast that is one-sixth of our economy will become one-fourth of our economy,” he said.

Bill Scanlon wrote this story while participating in The California Endowment Health Journalism Fellowships, a program of USC’s Annenberg School for Communication & Journalism.