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Series: Grand Junction's healthcare | Part I

Grand Junction healthcare is a model of low cost and high quality

The first of five parts: Read how the city and region is emerging as a national model for public healthcare.

February 25, 2010|By Bill Scanlon, Colorado Public News

The nurse says that the sickest patients leave the mountain town for specialist care in a big city, or easier breathing at sea level.

"If you are a fairly healthy person and don't have specialty needs, the system works just fine here," she says. "But if you have big issues, you are going to move, or you're going to die."

Family physician Pramenko concurs that Grand Junction's population has fewer health problems, and comparisons to McAllen may not be completely fair. But Grand Junction leaders maintain the preventative and comprehensive care they give to almost everyone — including the poor — lowers the risks for high-cost diseases and the cost of caring for the cases they do have. Grand Junction also has lower costs per patient for home health services, the number of tests ordered and other big cost drivers, Pramenko says.

And Mesa County looks good when compared to other parts of Colorado that have similar low levels of obesity and chronic disease. "The numbers do bear out that Grand Junction is well below the average Colorado cost" even when risk factors are considered, Pramenko says.

Health policy economist Nichols say experts from Dartmouth and elsewhere believe that existing health and social factors explain more like 30 percent of the difference in cost, and nowhere near 100 percent.

"That is the first line of defense of providers in high use areas" — ‘My patients are sicker than they look to you' — but it rarely holds up to sustained and careful analysis," Nichols says.

FTC problems

Not everyone likes collaboration.

In 1997, the Federal Trade Commission sued the Mesa County physicians' association, charging it with antitrust violations because it comprised 85 percent of the doctors in the county and was in a position to fix prices in a way to make it difficult for competing doctors and insurers. The doctors argued that their reviews of how medical equipment is used and their quality-assurance programs with RMHP amounted to a clinical integration that made their practices legal.

A year and $500,000 in legal bills later, the doctors won a compromise. The FTC dropped its demand that the 190-member association reduce its primary-care doctor 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 (doctors and the insurer) had fostered, cost-effective, innovative health care," the physicians' attorney, Mark Horoschak, said at the time.

Low costs bring bonuses

The Grand Junction system also saves money because physicians work with Rocky Mountain Health Plans under an unusual system of payment and oversight. The insurer pays doctors about 20 percent less than they would receive for patients with private insurance. That leaves money on the table at the end of the year.

Because RMHP is a nonprofit, that money doesn't simply go back to shareholders or into the company's coffers. Instead, it is a nice bundle that can be shared by the doctors, provided they've carved out efficiencies through the course of the year.

"To make sure they've done so, there are regularly scheduled peer reviews to see who is choosing quality over quantity, and who is choosing smart over more," Pramenko says. "Some of that comes from the culture in this town — the belief that more isn't necessarily better. And we don't have too many specialists, whereas many big cities do."

At least once a month, doctors get together and review the data. Doctors A, B and C ordered 7-8 MRIs last week — Doctor C ordered 40. In that scenario, Pramenko notes, you don't want to be an outlier, not unless you can justify it by proving that you had better results for your patients. If you can't justify it, then you just cost the system a superfluous 30 or so MRIs at an average cost of $1,400 — a total of $42,000.

ErkenBrack notes the group has been nonprofit from the outset. "The model we've created is a vehicle for everyone in the community to get health care," he says. "We don't dictate to doctors. But we do force people around the table to have that conversation."

Why does that matter? It matters to U.S. taxpayers, who are paying about half of all medical costs in America, through government programs such as Medicaid, Medicare and indigent care programs.

And it matters to those with private insurance, whose premiums are some 33 percent higher because of all the charity care and unreimbursed care the system must shoulder.

And in Grand Junction, it also matters to the doctors themselves.

If the total number of MRIs is down where it should be, if most of the patients are prescribed generics, not brand-name drugs, if scores of other potential cost run-ups are handled gracefully, then the doctors in Grand Junction get nice, fat year-end bonuses.

Bill Scanlon's reporting on this package of stories was funded by The California Endowment Health Journalism Fellowships.

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