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Believe it: Here’s how Fort Worth saved $5 million on health care after years of rising costs
by Mitchell Schnurman, Business columnist | October 21, 2018
The costs of health care have been climbing so fast, so long that most experts don’t talk about reversing the trend. The best they can aim for is to slow the increase — or “bend the cost curve.”
The city of Fort Worth has a more promising story. Its health plan, which serves nearly 14,000 employees, dependents and retirees, is projected to be $4.8 million under budget for fiscal 2018.
From January through June, spending in emergency rooms dropped 34 percent. Visits to the ER declined sharply, in network and out. Much of the credit goes to a new approach that bets heavily on the value of primary care.
Three health clinics were opened exclusively for city workers and their families, and five other satellite clinics were added to the mix. Members who see a doctor in those facilities — and wait times are less than five minutes, officials said — don’t have to pony up a co-payment or deductible.
That’s right: Office visits are free, as are about 40 of the most common prescriptions.
If the nearby clinics aren’t convenient, members can call a doctor line for a consultation. So-called virtual visits (via smartphone, computer or landline) are also free for those enrolled in the city’s health center plan.
This year, 59 percent of members chose that new option while the rest enrolled in a high-deductible plan with more traditional out-of-pocket costs.
“We want to drive as much health care as possible to primary care doctors, and we want to cut down on all the time it takes,” said Brian Dickerson, the city’s human resources director. “This is turning out to be pretty popular. We couldn’t be happier.”
They’ll have more to cheer if the program continues to deliver. It’s part of an accountable care organization whose providers work together to lower costs and improve health outcomes. If the plan surpasses expected savings, the city gets part of them.
The ACO is run by Southwestern Health Resources, the affiliation created in late 2015 by two of the region’s top medical operators, Texas Health Resources and UT Southwestern. The ACO is expected to have over 600,000 members next year.
What is an ACO?
ACOs encourage providers to form networks to better coordinate care. They share electronic records, try to eliminate duplicate tests and work with case managers and others to help patients stick with their regimen.
They resemble HMOs except that members are allowed to go outside the preferred network. They just have to pay more — at least $60 for an office visit in Fort Worth’s plan.
Teaming with Southwestern Health was projected to save at least $7 million from three areas: the new health clinics, discounts from Southwestern Health providers and improved management of diseases and other conditions.
Using more primary care doctors tends to reduce visits to specialists. Add in a telemedicine option, and that also reduces trips to the ER.
ACOs have grown rapidly, starting with Medicare patients and expanding into the commercial market. But many experts were disappointed with the savings in the early years.
The government said ACOs increased Medicare spending by $344 million from 2013 to 2015. But more recent studies, which use a different analysis, reported significant savings from the program — more than half a billion dollars over the same period.
The long view
Texas Health has spent millions to create the affiliation with UT Southwestern, and both systems are taking the long view.
“Health care is being disrupted everywhere and we’re trying to create a new model,” said Marinan Williams, Southwestern Health’s senior executive officer for market relations. “We’re still in the infancy phase, and it’s going to take some time.”
Southwestern’s ACO has succeeded in key measures: delivering care at lower prices and meeting the quality criteria required by the program. Its Medicare ACO had over $73 million in shared savings over a three-year period. In 2016, it ranked second in Texas for performance and No. 6 in the nation, officials said.
Last year, Southwestern’s ACO was selected for the government’s next-generation model, which offers the prospect of more savings — or losses.
Just over 1,000 ACOs were operating in the U.S. in the second quarter, covering over 33 million people, according to Leavitt Partners’ Torch Insight. Participation grew 25 percent in the last three years.
“They’re confident this model can save money,” Dickerson said.
The numbers increased faster here. ACOs covered almost 2.6 million Texans, and in Dallas, 15.3 percent of the population enrolled in such plans, according to Leavitt Partners, a health intelligence business in Salt Lake City.
When Fort Worth started considering options for the insurance plan, officials didn’t call Southwestern Health initially. It seemed too risky to contract directly with a health system, Dickerson said.
But over 4,000 doctors and 30 hospitals are part of that network, including many in Fort Worth. City employees wanted access to those providers, Dickerson said. And Southwestern Health responded quickly to its requests, agreeing to set up three new clinics by January 1.
The city wanted employees to get in the habit of going to the clinics first — and paying nothing for a visit.
By early October, the clinics had received almost 9,500 visits. Next year, Fort Worth expects the health plan’s costs to come in almost $4 million below budget — with no changes to employee co-pays, deductibles or premiums.
“It’s working out wonderfully,” Dickerson said.
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