A Model for Health Care Savings
Report Reveals Potential Health Cost Savings
Goshen, Indiana – A new report shows that approaches to health care used by Maple City Health Care Center in Goshen, Indiana, could save Indiana taxpayers more than $900 million dollars a year.
The report also demonstrates that quality health care does not need to be expensive.
The most recent data from a report by Managed Health Services indicates that if Maple City Health Care Center’s approach to health care were adopted by all health care providers in Indiana, Medicaid savings in Indiana could reach $902 million a year.
Such savings could solve the problem of health insurance for almost two thirds of the Indiana residents who currently live without health insurance.
Maple City Health Care Center provides high quality primary health care to people from mostly low-income, working families. Of the center’s 3,000 patients, over 600 are covered by Medicaid through Managed Health Services.
Managed Health Services is an Indiana for-profit Health Maintenance Organization that provides managed care to people covered by Medicaid in Indiana.
The report from Managed Health Services shows that for the first six months of 2008, the average monthly cost of medical care for Medicaid patients at Maple City Health Care Center was $59 compared to a state average of $97 per Medicaid patient – a health care savings of 39 percent.
But savings is only half of the story. Managed Health Services’ report also shows that while the cost of care at Maple City Health Care Center is less than the state’s average, the quality of care is better.
One indication of quality is that hospital costs for the center’s Medicaid patients were 56 percent less than the state’s average. Lower hospital costs show that the center’s less expensive health care is actually better at preventing serious illness.
Dr. James Nelson Gingerich
Dr. James Nelson Gingerich founded Maple City Health Care Center. He serves as the organization’s medical director and as a physician at the center. Dr. Gingerich describes the attributes that contribute to the center’s low cost and high quality.
“First and foremost, we see health care as a relationship rather than a commodity. We learn to know our patients and they learn to know us. We also help patients connect with each other. We use small groups to care for patients with chronic diseases like diabetes and high blood pressure. We use similar groups to provide prenatal care and education. People in these groups care for and empower each other.”
“Second,” continues Dr. Gingerich, “we focus on quality. Our mission includes both quality and affordability, but quality comes first. Surprisingly, we discover that it’s our commitment to quality that results in affordability.”
“Take office visits, for example. Because of our mission to provide excellent health care, we encourage plenty of office visits,” says Dr. Gingerich. “We end up spending lavishly on office visits.”
Managed Health Service’s report concurs that Maple City Health Care Center’s cost for office visits is high. Of the total cost of caring for a Medicaid patient, the center spends 40 percent on office visits compared to a state average of 20 percent.
“What’s so interesting,” says Dr. Gingerich, “is that for every dollar we invest in office-based primary care, we save nine dollars in other areas. Really, it makes sense. Plenty of personal interaction with our patients encourages healthy behavior. It enables us to catch problems early and it helps prevent more serious and more costly illness.”
“Many providers in the state try to save money by limiting office visits for their Medicaid patients. Unfortunately, this backfires,” explains Dr. Gingerich.” The costs are passed on to hospitals and expensive specialists.
“Another important attribute for us is integrated care. People on staff here provide counseling, chronic disease management, patient care coordination, prenatal classes, doula support, and breastfeeding coaching. Our care is also culturally integrated. A third of our employees and board members speak Spanish as a first language.”
The fourth attribute is practicality. For example, the center measures the effects of treatments and compares costs. Two years ago, Maple City Health Care Center invested $75,000 in an electronic medical records system. With the system, the center has data it needs to compare treatments and costs.
“We’re also careful about the medicine we prescribe. We find many low-cost prescriptions are just as effective as comparable medications that cost much more. The result is that medical providers here at the center prescribe fewer medications and medicines that cost less.”
According to the MHS report, the state average for the monthly cost of prescriptions for a Medicaid patient is $23. At Maple City Health Care Center, the cost is $9.
“We are committed to providing excellent health care to all of the people in our neighborhood,” Dr. Gingerich explains. “Because many of our neighbors lack insurance and because half fall below the federal poverty line, we develop habits to keep care affordable.”
“It’s been a gift to work here in our neighborhood. We don’t start with defensive medicine. We start with meeting the needs of people in a manner that they can afford. No wonder we end up with low cost, high quality health care.”
“Here’s how I like to think about the money Indiana could save,” concludes Dr. Gingerich. “We should apply the money toward insuring more people. There are currently more than 600,000 Hoosiers without health insurance. With a 39 percent savings rate, Indiana could provide health insurance similar to Medicaid to almost two thirds of the uninsured people in our state.”
“Incidentally,” adds Gingerich, “the current report from MHS is good news, but it’s not unusual for us. We show a pattern of similar savings for as long as we have had data.”
Maple City Health Care Center is a medical home for 3,000 of its neighbors. The center is located in a remodeled fire station in the north side neighborhood it serves. A board (primarily made up of patients) governs the center. Dr. Gingerich won the 2006 National Neighborworks Dorothy Richardson Award for leadership in community development.
Maple City Health Care Center’s mission is to provide high quality, affordable, accessible, integrated health care. The center’s Web site is www.mchcc.com.