The challenges in the U.S. healthcare system are immense, with key problems including rising costs and decreasing patient satisfaction. Iora Health aims to address these issues through a unique model for primary care delivery that is built around the patient. Headquartered in Cambridge, MA, it serves 12,000 patients through 13 primary care practices in 6 states. The business model is to provide cost-effective primary care though a focus on team-based preventative healthcare, a simplified payment model, and technology innovations.
Team-based preventative healthcare
One of the drivers of rising healthcare costs is the focus on expensive treatment of disease, particularly preventable chronic diseases like diabetes and high blood pressure. In contrast, the business model of Iora Health is focused on actually keeping people healthy and preventing disease/disease progression. This reduces expensive emergency room visits and hospital admissions to keep total costs low.
The staffing aspect of the operating model is built around this objective. Each patient has a team of care providers that includes a physician, a health coach, and a nurse, as well as behavioral health specialists and social workers as needed. The health coach is a key innovation in the model. They are carefully selected from the same community as the patient, allowing them to understand how the patient’s cultural context influences health. Health coaches meet with their assigned patients more frequently than the physicians do, and their role is to address non-medical barriers to the patient’s pursuit of health. Their activities include everything from helping patients find transportation to their appointments to accompanying patients to the grocery store to educate/advise on healthy purchases. Though these may seem trivial, missing appointments and continuing poor eating habits strongly contribute to the development and progression of disease.
Knowing that the health coach is addressing these issues allows each physician to practice at the top of his/her license, freeing up time to address the medical issues and more thoroughly explain diagnoses and treatment options.
Payment simplification and technology innovation
Another source of high costs in healthcare is the fee-for-service payment system, which pays physicians for each expensive test and procedure they perform. This incentivizes more care than is actually needed. Instead, Iora Health charges a flat-fee per patient from the unions and employers with whom it partners. There are no additional charges for appointments or tests in the clinic. If Iora Health is able to take care of the patient for less money than the flat-fee, it shares that savings with the patient’s union or employer. This incentivizes judicious use of expensive resources.
The payment model allows several operational benefits. First, it eliminates the need for staff that process insurance claims, which is costly and resource-intensive. It also eliminates the physician tasks of billing for every service provided and calling insurers for things like prior authorizations. Instead, physicians spend that time caring for patients.
The payment model also allowed Iora Health to build a proprietary electronic medical record (EMR) system focused on patient management. The majority of existing EMRs are built around insurance billing. Because Iora could design the system from scratch, they incorporated features aligned with their business model. There is a platform for patients to send health data that they are tracking and trending (e.g., blood pressure and blood glucose) directly into their EMR via text message. This eliminates the need to spend time during the visit entering this information into the system and deciphering trends. Instead, the care team can track the information and spot troubling trends in real time. They developed software that computes a “worry score” based on things like clinic notes and patient reported data. High “worry scores” alert the team to brewing problems. This allows them to proactively schedule an appointment with the patient, rather than reactively responding after a costly adverse health event occurs.
Iora Health’s results have been very impressive thus far. Patients are extremely satisfied: in one customer satisfaction metric, Iora scores an average of 90 while Apple scores only 72. In addition, at one Iora site, hospital admissions are 37% lower and healthcare spending is 12% lower compared to a control group of patients in a traditional primary care practice. In addition, emergency room visits down 30% at another site. Iora Health’s innovative and well-aligned business and operational models have allowed it to set a new standard for what is possible in healthcare.
http://www.newyorker.com/magazine/2011/01/24/the-hot-spotters (At the time, Iora Health was called Special Care Center)