Flexibility all: Spokane-based Health Care Associates expands its offerings using a unique model of consumer- and provider-centric plans

Health Management Technology, Dec, 2004 by Richard R. Rogoski

The rules governing managed care are rapidly changing. Cracks have appeared in the strict guidelines that once locked employees into plans where a gate-keeping primary care physician had sole control over referrals to specialists. Today employees have more latitude in choosing their own primary care physicians, specialists and even deductibles.

Leading the charge into this new world is Minneapolis-based Vivius Inc., which developed a core technology and innovative transaction model that allows healthcare consumers to build their own network of physicians and to choose the best premiums for themselves and their families.

In a move that is energizing self-directed plans, Vivius chose to make its model "dual-centric." Not only do employees have more freedom of choice, but healthcare providers also can create their own panels of allied physicians and set their own fees.

The technology on which this model is built has proven to be such a breakthrough that in May 2004, Vivius was granted a U.S. patent on both its core technology and various automated enrollment methods. In September, the company announced it would begin licensing the rights to its intellectual property to health insurance-related companies, including technology, accounting and financial service firms. In the past, Vivius had offered its Web-based program to consumers only through insurance companies under a private-labeling agreement.

For Valerie Steigerwald, human resources director at Health Care Associates in Spokane, Wash., adopting this new technology has resulted in the streamlining of her HR procedures. "During open enrollments, we used to spend two months sitting down with employees and helping them fill out forms," she says. "With Vivius, it's all done online."

Steigerwald believes that giving employees a greater stake in their healthcare decisions parallels other trends in business where more responsibility is being shifted from the company to the employee. "Consumer-directed healthcare is like private employers moving from defined-benefits pension plans to 401(k)s," she says.

Surveying for Maximum Flexibility

Steigerwald acknowledges that shifting to the Vivius model has been an evolutionary process.

As the largest radiology group in eastern Washington, Health Care Associates is composed of three distinct companies: The radiology group employs 40 radiologists and four vascular surgeons; a technical assistance group has 350 employees; and a professional management group employs 125. In addition, Steigerwald is the executive director of Columbia Primary Care, a group of 35 primary care physicians.

Finding a workable health plan for such a diverse group of employees was no easy task. "We had four different health plans," she says. "The physicians wanted an indemnity plan. But we also had a PPO and two separate managed care models."

Providing traditional managed care plans proved to be a challenge in itself. "When you're an insured employer, you purchase an off-the-shelf plan," she says, "and that doesn't allow employers much flexibility." Plus, plans bought off-the-shelf in Washington state must include coverage for certain alternative medicine practices like aroma therapy and acupuncture, which not every employee is going to use.

There also wasn't much flexibility for employees. Being under a 125 (tax code) plan based on pretax deductions, employees could change their deductions only once a year, unless there was a major change in the family such as the birth of a child, death of a spouse or a divorce. Also, if an employee wanted to change his physician when it came time to renew, that would automatically change the policy's premium.

A Step in the Right Direction

Steigerwald was in a quandary. There had to be a way, she thought, to offer a plan that was flexible for the employer, allowed employees and their dependents more involvement in their own healthcare decisions, would be cost-efficient and could take much of the administrative burden off the HR department. "When I evaluated consumer-directed plans, there weren't many," she says.

In 2002, however, she found her answer. HealthNet Insurance Co. began offering the Vivius model under the name "Uselect," and Health Care Associates became the first provider in the nation to install and use the Vivius software.

Interestingly, Group Health Cooperative, one of the two managed care companies covering Health Care Associates, allowed them to keep their coverage. But Steigerwald says fewer than 15 percent of her employees stayed with that managed care plan. "In the second year, for our July enrollment, we dropped the two managed care plans altogether," she notes

The internal evolution has continued. In July 2004, Health Care Associates went entirely self-insured, using HealthNet only as a stop-loss carrier, but still being able to design the health plan the way they wanted, says Steigerwald.

Making Decisions About Healthcare Dollars

Since the Vivius model is Web-based, employees simply logon to the Web site to set the parameters of their cover age. "The deductible is the first thing employees pick, and it's the same deductible for each family member," Steigerwald explains.