Don't call Valley Regional's new health plan an HMO

Vermont Business Magazine, Mar 01, 1997 by Muzeroll, Phyllis A

HMOs, POSs, PPOs, EPOs. Today, consumers shopping for a health care insurance plan often have to swim their way through a sea of alphabet soup to find something suitable. Valley Regional Hospital, in Claremont, NH, is about to add its own ingredients to the insurance pot, but just don't call its ground-breaking program an HMO.

Valley Regional is in the process of launching a new Partners Alternative Health Plan in early 1997, a "major first" for small, rural New Hampshire hospitals as it wades into the insurance waters.

LITTLE ORPHAN COUNTY

According to Don Holl, president of VRH, taking on this new enterprise represents a natural progression of alternative wellness programs that the hospital, sometimes in conjunction with other Sullivan County partners, has undertaken in recent years to address the region's growing health care needs. Sullivan County is across the Connecticut River from Windsor County.

Often regarded by its inhabitants as the "orphan county" of New Hampshire--in which little interest is taken by state officials--hospital, community, business and social service agencies have been working together for a number of years in partnership form to address such issues as affordable and adequate health care coverage for area residents.

Such vision has led to the creation of county health centers and clinics and a unique three-year program that brought together county and local municipalities, the Claremont School District and the hospital in a new partnership funded by a Federal Rural Health Outreach Grant. Still, those successes are not reaching everyone in Sullivan County who needs to access affordable and adequate health care services.

"We've looked at the county in terms of needs." explained Holl, "and segmented residents as fully insured, those with access to some insured care and those who are isolated, the silent group, the low-income.

"Also, in Sullivan County, a typical business is one with nine to 15 employees with limited access. We're rural, with businesses that are scattered and small. With a population of 35,000, big insurance companies are just not going to come in with affordable health care programs for most businesses. And with insurance plans so costly, this leads to a lot of part-time jobs where benefits are not available."

Statistics have shown that Emergency Department visits at VRH have risen by 40 percent over the last seven years, largely due to the increasing numbers of un/underinsured employees, and many in the county know only too well how costly health care has become in the region.

With these facts in mind, Holl said community and business leaders began meeting with hospital officials to address some of these problems.

"We needed to be creative and develop a cost effective plan that would be locally available, accountable and fit the market niche, something that would fit the needs of large businesses, smaller ones and also be available to the self-employed," said Holl.

4,000 TO 1 SHOT

What developed was the Partners Alternative Health Plan, put together by the Sullivan County Community Health Network; School Administrative Unit 6; the towns of Claremont and Newport, NH, and their Chambers of Commerce and the Sullivan County Economic Development Corp.

The model was entered in a national competition sponsored by the National Community Care Network Demonstration Program, where it was selected earlier this year as one of 25 winners out of 4.000 initial letters of intent. The PAHP grant will be funded for three years in the amount of $225,000; the money will come from the WK Kellogg Foundation and the Duke Endowment.

The project, which if successful, could be replicated across the country, requires a 50/50 funding match; that is, the remainder of the estimated $500,000 in start-up costs not covered by the grant will be financed by the loosely organized partners. The costliest part of the plan, demonstrating to state officials that a health care plan such as this have $6 million in reserve, has been met, said Holl, through the use of a "fronting" company--a private insurer with the necessary assets, in essence, a silent partner.

Although hospital officials have declined to identify the company "before all the t's have been crossed and the i's dotted" with the state, New Hampshire insurance regulators have been quoted as saying that the fin is "already licensed to offer insurance...and is a very solvent, responsible insurer." Holl said that the hospital and network were actively working with state regulators to secure the remaining necessary approvals to move forward.

The Partners Alternative Health Plan is managed care, but with a variety of options. According to Chris McAlpine, chief operating officer for Valley Regional and chief architect of the network, the program will offer two set of plans, one for self-insured employers and one for all other businesses.

Three different types of plans will be available: a Health Maintenance Organization, a Preferred Provider Organization and a Point Of Service plan. The network is using input from local employers to develop each option.