N.J. lawmakers advance bill on rewards for preventing, controlling illnesses among N.J. poor

New Jersey Gov. Chris Christie (center) makes his first budget address to a joint session of the New Jersey Legislature.

Amanda Brown/The Star-LedgerNew Jersey Gov. Chris Christie (center) makes his first budget address to a joint session of the New Jersey Legislature.

TRENTON — Declaring the health care system “hopelessly broken,” lawmakers in Trenton are advancing legislation that would provide financial rewards to doctors, hospitals and insurance companies for preventing and controlling illnesses — rather than just treating them — in New Jersey’s poorest communities.

In short, the effort is based on the old proverb: An ounce of prevention is worth a pound of cure. In this case, supporters say, it’s worth millions in health care costs.

The Senate Health, Human Services and Senior Citizens Committee last week unanimously approved a bill that would enable five groups of medical professionals and managed care companies that treat at least 5,000 Medicaid patients to form an “accountable care organization” — one of the latest buzzwords contained in the federal health care reform law.

The idea brings together doctors, hospitals mental health counselors — any professionals who see these patients regularly — to electronically track and share patient history, then jointly develop ways to prevent or control illness. The medical professionals participating in the network would be paid a bonus from money saved by providing more intensive patient supervision aimed at preventing the need for costly treatments.

The idea is so enticing, hospitals and doctors aren’t waiting for the federal government to spell out how it wants these organizations to work. Hospitals and physician practices have formed six organizations in the past year.

“It changes the incentives from doing more care to doing better care,” said David Shulkin, the vice president of Atlantic Health, one of the groups formed. “This is a time that demands new solutions and change.”

State lawmakers aren’t waiting either. The bill the Senate panel approved last week would create five accountable care organizations, each serving at least 5,000 low-income patients in one concentrated area who rely on New Jersey’s $9 billion Medicaid program. The state would sign off on bonuses based on what is saved with preventive care.

Medicaid may be the most ripe for savings, according to Jeffrey Brenner, a family doctor in Camden who launched a nonprofit network of health providers in 2007, and whose work is serving as a model for the promise of accountable care organizations.

Using data from all three Camden hospitals — Virtua, Cooper University Medical Center and Our Lady of Lourdes — Brenner’s nonprofit organization learned the most common reason people sought treatment at the emergency room was for a head cold. From 2002 to 2007, patients logged 12,600 visits for head colds, followed by 7,700 ear infections and 7,600 viral infections.

With hospitals, primary care doctors and mental health organizations working together, they’ve formed relationships with patients. The result: less costly but better care, Brenner said. One patient, a 70-year-old man with dementia and no family, “was backing up the emergency management system by calling 911 up to 10 times a day,” Brenner said. “Our team helped him get into a medical day program and meals on wheels.”

“We have built a very specialized and expensive health care system in New Jersey, but we don’t do the easy things well,” Brenner testified in Trenton. “In Camden, if you want a kidney transplant you’ll have great access. If you want an appointment to control your diabetes and blood pressure to prevent kidney disease, you could wait weeks or months.”

“We’re the most expensive state in the most expensive delivery system in the world,” Brenner added.

Newark and Trenton have recently received $350,000 grants from the Nicholson Foundation to launch a network emulating Camden.

Robert Garrett, president and CEO for Hackensack University Medical Center, calls the idea of accountable care organizations “utopian” but believes it can work with the right coordination and “alignment.”

Ev Liebman of the consumer organization Citizen Action of New Jersey praises the idea, and points out that the organizations are controlled by a board that includes patient advocates. The state Chamber of Commerce’s Senior Vice President Michael Egenton called it “an innovative approach to reducing costs and improving care.”

National models of such organizations include the Mayo Clinic, the Cleveland Clinic, and Kaiser Permanente.

The six health care groups formed in New Jersey in anticipation of the federal law kicking in next year include AtlantiCare; Atlantic Health, which operates Morristown Memorial Hospital and Overlook Hospital; Hackensack University Medical Center; Robert Wood Johnson Medical System in New Brunswick; Summit Medical Group and Optimus Healthcare Partners.

But there are few details on how the new organizations will function — or how they will succeed. The U.S. Centers for Medicare and Medicaid Services said last week they were still drafting rules — including those covering the shared-savings program. They were expected last fall.

Even so, Atlantic decided to take the plunge because reform is coming, Shulkin said. “This is an unpaved road — we don’t pretend we know where it’s going,” he said.

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