Featured Articles: Risk and Compliance

Managed Care in Rural Communities

Wednesday, February 11, 2015   (0 Comments)
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By Carlos Olivares, CEO of Yakima Valley Farm Workers Clinic


For the past 20 years, Yakima Valley Farm Workers Clinic (YVFWC), as a rural health care organization, has engaged in managed care contracting and has taken some risk in managing the lives of patients.  Initially we were not certain as to how or why should we take this type of risk, particularly when taking risk meant for us the possibility of losing precious resources that were needed in the day-to-day operations. 


So the question is, why would a small migrant community health center take these risks considering the lack of experience in managing risk contracts? As the CEO of the organization, I am trusted to ensure the care of patients and to have a financially sustainable organization.  As I looked at our patients and the care we were providing, I felt we had an opportunity, under a managed care system, that could benefit not only our patients but could give us financial stability. 


Over the years, our providers had to manage the care of our patients in a manner that is consistent with the principles of a managed care infrastructure.  They had little opportunity to refer patients to specialty care or to prescribe expensive medications.  Based on the current delivery system we had in the clinics, I believed we were already managing the care of patients and therefore decided to negotiate contracts with the managed care organization and take full risk for all the primary care provided in our clinics.


The strategy paid off, and the risk that we took was a reasonable one considering that our new contract demanded care that was already embedded in our primary care system.


To that strategy, we added a pharmacy risk to the initial contracts because we were already managing pharmaceuticals through our generic formulary.  The use of generic drugs was a significant contributor to realizing a lower medical loss ratio for each one of our patients. 


As we progressed and saw significant success in managing primary care at full risk, we began to venture into areas of risk contracting that expanded into taking upside risk on specialty and hospital care.  Most of our clinicians manage hospital work for our patients, and all of our providers have hospital privileges. It seemed to me, therefore, a fairly natural progression to take risk on our hospital contracts. That also paid off, since we were able to improve our medical loss ratios through managing our own hospital risk.   


Our story is one of risk taking and managing care for difficult populations. However, it is not something different than what we were already doing without a managed care risk contact. The end result of this is that, over the past 25 years, YVFWC has significantly benefited from taking managed care contracts at risk.  Because of it we have not only been able to improve the services to our patients but have also been able to expand care in our communities.  Today we manage 80,000 lives and have risk contracts with five managed care companies in both Oregon and Washington.  We continue to see successful financial results from doing so, and we have consistently seen improvement in the outcomes of care in our patient population. 


Data has been a significant element of our success. Through our data we have been able to better understand the risks that we want to take and have been able to target and improve strategies around our more risky patients, allowing us to continue to minimize the financial risks we take on those contracts.  As I reflect on the past 20 years of engaging our system in managed care, I have firmly concluded that risk contracting in a managed care environment in rural communities is not only possible, but it could be financially sustainable as well, as it provides a much more comprehensive patient-centered care. 


For more information, call Carlos at 509-865-5898, Ext. 2101. 

NWRPCA welcomes and regularly publishes white papers and articles submitted by members, partners and associates with subject matter expertise. The appearance of any guest publication in our Health Center News database represents the views of the author and does not constitute endorsement by NWRPCA of the stated opinions or perspectives, nor does it suggest endorsement of the contributor's products or services.

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