Insurer plans its own clinic in North Philadelphia

Emergency room physician Andrew Aronson can easily picture this scenario:

An elderly patient shows up at her family doctor, complaining of vomiting and diarrhea. It is clear that fluid loss has left her dangerously dehydrated.

One response? Send her to the hospital for fluids administered intravenously.

That's when Aronson might have met her, or someone like her - when she was costing her insurer as much as several thousand dollars for fairly simple, low-tech treatment, particularly if she wound up staying overnight.

Aronson still moonlights in the ER, but these days, as vice president of physician practices for Bravo Health Inc., he is helping the Baltimore-based insurer organize a clinic on Lehigh Avenue that he hopes will provide a less-expensive alternative for that woman, and thousands of elderly, and often poor, patients in North Philadelphia.

What makes the clinic unusual is that it is entirely funded and administered by an insurance company. Instead of working for medical practices or hospitals, every doctor, nurse, technician, and clerk at the two-story clinic will be a Bravo employee. And the patients won't be able to just walk in off the street. Every one of them will have to have Bravo insurance.

Here's what Aronson pictures for the dehydrated patient. Her family doctor, one of the physicians in Bravo's network, would bypass the ER. Instead, the doctor would send her to Bravo's clinic, where she could spend a few hours being rehydrated under medical supervision at a fraction of the ER's cost.

"It's certainly uncommon," said Mark V. Pauly, a health economist at the University of Pennsylvania's Wharton School of Business.

"My sense is that payers are quite reluctant to set up health-care-delivery organizations because it is not their core business," said Guy David, one of Pauly's health-economist colleagues at Wharton.

"They know how to process paperwork, but they really don't know how to manage patient flow," he said. "I can envision their reluctance to do it."

Maybe so, but Bravo is spending $5 million to build and equip a 9,500-square-foot clinic near the bustling intersection of Lehigh and Germantown Avenues. When it opens in January, it will operate 12 hours a day, seven days a week, treat 70 patients daily, and employ 20. Another center is scheduled to open in West Philadelphia in the spring.

The Bravo Health Advanced Care Center is part of the company's push into the region's Medicare business. It comes at a time when other local insurers, Independence Blue Cross, and Aetna Inc., are trimming back their Medicare plans. Senior citizens must choose a plan by year-end.

In this time of intense scrutiny of the nation's health-care system, there is much focus on cutting costs while improving access and care. Making money in the process doesn't hurt either.

Alternatives abound. Nurse practitioners run drugstore clinics, employers install doctors' offices in factories, and entrepreneurs fund urgent-care centers.

"The health-care-delivery system is ripe to do what we are doing here," Aronson said. "In emergency rooms, the wait time is hours."

Besides a lab, examination rooms, a radiation facility, and a classroom, the building will include a wardlike room with a half-dozen beds.

That is where the elderly woman could, for example, spend several hours getting her hydration, or where someone who needed antibiotics administered via a drip could rest during the procedure.

There will be a pleasant waiting room, with light snacks for patients. Nurses and a social worker will be available for telephone consultations. The pharmacy next door will deliver medications before patients leave.

Patients can come on their own, or their doctors can send them. But all must be Bravo subscribers.

Aronson said the clinic would not compete with primary-care providers in Bravo's network. Instead, it will offer enhanced disease-management services and the low-level daytime hospital-care substitute. It also will provide after-hours and weekend care, so a sick elderly person can see a doctor instead of running to the hospital.

"I think the concept is good," said Dr. Franz Ritucci, director of the American Academy of Urgent Care Medicine, a professional group.

"But you have to suspect when an insurance company starts opening up their own clinic," he said. "You'll have to look at what they will provide. Will they only do the bare bones? They are in the business to make money."

But making money in the world of Medicare is not simple.

With Congress looking to Medicare savings to bankroll health reform, insurers that sell Medicare Advantage plans are cutting back their 2010 offerings, saying federal reimbursements are too small.

Medicare is primarily federally funded health insurance, but its coverage has gaps.

Under Medicare Advantage programs, the government subcontracts with insurance companies to handle the paperwork, manage the care, fill in the gaps, and provide various extra services, such as drug and dental plans. The insurers also charge premiums and co-pays.

Government reimbursements for Medicare Advantage plans will be down 4 percent, insurers said, even as medical costs increase, squeezing margins for insurers.

But Bravo says it thinks it has a way to thrive even in this narrowing band. "We developed a care model to care for the frail, urban-based elderly patient," said Jason Feuerman, senior vice president and executive director of Bravo's Pennsylvania operation.

Medicare reimbursements are higher for groups that tend to be sicker. Bravo's bet is that the clinic can improve care and trim expenses enough to enhance the insurer's prospects in Medicare's changing landscape. For the clinic to pay off, it needs to save Bravo $6 million a year.

"There will be a time lag before physicians and patients accept this as an option, and it won't be six months," said Norristown internist Charles Cutler, incoming head of the American College of Physicians, a Philadelphia-based professional association.

"It assumes the doctor in the office can make a decision that the patient is somewhat sicker than the office allows treatment for, but not sick enough for the hospital," he said, "but that decision is really difficult."

Headquarters: Baltimore.

Philadelphia office: 15th and Spring Garden Streets.

Business:

Medicare Part D drug plans, 43 states.

Medicare Advantage HMO plans, four states and Washington, D.C.

Projected 2009 revenue: $1 billion.

Founded: 1996.

Philadelphia story: Entered and grew market share by acquisition of:

Health Net of Pennsylvania, marketed as Smart Choice, 2002.

AmeriChoice, marketed as Personal Care Plus, 2005.

Senior Partners, 2007.

Total subscribers: 306,000.

Drug plans, 231,000.

Medicare HMOs, 75,000.

Subscribers in region: 44,000.

Counties covered: Philadelphia, Montgomery, Bucks, Delaware.

Up next: Camden and Gloucester Counties.

Source: Bravo Health Inc.

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