Patricia
A. Liebman
Chief Executive Officer
UPMC Health Plan
Reports on 2002
Change is a
fact of business life. Change helps businesses grow, sometimes level
off, and then grow again.
For UPMC Health
Plan, 2002 was a year of change. In 2002, our total expenses exceeded
our total revenue by $5.7 million. However, our membership continued
to increase and, most important, we learned valuable lessons about
what we need to do in 2003 and beyond.
Change in 2002
gave us the opportunity to control costs without sacrificing quality,
and also to meet the challenge of growing membership
in a sluggish economy.
The challenges
of 2002 confirmed something we already knew: The interdependence
of all of our partners makes us stronger as a company, while it
also strengthens our community.
Our top priority
continues to be managing
these relationships to provide unparalleled health benefits in western
Pennsylvania.
Throughout this
annual report we declare our
interdependence with our members, doctors, hospital administrators,
employers, and people
in the community. And we show how this
interaction can lead to successful outcomes.
Like consumers
in any marketplace, our members look for value. For some of our
members, “value” means more medications, technologies,
and tests. Unlimited access to familiar physicians. A hospital in
every neighborhood. Copayments lower than the cost of a fast-food
dinner.
But delivering
value in the real world demands more practical approaches. The health
care dollar
is limited, and business and government payers
want high-quality health benefits at a reasonable price and with
reasonable contributions from consumers. Consumers must also have
a stake in maintaining costs at reasonable levels. That’s
what interdependence means.
One way UPMC
Health Plan has brought value to its members is through health management
programs that help them follow their physicians’ plans to
maintain their health, better understand and manage their medical
conditions, and reduce or prevent complications.
We call the
6,300 doctors and 78 hospitals in our network “accountable
providers.” What that means is that we provide them with the
information and support they need to practice the best possible
medicine. In return, we ask them to be medically and financially
accountable for the decisions they make every day.
Quality of care
is our first concern, and we work with our providers in their quest
for greater efficiency. We believe that reducing the variation in
medical treatment provided by doctors and hospitals can improve
quality of care and lower costs.
Here’s
one example of how we help reduce
variation in medical care. During 2002 we
reviewed charts of patients who visited the emergency room for abdominal
pain. We found that similar cases were often handled differently,
resulting in different medical outcomes—some better than others.
Our goal is to work with our providers to make sure that they consistently
use only methods that result in the best outcomes.
This consistency greatly improves care and, by reducing complications,
controls cost. We work daily with our providers to develop these
best practices in every facet of care and treatment.
Our efforts
to improve medical outcomes will intensify in 2003. We’ll
share more peer data with our providers, and we’ll concentrate
in areas such as diabetes, asthma, congestive heart failure, lower
back pain, cardiac catheterizations, MRI/CT procedures, and pharmacy.
We’ve identified these areas because of the higher costs associated
with them, the benefits of standardizing care, and, in the case
of cardiac catheterizations and MRI/CT procedures, the opportunity
to reduce, where appropriate, higher than normal utilization.
Other initiatives
we are aggressively pursuing:
- Encouraging
members to request—and doctors to prescribe—generic
medications that have the same effectiveness as more expensive
brand-name medicines.
- Working with
doctors to provide same-day appointments for urgent care. This
can help
avoid costly emergency room visits while giving patients faster
treatment in a more comfortable setting.
- Advising
our doctors and hospitals about
opportunities to weigh alternatives to hospital admissions, such
as hospital-based observations that provide the same level of
care at lower cost.
Knowledge of
patient needs and cost-effective alternatives can conserve limited
resources, maintain high-quality care, and reduce cost.
We think this is knowledge that doctors want, and we will continue
to provide it.
Our 2002 experiences
also spotlighted high interdependence among hospitals and other
partners in the health care system. The news was positive: For the
fourth year in a row, U.S. News & World Report included
our partners at UPMC in its “Best of the Best” honor
roll of hospital systems. UPMC was one of only 17 systems in the
nation so recognized, and the only one in western Pennsylvania.
UPMC is in good company—the list includes such systems as
Johns Hopkins, the Mayo Clinic, and UCLA Medical Center.
Our interdependence
with our hospital
partners stimulates such initiatives as placing
our staff members in emergency department offices at UPMC Presbyterian
and UPMC Shadyside. Seven days a week, our on-site
nurses manage inpatient admissions, coordinate treatment, and recommend
appropriate levels
of care for our members.
We also stay
in touch when our members leave the hospital. To identify barriers
to recovery, and to help our members understand instructions and
prescriptions, we now assign nurses to make regular calls to members
who are discharged from the emergency department after treatment
for congestive heart failure, diabetes, or asthma.
We added congestive
heart failure to our
health management program in 2002, and
early indications show strong benefits for our members (healthier
lives) and our business
clients (reasonable costs).
Similar to
our diabetes and asthma programs,
the one-on-one congestive heart failure program helps members follow
treatment regimens prescribed by their physicians and also helps
them understand and manage their disease. We are developing a pilot
program that offers home health care visits, after discharge, to
members who are admitted to UPMC-owned hospitals.
These threads
of interdependence not only connect our members, providers, and
business clients, but also extend to the communities we serve. Our
commitment to the community includes a product portfolio of commercial
benefit plans for employee groups and a variety of Medicare insurance
options.
In 2002 we expanded
our Medicare HMO service area and increased our UPMC for Life
HMO membership from 2,369 to 8,717.
To offer additional
choices to Medicare-eligible consumers, we introduced a preferred
provider organization (PPO) Medicare plan that offers members the
highest level of benefits for network care while also giving them
the choice of using out-of-network providers.
UPMC for
Life PPO was established after the U.S. Centers for Medicare
& Medicaid Services selected UPMC Health Plan as one of only
33 health plans in the nation to help demonstrate how this product
can work for Medicare beneficiaries.
In 2002, our
group plan participation in
UPMC for Life increased. More than 25 western Pennsylvania
companies now offer UPMC for Life HMO or PPO plans to eligible
retirees.
Meanwhile, the
Health Plan’s Medicaid
partnership with the Commonwealth
of Pennsylvania also continues to grow.
We renamed this product UPMC for You
in 2002 to better reflect our affiliation
with the world-class facilities of UPMC.
The needs of
the Medicaid population differ from those of the members that our
commercial and Medicare products serve. We’ve developed programs
and protocols that recognize these differences by collaborating
with key community organizations to tailor programs that match
these needs.
The interdependence
among the Health Plan, employers, doctors and hospitals, labor and
community groups, members, and others continues to challenge us
to seek innovative solutions to daunting health care cost increases.
As both an insurer and a provider, UPMC can play an invaluable role
in addressing the problem of delivering world-class health care
services without losing sight of the need to manage costs.
Out of this
recognition of our interdependence was born an idea that we think
shows exceptional promise for private and government employers and
the people who work for them. During 2002 we developed a test model
for a new kind of plan called UPMC Advantage and began offering
it to the 35,000 employees of the University of Pittsburgh Medical
Center.
Now UPMC offers
these employees the highest benefit level when they use hospitals
and other medical facilities that UPMC owns.
Our close collaboration
with UPMC-owned facilities will enable us to share information about
performance with hospitals and physicians. This dialogue, in turn,
will identify opportunities for controlling medical costs while
improving patient care and creating healthier communities.
Healthy communities
will allow our region to survive and prosper. That’s why we’re
committed to improving the health of our communities through medical
education, community sponsorship, public outreach, and products
that are leaders in both quality and cost-effectiveness.
By working with
business clients, physicians, hospitals, and community and labor
leaders,
we hope to change behavior. Just one example: Giving both educational
and financial incentives to patients to seek preventive services
can reduce—and even prevent—catastrophic medical incidents.
That will result in healthier and happier people, fewer sick days,
and reduced medical expenses.
We cannot achieve
such goals working alone. It’s only by embracing our interdependence
that we’ll succeed, getting people to lead healthier lives,
helping people who are ill to manage their illnesses, reducing costly
variations in medical care, and providing health insurance to underserved
populations.
We need to fix
the problems, not fix the blame.
I personally assure you that UPMC Health Plan will continue to be
part of the solution. We remain committed to western Pennsylvania
for the long term.
Sincerely,
Patricia A. Liebman
Chief Executive Officer
UPMC Health Plan
|