Seeking to reduce waste, lower costs and improve customers’ experiences, Inova Health System and insurance company Aetna in May 2012 formed a new partnership, Innovation Health.
The partnership began providing service in the fourth quarter of 2013 and now has 172,000 members, said CEO David Notari.
“This was the first of its kind,” he said. “In the past, hospitals and insurance companies were adversaries. It put the consumer in the middle of the mess. Here, the incentives are aligned and the consumer benefits at the end of the day.”
The new health-care model is “really going to catch fire and take off across the U.S.,” he predicted.
Cost savings – typically between 10 and 15 percent – are a major driver of the partnership’s success, Notari said. Savings need to be at least 8 to 10 percent before companies will consider switching health-care providers, he said.
“We negotiate better rates,” Notari said. “Price is still king.”
By leveraging Aetna’s pharmacy-benefit plan and price structure, Innovation Health has increased the number of lower-cost generic prescriptions issued by 21 percent, he said.
More than 1,400 small businesses participate in the program and 38,000 people buy its services on the federal government’s health exchange.
Innovation Health also has accounts with large, national firms such as Booz Allen Hamilton Inc. and public-sector agencies. About 24,000 Fairfax County Public Schools employees and retirees are enrolled in the program, Notari said.
Innovation Health has obtained an 11-percent share of the region’s health-care market, which numbers about 2 million people. In Loudoun County, the partnership’s market share is about 50 percent, he said.
Trust, flexibility and transparency were key factors as the two companies formed the partnership, said Innovation Health executive director Amy Turner.
“They took prudent steps to negotiate the terms ahead of time,” she said. “They needed to meet each other halfway to make this work.”
Innovation Health’s six-member leadership team next year hopes to expand the partnership’s geographical range as far west as Winchester and as far south as Fredericksburg, picking up Prince William County along the way, Turner said.
The partnership has been able to scale up its programs quickly and buys some services from Aetna, such as underwriting and technology, Notari said. Innovation Health uses Aetna’s network to serve employees of local companies who work in other states, not just those with access to Inova’s facilities, he said.
A key goal is to eliminate some of the estimated $765 billion per year in waste – such as duplicative testing – that occurs in the nation’s health-care system.
Enhanced communications help make that possible, partnership officials said. Innovation Health gets a “census feed” every day at 6 a.m. regarding the whereabouts of all patients, and then pairs that information with clinical data to identify gaps in medical care.
“Usually, in the past, the insurance company didn’t know a patient was in the hospital until the claim arrived,” Notari said.
While filling out paperwork recently to have both knees replaced, Notari encountered the inefficiencies and potential bugaboos in the health-care system.
“I never realized what a burden it is,” he said.
About 90 percent of medical cases have missing information when they’re submitted for approval, Notari said.
Innovation Health this fall will finalize, and roll out on Jan. 1, a plan to use private-exchange technology to eliminate paperwork in small markets. Patients will register online and will not be able to move forward with their applications unless they supply all needed information, he said.
“We’ll be the first in the area to offer a paperless system,” Notari said. “Health care is an old, stodgy business that hasn’t adapted well to technology. We need to hold ourselves accountable for that.”
Innovation Health does not at present take Medicare or Medicaid cases, Notari said.
“We’ll look to those in the future to see if it’s the right fit for us,” he said. “We’ll continue to focus on commercial and individual businesses.”
Fairfax County Public Schools’ relationship with Innovation Health is fairly new and has been in place for about a year and a half, school officials said in a statement to the Sun Gazette.
“We currently offer three health-coverage options, and about 46 percent of health-benefit-eligible employees and retirees have elected to participate in the Innovation coverage,” their statement read. “We have found the account team and management group effective and responsive to our group’s unique culture and needs under our administrative-services contract.”