North Bay Business Journal —

Health Care Conference Q&A: Rick Heron, Western Health Advantage

Dan Verel, Business Journal Staff Reporter
Monday, November 12, 2012, 6:06 am
Categories: Events, Health Care and Senior Living, Industry News, NBBJ events | No Comments

Rick Heron

Rick Heron is chief marketing and brand officer for Western Health Advantage, a Sacramento-based HMO that recently received approval to expand into Marin, Sonoma and Napa counties.

The move into the North Bay for the nonprofit HMO is a significant development for a number of providers and brokers alike, who have said the injection of another health plan will offer more choice — and thus more competitive pricing, it is hoped — for the region’s employers and individuals. Mr. Heron has been with Western Health Advantage for seven years.

Q: Now that health reform is here to stay, what is the feeling among hospitals and large providers? Will the Patient Protection and Affordable Care Act adequately contain costs for providers?

Mr. Heron: In its final form, the Affordable Care Act is an effort to extend health coverage to more Americans and drive health insurance market reforms — the combination of these two endeavors will eventually bend the cost curve and slow the rate of annual increases of premiums. The state of California and the Health Benefit Exchange Board, through the launch of Covered California, will encourage delivery system reforms that also contribute to stabilizing costs to Californians.

Health plans see the opportunity in the ACA to increase access to care for more Californians. Western Health Advantage is particularly excited because our type of health plan — regional, not-for-profit and closely aligned with providers and hospitals — has been identified as potentially successful model in a post-reform environment.

Q: Lately, the North Bay has seen significant movement toward coordinate care among providers, particularly in the form of accountable care organizations (ACOs) or ACO-type structures in the private sector. Will this movement continue and, if so, what will it look like for providers?

Mr. Heron: Western Health Advantage is excited about being a big part of the movement to bring our ACO-type structure to the North Bay. For 16 years, WHA has worked closely with our founding sponsors — NorthBay Healthcare, UC Davis Health System and Dignity Health (formerly CHW) — to offer affordable health coverage to businesses and quality service to employees.

Our model launched in the North Bay in October partnering with Meritage Medical Services and seven hospitals and medical centers. This integration with doctors and hospitals in a capitated environment forms an accountable-care system. Providers understand their important role in helping their patients actively manage their health, and the health plan enables a majority of care decisions to be made between the patient and their doctor. Most of the financial risk is placed on the providers and is dependent on their ability to manage the delivery of services effectively and efficiently.

Q: From your perspective, what is the biggest challenge facing health plans post health care reform? 

 Mr. Heron: The biggest challenge moving forward in 2014 for health plans is navigating a changing landscape of health coverage. Covered California, the California health benefits exchange, will completely change how individuals purchase health coverage. It will also affect employer-provided coverage for small businesses to a lesser extent. With this monumental shift, health plans have to be nimble and responsive to needs of the population and the Exchange.

Q: There is a palpable shift toward prevention and keeping patients out of the hospital as much as possible. How does this affect health plans?

Mr. Heron: The idea of “managed care” has been a bedrock initiative of California’s health care system for over 25 years. With managed care brings an incentive to keep members healthier, manage chronic conditions more actively, and keep patients out of episodic acute care situations. Health plans have always played a big role in health promotion and disease management. This role will increase as our members take a more active role in their own health.

The ACA makes staying healthy easier by mandating no cost-sharing or co-payments for preventive services. WHA takes it a step further by encouraging the use of health assessments to track overall health, facilitating discounts at gyms and fitness centers and organizing a number of outreach programs to help members manage their chronic conditions.

Q: To what extent will technology play a role in the aim of reducing health care costs and producing better patient outcomes? Can you give an example of something that your company has done? Obviously we are familiar with electronic health records, but what are some other areas in health information technology and technology overall that are worth noting?

Mr. Heron: WHA is taking advantage of a more-connected world by leveraging our digital communications, through our website, emails notifications and our mobile app for members. In an age of “consumerism” where individuals will need to take a more active role in their health and health care, these tools make it more convenient to record and monitor their health, manage their coverage and access their personal information when getting care.

Q: And, what are the associated challenges of developing and implementing such technology?

Mr. Heron: Building the infrastructure to share information in our system real-time between the health plan, 15 major facilities and seven medical groups will be a huge challenge. Consumers in the 21st century expect a seamless experience and while they have less expectations in health care than in retail or travel, for example, the trend is for all the systems we encounter in our lives to become simpler and more integrated.

Most health plans rely on data from patient encounters that may be weeks or months delayed through the payment system. This communication needs to be closer to real-time to be effective in helping patients manage their care. This will be the biggest challenge.

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