Carolinas HealthCare seeks to cut costs through prevention, technology

Facing falling government reimbursement rates and higher costs for providing care to the uninsured, Carolinas HealthCare System is turning to big data and new ways to provide care in an effort to keep costs down.

Much of the effort, executives said Tuesday, will focus on ways to harness patient information that’s now becoming available through electronic records to prevent illness or better manage chronic conditions.

Executives of the region’s largest hospital system said that they have yet to see a noticeable increase in the number of people getting insurance because of the Affordable Care Act. North Carolina decided not to accept federal funds to expand its Medicaid program, which hospital leaders had hoped would cover more of the cost of care.

“Our patients didn’t stop having babies, they didn’t stop getting pneumonia, they didn’t stop getting the flu just because the nation is having a prolonged ideological debate disguised as a conversation about how to provide better care,” CEO Michael Tarwater said during a meeting of his board of commissioners.

The hospital group is forecasting a $5 million loss next year on $4.8 billion worth of revenue this year for its core hospitals, its first loss in more than 30 years.

Carolinas HealthCare reported that uninsured discounts, uncollectable debts and financial assistance rose to 10 percent of gross patient revenue in 2013, up from 9.5 percent the year before.

To compensate, Carolinas HealthCare is turning increasingly to technology. Executives highlighted the push to move entirely to electronic medical records last year, which they said opens up the possibility for analyzing data to predict which patients will get sick – and possibly intervene before they do.

Dr. Zeev Neuwirth, who oversees the hospital system’s 200 physician practices, said new software makes the predictions possible. It’s the same sort of big data mining that lets Target decide which special offers to try and sell you, Neuwirth said.

“That’s really exciting stuff. It’s unusual,” said Neuwirth, who said he’s only aware of one other healthcare system, in Massachusetts, using such software. “We’re not using big data to sell things. We’re using big data to save lives.”

As an example, Neuwirth said when a patient comes in to the emergency room, software can now analyze about 40 parameters and compare that to a database of all patients to see if they look like someone likely to be readmitted to the hospital. If they do, they can be assigned a follow-up care team who works remotely to help manage conditions such as diabetes and heart disease.

The ultimate goal, Neuwirth said, is to apply such predictions to patients before they even visit their doctor.

“Nothing’s happened yet, but youre at risk” of an illness or hospitalization, based on data from your medical charts, said Neuwirth, describing such a scenario. “You literally get a call from us, or a text saying ‘I know you feel fine, but we want you to go into our care management program.’ ”

Such measures could ultimately reduce the number of visits patients make to their doctor, if they’re not getting sick as often. If the cost of providing care to many patients outweighs reimbursements from Medicare, Medicaid or insurance, that would ultimately keep costs down.

“We don’t get paid for this. We’re actually trying to prevent people from using our facilities,” said Neuwirth.

He said a recent experience in which his mother was hospitalized at a facility that didn’t use electronic medical records helped cement his belief in their importance.

“You don’t know how bad it is until you actually go back. It was like a time warp,” said Neuwirth. “The care is unsafe, it’s uncoordinated. It’s a nightmare...The system was absolutely stupid, and frightening.”

Chief operating officer Joe Piemont acknowledged that the rollout of electronic medical records to all the physicians’ offices has been rocky at time. “To say that this has been a smooth implementation would be generous,” he said.

But Piemont said that after an initial spike in doctors’ workloads as they learn the system, it ends up reducing their workload.

Carolinas HealthCare has also taken other measures to try to streamline its operations.

• Carolinas HealthCare decided last year to close its pension plan to new hires and move to a 401(k), to cut costs. Piemont said the core system isn’t looking to reduce jobs, but that its regional hospital affiliates – who he said are seeing less demand as more people go to urban hospitals for care – might have to cut personnel.

• Primary care practices have standardized many of their procedures, and doctors are holding “daily huddles” to go over patient care metrics and identify areas to improve.

• The hospital system’s MyCarolinas healthcare portal gives patients online access to their medical records. Carolinas HealthCare is also implementing a program to allow patients to have online appointments with their doctors.

For the full year, Carolinas HealthCare reported revenues of $4.5 billion, up 9.4 percent, for its primary enterprise, which includes a dozen Charlotte-region hospitals. That was below budget projections. The system’s operating profit fell 35 percent from the year before, to $92 million.

Counting investment gains, the group notched a profit of $338 million.

For the total system, which includes 40 hospitals owned, managed or leased by Carolinas HealthCare, revenue was up almost 20 percent, to $7.9 billion. Profits including gains on investments were up almost 11 percent, to $547 million.