EM physicians get out ahead of trends, government and insurance companies.
When Dr. Tim Peck made his pitch to potential investors in 2015 for support of his new startup company, Call9, his basic premise was one that had been obvious to experienced emergency physicians for decades: treating elderly patients in place before subjecting them to transfer will save money and lessen their complications and suffering.
A Centers for Medicare and Medicaid Services (CMS) study had already determined that up to 45% of patients transferred from skilled nursing facilities (SNF) could be avoided, resulting in savings as much as $40 billion a year. And this is just the financial side. Many elderly patients fear admission to the hospital as a harbinger of impending death. Treating them in place, when possible is better for everyone.
Peck had the pedigree to know what he was talking about. A board certified emergency physician, he had gone to medical school at New York University, residency in emergency medicine and eventually a faculty position at Harvard. He even had an appealing personal story. To learn about the human side of nursing homes, he actually moved into one for three months. Call9 was everything “pay for value” was about, decreased unnecessary costs while improving quality.
Investors rewarded Peck with $30 million dollars in initial funding to get the company off the ground. He recruited some of the best and brightest from all over the country to move to New York City to implement this project. He placed mini-labs in multiple nursing homes and staffed them with paramedics who could report to a board certified emergency physician 24/7/365.
Within months, Call9 was delivering life-changing care to thousands of patients and conducting hundreds of thousands of telehealth consults. But after three and a half years they still weren’t delivering the return on investment that the founders predicted. Why? At that time Medicare lacked CPT code to pay for evaluation, labs or telehealth rendered in the nursing homes. And private insurance needed hundreds of thousands of patients to prove the model and quantify the savings before they would commit to a shared savings model.
Call9 tried to switch over to a fee-for-service model, just to allow time for the business model to mature, but the idealistic entrepreneurs began to lose heart. The team that had invested their lives and fortunes to practice this new form of care delivery were frustrated, as were the investors who had seen the promise of huge profits from shared savings. Demoralized and out of money, Call9 shuttered its doors and called it quits.
Like any failure in a developing program, this one caused a lot of soul searching as the entire field of medicine is trying to rein in costs by switching from fee for service to pay for value. What happened? Was it a good idea improperly implemented? Was it a failure of management? Or was the basic idea flawed? A deeper look probably suggests that it was none of the above.
Let’s look at the typical scenario of the transfer of a patient from a nursing home to the ER to see if the concept is solid. The night shift LPN, probably one of the least clinically trained and experienced caregivers, notices that a patient has say a slight fever or previously unnoticed disorientation, was found on the floor, has a red area of skin or has a cough.
They may or may not have a nursing supervisor on site. The call to the RN may or may not be relayed to a physician. But most of the time, without consultation with family, or a truly knowledgeable provider, a decision is made to transfer the patient to the ER for “evaluation.” It’s the conservative thing to do. Anything less could bounce back to make the nursing facility look negligent.
But with Call9, a specially trained paramedic or nurse responded to evaluate the patient in the nursing home. Basic point of care tests were obtained and a video call was made to emergency physician on call. And just as important, communication begins with the family, where even if the patient is sick or injured, family members could weigh in on the appropriateness and desirability of transfer and/or admission to the hospital. On this point, most of us who live this scenario would say that Call9 has a solid case for improving care and the potential for lowering costs.
Avoiding an unnecessary ambulance transfer alone can save in excess of $1,500. And internal studies demonstrated a $15,000 to $19,000 savings on every avoided hospitalization. Call9’s ‘on site presence’ also improved communication with staff and family, which also further reduced costs. Patients near the end of their lives often chose not to have diagnostic and therapeutic interventions that they might otherwise have chosen for them by their caregivers. Or they might opt for interventions that are less intrusive, and less costly, than what happens when they are transported to the hospital. Not only was Call9 successful in reducing transports and admissions, but they were also successful in rendering care that met the needs of their patients. When the company folded, it was devastating to many of their clients. So why DID they fail?
The short answer is money. For any system of health care to survive it must ‘make money’. A ‘pay for value’ system makes money by saving money. While still a ‘fee for service’ practice, the real money is in ‘shared savings’ — payors who are willing to share with providers a portion of the difference in the previously documented cost of care.
This is not the ‘shared risk’ of the HMOs of the past where payors paid out a flat fee to providers of care who then were at risk for cost of care. This Call9 model is still a fair fee for service, but the provider was envisioned to get more — a lot more — when he was able to deliver better care for less.
We all know that not every CT is needed. But doing one may lower your liability and increase your E/M code for billing. The Call9 system rewarded clinicians who could do more with less, by sharing the savings from fewer CTs. Accountable Care Organizations attempted to do this under PPACA, but the rewards were minuscule and limited to primary care doctors. The response was tepid at best.
Peck and others tried to change this with the introduction of the bipartisan Reducing Unnecessary Senior Hospitalizations Act of 2018, the RUSH Act. This bill allowed certain services that were normally rendered and billed for in an emergency department to be provided on site. But most importantly, the documented savings were shared 37.5% to the providers, 12.5% to the skilled nursing facility and the rest going to Medicare. Tragically, the bill ran out of time before the Congress changed hands and new priorities were set.
Don’t hang up
Currently, there are very few mechanisms for rewarding those who save money instead of making money. If the medical system was actively looking for and handsomely rewarding those who invent ways to save money while improving care, it would look like Edward Scissorhands attacking the problem. We know where the unnecessary care and costs are. The Call9 approach opened the door to massive savings, but they still had trouble getting buy in from insurance companies.
They claim they need hundreds of thousands of patients before they feel safe in sharing much of their reserve profits. But any doubt about whether these potential savings were real was removed by a recent study by West Health and Harvard that demonstrated similar results.
In the end Call9 failed, not because of a flawed concept or execution. It was just ahead of its time. The same concept attempted with hundreds of thousands of patients with the legislative will to handsomely reward those who saved the system billions of dollars would finally turn the ship in the right direction.
Tim Peck was not defeated by Call9’s failure though. He, like all of us, knows the concept is solid. Keep your eye out for a second generation. When Congress becomes fully invested in this idea we will see improvements in care and savings to boot. Just remember that it was an emergency physician who got the ball rolling.