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St. Luke's Blogs

'Care I Want my Children, Grandchildren to Have'

By Dr. David C. Pate, News and Community
February 14, 2012

Here’s what I’m asked most often when I talk about our goal of providing accountable care:

How is accountable care different from the managed care of the ‘70s, ‘80s, and ‘90s? 

Let me begin with a quick refresher. For St. Luke’s, accountable care is really the Triple Aim espoused by Dr. Don Berwick, former head of the Centers for Medicare and Medicaid Services, when he led the Institute for Healthcare Improvement:  better health, better care, lower costs. 

Our strategy around better health is under development, but coming together with lessons learned from the Healthy U wellness program for St. Luke’s own employees and from what we are learning about some of the patient activation research that is developing. 

We know that to be successful, this model of care cannot be built around traditional, and even some of the new emerging, medical settings, including physician offices, medical homes, clinics, hospitals, etc.   We will have to be able to reach people where they live, work, and go to school. I think health care leaders who believe that they are going to reach people who are at high risk for lifestyle reasons, but who are not yet ill or don’t know yet that they have health issues, by having them come to physician offices or clinics are completely mistaken.

Our strategy for better care is to create systems in which every provider, and the patient, has access to a patient’s records through a single electronic medical record (EMR) across the System, with embedded evidence-based protocols and a multidisciplinary approach to better coordinate care for the best possible quality outcomes. We have already begun to roll this out.

We are also implementing and following evidence-based practices in patient safety and implementing best practices in patient satisfaction initiatives, since no patient is going to believe they had a quality experience if we did not keep them safe from avoidable harm or if they did not have an exceptional experience. 

Our strategy for lowering costs has centered around the implementation of Lean principles which we have adopted as our TEAMwork approach, the efforts we are making to address supply and pharmacy costs and to leverage centralized services across the System and other economies of scale. New lab and laundry operations within our System are examples of these types of changes.

However, we see the biggest opportunity for cost management and reduction being in care management. That is why we are aggressively pursuing clinical integration with our physician partners. We’ll have more about clinical integration in future blog entries.

So, how is all of this different from managed care? 

Managed care means different things to different people, but those who ask me about the managed care of the ‘70s, ‘80s, and ‘90s are referring to health maintenance organizations (HMOs).

The major concept behind HMOs was one aim: lower costs. To control costs, many HMOs went with a gatekeeper model. Everyone is assigned a primary care physician and all subsequent referrals have to be approved or authorized by him or her.  

The primary care physician was paid a fixed amount of money per assigned patient per month, and if the primary care physician could control the costs of care below that amount, the physician or physician group could retain the excess. Alternatively, the physician or physician group was responsible for costs that exceeded the fixed payment. 

By transferring financial risk/benefit to the physician, it was thought that primary care physicians would take care of more medical problems at a lower cost, reduce referrals to specialists, help keep patients out of hospitals, and reduce high-cost imaging and procedures. What was not anticipated was that without proper incentives or penalties for outcomes of care, physicians would be incentivized to withhold care or services that would cost more, even if that care or service might have improved the quality or outcomes of care.

Accountable care, on the other hand, aims at three things: better health, better care, and lower costs.  St. Luke’s believes that the right approach in providing care is to fully utilize a team of care providers according to what will provide the patient with the most convenient and prompt access, the right care, and the lowest cost. This approach is a component of patient-centered care, and I’ll post more on that in the future. 

We believe that the road to accountable care must create incentives, not for providing more services, which is the basis for today’s fee-for-service model that rewards health care providers for each service they perform, and not only based on reducing costs, such as we saw with the earlier HMO model, but for value – better outcomes at a lower cost. In addition, there must be incentives for promoting health.  

As I have said many times, the real health care crisis is coming. Even if we are effective in lowering costs for all those who are patients today, the pipeline of disease burden approaching among people who are not yet patients will overwhelm the health care system and increase the costs far above what they are today. The current epidemic of childhood obesity is only one aspect of that wave I see coming.

We must do something to keep people who are not patients today from developing preventable illnesses that are very expensive to treat, that decrease productivity for employers, and that eventually create a financial burden on state and federal health care programs. No current insurance product, including commercial insurance programs, Medicaid, and Medicare, does this today.  Accountable care, done the right way, should help accomplish this by rewarding the time and efforts it will take to do this.

HMOs did not fail everywhere, and there are many types of HMOs. But accountable care is dramatically different from managed care, which did nothing to incentivize physicians to engage in health promotion for people who were not already patients. 

I look forward to the day when St. Luke’s, along with state, federal, and local payers, has figured out how to do all this successfully. This will be the kind of care I want available to help attract more businesses to Idaho, to lower health care costs for current Idaho employers, and to make care more affordable for all the communities we serve.

The kind of health care I want my children and grandchildren to have.

About The Author

David C. Pate, M.D., J.D., is president and CEO of St. Luke's Health System, based in Boise, Idaho. Dr. Pate joined the System in 2009. He received his medical degree from Baylor College of Medicine in Houston and his law degree from the University of Houston Law Center.