Randy Jordan – The Value of the Health Safety Net Pt. 1

Today we hear a conversation between CHESS President Yates Lennon and community health expert Randy Jordan, who is the current Chief Advisor of Impact for Health at Next Stage Consulting. We listen as they discuss Managed Medicaid, funding the health safety net for the uninsured, and how different types of healthcare organizations can work together in a sustainable way.

Alright, Randy Jordan, welcome to the Chess Move to Value podcast. We’re thrilled to have you here today. Look forward to our conversation.

Well, thank you, Yates. It’s really good to be with you and with your audience today.

Awesome. So why don’t you just start by telling us a little bit about yourself, what you do today, and then your journey through the healthcare maze to get to where we are today.

Be glad to starting with today’s probably the easiest part because the rest is kind of a winding path. But today I’m working as a healthcare consultant with consulting practice out of Charlotte by the name of Next Stage. It’s an interesting place to work. They have a great vision and mission for helping local communities and underserved populations and that’s why I’m there. But prior to this current role, I had started out as a young man as a pharmacist practice pharmacy in the state of Florida come from a long line of pharmacists. So healthcare runs as a deep strain in my family history. After running a pharmacy, community pharmacy for a while, I ended up going to law school and decided to become a healthcare lawyer and that was a really interesting time in my life. I learned a lot from that experience and then moved on to become involved in nonprofit work and spent nearly 20 years working for an international faith-based charity out of Philadelphia by the name Hope Worldwide. And the last seven years I was that organization CEO. And then most recently, having moved to North Carolina eight years ago, I accepted the role as CEO of North Carolina’s Free and Charitable Clinics Association. And that gave me a real great sense of the local flavor of North Carolina safety net. So that’s how I got here today through that windy path. Always, always focused on healthcare, Always, as I look back, always focused on trying to help others.

OK, that’s an interesting story. I know you spent a little bit of time in Cambodia. Can you tell us a little bit about what you did there and then we’ll come back to that I think more a little bit later in our conversation, but really curious about what that was about and what you learned there.

Yeah, I, I actually never lived in Cambodia, but had a a strong period of work there. It started at the beginning of my time at the international charity, where I started as the general counsel, and the first assignment there was to put together a joint venture between Japanese Shinto priest, a journalist from Time magazine, and the CEO of our charity. And so that was an eclectic mix right there. But the purpose of that mix was to open up a free care hospital in Phnom Penh. Cambodia was named after the king and its purpose was to help people that didn’t have access to healthcare. At the time, Cambodia was one of the poorest nations in Southeast Asia. They were spending about $2.50 per year on those that live there. They had undergone a horrible genocide through Pol Pot, and it was a very unique chance to get involved in that country. We brought up that first hospital in Phnom Penh. In the course of that work, there developed three free clinics in order to help support that hospital because some of the patients were able to pay a small amount and then finally open another hospital in the South of Cambodia in a little in a town by the name of Kempat. But all very formative experiences for our conversation today.

Wow, really interesting. So in your role as the CEO of the North Carolina Association of Free and Charitable Clinics, you would have a very unique lens on the uninsured. Tell us a little bit about, you know, the uninsured population in North Carolina or in general, I guess. And then what are some of the characteristics of that population?

Yeah. You know, that’s a a, a label which accurately describes a certain population in North Carolina. Probably over the last 10 years. The percentage of North Carolina’s population that is classified as uninsured ranges from its current level of about 11%. When I first started with a free clinic association, it was approaching 14%.Medicaid expansion in our state is expected to make a big difference in in lowering that number. But still when you think about a state of more than 10 million people, 11 or 14% is a lot of folks, a lot of folks and a lot of folks that are uninsured. So that’s that’s where we focused in the free and charitable clinic world. We took care of of nearly 80,000 of that number who didn’t have access to health insurance. They couldn’t afford it or for whatever life circumstance was there for them. But you know, the reason I hesitate a little bit on that title, Yates, is I don’t think it describes the full breadth of who the uninsured are. We can describe them numerically, but we, but when all we look at is that label of whether they have an insurance card or whether they don’t, then we miss out on the richness of that population. Many of them are working. Over 3/4 of the state’s uninsured are working. It’s a bit of a myth to say that they don’t work. They do work. They just have jobs that don’t provide insurance or don’t provide enough money for them to buy insurance even through the exchange. So, you know, it’s, it’s, it’s a, a, a group that I think deserves health care to make it more personal that the, the uninsured person that you might know the best could be the person that’s cutting your hair.

They might well, for me that, well, maybe it’s even another analogy.

The person that’s serving you food at the restaurant, right? But all, all kinds of folks, folks that might be mowing your yard. They’re the kind of people that we’re trying, that we were trying to help, right.

Well, speaking about then let’s talk a little bit about how how the health safety net providers, free and charitable clinics, etcetera here in the state are, how are they financed? What is the finance mechanism to help support those clinics, keep the doors open, give those patients a place to receive quality care?

Well, if I might start with who that group is in its entirety, because the word safety net is often used is a broad term, but it’s comprised of a an amalgamation of really dedicated folks. We’ve already mentioned the free and charitable clinics, but also counted in that number in the primary care space would be federally qualified health centers, rural health centers. About 55 of the public health units in our state have primary care services that they offer there. Even some schools have school-based health clinics that provide services to kids that don’t have health insurance. So that mixture of people come together in North Carolina to provide a, a, a real matrix of services and they’re each one funded slightly differently. That’s why in responding to your question, I teased it out. Free charitable clinics, which I know most about, they live by virtue of donations and grants. They don’t get insurance where the qualified health centers and rural health centers do take insurance. So they are able to benefit from that source of revenue, but then they have obligations in order to maintain that status to take care of a certain volume of uninsured patients. So, you know, they, they have a certain percentage of their patients census that is uninsured, school-based health centers, public health units, they all have their different ways of of receiving funding. So it’s a little bit of a mix and it’s an and I think that’s actually why it’s a little bit complicated on how to fund and sustain the safety net

Right? it is a mix of of funding. That’s interesting. You recently wrote a blog post, I believe about capitation and Medicaid in North Carolina and how the, the FQHCS, the free and charitable clinics may actually be an existing infrastructure that is well positioned for capitated payment models. Can you talk to us a little bit about that And, and is that an accurate assessment of your blog post first?

Yeah. Well, it it relates to my professional journey. The experience that I gained in Cambodia is that there is something unique about low cost health care systems when they exist. You can, you have more flexibility and you have more options. My experience with the Free and Charitable Clinic Association taught me that there’s not a real downturn in quality when the safety net is applied, particularly in this state. When you look at measures like diabetes and hypertension, match it up against insurance, different types of safety net providers, free and charitable clinics themselves stand up quite well in terms of providing quality care. So you have you have a low cost option, you have a high, high or on par quality option. And that in and of itself creates an environment where capitation, which is paying a fixed payment per patient per month can live and thrive. And so the, the, the reason I know that to be true is that in my career of experience around safety net type organizations, they all live off of fixed budgets. They don’t have the ability to rise and fall with the Medicaid rate or an insurance payment. They have to live within the money that they haven’t provide the services. And so that is a, is a form of capitation. It’s just never been described that way. It’s it’s what we would call today global capitation. So in my theory of the case is that if we could find meaningful relatable mechanisms for payment to the safety net, ones that they could accept without having to process an insurance claim, then we could leverage and maximize the the benefits that exist in the safety net.

Yeah. So when you say global, that one of the areas I kind of wanted to nerd out on for just a minute is if you’re, if you’re talking about capitated payments to your FQACS, rural health clinics, free and charitable clinics. Are you talking about a primary, what we would call a definitions are tricky sometimes, but a primary care capitation where you’re capitating the amount of spend in the outpatient space? Or are you saying that they would have control over the whole healthcare dollar, which means then for inpatient services they would have to have a mechanism of paying the health system for that service? Can you help me understand those how, how that works in your mind?

Yeah, great question. I, I, I’m referring to a primary capitation, right? Yeah, because that’s, that is the, the comparable services of providing a medical home for a pension in need. It’s really that aspect of providing a medical home that I’m referring to. But the fascinating thing about it is that just by doing that one thing, finding a medical home for an uninsured patient allows the savings to be yielded downstream or upstream, depending on which way you want to describe it in the healthcare system. Because having a patient whose care is managed means that they’re not running to the emergency room every time they yes, yes.

And if you think about it, then health systems have been in the risk-based business for a long time because they’re at risk for the the care that those patients receive in the hospital. So to me it has always made sense that it would be a wise investment to invest in the care management, outpatient care management for that population of patients because it’s a lot less costly that we all know. That’s what we’re doing in value based contracts, right? We’re trying to improve the quality of care, deliver it right place, right care, right time to avoid those high costs sites of care. The same investment seems to make sense, which really leads to the next question, which is how can health systems, FQHCS, rural health clinics, free and charitable clinics, how can they work together in some model that is financially sustainable for everyone, patient included?

I think the answer in part has to do with identity. And by that I mean, how do these different groups see themselves? Do they see themselves on their own, trying to make their own way? Or might we elevate that thought to where they see themselves as part of a system of care, a safety net system of care, not an insured system of care, but a unique safety net system of care. When you do that, when you make that identity leap, you begin to think about this issue differently because as I said earlier, every one of these safety net providers has a responsibility to the uninsured. But have they ever thought about how that relationship with the uninsured relates to each other in the way they practice? And I’ll give one small example. Federally qualified health centers have a certain cost structure and they have to take care of a certain volume of uninsured patients. If with Medicaid expansion in North Carolina, those federally qualified health centers could begin to shift their patient mix so that they had more Medicaid patients as compared to uninsured patients, then they would you would increase profitability on the FQHC side. But if the free and charitable clinics, as an example, we’re in a position where they could begin to take on more uninsured patients because their cost structures are even lower. And there was a mechanism for funding that rational allocation of patients to the, to the, you know, the highest and best source of care. Then you begin to think like you’re a system, you’re working together, You’re trying to put the patient in the place where their care is the most appropriate. And you’re not just handing off, you’re also recognizing that there’s an economic consequence to that transfer. And so it’s that type of systemized thinking is one example that I think it lays ahead for us if we can begin to get our minds around this unique space, the safety net place in North Carolina.

Are you aware of any examples of where this is happening across the country and being done successfully?

Well, another example in North Carolina relates to the hospital system there. There is a hospital in Jacksonville that was having some financial challenges. It was an independent hospital and one of their challenges was that their emergency room costs were too high and they didn’t have a a place to discharge patients that were homeless. Those two factors were causing their costs to be elevated. They entered into an agreement with a free and charitable clinic in North Carolina that within a one week of an uninsured patient’s arrival in the ER and they’re having been identified as having being uninsured, that they would be referred to the free clinic. They would the the free clinic guaranteed there would be an appointment within one week’s time so that that uninsured patient could then be put into a medically managed environment. It just so happened that this free and charitable clinic also had as part of its array of social determinate of health services housing. And so they are they guaranteed to the hospital that they would open two beds, one for a man and one for a woman, for any discharged homeless patient. So that that patient would have a place that they could go and they could be properly discharged from the hospital. Though that relationship, that recognition that we each have a role to play with the uninsured need healthcare was was touted by the hospital CFO is is making a significant difference in the financial position of that hospital post that arrangement. And it’s certainly then allowed for the free and charitable clinic to increase their services before the agreement. They started with 200 patients on their patient census after the agreement was in full bloom. That patient’s census went up to 2000 patients, and the hospital agreed to compensate the free clinic for the value of the services that were being provided.

Wow, that’s fascinating. Has that been written up anywhere, like in a white paper or a blog or?

We’re talking about a part of. We’re talking about a part of, of, of caring for the uninsured that really doesn’t have a lot of, of, of a research trail. It doesn’t have a lot of running up. I mean, that’s the point. It’s how might we elevate the needs of the uninsured to where these kinds of solutions could be recognized and could be, could be brought on board?

Yeah. It should be able to be scaled, if you would think.

And one of the things that interested me in speaking with you today has to do with the role of data and the need for data for uninsured people. Because as you well know, Yates, most of the data that is collected on healthcare comes off of the claim form, right, Right. If you don’t, if you don’t have any, you don’t have claims, you don’t get the data. But that doesn’t mean that there’s not been a data worthy encounter. That’s right, data worthy patient encounter. And so one of our challenges is how do we get our arms around, from a data perspective, the uninsured, so that we can identify them, count them, see their patterns through the healthcare system, find out when they’re going in the yard, when they’re showing up in a free clinic. And, you know, in this in this wonderful state, we have lots of tools. The health information exchange is one of them. And we’re that that takes us some distance towards solving this problem. But so far, it’s not solved it by itself. And we’re gonna need to have some initiatives. Yeah, that’ll put data in play.

Awesome. Randy, this has been a fascinating conversation and I’d I hope that you, if you’re available, you’ll stick around for a few minutes and maybe we could talk a little bit more.

I’d be happy to.