Quality: Allegiance to Quality

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Health systems can lead by example with community health networks.

Georgia Fojtasek, CEO of Allegiance Health, recalls some of the responses nearly a decade ago when Allegiance decided to take a different direction by working with a new community-based health improvement organization. To start, Allegiance—a community-owned hospital and health system headquartered in Jackson, MI—focused on its own staff members, encouraging them to embrace better health habits.

"When we started this, it was tough. We had very few believers and a lot of challenges with our staff," she says. "We really were heretics in many ways."

While she can laugh about it now, she now realizes that this different healthcare model—one that encourages quality, health, and productivity throughout a community—might be an answer to calls for reform. Allegiance has seen the overall health of its employees improve while its own healthcare costs have declined somewhat.

It was 10 years ago when local employers encountered a bleak reality: They were faced with insurance rate increases of about 40%, which could mean a spike in the uninsured population if employers decided to drop coverage. This was tied in part to higher rates of health problems—related, for instance, to obesity or smoking—found in the Jackson area population. That's when a health improvement organization was born—a community-driven initiative designed to promote improved health status.

But if Allegiance was going to "drive a culture of health improvement in our community, we [knew we] would have to start here," says Amy Schultz, MD, director of prevention and community health at Allegiance Health's Health and Productivity Management Program. By building within its own employee population, the organization would "be able to provide better care to the community and promote it as a model."

Allegiance selected a strategy that would move away from focusing on treating chronic conditions to focusing on health and productivity management for its 3,000 employees. "Basically, that means looking at all of the services and data related to the health of an employee that would impact their work performance," she says. "This isn't just looking at healthcare costs but also looking at productivity as an outcome."

To make it work, employees would have to be engaged in the process, Schultz says. "Otherwise, you're just talking at them."

To meet this goal, Allegiance created a program called "It's Your Life," which focuses on individual tracks that employees could follow—from asthma and diabetes control to exercise, healthy heart, and stress management.

"But change is individual," Schultz emphasizes. "You can't roll out a one-size-fits-all and expect that to work for every person." Each person has a coach to help make lifestyle changes. Rewards, in the form of flexible savings accounts for health- and prevention-programs related costs and copays are given out. The rewards don't reflect outcomes but rather progress on individual goals. A premium differential tied to compliance with deadlines is used.

Key to assisting individuals in meeting their goals is providing a "supportive environment" along the way. For instance, "we do have a smoke-free campus policy and are looking at additional smoke-free work day policies. We changed our cafeteria options to increase the healthy choices," she says.

The result has been more Allegiance employees remaining in the low-risk—and hence, lower-health-cost area.

In 2008, "we're up to 63%." Back in 2001, when the program started, just 48% of the employees were in the low-risk category.

With the community initiative, Allegiance currently works a "strong core" of 30 employers—providing services similar to those provided to its employees—and hopes to increase that number three-fold soon. "We're really trying to galvanize our leadership around that in the community."

Employer groups have reported results similar to those of Allegiance. For instance, Jackson County has about half of its 500 employees enrolled in "It's Your Life," says Randy Treacher, administrator/controller with the county. The county has participated for about five years, and has seen its healthcare costs rise only about 5% a year—at a time when many companies nationwide are seeing double-digit increases annually.

He attributes one of the main reasons for this low increase to employee participation in the program. The county, which is self-insured, notes the cost to the county is small ($60,000 to $70,000 per year) out of an $8 million budget. (Employees participate for free.)

Like at Allegiance, individuals who meet goals can receive awards ranging from $50 to $350—which gets employees' attention. Treacher would like to see the program expand to employees' spouses and the approximately 250 retirees.

As part of its culture of improvement, county employees are permitted to participate in activities—such as exercise—that they might need as part of their health promotion strategy during work hours. Treacher acknowledges that the program is good for an employer—because it holds down health costs—but it benefits employees as well. "I'll let the employees decide if they want to look at it from financial perspective because of lower premium costs or a health perspective."

Janice Simmons

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