CarePoint’s CEO has twin goals Growing the for-profit system and keeping its community healthy

Beth Fitzgerald//October 8, 2014

CarePoint’s CEO has twin goals Growing the for-profit system and keeping its community healthy

Beth Fitzgerald//October 8, 2014

Dennis Kelly this month assumed the new position of chief executive of CarePoint Health, where he’s continuing efforts to improve health care delivery to the population served by CarePoint’s Hudson County hospitals, while expanding CarePoint’s footprint in northern New Jersey.Since joining CarePoint as chief strategy officer in 2012, Kelly has been working with the for-profit CarePoint ownership group to better integrate the care delivered to patients by the system’s three hospitals — Bayonne Medical Center, Hoboken University Medical Center and Christ Hospital — and the nearly 450 CarePoint physicians working at the hospitals and in the community.

“The goal is a care management model where you are keeping the patient healthy,” Kelly said. “You avoid expensive interventions through wellness initiatives and making sure that it’s the right care at the right time in the right setting. That takes a lot of work, and a major investment in technology so that you can identify those who are at risk and make sure that where appropriate you are getting preventive care to them early — so that you can avoid an ER visit or a hospitalization.”

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CarePoint is part of an emerging trend by health systems to offer health insurance plans to the communities it serves, alongside medical care. CarePoint launched a Medicare Advantage plan two years ago in Hudson County, and now has about 3,000 members. It will expand into five more counties — Bergen, Essex, Passaic, Somerset and Union — when Medicare open enrollment begins Oct. 15. Medicare beneficiaries do not pay a premium to enroll in CarePoint’s Medicare Advantage plan, which provides access to a network of hospitals and doctors throughout the six-county service region.

CarePoint also plans to enter the state’s Medicaid market. New Jersey contracts with several managed health care companies to administer the state/federal Medicaid program, and Kelly said CarePoint has applied to the state to become a Medicaid provider.

Kelly said CarePoint faces the challenges inherent “in the market that we work in: we are in very much an urban marketplace with a large population of patients in Hudson County that have poor access to primary care and poor access to specialized care.”

For patients like CarePoint’s Medicare Advantage members, CarePoint has a financial incentive to deliver efficient care that avoids, when possible, an admission to the hospital or visit to the ER. And Medicare is leading a national drive to get hospitals to deliver more efficient care: Medicare imposes financial penalties on hospitals that have excessive patient readmissions.

But Kelly pointed out that all health plans are moving toward the same goal: making more efficient use of the resources of the health care system, in order to get some control over the nation’s rising cost of health care.

To that end, Kelly intends to keep CarePoint focused on care management.

“It’s all about reducing the cost of being a (health care) provider and providing good care, but also increasing the access and quality of the care,” Kelly said.

Since 2008, CarePoint has acquired its three hospitals, thus preventing them from going bankrupt and shutting down.

And a commitment to care management aligns the health of the people CarePoint serves with the financial health of the CarePoint organization. To that end, CarePoint “has been very deliberate about creating alternate sites of care,” Kelly said.

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CarePoint created neighborhood health centers for each of its hospitals, where outpatient care is helping to avoid overuse of the hospital ERs. For patients eligible for the state’s charity care program, CarePoint has charity care clinics within the hospitals. Kelly said 58 percent of its ER patients, and 38 percent of the patients admitted to the hospitals, are covered by Medicaid or charity care, or they are uninsured.

“Our challenge is providing appropriate care to that population of patents in a cost efficient manner when we know the reimbursement we get is not adequate,” Kelly said.

Kelly said that, in 2013, CarePoint invested $45 million in the system, including capital equipment and technology, and the expansion of its physician practices and its surgical practice group.

CarePoint is controversial because its hospitals don’t participate in most commercial health insurance networks. (CarePoint is in-network with the state’s largest insurer, Horizon Blue Cross Blue Shield of New Jersey.) The result is that patients can receive unusually high out-of-network bills, which Kelly argued are ultimately negotiated downward between the hospitals and the insurers. Earlier this month, Kelly testified in Trenton before an Assembly committee looking at regulating out-of-network medical bills.

At that hearing, Ward Sanders, president of the New Jersey Association of Health Plans, which represents the state’s health insurers, testified that a number of hospitals and providers are taking advantage of consumers and engaging in price gouging.

Kelly said he would like the Legislature to take a comprehensive look at how hospitals are reimbursed by insurers, and consider “all of the costs of providing care, both in the suburban environment and in an urban environment, and make sure the underserved and the economically disadvantaged have the same access to care” as those living in affluent areas of the state.


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