(Brian McDonald)
Name: Christopher F. Koller
Age: 40
Position: Chief Executive Officer, Neighborhood Health Plan of Rhode Island
and current chairman of the Association of Health Center Affiliated Health Plans,
a national membership association of 17 health plans which comprises approximately
one million enrollees.
Background: Former chairman of the state’s HMO association. Koller was
a contracts and operations manager in a series of positions for an HMO in Buffalo,
N.Y., and served as a consultant to the Bureau of Primary Health Care. He has
also worked as an administrator of a primary care medical center for an HMO and
as a staff person for The HMO Group, a membership association of staff and group
model HMOs.
Education: Bachelor’s in math and economics, Dartmouth College. Master’s
in management and religion, Yale University.
Family: Married, two children
Residence: Rumford
Neighborhood Health Plan of Rhode Island is a 68,000-member HMO founded in
1994 by Rhode Island’s Community Health Centers. It serves primarily enrollees
in RIte Care, the state’s managed-care program for uninsured families. NHPRI is
the largest HMO in the RIte Care program and the first health-center affiliated
health plan in the country to attain National Committee of Quality Assurance accreditation.
Its primary care delivery system consists of 14 community health centers, hospital-based
primary care practices and private practices.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
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PBN: How is Neighborhood Health Plan different from other health insurers?
KOLLER: We’re really focused on working with folks who might normally have
a hard time getting health insurance and getting into care once they have health
insurance. Seventy percent of the uninsured population of the state is actually
working, so often the conceptions of the uninsured are not necessarily the case.
But we’re a health insurer, so we have to do everything that a health insurer
does. We’re licensed by the state, we have a network of over 700 physicians, we’re
paying claims for all those physicians, we have a staff of about 135, we have
an annual budget of over $100 million, and we have to make money, which we have
for the last four years.
Neighborhood Health Plan for about a year and a half had been the only insurer
taking new RIte Care members. I take it you experienced explosive growth?
In November of 1999, when we became the only health plan open (to RIte Care members),
our enrollment was about 30,000. Right now it is 68,300. How we’ve handled it
is by focusing on basic operations. Our staff went from 65 to 135 during that
time. We’ve really worked hard at staying on top of paying our claims, making
sure the information systems work. It’s what I call keeping the trains running
on time. If you can make sure you can answer the phones and pay your claims, the
rest takes care of itself. We’ve expanded our physician network because we want
to get people into their doctors.
Has Neighborhood Health Plan had to change its strategy to compete now that
BlueCHiP and UnitedHealth are taking RIte Care members?
I think the state, as a purchaser of health care, wanted to have a choice of health
plans, although often our networks are quite similar. We have a very positive
relationship with the physicians we contract with, and we get feedback that that
makes a difference, that they like working with us. They appreciate the fact that
we’re working with them on their patients, as opposed to sort of working at cross-purposes.
So our strategy has been to try to partner with the providers to provide care
for the members.
Tell me about the investment in NHPRI last year by the Rhode Island Foundation.
Up until last year we were incorporated as a for-profit corporation, with ownership
held by the Massachusetts Community Health Centers, who provided the startup capital
and converted that debt to an equity stake. They had made it clear to us that
they were interested in divesting that investment. So we started to look for a
buyer of that stake, but what we wanted to do was maintain our status as the community-based
health plan in the state. Traditional sources of debt or equity were going to
demand terms that we couldn’t or didn’t want to meet. There also was a concept
floating around the Rhode Island Foundation about a program-related investment,
which is where you take part of your portfolio and invest it to work in a way
that’s consistent with your organization. We were able to construct with them
a proposal that allowed us to buy out our Massachusetts owners. That investment
was contingent on our buying out our owners and then converting into a non-profit.
It allows us to continue to be community-based a nd it gives us a very powerful
ally in terms of trying to strengthen the community health infrastructure in the
state.
How has NHPRI been able to remain profitable when most health plans struggled
in recent years?
The state has recognized that they need us as much as we need them. Because of
our health-centers partnership, the state can’t simply say “if you can’t live
on the money, too bad.” (The state) realizes it has to pay a premium that can
support us, so we’ve been able to work out a partnership arrangement, including
some pretty innovative financial arrangements. It’s part of a longer-term purchasing.
We think that what we do really is a community function, so we’re not about maximizing
returns to shareholders, we’re not about building huge reserves. And if the state
is convinced of that, then they have a stake in seeing us survive. The other thing
is the health centers. Group practices practice health care in a very effective,
efficient manner. When you get groups of physicians together, they can share practices,
they can share resources, and they can start to standardize how they do things.
How have increasing health-care costs affected NHPRI?
Take a step back for a minute. The U.S. spends about 40 percent more a person
on health care than the next closest country. Yet we have nearly 20 percent of
our population with no insurance, and we have the 24th best life-expectancy
rates. We’re just behind Israel and just ahead of Cypress. When you spend 40 percent
more than anybody else, that doesn’t make any sense. The bad news is it’s going
to get worse, because of the aging population and technology. In the U.S., the
ratio of primary-care physicians to specialists is exactly the reverse of most
other industrialized countries. We make a lot more specialists than anybody else,
and the technology required for that specialization, drives a lot of the costs
without a commensurate improvement in basic health status. Hospitals and physicians
are doing what they can, but there’s no easy culprit here. We’ve got a system
set up to give us exactly what we produce. We don’t want to say no to anybody
but we try to say yes to everybody. We have this myth that we don’t want to ration
care, but we already do that with nearly 20 percent of the people uninsured.
People have referred to RIte Care as a national model for a state’s role in
providing health coverage. Do you think that’s true?
We’re going to continue to see increases of 10 to 15 percent, particularly falling
on small and medium-sized employers, because they don’t have any volume. So the
health insurers are going to give their best deals to the large purchasers and
give whatever is left over to the smaller folks. I think that longer term, we
have a stake in trying to say, and “We’re all in this together.” There might be
a role for programs like RIte Care in there. I think part of the answer is that
you have to give more people the protection of larger, stable purchasing pools.
The rates of increase for RIte Care are less than they are for commercial. Well,
can you do that for other groups, for the small and medium-sized businesses out
there? What if a small businessperson wanted to buy into the RIte Care program?
What if they said “State, I’ll pay all the money? I’m not looking for a subsidy,
but you know how to buy health insurance better than I do. I know you can get
a better value for me than if I went and did it on the open market. And in return,
I’ll commit to buy health insurance for a few years.”
But isn’t there a chance RIte Care has already gotten too big?
Ninety-three percent of RIte Care enrollees have an income under 150 percent of
poverty. That means for a family of four, you’re talking about an income of something
like $27,000. So I think we have to temper our concerns about RIte Care being
too large with the need that’s really out there. I think that the challenge —
and Rhode Island is the perfect place to work on it – is how do you combine the
employer, the employee, the state and the federal funds to get the most value.
Isn’t that what Rite Share is trying to do?
Yes, Rite Share is trying to get at it. I think that the part we have to be careful
about is Rite Share is essentially paying money to the employer for the employees
who are eligible for RIte Care. There are two issues with that. One is it’s a
very confusing process to manage, so you’ve got some of your employees eligible
for RIte Car e and some who aren’t. The other thing is it’s still up to the employer
to go out and buy the health insurance. And a 100-employee shop is not going to
be able to demand the volume discounts that a 3,000-employee shop is. So I’m a
real supporter of large, stable insurance pools because it avoids the fluctuations
that smaller places see, and you’ve got predictable costs and predictable prices.
