In the Pacific Northwest, a new kind of health system, "with insurance built in," is trying to validate its primary care model and disrupt a seemingly competitive regional healthcare market.
In Oregon, state insurance regulators took the unusual step this summer of ordering some individual and small business health plans to raise their premiums. Now the standard silver plan on and off exchange for 2016 will range from $271 (from Kaiser Foundation Health Plan) to $389 (from PacificSource Health Plan).
As initially proposed by insurers, Oregon's lowest-priced silver plan would have been $233, in greater Portland, sold by Zoom+, a 9-year-old health clinic network now selling insurance for the first time. It would have been one of the lowest-priced plans in the country--but will still be among the most unique in its integrated, anti-establishment model.
"If Apple was to move into the healthcare space, I imagine Zoom+ would be what it would look like," as the company's newest product manager, Baltimore technologist Mike Brenner, told the Portland Business Journal.
In the end, the Oregon Insurance Division required Zoom+ to raise rates 17 percent, to $276, positioning it as the second-lowest cost silver plan, the benchmark for subsidies, and $5 more per month than Kaiser.
But there's little worry about the rates going into the next open enrollment for Zoom's co-founder and CEO Dave Sanders, MD. The family medicine doc, serial entrepreneur and father of two homeschooled sons is confident his model is going to work on all accounts, for patients and the business.
"We had no idea where the market was going to be," Sanders said about its positioning as one of the most affordable plans. "We simply worked with the best actuaries and applied our unique delivery system model."
Sanders likes to describe that unique model as alternative vision of the health reform Triple Aim (improving quality, population health and costs): "to deliver twice the health, at half the cost and 10 times the delight."
At 28 neighborhood clinics and "advanced care studios" in Portland, Vancouver, Washington, and Seattle, Zoom patients get team-based care from MDs, NDs, NPs, and PAs, with same day appointments, telemedicine, health coaching, food and exercise counseling, parenting help, mental health treatment and basic dental services, which will all come as part of the health plans.
Serial MD
Sanders always wanted to be a doctor; in college he majored in pre-med and then went to the UCLA Medical School. But when he started practicing family medicine in the early 1990s, in Portland, Oregon, he was "crushed."
"Can it really be this dysfunctional?" he remembers thinking at the time.
Sanders and his friend, Albert DiPiero, MD, started new companies aimed at fixing and serving certain healthcare business needs (which also made them some money in the process). In 1995, they founded Salu, a healthcare internet content and e-commerce company, that in 2000 was sold to Walgreens. Then they founded MyHealthBank, a digital health savings account company that was later bought by Trizetto.
But those two companies still left them "unfulfilled," Sanders said. In 2006, they started Zoom, a retail clinic network aimed at bringing people "the most convenient care for the most common conditions."
They targeted their model at a composite patient dubbed Sarah, a patient with several unmet needs: healthcare that is local and in retail settings, "on demand" services with same day appointments or late night video conferencing, and simple prices.
Over the past nine years, Zoom has evolved into a kind of 3.0 version of Group Health Cooperative, HealthPartners or Kaiser Permanente. It might also be compared to direct primary care networks like Qliance or Iora Health, as well the new health insurer Oscar.
More recently, the idea to add a health plan to the model seemed natural, Sanders said. "With the emergence of healthcare reform, technology and retailism, we thought this was the moment. If we're really going to go after this two-half-plus ten, we had to have this insurance in the middle and make it a product Sarah could use everyday. "
Sanders pitches Zoom as a "complete health system with insurance built in that you control with your phone."
Among the Zoom+ "Performance Health Insurance" plans are Zoom+Zero, a no deductible plan, Zoom+100, with deductibles, and Zoom+Standard, the federally mandated bronze, silver and gold plans.
Zoom's foray into insurance is a bet on a well-branded, high-tech and high-touch holistic primary care experience--a unique, but still narrow network--as the main service patients and healthcare consumers need. For hospital and some speciality coverage, Zoom health plans offer members access to Providence Health and Services, Legacy Health and the Oregon Health & Sciences University Medical Center, where DiPiero is an assistant professor.
Currently, Zoom serves around 250,000 patients annually in Oregon and Washington, and the new health plan could attract thousands more. Many of the patients already being served at Zoom's urgent and primary care clinics have insurance, and Zoom takes reimbursement from a number of insurers. Earlier this year, Cigna's contract was terminated with Zoom, after what Sanders said was a bid to negotiate a discount from a list price that's supposed to be the same price for everyone--a part of the journey towards "simplicity, fairness and clarity."
The healthcare system, Sanders argues, is extremely dysfunctional for the patients it is supposed to serve, based on a corporate bureaucracy disguised as consumer choice--"a commodity sold through wholesale channels," where "every insurer really has the same networks" and same kind of high deductible plans.
Zoom is an alternative in integrating healthcare delivery and insurance, and is still different than the largest integrated delivery network, Kaiser Permanente, Sanders argues.
One thing that sets Zoom apart is its "food and movement as medicine" approach to chronic disease like diabetes and obesity, the increasingly prevalent metabolic disorder condition that is putting millions of Americans at risk of severe cardiovascular disease and diminished quality of life.
"As physicians, what we all know to be true are that food and movement are the soul of human health, along with relationships, stress and sleep," Sanders said. "For some reason, our medical schools and system perpetuate the myth that health relies in laboratories, and imaging and medicine."
Zoom offers those condition management services, but the goal is to spread a "culture and ethos" of "food and movement as medicine"--clinics that offer personalized activity training, diet counseling and smoothies.
Here, Zoom faces one of its toughest challenges: the American diet, the modern predilection towards inactivity, the reliance on medications. Sanders sees the population in three segments: those who want to prevent or reverse metabolic disease and who are ready to engage in lifestyle changes, those who are interested but not fully committed, and those who don't want to change their diet and habits and want medication and medical management. "We have to serve all three," he said.
If Zoom can serve those populations and win converts from the third segment, while nurturing a strong brand and experience, Sanders said they could expand to other regions and patient populations. Currently, as critics have pointed out, Zoom does not accept insurance for Medicaid or Medicare.
"Now, we go through a period of evaluation," Sanders said. "We have to validate what we worked so hard to create."