JIM LEHRER: The Health Unit is a partnership with the Robert Wood Johnson Foundation.
U.S. PRESIDENT BARACK OBAMA: There are examples of how we can make the entire health care system more efficient.
BETTY ANN BOWSER, NewsHour correspondent: When President Obama talks about his idea of great health care, he usually singles out a few choice models.
BARACK OBAMA: What worked? The Mayo Clinic, the Cleveland Clinic, Geisinger, Kaiser Permanente. There are health systems around the country that actually have costs that are as much as 20 or 30 percent lower than the national average and have higher quality. What is it that they’re doing differently than other systems?
BETTY ANN BOWSER: What they’re doing is providing excellent care at a low cost through an integrated system where doctor visits, tests, surgery, hospital care — the works — are all done under one roof.
But the Mayo and Cleveland Clinics aren’t the only integrated health care systems getting good outcomes. In a place you might least expect to find it, here in south-central Montana, the Billings Clinic is getting similar results.
DR. MARK RUMANS, physician-in-chief, Billings Clinic: At the core of who we are is this multi-specialty group practice where all the physicians are really working together for the care of the patient.
BETTY ANN BOWSER: Dr. Mark Rumans is Billings’ physician-in-chief.
DR. MARK RUMANS: We have nearly 240 physicians here now who believe in this model that we have, and we can be successful by showing that we can deliver high-quality, safe patient care and have better outcomes by doing it this way.
BETTY ANN BOWSER: Across the country, most doctors are independent private contractors who get paid a fee for every service they perform. But at Billings, like the Mayo and Cleveland Clinics, doctors are employees on salary. That includes high-end specialists like cardiologists, oncologists and radiologists. Since they all work together in the same system, for patients it’s a kind of one-stop shopping.
BILLINGS EMPLOYEE: We have a lady we’re bringing up to labor and delivery.
BETTY ANN BOWSER: With 3,500 employees, the Billings Clinic is Montana’s largest multi-specialty medical group practice, treating 148,000 patients annually and a dozen primary care and specialty care clinics in the region.
Dr. Jorge Nieva is an oncologist at Billings.
More collaboration, less expense
DR. JORGE NIEVA, oncologist, Billings Clinic: Care here is very patient-centered. Patients get brought here, and we try to arrange for them to see everybody that they need to see in a very rapid period of time. It's a collaborative model. It's a model where I can always call up the doctor down the hall or walk across the hall and get him to see somebody the same day, if they need to be seen that day for a serious illness or diagnosis.
BETTY ANN BOWSER: Nieva and his colleagues routinely talk to each other about how to best treat patients.
DR. PAUL GRMOLJEZ, general, thoracic and vascular surgeon, Billings Clinic: Can he have additional radiation therapy after excision of the lesion, if there's any suspicion of margins in that area there, Chris?
DOCTOR: I guess I wouldn't recommend anything beyond what he's already had.
DOCTOR: Brock had suggested trying chemo again, but I don't think that that's going to fly with him.
BETTY ANN BOWSER: And avoid repeating expensive tests, which often are unnecessary. And while, nationwide, Medicare spends an average of $8,304 a year on each patient, in Billings, Montana, that number is $6,332, among the lowest in the country.
The Billings Clinic is 1 of 10 physician group practices nationwide taking part in a Medicare demonstration project. It's designed to see if better coordinated care for chronically ill patients can save the government money and improve patient outcomes.
Two years into the project, the answer was yes. The cost savings at Billings came from 500 congestive heart failure patients monitored in a disease management program. Dr. Doug Carr is the medical director of Billings and headed the study.
DR. DOUG CARR, medical director, Billings Clinic: We were able to reduce hospitalizations for them over the long haul over 40 percent. That's about 500,000, or half a million, per year, but we were able to save somewhere between 1 million and 1.5 million in avoided hospitalizations.
BETTY ANN BOWSER: Hospitalizations are the single most expensive item on America's health care tab, but staying out of the hospital is exactly what Clare Frees wants to do.
CLARE FREES: I was going to the hospital approximately once a week.
BETTY ANN BOWSER: That was before she enrolled in the Billings program of all-inclusive care for the elderly, or PACE. For an annual fee paid by Medicare or Medicaid, all health care services are coordinated by a team of medical and social service providers.
DOCTOR: And she wants to just check another thyroid level.
BETTY ANN BOWSER: PACE also provides its members with transportation to doctors appointments and a day center. With consistent access to care, Frees and the other PACE members are able to continue living on their own, instead of ending up in a nursing home, which is much more expensive.
But when Billings officials talk about the key to keeping medical costs down, the one thing they always point to is the way they pay their doctors.
DR. DOUG CARR: Physicians are paid a competitive salary, but it is not based on whether they see patients -- Medicare patients, Medicaid patients, commercial patients, whatever. And they're not paid -- they're paid for doing things for patients, and they're not paid for tests that they order or where they do their surgeries.
BETTY ANN BOWSER: Dr. Pat Coon is a geriatric specialist at Billings.
DR. PAT COON, geriatrician, Billings Clinic: I get no reimbursement based on how many X-rays I order, how many EKGs I order, stress tests, or laboratory tests that I order. What I'm looking at is, what is the best way to manage that patient and what do I need to do that?
BETTY ANN BOWSER: And while many doctors argue tests protect them from malpractice lawsuits, there are also financial reasons for doctors to order more tests, because many of them own interests in imaging centers. And when they send their patients there for an expensive CAT scan or an MRI, they make more money, but there's no incentive to do that here at the Billings Clinic.
Doctors paid under fee-for-service arrangements usually make more money than physicians in integrated health care systems. And University of Maryland medical school professor and cardiologist Dr. John Kastor thinks convincing those doctors to join systems like Billings will be a hard sell under any health care reform plan.
DR. JOHN KASTOR, University of Maryland School of Medicine: This means that the doctors are going to have to give up their private practices and become salaried employees of the hospitals where they work. And doctors are an independent lot, and many are imbued with the American tradition of working as hard as you can and being very well rewarded for it. You know, you're fighting that very fundamental part of our culture.
BETTY ANN BOWSER: But Dr. Elliot Fisher, director of the Center for Health Policy Research at the Dartmouth Institute, thinks it's not a question of how much doctors are paid.
DR. ELLIOT FISHER, Dartmouth Atlas of Health Care: I don't think -- we don't need to pay physicians less at all. We need to pay them differently. We need to give them rewards for improving the overall quality and lowering the costs of care and actually pay them more when they lower the overall cost of care.
A lot of the extra costs are in unnecessary hospital stays. They're in patients going to the nursing home when they don't need to and could be cared for at home. There are ways of reducing the costs that would give us a little bit of money to reward the physicians for doing better and actually perhaps preserve or improve their incomes.
BETTY ANN BOWSER: Other cost-savings features of the Billings Clinic include an electronic medical records system, a hallmark of most integrated health care systems. That gives doctors quick access to patients' histories and treatments clinic-wide.
And Billings doctors are able to treat thousands of patients in remote areas of the state and in the neighboring western Dakotas, Wyoming, and Idaho through an innovative telemedicine program.
DR. PAT COON: So I wanted to do a follow-up visit with you just to see how things are going.
BETTY ANN BOWSER: Here, Dr. Coon is able to examine a woman 300 miles away in Scobey, Montana. There, there's just one family doctor for several hundred miles.
DR. PAT COON: Do you measure your blood sugars at home?
PATIENT: Yes, yes, I take them every day.
BETTY ANN BOWSER: Many, like 80-year-old Fitz, are unable to drive the hundreds of miles to Billings to see a specialist.
DR. PAT COON: Just would provide better care for her than coming here for one time and then getting lost in care transition, going back to the community.
BETTY ANN BOWSER: In the past year, Billings has conducted about 3,000 telemedicine encounters, which it estimates has saved patients over a million dollars in out-of-pocket expenses.
NURSE: I'm going to just take your vital signs here.
BETTY ANN BOWSER: While health policy experts are divided over whether the principles of integrated health systems could be applied in communities all over the country, most agree on one thing: If more doctors collaborated, overall care could improve and, most important, could save money.