healthcare feature

Why ex-Horizon exec founded new business in NYC, not N.J.

A former Horizon Blue Cross Blue Shield of New Jersey executive has started a company that aims to bring value to businesses — largely health insurers — looking at data of their customers … but it isn’t based in New Jersey.

No stranger to entrepreneurship, Minal Patel, former senior vice president and chief strategy officer of Horizon, has started a couple of companies in the past. One was based in Hoboken and another in Springfield.

But Abacus Insights, the latest, is based in New York City.

“This one, the reason why I (started) in New York City, was really to have the most accessible geography to talent,” Patel said.

“It’s not that New Jersey doesn’t have the talent. We have quite a few people who travel from New Jersey into Manhattan. But I also have people traveling from Brooklyn and Queens that otherwise may not have joined us if they had to make one more leap over the river. So, my New York office is based, literally, four blocks from Port Authority, two blocks from Penn Station, all the subway lines run through here — so there is no one that can tell me they can’t join us because of the commute.”

The company announced May 30 the completion of a $12.7 million Series A financing round, led by CRV, along with existing investors .406 Ventures and Echo Health Ventures.

Patel started the company in August 2017, and has hired employees from along the East Coast, from Florida to Massachusetts.

His target client is the health insurance industry, where data is being collected in droves but not being used well, he said.

“Watching the struggle of trying to get data in order to try to create any kind of value, whether you’re an entrepreneur, physician or any kind of health plan … it just didn’t matter,” he said.

“Because we understood the pain points so much, what we wanted to do and how we wanted to accomplish it was very clear.”

Rather than stay at Horizon and create the software, where it was likely to hit several speed bumps and be a low priority as part of a large organization, Patel chose to leave and spend all his time working on the idea.

Being a startup has its advantages, such as the flexibility to hire remotely. It also allows the company to be nimble, and adapt to changes in technology quickly, Patel said.

“The technologies in the space continue to innovate,” Patel said.

“The two things that really allow this to happen now versus five years ago or 10 years ago, from the technical perspective … is that, one, data is more digitized today than it’s ever been … and the second thing is, now you have data up until three to five years ago, to give us the ability to really leverage the advanced computing capabilities to take large sums of data and really make sense out of it.”

The cloud, specifically, is where all the magic happens.

“Over the last 24 months what has really happened is the clouds — Amazon, Google, Microsoft — they’ve recognized that, if they want to be in the health care space, not only do they have to provide the computing capabilities to do the financial services and for other industries they work with, but health care also has very specific privacy and security requirements,” Patel said.

“Even in the time that we have existed, Amazon, for example, has matured a lot of its components to become more HIPAA-friendly and HIPAA-compliant. That has allowed us to leverage those capabilities in a much more rapid fashion. So, when we first started the company, we had used third-party software, because Amazon’s wasn’t quite ready yet. But in the six to nine months since we started, their products did mature to the point where we could use them. That cycle of innovation in months — not years, and sometimes in quarters — is really difficult for one single entity to keep up with.”

The hope, Patel said, is to have the buy-in of insurers as well as health care business in general — including doctors — but the platform is likely to be able to serve a broad range of business types so entrepreneurs can take advantage of the data analysis he wants to provide.

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Bringing health care home: St. Joseph’s CEO says tech will help move treatment

Kevin Slavin knows the world of health care is changing, which is why his small hospital system is looking for partners.

Between a change in the way hospitals are being paid, the increasing demand for in-home care and increasingly tech-savvy patients, hospitals have needed to adjust and scale faster than ever before.

Kevin Slavin

“Where home care is going, with technology and diagnostics and the explosion of innovation, there will be more care in the home,” Slavin, CEO of St. Joseph’s Regional Healthcare System, told ROI-NJ in a recent interview.

It’s something he candidly tells his staff: There will be more people providing care in the home than there will be at hospitals.

“Everybody will want to be treated at home if they can, and more and more things are moving in that direction,” Slavin said.

St. Joseph’s Regional Healthcare system already has an affiliation with Trinitas Regional Medical Center for behavioral health, and with Hackensack Meridian Health for home care.

But the partnerships and affiliations need to grow to help the system maintain its independent identity, Slavin said.

One of the key things he and his team have determined, in the requirements of a partnership, is that the system would remain Catholic and retain the governance structure currently in place through the Sisters of Charity.

“That is non-negotiable,” Slavin said. “We’ve made it clear to all the organizations. So, if they can’t live with that, then don’t submit a proposal.”

There is also an emphasis on access to capital, ability to develop new services and focusing on population health — especially because St. Joseph’s serves a vulnerable population in Paterson.

But Slavin isn’t coming to the table empty-handed — despite the fact that the revenues for the hospital relies heavily on Medicaid, charity care and self-pay.

“That’s obviously the big challenge we have,” Slavin said. “We’ve really continued to strengthen ourselves financially — we’re stronger than we’ve ever been before — we’ve focused a lot in the last three or four years on our balance sheet.”

He detailed how.

“We were one of the last to have a defined contribution pension plan …. so, we de-risked the balance sheet,” he said. “We’ve refinanced the debt, saved money on the bond interest rates and reorganized all of our investments. So, our balance sheet is stronger. We can certainly remain independent for the foreseeable future.”

One of the biggest things St. Joseph’s has been able to do to make a name for itself in the recent past is develop the Alternatives to Opioids, or ALTO, program. 

As the name suggests, it’s simply avoiding prescribing opioids and searching for alternatives.

And hospitals around the country have been calling St. Joseph’s for the last two years to learn how to implement it.

That has caused some problems with insurers, who are less willing to approve more costly drugs and topical pain relievers — but the model was passed by Congress and is now a federal law, with federal money to boot, and has been adopted broadly by the state Department of Health and the New Jersey Hospital Association.

St. Joseph’s is getting attention for its ALTO opioids program.

Here are some of the other topics Slavin discussed with ROI-NJ.

ROI-NJ: Aside from finances, what are you bringing to the table for the other organizations who might be interested in partnering with you?

Kevin Slavin: One of the things that makes us attractive is our expertise with the poor, vulnerable populations — whether it be Medicaid or uninsured. We have 150 years of understanding how to work with those groups and have them access the care; it’s not just the recent health coalition, but the Sisters have been doing this for years.

We have a center for what we call ambulatory physician care for Medicaid and uninsured — we don’t like to use the word clinic. They get the same care as anyone will get in a private office.

ROI: How did that center come about?

KS: It used to be five different centers all throughout Paterson. That included pediatric, internal medicine, family medicine, HIV and specialty. We consolidated a couple of years ago into one efficient, more accessible location.

ROI: I hear a lot of focus on social determinants of care — so, things in the home or home environment — and transportation being a barrier to care. With this consolidated location, what is being done about transportation?

KS: That’s a big one. We think we should be more into the transportation business. We know what we are good at as a health system, so that might be another avenue for us to look for a partner that really knows medical transportation.

A good example of one of the things we are doing is we run the WIC program for not just Passaic County, but a couple of counties, for many years. That is in a location in Paterson that is not on the bus route. So, we are moving it. It’s going to cost us more money to move it, but we are going to move it at a renovated place down the street — and that’s going to be on the bus route in June. It’s about a half-a-million-dollar renovation into an existing building where we had our IT department before. 

ROI: St. Joseph’s also helped start the Health Coalition of Passaic to focus on social determinants, emulating the type of collaboration that began with the Camden Coalition. How is that going and what is the next step?

KS: We’ve been looking at this whole high-utilizer topic that Dr. (Jeffrey) Brenner started in Camden. Learning from it, Nicholson Foundation (which partnered to launch the Coalition) is big on learning small and then growing. So, we recently launched this past year after we built up the staff. We have a program where we are case-managing 86 of the highest emergency room utilizers in certain ZIP codes and finding all kinds of things. For example, the biggest challenge for that population is housing. Not necessarily being homeless, but substandard housing. We’re hopeful to be designated as one of the pilots for the supporting housing project that NJHA and the Housing and Mortgage Finance Agency are working on.

ROI: What else is on the horizon?

KS: We are hopeful to get a grant to launch an innovation center here. (The grantor) felt it was important that a safety-net organization be able to do innovation just like the more affluent systems that can take $5 million and put it in a fund and say, ‘Here, go create things.’ We are putting some of our own resources in it, but it’s a different approach than others have taken.

This is to learn the discipline of innovation and learn how to do innovation. Things like human-centered design, prototyping, very specific skills that successful companies have instilled. A lot of it comes out of Kaiser Permanente. They drive this through their culture through innovation. Do projects along the way, but also learn from a leadership team perspective and then drive it to the rest of the organization. So, it’s not a program, it just becomes the way you do things.

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Summit Medical Group to merge with CityMD

Summit Medical Group and its overarching management company are merging with New York-based CityMD, CEO Dr. Jeffrey LeBenger confirmed to ROI-NJ on Thursday.

LeBenger will remain CEO of Summit, but the merged entity will now be backed by New York-based private equity firm Warburg Pincus.

Merging CityMD, a strong urgent care provider, and Berkeley Heights-based Summit Medical Group will create a uniquely accessible and comprehensive model for patients across the New York/New Jersey metro area, the players said in a joint statement.

“Since its inception in 2010, CityMD has built healthier, kinder communities by providing high-quality, convenient and compassionate care for everyone,” Dr. Richard Park, co-founder and CEO of CityMD, said. “This exciting merger will integrate our urgent care centers with an exemplary multispecialty medical organization and expand patient access to some of the best medical care in the tri-state area.”

Warburg Pincus first partnered with CityMD in June 2017.

TJ Carella, managing director, said the deal makes sense on a lot of levels.

“Warburg Pincus is pleased to support the merger of these two exceptional health care companies in creating the leading physician-centric and consumer-oriented integrated delivery system in the largest U.S. health care market,” he said in a statement.

LeBenger said the two physician groups Summit acquired out West, one in Arizona and the other in Oregon, will be unaffected by the change.

“We are still a physician-owned and physician-run health care system,” he said.

Details about the management structure, and any potential rebranding, remain unclear at this time.

Summit Medical Group, which has roots dating back to 1919, has had tremendous growth and success under LeBenger.

With more than 900 providers at over 80 locations in New Jersey, multiple comprehensive ambulatory care campuses and a world class cancer center, SMG handles 1.9 million patient visits annually.

CityMD was founded in 2010 by a group of emergency medicine physicians with a mission to serve its communities by providing an exceptional experience through high-quality medical care and convenient access.

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HMH formally announces $714M expansion at Hackensack University Medical Center

Hackensack Meridian Health CEO Bob Garrett says the expansion of the system’s flagship hospital in Hackensack will “prepare us to effectively meet the growing needs of our patients and the communities we serve.”

Northern market regional President Ihor Sawczuk says it will elevate “the standard of health care not only in New Jersey, but across the country.”

And Mark Sparta, the hospital’s CEO and president, says it will “ensure Hackensack University Medical Center remains on the forefront of patient care, with cutting-edge operating rooms and modern patient accommodations.”

When Hackensack Meridian officials formally announced the transformation of the campus of Hackensack University Medical Center, it was as much about the ability of the hospital — and the system — to meet the health care needs of the future as the state-of-the-art facility itself.

And the facility itself is impressive.

As first reported in ROI-NJ last fall, the $714 million expansion will feature 438,000-square-feet of useable space in a nine-story tower.

The new pavilion is the first step in that process and will feature 24 new operating rooms, new and improved Intensive Care Unit beds, as well as three floors of private patient rooms. In addition, the building will include:

  • New Second Street entrance/visitor lobby;
  • A visitor center;
  • A new central sterile processing department;
  • 24 operating rooms, including an intraoperative MRI;
  • 50 ICU beds;
  • Shell space for an additional 25 ICU beds;
  • 100 medical-surgical beds;
  • 50 bed Orthopedic Institute;

Construction on the project will begin this summer. It currently is projected to open in 2022.

Hackensack Meridian Health board of trustees Chair Gordon Litwin said the expansion is symbolic of the system’s commitment to the community.

“This innovative project reflects our network’s deep commitment to better serving the needs of patients and families,” he said.

“This new pavilion will provide an enhanced patient experience, while preserving the privacy, respect and dignity our patients and families deserve. Our patients are at the heart of the work we do, and we will continue to pursue groundbreaking initiatives that advance the network’s world-class, patient- and family-centered care well into the future.”

The expansion also will help the next generation of doctors, since the hospital serves as the primary teaching site for the Hackensack Meridian School of Medicine at Seton Hall University.

Garrett said the timing is right.

“As Bergen County’s first hospital and the largest provider of inpatient and outpatient services in the state, Hackensack University Medical Center has always been setting the standard for excellence in health care,” he said. “This is a major investment to elevate our best-in-class health care services and modernize our facilities to ensure we are providing patients the world-class, cutting-edge care they deserve.”

RSC Architects of Hackensack is the lead architect. It partnered with EYP Architects of Houston. Stantec Consulting is providing project management services/owner’s representative services for the overall project. The W.M. Blanchard and Turner Construction Co. has created a joint venture to provide construction management services for the project.

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Wrap it up: Overlook nurse’s idea helps reduce blue wrap waste

Hospitals today are competing in the innovation space to solve a wide range of operational and clinical problems cost-effectively and in-house.

While that sometimes requires high-tech solutions, the problem of recycling surgical blue wrap has a simple fix that a team at Atlantic Health System recently found.

The wrap is used to help keep surgical tools sterile, and as a result is a single-use product.

Tami Ochs, a behavioral health nurse at Overlook Medical Center, decided to try to solve the problem herself.

“One day, when I was discharging a patient, I (thought), ‘Why don’t I make bags and replace the single use plastic bags we are currently using?’” she said.

Typically, if patients show up in an emergency situation, they don’t have a bag to carry their belongings, Ochs said.

Michael Atanasio, director of food and nutrition, parking and patient transportation at Overlook, said that replacing plastic bags with the blue totes is a cost-saver in multiple ways.

“We can save up to $30,000 per year with the replacement of the plastic bags,” he said.

It saves 100,000 plastic bags from being used annually, in addition to saving the blue wrap from ending up in dump sites, he said.

In addition, it removes the cost of dumping the blue wrap.

“If we were to do nothing, it would cost us about 8 to 9 cents per pound, plus the tipping charge to remove the blue wrap,” he said.

The waste is a problem the hospital industry has known about for some time.

In 2002, the U.S. Environmental Protection Agency published best practices article highlighting the idea of recycling blue wrap.

“The Nightingale Institute estimated that approximately 19% of the waste stream generated by surgical services is blue sterile wrap,” according to the article.

That is roughly 255 million pounds of waste annually nationwide, according to the EPA.

A number of companies have cropped up over the years to help with the problem — but contracting a vendor would cost the same as the cost of the waste removal, Atanasio said.

So, one day, Ochs began stitching the blue wrap into tote bags.

By herself.

“I’ve given up on sleep,” Ochs said.

“I do it in my free time. And I find sewing very relaxing, so I’ll sit and sew for a couple hours.”

But she does have a little bit of help — from behavioral health patients who stay for extended periods of time.

“I’ve also incorporated it into having my patients in my unit helping me with the prep work on the bags,” she said.

“They really enjoy it. They’ve been helping me with the — I don’t use straight pins, I use paper clips on the bags because they are very thick fabric — so the patients will help me with paper clipping, marking them up for handle placement, they help me inside-out the bags when they are done. I try to put a bunch (of the bags) together, so they help a lot like that.

“We go into the dining room and…they love it. We’ll spend two hours in there sometimes, and they’ll help me get organized and they have a really good time.”

Those totes are not only being provided to patients who are leaving the surgery department after a stay, but are now sold in the hospital gift shop for $2.99.

This represents a revenue source and a growth opportunity, but ramping up the output volume is a challenge.

“As we start looking at our business plan and moving this to the next level, the next level is going to include volume, and we are looking to research what resources we have at our disposal,” Atanasio said.

“So, for example, we are looking into local schools. Do they have sewing programs (or clubs)? So, we can take Tami’s template and put Tami at the head of this and increase the production. Because we only have Tami. So, really, the next step for us is, looking at the financials, how can we increase this without adding a significant amount of cost?”

Melissa Bonassisa, a radiology nurse at Overlook, said the idea has blossomed into a much larger project than anyone anticipated.

“We were very naïve when we started requesting having the blue wrap sent to us, what exactly we were getting into,” Bonassisa said.

In terms of weight, the number may not seem impressive because the wrap material is light, but it adds up, she said.

The hospital is currently using 15,000 pounds of blue wrap per year.

In a Facebook post recently, the hospital announced future plans for the blue wrap could include ponchos and sleeping bags for the homeless.

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University Hospital names Elnahal its CEO; health commissioner will leave Murphy administration

The University Hospital board of directors voted Wednesday afternoon to approve state Department of Health Commissioner Dr. Shereef Elnahal as the Newark medical center’s new CEO and president.

Elnahal was one of at least three finalists and was expected to be named, several sources previously told ROI-NJ.

Sources familiar with Elnahal’s thinking but who were not authorized to speak publicly said he was interested in the Newark-based position — after being approached to apply — because of the amount of time he was already spending on the hospital.

University Hospital’s board voted to install Elnahal, who will replace interim CEO Judith Persichilli, on July 15.

In a statement Wednesday, Elnahal said he was excited for the new role.

“It’s been my greatest honor to serve in the (Gov. Phil) Murphy administration,” he said.

During my tenure, we accomplished much to advance the governor’s agenda for social justice in health: restoring funding for women’s health care to reach over 10,000 additional women, serving thousands of women of color to target black infant and maternal mortality, setting the foundation for the state’s public health approach to the opioid epidemic, improving the state’s psychiatric hospitals, helping to preserve the gains New Jersey has made with the Affordable Care Act and overseeing the largest expansion of the state’s medical marijuana program in its history.”

Elnahal said he intends to revive the community’s trust in the hospital, which was recently damaged by its handling of virus outbreaks and infections.

Gov. Phil Murphy, who appointed Elnahal to the commissioner role, expressed his support for the decision.

University Hospital
University Hospital in Newark.

“It is bittersweet to see Dr. Elnahal leave the Department of Health for his new role as the CEO of University Hospital,” he said in a statement.

“Over the past year and a half, Shereef has proven again and again that he was the perfect choice for our administration’s first commissioner of health. Whether it was guiding the state through a troubling viral outbreak, working with the first lady to tackle maternal health disparities or ensuring that more patients than ever before will have access to medical marijuana, he has made us proud. While I am sad to see him leave the Department of Health, I am immensely happy to see him continue his service to the people of New Jersey and some of our most underserved residents at University Hospital.”

University Hospital board Chair Tanya Freeman thanked Persichilli for her work and welcomed Elnahal.

“We are confident that his strong leadership and creativity will be the driving force necessary to continue the momentum we have begun to develop over the last several months as we craft a strategic plan for the future,” she said. “The board is also deeply grateful to the selfless work of Judy Persichilli during this transition period. She has brought a culture of transparency and gratitude to the leadership team that is felt by our patients, employees, and community.”

Health Care Quality Institute CEO Linda Schwimmer also expressed her support for the choice.

“I’ve worked with Dr. Elnahal since we served as co-chairs of Gov. Murphy’s health transition team,” she said in a statement.

“I’ve seen firsthand his incredible energy and commitment to quality, safety and equity in health care. He’s a strong and compassionate leader who will be a trusted partner for the Newark community. Dr. Elnahal’s experience at the (Veterans Administration) and New Jersey Department of Health will help him create and execute a vision for the future of University Hospital and its role as a patient-centered research and teaching hospital. It’s an inspired selection. The state was also lucky to have someone of Judy Persichilli’s caliber and experience willing to step in and take the helm during such a challenging time in the history of University Hospital.”

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Humanizing health care is key to messaging, Montclair’s OptiBrand Rx says

Explaining that it takes a decade and millions of dollars to bring a drug to market doesn’t evoke sympathy from an irate public.

Explaining how drugs save lives does.

And it’s helped Montclair-based OptiBrand Rx, a global consulting company, find a niche in the life sciences industry.

OptiBrand Rx is helping pharmaceutical companies change from traditional brand marketing to a more targeted approach.

The stories of how those drugs have saved lives, targeting whom they are meant for through advertising and discussing the value proposition in relation to a patient’s life are some of the ways OptiBrand Rx is helping the industry change its messaging to a value proposition approach.

Dominick Cirigliano, OptiBrand’s executive vice president of strategic research, said the idea is catching on.

“We’ve doubled the size of our business in the last year and a half,” he said.

Payor and insurance companies have the pertinent information — the costs of each disease or problem — and weighing that overall cost with the cost of the new medication is where the value proposition comes from.

The strategy of educating clients and honing in on a message — rather than hoping for mass-market success — has been a successful service line the company began offering in 2012.

“We found out very quickly people valued our thinking quite a bit,” Cirigliano said.

The company does about $20 million in revenues annually and has grown from just two to 40 employees.

It has projected another 30% growth this year — but Cirigliano said the company already is on pace to beat that expectation.

The company has figured out how to bridge the gap between the scientists who create the drugs and the business minds who run the pharma companies and focus on selling and mass-producing it.

“A lot of these pharma companies, they’re scientists,” Cirigliano said. “They’ve invented these drugs, they’ve dedicated their lives to bringing them to market, so they’re not communicators, necessarily.”

Which is why there isn’t enough education around the products and who they are best for, Cirigiliano said.

“That’s what we help do,” he said. “We help make sure it’s clear to physicians, clear to patients … even pharmacists and payors.”

The pressure on the pharma industry due to a public outcry over rising drug costs, paired with the spotlight on sales and advertising from court cases over the opioid crisis, also has changed the spending habits of the drug companies, Cirigliano said.

Cirigliano said the biggest thing is that pharma has backed off spending on ads and promotion, and is spending more time on communicating how to use products better.

“It’s a big change,” he said. “The old days of merchandising and acting more as a traditional consumer goods company has stopped.”

In addition, the science has improved.

Drugs are more efficacious and have fewer side effects, and are able to target specific diseases, Cirigliano said.

This means that they are successful in keeping people alive longer, which increases their value, which is why costs go up, he said.

The goal is to show the value proposition, the end benefit for the patient and the cost savings, Cirigliano said.

Especially since drugs affect different people differently.

“There’s always going to be some individualities to taking medication,” Cirigliano said.

That includes patients who are noncompliant. If a patient doesn’t feel the symptoms, they may stop taking medication, and that could complicate matters and land them in a hospital — which then increases their cost of care, he said.

One thing OptiBrand can’t do is figure out how patients can access cheaper drugs.

The problem, in Cirigliano’s opinion, is that cheaper drugs will be less effective than the brand-name drugs, so the patient will get what they pay for.

“We’re not an education company, we’re not out there to educate the general public,” he said.

“It’s really our job to help the pharmaceutical companies with what is the market perception, what are the things they’re going to have to consider when telling the story about their products.”

The company also focuses on over-the-counter drugs, which pose their own problems.

“The challenge is people are more educated, there’s a lot more information available thanks to the internet — (and) not all of it is good information,” he said. “So, trying to educate people is less physician- or practitioner-oriented, it’s a little more weighted towards consumers.

“So, how do you talk to consumers so they understand the different options and they can make a more educated decision? You have to make sure you’re clear and you have to be honest. If you fool somebody once and they use your product and they don’t have a good experience with it, they’re never going to buy it again.

“So, it’s important that the right people are using the right product at the right time.”

But the company hasn’t always been focused on pharmaceuticals; it has also had clients in the consumer brand space. A look at its website reveals an expansive list of top brands such as Starbucks, M&Ms, McDonald’s, Burger King, GM, Mercedes-Benz and Gerber.

“It’s a small part of our business, but it’s something we get requests (for) and it’s good to have diversity,” he said.

The company moved its global headquarters from New York City to Montclair in 2009, after which it has opened satellite offices in Florida and Quebec, along with NYC.

“Most of our big clients are here in New Jersey,” Cirigliano said. “Obviously, it’s a pharma hotbed. Also, a lot of the companies headquartered in New York had left.”

Being outside of New Jersey is important, too.

“A lot of that is the research, we do a lot of global work, so we have a presence in Montreal and Europe … we do a lot of work out of Switzerland,” Cirigliano said.

Cirigliano said the company also is hoping to expand to the Midwest and West Coast, and sees the pharmaceutical industry as the place to be.

“We’re not here to make sure our clients make the most money, we are here to make sure the patients benefit from the product properly,” he said. “When that happens, everyone wins, including the pharma companies.

“That’s been the change over the years is recognizing the fact that being clear and specific about using the product is much more beneficial than traditional marketing methods of blasting it out.”

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Murphy signs law requiring insurers to cover mental health as they do physical health

Gov. Phil Murphy signed a mental health parity law Thursday to help strengthen existing federal and state laws that require health insurers to cover mental health in the same way they cover physical health.

The bill, sponsored by 49 legislators, including Assembly Speaker Craig Coughlin (D-Woodbridge), Senate Minority Leader Tom Kean (R-Westfield) and Sen. Joseph Vitale (D-Woodbridge), changes how behavioral health is defined, and allows the state greater authority in enforcing the law and fining insurers who are found in violation.

Department of Banking and Insurance Commissioner Marlene Caride said the new law will help the department hold insurers accountable.

“Carriers must demonstrate to the department compliance with the mental health parity laws,” she said. “Digital oversight … will provide clarity to consumers and allow the department to gain the information needed for compliance.”

The changes redefine behavioral health to ensure greater compliance with the 2008 federal law sponsored by a former Democratic Congressman from Rhode Island, and current Brigantine resident, Patrick Kennedy.

Behavioral health was previously defined as “a mental or nervous condition that is caused by a biological disorder of the brain and results in a clinically significant or psychological syndrome or pattern that substantially limits the functioning of the person with the illness, including but not limited to, schizophrenia, schizoaffective disorder, major depressive disorder, bipolar disorder, paranoia and other psychotic disorders, obsessive compulsive disorder, panic disorder and pervasive developmental disorder or autism” to “procedures or services rendered by a health care provider or health care facility for the treatment of mental illness, emotional disorders, pervasive developmental disorder and autism, or drug or alcohol abuse.”

Sue Devlin, executive director at Comprehensive Behavioral Healthcare in Hackensack, said as much in a statement.

“This is the exact reason the Mental Health Parity and Addiction Equity Act of 2008 was passed, but insurance companies still have denied coverage for patients with conditions ranging from seasonal depression to bipolar disorder and schizophrenia, denying access to top-rated prescription drugs, and only paid for generic or less-proven medications,” she said.

“I know, from the 4,000 consumers we serve every year at CBH Care, how important access to therapy sessions and the proper medications — rather than the cheapest ones — can be in managing mental health disorders and preventing mental health crises.”

Murphy gave a shout-out to Kennedy at the bill signing event Thursday, and reinforced that the new law is a supplement to existing law.

“Mental health parity is … already part of our federal and state law,” he said. “For too many individuals, true parity still does not fully exist; unless we take the steps to close gaps in access, individuals with mental health issues will continue to fall through those gaps.”

That is true whether individuals have health care coverage through the federal (and eventually state-based) health care marketplace, or through their employers, Murphy said.

The New Jersey Association of Mental Health and Addiction Agencies said the governor signing the bill signaled yet another commitment to helping fight the opioid epidemic.

“The governor has shown us repeatedly how dedicated he is not only to health care for all, but specifically to fighting the opioid epidemic,” CEO and President Debra Wentz said.

“The parity law provides new standards by which to measure the success of those efforts, as well as the progress in expanding access to all mental health and substance use treatment and services.”

Caride said the department will be holding public sessions throughout the state to provide information to providers, advocates and families on how the new law will be applied.

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A new way to pay: Ostrowsky fighting costs of chronic illnesses

Like any health care executive, RWJBarnabas Health CEO Barry Ostrowsky knows that caring for chronic illness takes the most resources and costs the most money.

That’s why he’s continuing his pitch to change the way such patients are cared for. And, more importantly, how it is paid for.

Ostrowsky said he is trying to change all this through his relationship with Horizon Blue Cross Blue Shield of New Jersey. The two organizations, he said, are focusing their efforts on figuring out how to reimburse for non-clinical care that keeps a patient away from costly hospital visits.

In a recent interview with ROI-NJ, Ostrowsky detailed his side of the focus on social determinants, and how things have developed in the past year.

“There still is this lag by conventional reimbursement programs in terms of paying for these social programs,” Ostrowsky said. 

“And the problem is, I’m not going to be able to point to a data point in the next fiscal quarter that says, ‘See, we did this and that’s why we’re making a lot of money.’ That doesn’t happen.”

Ostrowsky said the payment system for the chronically ill is reversed, with those responsible for paying — insurance companies and the federal government — doing so after the onset of the illness.

Ostrowsky is pushing for money up front, which would then go to preventing an issue, and, ultimately, he said, resulting in less money spent and healthier people.

Because chronically ill patients utilize the health care system a higher number of times, if the payor set a cap rate that providers would budget annually for each chronically ill patient, there would be a lower cost associated with chronic illnesses, Ostrowsky said.

“If someone gives us an annual payment and says, ‘Please take care of (this person) and we’re going to audit you for access of that patient, for quality, for patient satisfaction — frankly, we don’t care if you visit that patient every day or twice a day’ — if you want to put that in the budget, put that in the budget,” Ostrowsky said. 

“It would, at that point, fall to us to decide what’s the most effective way to treat someone with chronic illness.”

Ostrowsky admits it wouldn’t be a cure-all. And it wouldn’t cure all of the conditions of the chronically ill.

Plus, he said, it’s not something that RWJBarnabas Health can do on its own.

Chronic illnesses require commitment on the part of the patient, he said.

“There is a patient responsibility here that has nothing to do with money,” Ostrowsky said. “So, we need you to commit to a better diet. And we’ll call you every morning, if that’s what it takes. The data suggests if you do it, you make the patient healthier and you save an awful lot of money.”

Which is why insurers and government payors could provide essentially an annual payment per patient for chronic patients. 

Of course, Ostrowsky knows that’s easier said than done.

“The problem is … every system in New Jersey is not yet ready to take that financial risk because the behavior of health care delivery in New Jersey is not yet efficient enough to live within the kind of budget that most programs are willing to offer for an annual capitation,” he said. 

“We’re moving in that direction, but it’s probably going to be a little bit sometime before we’re prepared to do that.”

Ostrowsky said this change in payment structure is not limited to chronically ill patients. It also could be applied to senior care, which is paid for by Medicare.

“If the house in which the senior lived had railings and bars in the bathroom and better floor covering and better lighting and things were on a lower shelf instead of a higher shelf, you would preclude a certain number of (hospital visits),” Ostrowsky said. 

“The cost of seniorizing a house is less than $3,000; the cost of fixing of pelvic fracture on average is $70,000. So, if you were running the Medicare program and someone presented that data to you, I would assume you’d say, ‘Well, I’d rather give you $3,000 so that I don’t end up having to pay $60,000-plus when that person falls.’”

And, if payors like the government, through Medicare and Medicaid, and commercial insurers or self-funded employer plans all focus on things like this, it could lower the cost of health care overall.

“Eventually, the folks who pay for sickness care will come to the realization that they’d be better off making an investment and keeping people well so that they don’t have to pay for sickness care,” Ostrowsky said. 

“Obviously, we’re not going to eradicate sickness, but we can take a big chunk out of it.”

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Federal judge’s insurance ruling is big win for N.J., which joined other states in fight

A ruling by a federal judge to shut down association health plans — which allowed companies located in a contiguous area to set up self-funded plans — will have little impact on New Jersey’s insurance market, because the state has only two AHPs.

But, state officials said Friday, it is a big win for the state.

New Jersey was one of the 11 states that sued the federal government to halt the sale of AHPs last June.

New Jersey Commissioner of Banking and Insurance Marlene Caride said in a statement to ROI-NJ that the ruling is helping maintain the Affordable Care Act.

“The Trump administration’s Association Health Plan rule was part of its ongoing effort to dismantle the Affordable Care Act,” Caride said. “The court appropriately called the rule an ‘end-run around the ACA.’ New Jersey joined with its partner states in standing against this attack through the unlawful expansion of association health plans that fail to provide important protections that residents deserve.”

New Jersey’s laws have often been called as stringent, if not more, as the Affordable Care Act, which was cited by the judge as the reason AHPs were being pushed by President Donald Trump’s administration.

U.S. District Judge John Bates said as much in his 43-page ruling.

“The (AHP rule) is clearly an end-run around the ACA,” he wrote. “Indeed, as the president directed, and the secretary of labor confirmed, the (AHP rule) was designed to expand access to AHPs in order to avoid the most stringent requirements of the ACA.”

Caride said any insurer operating in the state must abide by state laws.

“Association health plans are subject to state regulation in New Jersey and must comply with strict standards. Notably, if they are covering small employers, their plans must provide benefits equal to plans sold in the small employer market,” she said.

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