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TULSA MARKET OVERVIEW
Tulsa
Counties Covered:
Creek, Okmulgee, Osage, Pawnee, Rogers, Tulsa and
Wagoner
Key Cities Covered:
Tulsa, Broken Arrow, Claremore, Owasso and
Sapulpa
Population:
946,962
Contents:
3 Updates: Key Market Events
4 Executive Summary
5 Tulsa Market
9 Health Systems & Hospitals
22Physicians
28 Health Plans
36Medicaid/Medicare/Uninsured
40Pharmacy
42Legislation
43Employers
45 Demographics & Statistics
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HealthLeaders-InterStudy
Market Analyst
Jenny Kerr
Corporate Training Manager
Jacky Lancio
Tulsa Analyst
Principal Director, Managed Markets Analysis
Carolyn McMeekin
CORPORATE OFFICE
Jenny Kerr
Assistant Directors, Managed Markets Analysis
Renée Burnham, Josh Kelley, Dave Raiford
[email protected]
Editors
Holly Fults, Keith Wagner
Design and Production
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Nashville, TN 37228
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Key Account Directors
Matt Hanvey, Jolayne Perry,
Bob Fucile
Except where otherwise indicated, information in this product is from analysis of HealthLeaders-InterStudy data, interviews with local experts, news sites, and industry reports.
Published May 2013. Copyright © 2013 HealthLeaders-InterStudy, A Decision Resources Group Company. All Rights Reserved. Reproduction, distribution, display, transmission, or creation of derivative works, of this report in any form, in
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KEY MARKET EVENTS
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Update
Updates: Key Market Events
2013 Market Overview
May 2013 - HealthLeaders-InterStudy publishes annual Market Overview for Tulsa
The annual report provides data and analysis of several sectors of the Tulsa healthcare market, including
hospitals and health systems, physicians, health plans, Medicaid, Medicare, the uninsured, pharmacy,
legislation, and employers.
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Executive Summary
Market Outlook
The Tulsa market has not been a hotbed of innovation when it comes to coordinated care, but adoption of
such programs has shifted into high gear since the Centers of Medicare & Medicaid Innovation selected the
region as one of seven sites for the Comprehensive Primary Care Initiative in 2012. Through that program,
Medicaid, Medicare and payers Blue Shield of Oklahoma and CommunityCare will reward physicians for
coordinating care through medical homes. Large physician groups tied to health systems have signed up
to participate in the program and the number of medical homes in the market has grown from one a year
ago to 68. The adoption of this coordinated care model will likely spur innovation as providers and payers
look to increase quality of care while reducing costs.
Highlights:
»» O
klahoma Gov. Mary Fallin has said the state will not expand Medicaid, but that hasn’t stopped hospitals and the business community from lobbying lawmakers to implement expansion. Fallin has said
she is pursuing a “state-based solution” to expand insurance coverage. The state’s existing Insure Oklahoma expansion program is expected to lose federal funding at the end of 2013 because those individuals were supposed to become covered by Medicaid expansion or through health insurance exchanges.
»» H
illcrest HealthCare System and St. John Health System have been growing market share in suburban
areas, acquiring hospitals or building new ones. Largest system Saint Francis Health System has taken
the opposite strategy and has launched the largest expansion to its flagship hospital in Tulsa in its history. Hillcrest has also become a leader in bundled payments, ending a three-year pilot with Medicare in
2012 in which it achieved savings in all three years. Hillcrest has signed up for more bundled payments
with Medicare, and Saint Francis is now part of a new bundled payment pilot with Medicare in 2013.
»» T
ulsa’s safety-net hospital—once saved by the city in 2009—is facing the possibility of closure again.
Oklahoma State University Medical Center had been managed by St. John Health System since the city
purchased it from Ardent Health Services. St. John decided to end its management agreement in 2012,
and the hospital is pursuing a suitor. The hospital needs $18 million from the legislature in 2013 or it
will close, leaving the rest of Tulsa’s hospitals to bear the burden of the city’s uninsured.
»» T
ulsa has a growing and robust health information exchange, MyHealth Access Network, which allows
physicians and hospitals across all major health systems to share patient data on 2 million patients so
far. The exchange was funded by a three-year, $12 million Beacon Community grant from the federal
government, and was a primary reason Tulsa was accepted as a CPCi market. The exchange of health
data should help the market reach its goals of raising the health status of its population, and lowering
costs. MyHealth is in the process of acquiring SmartNET, which connects hospitals in Oklahoma City.
Community leaders say Tulsa’s economic future depends on reforming its high-cost system, which
makes it difficult to attract employers to the area.
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Analysis For Tulsa Healthcare Market
Tulsa Market
Market Indicators
Table 3-2:
Market Stage: Consolidated*
Market
» Moderate consolidation/integration of physician groups
» High consolidation/integration of health systems/hospitals
» Moderate use of disease management, utilization management
» Health plans have implemented a number of cost/quality controls for physicians/hospitals
» PPO benefit option prevails
*For definitions of other market stages, see the Market Overview Product Manual.
Source: HealthLeaders-InterStudy, 2013.
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Table 3-4:
Situation Analysis by Segment
O
+
O
Health Systems and Hospitals
Neutral for health systems and hospitals. Look for steady patient volumes and stable earnings.
Physicians
Positive for physicians. Look for improved profitability for this segment.
Health Plans
Neutral for health plans. Look for stable health plan enrollments and/or profitability.
O
Pharmacy
Neutral for pharmaceutical sales. Expect unchanged PMPM costs for health plans and/or overall stability in
the use of branded drugs.
O
Employers
Neutral for employers. Expect stable healthcare premium increases, with no change in efforts at healthcare
cost containment.
Table 3-5:
Market Consolidation
Hospital segment
Physician
segment
Health plan
segment
»
»
»
High: 2 or 3 organizations control about 80% of the market.
Moderate: 4 or 5 organizations control about 70% of the market.
Low: More than 5 organizations control about 70% of the market.
Leading Organizations & Health Plans
Table 3-7:
Health Systems/Hospitals
Name
Total # of Hospitals
Total # of Beds
Market Share*
Saint Francis Health System
4
935
33%
Hillcrest HealthCare System
7
905
28%
St. John Health System
4
663
23%
*Based on inpatient discharges.
Sources: HealthLeaders-InterStudy, 2013; based on data from Billian’s HealthDATA, 2012.
Table 3-8:
Physician Organizations
Name
Total # of Physicians
OU Physicians
320
Warren Clinic
315
St. John Physicians Inc.
226
Source: HealthLeaders-InterStudy, 2013.
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Table 3-9:
Total Enrollment*
Plan
Enrollment
Market Share
Health Care Service Corp.
125,090
27%
UnitedHealth Group
114,142
24%
92,231
20%
Enrollment
Market Share
CommunityCare (OK)
87,784
77%
UnitedHealth Group
10,610
9%
7,682
7%
Enrollment
Market Share
121,294
52%
Aetna
58,592
25%
WellPoint**
11,181
5%
Enrollment
Market Share
UnitedHealth Group
87,259
79%
Cigna
19,789
18%
2,624
2%
Enrollment
Market Share
N/A
N/A
CommunityCare
*All HMO, PPO, POS, indemnity, Medicaid and Medicare products.
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Table 3-10:
HMOs*
Plan
Global Health
*All HMO products, including Medicaid and Medicare.
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Table 3-11:
PPOs*
Plan
Health Care Service Corp.
*Includes fully and self-insured commercial and Medicare PPO. **Projected
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Table 3-12:
POS*
Plan
WellPoint**
*Includes fully and self-insured point-of-service plans. **Projected
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Table 3-13:
MCO-Managed Medicaid*
Plan
None
*Includes Title 19, CHIP, and other managed Medicaid lives.
Source: HealthLeaders-InterStudy, as of July 1, 2012.
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MCO-Managed Medicare*
Table 3-14:
Plan
Enrollment
Market Share
27,901
65%
Humana
6,334
15%
UnitedHealth Group
5,852
14%
CommunityCare
*Includes HMO, PPO, PFFS, and other managed Medicare lives.
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Major Employers
Table 3-15:
Name
# of Employees
American Airlines
7,901
Tulsa Public Schools
7,650
City of Tulsa
7,646
St. John Health System
6,807
Wal-Mart Stores
6,508
ONEOK
5,754
State of Oklahoma
5,278
The Nordam Group
4,931
Sources: HealthLeaders-InterStudy, 2013; January 2012 Employer Vantage.
Table 3-16:
Pharmacy Chains
Name
Albertsons, CVS/pharmacy, Drug Warehouse, Food Pyramid, Kmart, May’s Drug Stores, Med-X Drug, Target, Walgreens, Wal-Mart
Source: HealthLeaders-InterStudy, 2013.
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Health Systems & Hospitals
Table: Situation Analysis
O
THIS SECTOR IS: NEUTRAL
Sector Outlook
Although health systems in the Tulsa area have not pursued formation of accountable care organizations,
some systems have been adopting payment reform such as bundled payments. Hillcrest HealthCare System, for instance, is completing a three-year pilot program that bundled payments for cardiac and orthopedic care and the system. Competition between health systems remains intense with Hillcrest moving to
overtake Saint Francis as the largest system in the market. Saint Francis has responded by expanding its
facilities. Health systems in the market are in agreement that the state should expand Medicaid eligibility
to reduce uncompensated care and the future of the region’s safety-net hospital, Oklahoma State University
Medical Center, could hinge on the future of the program.
Highlights:
» » Market composition:
The Tulsa market is led by two Catholic organizations that have a combined 57 percent market share
and a for-profit system—Ardent Health Services’ Hillcrest HealthCare System—with a 28 percent
market share. Tulsa also has a handful of physician-owned specialty hospitals and a safety-net hospital
that is publicly owned. The market has no Level I trauma center. Those patients are sent to University
of Oklahoma Medical Center in Oklahoma City. Together, the top three systems in Tulsa control 84
percent of the hospital market, making it a highly consolidated sector.
» » Hospital makeup:
The seven-county Tulsa market has 26 acute-care hospitals (excluding the local Indian Health Service
facility), with an estimated 140,812 inpatient discharges annually and 3,158 total acute-care beds.
The average daily occupancy rate is 57 percent and the average length of stay is 5.6 days. Medicare
and Medicaid account for an average 29 percent and 21 percent, respectively, of the area’s acute-care
discharges (based on the most recent federal Medicare hospital statistics from Billian’s HealthDATA).
Data for inpatient discharges, average occupancy, average length of stay and Medicare and Medicaid
patient volume exclude Saint Francis Hospital South and St. John Broken Arrow.
» » Value-based purchasing:
The Centers for Medicare & Medicaid Services began withholding 1 percent of regular hospital reimbursement based on performance, including the rate of hospital readmissions and patient experience.
The highest-scoring hospitals will get all of their Medicare deductions back and the lowest-scoring
hospitals will get nothing back. The level of deduction will increase over a five-year period, topping
out at 2 percent in late 2016. Tulsa hospitals ranked 122 out of 295 hospital referral regions in patient
satisfaction in 2010 (Kaiser Health News analysis of Centers for Medicare & Medicaid Services’ data).
Hillcrest Medical Center in Tulsa was penalized the entire one percent.
» » Medicaid expansion:
Oklahoma Gov. Mary Fallin decided not to expand Medicaid, and the idea has little support in
Oklahoma’s Republican-led legislature. Despite Fallin’s decision, the Oklahoma Hospital Association
and the local business chambers continue to lobby Fallin, lawmakers and voters to support Medicaid
expansion. Advocates of expansion note that lower Medicare reimbursements without additional
revenue from Medicaid will likely mean closure of many rural hospitals in the state. The governor has
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said she is searching for a state-based solution to expand insurance coverage but no details about this
plan have surfaced.
» » Significant legislation:
The Oklahoma Hospital Association is lobbying state lawmakers to extend the hospital provider fee
through 2019. The Supplemental Hospital Offset Provider Payment was signed by Gov. Fallin in May
2011 and allows hospitals to assess a 2.5 percent fee on net patient revenue to garner more federal
matching funds. It applies to 77 of the state’s 146 hospitals. State-owned, critical access, long-term care,
and specialty hospitals are exempt from the fee. The fee generated about $154 million in 2012, which
allowed the state to draw down $269 million in federal matching funds for Medicaid providers. About
$336 million of that money supports hospitals that treat Medicaid patients and the remainder supports
physicians, pharmacists and nursing homes.
Extending the fee has become more important after Gov. Fallin decided not to expand Medicaid in
Oklahoma under federal healthcare reform, which is already cutting Medicare payments to the state
by about $1.63 billion. That money would have been recovered by Medicaid expansion.
» » Safety-net hospital:
The market’s safety-net hospital, Oklahoma State University Medical Center, is in financial trouble
again. After it was purchased by a city trust from Ardent in 2009, St. John Health System took over
management. The health system said in 2012 it no longer wanted to manage the facility, and now the
hospital is negotiating with potential suitors and lobbying the state for much-needed funding. The
hospital needs $18 million from the state legislature or it will close. The closure of the hospital would
have significant consequences for area health systems as uncompensated care increases.
» » Expansion plans:
After Saint Francis Health System’s two largest competitors built or acquired suburban hospitals to
increase market share, the system responded with the largest addition in its history—a new 150-bed
patient tower and emergency room. Hillcrest HealthCare System surpassed St. John Health System
in market share last year by acquiring two hospitals in the market and continues to pursue suburban
growth. St. John did the same, giving growing suburb Broken Arrow its first hospital since Saint Francis closed its hospital there years earlier.
Facility expansion and acquisition has slowed in the market since then, and the battle now appears to
be in physician acquisition and exploring new models of care through bundled payments and medical
homes.
» » Accountable care organization:
While no ACOs currently exist in Tulsa, its three largest health systems have all hinted at interest. Hillcrest and Saint Francis are trying out bundled payments with Medicare, and St. John Health System’s
new ownership by Ascension Health could boost its ability to launch an ACO since Ascension already
operates several in its markets.
» » Medical homes:
When the Tulsa market was tapped as a pilot site for the CMS Comprehensive Primary Care initiative
in 2012, it spurred rapid development of medical homes, up from only one a year ago to 68. As physicians become adept at care coordination, and health systems test how well such care can save money,
other payment reform models are likely to surface here. (See Physicians section for more details.)
» » Payment bundling program/pilot:
Hillcrest Medical Center and Hillcrest Hospital South are testing bundled payments under Model
2 of CMS’ Bundled Payments for Care Improvement initiative. The payments are for a full range of
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episodes of care including urinary tract infection, spinal fusion, revision of the hip or knee, amputation and many others.
Saint Francis Hospital and Saint Francis Hospital South are testing bundled payments under Model 2
for congestive heart failure under the same program.
Hillcrest Medical Center has the most experience with bundled payments, having completed its threeyear Acute-Care Episode demonstration pilot with Centers for Medicare & Medicaid Services that
bundles payments for certain Medicare procedures. Hillcrest, and its owner Ardent, consider the bundled payment pilot a success. It experienced savings in all three years. (See Hillcrest profile for details.)
» » Bed delays:
A study requested by the Medical Control Board found EMSA paramedics spent more than 2,500
hours over five months waiting with patients for an emergency room bed at Tulsa hospitals. The study
covered transports from January through May 2012. The study was conducted statewide but most of
the bed delays (89 percent) happened in Tulsa. The study has healthcare officials questioning if Tulsa
has a shortage of beds marketwide.
» » Reducing pre-term births:
Hospitals in Oklahoma began an initiative in 2011 to reduce the number of births scheduled before
39 weeks without a medical reason called Every Week Counts. One-year later results showed the campaign is working with a 66 percent reduction in early scheduled births, according to the University of
Oklahoma Health Sciences Center Office of Perinatal Quality Improvement.
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Saint Francis Health System
Table 4-1
Local
hospitals:
Local hospital
beds:
Physicians
employed:
Physicians
affiliated:
PBM:
GPO:
4
935
315
1,100
N/A
VHA Mid-America, VHA Oklahoma/Arkansas
Acute-care hospitals:
» Saint Francis Hospital (including The Children’s Hospital at Saint Francis), Tulsa, 743 beds
» Saint Francis Hospital South, Tulsa, 96 beds
» St. Francis Heart Hospital, Tulsa, 96 beds
Physician groups:
» Warren Clinic, a network of 315 primary-care and specialty physicians with 13 locations
Health plan:
» Ownership interest with St. John Health System in CommunityCare, a managed care organization with 92,231members as of July 1, 2012
Other details:
» Two urgent care locations in Broken Arrow and Tulsa
Sources: HealthLeaders-InterStudy; based on data from Billian’s HealthDATA.
Description
The largest health system in the Tulsa market, nonprofit, Catholic-sponsored Saint Francis Health System
is locally owned and operated.
Saint Francis’ hospitals account for 33 percent of inpatient discharges and 30 percent of total acute-care
beds (most recent federal Medicare hospital statistics). The average occupancy rate is 64 percent, and the
average length of stay is 5.8 days. Medicare and Medicaid account for an average 25 percent and 21 percent, respectively, of acute-care discharges. Data for inpatient discharges, average occupancy, ALOS, and
Medicare and Medicaid patient volume exclude Saint Francis Hospital South.
The flagship Saint Francis Hospital is a regional tertiary-care facility and operates a Level II trauma center.
The Children’s Hospital at Saint Francis is a regional referral center and includes the Eastern Oklahoma
Perinatal Center and a pediatric intensive care unit. The Natalie Warren Bryant Cancer Center offers
comprehensive cancer services, including pediatric oncology/hematology, blood and marrow transplantation, and advanced radiation treatments. Located on the Saint Francis Hospital campus, Saint Francis
Heart Hospital provides heart surgery services and includes a chest pain center and cardiac rehabilitation
services. The hospital was founded as a joint venture between Saint Francis and Cardiology of Tulsa, a
physician group. The cardiology group later merged with Saint Francis’ Warren Clinic, and the hospital is
now owned by the health system.
Saint Francis Hospital South is a community hospital offering medical/surgical services, including emergency and intensive care. It includes the Laureate Psychiatric Clinic and Hospital, a freestanding inpatient
and outpatient psychiatric facility. The system also offers urgent care at Saint Francis Broken Arrow Urgent
Care Clinic and the Warren Clinic in Tulsa.
News and Analysis
Saint Francis Health System’s big news is its largest expansion ever: the addition of a new 150-bed patient
tower and emergency room at Saint Francis Hospital, which is already the largest hospital in the market.
While Hillcrest HealthCare System is trying to overtake Saint Francis’ top market share spot by acquiring more suburban hospitals, Saint Francis has responded by putting all of its money for expansion into
its flagship facility. As a well-regarded hospital in a good location in south Tulsa, its strategy is likely to
continue to make it a competitive force.
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Advocacy: Saint Francis Health System CEO Jake Henry Jr. became the chair of the Tulsa Regional Chamber’s board of directors in early 2013 and has been outspoken about the need to expand Medicaid. He said
Saint Francis Health System would lose $14.8 million in payments if Medicaid isn’t expanded.
Expansion plans: St. Francis Hospital is building a new patient tower and emergency room. The system says
the $206 million, 500,000-square-foot project is the largest in its 50-year history. The eight-story tower will
add 150 private beds to the hospital. The expansion includes a trauma ER with a separate pediatric emergency center, intensive care and surgery rooms, and two helicopter pads. The project will be completed in
summer 2014, bringing the hospital to more than 1,100 beds. The new ER will have 85 beds to accommodate more than 120,000 patients a year. The pediatric ER will hold about 30,000 a year.
Saint Francis owns land in upscale suburb Jenks that it purchased in 2009, and it may eventually pursue
plans to build a hospital or medical facility in Jenks, which does not have its own hospital.
Physician relationships: Since 2009, Saint Francis has recruited more than 120 physicians to the Tulsa
market to establish its Trauma Institute and an obstetrical hospitalist program, and to expand the number
of pediatric specialties at The Children’s Hospital.
The Children’s Hospital and Laureate Psychiatric Clinic and Hospital serve as teaching sites for the University of Oklahoma–Tulsa School of Community Medicine’s pediatric and psychiatric residency programs.
Information technology initiatives: Saint Francis uses an EMR system in its hospitals and has been implementing it its Warren Clinic offices.
Awards: St. Francis Hospital is a top-ranking facility in gastroenterology, pulmonology and nephrology.
(U.S. News & World Report).
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Hillcrest HealthCare System
Table 4-2
Local
hospitals:
Local hospital
beds:
Physicians
employed:
Physicians
affiliated:
PBM:
GPO:
7
905
230
1,100
N/A
HealthTrust Purchasing Group
Acute-care hospitals:
» Hillcrest Medical Center (includes Children’s Medical Center at Hillcrest and Oklahoma Heart Institute), Tulsa, 539 beds
» Hillcrest Hospital South (formerly SouthCrest Hospital), Tulsa, 187 beds
» Bailey Medical Center (joint venture with physicians), Owasso, 73 beds
» Hillcrest Hospital Claremore (formerly Claremore Regional Hospital), 65 beds
» Hillcrest Hospital Henryetta (formerly Henryetta Medical Center), 41 beds
Physician groups:
» Utica Park Clinic, a network of 150 primary-care and specialty physicians
Other details:
» One acute-care hospital located just west of the local market: Hillcrest Hospital Cushing
Sources: HealthLeaders-InterStudy; based on data from Billian’s HealthDATA.
Description
For-profit Hillcrest HealthCare System is owned by Nashville, Tenn.-based Ardent Health Services. The
health system’s hospitals account for 28 percent of inpatient discharges and 29 percent of total acute-care
beds (most recent federal Medicare hospital statistics). The average occupancy rate is 58 percent, and the
average length of stay is 5.2 days. Medicare and Medicaid account for an average 28 percent and 28 percent,
respectively, of acute-care discharges.
Hillcrest Medical Center is known for its regional burn center and its freestanding Peggy V. Helmerich
Women’s Health Center, which has the largest birthing program in northeast Oklahoma. Hillcrest Medical
Center includes Oklahoma Heart Institute and Children’s Medical Center at Hillcrest.
Bailey Medical Center is a joint venture with local physicians and offers a wide range of services, including
cardiology, bariatric surgery and women’s health services. Hillcrest Hospital Henryetta is a community
hospital in the city of Henryetta on the southern side of the market. In 2011, Hillcrest purchased SouthCrest
Hospital and Claremore Regional Hospital from Tennessee-based Community Health Systems, changing
the names to Hillcrest Hospital South and Hillcrest Hospital Claremore. The system also includes Hillcrest
Specialty Hospital, a long-term acute-care facility.
News and Analysis
Hillcrest CEO Kevin J. Gross has publicly said he’s focused on overtaking Saint Francis Health System as
the largest health system in the market. Hillcrest acquired several suburban hospitals in 2011, boosting
its market share and giving it a geographic foothold in south Tulsa, where Saint Francis’ South hospital is
directly adjacent to Hillcrest’s. The two will compete directly in this market, which is a growing and more
insured area. The system continues to expand its cardiology and sleep care services to its new suburban
acquisitions. The system has been participating in bundled payments, which may prepare for further new
payment models such as ACOs in the future.
Hospital acquisitions: Hillcrest HealthCare System purchased SouthCrest Hospital in Tulsa and Claremore Regional Hospital from Community Health Systems. The deal closed Sept. 1, 2011. The two hospitals
have more than 70 primary-care physicians, specialists and midlevel providers and 1,100 employees. Hill-
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crest is investing in both hospitals, replacing two new heart catheterization labs at Hillcrest Hospital South
(a $3.2 million project) and expanding women’s services by upgrading the nursery and monitoring systems.
Hillcrest sees ob/gyn services as a strong growth area, as Hillcrest Hospital South already delivers 2,800
babies annually. Hillcrest is investing $800,000 in renovations at Hillcrest Hospital Claremore. Ardent gets
about a third of the 4,000 Claremore area patients that use Tulsa providers. The health system expects to
nearly double that. Through a partnership with OU, Hillcrest is expanding urology services at Hillcrest
Medical Center and Hillcrest Hospital South.
The acquisition includes the hospitals’ two physician groups, SouthCrest Medical Group and Northeast
Oklahoma Medical Group. Both are now part of Utica Park Clinic.
Palliative care: Hillcrest became the first hospital in Oklahoma and the 12th in the nation to be certified in
palliative care by The Joint Commission. Palliative care teams meet with patients and families of patients
who have a serious illness to reduce suffering, manage symptoms and make care decisions. The palliative
care program at Hillcrest began in June 2011 and has three physicians and two nurse practitioners.
Expansion plans: Large scale expansion for the system occurred in 2011 and the system has been adding
services at these hospitals:
»» O
klahoma Heart Institute opened a new location at Hillcrest Hospital South to offer a broader range
of cardiology services and emergency procedures there, including two new heart catheterization labs.
About 10 cardiologists will now remain at Hillcrest South. OHI offers cardiology care in 12 regional
locations, including the system’s four hospitals.
» » OHI expanded its sleep care services in 2012, and now offers sleep care at six hospital locations.
»» T
he system added a da Vinci surgical robot at Hillcrest Medical Center in 2012, and one at Hillcrest
Hospital South in 2013.
Information technology initiatives: Hillcrest implemented a patient monitoring system so physicians can
monitor labor and delivery patients by seeing their vital signs from anywhere. The technology, AirStrip OB,
lets physicians see real-time data such as fetal heartbeat, maternal contractions and vital signs. The system
is in use at Hillcrest Medical Center, Bailey Medical Center and Hillcrest Hospital Cushing.
Payment bundling pilot: Hillcrest Medical Center is completing its third year of the Acute-Care Episode
(ACE) demonstration pilot with Centers for Medicare & Medicaid Services that bundles payments for
certain Medicare procedures. Hillcrest, and its owner Ardent, consider the bundled payment pilot a success. It experienced savings in all three years. The pilot began in May 2009 with four other hospitals or
systems. When it ended April 30, 2012, the hospital said it would continue the orthopedic component of
the program, but not the cardiac component. Hillcrest employs its cardiac surgeons, so integration already
exists. Hillcrest also signed on with CMS in 2013 to continue receiving bundled payments through the new
Bundled Payments for Care Improvement initiative.
Medicare fee-for-service patients were eligible for financial incentives for certain cardiac and orthopedic
procedures at Hillcrest. The orthopedic payment included nine DRGs related to hip and knee replacements
and the cardiac component included 28 DRGs. The system saw its overall surgery volume increase by more
than 25 percent during the three years. But the system has concluded that the financial incentive to patients
was not a key driver. In a survey, most patients said they didn’t choose Hillcrest because of the incentive.
However, results were positive: Hillcrest’s overall surgery volume increased 25 to 40 percent, and CMS
saved money. Hillcrest said it isn’t sure the hospital’s increase in surgeries is linked to ACE because it
also made capital investments, expanded programs and recruited physicians at the same time. (HFMA,
accessed on March 11, 2013)
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Parent company earnings: Nashville, Tenn.-based Ardent Health Services is privately held and does not
release financial statements. Ardent’s network includes 10 acute-care hospitals in Oklahoma and New
Mexico, a rehabilitation hospital, a multispecialty medical group, a health plan and retail pharmacies.
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St. John Health System
Table 4-3
Local
hospitals:
Local hospital
beds:
Physicians
employed:
Physicians
affiliated:
PBM:
GPO:
4
663
292
800
N/A
HealthTrust Purchasing Group
Acute-care hospitals:
» St. John Medical Center, Tulsa, 539 beds
» St. John Broken Arrow, 68 beds
» St. John Owasso, 32 beds
» St. John Sapulpa, 24 beds
Major outpatient centers:
» St. John South Campus, an outpatient facility with urgent care
» St. John Claremore, an outpatient facility with a comprehensive breast center
Physician groups:
» OMNI Medical Group, a network of 49 primary-care physicians and 11 midlevel providers
» St. John Physicians Inc., a multispecialty group practice of 226 physicians
» Family Medical Care, a primary care practice of 17 physicians
Health plan:
» Ownership interest with Saint Francis Health System in CommunityCare, a managed care organization with 92,231 members in the Tulsa market as
of July 1, 2012
Other details:
» St. John LaFortune Cancer Center
» St. John Urgent Care, with three locations in midtown and south Tulsa and Sand Springs
» Three acute-care hospitals outside the local market: Jane Phillips Medical Center in Bartlesville, Sedan City Hospital in Kansas, and Nowata
Hospital
Sources: HealthLeaders-InterStudy; based on data from Billian’s HealthDATA.
Description
The nonprofit St. John Health System is the second-largest health system in the Tulsa market, sponsored by
the Tulsa-based Marian Health System, a Catholic healthcare network. Ascension Health has an agreement
to purchase Marion Health System in 2013.
The system’s hospitals account for 23 percent of inpatient discharges and 21 percent of total acute-care
beds (most recent federal Medicare hospital statistics). The average occupancy rate is 66 percent, and the
average length of stay is 6.2 days. Medicare and Medicaid account for an average 33 percent and 10 percent,
respectively, of acute-care discharges. Discharge, occupancy, ALOS, Medicare and Medicaid data do not
include St. John Broken Arrow, which opened in September 2010.
The flagship St. John Medical Center is known for radiology, cardiology, oncology, women’s health, wellness and physical rehabilitation. Its St. John Heart Institute has pioneered many cardiovascular treatments
in Tulsa, including the city’s first pacemaker implant, first bypass surgery and first angioplasty. St. John
Owasso is a community hospital featuring emergency, radiology and women’s health services, and St. John
Sapulpa is a rural critical access hospital with 24-hour emergency services. The system opened St. John
Broken Arrow in September 2010, the first hospital in the suburb since Saint Francis removed its hospital
operations from there several years before. The hospital includes the Center for Joint Replacement, two
medical-surgical floors and an emergency center with air ambulance capability. The adjacent medical
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office building includes cardiology, neurosurgery, obstetrics/gynecology, general surgery, and lab services
and primary-care physicians.
News and Analysis
St. John Health System is about to join the largest Catholic hospital operator in the country. The size will
help the health system navigate healthcare reform, and is likely to help it launch an accountable care organization in the future, since Ascension hospitals are already operating several of these across the country.
The system is poised to expand in upscale areas Jenks and south Tulsa after buying land there, continuing
its strategy of pulling insured patients from the suburbs into its flagship hospital.
New owner: The Sisters of the Sorrowful Mother, which owns Marian Health System—the owner and
operator of St. John Health System—signed a nonbinding agreement in September 2012 to sell Marian
to Ascension Health. The agreement involves two health systems in Wichita and Milwaukee as well, and
is expected to be finalized in the first quarter 2013. Ascension is a Catholic hospital operator based in St.
Louis, and operates 1,400 locations in 21 states. St. John says Ascension’s size gives it a strong national
platform and connection to an innovative organization.
Real estate deal: St. John paid $147 million in June 2012 for the six-story St. John Broken Arrow and
its four-story medical office building to two investor owners. St. John has been leasing the building
from the investors since the hospital opened in 2010. The hospital has 185 employees and 44 beds. St.
John Broken Arrow is home to the 44-bed St. John Center for Joint Replacement, which saw 2,075 adult
admissions in 2011. The medical office building is 75 percent occupied, and the system plans to add
more floors in the future.
Financials: The health system reported gross patient revenue of $1.28 billion in 2011. (The Journal Record)
Expansion plans: After opening its Broken Arrow hospital, it appears the system is positioning itself to
open outpatient centers or hospitals in two upscale suburban locations to expand geographically. Both land
acquisitions are preliminary and no construction plans have been announced:
» » S t. John Sapulpa renovated its emergency department in 2012, adding more exam rooms for the 1,600
patients monthly that come through the emergency room. Electronic health records were installed.
The expansion and EHR installation should decrease wait times for patients.
»» A
n affiliate of St. John Health System acquired 10 acres in south Tulsa, an upscale area of town, for
$2.28 million in September 2012 but would not comment on plans. An expansion would provide the
system with a presence in southwest Tulsa, where it does not have a hospital, but does have some nearby
physician clinics.
»» T
he system also owns land in Jenks, an upscale suburb. It purchased a former Reasor’s grocery store site
in Jenks in August 2011 for $3.7 million. The system says it has no immediate plans for the property.
The move appears to be a strategic play to build a facility in the area in the future, helping the system
funnel more insured patients into its hospitals and potentially compete with Saint Francis, which also
owns land in the suburb.
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Medical home/Accountable care organization: The system’s primary care group OMNI Medical Group
is operating a medical home as part of the Comprehensive Primary Care initiative, which has added care
managers to coordinate care for high-risk patients.
System officials note it has the pieces in place to operate an ACO, however, the system has concerns about
the proposed regulations governing Medicare ACOs and would prefer to enter full-risk contracts with
payers. Its new owner, Ascension Health, has several ACOs across the country, making it likely St. John
could operate one in the future.
Physician relationships: In early 2012, St. John launched an ob/gyn hospitalist program to bring obstetricians and gynecologists onsite 24/7. Services include providing care in times of emergency prior to the
arrival of a patient’s physician, supporting care of high-risk pregnancies and delivering babies for patients
without an obstetrician.
In July 2011, it acquired Family Medical Care, a primary-care physician group, which will remain separate
from OMNI Medial Group. Family Medical Care has one Tulsa location and 18 physicians, many of whom
serve as teachers for the In His Image medical residency program, which has 30 first-, second-, and thirdyear residents. St. John became the primary teaching hospital for the In His Image Family Medicine Residency Program in July 2011. It is also the primary teaching hospital for the OU-Tulsa School of Community
Medicine general surgery and internal medicine residency programs. The system provides financial and
facility support to train more than 60 medical residents a year.
Information technology initiatives: St. John has been converting its clinical systems to electronic medical
records, and all St. John facilities are now connected to its EMR, CareConnect. A project to add physician
order entry capabilities went live in summer 2011.
Awards: St. John Medical Center is a top-ranking facility in Tulsa for gynecology, urology and orthopedics
(U.S. News & World Report).
Other Health Systems and Hospitals
Oklahoma State University Medical Center is Tulsa’s primary safety-net hospital and provider of uncompensated care. In 2009, Nashville, Tenn.-based Ardent Health Services transferred ownership of the
financially troubled medical center to a trust established by the city of Tulsa. At that time, St. John Health
System was chosen to manage the hospital. OSU Medical Center is the primary teaching hospital for the
Oklahoma State University Center for Health Sciences, providing residency training for 130 physicians
each year, and is one of the nation’s largest osteopathic healthcare centers.
St. John Health System ended its management agreement with OSU Medical Center in August 2012. The
medical center trust approved the decision at the request of St. John. The trust agreed with St. John that
there were conflict-of-interest issues because the hospitals compete in the same market. How the hospital
will operate going forward without St. John is still uncertain.
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Diane Rafferty was named the medical center’s CEO in October 2012 to replace Jan Slater, whose term
ended when the management agreement with St. John Health System ended. Rafferty was formerly CEO
of the University Physicians Hospital at Tucson, Ariz.
The hospital must receive $18.25 million in annual operating revenue in the 2013 legislative session or will
be forced to close. It if receives only a portion of what it needs, services will be cut. The hospital has received
$5 million in annual state funds in order to obtain matching funds, giving it a total of $17 million a year
in funding. The hospital won’t be able to leverage federal matching funds anymore, so the state must find
a way to support it. The public teaching hospital receives no state subsidy. Rafferty said the hospital also
needs about $19 million in one-time funds for improvements like an electronic health system and maintenance and repairs. However, Gov. Mary Fallin’s 2013 budget cuts $5.6 million in funding to the OSU University Medical Center. The Tulsa chamber is lobbying for new funding to be appropriated to the hospital.
OSU has said it is negotiating with a national hospital administrator for a partnership, but did not name the
company. OU Medical Center in Oklahoma City is partly owned by Nashville-based HCA. But a merger
or deal will be dependent upon state funding.
OSU Medical Center accounts for 7 percent of inpatient discharges and 8 percent of total acute-care beds in
the local market. The average occupancy rate is 52 percent and the average length of stay is 6.0 days. Medicare and Medicaid account for an average 27 percent and 39 percent, respectively, of acute-care discharges
(based on the most recent federal Medicare hospital statistics from Billian’s HealthDATA).
Expansion plans for OSU Medical Center include the following:
»» T
he city council approved $2.1 million in September 2013 for OSU Medical to upgrade its maternity
department because its labor and delivery and postpartum care areas are separated in the hospital. It
would remodel the existing 10-patient space to handle all functions in one room. The hospital received
$1 million from Morningcrest Healthcare Foundation for the project, which officials hope to complete
by January 2014.
»» T
he facility has undergone $25 million in renovations and upgrades since the city trust purchased the
hospital from Hillcrest in 2009. The trustees have authorized the creation of a geriatric medical psychiatric unit, which they hope to open in June 2013. No facility in Tulsa takes geriatric psychiatry patients
who have a medical condition. Officials say the unit would be 70 percent occupied within its first year.
Cancer Treatment Centers of America at Southwest Regional Medical Center is a cancer hospital that
offers imaging, a 24-hour chemotherapy infusion center and a treatment where heat is applied in conjunction with radiation to kill tumors.
CTCA opened its $30 million, 200,000-square-foot hospital in May 2005, and has spent another $20 million in expanding the facility to almost 300,000 square feet. The hospital was previously located at Oral
Roberts University.
CTCA has been expanding rapidly, and says its strategy is to triple its size in five years. It completed a $3.1
million project adding a new surgery and radiation oncology department in 2012, and plans to begin a
project to provide bone marrow transplant services by converting seven current inpatient rooms into the
unit. The new surgical department has helped physicians who were experiencing scheduling conflicts with
room availability.
CTCA started construction in early 2013 on a $4.3 million mixed-use building to consolidate personnel
and supplies that are currently in an off-site leased space. The office building will house 110 employees
with administrative functions.
CTCA is involved in the nation’s only active clinical trial of deep tissue hyperthermia.
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Table 4-4:
Tulsa Hospitals
Name
City
Beds
Saint Francis Hospital (includes The Children’s Hospital at Saint Francis)
Tulsa
743
St. John Medical Center
Tulsa
539
Hillcrest Medical Center (includes Children’s Medical Center at Hillcrest and Oklahoma
Heart Institute)
Tulsa
539
Oklahoma State University Medical Center
Tulsa
249
Hillcrest Hospital South (formerly SouthCrest Hospital)
Tulsa
187
Wagoner Community Hospital
Wagoner
100
Saint Francis Heart Hospital
Tulsa
96
Saint Francis Hospital South
Tulsa
96
Oklahoma Surgical Hospital
Tulsa
76
Bailey Medical Center
Owasso
73
St. John Broken Arrow
Broken Arrow
68
Okmulgee Memorial Hospital
Okmulgee
66
Hillcrest Hospital Claremore (formerly Claremore Regional Hospital)
Claremore
65
Cancer Treatment Centers of America at Southwestern Regional Medical Center
Tulsa
43
Hillcrest Hospital Henryetta (formerly Henryetta Medical Center)
Henryetta
41
Tulsa Spine & Specialty Hospital
Tulsa
37
St. John Owasso
Owasso
32
Bristow Medical Center
Bristow
30
St. John Sapulpa
Sapulpa
24
Fairfax Community Hospital
Fairfax
15
Drumright Regional Hospital
Drumright
15
Cleveland Area Hospital
Cleveland
14
Pawhuska Hospital
Pawhuska
10
Claremore Indian Hospital
Claremore
N/A
Sources: HealthLeaders-InterStudy, 2013; based on data from Billian’s HealthDATA, 2012.
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Physicians
Table: Situation Analysis
+
THIS SECTOR IS: POSITIVE
Sector Outlook
Physicians in the Tulsa market have had to rapidly transform their practices into medical homes in order
to participate in the region’s Comprehensive Primary Care initiative with the Centers for Medicare &
Medicaid Services, Blue Cross and Blue Shield of Oklahoma and CommunityCare. OU Physicians was
the only operational medical home in the market previously. It was being reimbursed for its medical home
by Medicaid only, but now three more payers join those ranks. All of the largest physician groups in the
market chose to participate. The adoption of the medical home model of care and care coordination could
have a significant effect on the market over the long term. Such programs can serve as a foundation for
accountable care organizations and make the adoption of reimbursement reform an easier transition.
Highlights:
» » Market composition:
Tulsa’s physicians sector includes several large medical groups, including the large academic practice
OU Physicians, but the market still has many small independent group practices. There is a movement
toward consolidation in the market as those independent practices join large group practices linked
to health systems. All of the market’s largest physician groups are owned by or affiliated with health
systems except OU Physicians, which does not have an affiliated hospital in Tulsa. Some estimates in
the market have shown a high rate of consolidation, with one health system executive saying about 90
percent of physicians in the area are employed by a health system.
» » Physician supply:
Oklahoma suffers from a severe physician shortage in its rural areas. An analysis of physician licenses
showed that specialists, including cardiologists and oncologists, were scarce or nonexistent in the
state’s rural areas (Tulsa World). Oklahoma has 36 counties with fewer than five family-practice physicians, and at least four counties have none. America’s Health Rankings for 2011 ranks the state 48th for
rural doctor shortage. A study in The New England Journal of Medicine says one reason Oklahoma
has a shortage may be its high rate of uninsured residents and high rates of poverty, which makes it
more difficult to attract and retain physicians.
An analysis by Oklahoma State University Medical Center trustee board found that most residents
who come from out-of-state medical schools left Oklahoma after their residency. The board is recommending that programs give preference to Oklahoma graduates when choosing residents. OSU is
focused on getting residents to stay in Oklahoma, especially practice in rural Oklahoma.
In Tulsa, 40 percent of the population lives in an area with only 4 percent of the city’s physicians, and
residents of north Tulsa have a seven-year shorter life expectancy than those in the rest of the region.
As a way to increase physician numbers in Tulsa, the University of Oklahoma and Tulsa University
have joined together to form the city’s first four-year medical school, Tulsa School of Community
Medicine. OU-Tulsa currently takes medical students in their second two years for clinical instruction in Tulsa after two years of classes at the OU Health Sciences Center in Oklahoma City. The Oxley
Foundation awarded the new school a five-year, $30 million gift to launch the school. The school will
train primary care physicians to work in underserved areas of the state.
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A bill that passed the 2012 legislative session aims to combat Oklahoma’s physician shortage by providing more than $3 million to create residency programs at hospitals in rural, underserved areas. The
Oklahoma Health Care Authority will contract with Oklahoma State University College of Osteopathic Medicine in Tulsa and the University of Oklahoma College of Medicine in Oklahoma City to
establish and run new residency programs in medically underserved areas. Universities are focused
on recruiting students out of rural areas for medical school.
» » Nurse practitioners:
Oklahoma ranks last in the nation in the number of nurse practitioners. It has 1,092 total licensed
nurse practitioners as of 2011. This number translates to 28.8 nurse practitioners per 100,000 population, versus 58 per 100,000 nationwide, ranking the state 50th among all 50 states and the District of
Columbia (Kaiser Family Foundation analysis of data from the Pearson Report).
» » Comprehensive Primary Care initiative:
The Tulsa area was one of seven regions awarded the Comprehensive Primary Care initiative in April
2011. The goal of the multipayer initiative is to foster collaboration between public and private payers
to strengthen primary care. The Centers for Medicare & Medicaid Services named 68 primary-care
practices (280 providers) to be part of the medical home pilot in August 2012. The providers cover 25
eastern Oklahoma counties, representing the Greater Tulsa region. While medical homes are a new
concept for commercial payers in Tulsa, 41 of the 68 practices were already being reimbursed through
a medical home model by Medicaid.
The initiative is a collaboration between Blue Cross and Blue Shield of Oklahoma, CommunityCare the Oklahoma Health Care Authority and CMS. Private payers will determine their own
care coordination fees, but the program means that all private and public payers have agreed on 20
quality metric standards that physicians will be evaluated on and reimbursed for, allowing physicians to operate a medical home more easily because the standards will be the same across payers.
The metrics include tobacco use, colorectal cancer and breast cancer screenings as well as diabetes
indicators and readmission rates.
Beginning in October 2012, providers in the program were reimbursed by Medicare for fee-for-service
patients up to $20 per member, per month. Each commercial insurer can choose their own reimbursement rate. Blue Cross and Blue Shield of Oklahoma is paying a supplemental, risk-adjusted PMPM fee.
About 43,740 Medicare beneficiaries are in the pilot, and the four payers combined expect to serve
nearly 200,000 patients. SoonerCare had 74,351 members in the CPCi test as of January 2013. Blue
Cross and Blue Shield of Oklahoma has about 20,000. Eventually, participating practices will share
in any savings in two years. Most primary care physicians in OMNI Medical Group, OU Physicians,
Utica Park Clinic and Warren Clinic are participating. Medical home payments are expected to inject
$100 million into the Tulsa medical community.
Efficiencies are expected to be found through more physicians using MyHealth Access Network, the
area’s regional electronic medical records system to eliminate waste and track prescriptions. BCBS of
Oklahoma is also sharing its claims data with its medical home practices, allowing them to track if
their patient is seeing another physician, what prescriptions they are filling and hospital stays.
In the second through fourth years of the initiative, physicians can share in any savings to Medicare
and Blue Cross. For the pilot, primary-care physicians must manage care for patients with high
healthcare needs, ensure access to care, deliver preventive care, engage patients and caregivers and
coordinate care across the medical neighborhood (Center for Medicare & Medicaid Innovation).
Physician practices are using the extra payments to hire care managers and to focus on data measures
to increase quality. For OU Physicians, the pilot provides three more payers that will pay for quality
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care instead of just Medicaid, helping it to hire extra professionals needed to coordinate care: nurse
care managers, Pharm.D.’s, social workers and IT staff.
» » Information technology:
The CPCi initiative is boosted by Tulsa’s MyHealth Access Network, the area’s health information
exchange to share patient data. MyHealth has records on 2.2 million patients as of March 2013 and
continues to grow at about 20,000 patients per month. It has contracts with more than 1,500 physicians. Revenue from those providers is about enough for MyHealth to break even on its annual $2
million operating budget. It has been funded through a three-year, $12 million Beacon Community
Grant from the federal government. MyHealth is expanding statewide, and in the process of acquiring
SMRTNET, a health information exchange that largely consists of Oklahoma City hospitals.
» » Medical homes:
The state Medicaid program’s patient-centered medical home delivery system provides payments for
physicians who meet quality-of-care criteria. The medical home awards physicians for prescribing
generics.
» » Medical liability:
Medical malpractice rates remain low in Oklahoma and have been stable after comprehensive reform,
including a cap on noneconomic damages in malpractice cases, was passed in 2011.
» » Government reimbursement levels or cutbacks:
Physicians in Oklahoma had their Medicaid reimbursement rates cut by 3.25 percent in 2010. With
the governor proposing $40 million in new funding for Medicaid, physicians will be lobbying in the
2013 session to have their cut restored.
» » Direct primary care:
Access Solutions Medical Group offers monthly membership for primary-care services targeting the
uninsured and individuals with high-deductible plans. Members pay $25 to $35 in monthly dues to
receive a flat fee of $50 for each patient visit, covering all lab work, X-rays and procedures. Access
Solutions has 1,300 members.
» » Urgent care:
While Tulsa has both Walgreens and CVS pharmacies, it does not have retail clinics. One reason may
be the proliferation of urgent-care centers. St. John Health System has three urgent-care locations
in Tulsa and Sand Springs, and Saint Francis has two in Tulsa and Broken Arrow. Physician-owned
MedCenter has three locations, and MedNOW operates two locations in Tulsa and Broken Arrow. The
market also has three Concentra clinics and a pediatric urgent-care center in Tulsa.
» » Cherokee Nation:
The Cherokee Nation approved an 11-percent pay increase for its providers at its eight health centers
and W.W. Hastings Hospital in Oklahoma in February 2013. It had been several years since the tribe
had conducted an evaluation of its compensation compared to other tribes and providers, and concluded the increase was necessary. Nurse practitioners, physician assistants, pharmacists, physicians
and dentists will all see the increase.
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OU Physicians
Table 5-1
Type: Academic
Internal Guidelines: Yes
Total Physicians: 340
Medical Management: Yes
Primary-Care Physicians: 174
Clinical IS: Yes
OU Physicians is the faculty group practice of the University of Oklahoma School of Community Medicine in Tulsa. The college-operated physician practice has 120 faculty physicians and 220 medical resident
physicians at 12 clinic locations, including onsite clinics for employers, and handles more than 210,000
patient visits each year. It specializes in family medicine, internal medicine, pediatrics, obstetrics/gynecology, psychiatry and surgery. Partner hospitals are Hillcrest Medical Center, Saint Francis Hospital and St.
John Medical Center. The Tulsa group is affiliated with the Oklahoma City-based OU Physicians, which
has more than 500 physicians statewide.
OU Physicians has EMR systems in all of its clinics and embedded evidence-based guidelines to guarantee
standardized care. The group uses a patient-centered medical home through which it employs a team-centered approach to medical care that coordinates physicians, physician assistants and nurse practitioners.
Together with the medical school, OU Physicians offers onsite clinics at Tulsa-area businesses, including
Williams Co. and the Union Public Schools district. OU Physicians also has primary-care clinics onsite
at schools in Tulsa, offering services to students, staff and their families. The OU School of Community
Medicine operates school clinics at two Union elementary schools, the University of Tulsa, Roger State
University and Youth Services of Tulsa.
In July 2013, OU opened the $20 million Wayman Tisdale Specialty Health Clinic in north Tulsa, a
50,000-square-foot facility to serve north, east and west Tulsa. OU-Tulsa research says the life expectancy
in that area is 14 years less than in neighborhoods in midtown and south Tulsa.
OU Physicians in Tulsa have applied to NCQA for certification as a patient-centered medical home. Only
one practice in Duncan is currently certified in the state.
OU Physicians Pediatrics provides medical care for more than 800 Tulsa County children in foster homes
through its Fostering Hope Clinic.
Blue Cross and Blue Shield of Oklahoma awarded a $100,000 grant to the OU School of Community Medicine in February 2012 to provide patient services to children and their families, regardless of insurance
coverage, at OU’s school-based clinics.
Dr. Daniel Duffy will step down as Dean of the OU College of Medicine’s School of Community Medicine
to return to teaching effective April 30, 2013. A national search for a new dean is underway.
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Warren Clinic
Table 5-2
Type: Health-system owned
Internal Guidelines: N/A
Total Physicians: 315
Medical Management: N/A
Primary-Care Physicians: N/A
Clinical IS: N/A
Owned by Saint Francis Health System, Warren Clinic is the largest privately owned physician group in the
state. Its 315 physicians practice at more than 40 office locations in eastern Oklahoma. Specialties include
cardiology, orthopedic surgery and pediatric oncology. The group also runs two urgent-care clinics that
operate after hours and on weekends in Tulsa and Broken Arrow. Each of its clinics offers disease prevention and management of chronic conditions. The health system has said it plans to grow Warren Clinic to
400 physicians by 2015. In 2012, it renovated its facility in McAlester, which is just outside the market, at a
cost of $1.7 million. The facility has 26 providers and offers walk-in care.
St. John Physicians Inc.
Table 5-3
Type: Multispecialty group practice
Internal Guidelines: Yes
Total Physicians: 226
Medical Management: Yes
Primary-Care Physicians: 0
Clinical IS: Yes
St. John Physicians Inc. is the specialty medicine arm of St. John Health System’s employed physicians. It
has 226 physicians and 22 midlevel providers and 43 certified registered nurse anesthetists. The group has
locations throughout northeastern Oklahoma. It offers care in the fields of anesthesia, cardiology/cardiothoracic surgery, neurology/neurosurgery, emergency medicine/urgent care, hospitalists, gastrointestinal,
pulmonology, radiation oncology and more.
Utica Park Clinic
Table 5-4
Type: Health-system owned
Internal Guidelines: Yes
Total Physicians: 150
Medical Management: Yes
Primary-Care Physicians: N/A
Clinical IS: Yes
Utica Park Clinic is part of the Hillcrest HealthCare System and has 150 physicians and 24 midlevel providers practicing in more than 35 locations in northeastern Oklahoma, offering primary-care and specialty
services, including gastroenterology, neurology, podiatry, and cardiovascular and thoracic surgery. The
group includes the cardiologists of Oklahoma Heart Institute and is adding pharmacies to its clinics, with
the first pharmacy located in UPC Central Clinic. UPC specialty services grew extensively in 2012, adding
ear, nose and throat providers at the Hillcrest South campus, and two oncologists at the Hillcrest campus.
Its general surgery group has grown to 10 physicians. The group plans to expand its infusion center in 2013.
In 2012, UPC added its entire primary care base to the NextGen electronic medical record system. That
EMR will integrate with the system’s hospitals to allow patients’ records to follow them to any provider in
the system. UPC expanded its clinical quality program in 2011 so that its EMR system would send patients
reminders and offer disease-specific patient registries.
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Utica Park Clinic Research participates in clinical trials for investigational drugs for conditions such as
diabetes, high blood pressure and high cholesterol. A new clinic, Utica Park Medical Oncology, established
by three oncologists, opened in April 2011 on the Hillcrest Medical Center campus. SouthCrest Medical
Group and Northeast Oklahoma Medical Group are also part of Utica Park Clinic.
OMNI Medical Group
Table 5-5
Type: Group practice
Internal Guidelines: Yes
Total Physicians: 49
Medical Management: Yes
Primary-Care Physicians: 49
Clinical IS: Yes
OMNI Medical Group, an affiliate of St. John Health System, is a primary-care group practice with 15 locations in northeastern Oklahoma and 49 physicians and 11 midlevel providers. The group uses evidencebased medicine guidelines, patient-care teams and advanced access scheduling. OMNI physicians use
EMR systems and a disease management registry to form a comprehensive patient history, resulting in
a higher level of care. OMNI reports that 97 percent of its patients with diabetes have been measured for
glucose control. The practice has offices in Broken Arrow, Claremore, Oologah, Owasso, Sand Springs,
Sapulpa, Skiatook and Tulsa as well.
Additional Physician Organizations
» » OSU Physicians:
OSU Physicians is an academic group affiliated with the Oklahoma State University Center for Health
Sciences. OSU Physicians has 60 physicians serving Northeastern Oklahoma. It operates seven clinics:
six in Tulsa and one in Muskogee. All are staffed by medical residents and faculty physicians. It opened
its newest clinic, OSU Physicians–Eastgate, in April 2010 in east Tulsa. The group is providing primary
care in 4,000-square-feet of a new healthcare facility, Tulsa City-County Health Department’s $8.2
million North Regional Health and Wellness Center, which opened in August 2012.
» » Tulsa Bone & Joint Associates:
Tulsa Bone & Joint Associates is an independent group practice of 28 physicians practicing at three
locations in Tulsa. One location also includes an urgent care center. Its physicians specialize in orthopedic surgery, sports medicine and rheumatology.
» » Cancer Care Associates:
Cancer Care Associates is a physician-owned oncology network of 15 physicians offering services at
six clinics, including three offices in Tulsa. The group has nine ongoing clinical trials.
» » Family Medical Care:
Family Medical Care is a primary-care physician practice that was acquired by St. John Health System in July 2011 but remains separate from OMNI Medical Group. The practice has 17 physicians
and one location.
» » Oklahoma Oncology:
Oklahoma Oncology is a ten-physician group practice with one location. Its physicians have directed
the LaFortune Cancer Center at St. John Medical Center since 1977. They are also in charge of the
blood and marrow transplantation program at Saint Francis Hospital.
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Health Plans
Table: Situation Analysis
O
Table 6-1:
THIS SECTOR IS: NEUTRAL
Local & State Enrollment
Commercial HMO:
Commercial PPO:
Commercial POS:
Indemnity:
Managed
Medicaid:
Managed
Medicare:
Local
80,493
225,076
109,809
11,301
0
42,745
State
163,819
1,015,667
290,360
26,752
0
98,676
>>>
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Sector Outlook
Through the Comprehensive Primary Care initiative, two of the market’s largest payers, Blue Cross and
Blue Shield of Oklahoma and CommunityCare, are reimbursing 280 providers in Tulsa on a per-member,
per-month basis for coordinating care through medical homes. Both insurers see the program as the right
step forward for the market, which has high healthcare costs and low quality outcomes. If insurers and
physicians in Tulsa see quality results and lower costs, expect further development of programs and partnerships between providers and payers.
BCBS of Oklahoma remains the dominant insurer in the market, although Aetna and Coventry have
priced their narrow- and tiered-network plans aggressively in a bid to compete more effectively with the
Blue plan. With Aetna’s acquisition of Coventry this year, a slight gain in market share could put the former
in a better position to compete with BCBS of Oklahoma. Expect continued movement toward narrow- and
tiered-networks and HMOs in this market while interest in consumer-directed health plans wanes.
Highlights:
» » Market composition:
Health Care Service Corp.’s BCBS of Oklahoma leads the Tulsa market in total enrollment, with a
27 percent market share, followed by UnitedHealth Group, with 24 percent, and CommunityCare,
with 20 percent. CommunityCare is jointly owned by Tulsa’s Saint Francis Health System and St.
John Health System. Aetna, with 14 percent of total enrollment, is the fourth-largest insurer in the
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market. HCSC leads PPO enrollment, with 52 percent of that segment, while UnitedHealth Group
tops the stand-alone POS market with a 79 percent share. CommunityCare leads HMO enrollment,
with 77 percent of that segment’s enrollment. Forty-nine percent of commercial enrollees are in fullyinsured plans, and 51 percent are in self-insured plans. Tulsa remains a stronger HMO market than
Oklahoma City, thanks to CommunityCare, which uses the two Catholic health systems that own it
in the market.
» » Medicaid expansion:
Gov. Mary Fallin decided in November 2012 to not expand Medicaid in Oklahoma under federal
healthcare reform because the cost was too high and would force the state to cut other services such as
education. In 2014, Oklahoma residents who make too much to qualify for Medicaid but too little to
buy subsidized coverage on the health insurance exchange will have no options unless Fallin changes
her mind.
Instead, Fallin said she would pursue a state-based solution that would use federal and state funding to make patients healthier. The plan would require a Medicaid waiver. Fallin has called on the
Obama administration to look at Medicaid waiver requests with open minds and act quickly on
innovative ideas.
» » Narrow networks:
BCBS of Oklahoma has been highly successful with its tiered coinsurance plans called BlueOptions
and BlueOptimize. This tiering basically requires employees to choose a larger or smaller network at
the point of service rather than annually when enrolling for insurance. Employees choosing larger
networks have higher levels of coinsurance. Brokers say BlueOptions has been popular among employers. BlueOptimize is the newer version of BlueOptions, with higher deductibles but lower costs for
small employers.
The smaller Blue Cross network eliminates the two largest Catholic systems and includes only Hillcrest HealthCare System and Oklahoma State University Medical Center. The larger network includes
all the hospitals. The narrow network plan is popular because of competitive pricing, brokers say.
Aetna and Coventry have introduced tiered network plans to compete more effectively with BCBS of
Oklahoma and brokers say the carriers have lowered the premiums on the plans. Similar to BCBS of
Oklahoma’s BlueOption plans, Aetna’s Savings Plus plans and Coventry’s Affordable Options plans
offer lower rates when members choose a designated or premier provider network.
CommunityCare operates a narrow network that only includes the two Catholic systems that own
CommunityCare. Another option offers a larger network that includes Hillcrest. Its PPO Preferred
Community Choice Select, the smaller network, is offered at a sharply discounted rate, about 27 percent less than its regular PPO if all employees are in Tulsa, brokers say. Its HMO remains popular with
employers whose employees are all inside the Tulsa metro area.
» » Medical homes:
Blue Cross and Blue Shield of Oklahoma is sharing its claim data with its providers operating medical
home contracts through the Comprehensive Primary Care initiative. It plans to expand the model
throughout the state, especially into Oklahoma City.
» » Acquisition:
In August 2012, Aetna announced an agreement to purchase Coventry Health Care for $5.7 billion,
adding a total of 3.6 million medical lives and 4.6 million pharmacy lives to Aetna’s membership.
When the acquisition closes in 2013, Aetna will remain the fourth-largest insurer in Tulsa after gaining Coventry’s small 1.2 percent market share in the Tulsa market. The acquisition will further limit
competition in Tulsa, where competition will be mainly limited to BCBS of Oklahoma, Aetna, UnitedHealthcare and CommunityCare.
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» » Medical loss ratio rebates:
Ten insurers paid $20.6 million in rebates in August 2012 with the average rebate at $126 for 161,000
families. BCBS of Oklahoma paid more than $9.6 million to individual and small group customers.
UnitedHealth Group issued $4.7 million in rebates to small group customers and $411,290 in rebates
to large group customers. Aetna paid $230,000 in rebates in Oklahoma. Golden Rule Insurance Co.
issued $1.7 million in rebates.
» » Health insurance exchanges/essential health benefits:
Oklahoma Gov. Mary Fallin said in November 2012 that the state would not run its health insurance
exchange despite lobbying from the business community and hospitals. Fallin had accepted a $54
million grant in early 2011 to set up an exchange and then later rejected the funds.
The ACA requires all plans cover certain defined benefits. The small group plan with the largest
enrollment is used as the default benchmark plan, which will be Blue Cross Blue Shield of Oklahoma
BlueOptions PPO. The law requires exchange plans created after Sept. 23, 2010 must cover cholesterol
screenings, immunizations, mammograms and autism screening for children. In April 2011, Gov.
Fallin signed a measure into law prohibiting any plans offered on the exchange from covering abortions except in the cases of rape, incest or life endangerment of the pregnant woman. The bill allows
enrollees the option to purchase additional abortion coverage if desired.
Brokers say UnitedHealthcare and Aetna are planning to offer coverage only on the individual
exchange, and offer their own private exchange for small groups.
» » Defined contribution:
Some large brokerage firms and insurers are offering private exchanges to compete with the public
exchange for group business. BCBS of Oklahoma offered this product to the Central Oklahoma Manufacturers Association in 2012.
» » Generic drug formulary:
BCBS of Oklahoma has added a new Generic Plus Formulary drug plan with copays of
$4/$35/$75/$150. The formulary is focused on providing savings by giving incentives to patients to
choose generics. The new drug card is offered with select Blue Choice, Blue Preferred, Blue Options
and Blue Optimize products.
» » Legislation:
Senate Bill 1621 was signed by the governor in April 2012, allowing small businesses to buy group
insurance through “employer associations” that can pool resources with other businesses. The Small
Employer Health Insurance Reform Act became effective Nov. 1, 2012. Lawmakers touted that the
measure will lower insurance costs for small businesses.
» » Insure Oklahoma:
The state’s Insure Oklahoma program, which provides health coverage to the uninsured, is scheduled
to lose nearly two-thirds of its government funding at the end of 2013 because those eligible would
have been absorbed under Medicaid expansion. Now that Gov. Mary Fallin has decided against expansion, the state would need a federal waiver to allow the program to continue. Working adults earning
up to 200 percent of the federal poverty level are eligible. Their insurance premiums are paid for by
the state (60 percent), their employer (25 percent) and the employee (15 percent). The state’s portion is
paid through tobacco tax revenues and matching federal dollars.
Insure Oklahoma has seen declining participation from employers in the last two years, a result that
may be due to the program’s uncertain future and the impact of recession on small employers. The
program is capped at 35,000 participants.
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Health Care Service Corp. (Blue Cross and Blue Shield of Oklahoma)
Table 6-3:
Commercial Enrollment
Fully Insured
HMO:
Self-Insured
HMO:
Fully Insured
PPO:
Self-Insured
PPO:
Fully Insured
POS:
Self-Insured
POS:
Indemnity:
Local
1,269
1,075
65,482
55,812
0
7
1,445
Statewide
8,217
1,373
401,057
237,098
0
241
4,029
>>>
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Table 6-4:
Government-Sponsored Enrollment
Managed Medicaid:
Medicare HMO:
Medicare PPO:
Medicare PFFS:
Other Medicare:
Local
0
0
0
0
0
Statewide
0
0
0
0
0
>>>
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Nonprofit, Chicago-based Health Care Service Corp., which operates primarily as Blue Cross and Blue
Shield of Oklahoma, accounts for 27 percent of Tulsa’s total enrollment and has 52 percent of PPO enrollment. HCSC is also the largest MCO statewide, with the largest PPO enrollment.
BCBS of Oklahoma’s PPO offerings include BlueChoice, which has an extensive network of providers, and
BluePreferred, which has a leaner network. BlueOptions offers a tiered network for employers with three
levels of coverage for members. BlueOptimize is a similar product geared toward small employers. The
insurer’s HMO products include BlueLincs Plan H, BlueLincs Value Option and Special Option. It offers
consumer-directed products through HSA Blue.
BCBS of Oklahoma has been very successful with the BlueOptions and BlueOptimize tiered coinsurance
plans. Employees must choose a larger or smaller network at the point of service instead of once a year when
enrolling for an insurance plan. Employees choosing larger networks have higher levels of coinsurance.
Brokers say BlueOptions has been popular among employers, and BlueOptimize has higher deductibles
but lower costs for small employers.
Blue Options and BlueOptimize have been a huge win for Blue Cross, brokers say, because they allow
employees choose their provider and network at the time of service. This dual-network strategy is targeted
at metro area employers, who like it because they can offer employees only one plan instead of two.
BCBS has about 20,000 lives under medical home contracts with physicians in the Tulsa region through
the Comprehensive Primary Care initiative. The program reimburses physicians on a risk-adjusted, permember, per-month basis that will eventually reward them for quality measures. BCBS is piloting medical
homes in Tulsa and plans to tweak it in the future to expand it throughout the state, and share claims data
with Oklahoma City physician groups. It also plans to offer medical homes and design benefit plans for
employers to target its top disease states, as well as other groups such as American Indian tribes.
In Oklahoma City, Health Care Service Corp. opened a new sales division in mid-2011 to more aggressively
target the individual market. HCSC says the expansion is in reaction to healthcare reform. The majority
of the company’s current policyholders are group members. The insurer expects the division to expand to
more than 100 employees over the next three years.
BCBS sells products to businesses through the state’s Insure Oklahoma program, which provides subsidies
of up to 60 percent of employee premiums. The Blue plan has been adding large employers over the last
several years, including the University of Oklahoma and the city of Tulsa.
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BCBS offers Chamber Choice through the Greater Oklahoma City Chamber of Commerce, where small
businesses can get insurance for their employees through a large pool of small businesses. The number of
employers using this plan has grown to 1,000. The Blue plan also offers Oklahoma Chamber Blue through
The State Chamber of Oklahoma.
As an employer, BCBS enforces surcharges on employees who smoke. It also has a discount program called
BlueExtras, which offers members discounts for healthcare products and services generally not covered
by a health plan.
Blue Cross and Blue Shield of Oklahoma is one of four divisions of Chicago-based Health Care Service
Corp. A mutual legal reserve company, HCSC operates Blue Cross and Blue Shield licenses in Illinois, New
Mexico, Oklahoma, and Texas and has 13 million members across all product lines. Approximately 63
percent of its membership is self-funded business, and 37 percent is at-risk business (Standard and Poor’s,
October 2011).
In September 2012, HCSC announced plans to enter an alliance with Blue Cross and Blue Shield of Montana, pending regulatory approval. BCBS of Montana had approximately 150,501 members as of July 1,
2012, according to HealthLeaders-InterStudy data.
From its four Blue plan divisions, the company had revenues of $19.9 billion in 2011, and net income
jumped 10 percent to $1.2 billion in 2011 from about $1.1 billion in 2010. (HealthLeaders-InterStudy)
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UnitedHealth Group
Table 6-5:
Commercial Enrollment
>>>
Local
Statewide
Fully Insured
HMO:
Self-Insured
HMO:
Fully Insured
PPO:
Self-Insured
PPO:
Fully Insured
POS:
Self-Insured
POS:
Indemnity:
4,954
0
5,322
4,569
26,126
61,133
6,186
23,250
0
17,742
10,702
69,941
147,726
12,790
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Table 6-6:
Government-Sponsored Enrollment
Managed Medicaid:
Medicare HMO:
Medicare PPO:
Medicare PFFS:
Other Medicare:
Local
0
5,656
196
0
0
Statewide
0
29,135
2,762
2,710
0
>>>
Source: HealthLeaders-InterStudy, as of July 1, 2012.
UnitedHealth Group is the second-largest managed care organization in the Tulsa market and has the
largest POS enrollment and third-largest managed Medicare enrollment. Statewide, UnitedHealth Group
is the second-largest carrier.
Most UnitedHealth plans in Oklahoma are offered through its UnitedHealthcare subsidiaries. The
insurer also offers an HMO to state employees and participates in Insure Oklahoma. UnitedHealth is
the nation’s largest insurer in terms of enrollment in commercial group insurance, Medicare, Medicaid
and individual products.
The Minnetonka, Minn.-based UnitedHealth Group reported net earnings of $5.53 billion for calendar
year 2012, up from $5.14 billion in 2011. Revenues were $110.62 billion, up from $101.86 billion in 2011,
while the operating margin was 8.4 percent, up slightly from 8.3 percent the previous year. At year-end
2012, the company had 45.2 million medical members (including stand-alone Medicare Part D enrollment), a 15 percent increase from 39.4 million medical members in 2011.
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CommunityCare
Table 6-7:
Commercial Enrollment
Fully Insured
HMO:
Self-Insured
HMO:
Fully Insured
PPO:
Self-Insured
PPO:
Fully Insured
POS:
Self-Insured
POS:
Indemnity:
Local
59,883
0
4,364
0
83
0
0
Statewide
77,082
0
17,622
0
288
0
0
>>>
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Table 6-8:
Government-Sponsored Enrollment
Managed Medicaid:
Medicare HMO:
Medicare PPO:
Medicare PFFS:
Other Medicare:
Local
0
27,901
0
0
0
Statewide
0
28,167
0
0
0
>>>
Source: HealthLeaders-InterStudy, as of July 1, 2012.
CommunityCare is the third-largest managed care organization in the Tulsa market and has the largest
total HMO enrollment and the largest managed Medicare enrollment. The MCO is owned by Tulsa’s Saint
Francis Health System and St. John Health System, two of the largest hospital systems in the market. In
Oklahoma, CommunityCare is the fourth-largest MCO and has the largest total HMO enrollment.
In 2012, CommunityCare introduced a new suite of POS plans and HMO plans with coinsurance. The
company offers three product lines for employer groups: CommunityCare HMO, CommunityCare HMO
Plus POS and CommunityCare Life & Health PPO Plans. PPO options include Preferred CommunityChoice PPO and PCCSelect, whose exclusive Tulsa-area provider network features Saint Francis and St.
John facilities only.
Its managed Medicare plans include three Senior Health Plan options available in Creek, Rogers, Tulsa
and Wagoner counties and portions of Osage and Washington counties. It also offers CommunityCare65
Medicare supplemental insurance and individual insurance plans.
CommunityCare’s wellness and cost-reduction programs include ExcelCare utilization management,
which helps employers monitor hospital admissions, treatments and lengths of stay, and an employee assistance program that aims to identify and resolve productivity problems associated with personal, marital
or substance-abuse issues.
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Table 6-9:
Health Plans and Pharmacy
Health Plan
$Rx Generic
Copay
$Rx Preferred
Brand Copay
$Rx Nonpreferred Brand
Copay
2-tier Design%
3-tier Design%
4-tier Design%
16%
17%
12%
$12.00
$25.00
N/A
0%
90%
9%
$10.00
$35.00
$60.00
N/A
N/A
100%
$10.00
$20.00
$35.00
Blue Cross and Blue Shield of Oklahoma
UnitedHealthcare
CommunityCare Managed Healthcare
Plans of Oklahoma
Source: HealthLeaders-InterStudy, July 2012 Pharmacy Benefit Evaluator. Tier design is national company data for all Rx benefits; copay data is for the most typical plan offering.
Table 6-10:
Health Plans and Pharmacy Management
Health Plan
PBM(s)
PBM Provides Formularies or
Formulary Consultation?
PBM Provides Consultations on
Benefit Design?
Blue Cross and Blue Shield of
Oklahoma
Prime Therapeutics, Inc. (Retail,
MailOrder, Specialty)
No
No
UnitedHealthcare
Express Scripts, Inc. (Retail,
MailOrder)
No
No
No
Yes
OptumRx(Specialty)
Company Managed (Retail)
CuraScript(Specialty)
Express Scripts,
Walgreens(MailOrder)
CommunityCare (OK)
Source: HealthLeaders-InterStudy, July 2012 Pharmacy Benefit Evaluator. National company data.
Table 6-11:
Health Plans and Generics
Percent Spent
on Generics Percent Spent on Preferred Brands
Health Plan
Percent Spent
on Nonpreferred Brands
Blue Cross and Blue Shield of
Oklahoma
26%
36%
38%
UnitedHealthcare
21%
49%
30%
CommunityCare
N/A
N/A
N/A
Source: HealthLeaders-InterStudy, July 2012 Pharmacy Benefit Evaluator. National company data for all Rx benefits.
Note: For more information about health plans and pharmacy benefits, please contact HealthLeadersInterStudy about purchasing access to the Pharmacy Benefit Evaluator. Additional coverage includes indicators of commercial, Medicaid and Medicare business opportunity; indicators of branded drug coverage;
indicators of access to biological drugs; drug expenditures by therapeutic class; and indicators of plans’
ability to control Rx benefit.
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Medicaid/Medicare/
Uninsured
Table 7-1:
Medicaid
Total Beneficiaries:
Percent of Population:
MCO-Managed Medicaid:
MCO-Managed Medicaid:*
Local
167,793
18%
0
0%
State
721,707
19%
0
0%
>>>
*Represents percentage of total beneficiaries.
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Gov. Mary Fallin decided in November 2012 not to expand Medicaid in Oklahoma under federal healthcare reform because the cost was too expensive and would force the state to cut other services like education. Fallin said expanding Medicaid would cost the state $689 million between 2013 and 2022, although
the Kaiser Commission on Medicaid and the Uninsured projected it would cost $484 million in the same
time frame after accounting for reduced state spending on uncompensated care. Expansion would have
extended coverage to an estimated 200,000 people in Oklahoma. Federal government figures suggest the
cost to be as low as $120 million.
The expansion would have allowed Oklahomans earning up to 133 percent of the federal poverty level, or
about $30,000 for a family of four, to be eligible. Current law requires only children in families earning up
to 185 percent of the federal poverty level to be eligible for Medicaid, pregnant women earning up to 185
percent of the FPL and adults making up to 37 percent of FPL. The income threshold for aged, blind and
disabled is 100 percent of FPL. Fallin proposed a $40 million budget increase for the Oklahoma Health
Care Authority in 2013 to expand coverage to residents who aren’t enrolled in Medicaid but are eligible.
Fallin is looking for ways to expand coverage through a state solution. The Oklahoma Health Care Authority approved a $500,000 contract with Leavitt Partners in January 2013 to develop ways to target the nearly
20 percent of Oklahoma’s residents with no insurance. Fallin hopes the group can develop recommendations that lawmakers can enact before the session ends at the end of May.
Enrollment in SoonerCare, the state’s Medicaid program, has grown throughout the recession, forcing
budget cuts in 2010, ranging from cutting the number of prescriptions allowed per month to cutting provider reimbursement. The Oklahoma Health Care Authority would like to restore provider rate cuts in
2013 if the Legislature allows.
Oklahoma administers its Medicaid program through fee for service and a patient-centered medical home
program called SoonerCare Choice. Members can change primary-care providers as they deem necessary,
and providers are paid a monthly case management/care coordination fee.
As of January 2013, SoonerCare Choice accounts for 533,998 enrollees, or 69 percent, and SoonerCare Traditional or fee for service accounts for 196,254 enrollees, or 25 percent (Oklahoma Health Care Authority).
To be eligible for SoonerCare, applicants must provide proof of citizenship. An exception is the Soon-tobe-Sooners program, which covers prenatal care for pregnant women whose babies will be U.S. citizens.
The medical home program also includes additional bonus payments to qualifying providers who meet or
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exceed quality-of-care targets such as child health exams, prescribing generic drugs, screening for breast
and cervical cancer, providing inpatient care, and participating in a project to reduce inappropriate emergency room use. SoonerCare Choice currently has 1,952 providers.
Oklahoma Medicaid has 34,431 providers. It covers optional benefits such as prescription drugs, behavioral health services, dialysis, durable medical equipment, podiatry, and dental and eye care services.
Enrollment increased significantly in Oklahoma thanks to the implementation of online enrollment in
September 2010.
The state’s Medicaid program has held the line on costs over the last decade with the increased use of
generic drugs. Its per-member, per-month pharmacy costs were $39 in fiscal year 2001, compared with $44
in fiscal year 2010. The state’s generic dispensing rate in January 2013 was 87 percent. Policies like prior
authorization and quantity limits have helped keep pharmacy costs down. Most branded products require
prior authorization, so physicians are more likely to prescribe generics. SoonerCare’s medical home also
gives incentives for generic prescribing. Medical homes are paid quarterly based on their generic prescribing rates.
Medicaid’s Oklahoma Medical Risk Management program improves coordination for Medicaid recipients
younger than 18 who have both physical and mental health conditions and receive care from multiple
physicians. The program provides detailed profiles of the patient’s health history and prescriptions to
all providers and reports when patients are late in refilling prescriptions as well sending alerts for health
screenings. A study of the program has shown a 31 percent reduction in hospital admissions, a 17 percent
reduction in the number of physicians prescribing behavioral drugs, a 13 percent reduction in office visits
and 10 percent reduction in emergency room visits.
Table 7-2:
Medicare
Medicare PFFS:
Other Managed
Medicare:
Total MCOManaged
Medicare:*
7,102
1,645
0
28%
22,638
10,802
211
16%
Total
Beneficiaries:
Percent of
Population:
Medicare HMO:
Medicare PPO:
Local Medicare
152,246
16%
33,998
State Medicare
633,324
17%
65,025
>>>
*Represents percentage of total beneficiaries.
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Table 7-3:
Prescription Drug Plan
MA-PDP:
Stand-alone PDP:
Total PDP Penetration:*
Local PDP
36,245
59,523
63%
State PDP
83,058
296,059
60%
>>>
*Represents percentage of total beneficiaries.
Source: HealthLeaders-InterStudy, as of July 1, 2012.
CommunityCare is the largest provider of managed Medicare in Tulsa, with a 65 percent market share,
followed by Humana and UnitedHealth Group, respectively.
Oklahoma has only 14 practicing physicians for every 1,000 Medicare beneficiaries (state medical association); 15 percent of residents live in health professional shortage areas.
Oklahoma is a single-state region for Medicare Part D and joins with Kansas to form a single region for
Medicare Advantage plans with an attached prescription drug benefit.
Oklahoma is one of 15 states that received $1 million from the Centers for Medicare & Medicaid Services
in April 2011 to integrate care for residents dually eligible for Medicaid and Medicare. The state is soliciting vendors for a risk-based contract for care management services. It is proposing an ACO, as well as
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expansion of the Oklahoma Cherokee Elder Care Program. The state also proposes to consider managed
care focused on dual eligibles with behavioral health needs. The University of Oklahoma–Tulsa and the
Oklahoma Health Care Authority received the money to work with other states to create a plan to care for
dual-eligibles.
A May 2011 summary of the state’s initial design concepts for the dual-eligible program offers a threepronged approach for care integration. Those include an accountable care organization with embedded
medical education programs that would target about 2,200 individuals in Tulsa and establishing a statewide benefit plan and network administered through the Oklahoma Health Care Authority for all dualeligibles but especially those with behavioral health needs. The other program targets dual-eligibles
who need nursing care by expanding Oklahoma’s Cherokee Elder Care (PACE) program statewide. The
PACE model combines the services of an adult day health center, primary-care office and rehabilitation facility into a single location. CMS is sharing data about these patients with the states so they can
develop these plans. The state is in negotiations with CMS on the Memorandum of Understanding so
the program can begin.
Table 7-4:
Uninsured
Uninsured:
Percent of Population:
Local
178,027
19%
State
725,770
19%
48,873,523
15%
>>>
National
Source: HealthLeaders-InterStudy, as of July 1, 2012.
Oklahoma has 17 federally qualified health centers, and Tulsa has three that provide primary care to the
uninsured and underinsured, including dental, vision and mental healthcare. However, officials say referring the uninsured to specialists or inpatient care is a daily struggle in the market. Many specialists will
accept only a certain number of uninsured patients per month.
The University of Oklahoma School of Community Medicine opened the OU Wayman Tisdale Specialty
Health Clinic in July 2012. The 44,000-square-foot facility will give uninsured residents of north, west and
east Tulsa access to specialty care, diagnostic testing, outpatient surgery, urgent care and chemotherapy. The
$20 million facility was funded through the state, the George Kaiser Family Foundation and several area
health systems. The clinic will also act as a satellite clinic for the OU Cancer Institute in Oklahoma City.
St. John Health System and a local foundation fund the Medical Access Project to help the medically
underserved access care. The project supports free clinics, a diagnostic imaging center and a network of
specialists for the uninsured. In January 2012, Rockford Medical Access Clinic opened to serve as a medical
home for managing chronic diseases for the uninsured. Saint Francis operates Xavier Medical Clinic with
volunteer physicians and pharmacists for the uninsured.
A clinic for women, Greenwood Healthcare Specialists for Women, opened in a federally designated Health
Professional Shortage Area and Medically Underserved Area in north Tulsa in September 2011 with a
nurse practitioner and a medical assistant.
Oklahoma formed a temporary high-risk pool in September 2010 to serve as a bridge until healthcare
reform is implemented in 2014. Oklahoma Temporary High Risk Pool Program members must be legal
U.S. residents, have pre-existing conditions, and have been uninsured for six months or more. The plan is
administered by Blue Cross and Blue Shield of Oklahoma and has annual medical and prescription drug
deductibles of $2,000 and $200, respectively.
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The Oklahoma High Risk Pool, created by the Oklahoma Legislature in 1995, insures 2,473 people, including 125 children, who pay 150 percent of average premiums nationwide. For coverage, members must prove
that they have a pre-existing medical condition and show that they have been denied coverage by two
licensed carriers. It is also administered by BCBS of Oklahoma.
Insure Oklahoma is the state’s health insurance expansion program for residents with incomes between
185 percent and 200 percent of the federal poverty level. Enrollment is about 30,300 as of February 2013.
Under Insure Oklahoma’s individual plan, people who cannot access benefits through their employers
(including the self-employed or those who may be temporarily unemployed) can buy health insurance
directly through the state. About 20 insurance carriers provide plans through the program, including
Aetna, BCBS of Oklahoma, UnitedHealthcare and CommunityCare.
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Pharmacy
Table: Situation Analysis
O
THIS SECTOR IS: NEUTRAL
Oklahoma’s poor health status is driving prescription drug sales, and Tulsa’s medical home pilot with
Medicare should steer physicians toward the right drug rather than only the least expensive. But SoonerCare, the state Medicaid program, rewards physicians for prescribing generics in its medical home
and requiring prior authorization for most branded drugs, eroding sales of branded drugs. While prescription sales are likely to increase here, expect Medicaid and insurers to steer physicians increasingly
toward generics.
Factors that are favorable to pharmaceutical sales include the following:
»» T
he market’s largest insurer reported increasing spending on per-member, per-month pharmacy costs
for its HMO. Health Care Service Corp.’s Blue Cross and Blue Shield of Oklahoma, doing business as
BlueLincs HMO, saw its pharma spending increase to $47 in 2011 from $45 PMPM in 2010.
»» O
klahoma ranks 43rd in the nation for the health status of its residents, up from 46th in 2011. It has a
high prevalence of smoking, obesity, and diabetes and a shortage of primary-care physicians as well
as a high rate of cardiovascular disease. The state does have a low incidence of binge drinking and
infectious disease (United Health Foundation’s America’s Health Rankings, 2012).
»» M
ore Oklahoma patients take the diabetes drug Avandia than patients in any other state (March 2010
Diabetes Care). The state ranks last in fruit and vegetable consumption (Centers for Disease Control
and Prevention).
»» O
klahoma is one of the top 12 most challenging places to live with asthma (Asthma and Allergy Foundation of America). Ten percent of adult Oklahoma residents report that they have asthma (Centers
for Disease Control and Prevention).
»» T
he American Lung Association ranked Oklahoma as the No. 4 “quit-friendly” state for tobacco users
based on state actions that make it easier for smokers to quit, including tobacco cessation treatments
covered by the state’s Medicaid program. SoonerCare covers all seven FDA-approved drugs to help
smokers quit: nicotine gum, patches, lozenges, inhalers, nasal spray, Chantix and Zyban. (CDC).
»» O
klahoma ranked 4th in the number of residents who reported that a physician told them they had
chronic obstructive pulmonary disease. Eight percent of state residents have COPD. (Centers for Disease Control and Prevention)
»» T
ulsa is a promising area for market expansion in treating chronic obstructive pulmonary disease, dyslipidemia, HIV and psoriasis based on estimates that show relatively high percentages
of untreated patients and residents with prescription drug benefits in 2011 (Decision Resources’
PatientFinder database).
»» A
bout 42.5 million prescriptions were filled in Oklahoma at a total value of $2.7 billion in 2011. About
11.2 prescriptions were filled per capita, versus the national average of 12.1, ranking the state 37th in
the nation on that measure (analysis of data by the Kaiser Family Foundation).
Factors that are unfavorable to pharmaceutical sales include the following:
»» A
ccording to a CVS Caremark study on medication adherence, Oklahoma generally ranks below
average on adherence-related measures. It is slightly above average in mail dispensing rates but ranks
among the bottom ten states in obesity, physician activity and commercial health coverage.
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»» T
hird-largest insurer CommunityCare saw its pharmacy spend decline to $54 PMPM in 2011 from
$69 PMPM in 2010.
» » S oonerCare, the state’s Medicaid program, has held the line on pharmacy costs over the last decade
with increased use of generic drugs. The state’s generic dispensing rate in January 2013 was 87 percent.
Policies such as prior authorization and quantity limits have helped keep down pharmacy costs.
» » S oonerCare’s medical home program rewards physicians with incentive payments for prescribing
generics.
»» B
udget cuts authorized in December 2009 reduced the number of prescriptions for SoonerCare
members from three branded prescriptions to two branded and four generic prescriptions per month.
» » The state has a shortage of primary-care physicians, which could limit prescription volume.
» » I n dealing with the pharmaceutical industry, the American Medical Student Association rates the
University of Oklahoma College of Medicine with a B for its policies, saying most address potential
conflicts of interest. The AMSA says OU’s policy on purchasing and formularies is exemplary. While
the school’s policy does not address sample distribution, it does list sanctions for non-compliance
with the policy. However, the group rates the Oklahoma State University Center for Health Sciences
– College of Osteopathic Medicine with a D, saying its policy does not adequately address small gifts,
on-site meals or the presence of sales representatives at the medical center. Samples are not explicitly
discussed either. Tulsa has both OU and OSU physicians operating within the market.
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Legislation
Gov. Mary Fallin has been promoting a healthier Oklahoma, and opened a new fitness center at the state
capitol in place of the smoking room. Funding was provided by a grant from the Oklahoma Tobacco Settlement Endowment Trust and the Oklahoma Hospital Association. The governor banned tobacco on state
property as of August 2012, and there’s legislation being considered that would allow local municipalities
to do that as well. The 2013-2014 session of the Oklahoma legislature opened on February 4, 2013 and will
adjourn on May 31, 2014.
Table 9-1:
Summary of Recent Legislation
Bill Name and Number
Description
Status and Date
Enforcing ACA (HB 1021)
Would allow the Legislature to pursue any necessary means to prevent the
enforcement of the Affordable Care Act. It provides than an agent, official or
employee of the federal government will be fined $5,000 for attempting to enact or
enforce the act.
Passed House Committee
Would create the Nondiscrimination in Treatment Act, which would prohibit a
healthcare providers from denying certain services to a patient
Passed House Committee/
Passed Senate
Nondiscrimination in Treatment
Act (HB 1403/SB 915)
March 2013
March 2013
Pharmacy benefit managers
(HB 2100)
Would require pharmacy benefit managers to be licensed by the pharmacy board
and meet certain standards to protect plan sponsors and the pharmacies who
have contractual agreements with them
Passed House
Small Employer’s Health Insurance Reform Act (HB 2191)
Would amend the Small Employer’s Health Insurance Reform Act to permit offering Passed House Committee
wellness program to employees, including smoking cessation
March 2013
Smoking bans (SB 501)
Would allow the governing bodies of cities and counties to designate all city or
county buildings and other properties such as parks as nonsmoking.
Passed Senate Committee
Nonresident pharmacies
(SB 522)
Would require nonresident pharmacies to submit certain information in applications for licenses
Passed Senate
High risk pool (SB 698)
Would require the Health Insurance High Risk Pool Board of Directors to comply
with provisions of the ACA and provide to the Insurance Commissioner a written
plan for continued future operation, including possible dissolution of the Health
Insurance Risk Pool
Passed Senate Committee
March 2013
March 2013
February 2013
March 2013
Source: HealthLeaders-InterStudy, 2013.
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Employers
Table: Situation Analysis
O
THIS SECTOR IS: NEUTRAL
Sector Outlook
Employers in this market haven’t embraced switching to consumer-directed health plans as much as in
Oklahoma City, perhaps due to the familiarity with a lower-cost option of the HMO. Meanwhile the desire
to lower healthcare benefit costs is driving adoption of tiered- and narrow-network plans. Some large
employers are implementing wellness programs and onsite clinics, and the employer coalition continues
to push the state to expand Medicaid and fund the city’s safety-net hospital, which is again at a crossroads.
Expect employers here to continue strong advocacy at a state level, and to steer employees into narrow or
tiered network plan designs.
Highlights:
» » Economy:
Oklahoma’s economy is rebounding, thanks to a strong energy industry and gains in manufacturing. Unemployment fell in the state in 2012 from 6.1 percent in January to 5.2 percent in November.
Oklahoma ranked among the top 10 states for its overall growth rate, job gains and expansion of
manufacturing jobs, according to the state’s commerce department.
But in Tulsa, the bankruptcy of large employer American Airlines meant layoffs for 400 workers at a
major maintenance hub and the closing of a Hostess Brands bakery meant 200 more workers lost their
jobs. Oklahoma farmers also suffered a major drought, stunting the year’s cotton crop.
The unemployment rate in Tulsa in November 2012 was 5.1 percent, down from 6.7 percent one year
earlier. The national average was 7.4 percent in November 2012. Tulsa’s economic foundation is in the
aerospace, energy and manufacturing industries.
» » Plan design/premiums:
Premiums for employers in Tulsa have risen about 9 percent on average in the last year, brokers say.
Tiered networks and narrow networks continue to grow in the market, with CommunityCare’s HMO
remaining a mainstay as well. Employers here haven’t embraced consumer-directed health plans here
as much as other areas, but some employers do offer it along with other options as a base plan. Brokers
report some interest among small employers in private exchanges and self-funding.
A study by the Commonwealth Fund found the cost of employer-sponsored family health insurance
rose 64 percent to $14,673 in Tulsa between 2003 and 2011, which was higher than Oklahoma City’s
48 percent increase in the same time frame. The national average increase was 61 percent.
» » On-site clinics/wellness initiatives:
Some employers are initiating wellness programs and health risk assessments in the Tulsa market;
however, onsite clinics still remain mostly a program offered only by large employers. Tulsa-based
QuikTrip, a chain of convenience stores, has been operating a health clinic for its employees through
Tulsa-based Care Around-the-Clock for several years. Care ATC has about 15 self-insured employers
in Tulsa with onsite clinics.
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OU Physicians offers onsite clinics at Tulsa-area businesses, including Williams Cos. and the Union
Public Schools district. In 2009, the city of Tulsa selected BCBS of Oklahoma as its carrier, partly
because of the insurer’s implementation of free, onsite healthcare clinics for employees.
» » State employee program:
In 2013, a change in state law capped state employee benefits at 2012 levels or at the cost of the HealthChoice high option premium, whichever one is higher. Some lawmakers want to change the state
health plan to a high-deductible health plan with a health savings account, similar to Indiana’s state
plan. They believe it will help stabilize costs by giving employees a financial incentive to choose lowercost providers.
New health plans for state workers called Wellness Alternative Plus were added in 2012 from three
HMOs: CommunityCare, GlobalHealth and UnitedHealthcare. These plans are designed exactly like
the other HMOs but with a premium that is $25 less per month if the employee takes a health risk
assessment. After taking the assessments, employees will be put in risk tiers based on chronic diseases
and given a health coach and action plan.
The new plans are part of the reinvented OKHealth Wellness Program, which debuted in October
2011 with a focus on disease and stress management, cardiovascular disease prevention, and physical
activity. State workers can also choose plans from HealthChoice, the state’s self-insured indemnity
plans, in which smokers and other tobacco users pay higher annual deductibles.
» » Insure Oklahoma:
Insure Oklahoma is the state’s health insurance expansion program for residents with incomes
between 185 percent and 200 percent of the federal poverty level. The program has two parts: Under
the Employer-Sponsored Insurance component, the state pays 60 percent of premiums, the employer
pays 25 percent and the employee pays 15 percent. Under the Individual Plan, people who cannot
access benefits through their employers (including the self-employed or those who may be temporarily
unemployed) can buy health insurance directly through the state. About 20 insurance carriers provide
plans through the program, including Aetna, BCBS of Oklahoma, UnitedHealthcare and the HMO
CommunityCare.
Business Coalitions
Tulsa has no business coalition dedicated exclusively to healthcare issues, but it does have a very active
Chamber of Commerce. The Tulsa Metro Chamber partners with BCBS of Oklahoma to offer Chamber
Choice health insurance to small businesses with two to 50 employees. The plans offer a PPO and HMO
and prescription drug coverage and cover more than 4,000 individuals through 700 local businesses.
The Tulsa chamber’s OneVoice agenda for 2013 includes: state Medicaid expansion, adequate funding for
Oklahoma State University Medical Center and the University of Oklahoma Wayman Tisdale Specialty
Clinic in Tulsa, and expansion of OU and OSU medical school class sizes in Tulsa.
The State Chamber of Oklahoma, a coalition of business, military and legislative leaders, is active in
promoting incentives to bring primary-care providers to rural populations, along with pushing other
healthcare initiatives that include evidence-based medicine and electronic medical records. The State
Chamber offers Oklahoma Chamber Blue, a health insurance plan for small businesses in 62 rural counties. Offered by BCBS, Chamber Blue includes three five PPO and HMO plans and with three deductible
options. Offered by BCBS, Chamber Blue includes five PPO and HMO plans with three deductible options.
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Demographics & Statistics
Table 11-1:
Tulsa, OK Demographics & Statistics
July 2012
% Change
Population
946,962
1.0%
# of HMOs
13
July 2012
Managed Care Market
July 2012
Total HMO Enrollment
114,491
HMO Penetration %
12.1%
23.6%
Medicare %
28.1%
27.2%
Medicaid %
0.0%
58.4%
National Avg.
Physician Supply (2012)*
Physicians/100K Population
Number
% of Total
Regional
National
734
40.5%
77.5
64.0
Specialists
1,079
59.5%
113.9
113.8
Total Patient-Care Physicians
1,813
100.0%
191.5
177.8
Primary-Care Physicians
Hospitals**
2012
2012 National Avg.
Number of Hospitals
26
N/A
Acute-Care Beds per 1,000 Pop.
3.3
1.6
57.4%
60.7%
5.7
4.7
Inpatient Occupancy Rate
Average Length of Stay (Days)
Note: HealthLeaders-InterStudy relies on third parties to assemble some of the data above. Variations in these firms’ methods may introduce inconsistencies when comparing their data.
*Office-based physicians only.
**Calculations exclude the following hospital types: federal, state, psychiatric only, rehab only, nursing home, skilled nursing facility care, and long-term acute care.
Sources: HealthLeaders-InterStudy; based on data from Billian’s HealthDATA; SK&A Information Services Inc.
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