July 22, 2012; Source: Oregonian

With national health care reform underway, the wonky term “coordinated care organization” (CCO) is a phrase that the average American might now recognize. The term may be relatively new, but the concept of coordinated care isn’t; there are exemplary, longstanding nonprofit examples of what a CCO can, at its best, deliver. The experience of the award-winning Southcentral Foundation, a nonprofit health care system serving Alaska Native and American Indian people, is being used as a blueprint for the State of Oregon’s new system of coordinated health care. The lessons of its experience have implications not only for health care policy, but also for nonprofit innovation in general.

Based in Anchorage, Southcentral was established in 1982 by Cook Inlet Region, Inc., a tribal corporation owned and operated by Alaska Natives. The system serves 60,000 Native people in Anchorage, the neighboring Matanuska-Susitna Valley and sixty rural villages. The gamut of services includes primary and emergency care, surgery, dentistry, behavioral health, acupuncture, traditional healing and more. The driving goal, according to Dr. Douglas Eby, Southcentral’s vice president of medical services, is to improve its target population’s general health.

Key system elements include:

  • Clarity about what drives impact: According to Dr. Eby, “measured care,” or specific health care services provided, makes up only 10-20 percent of that which impacts health. So Southcentral doesn’t focus on maximizing its “measured care.” Rather, the focus is on building relationships with patients—or, as they’re called, “customer-owners”—so that they can make informed decisions about all that determines their health.
  • Deep ties to local communities and cultures: Southcentral’s facilities, staff and services mirror the diverse Alaska Native cultures of its patients.
  • Compensation tied to incentives and outcomes: Most patients can be seen the same day they call because they’re each connected with a provider team that has shared knowledge and relationships. Service providers are compensated based on the health outcomes of their patient group.
  • Maximum use of budget to support operations without debt: Because of the special status of tribal governments and Native land claims, Southcentral has the enviable position of having received is primary care facility free and clear from the Indian Health Service. It also co-owns the adjacent hospital facility free and clear. This freedom from mortgage debt makes for more flexible, patient-centered budgets.

Does the model work in terms of improving health outcomes and reducing costs? Over the past decade, the population served has become demonstrably healthier. The once-notorious rates of binge drinking, strokes, heart disease, and cancer among Anchorage-area Natives have declined so that they’re now in line with the national average. Among Southcentral patients, the rates of emergency room visits, specialty care, and routine doctor visits have also significantly declined so that even while the number of patients has increased by seven percent annually, the operating budget has increased by only two percent a year.

For all of this, Southcentral won a 2011 Malcolm Baldrige National Quality Award, the highest presidential honor for performance excellence by any type of organization. Although nonprofits have only been eligible recipients since 2007 for what was originally a private sector honor, it’s interesting to note that all four 2011 recipients were nonprofit organizations. Why are we not surprised?! –Kathi Jaworski