October 25, 2014

Health Care Trends

Capital Gains

Tallahassee-based Capital Health Plan is a rare bird in the health world: An HMO that has both held down costs and kept its customers happy.

Lilly Rockwell | 9/11/2012

The secret sauce

When Hogan started at Capital Health, consultants told him it wouldn’t work, he says. The enrollment pool was too small and it would take two to three years to become profitable, they said. Hogan, who previously worked as an associate director of two health system agencies in Georgia, felt he knew the community well enough to make Capital Health succeed. It was profitable within five months and had 8,000 new members in its first year.

Last year, Capital Health had $640 million in total revenue, making it the eighth-largest managed care organization in the state. That same year, the plan earned $52.6 million in net income, $30 million higher than the state average for managed care groups, which includes HMOs and PPOs. Capital Health has posted a net income for 23 of its 30 years in operation.

To control costs, Hogan and Van Vessem say Capital Health aggressively uses its primary care physicians as gatekeepers to try to keep its customers out of the hospital and avoid the unnecessary tests and expensive treatments that drive up costs. “When you’re in an emergency room as a patient, you are typically going to see someone that does not know you, may not have access to your record and is in a pressure environment,” Hogan says.

Van Vessem says the company’s physicians regularly test cholesterol of at-risk patients such as diabetics, for example, so that physicians can guard against potential strokes and heart attacks — common killers of diabetics. Capital Health can even set up its electronic records to remind physicians about specific tests or questions to ask certain patients. “We try to detect and fix problems before they become a real emergency,” Van Vessem says.

In addition to holding down costs, the focus on preventive care has translated to high levels of customer satisfaction and few complaints. According to data from the state’s Department of Financial Services, which regulates insurers, Capital Health has had 24 customer complaints since 2009, far below the average of 143 complaints for managed care companies with similar enrollment size.

Mary Pankowski, 71, first became a Capital Health member when she worked for Florida State University in the 1980s. Pankowski, now an assistant state attorney, praises the plan’s customer service and affordability. When her husband last year had a quintuple bypass, neck and foot surgery, Pankowski says, “not for one moment did I worry that the best care wouldn’t be provided.” The cost was “a relatively small amount given the value we get,” she says.

Insurer 2006 2011
Aetna Health $61.6 $91.3
United Healthcare of Florida $59.4 $73.8
Capital Health Plan $31.2 $52.6
WellCare of Florida $12.1 $37.0
Universal Health Care -$13.8 $9.0
Coventry Health Care of Florida NA $8.9
Cigna Healthcare of Florida -$2.5 $0.5
Avg. for Florida HMOs $16.7 $21.9
Source: State of Florida Office of Insurance Regulation


Tags: Healthcare, Insurance

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