The South Central Kansas Medical Center Board of Trustees voted 7-0 on Oct. 19 to move forward with a plan that could revolutionize the way people in Cowley County access medical care.

SCKMC and RHS
Photo by Jeni McGee

South Central Kansas Medical Center CEO Virgil Watson explains SCKMC’s plans to increase revenues and reduce costs, including enrolling in the RHS system, to Vice Mayor Karen Welch, Mayor Dan Jurkovich and Commissioner Duane Oestmann during a study session Oct. 13 at City Hall.

This plan involves partnering with Revere Healthcare Solutions, Inc. (RHS), a company that provides direct, employee-based primary and preventative health care.

This care occurs outside of traditional health care models, which bill insurance companies for each doctor visit and also generally charge patients copay amounts of $25 or more.

But under the RHS program, there is no copay for unlimited access to a designated clinic — which is not dependent on insurance agencies for payment, but rather a small monthly fee charged to employers who enroll in the program.

The owner and founder of RHS, Carmine DiPalo, shared the business model during the City Commission’s Oct. 13 study session and the Oct. 19 SKCMC board meeting.

“(There are) still some finer points that we have to work out,” said SCKMC Chief Executive Officer Virgil Watson.

Alley a proponent

Kansas Sen. Larry Alley, R-Winfield was present among the crowd gathered for the meeting.

Alley was one of the driving forces behind the implementation of the program, which currently is in place in Garden City.

“He said the very first year they implemented the plan, it saved the City of Garden City $300,000 — approximately $1,000 per employee,” Alley said of Matt Allen, Garden City’s city manager.

As a result, Garden City’s health insurance premiums have not risen in the last three years — as contrasted with the City of Arkansas City’s premiums, which have gone up nearly 10 percent in both 2017 and 2018.

“The control of the destiny of this hospital rests with you, with the residents of this community,” Alley said.

“It will be a boon to the hospital — but better than that is what it will do for the residents of this community. It will give them health care.”

By changing the model used for primary care, there is the potential for profitability at the hospital level of more than $1 million, according to an estimate from DePalo.

“If we change the discussion of health care from the dollars to (what’s best for) the patient … that would be a great thing. And that’s what we’re doing here today,” Alley said.

Origins of Revere Healthcare

DiPalo is a 1998 graduate of the Massachusetts Institute of Technology who has a background in finance.

His holding company acquired the business model that spurred the creation of RHS after the original model failed, 20 years after its inception.

The concept was the brainchild of a nurse who was unable to make the concept work because of her lack of business knowledge, he said.

However, DiPalo was able to fix the elements of the model that weren’t working.

He later reached out to Alley, who introduced the program to Watson.

RHS program specifics

The program promotes overall general wellness for those who choose to participate.

Preventative care soon becomes the norm, which results in less long-term, preventable diseases, which in turn equates to lower health care costs.

The program encompasses three aspects — a mandatory yearly checkup, dietary counseling and basic physical fitness training.

In Garden City, the only Kansas site making use of the program thus far, employers have seen a stabilization in insurance rates.

Health insurance premiums have been climbing dramatically in the last three to five years, to the tune of 10 to 15 percent annually.

High-volume primary care visits disappear from insurance usage under the RHS model, though, because the clinic gives everyone enrolled in the program free, unlimited access to its services.

This creates an environment in which people use their health insurance only for hospital care or things that are treated on a more specialized level, rather than for basic primary health care.

“I should think that a healthier population is more profitable for a health care insurance company than a less healthy population,” DiPalo said.

Implementing RHS locally

Watson initially planned to start the program with just SCKMC employees. It will be located at either the hospital’s specialty clinic or Winfield Medical Arts.

But now he also is looking for a few large employers to serve as anchor businesses for the program. Eventually, it also would become available to small companies and even individuals.

There will be two presentations for large employers this week and another in November.

“Wellness is the way we need to go for ourselves,” Watson said. “We’re not in the business of prevention at this time.”

The hospital’s agreement with RHS will total $4,000 per month.

“It costs us approximately $35 per employee,” Watson said.

But the implementation of the program takes approximately one year to make an impact

And while the program may begin with just a few large employers, it will be available to everyone in the future.

“It has no limitation on how big or small that employer can be,” Watson said, “from the mom-and-pop stores that have no care, no coverage … to the big employers who have 700 employees.”

Board members Dr. Nick Rogers and Karen Zeller did not attend the meeting. City Manager Nick Hernandez also was absent.

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