Kevin Kelleher, Director of Research and Economic Services at New Jersey Education Association, the union representing New Jersey’s professional educators.

As a member of the School Employee Health Benefits Design Committee, can you tell us how you tried to make the health care benefits program more effective and efficient?

The charge of the committee is to design benefits. It is a six-member board that has three seats representing employers and three seats representing members.  If you don’t want every vote to be a three-three-tie, you have to work on compromise. The members representing the employers want to see cost containment — and that usually means shifting higher deductibles and higher co-pays to the employee. The union side believes that increasing the cost to access health care is ultimately not good medicine.  We needed to work together to find solutions that both sides could be happy with.

You came up with a different model that you call the direct primary care medical home. How does that model work?

We developed a plan that would take doctors off the hamster wheel of fee-for-service — where they are servicing 2500 to 3000 patients a year, and the average office visit is no more than seven minutes. What we’ve done is to limit the doctor’s patient panel to no more than 1000 patients. Each patient visit lasts a half hour, and you have 24/7 access to call or text the physician. We want to encourage the relationship between the doctor and the patient, and we have same day, or next day, appointments. The out-of-pocket is zero if you use the doctor in your medical home. We are encouraging the use of primary care and you still hold on to all the same benefits.

The model sounds great for employees, but how are you driving down costs?

The aim is that the primary care doctor acts like the quarterback and coordinates all your care. If you need to go to a cardiologist, the primary care doctors can help you find the right one — one that coordinates with the primary care doctor for your follow up care. The aim is to keep healthy people healthy. And we know that 75 cents of every health care dollar goes toward chronic illness. We think if we get people to have a good relationship with their primary care doctor we will drive down the cost of treating chronic illness.

So how has it been working and what have you learned?

The state of New Jersey is not in the health care business and so it contracted with two companies, R-Health and Paladina Health. We are starting slow. We cover 800,000 lives and we don’t have 800 primary care doctors. Right now we have a few thousand members enrolled. In one survey, we found that members are overwhelmingly pleased with their services, including wait times. In the past, for instance, members with seven health issues to talk to their primary care doctor about had time for about three.  Under this model, they can have a true conversation about all their health care issues and see that the doctor is listening and not running off to see the next patient.

We have not done a study on cost savings yet, but we will as we enroll more people.  We believe that time will show that costs will decrease. … Doctors go into medicine because they want to help people. When you are seeing a patient every seven minutes, that’s not satisfying. Doctors want to keep people healthy and when they are sick they want to see them through their illness. And the salaries of doctors in our medical home are comparable to fee-for-service. Our doctors are not paid to keep people out of the hospital or use fewer services. There are some salary escalators for the doctors if the physician meets certain quality benchmarks.

Why did NJEA decide to join the Quality Institute?

We support the mission of the Quality Institute and appreciate being at the table to work on solutions to improve health and reduce costs — in a smart way.  I also am on the Quality Institute’s and Senator Vitale’s health care reform workgroup.