It was 1988 and that's what it said on the sweatshirts he designed as motivation for the staff of Foundation Health Plan; "CHAMPS'R'US." Foundation Health was the winning (only) bidder for a new, massive government health care contract. The designer was a recently retired Air Force Lieutenant Colonel line officer who was working in our newly established corporate marketing department. He was part of a massive roll out of a Department of Defense demonstration project called the "CHAMPUS Reform Initiative" or "CRI." It was a test of a triple-option health care health plan that was designed to supplement the military health care system with providers who would deliver health care to nearly a million eligible members throughout the western US.
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A commemorative contract award
plaque and the world's largest name tag. |
In 1987, I had recently retired from the Air Force and was rotating among Foundation Health Plan departments to learn the HMO ropes when we won the contract. Foundation was one of the first federally recognized companies under the HMO Act of 1973. It was something new and interesting to me and I was happy to be learning under the tutelage of one of its founders, Dr. James J. Schubert and his expert staff.
Then, I was fortunate named COO for the Northwest portion of the contract, serving almost 400,000 beneficiaries and their MTFs...mainly because of my military health care background and certainly not because of my managed care knowledge. The southern part of California was to be operated by a subcontractor to Foundation.
We were given just six months to hire and train the staff needed to perform the contract requirements and a lot of new folks were pretty burnt out. The Colonel thought up the "Champs R US" expression in a spin off of the famous "ToysRUs" company name and had it printed on sweatshirts for all the staff. It was a small bright spot in an otherwise difficult time. All in all though, we were extremely lucky and hired some terrific people.
I do recall one dark moment in our hiring process. We had been at it for a few weeks and we needed nurses for our advice lines, utilization management and satellite offices near MTFs. We had an open interview one Saturday morning and when I walked through our lobby I saw a bunch of them waiting to be interviewed. My first reaction was a sense of disappointment that our healthcare system would attract nurses away from patient bedsides. It was my old hospital hat kicking in I guess but I couldn't help but wonder why we, as in all of us, couldn't do a better job of retaining them in direct care.
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Plaque reverse side -
Copy of the actual contract award |
As you might suspect, just getting to the implementation of CRI involved hundreds if not thousands of chance occurrences. There had to be an Assistant Secretary of Defense for Health Affairs (William Mayer, M.D.), supported by Colonel Fred Vago and Lt Col Dave Fant, both Air Force MSCs and a host of others who had the vision and support staff needed to design a workable request for contract proposals. There had to be an HMO Chairman of the Board, another MD (James J. Schubert) who also had the vision and support staff to see the possibilities. Doctor Schubert had done his Orthopedic residency at Walter Reed and felt closely tied to the Military Health System.
Finally, there had to be what was called a "risk management corridor" to spread the rewards if it worked and limit the losses if it didn't. There was so much money and so many lives involved that failure meant many jobs and an entire company would likely be lost. More importantly, a program to improve military family access to quality health care at a reasonable price would be lost. Before the risk corridor (which I believe was thought of by the Foundation actuary) there were several HMOs nationwide who had interest and all but one had dropped out over concern for ambiguities in the program including enrollment projections, sharing resources with the military and most important to them...the potential for significant financial losses.
The contract technical proposals themselves were 12 volumes of individual 3 inch binders, all with matching binders of attachments covering such major topics as contract management, provider relations, utilization management, implementation, claims, resource sharing, finance and on and on. Somewhere between 6-9 sets were to be submitted as I vaguely recall and of course, there had to be at least an equal number of sets retained for internal use. Just the actuarial work on available data needed for substantive estimates on factors including enrollment and utilization alone could easily run a couple of million dollars. There were, again, hundreds if not thousands of moving parts to the project and it is very likely none of the parties knew them all.
For example; just imagine putting together a full service provider network using newly trained hires to convince docs and hospitals to sign up to deliver health care at a price significantly lower than they were used to...for a million people give or take. Then build a claims system that would adequately handle the results. Well, the first worked pretty fair but the second; claims, was a disaster. The fact is, an entire lengthy book could be written on the failure of the "Eagle" claims system alone. But those are stories for another time and someone much more knowledgeable than I. Blend in some utilization management (a review and denial system) that the docs hated and throw in some rigid quality assurance for good measure. While you are at it, convince and reassure MTF commanders and military families they were being well taken care of..."those moving parts" right?!
The up front hiring was set at a frantic pace and there were government monitors everywhere. DOD had a full-time rep (the Major Don Palen, another AF MSC) on site to watch for things that were broken. There were frequent visits and meetings held at various headquarters and health care facilities throughout the Western US and Hawaii. In the end, CRI opened its doors for business, suffered setbacks but eventually worked out. It was blessed by an external, independent review from Rand Corporation and over time was expanded, became known as Tricare. Tricare has continued for more than thirty years and is presently serving over nine and a half million beneficiaries world-wide.
Note: There are probably a bunch of mistakes in this account and they are all mine. Memory doesn't always serve you know?!
