Start-Up Company Backed by Famous Health System Brings Proven Solutions to Marketplace

by HCE Exchange on July 18, 2014

Earl-Steinberg-thumbEarl Steinberg, M.D., MPP, Chief Executive Officer

Dr. Earl Steinberg was hired by Geisinger Health System, one of the most prominent integrated healthcare delivery systems in the United States, after accumulating 30 years of experience in various healthcare organizations.

Steinberg’s diverse background includes 12 years as a medical professor and researcher at Johns Hopkins University, during which time he developed several of the HEDIS measures and CMS quality-care measures for dialysis centers that are still in use today.

He also founded Resolution Health Inc. (RHI), a company that performed sophisticated data analyses to identify actionable opportunities to improve quality and reduce costs and offered a number of high-tech, low-touch interventions to address those opportunities. Prior to being purchased by WellPoint, RHI analyzed data on approximately 30 million lives.

After WellPoint purchased RHI, Steinberg became a senior vice president at WellPoint in charge of quality and clinical strategy, until he was recruited three years ago by Dr. Glenn D. Steele Jr., the world-famous CEO of Geisinger.

Steele had spearheaded numerous innovations during his time with Geisinger and was interested in exporting the system’s accomplishments to other healthcare delivery systems. He hired Steinberg to figure out which Geisinger innovations were exportable and scalable, how to go about exporting them, and ultimately to manage the service and product-delivery effort. .

Building xG Health Solutions from the system out

Steinberg spent about eight months studying Geisinger Health System in order to understand the intricacies of its influence.

After developing a business plan and partnering with JPMorgan Chase to raise $40 million, Steinberg unveiled xG Health Solutions Inc. on Feb. 1, 2013. Although xG Health is primarily owned by the Geisinger Health System Foundation and private equity firm Oak Investment Partners, it is an independent entity from Geisinger itself.

In addition to contributing start-up funds to xG Health, Geisinger also licensed all of its healthcare performance improvement intellectual property that existed as of February 1, 2013, and that it develops until February 1, 2023, to the newly formed organization.

“So, basically, xG Health has received a perpetual license, on an exclusive basis, to everything Geisinger has developed or develops over the next 10 years that, broadly construed, is related to healthcare performance improvement, including care management, data analytics, electronic medical records, and other HIT, contracting, compensation, and leadership,” Steinberg said.

Along with this exclusivity is a non-compete agreement, which means that no part of Geisinger can compete with xG Health outside of Geisinger’s own delivery system.

Since the Geisinger Health Plan had begun doing work with other healthcare delivery systems 18 months prior to xG Health’s rollout, the agreement between Geisinger and xG Health specified that the health plan would subcontract with xG Health to provide population health data analytics and care-management services outside of Pennsylvania.

“We started with 11 customers as a result of the contributions from Geisinger, and we’re now up to 29 customers,” Steinberg said. “And we started with 11 employees and we’re now up to 100.”

Providing healthcare organizations with three services

xG Health Solutions Inc. provides three types of services: advisory services focused on assessing a healthcare provider’s current state and developing a volume-to-value roadmap; care design and delivery; and population health data analytic services.

For advisory services, xG Health assists “a healthcare delivery system in developing a road map or action plan for how to transform themselves and move from the typical fee-for service volume orientation to a value orientation without committing financial suicide,” Steinberg said.

For care design and delivery services, xG Health helps clients redesign primary care and establish advanced patient-centered medical homes; implement evidence-based protocols, which are known as ProvenCare™ modules; and coordinate care across the care continuum. xG also trains or embeds trained case managers in PCMHs to manage complex patients and in hospitals to facilitate transitions of care, provide case-management software, and help integrate workflow redesign into providers’ EMR systems.

For population health, Steinberg said xG Health analyzes insurance-claims data, EMR data, lab results, and patient-reported data, such as health-risk appraisals, to “produce insight into how to manage a population as opposed to managing one patient at a time.”

Finding success with its first engagement

“Our first engagement was with West Virginia United Health System, which is the largest system in West Virginia and an academic medical center,” Steinberg said. “It’s got about eight hospitals, 1300 beds, 900 physicians, and 12,000 employees overall.”

Like most providers of its size, WVUHS was self-insured and interested in beginning its transformation from volume to value by focusing on its self-insured lives. Geisinger Health Plan became WVUHS’ third-party administrator (TPA), conducting claims processing and benefits design, as well as performing population health and data analytics and providing UM and DM services.

“Because we have to allow adequate time for the claims run-out, we have data through 20 months of experience,” Steinberg said. “In the first year, we reduced admissions by 16 percent and readmissions by 16 percent. By 20 months, we had reduced admissions by 26 percent and readmissions by 37 percent. We also reduced ER visits, total cost of care, and we markedly improved quality on a rather typical set of HEDIS-type measures.”

He added, “The point is we got results within a year, the results have improved in the second year, and we haven’t even turned on everything that we can turn on.”

xG Health’s influence has grown rapidly and its solutions are being used at facilities in eastern Maine, Delaware, Washington State, California, Georgia, and even Singapore.

In Steinberg’s opinion, one major factor makes xG Health unique: it is not a company that is trying out new concepts and technology.

“These are techniques, technologies, and protocols that have been refined over 15 years at Geisinger and have been proven to work there,” he said. “We have a playbook in each of the areas that we have been able to extract from Geisinger. We started out with something that had already been shown to be successful and what we’ve done is basically adapt them and package them in ways that can be implemented elsewhere.”

-by Pete Fernbaugh

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