U.P. Health Plan turns 15

MARQUETTE – Concerning the future of the Upper Peninsula Health Plan, the prognosis is good.

The Marquette-based company celebrated its 15th anniversary in August and the National Committee for Quality Assurance – a not-for-profit organization whose rankings are the industry standard for measuring health care quality – has ranked the plan 18th in the nation among Medicaid managed-care organizations and 6th in Michigan.

“Obviously we work very hard for those numbers, but we couldn’t do it without the physicians’ help,” said Dennis Smith, president and CEO of the U.P. Health Plan. “We never would have been successful, we never would have gotten this far, had the physician community not really … bought into everything and served on our committees or really kind of helped us, given us ideas of better ways to do things.”

As a Medicaid managed-care organization, the UPHP acts much as a private insurance company does. When you go see your doctor, for example, the UPHP is billed for the health services he or she provides. You might have a copay or coinsurance due, but most of the expense is covered by your health plan. With a Medicaid MCO, the state of Michigan – via the federal government – contracts companies like the UPHP to pay your doctor with Medicaid funds, giving them a fixed fee – called “capitation” – for their members each year.

The Upper Peninsula Health Plan began as the second phase of an idea from U.P. hospital CEOs. Three years earlier, in 1995, the executives had formed the Upper Peninsula Health Care Network corporation in order to coordinate health care delivery, share services and promote collaboration with providers across the U.P.

“They wanted to put Medicaid into managed care because they were relatively sure they could increase the quality of care, reduce the overall cost, reduce a lot of the duplicate costs and eliminate waste, but yet the population would … be healthier,” Smith said.

The UPHCN – for which Smith serves as executive director – wanted to bid on the Medicaid services, Smith said, but because they were unable to do so, they “created a series of companies to be the management companies, then UPHP was formed really to bid on the managed care Medicaid contract in 1998.”

When it started in 1998, the Upper Peninsula Health Plan had only a handful of employees, managed the health care of 1,900 Yoopers and partnered with 300 hospitals, clinics and medical providers across the U.P. Today the provider network has grown to include more than 900 hospitals, offices and individuals offering services to more than 30,000 members. Their staff now number 86.

“I think like everybody else, it was just good planning and dumb luck,” Smith said of the company’s success. Originally working together with Wisconsin-based Mutual of Wausau Insurance Corp. as a for-profit entity, Smith said when the relationship with Wausau changed, the UPHP created its own claims system and “started hiring people that basically were part of UPHP.” The plan became a not-for-profit company in 2003 and remained so until 2012, when Marquette General Hospital – who owns more than 50 percent of the company – was bought by Duke LifePoint. Smith said, “The acquisition of Marquette General Hospital – who’s a stockholder – by (Duke) LifePoint moved us from a nonprofit to (a Limited Liability Co).”

The implementation of the Affordable Care Act – known as “Obamacare” – will be another positive for the company moving forward. The ACA won’t at all affect the way UPHP provides its services, Smith said, and in fact will add 12,000 to 16,000 more members to the UPHP – a 37 to 50 percent increase.

The “Healthy Michigan” plan Gov. Snyder signed into law Sept. 16 uses federal funding from the ACA and is designed to reform Medicaid and expand eligibility to nearly half a million Michigan residents.

“Since we’re strictly in government programs, as opposed to anything commercial, it should have a really positive effect … on us as a company,” Smith said. “It will create some more jobs, and this whole population that’s … had to go to the ER for its health care, that’ll be eliminated because the focus for that particular population will be on preventative health.”

Smith said the effect of taking on so many more members is having to hire more staff to accommodate them.

“We’re probably going to be looking over the next two years to add anywhere from 15 to 20 more employees to help serve this population,” he said.

As they expand, the UPHP might also soon be looking for a new headquarters.

“We’ve outgrown this building and now we’re in the city hall next door – the old city hall – and we’re kind of pushing this building as far as growth,” Smith said.

Zach Jay can be reached at 906-486-4401.