Quality care on a budget A new tack: Hopkins' Jerome Gotthainer intends to improve the image of managed care.

April 27, 1996|By Mark Guidera | Mark Guidera,SUN STAFF

If there's one thing Jerome Gotthainer says he doesn't want, it's another managed health care plan interested in profits first and patients last.

The New Jersey native now finds himself in a place -- the helm of Johns Hopkins Health System's new venture into the managed health care business for employers -- to steer Hopkins' new ship in a different direction and, he hopes, shape the direction of managed health care in the region, if not the country.

He's confident that in shaping the new Hopkins venture -- called Employee Health Plans -- he can improve the image of managed care both with large, self-insured companies and the people they employ.

"Managed care needs to lighten up and get back to its basic mission -- providing quality care at an affordable price for people," Mr. Gotthainer said.

"EHP isn't going to be strictly about making money. It's also going to be about discovering a better way to deliver care in the new environment coming down."

The boating lover, who promptly bought a home with a slip on a creek near Annapolis after taking the Hopkins post, is a firm believer that managed care, if set up with strong input from the doctors, nurses and others on the clinical side, is the best bet in today's environment for providing quality care.

"Managed care is the right thing to do," he said. "But it's got to be seamless, cost-effective and, above all, compassionate. Only then is it truly managed care."

Sound altruistic? Perhaps, but to those who know him, it's vintage "Jerry," as he's known to friends and peers.

"Jerry could have had his pick of 100 different jobs with a much better salary, stock options and the like -- at the big HMOs and insurance companies," said Dr. James A. Block, president and chief executive officer of the Johns Hopkins Health System, the nonprofit organization that coordinates health care at Johns Hopkins Hospital, Johns Hopkins Bayview Medical Center and 19 outpatient sites in the Baltimore area.

"I really think Jerry took this job because he has a very fundamental concern for the welfare of his fellow man," Dr. Block said.

"Also, he's very interested in discovery. What works best? What new can we create that others may want to replicate? Discovery is what Hopkins is all about, so this is the right place for him."

While Mr. Gotthainer may be driven to make a lasting contribution to managed health care, for Hopkins, EHP represents a way to protect its market share as HMOs and other managed-care plans direct patients to lower-cost hospitals; Hopkins Health System is locked out of the health maintenance organization business until 2001 by an agreement under which it sold its HMO to Prudential in 1989.

It was Dr. Block who tapped Mr. Gotthainer and his 25 years of experience in the health care field to head up Hopkins' Employee Health Plans as president and chief executive. It was quietly launched in January and has signed up several large area employers, including Baltimore Gas and Electric Co.

The two men had worked together from 1991 to 1992 at QualChoice Health Plan, a large HMO and third-party VTC administrator in Ohio. Dr. Block was chairman of the board of QualChoice at the time and hired Mr. Gotthainer to head the new venture.

Before joining QualChoice, Mr. Gotthainer worked in executive posts of the national accounts section of Empire Blue Cross/Blue Shield in New York, and on the operations side of Blue Cross of North Eastern New York.

At QualChoice, Dr. Block, who came to Hopkins in 1992, said he was particularly impressed with Mr. Gotthainer's deft understanding of many aspects of the managed-care business -- from operations to accounting to clinical concerns.

"Jerry has such a deep understanding of so many sides of the business that he is able to pull different pieces of it together and see how they might work in a new way," he said.

It was just that mental acuity that Dr. Block believed would be necessary for the person heading up EHP. And down the road, those skills could help expand EHP's services into other areas of health care -- namely managed care for Medicaid patients.

For now, though, Mr. Gotthainer's marching orders are to pitch EHP's service to large self-insured companies as a new option to keep costs in check while offering health care under the Hopkins' name to employees.

EHP functions both as a benefits administrator, a role some believe unique for an American hospital, and care provider through a network of nearly 4,000 participating doctors and 10 hospitals.

Until now, self-insured employers could contract for health plan administrative services from insurance companies, like Blue Cross and commercial insurers, or from specialized firms called third-party administrators, or TPAs.

EHP has 14,000 members now -- many of them employees of the Hopkins Health System itself. But Mr. Gotthainer believes the organization will see membership grow to more than 20,000 by next year and see a similar annual growth rate for the next four to five years.

There are two key elements of EHP that Mr. Gotthainer is particularly proud of and believes offers the organization its best shot at success.

First, a policy committee composed of health professionals at Hopkins and area community hospitals will help decide what treatment and care are appropriate.

Second, employers who join EHP will have a clear role in structuring what type of health care plan they believe is best for their employees' needs.

"Instead of tailoring which benefits are available to reduce costs," Mr. Gotthainer said, "we're trying to create a system where economic decisions are tempered by the realities of medical care and what patients really need."

Pub Date: 4/27/96

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