CHPS currently provides self-insured employers with claims processing and medical management services, as well as a network of over 500 contracted facilities and professionals throughout the region. CHPS serves over 3,000 enrollees, and plans to joint venture with a licensed carrier to offer fully-insured coverage to small employers and individuals. CHPS also allocates a portion of its income to subsidize wellness care for the high risk uninsured. This helps to keep their conditions from becoming expensive medical emergencies, whose costs hospitals must pass on to other patients in the form of higher charges.
These services help CHPS accomplish its mission in several ways. First, they redirect back into the local economy dollars that would otherwise leave to pay for management expenses and dividends of for-profit companies, and to pay for medical and administrative services that could be provided locally. Second, by effectively managing care, CHPS not only improves people’s health, but also reduces costs. In turn, lower costs expand access by making services and coverage more affordable, and by freeing up resources to subsidize wellness care for the uninsured. Third, as higher incomes correlate with healthier lifestyles, a strong health care system and a healthy population help attract businesses to Siskiyou County, further fueling this positive cycle.
Over the last several years, so-called “managed care” has suffered from overwhelmingly negative public relations, some deserved, some not. Nevertheless, CHPS believes that many of the principles of managed care can greatly enhance the health and quality of life of local residents. These principles include, for example: improved access through lower out-of-pocket costs and expanded benefits; an emphasis on prevention and wellness; coordination of care across the delivery system continuum; use of treatment protocols based on solid clinical research; flexibility in responding to unique clinical situations; and measurement of and accountability for health outcomes.
Although it is a nonprofit corporation with a community-wide mission, CHPS has always recognized that it operates in a highly competitive industry, and that it must earn customer loyalty by providing excellent service at a competitive price, not just by relying on the “feel good” value of being a locally-based nonprofit. Therefore, unlike many “traditional” nonprofit companies, CHPS operates with a very pragmatic, entrepreneurial, customer-focused culture.
During the 1980s, as a result of many factors, the timber industry on which Siskiyou County’s economy had depended for decades began to decline rapidly. With unemployment around 20%, many County residents are uninsured or underinsured, or pay an excessively high portion of their income for health coverage. By 1991, a number of community leaders saw the need to assess the impact of this economic depression on the community’s health. Thus, they convened a grassroots partnership (today called Siskiyou Health Partnership), consisting of about 40 volunteer representatives from schools, consumer groups, businesses, senior citizen groups, local government, public health, and various types of health care professionals.
In 1991-92 this partnership conducted numerous interviews, surveyed hundreds of households, and accumulated a vast amount of data from many other sources. They then convened an all-day public forum that drew over 100 attendees. In 1993, Siskiyou Health Partnership began a thorough analysis of the outcomes of this comprehensive community needs assessment. Among other findings, they recommended developing a locally based health plan that recognizes the need for collaboration among the many diverse segments of the community that impact people’s health.
The Partnership formed a health plan task force, which recruited a part-time executive director. The executive director focused her initial efforts on raising seed capital from a number of local residents and organizations, including local physicians and the county’s two private, nonprofit hospitals. In August, 1994, after extensive deliberations regarding legal form, governance, philosophy and other issues, the task force named an interim board of directors and incorporated CHPS. The majority of CHPS’ board consists of laypersons who are not otherwise involved in health care.
CHPS began its development by negotiating contracts with the two local hospitals, and with the majority of local physicians. As a result of intense marketing efforts, by the end of 1995 CHPS had convinced its first employer client to begin using the CHPS network in its self insured benefit plan. During 1996, CHPS twice changed executive directors, as first one and then another moved on to new positions. This turnover delayed progress toward CHPS’ long-term objectives. Thus, the board decided to retain a management services company to provide more leadership stability.
CHPS focused its 1997-98 efforts on raising capital from both local sources and charitable foundations in order to resume pursuit of its strategic objectives. Also during this period, the people of Siskiyou County donated almost three million dollars, and raised over two million dollars in grant funding, to replace the older of the two local hospitals with a brand new facility. After an extraordinarily successful capital development effort, during 1999 CHPS expanded its small network to include over 500 physicians and 10 hospitals throughout the region. In 2000, CHPS began providing claims administration and medical management services, as well as coverage outside the Siskiyou region through key strategic alliances. As a result of these accomplishments, CHPS’ revenue has grown dramatically since the beginning of 1999.
Also at this time, CHPS’ board decided to convert CHPS into a “membership” corporation, and to create a charitable 501(c)(3) as its sole corporate member. This would ensure that CHPS’ efforts always remain focused on community benefit. Thus, as CHPS’ sole corporate member, Klamath Health Services Inc. now elects CHPS’ board of directors. KHSI’s self-perpetuating board consists of twelve Siskiyou County residents, the majority of whom are laypersons not otherwise involved in health care. In addition to providing support services to CHPS for a monthly fee, KHSI also provides support services to other health initiatives, including the newly-reactivated Siskiyou Health Partnership. The Partnership began to reconvene in 1999 to conduct a new community assessment like the one in the early 1990s that resulted in the formation of CHPS. Thus, the original effort has now come full circle and become self-perpetuating.
As the U.S. health care system continues to evolve indefinitely into the future, CHPS and KHSI have become permanent fixtures in Siskiyou County, and continue to forge relentlessly ahead with their long-term plans. Many rural communities have contemplated developing “community-based health plans”. However, only a few have created plans that have survived the rigors of creation, development and operation to the point of actually serving patients. Nevertheless, through the commitment of the people of Siskiyou County, CHPS has actually become financially self-sustaining at its current scope of operations, and continues to grow as a model for rural health.