What's A Ton Of Prevention Worth?

Allina Health is trying to heal the sick--by healing society

Gordon M. Sprenger does not come off as a radical. Pin-striped, affable, and soft-spoken, the 59-year-old head of Allina Health Systems exudes the casual air of a family doctor and speaks in the lofty tones of a college professor. His view of society is rooted squarely in the strong community ethic of the small Minnesota farm town where he grew up.

But Sprenger is, in fact, a man at the edge of his turbulent profession, an executive with an audacious vision of what his hospital and managed-care company must accomplish in order to survive. Medical treatment alone, he argues, does not constitute effective health care. Rather, health systems increasingly must explore medical solutions through social work and public advocacy.

That's why Minneapolis-based Allina this year has set up a free clinic for poor kids at an elementary school near one of its hospitals, the first of its kind in the nation. Allina doctors have begun working with local police to counsel former gang members and remove their identifying tattoos. Company executives are lobbying state legislators for antitobacco and gun-control initiatives.

This is health care? "I'm not trying to boil the ocean," says Sprenger, who is using his perch as president of the American Hospital Assn. to trumpet the approach. "But hospitals must team with communities to address violence, problems of our youth, unemployment, and housing with the same vigor we attack illness." Keep kids out of gangs and they'll stay out of the emergency room, too. Make cigarettes less accessible, and Allina might reduce its $36 million annual tab from smoking-related illnesses. Ultimately, "every social problem becomes an expensive medical problem."

PIE IN THE SKY? The notion of preventive care, of course, has become accepted industry wisdom. Hospitals across the U.S. offer AIDS education and maternity wellness programs, and health maintenance organizations have effectively reduced costs by targeting asthmatics and diabetics for care before they need doctors. But hospitals and other health organizations still largely ignore the social phenomena that affect health outside their walls. Allina, a not-for-profit group formed in 1994 from 19 hospitals and an HMO that serves nearly half of Minnesota's 4 million residents, is the first to seriously research and address public-health trends. It realizes "that the cost of health care extends across the whole community," says Peter Konigsberg, a health-care consultant at Coopers & Lybrand.

This is pretty much pie-in-the-sky stuff: Allina will spend $8 million this year on community health programs without any real promise of a payoff. Indeed, says analyst Kenneth Abramowitz at brokerage Sanford C. Bernstein, these are the sorts of schemes that government should be funding. "I can see how the strategy may be useful, but I can't see how hospitals can make money at it," he says.

The way Sprenger sees it, though, aggressive community health is the only way to stay in business. As insurers press health providers to accept lower rates and as medical inflation persists, hospitals are slashing staff and facilities to the bone. Last year, not-for-profit Allina produced a $30 million surplus on $2 billion in revenue--but Sprenger worries that such margins can't last. "In a few years," he says, "there's just not going to be enough money" for those who need critical care.

INTERVENTION. Cut out preventable costs, he reasons, and enough will be left to assure quality care--and lower insurance premiums. So Allina pays paramedics to lead helmet-awareness seminars in local parks to reduce roller-blading injuries. It sponsors a network of vans to transport the elderly to doctors' offices, preventing the no-shows that eat into physicians' revenue. Allina approached a Minneapolis police department task force to help reduce gang-related violence. It now is treating 27 ex-gang members to remove old tattoos, which otherwise mark them as targets for violence.

At Anderson Schools, four Allina-paid nurses treat 400 mostly poor students for everything from asthma to malnutrition. Allina hopes it can intervene with parents and stanch a "culture of poverty" that requires nearly $100 million in free hospital services to uninsured patients each year. "Hopefully, this will reduce unnecessary ER visits and hospitalization," says pediatric nurse Cynthia Brady. "But at the very least, I can see students, examine them, and send them back to class."

Allina also is venturing into data analysis to produce "community health assessments." It is combining patient records with reports from police, schools, and state agencies to get at the causes of illness and deaths. If it sees a high absenteeism rate due to a flu, for example, Allina can give vaccinations--or contact the school board to fix a drafty building. Similarly, it hopes to rely on paramedics to receive data on instances of spousal abuse, or on accidents from roads that could be repaired.

The state's business community is showing tentative support for Sprenger's early moves. Nearly a dozen employers have signed multiyear contracts with Allina's HMO, and overall enrollment is up 17% in two years. But others are wary of Allina's vocal support, regarded as anti-business, for a tobacco tax and restrictions on cigarette vendingmachine access. And even some of Sprenger's allies aren't yet convinced how effective Allina can be as a social agent. "It's a question of how far you go with this," says board member William W. George, CEO of medical device maker Medtronic Inc. George generally supports Allina but has misgivings about whether Sprenger's idealism will yield results: "I like visions for problems that are possible to correct."

Not confronting such issues may be far more expensive. Sprenger "is trying to convince us that we pay for these social problems now or we pay for them later in the form of higher premiums," says Duane Benson, executive director of the Minnesota Business Partnership, an employer group. Sprenger himself is encouraged. "Soon, we'll be able to confront the skeptics with real hard numbers that prove this is working." The skeptics are waiting with interest.

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