Jacksonville - One Stop Shop

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2013 MARKET OVERVIEW
Jacksonville
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Published: December 2013
HealthLeaders-InterStudy, A Decision Resources Group Company
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www.hl-isygateway.com
JACKSONVILLE MARKET OVERVIEW
Jacksonville
Counties Covered:
Baker, Clay, Duval, Nassau, and St. Johns
Key Cities Covered:
Jacksonville and St. Augustine
Population:
1,377,850
Contents
3 Updates: Key Market Events
4 Executive Summary
5 Jacksonville Market
9 Health Systems & Hospitals
23Physicians
HealthLeaders-InterStudy Staff
Jacksonville Analyst
Mark Cherry
[email protected]
30 Health Plans
37Medicaid/Medicare/Uninsured
40Pharmacy
41Legislation
43Employers
Market Analyst
Mark Cherry
Sales Vice President
Paul Holloway
Market Access Insight Products Vice President
Carolyn McMeekin
Key Account Directors
Matt Hanvey, Jolayne Perry,
Bob Fucile
Market Access Insight Products Director
Renée Burnham
Assistant Directors
Josh Kelley, Dave Raiford
Manager
Holly Fults
Content/Editorial Advisers
Taylor Holliday, Carly Stewart, Keith Wagner
Customer Experience Vice President
Carol Barry
CORPORATE OFFICE
One Vantage Way, B-300
Nashville, TN 37228
Toll free: 1-855-380-4850
www.hl-isy.com
Design and Production
Stephen Benton
Except where otherwise indicated, information in this product is from analysis of HealthLeaders-InterStudy data, interviews with local experts, news sites, and industry reports.
Published December 2013. Copyright © 2013 HealthLeaders-InterStudy, A Decision Resources Group Company. All Rights Reserved. Reproduction, distribution, display, transmission, or creation of derivative works, of this report in any
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2013 Market Overview
› CITY: JACKSONVILLE
Copyright © 2013 | HealthLeaders-InterStudy, A Decision Resources Group Company
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Updated
Updates: Key Market Events
December 2013 - HealthLeaders-InterStudy publishes annual Market Overview
for Jacksonville
The annual report provides data and analysis of several sectors of the Jacksonville healthcare market,
including hospitals and health systems, physicians, health plans, Medicaid, Medicare, the uninsured,
pharmacy, legislation, and employers.
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Executive Summary
Market Outlook
Jacksonville is one of the more traditional healthcare markets in Florida, with hospitals generally reticent
to take on risk. Competition between health systems remains driven by large construction projects and
physician employment, designed to increase clout in negotiations with health plans rather than fundamentally altering reimbursement models. But local health systems are working toward clinical integration
with physicians, and health plans have introduced narrow network plans on the insurance exchange, both
factors that will encourage increased care coordination for patients. As the more populous Duval and Clay
counties become saturated with competing healthcare facilities, expect Jacksonville health systems to focus
on demonstrating their quality and cost effectiveness to insurers as well as employers.
Highlights:
»» C
lay County is the local battleground for patient volume, with three of the market’s four health systems
building major new facilities in the growing suburban county. For more than four decades, the only
major hospital presence in Clay was HCA’s Orange Park Medical Center, but 2013 saw the opening of St.
Vincent’s newest hospital and a freestanding ER by Baptist Health, which can be developed into a fullservice hospital. HCA plans to open another hospital in Clay County in 2016 and has made improvements at OPMC, most notably a controversial and now-closed trauma center. Hospitals in Jacksonville
proper have also seen major capital projects, with Baptist Health opening a $200 million patient tower
and Mayo Clinic Florida working on a $92 million expansion.
»» T
here are only two health plans on the local health insurance exchange for individuals in Duval County:
Florida Blue and Aetna. Both are offering narrow network options alongside broader access products.
The narrow network product by Florida Blue is branded BlueSelect, while the more-limited network
offering from Aetna uses the recently acquired Coventry brand. Both narrow networks steer members
to St. Vincent’s HealthCare for acute-care services, and the Coventry plan is the lowest-cost product
on the local exchange. As is the case in several Florida markets, the runner-up health system by market
share is working with insurers to be on their narrow network health insurance exchange products for
individuals.
»» B
aptist Health has announced plans to collaborate with Flagler Hospital (the last major independent
hospital in the market) and Southeast Georgia Health System, potentially forming a geographically
contiguous health network that is just short of a financially merged entity. Jacksonville is culturally
separate from the rest of Florida, and any regional consolidation will likely occur with systems in north
Florida and southeast Georgia. UF Health, for example, is affiliated with the University of Florida and
UF Shands hospitals in Gainesville.
»» F
lagler Hospital has formed a clinically integrated physician hospital organization, First Coast Health
Alliance. The organization will work with independent physicians to improve cost efficiency, set protocols, and other goals. The PHO is designed to be the backbone of an accountable care organization, and
considering Flagler’s discussions with Baptist Health, the model could be built up to encompass much
of the local medical community.
» » S hands Jacksonville changed its name to UF Health to reflect its status as an academic medical center
rather than its position as safety net hospital. Actions by the State of Florida in 2013 have been particularly unkind to UF Health; the state rescinded its approval for the health system to build a new hospital
on the city’s north side, and the legislature rejected Medicaid eligibility expansion. These decisions
ensure that UF Health will continue to have a heavy uninsured burden.
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Jacksonville Market
Analysis For Jacksonville Healthcare Market
Market Indicators
Table 3-2:
Market Stage: Consolidated*
Market
» Moderate consolidation/integration of physician groups
» High consolidation/integration of health systems/hospitals
» Moderate use of disease management, utilization management
» Health plans have implemented a number of cost/quality controls for physicians/hospitals
» PPO benefit option prevails
*For definitions of other market stages, see the Market Overview Product Manual.
Source: HealthLeaders-InterStudy, 2013.
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Table 3-4:
Situation Analysis by Segment
+
Health Systems and
Hospitals
Positive for health systems and hospitals. Look for increased patient volumes and improved profitability.
+
+
Physicians
Positive for physicians. Look for improved profitability for this segment.
Health Plans
Positive for health plans. Look for growth in health plan enrollments and/or increased profitability.
+
Pharmacy
Positive for pharmaceutical sales. Expect increasing PMPM costs for health plans and/or overall
increase in the use of branded drugs.
O
Employers
Neutral for employers. Expect stable healthcare premium increases, with no change in efforts at
healthcare cost containment.
Table 3-5:
Market Consolidation
Hospital
segment
Physician
segment
Health plan
segment
»
»
»
High: 2 or 3 organizations control about 80% of the market.
Moderate: 4 or 5 organizations control about 70% of the market.
Low: More than 5 organizations control about 70% of the market.
Leading Organizations & Health Plans
Table 3-7:
Health Systems/Hospitals
Name
Baptist Health of Northeast Florida
Total # of Hospitals
Total # of Beds
Market Share*
6
1,224
27%
St. Vincent’s HealthCare
3
905
22%
HCA South Atlantic
2
680
21%
*Based on inpatient discharges.
Sources: HealthLeaders-InterStudy, 2013; based on data from Billian’s HealthDATA, 2013.
Table 3-8:
Physician Organizations
Name
Total # of Physicians
Mayo Clinic
439
University of Florida Jacksonville Healthcare
371
First Coast Health Alliance
180
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Table 3-9:
Total Enrollment*
Plan
Enrollment
Market Share
Florida Blue
175,980
21%
UnitedHealth Group
155,332
19%
Aetna
139,788
17%
Enrollment
Market Share
Shands Jacksonville
68,578
24%
Aetna
52,343
18%
Centene
48,196
17%
Enrollment
Market Share
158,113
43%
Aetna
84,480
23%
UnitedHealth Group
32,595
9%
Enrollment
Market Share
UnitedHealth Group
95,986
62%
Cigna
46,665
30%
7,771
5%
Enrollment
Market Share
Shands Jacksonville
68,578
46%
Centene
48,196
33%
UnitedHealth Group
13,071
9%
*All HMO, PPO, POS, indemnity, Medicaid and Medicare products.
Source: HealthLeaders-InterStudy, as of Jan. 1, 2013.
Table 3-10:
HMOs*
Plan
*All HMO products, including Medicaid and Medicare.
Table 3-11:
PPOs*
Plan
Florida Blue
*Includes fully and self-insured commercial and Medicare PPO.
Table 3-12:
POS*
Plan
WellPoint
*Includes fully and self-insured point-of-service plans.
Table 3-13:
MCO-Managed Medicaid*
Plan
*Includes Title 19, CHIP, and other managed Medicaid lives.
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MCO-Managed Medicare*
Table 3-14:
Plan
Enrollment
Market Share
UnitedHealth Group
17,957
36%
Humana
15,372
31%
WellCare
7,441
15%
*Includes HMO, PPO, PFFS, and other managed Medicare lives.
Major Employers
Table 3-15:
Name
# of Employees
Federal government
29,340
State of Florida
15,469
Duval County Public Schools
14,860
11,691
Florida Blue
8,871
City of Jacksonville
8,719
Publix Super Markets
8,198
Lone Star Fund IV
8,131
Sources: HealthLeaders-InterStudy, 2013; January 2012 Employer Vantage.
Table 3-16:
Pharmacy Chains
Name
Costco, CVS, Kmart, Publix, Sam’s Club, Target, Walgreens, Walmart, Winn-Dixie
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Health Systems & Hospitals
Table: Situation Analysis
+
THIS SECTOR IS: POSITIVE
Sector Outlook
Jacksonville health systems have been more conservative than those found in other Florida markets when
it comes to new reimbursement models, and for the past few years they have focused on the more conventional strategies of physician employment and major capital projects, particularly in suburban Clay County, where two major health campuses opened in 2013 and a third is in the works. As the market reaches a
saturation point of healthcare facilities, expect more aggressive physician recruitment and integration, as
well as efforts to demonstrate quality and cost efficiency, which will eventually lead to a greater acceptance
of shifts in the reimbursement model to value-driven rather than fee-for-service. St. Vincent’s HealthCare
and Mayo Clinic Florida have bundled payments arrangements, while Flagler Hospital launched a clinically integrated PHO in 2013. Market leader Baptist Health has been a proponent of patient-centered medical homes and is in talks to create a larger regional health network, which could be precursors to crafting
ACO-style contracts.
Highlights:
» » Market composition:
Four health systems control nearly 86 percent of inpatient volume in the Jacksonville market, and all
four are working on building new facilities that will allow them to tap into the suburbs around the
perimeter of Duval County. Locally based nonprofit Baptist Health of Northeast Florida is the largest
health system in the market. The two next largest health systems in Jacksonville are each owned by
large national hospital chains; St. Vincent’s is owned by nonprofit Ascension Health, and HCA South
Atlantic is part of for-profit HCA Healthcare. St. Vincent’s HealthCare is closing the patient volume
gap with Baptist with the 2013 opening of a new hospital in high-growth Clay County. Baptist Health
and St. Vincent’s were briefly merged in the late 1990s but broke apart in 2000 because of differing
corporate governance.
Academic medical center/safety-net health system UF Health (formerly UF&Shands Jacksonville)
is the market’s fourth-largest system. Jacksonville is home to one of three Mayo Clinic campuses
nationwide; the Minnesota-based organization is renowned for its quality of care and clinical integration. The only independent private hospital in the market is Flagler Hospital of St. Augustine, which
recently announced the development of a partnership with Baptist Health and a south Georgia health
system. Ed Fraser Memorial Hospital in rural Baker County is a small public hospital with negligible
inpatient volume.
Notable oncology facilities in the market include the Mayo Clinic Cancer Center, a National Cancer Center Institute designated comprehensive cancer center; and the University of Florida Proton
Therapy Institute, located at UF Health Jacksonville.
» » Hospital makeup:
The five-county Jacksonville market has 15 acute-care hospitals (excluding Naval Hospital Jacksonville), with an estimated 180,468 inpatient discharges annually and 3,674 total acute-care beds. The
average daily occupancy rate is 52 percent, and the average length of stay is 5.6 days. Medicare and
Medicaid account for an average 34 percent and 14 percent, respectively, of the area’s acute-care dis-
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charges (based on the most recent federal Medicare hospital statistics from Billian’s HealthDATA).
Data for inpatient discharges, average occupancy, ALOS, and Medicare/Medicaid patient volume
exclude St. Vincent’s Medical Center Clay County, which opened October 2013.
» » Value-based purchasing:
The Centers for Medicare & Medicaid Services is using the Hospital Readmissions Reduction Program
to penalize hospitals deemed to have too many readmissions of patients who were originally admitted for a heart attack, heart failure, or pneumonia. For the program’s second year, which began Oct.
1, 2013, hospital reimbursements for patient stays are being reduced by up to 2 percent. In Florida,
hospitals are receiving an average penalty of 0.35 percent, compared to the national rate of 0.38 percent (Kaiser Health News analysis of CMS data). Three hospitals in the Jacksonville market saw no
penalties: Baptist Medical Center Nassau, Ed Fraser Memorial, and Flagler Hospital. The highest
penalties were at Baptist Medical Center Beaches (0.76 percent), Memorial Hospital (0.63 percent),
and St. Vincent’s Riverside (0.43 percent). The largest hospitals in the market saw very low penalties:
Baptist Medical Center was 0.03 percent and UF Health was 0.06 percent. Beginning in October 2014,
reimbursements will be reduced by up to 3 percent, and CMS plans to begin penalizing hospitals for
readmissions of patients with additional conditions, such as chronic lung disease.
CMS is also using the Hospital Value-Based Purchasing Program to give hospitals financial penalties
or bonuses based on quality measures that assess how well hospitals follow basic clinical standards and
how well they perform in patient survey ratings. The most a hospital can gain or lose is 1 percent, which
will increase to 2 percent in 2016. In Florida, hospitals’ average change in payment from the program is
0.04 percent, compared with 0.02 percent nationally (Kaiser Health News analysis of CMS data). In the
Jacksonville market, only two hospitals saw their Medicare payments increase: Orange Park Medical
Center (up 0.41 percent) and Baptist Medical Center Nassau (up 0.09 percent). Flagler Hospital saw the
market’s largest penalty at 0.57 percent, while UF Health, St. Vincent’s Riverside, Baptist Jacksonville,
and St. Vincent’s Southside all saw penalties of more than 0.30 percent.
» » Government reimbursement levels or cutbacks:
The state legislature’s decision not to expand Medicaid eligibility will be felt most acutely at UF Health
Jacksonville, the region’s safety net hospital. UF Health Jacksonville has had two years of deficits, and
the lack of Medicaid expansion could place the hospital in a “downward spiral,” according to health
system CEO Russell Armistead (Jacksonville Business Journal). Armistead claims that expansion
would have provided the health system with an additional $40 million in revenue. The rejection of
Medicaid expansion comes on the heels of cutbacks to Medicaid reimbursement by the state and of
the recalibration of the state’s outpatient Medicaid reimbursement methodology from per diem to
AP-DRG on July 2013.
» » Expansion plans:
St. Vincent’s $60 million Clay County hospital opened in October 2013, the biggest splash thus far in
a local rush to the high-growth suburban county west of the city center. The new hospital is near the
planned First Coast Outer Beltway, an interstate loop that is expected to drive even more population
growth in Clay County.
Baptist Health and HCA both saw their plans for hospitals in the county altered by the state Agency
for Health Care Administration in light of the St. Vincent’s approval, but both still have plans to build
new facilities there. HCA’s 85-bed hospital has been delayed until after the St. Vincent’s hospital had
been established as part of a settlement with the rival; the West Jacksonville Medical Center is scheduled to open in 2016.
Freestanding ERs, which are not subject to Florida’s certificate of need laws, have become popular
options for health systems attempting to stake a claim in a desirable area. After having its CON application for a hospital in Clay County denied, Baptist opened an outpatient campus with freestanding
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ER in April 2013 about 10 miles from St. Vincent’s newest hospital. In October 2013, HCA broke
ground on a freestanding ER in East Arlington, scheduled to open in spring 2014, the health system’s
second such facility in the market. UF Health is building a freestanding ER at its new Northside medical complex, to open in early 2015.
UF Health’s ER is bitter consolation for the denial of the health system’s proposed Northside hospital.
After receiving a preliminary CON for the new hospital in December 2012, the AHCA withdrew the
approval in April 2013, after Memorial Hospital protested the decision. UF Health went ahead with
plans to build a six-story medical office complex and resubmitted the CON request for its 100-bed hospital in August 2013. In light of the state of Florida’s decision against expanding Medicaid eligibility,
no health system needs payer mix normalization more than UF Health, which handles more Medicaid
and uninsured patients than any other local hospital.
While there is a great deal of healthcare construction activity in Clay County, Duval County remains
the center of the Jacksonville market. Baptist Health opened a $200 million, 11-story patient tower in
December 2012, and the $80 million expansion at Mayo Clinic will add 92 beds.
» » Medical home(s):
Baptist Primary Care, the primary-care physician group for Baptist Health, has 24 of its 44 locations
certified at Level 3 patient-centered medical homes by the National Committee for Quality Assurance,
as of August 2013. Nearly all of the primary-care practices at UF Health Jacksonville have transitioned
to patient-centered medical homes (Jacksonville Florida Times-Union).
» » Payment bundling program/pilot:
St. Vincent’s is a participant in CMS’s bundled payment initiative, Model 2. In December 2012, Mayo
Clinic Florida introduced a bundled payment agreement with Florida Blue regarding knee replacement surgery.
» » Narrow networks:
On the health insurance exchange for individuals, St. Vincent’s HealthCare is the only hospital option
for the narrow network plans offered by both Coventry and Florida Blue. The Coventry plan is branded
as the CareLink HMO, while the Florida Blue narrow network is called BlueSelect.
The Coventry options are by far the lowest-cost insurance policies on the exchange in Duval County
when compared to similar plans from Florida Blue and Aetna (Coventry’s parent company).
Baptist and St. Vincent’s announced in October 2013 a narrow network plan administered by Coventry Health Care and offered to businesses with more than 50 employees. The practical effect of the
“narrow network” is to exclude HCA’s hospitals from the local provider options; the for-profit health
system has reportedly been one of the more expensive options in the market.
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Table 4-1
Local
hospitals:
Local hospital
beds:
Physicians
employed:
Physicians
affiliated:
PBM:
GPO:
6
1,224
248
1,244
N/A
MedAssets/Amerinet/Premier
Acute-care hospitals:
»B
aptist Medical Center Jacksonville (includes Wolfson Children’s Hospital, Baptist Heart Hospital, and Baptist Medical Center South),
Jacksonville, 619 beds
» Baptist Medical Center Beaches, Jacksonville Beach, 146 beds
» Baptist Medical Center Nassau, Fernandina Beach, 54 beds
Major outpatient centers:
» Baptist Clay Medical Campus, Fleming Island
Physician groups:
» Baptist Primary Care, 131 physicians in 45 offices
» Thirteen specialty groups, including Jacksonville Orthopaedic Institute and Baptist Heart Specialists
Other details:
» Baptist Emergency Center Clay
» Thirteen local CareSpot (formerly Solantic) urgent-care centers
» Two ambulatory surgery centers
Sources: HealthLeaders-InterStudy; based on data from Billian’s HealthDATA.
Description
Locally based nonprofit Baptist Health has six hospitals in the Jacksonville market, including three on its
downtown campus. The system utilizes the hub-and-spoke model of care, with the flagship campus downtown supported by community hospitals, outpatient facilities, a primary-care network of physicians, and
a network of urgent-care centers.
Baptist Health accounts for 27 percent of inpatient discharges and 33 percent of total acute-care beds (most
recent federal Medicare hospital statistics). The average occupancy rate is 63 percent, and the average length
of stay is 6.2 days. Medicare and Medicaid account for an average 27 percent and 13 percent, respectively,
of acute-care discharges.
Baptist Medical Center Downtown is a tertiary care facility on the south bank of the St. Johns River in
Jacksonville. The medical center includes Baptist Cancer Institute and the AgeWell Institute. All Baptist
hospitals are accredited chest pain centers, although the downtown campus is further accredited with
percutaneous coronary intervention.
The downtown campus includes the Baptist Heart Hospital and Wolfson Children’s Hospital, which is
a regional referral center for northeast Florida and southeast Georgia. The only pediatric hospital in the
market, Wolfson houses a Level III neonatal ICU and is the main teaching facility for the University of
Florida’s Jacksonville Pediatric Residency Training Program. Wolfson is connected to Nemours Children’s
Clinic via a crosswalk. The health system has three acute-care satellite campuses plus an emergency center
campus in Clay County.
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News and Analysis
In November 2013, Baptist Health announced plans to affiliate with Flagler Hospital and Southeast Georgia Health System, just south and north of Jacksonville proper, respectively. While insisting that the partnership will not be a merger or acquisition, the member systems claimed in a statement to be considering
the creation of a health network that spans from St. Augustine to Brunswick, Ga.
Expansion plans: Even though Baptist does not yet have an acute-care facility in coveted Clay County, the
health system has a wide geographic scope within the market, with a system of primary-care facilities and
satellite medical campuses feeding into the downtown campus.
»» B
aptist Health opened a $200 million, 11-story patient tower on its downtown campus in December
2012, allowing the hospital to convert to all-private rooms. The J. Wayne and Delores Barr Weaver
Tower includes four floors devoted to a new oncology unit, a 24-bed adult neurology/neurosurgery
ICU, and North America’s first intraoperative iMRI and iCT technology, allowing neurosurgeons to see
real-time imaging tests as they perform surgery on adults and children. The lower floors of the tower
serve as an expansion of Wolfson Children’s, including an 11-bed pediatric inpatient behavioral health
unit and a 12-bed pediatric cardiovascular ICU and pediatric neurosurgery operating suite.
»» T
he $40 million Baptist Clay Medical Campus opened in April 2013, anchored by a freestanding emergency and diagnostic center. A medical office building with specialists from Wolfson Children’s opened
in September 2013. The original plans for the campus included an acute-care hospital, but the CON
application was denied in light of St. Vincent’s new Clay County hospital.
»» C
onstruction on the $8 million expansion at Baptist Medical Center Nassau began in July 2013. The
project includes a new three-story medical office building, scheduled to open in summer 2014. The
health system announced an expansion and renovation of the ER in November 2013.
Medical home: The majority of Baptist Primary Care’s 44 office locations have achieved Level 3 patientcentered medical home certification from the National Committee for Quality Assurance. Through the
coordination of care navigators and EMR, patients of Baptist Primary Care who are admitted to a Baptist
hospital can expect a follow-up phone call within 48 hours of discharge to schedule a follow-up appointment within two weeks.
Physician relationships: The health system owns the region’s largest primary-care group, Baptist Primary
Care, as well as 13 specialty practices. Southeast Gynecologic Oncology Associates, a three-physician
practice, affiliated with Baptist Health in November 2013.
Information technology initiatives: Baptist Physician Services received $2.0 million in Medicaid meaningful use incentive payments for implementing electronic health records in fiscal 2013. All Baptist hospitals
are fully digital, with EMRs and a PACS system to capture medical images.
Awards: All five of Baptist’s acute-care hospitals, plus its home health service, has been recognized as a
Magnet facility by the American Nurses Credentialing Center, the credentialing arm of the American
Nurses Association.
Parent company earnings: For the year ended Sept. 30, 2013, Baptist Health posted net patient service revenue of $1.18 billion and total operating revenue of $1.24 billion; the system’s operating income was $81.3
million (6.5 percent margin), down from $85.9 million (7.3 percent margin) the previous year.
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St. Vincent’s HealthCare
Table 4-2
Local
hospitals:
Local hospital
beds:
Physicians
employed:
Physicians
affiliated:
PBM:
GPO:
3
905
120
1,200
N/A
MedAssets/Amerinet/ MHA/
Novation
» St. Vincent’s Medical Center Riverside, Jacksonville, 528 beds
» St. Vincent’s Medical Center Southside, Jacksonville, 313 beds
» St. Vincent’s Medical Center Clay County, Middleburg, 64 beds, opened October 2013
» Orange Park Health Center, outpatient facility
Physician groups:
» St. Vincent’s Primary Care, 57 primary-care physicians at nine locations
Other details:
» St. Catherine Laboure Manor, longer-term nursing facility, Jacksonville
» Clinically affiliated with 12 CVS MinuteClinics in the Jacksonville area
Description
Faith-based, nonprofit St. Vincent’s HealthCare includes three hospitals in Jacksonville. The local health
system is part of St. Louis-based Ascension Health Alliance, the nation’s largest nonprofit health system.
St. Vincent’s accounts for 22 percent of inpatient discharges and 24 percent of total acute-care beds (most
recent federal Medicare hospital statistics and Florida Agency for Health Care Administration). The average occupancy rate is 73 percent, and the average length of stay is 5.0 days. Medicare and Medicaid account
for an average 46 percent and 5 percent, respectively, of acute-care discharges. These figures do not include
St. Vincent’s Medical Center Clay County, which opened in October 2013.
The health system’s flagship facility is St. Vincent’s Medical Center Riverside, which specializes in heart
and vascular care, cancer, breast health, women’s surgery, neuroscience, orthopedics, atrial fibrillation,
bariatric services, and pulmonary disease. The medical center, located in the Riverside neighborhood
of Jacksonville, has the largest cardiovascular program in the region and a high volume of hip and knee
replacement surgery. St. Vincent’s Spine & Brain Institute has four neurosurgeons and four neurologists.
The oldest private hospital in Florida, St. Luke’s Hospital was purchased from Mayo Clinic in April 2008
and was renamed St. Vincent’s Medical Center Southside in January 2012. Because of its previous association with Mayo, the former St. Luke’s has an electronic medical record system. Other components of St.
Vincent’s include St. Catherine Laboure Manor and St. Vincent’s Ambulatory Care.
News and Analysis
With the expected expansion of its newest hospital, St. Vincent’s is closing the inpatient volume gap with
market leader (and former partner) Baptist Health. St. Vincent’s is the only local health system on the narrow network exchange plans offered by both Florida Blue and Coventry, and it is positioning itself as the
lower-cost alternative to Baptist and HCA.
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Expansion plans: After years of bureaucratic wrangling, St. Vincent’s is staking claim to the heart of Clay
County with its newest hospital. While HCA’s existing Orange Park Medical Center and Baptist’s new ER sit
along the eastern edge of the county, St. Vincent’s Clay County will be more accessible to the growing area.
The $110 million, three-story St. Vincent’s Medical Center Clay County opened in October 2013, with plans
to eventually expand the 64-bed facility to 221 beds. The St. Vincent’s hospital is located in Middleburg,
more centrally located to the county’s fastest growing communities than the existing facilities run by
Baptist and HCA. The facility includes a child-friendly ER, a heart and vascular center, and an outpatient
medical mall.
Payment bundling program/pilot: St. Vincent’s HealthCare is a participant in Model 2 of the Bundled
Payments for Care Improvement Program from CMS, where the federal agency and provider agree on a
target payment amount for a defined episode of care. Participants are paid at a discounted Medicare feefor-service rate, and at the end of the episode, total payments are compared to target price, with providers
sharing in produced savings. While Model 1 focuses on the inpatient stay, Model 2 also includes post-acute
care, up to 90 days after discharge. Model 2 includes physician services, related readmissions, Part B drugs,
and other services. St. Vincent’s is participating in three episodes: total joint replacement, spinal surgery,
and congestive heart failure.
Additionally, St. Vincent’s Southside is participating with Brooks Health System in five episodes of care for
Model 3, which focuses on retrospective post-acute care only and therefore only appeals to skilled nursing,
long-term care, home health, or inpatient rehabilitation facilities.
Parent company earnings: For the year ended June 30, 2013, Ascension Health Alliance saw $16.91 billion in net patient revenue and $17.10 billion in total operating revenue, with $474.1 million in operating
income. St. Vincent’s in Jacksonville is part of the St. Vincent’s Health Services Corporation health ministry for Ascension, which includes facilities in New York, Connecticut, and other areas. Ascension is the
third-largest health system in the nation by revenues and includes 100 hospitals.
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HCA South Atlantic
Table 4-3
Local
hospitals:
Local hospital
beds:
Physicians
employed:
Physicians
affiliated:
PBM:
GPO:
2
680
366
800
N/A
HealthTrust Purchasing Group
» Memorial Hospital, Jacksonville, 425 beds
» Orange Park Medical Center, 255 beds
» Memorial Healthcare Plaza outpatient center, Jacksonville
Physician groups:
» Memorial Family Medicine, primary care with 32 physicians at 14 offices
» Orange Park Medical Center Medical Network, 22 physicians at 14 offices in Clay County
Other details:
» Memorial Emergency Care Center Julington Creek, St. Johns
» Specialty Hospital, 107-bed long-term acute-care hospital, Jacksonville
» Four ambulatory surgery centers
Description
For-profit national hospital chain HCA has two acute-care hospitals in the Jacksonville market, plus a
specialty hospital and several outpatient surgery and imaging centers. The local facilities are part of the
South Atlantic Division of HCA.
The two local acute-care HCA hospitals account for 21 percent of inpatient discharges and 18 percent of
total acute-care beds (most recent federal Medicare hospital statistics). The average occupancy rate is 74
percent, and the average length of stay is 5.6 days. Medicare and Medicaid account for an average 35 percent
and 13 percent, respectively, of acute-care discharges.
Memorial Hospital is HCA’s local tertiary-care facility. Orange Park Medical Center was the first hospital
in Clay County.
HCA South Atlantic is headquartered in Charleston, S.C., and includes seven acute-care hospitals with
more than 1,500 beds in South Carolina and northeastern Florida. Nashville, Tenn.-based HCA has 162
hospitals and more than 100 freestanding surgery centers in 20 states and England. In Florida, HCA has
38 hospitals and 33 outpatient surgery centers.
News and Analysis
HCA has taken the axiom “the ER is the front door to the hospital” to heart, building two suburban freestanding ERs in the market as well as a Level II trauma center (which is currently closed). Certificate-ofneed applications are not needed for the freestanding ERs, which can be used to direct patients to the two
local HCA hospitals.
Expansion plans: Just as Memorial Hospital used the state’s CON process to shelve a new hospital by UF
Health, HCA’s plans to build a new hospital in Clay County were delayed by legal challenges from St. Vincent’s. Construction on the West Jacksonville Medical Center is scheduled to start after the recently opened
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St. Vincent’s Clay County hospital has established itself.
»» M
emorial Hospital’s second local freestanding ER in East Arlington is scheduled to open in spring 2014.
Memorial Emergency Center–Atlantic is the health system’s second such facility in the market, following the ER at Julington Creek, which opened in St. Johns County in October 2012.
»» O
range Park Medical Center opened the H2U Orange Park Health Center in November 2013. The
facility will provide employer-sponsored healthcare services, such as preventive care, medication
dispensing, disease coordination, and acute/episodic care, for participating employer groups. Currently available to employees and dependents of OPMC and Parallon Business Solutions (about 2,700
employees combined), the H2U program is being marketed to local business partners who can access
the facility at a lower-than-market rate. A second H2U Health Center is scheduled to open at Memorial
Hospital in early 2014.
»» A
four-story patient tower is planned to be built above the new ER at Orange Park Medical Center,
which was expanded as part of the hospital’s trauma center project. One of the floors may be reserved for
inpatient rehabilitation, while the remainder will be used for patient stays. Groundbreaking is scheduled
for 2Q 2014.
»» O
range Park Medical Center Physician Network opened an office on Fleming Island in December 2012.
The location includes primary care, general surgery, orthopedics, and neurosurgery.
Trauma centers: In February 2013, the state Department of Health closed the Level II trauma center at
Orange Park Medical Center. Ostensibly, the shutdown was the result of an inspection that found deficiencies at the ER, but the facility has been a point of contention since its 2011 opening, when parent company
HCA opened several Level II trauma centers in suburbs throughout the state. Critics contend that these
suburban Level II centers siphon relatively straightforward trauma cases incurred by well-insured patients
away from Level I trauma centers (UF Health, in the case of Jacksonville), which still must handle complicated cases from across the region. An administrative law judge found that the Florida DOH had approved
the trauma centers based on invalid rules, siding with established Level I trauma centers in Jacksonville
and Tampa Bay, and the matter is now before the Florida Supreme Court. The ER at Orange Park remains
open, but without the trauma center designation.
Parent company earnings: Nashville, Tenn.-based HCA Inc. is the nation’s largest private hospital company, with 164 hospitals and 106 freestanding surgery centers in 20 states and Great Britain. These figures
include eight hospitals and nine freestanding surgery centers that are joint ventures. Revenues attributable
to HCA Holdings totaled $33.01 billion for the year ended Dec. 31, 2012, compared with $29.68 billion for
the year ended Dec. 31, 2011. Net earnings attributable to HCA Holdings for 2012 totaled $1.61 billion,
compared to$2.47 billion in 2011.
In July 2013, HCA CEO Richard M. Bracken announced his retirement from that role, with R. Milton
Johnson named his replacement as CEO. Bracken will stay on as chairman of the board.
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University of Florida Health at Jacksonville
Table 4-4
Local
hospitals:
Local hospital
beds:
Physicians
employed:
Physicians
affiliated:
PBM:
GPO:
1
696
619
1,500
N/A
MedAssets/University HealthSystem Consortium/ MHA/
Novation
» UF Health Jacksonville (formerly Shands Jacksonville Medical Center), 696 beds
» Emerson Medical Plaza, Southside Jacksonville
Physician groups:
» University of Florida Faculty Group Practice, 619 physicians
» UF Jacksonville Healthcare, a network of more than 60 primary-care and specialty locations with 400 physicians
Health plan:
» First Coast Advantage, Medicaid provider service network, 68,578 local enrollment
Other details:
» Affiliated with University of Florida Health Science Center Jacksonville
» UF Proton Therapy Institute
Description
University of Florida Health at Jacksonville (UF Health), an academic medical center and the safety-net
hospital for northeast Florida, changed its named from UF&Shands Jacksonville in May 2013 to emphasize
its academic ties with the University of Florida Health Science Center while downplaying its indigent-care
reputation.
UF Health accounts for 16 percent of inpatient discharges and 19 percent of total acute-care beds (most
recent federal Medicare hospital statistics). The average occupancy rate is 67 percent, and the average length
of stay is 6.0 days. Medicare and Medicaid account for an average 22 percent and 30 percent, respectively, of
acute-care discharges; the hospital’s Medicaid burden is the highest in the market by a significant amount.
UF Health Jacksonville is the acute-care component of the health system, a tertiary teaching hospital in the
Springfield area of downtown that also includes University of Florida Health Science Center Jacksonville
and University of Florida Jacksonville Healthcare, a network of primary-care physicians and specialists.
The trauma center at UF Health was the first Level I center in the state, and it remains the only Level I adult
and pediatric trauma center in north Florida and southeast Georgia. The hospital has a Level III NICU
center and a Joint Commission-certified Primary Stroke Center. UF Health also participates in clinical
trials through the UF Shands Cancer Hospital.
The nonprofit health system is closely affiliated with the University of Florida Health Science Center campuses in Jacksonville and Gainesville but is privately owned by Shands Jacksonville HealthCare. The UF
facilities in Gainesville and north central Florida have retained the Shands name.
University of Florida Physicians is a multispecialty group practice with about 400 physicians and dozens
of outpatient practices in the Jacksonville area. These physicians and 250 community physicians staff UF
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Health. Third- and fourth-year medical students from the university in Gainesville conduct part of their
training at the Jacksonville campus.
News and Analysis
The name switch to “UF Health” in May 2013 is the latest in a series of rebrandings for the city’s safety-net
academic medical center, initially called Duval Medical Center, then University Hospital, and later Shands
Jacksonville, after a merger with Methodist Medical Center. While the state has allowed local competitors
to expand into suburban sprawl in order to achieve a better payer mix, UF Health’s plans to build a new
hospital in north Jacksonville have been stymied. The state of Florida’s decision to not expand Medicaid
eligibility will be felt most acutely at UF Health.
Financial performance: The city of Jacksonville gives the health system an annual payment of $26.3 million
to serve as the area’s safety net hospital. The City Council approved a $2.5 million increase in September
2013, the first raise since 2002; the health system had asked for $5 million.
Inpatient admissions took a 9 percent hit in fiscal 2012, attributable to Humana Medicare cancelling its
contract with UF Physicians in October 2011, combined with a shift to observation status cases. Meanwhile, outpatient admissions increased nearly 4 percent. The state of Florida decreased disproportionate
share funding to the hospital by $16.2 million in fiscal 2012 (UF Health).
Expansion plans: The reconsideration of UF Health’s Northside hospital by the state’s Agency of Health
Care Administration is expected by year-end 2013, but that is only the first step in the CON process. As
was the case in the health system’s initial CON application, another hospital can challenge the decision.
» » I n August 2013, UF Health Jacksonville again filed a letter of intent with the Agency for Health Care
Administration to build a 100-bed acute-care facility on the city’s north side, a reapplication for a certificate of need that had fallen victim to the state’s byzantine and recriminatory approval process. The
health system had previously won a preliminary certificate of need in December 2011, but after the plan
was challenged by HCA’s Memorial Hospital, permission was rescinded.
»» U
F Health went forward to build a $65 million, six-story medical office complex at the north side site
of the proposed hospital. The facility, which does not require a CON, will open on the campus of UF
Health Jacksonville North in early 2015 with an ER, outpatient care, and physician offices.
» » The health system plans an $8 million emergency room renovation.
Medical home: UF Health primary-care centers have been designated as Patient-Centered Medical Homes
by the National Committee for Quality Assurance.
Settlement: In August 2013, UF Health and its parent company were ordered by the U.S. Department of
Justice to pay the state and federal governments $26 million to resolve allegations of false claims submitted
to Medicare, Medicaid, and TRICARE for inpatient procedures that should have been billed as outpatient.
Allegedly, the Jacksonville campus, along with five other Shands hospitals, knowingly submitted these false
claims between 2003 and 2008.
Contracting: First Coast Advantage, a Medicaid provider service network owned by UF Health, was
selected by the state to be one of the insurers for the mandatory managed Medicaid program for Region
4, which includes all of the Jacksonville market plus Flagler and Volusia counties. The provider network
includes UF Health, UF Physicians, Nemours Children’s Clinic, Wolfson Children’s, and Brooks Rehabilitation Hospital.
Key personnel changes: Russell E. Armistead was named CEO of the health system in January 2013,
replacing James R. Burkhart, who left to take the helm at Tampa General Hospital.
Awards: UF Health is recognized as a Magnet facility by the American Nurses Credentialing Center, the
credentialing arm of the American Nurses Association.
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Parent company earnings: UF Health (Shands Jacksonville HealthCare) saw $430.1 million in net patient
revenue for the year ended June 30, 2013, but government funding and other revenue brought total operating revenue up to $522.9 million, up from $515.3 million in fiscal 2012. The health system’s operating
income was $19.5 million in fiscal 2013, up from $6.8 million in 2012. But payments to the University
of Florida and interest expenses have been a drag on UF Health’s bottom line, resulting in an overall
decreased in net assets for fiscal 2013 of $5.8 million.
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Other Health Systems and Hospitals
The only hospital in St. Johns County, Flagler Hospital in St. Augustine (not to be confused with Florida
Hospital Flagler to the south in Flagler County) is a private, nonprofit hospital founded in 1889. Flagler
accounts for 7 percent of inpatient discharges and 9 percent of total acute-care beds (most recent federal
Medicare hospital statistics). The average occupancy rate is 54 percent, and the average length of stay is 5.0
days. Medicare and Medicaid account for an average 47 percent and 12 percent, respectively, of acute-care
discharges.
In August 2013, Flagler announced the formation of First Coast Health Alliance PHO with 185 area physicians. The goals of northeast Florida’s first clinically integrated PHO include improving clinical outcomes,
adopting evidence-based protocols, enhanced coordination of care, and reduction of healthcare costs.
The hospital announced in November 2013 the signing an initial letter of intent with Baptist Health and
Southeast Georgia Health System to explore collaboration opportunities.
Flagler Hospital is recognized as a Magnet facility by the American Nurses Credentialing Center, the credentialing arm of the American Nurses Association.
Mayo Clinic Florida in Jacksonville opened in 1987 as one of two outposts for the world renowned Mayo
Clinic, based in Rochester, Minn.; the other campus is in Scottsdale, Ariz. The health system’s local flagship
is 214-bed Mayo Clinic Hospital, which opened a new campus in 2008 near the Atlantic Coast.
Mayo Clinic Florida is a tertiary-care center with more than 40 medical and surgical specialties, including cancer treatment, organ transplantation, surgery, and neurosciences. The hospital has the largest liver
transplant program in the nation, according to Mayo. Bone marrow, pancreas, kidney, heart, and lung
transplants also are performed.
In May 2012, Mayo Clinic Florida announced plans for an $80 million expansion at the hospital to add
92 beds; 35 of these beds came online in September 2013. Mayo’s $16.7 million primary-care center on
the south side of the city opened in July 2013. The hospital has been sitting on a parcel of land in St. Johns
County since August 2013 (Jacksonville Business Journal). Former Jacksonville Jaguars owners Wayne
and Delores Weaver donated $7 million toward the construction of a surgical simulation center at Mayo
that opened in February 2013.
Mayo Clinic Florida and Florida Blue announced a bundled payment agreement on knee replacements in
December 2012. The single bundled payment will cover all related surgical procedures as part of the knee
replacement, including anesthesia services, injections, and drugs administered during the surgery; imaging; cost of implant and medical supplies; discharge planning; and office visits.
The health system acquired the parent company of Satilla Regional Medical Center in southeast Georgia
in March 2012 and renamed the facility Mayo Clinic Health System–Waycross.
The hospital is part of Mayo Clinic Cancer Center, a National Cancer Institute-designated cancer center,
with two other campuses in Rochester, Minn., and Scottsdale, Ariz.
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Table 4-5:
Jacksonville Hospitals
Name
City
Beds
696
UF Health Jacksonville
Jacksonville
Baptist Medical Center Jacksonville (includes Wolfson Children’s Hospital, Baptist
Heart Hospital and Baptist Medical Center South)
Jacksonville
St. Vincent’s Medical Center Riverside
Jacksonville
528
Memorial Hospital
Jacksonville
425
Flagler Hospital
St. Augustine
335
St. Vincent’s Medical Center Southside
Jacksonville
313
Orange Park Medical Center
Orange Park
255
Mayo Clinic Florida
Jacksonville
214
Baptist Medical Center Beaches
Jacksonville Beach
146
St. Vincent’s Medical Center Clay County
Middleburg
64
Baptist Medical Center Nassau
Fernandina Beach
54
Ed Fraser Memorial Hospital
MacClenny
25
Naval Hospital Jacksonville
Jacksonville
619
N/A
Sources: HealthLeaders-InterStudy, 2013; based on data from Billian’s HealthDATA, 2013.
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Physicians
+
Sector Outlook
With the construction of new healthcare facilities, health systems have developed employed physician
groups to ensure that referral streams are in place to direct patients to these hospitals and outpatient centers. These health systems have already transitioned most of their primary-care physicians to the patientcentered medical home model; expect them to exert tighter integration and cost controls. Flagler Hospital
introduced its clinically integrated physician-hospital organization in 2013, a model that could spread
throughout the market and encourage health systems to launch accountable care organizations. For now,
Jacksonville’s ACOs are physician-led, and like the independent single-specialty practices in the market
they provide local doctors a vehicle to retain autonomy.
Highlights:
The largest physician groups in the market are the group practices of UF Health and Mayo Clinic,
although the largest health systems in the market have also built large, employed practices. Humana
has a group of employed physicians, and the model is catching on in other parts of the state.
Much of the local physician market is organized into large single-specialty groups, such as orthopedics, gastroenterology, obstetrics, oncology, radiology, and primary care. These groups are in a position of strength as they negotiate terms with payers and potential accountable care organizations with
insurers and hospitals.
» » Physician supply:
There are 4,444 total physicians in the Jacksonville market, of whom 1,083 are primary-care physicians, making for 32.3 physicians per 10,000 population. More than 77 percent of the total physicians
are in Duval County. The presence of the UF Health academic medical center helps to ensure a healthy
physician population.
» » Accountable care organizations:
There are two ACOs in northeast Florida, and both are led by independent physician organizations.
Orange Health Solutions launched Orange Comprehensive ACO (Northeast Florida Accountable
Care) with CMS approval in January 2013 and has more than 5,000 patients. Orange Health Solutions also sells its services to ACOs outside its own, providing groups with services such as IT,
administrative, and patient engagement; the latter includes discharge plans and drug adherence
programs led by care coordinators. In its first operational quarter, Orange ACO reduced hospitalizations by 3 percent, decreased 30-day readmissions by 8 percent, and lowered ER visits by 7
percent (Jacksonville Business Journal).
Family Care Practices received approval for its Advance Payment Model ACO, Accountable Care
Partners, in July 2012. The ACO, unaffiliated with any hospital, includes six Family Care Partners
locations plus four other physician practices.
In April 2013, a group of Florida-based ACOs, including Orange ACO, banded together to create the
Florida Association of Accountable Care Organizations.
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» » Oncology:
First Coast Oncology, a three-physician practice, plans to open a $30 million proton therapy center
featuring a proton accelerator by Mevion, based in the Boston area; the machine has not yet been
approved by the U.S. Food and Drug Administration. The Mevion device is smaller and less expensive
than existing proton accelerators. First Coast Oncology plans to open the facility by year-end 2013;
construction began in May 2012. Mevion is also supplying an accelerator for South Florida Radiation
Oncology in Palm Beach County.
» » Clinical integration:
Flagler Hospital in May 2013 announced the formation of a clinically integrated PHO, the First Coast
Health Alliance. The organization is billed as an opportunity for physicians to retain independence
while enhancing care coordination and adopting evidence-based protocols. The clinically integrated
network plans to function as an ACO while entering into shared savings contracts. With Flagler Hospital discussing a collaboration with Baptist Health and Southeast Georgia Health System, the PHO
model could spread throughout the region.
» » Health plan contracting:
Humana entered new relationships with two Florida-based physicians groups in November 2012:
MCCI Holdings and Metropolitan Health Networks. The two physician groups had already been
strongly affiliated with Humana, with virtually all of their patient volume comprised of Humana
members. MCCI (short for Medical Care Consortium) had been introduced into the Jacksonville
market in summer 2011. Humana had announced that its Medicare Advantage contract with UF
Physicians would expire in September 2011, a move that affected about half of the insurer’s MA population in the market at a time outside open enrollment, when members could not move to a different
MA plan.
To absorb the Humana MA seniors who went to UF Physicians, the insurer directed members to
ostensibly independent MCCI, which had built four new clinics in the Jacksonville area in anticipation
of the new patient load.
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Mayo Clinic
Table 5-1
Type: Group practice
Internal Guidelines: Yes
Total Physicians: 439
Medical Management: Yes
Primary-Care Physicians: N/A
Clinical IS: Yes
Rochester, Minn.-based Mayo Clinic is a nonprofit, integrated medical practice with 4,100 physicians,
scientists, and researchers, including 439 in Jacksonville. The largest integrated medical practice in the
world, Mayo came to Jacksonville in 1986.
Physicians are paid a salary and thus do not rely on insurance reimbursements for their pay. Mayo Clinic
also has 336 residents, fellows, and temporary professionals in the local area. The clinic’s physicians provide
35 medical specialties on a campus in Jacksonville with a 214-bed hospital. Additional facilities include
outpatient clinics and research buildings. Physicians use an electronic medical record system, and patients
have access to an online primary-care system that allows them to leave messages for physicians, maintain
their health records, renew prescriptions, and make appointments.
University of Florida Jacksonville Healthcare
Table 5-2
Type: Academic
Primary-Care Physicians: 95
Clinical IS: Yes
Working alongside UF Health (formerly Shands HealthCare), University of Florida Jacksonville Healthcare is a network of more than 60 primary-care and specialty-care centers with nearly 400 UF faculty physicians in northeast Florida and southeast Georgia. The largest collection of UF physicians is at Emerson
Medical Center, a multiservice healthcare center housing 18 UF practices.
The physician practice plan, University of Florida Jacksonville Physicians, was established as a nonprofit
corporation in 1979. The physicians are employed by the University of Florida and provide services like
medical coding training, fee schedule analyses, and compliance education and testing for Medicare and
other programs (University of Florida website, accessed Oct. 22, 2013).
The group performs clinical trials through UF Health and staffs the only regional Level I Trauma Center
in Jacksonville, TraumaOne.
For the year ended June 30, 2012, University of Florida Jacksonville Physicians saw $100.8 million in operating income on $189.8 million in operating revenues (University of Florida 2012 Annual Report).
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First Coast Health Alliance
Table 5-3
Type: PHO
Clinical IS: Yes
In May 2013, Flagler Hospital announced the formation of a clinically integrated PHO, the First Coast
Health Alliance. The group is billed as an opportunity for physicians to retain independence while enhancing care coordination, adopting evidence-based protocols, reducing healthcare costs, improving clinical
outcomes, and improving reimbursement by demonstrating quality and efficiency. The PHO plans to function as an ACO while entering into shared savings contracts, both through CMS and commercial payers.
Flagler Hospital owns 50 percent of the for-profit PHO, with physician members owning the remainder.
The organization’s board of directors includes six representatives from Flagler Hospital, seven elected
physicians, and one community member.
Baptist Primary Care
Table 5-4
Type: Health-system owned
Primary-Care Physicians: 130
Clinical IS: N/A
Baptist Primary Care was incorporated as a for-profit group in 2001. Areas of practice include pediatrics,
family medicine, and internal medicine. The group is part of nonprofit Baptist Health, which has six hospitals in the market. The group’s physicians admit patients to these hospitals when acute care is needed.
Twenty-three of the group’s board-certified physicians are hospitalists providing care to inpatients. The
group is installing an electronic medical record system in its offices; the EMR has been installed in about
40 of the group’s 44 offices.
Baptist is emphasizing the medical home model, with PCPs playing a more significant role in care co-ordination. By August 2013, 24 of the 44 offices had achieved Level 3 Patient-Centered Medical Home Accreditation through increased emphasis on preventative care, same-day appointments, postdischarge checkups,
and collaboration with Baptist Health (Baptist Health website, accessed Oct. 22, 2013). Baptist’s AgeWell
Center for Senior Health in Jacksonville is one example of a medical home model for geriatric patients.
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Nemours Children’s Clinic
Table 5-5
Type: Group practice
Clinical IS: Yes
Nemours Children’s Clinic is a single group practice that has 125 physicians in the Jacksonville area and
622 pediatric specialists and subspecialists nationwide. The Home Office for Nemours’ Florida operations
is in the 11-story Nemours Children’s Clinic in Jacksonville. Elsewhere in Florida, Nemours operates
specialty-care clinics in Destin, Fleming Island, Lake Mary, Orange Park, Orlando, Pensacola, and Viera.
The 95-bed, $397 million Nemours Children’s Hospital opened in Orlando in October 2012, and in 2014
the five-story Nemours/Alfred I. duPont Hospital for Children expansion will be complete.
The clinic offers 30 nationally recognized pediatric specialty services in Jacksonville, including programs
in endocrinology, oncology, pulmonology, neurology, and urology.
Nemours Children’s Clinic has a “unique” relationship with Wolfson, allowing Nemours specialists to
provide pediatric consultation in the ER, hospital, or outpatient surgery center at the Baptist-owned facility. In 2012, the two adjacent hospitals became connected via skyway.
Nemours operates in four states, with its corporate headquarters in Jacksonville. The physicians use a
single electronic medical information system that includes a fully deployed ambulatory EMR with physician order entry, automated pharmacy dispensing, bar-code medication, and computer-generated alerts
and reminders. Physicians who refer patients to Nemours specialists have access to their patients’ medical
data via a secure website.
Jacksonville is the “incubation site” for Nemours’ BrightStart! Program, which develops programs to
support early identification and treatment for young children at risk for reading failure, such as dyslexia.
For the year ended Dec. 31, 2012, the Nemours system posted $33.4. million in operating income on $631.4
million in net patient service revenue.
Additional Physician Organizations
» » North Florida Obstetrical & Gynecological Associates:
North Florida Obstetrical & Gynecological Associates, founded in 1994, has 70 physicians who practice at 33 offices in Duval, Clay, and Nassau counties. The group’s physicians provide care at Baptist
Health, St. Vincent’s, and HCA hospitals in the Jacksonville market.
» » Borland-Groover Clinic:
The largest gastroenterology clinic in the southeastern United States, Borland-Groover Clinic was
founded in 1947 and now includes 66 physicians, most of whom practice in northeast Florida,
although the clinic also has locations in central and south Florida. The clinic specializes in gastroenterology, hepatology, and endoscopic procedures and operates mainly as a referral practice. Its
affiliates include Orange Park Medical Center, Ed Fraser Memorial Hospital, Memorial Hospital, St.
Vincent’s HealthCare, and Baptist Health of Northeast Florida. In northeast Florida, the clinic has 17
offices and five places of procedure, including The Jacksonville Center for Endoscopy in both Riverside
and Southside. In October 2013, the clinic announced plans to build a 12,500-square-foot administrative building in suburban Jacksonville. The clinic participates in clinical trials for several diseases,
including hepatitis, Crohn’s disease, and reflux.
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» » St. Vincent’s Primary Care:
St. Vincent’s Primary Care has 59 physicians who practice at more than 30 locations. The physicians
are employed by St. Vincent’s HealthCare, the market’s second-largest health system in terms of inpatient discharges. St. Vincent’s Primary Care family physicians serve as medical directors for the CVS
MinuteClinic locations in the Jacksonville market.
» » Integrated Community Oncology Network (ICON):
Integrated Community Oncology Network is an organization comprised of five cancer practices
with a combined 50 physicians. The organization began in 2004 with the merger of Florida Oncology
Associates (formerly of US Oncology) and Florida Radiation Oncology Group (FROG). The group now
includes the radiation oncology practice FROG (26 physicians, six locations), the medical oncology
group ICON Oncology (five physicians, two locations), plus three urological groups: McIver Urological Clinic (founded 1921, 13 physicians, four offices), Urology Associates of North East Florida (three
physicians), and Kasraeian Urology (three physicians). In 2013, FROG changed its name to First
Radiation & Oncology Group (retaining the acronym) and added dedicated Imaging and Medical
Oncology divisions.
» » Mori, Bean & Brooks:
Founded in 1968, Mori, Bean & Brooks is a Jacksonville radiology group with 42 physicians who provide a wide range of imaging services at six outpatient centers, as well as at Baptist Health and HCA
hospitals. Subspecialties include nuclear medicine, pain management, neuroradiology, and remote
radiology, among others.
» » Jacksonville Orthopaedic Institute:
Pavilion Health Services, a for-profit subsidiary of Baptist Health, purchased Jacksonville Orthopaedic Institute in February 2011 for $14.5 million. The 29-physician group has six office locations and
nine rehabilitation centers.
» » Family Care Partners:
Family Care Partners has 30 physicians who provide primary care to adults and children at seven locations. The physician-owned group is a patient-centered medical home and has an electronic medical
record system. In July 2012, the group was approved by the Centers for Medicare & Medicaid Services
to launch an accountable care organization with more than 6,000 patients. The ACO runs on both the
advanced payment and the risk models.
» » North Florida Surgeons:
Founded in 1996, North Florida Surgeons has 40 physicians who practice at 18 locations, including
Baptist Health, St. Vincent’s, and HCA facilities. The group performs a range of services including
hand, bariatric, and endocrine surgery.
» » Cancer Specialists of North Florida:
Cancer Specialists of North Florida claims to be the largest cancer practice in Jacksonville, with 25
physicians at 11 locations, plus the Florida Specialty Pharmacy. CSNF was part of Integrated Community Oncology Network until late 2012. The group opened its new central business office in July 2013
on Jacksonville’s Southside. The facility includes an onsite pharmacy as well as research and clinical
trials. CSNF is constructing two linear accelerator vaults, one on Jacksonville’s Southside and one on
Fleming Island, for a combined $10.5 million; they are to open in spring and fall 2014, respectively.
» » Diagnostic Cardiology Associates:
Diagnostic Cardiology Associates has 19 physicians who partner with St. Vincent’s HealthCare and
its Atrial Fibrillation Institute. The physicians have offices at five locations.
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» » Baptist Heart Specialists:
The 27-physician Baptist Heart Specialists was created in May 2012 with the merger of Jacksonville
Heart Center and Southern Heart Group. The new organization has 10 offices and is a division of
Baptist Health.
» » First Coast Cardiovascular Institute:
First Coast Cardiovascular Institute, founded in 2002, has 14 physicians with 12 office locations in the
metro area. FCCI is affiliated with Baptist Medical Center, Flagler Hospital, HCA’s two local hospitals,
Brooks Rehabilitation Hospital, St. Vincent’s Medical Center, and Putnam Community Medical Center. Some subspecialties of the practice include vascular and endovascular medicine, sleep medicine,
nuclear cardiology, and electrophysiology.
» » Northeast Florida Endocrine & Diabetes Associates:
The largest private endocrinology practice in the United States, Northeast Florida Endocrine & Diabetes Associates has 14 physicians who practice at five locations. NEFEDA’s physicians participate in
clinical drug trials for diabetes, cardiology, urology, and other conditions. The group focuses on fully
integrated care, with most services provided in-house.
» » Baptist Neurology:
Jacksonville’s largest full-spectrum neurology practice, Baptist Neurology includes 10 physicians who
practice at three locations. The group was formed by Baptist Health in 2010, and the member physicians helped establish the Stroke Centers at Baptist’s Downtown and South hospitals. The group is
affiliated with five-physician Lyerly Neurosurgery in Jacksonville.
» » Baptist ENT Specialists:
This group was formed in September 2011 when Baptist Health merged four acquired otolaryngology
practices. The six physicians at Baptist ENT Specialists practice at five office locations.
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Health Plans
+
Table 6-1:
Local & State Enrollment
Commercial
HMO:
Commercial
PPO:
Commercial
POS:
Indemnity:
Managed
Medicaid:
Managed
Medicare:
Local
118,696
337,585
153,672
15,150
147,799
49,967
State
1,558,819
4,008,304
2,421,169
173,198
1,729,272
1,319,380
>>>
Sector Outlook
While other major metro areas in Florida have attracted competition on the individual health insurance
exchange, there are only two insurers on Jacksonville’s ACA marketplace: Florida Blue and Aetna. Each of
these plans are offering two flavors of their products in Duval County—broad network and narrow network—with both narrow networks directing members to St. Vincent’s HealthCare. Along with a narrow
network plan from Coventry directed to larger employers, the acceptance of more limited but less costly
provider networks may be at hand in northeast Florida. While insurers have been able to develop ACOstyle contracts in other Florida markets, Jacksonville providers have been more hesitant. That attitude
may change in the coming year as health systems work to demonstrate their abilities to manage cost and
population health.
Highlights:
Florida Blue, UnitedHealthcare, and Aetna have the largest total enrollments in Jacksonville, with
locally based Florida Blue having the edge. Nearly all of Florida Blue and Aetna’s enrollment is in the
commercial sector, while UnitedHealthcare is more diversified, with significant Medicaid and Medicare membership. About 44 percent of total enrollment is in PPO, with 35 percent in the HMO model,
although that figure is padded by Medicaid HMOs.
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Four health plans (the above three plus Cigna) divide about 80 percent of the commercial market, with
Florida Blue controlling nearly 28 percent of commercial enrollment. Aetna took a membership hit
when the insurer lost the contract to serve the city of Jacksonville, which it had held since 1999. Florida
Blue won the bid, starting in 2013.
UnitedHealthcare and Humana are the largest Medicare Advantage players in Jacksonville, with UnitedHealthcare taking 36 percent of total private Medicare enrollment. Humana, the Medicare leader
in most of Florida, dropped UF Physicians from its provider network in 2011, replacing the academic
group with its owned physician group, MCCI.
First Coast Advantage, a provider service network owned by UF Health, is the dominant Medicaid
plan in the market, and because of this has the largest HMO enrollment. Centene’s Sunshine State
Health Plan is runner-up, with UnitedHealth in third. The Jacksonville market is where the state
of Florida launched its mandatory managed Medicaid pilot project, which is now being expanded
across the state.
» » Health insurance exchange:
Florida Blue and Aetna are the only two insurers on the Jacksonville exchange for individuals,
although Aetna is not available in Baker and Nassau counties. Within Duval County, both insurers
are offering narrow network options that direct to St. Vincent’s HealthCare. Aetna is using its recently
acquired Coventry Carelink HMO brand to sell its narrow network, while Florida Blue calls its version
BlueSelect.
Coventry is generally the least expensive option in Duval County, with its lowest cost Bronze, Silver, and Gold plans costing $137.25, $186.24, and $201.98, respectively, per month for a 27-year-old
nonsmoker, before subsidies. The lowest cost BlueSelect options cost $189.05, $210.02, and $241.31,
respectively.
The region’s second-largest insurer, UnitedHealth, is not participating in Florida’s exchange, while
Cigna has generally gravitated to Florida markets, where it has larger membership bases. Centene’s
Sunshine State Health Plan is focused on the three-county south Florida market.
Florida Blue cancelled about 300,000 individual policies that did not comply with the minimum
standards of the Affordable Care Act in October 2013 and worked to transition these members to
ACA-compliant plans on the exchange. But the cancellations proved to be a clarion call for opponents
of the ACA nationwide, so when President Obama gave insurers the option to continue offering these
cancelled plans, Florida Blue relented, allowing these members to hang onto these mini-med plans
even if more robust, subsidy-eligible plans are available on the exchange. Florida had already allowed
insurers to grandfather in these deficient products; UnitedHealth and other insurers had taken this
option.
» » Retail insurance stores:
Florida Blue has 18 retail locations in the state, including two in the Jacksonville market.
» » Narrow networks:
The Jacksonville market has favored broad networks, but the desire to keep healthcare costs low should
provide an opening for narrow network plans. In addition to the aforementioned narrow network
plans offered by Florida Blue and Aetna on the exchange, Coventry is working with Baptist Health
and St. Vincent’s to offer a narrow network plan for employer groups of more than 50 (Jacksonville
Business Journal). The product essentially leaves out HCA South Florida (which is viewed as the most
expensive health system in the market) and UF Health (academic medical centers are generally more
expensive than traditional hospitals).
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Florida Blue
Table 6-3:
Commercial Enrollment
>>>
Local
Statewide
Fully Insured
HMO:
Self-Insured
HMO:
Fully Insured
PPO:
Self-Insured
PPO:
Fully Insured
POS:
Self-Insured
POS:
Indemnity:
14,206
3,466
71,404
83,380
0
0
119
308,972
57,977
974,252
1,009,705
5,394
0
1,349
Table 6-4:
Government-Sponsored Enrollment
>>>
Managed Medicaid:
Medicare HMO:
Medicare PPO:
Medicare PFFS:
Other Medicare:
0
76
3,329
0
0
4,706
41,356
56,661
0
0
Local
Statewide
Locally based nonprofit Florida Blue is the largest managed care organization in the Jacksonville market,
with the plan’s enrollment for 2013 bolstered by the city’s decision to switch to the Blues plan, a contract
held by Aetna since 1999. In 2013, the company reported serving approximately 4.3 million members, or
30 percent of the overall market share for Florida health insurance.
Florida Blue is the largest carrier in Florida and is the only insurer on the individual health insurance
exchange in all 67 counties in the state. While Florida Blue primarily sells products through its PPO
platform (it is has the largest local PPO enrollment by far), the insurer does maintain commercial HMO
enrollment. The Blue Cross and Blue Shield plan has two subsidiaries in the state: Capital Health Plan, an
HMO in the Tallahassee area, and Florida Health Care Plans, an HMO on the Space Coast.
In August 2013, the Florida Office of Insurance Regulation authorized Florida Blue to reorganize as a policy-owned, nonprofit mutual insurance holding company. The move, to be completed by 2014, is designed
to give the insurer greater flexibility to make acquisitions; FLOIR’s approval includes a provision that keeps
Florida Blue from being acquired by a larger company. The move to a mutual holding company is similar
to those of Independence Blue Cross and Blue Cross and Blue Shield of Michigan, which are partners of
Florida Blue through AmeriHealth Caritas. The move could conceivably set up a multistate Blues company
similar to Health Care Services Corporation.
Additionally, an amendment tacked onto HB 356 gave Florida Blue the ability to shift to the new corporate
structure and allow the insurers to make larger investments in its subsidiaries and other nonprofit companies in the state, which had been limited previously; the bill was signed into law in June 2013.
Florida Blue launched its statewide patient-centered medical home program in February 2012, enrolling
1,500 physicians and collectively serving nearly 530,000 members. The medical home targets chronic medical conditions and provides health maintenance, preventive care, and overall management for members
with diabetes, chronic obstructive pulmonary disease, coronary artery disease, asthma, or congestive heart
failure. Enrolled providers receive additional compensation based on adherence to program guidelines and
overall patient results. They also earn awards by scoring higher than their peers on clinical quality metrics.
Florida Blue offers the only PPO available to employees of the state of Florida, although there are HMO
options from other MCOs, depending on county. In 2014, state employees will be able to opt for a Standard
PPO Plan or an HSA-compatible Health Investor PPO Plan.
Florida Blue partnered with AmeriHealth Caritas in 2012 to create nonprofit Florida True Health, a
Medicaid managed organization committed to preventive care, health maintenance, and community
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partnerships. AmeriHealth Caritas is a subsidiary of Independence Blue Cross and Blue Cross Blue Shield
of Michigan. The joint venture serves Medicaid beneficiaries through the Florida TrueBlue plan.
In October 2013, Florida Blue made national news with the cancellation of 80 percent of its individual policies (about 300,000 policies) as a result of requirements set forth by the Affordable Care Act for 2014. The
insurer made efforts to assure affected members that they would be transitioned to ACA-compatible plans
on the exchange, but these fears were not allayed.
Florida Blue reported its 24th consecutive year of positive financial performance in 2012, with a consolidated net income of $217 million on $8.9 billion in total revenue.
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UnitedHealth Group
Table 6-5:
>>>
Local
Statewide
Fully Insured
HMO:
Self-Insured
HMO:
Fully Insured
PPO:
Self-Insured
PPO:
Fully Insured
POS:
Self-Insured
POS:
Indemnity:
9,674
0
6,480
8,158
29,579
66,407
4,006
199,016
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150,832
126,339
342,290
984,598
68,495
Table 6-6:
>>>
Local
Statewide
Managed Medicaid:
Medicare HMO:
Medicare PPO:
Medicare PFFS:
Other Medicare:
13,071
0
17,957
0
0
196,619
132,930
219,664
0
0
For-profit UnitedHealth Group, which does business locally primarily as UnitedHealthcare, is the secondlargest insurer in the Jacksonville market and has the market’s largest point-of-service enrollment. UnitedHealth is also a significant player in the local managed Medicare segment and is involved in local Medicaid.
Statewide, UnitedHealth Group has the largest enrollment. Nationwide, UnitedHealth Group has the
country’s largest enrollment in all Medicare product offerings, including Medicare Part D, Medicare
Advantage, and Medicare supplement plans.
UnitedHealth implemented its Primary Care Physician Incentive Model in Tampa in October 2012. The
model will affect 40 percent to 60 percent of members in the market. Participating physicians are eligible for
an annual bonus payment of $1 to $3 per attributable member, per month, with payments starting in 2014.
While value-based contracting will affect only 2 percent of UnitedHealth’s commercial members in 2012,
the MCO expects that to reach 50 percent to 70 percent by 2015. Performance measures will be based on
UnitedHealth’s prior experience with its Premium designation and other programs. Self-funded clients
will not be required to participate in patient-care medical home initiatives in 2012.
UnitedHealth currently participates in 21 patient-centered medical home initiatives nationwide, including
one in Florida in conjunction with a federally qualified health center. Through the homes, net savings on
medical costs average about 2 percent.
In October 2013, UnitedHealthcare announced it would sever approximately 2,250 physicians across the
country from their participation in the Medicare Advantage network in 2014.
The company also announced the addition of Walmart and Sam’s Club in 2014 to its preferred retail pharmacy network and Pharmacy Saver program for customers in UnitedHealthcare’s stand-alone Part D and
Medicare Advantage plans.
The Minnetonka, Minn.-based UnitedHealth Group reported net earnings of $5.5 billion for calendar year
2012, up from $5.14 billion in 2011. Revenues were $110.62 billion, up from $101.86 billion in 2011, while
the operating margin was 8.4 percent, up slightly from 8.3 percent the previous year (UnitedHealth Group
2012 Annual Report). In 2012, the company gained an additional 2 million American members and 4 million Brazilian members for a total of more than 45 million members.
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Aetna
Table 6-7:
>>>
Local
Statewide
Fully Insured
HMO:
Self-Insured
HMO:
Fully Insured
PPO:
Self-Insured
PPO:
Fully Insured
POS:
Self-Insured
POS:
Indemnity:
50,276
573
6,362
77,219
20
5
2,940
405,576
27,461
86,033
605,131
47,926
55
41,023
Table 6-8:
>>>
Managed Medicaid:
Medicare HMO:
Medicare PPO:
Medicare PFFS:
Other Medicare:
0
1,494
899
0
0
70,513
52,869
19,818
0
0
Local
Statewide
National for-profit insurer Aetna has the third-largest total enrollment in the Jacksonville market, and is
also the third-largest MCO on the state level. The largest concentrations of Aetna’s members are in Tampa,
St. Petersburg, Clearwater, Miami, Fort Lauderdale, and Jacksonville. Aetna and recent acquisition Coventry Health are marketing products on the individual health insurance exchange in parts of the Jacksonville
market. Aetna completed its acquisition of Coventry Health Care in May 2013, increasing its worldwide
membership to nearly 44 million.
Coventry’s offering on the insurance exchange is based on the Carelink HMO narrow network, which
directs local members to St. Vincent’s for acute-care. Coventry is also working with St. Vincent’s and Baptist Health on a narrow network plan for employer groups of more than 50.
Aetna offers customers its Aexcel performance network, which is smaller than its traditional network
and offered to employers who want to reduce costs yet maintain quality care. Network physicians receive
an Aexcel designation for meeting measures of clinical performance and cost efficiency derived from an
analysis of Aetna claims data. In north Florida, 678 physicians received the Aexcel designation for 2014,
representing 46 percent of physicians eligible to participate in the performance network in the local area.
In February 2013, Aetna began selling health insurance plans at Costco stores in 10 states, including
Florida. Costco Personal Health Insurance has five options, with deductibles ranging from $3,000 to
$7,500. Two of the options have “robust” benefits with primary-care, specialists, urgent-care, and ER visits
covered by copays; these plans also have separate $500 pharmacy deductibles. The two “value” options
only cover generic prescriptions and limit the number of office visits that are covered by copays. There is
one HSA option, where all but preventive care is subject to a $4,000 deductible, after which a 10 percent
coinsurance kicks in.
Hartford, Conn.-based Aetna Inc. posted net income of $1.66 billion for 2012, a 16.5 percent decrease from
$1.99 billion in 2010. Total operating revenue in 2012 was $35.54 billion, a 5.8 percent increase from revenue
of $33.61 billion the prior year. As of June 30, 2013, Aetna had 22 million medical members involved in a
nationwide network of more than 597,000 primary care doctors and specialists.
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Table 6-9:
Health Plans and Pharmacy
Health Plan
2-tier
Design%
Florida Blue
3-tier
Design%
4-tier
Design%
$Rx Generic
Copay
$Rx Preferred Brand
Copay
$Rx Nonpreferred Brand
Copay
N/A
N/A
N/A
$10.00
$50.00
$80.00
UnitedHealthcare
0%
89%
9%
$10.00
$35.00
$60.00
Aetna Inc.
8%
70%
10%
$10.00
$35.00
$50.00
100%
N/A
N/A
N/A
N/A
N/A
First Coast Advantage (PSN)
Source: HealthLeaders-InterStudy, January 2013 Pharmacy Benefit Evaluator. Tier design is national company data for all Rx benefits; copay data is for the most typical plan offering.
Table 6-10:
Health Plans and Pharmacy Management
Health Plan
Florida Blue
UnitedHealthcare
PBM(s)
CVS Caremark (specialty)
Prime Therapeutics Inc. (retail, mail-order)
Accredo and Freedom Fertility (specialty)
OptumRx (retail, mail-order)
PBM Provides Formularies
or Formulary Consultation?
PBM Provides Consultations on Benefit Design?
No
N/A
No
No
Aetna
Aetna Pharmacy Management (retail, mailorder, specialty)
No
No
First Coast Advantage
State Medicaid Formulary (retail, mail-order,
specialty)
No
N/A
Source: HealthLeaders-InterStudy, January 2013 Pharmacy Benefit Evaluator. National company data.
Table 6-11:
Health Plans and Generics
Health Plan
Percent Spent
on Generics
Percent Spent on Preferred
Brands
Percent Spent
on Nonpreferred Brands
Florida Blue
61%
25%
14%
UnitedHealthcare
23%
43%
35%
Aetna
23%
54%
23%
First Coast Advantage
N/A
N/A
N/A
Source: HealthLeaders-InterStudy, January 2013 Pharmacy Benefit Evaluator. National company data for all Rx benefits.
Note: For more information about health plans and pharmacy benefits, please contact HealthLeadersInterStudy about purchasing access to the Pharmacy Benefit Evaluator. Additional coverage includes indicators of commercial, Medicaid and Medicare business opportunity; indicators of branded drug coverage;
indicators of access to biological drugs; drug expenditures by therapeutic class; and indicators of plans’
ability to control Rx benefit.
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Medicaid/Medicare/
Uninsured
Table 7-1:
Medicaid
Total
Beneficiaries:
Percent of
Population:
MCO-Managed
Title 19 Medicaid:
MCO-Managed
CHIP:
Other MCOManaged Medicaid:
Total MCO-Managed Medicaid:*
Local
229,916
17%
2,748
11,162
133,889
64%
State
3,449,179
18%
1,061,275
235,973
432,024
50%
>>>
*Represents percentage of total beneficiaries.
Florida has started the process of shifting nearly all of its Medicaid beneficiaries to mandatory managed
care, affecting nearly 2 million Medicaid beneficiaries by mid-2015. The Statewide Medical Managed Care
program is based on a pilot project that started in the Jacksonville area, where all Medicaid beneficiaries
have been required to enroll in an HMO or provider-service organization. The Jacksonville pilot has faced
criticisms about cost control and access to care.
The Centers for Medicare & Medicaid Services delivered its completed waiver for managed Medicaid in
June 2013. There are two components to the Statewide Medicaid Managed Care program: Long-Term Care
and Managed Medical Assistance, with the latter covering the bulk of the Medicaid population. The state’s
Agency for Health Care Administration has selected which plans will be offered throughout the state,
which has been split into 11 Medicaid Managed Care Regions. The five counties in the Jacksonville area
are in Region 4, along with counties Flagler and Volusia to the south.
Region 4 will be in the final batch of those transitioned to the Long-Term Care component of the expansion, to be completed by March 1, 2014. Region 4 enrollees in the Long-Term Care component can choose
among the following: American Eldercare, Humana, Sunshine State Health Plan, and UnitedHealthcare.
Region 4 was one of only three regions won by Humana, while American Eldercare won contracts in all 11
regions for LTC. In July 2013, Humana announced plans to acquire American Eldercare.
The MMA component is expected to enroll more than 3 million recipients statewide, including 302,581
people in Region 4, which is expected to have the program implemented in by May 1, 2014. The Region 4
MMA plans are First Coast Advantage, Sunshine State Health Plan, and UnitedHealthcare. These are the
current participants in Jacksonville’s Medicaid program, with UF Health’s First Coast Advantage the largest player. In November 2013, the state added WellCare to Region 4 after the insurer protested being left out.
Magellan Complete Care Serious Mental Illness Specialty Plan and Sunshine State Health Plan Child
Welfare Specialty Plan will be the specialty plans offered through the program.
Even though Gov. Rick Scott and the Florida Senate largely endorsed the expansion of Medicaid eligibility
to 133 percent of federal poverty level, the Florida House of Representatives rejected the move, ensuring
that the state will continue to have one of the highest uninsured rates in the nation. Florida’s current Medicaid program is one of the more restrictive in the nation, with eligibility limited to disabled individuals
with incomes up to 75 percent FPL, parents with dependent children up to 20 percent FPL, and school-aged
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children up to 100 percent FPL (Florida Center for Fiscal and Economic Policy). Non-elderly adults without
children do not qualify.
Even with managed Medicaid long established in northeast Florida, there continue to be hassles for local
beneficiaries. For example, in October 2012 the Agency for Health Care Administration switched more
than 2,000 beneficiaries in St. Johns County to WellCare’s StayWell plan without informing the members.
Flagler Hospital, the only acute-care facility in St. Johns County, was initially not in the insurer’s provider
network; after negotiations, the hospital joined the network in January 2013.
Table 7-2:
Medicare
Total
Beneficiaries:
Percent of
Population:
Medicare
HMO:
Medicare
PPO:
Medicare
PFFS:
Other Managed
Medicare:
Total MCOManaged
Medicare:*
Local Medicare
217,345
16%
22,669
27,238
44
16
23%
State Medicare
3,653,782
19%
935,780
378,732
3,866
1,002
36%
>>>
Table 7-3:
Prescription Drug Plan
MA-PDP:
Stand-alone PDP:
Total PDP Penetration:*
Local PDP
47,162
85,543
61%
State PDP
1,261,892
1,300,007
70%
>>>
While managed Medicare is popular in other regions of Florida, particularly in the south, seniors in northeast Florida have been more resistant to making the switch to private insurers. Less than a quarter of local
seniors have opted for managed care, while the state average is 36 percent.
About two-thirds of local MA enrollment is in either UnitedHealthcare or Humana, with the former
enjoying the lead. Former market leader Humana has seen its lead erode since kicking University of Florida
Physicians off its provider network in late 2011, allowing UnitedHealthcare to eclipse Humana’s enrollment. UnitedHealth finally took the lead from Humana in 2013.
Humana took UF off its network in part to exert greater controls over its care coordination with physicians,
utilizing the Medicare clinic model that is already popular and effective in south Florida. Humana purchased a noncontrolling interest in MCCI (the physician group that replaced UF Physicians in Jacksonville)
and acquired Metropolitan Health for $500 million in 2012; the patient bases of each of these practices were
already severely weighted toward Humana members. UnitedHealth purchased two Medicare Advantage
plans, both south Florida-based, and both with facilities devoted to serving members.
These efforts contributed to Humana’s flagship Gold Plus MA plan garnering 4.5 out of 5 stars in 2013;
Humana subsidiary CarePlus achieved a 4.5-star rating for 2014. These are the two highest-rated MA plans
available in Duval County. South Florida-based Florida Healthcare Plus is a new entrant into the local
Medicare Advantage market, and it offers the lowest in-network out-of-pocket maximum in Duval County,
$3,400 (tied with the PrimeTime HMO from Florida Blue).
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Table 7-4:
Uninsured
Uninsured:
Percent of Population:
Local
227,378
17%
State
4,099,197
21%
49,262,628
16%
>>>
National
The state of Florida has the third-highest rate of uninsured in the nation, with one out of every five residents
in the state without health insurance. Only Texas and New Mexico have a higher percentage of uninsured.
The uninsured rate in Jacksonville is closer to the national average, thanks in part to collaborative efforts
by the area’s major health systems and the Duval County Health Department.
The Duval County Health Department has worked with hospitals to steer frequent emergency room users
away from the ER and into primary-care physician offices. Nurses help direct patients discharged from
the ER to PCPs, and to medication if necessary. The population primarily targeted by this initiative lives
north of downtown Jacksonville, where the new UF Health hospital was planned to be built. This area has
few medical services and high rates of chronic illness (Florida Times-Union). The ER diversion program
focuses on patients with heart disease, asthma, and diabetes.
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Pharmacy
+
The Jacksonville market has fundamental dynamics that are favorable to pharmaceutical companies, such
as relatively easy access to physicians, a competitive health system segment, the presence of an academic
medical center, a low unemployment rate, and an uninsured rate that is lower than the state average. The
local physician segment is also competitive, particularly among specialties such as cardiology, cancer, neurology, and orthopedics, possibly increasing utilization of services and drugs. But the medical community
is becoming integrated with health systems, which may eventually work to dictate formularies, particularly
as reimbursement shifts encourage shared savings.
Factors that are favorable to pharmaceutical sales include the following:
»» L
ocal health systems are employing the patient-centered medical home model and more actively
engaging patients, particularly after hospital discharges, which should help increase drug adherence.
Programs such as the Baptist Health AgeWell Institute are focused on improving care coordination for
seniors.
»» T
he prevalence of urgent-care and emergency centers sponsored by health systems provides customers
with more immediate access to prescribing physicians.
»» T
he presence of the medical school at UF Health ensures a high per capita physician rate, and the competitive health system environment will mean more aggressive recruitment of physicians.
»» T
he Florida Drug Discount Card program helps provide prescription drugs to residents who are at least
age 60 who do not have drug coverage and who are not in the Medicare coverage gap. Card holders
receive discounts, without which they may elect to go without their prescribed drugs.
»» F
lorida’s overall health ranking remained at 34th in the nation in 2012. Florida has higher-than-average
rates of diabetes and a large uninsured population (2012 America’s Health Rankings from United Health
Foundation).
Factors that are unfavorable to pharmaceutical sales include the following:
»» F
lorida and Alabama are the only states in the country that do not allow nurse practitioners to write
prescriptions for controlled substances.
»» F
lorida Medicare beneficiaries were found in early 2013 to have below-average adherence to prescription drugs treating diabetes, dyslipidemia, hypertension, and depression (CVS Caremark, “State of
Adherence” report, 2012).
»» T
he American Medical Student Association gives the University of Florida College of Medicine a score
of “A” for its conflict of interest policies, claiming that the school “has an excellent set of policies to limit
and illuminate relationships between industry and its medical school faculty, staff and trainees.”
»» A
s part of UnitedHealth Group’s Select Designated Pharmacy Program, members of the carrier’s fully
insured plans in Florida have financial incentives to obtain certain chronic-care drugs via mail (instead
of retail pharmacies) or to switch to a drug on a lower tier. The initiative affects 18 drugs on Tier 3 of the
company’s formulary. UnitedHealth has 21 more effective brands on Tier 1 of its formulary and roughly
50 generics on Tier 2 in certain cases. UnitedHealth officials report that this approach has helped it to
increase generic utilization significantly.
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Legislation
The state’s response to the Patient Protection and Affordable Care Act was the major healthcare story to
come out of the 2013 Florida Legislature. The Senate convened on March 5, 2013, for the 2013 regular session, although legislative action unofficially began in mid-January with the start of committee hearings.
Gov. Rick Scott supported the expansion of Medicaid eligibility in Florida in February 2013, to go in tandem with the federal government allowing the state to expand its mandatory managed Medicaid pilot.
The two decisions, having won support from hospitals, health plans, and various chambers of commerce,
would have added 3 million beneficiaries to the rolls of managed care. However, legislative leaders rejected
the statewide Medicaid expansion as defined by Scott and the federal government. Senate leaders backed
a plan that essentially went along with Medicaid expansion, but conservatives in the House dug in their
heels, proposing a more costly and less effective counterproposal. Scott did not push the issue, and eligibility expansion died with the end of the session on May 3, 2013.
The State House’s leadership reiterated in late 2013 their opposition to Medicaid expansion, meaning that
the measure may not be seriously taken up until after the 2014 elections.
Table 9-1:
Summary of Recent Legislation
Bill Name and Number
Description
Status and Date
Optometry – Scope of
Practice Expansion (HB 239)
Authorizes certified optometrists to administer and prescribe certain oral
preparations of ocular pharmaceutical agents
Signed by governor
Pharmacy – Biosimilars
(HB 365)
Allows a biosimilar that has been approved by the FDA to be interchangeably substituted for a prescribed biological drug
Signed by governor
Physician Assistants
(SB 398)
Allows physician assistants to order any medication for patients in hospitals and surgical centers under the direction of their supervisory physician
Signed by governor
Workers’ Compensation
(SB 662)
Provides the same rate of reimbursement for repackaged or relabeled
drugs as for non-repackaged drugs
Signed by governor
Health Care Bill
(SB/HB 1159)
Establishes criteria for designating Level II trauma centers in areas with
limited access to trauma care; requires individual and group health insurance or health maintenance policies that provide coverage for cancer
treatment medications to provide coverage for oral medications.
Signed by governor
General Appropriations Act
(SB 1500)
Florida’s budget for fiscal year 2013–2014 was approved at a level of $74.5
billion, which includes state revenues, federal revenues, and other grant
funding
Signed by governor
Medicaid Billing Process
Revised
(SB 1520)
Requires the state to implement a prospective payment system for
inpatient hospital services using diagnosis-related groups; requires the
Department of Revenue to manage collections and notify each county of its
required annual contribution, which is due in equal monthly installments;
establishes Statewide Medicaid Residency Program.
Signed by governor
Medical Malpractice Insurance Exemption Extension
(SB 1770)
Prevents Florida physicians from being taxed on their medical liability
premiums
Signed by governor
April 2013
June 2013
June 2013
June 2013
June 2013
May 2013
May 2013
May 2013
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Priority Medical Liability
Reform
(SB 1792)
Requires an expert medical witness to be in the same specialty as the
defendant physician; ensures a physician’s constitutional right to counsel;
gives parties equal access to medical fact witnesses.
Signed by governor
Florida Heath Choices Program
(SB 1844)
Revises enrollment period of the Florida Health Choices Program
Signed by governor
June 2013
June 2013
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Employers
O
THIS SECTOR IS: NEUTRAL
Sector Outlook
The coming year could see greater acceptance of narrow networks by midsize groups in Jacksonville, but
the largest employers, particularly with a national scope, may be resistant to restrict provider choice, especially if local health systems do not yet have the ability to demonstrate cost efficiency and care coordination.
As the market matures into accountable care organizations/integrated delivery systems, employers will be
able to work more closely with insurers on new reimbursement models. To bolster enrollment ahead of
anticipated tough negotiations with health systems, commercial insurers may be willing to cut deals with
desirable groups.
Highlights:
» » Economy:
The Jacksonville market is stabilized by the presence of several large employers, mostly in the government, healthcare, and financial services sectors. Through the Naval Air Station at Jacksonville,
the federal government is the largest employer in the area, with the city of Jacksonville and Duval
County Public Schools also serving as big employers. Baptist Health, Florida Blue, and the Mayo
Clinic are among the largest employers in the area, and they should be beneficiaries of the full
implementation of federal healthcare reform. The market also has a significant financial services
base, with Bank of America, Merrill Lynch, Citi, JP Morgan Chase, and Wells Fargo each employing
thousands in the region.
The unemployment rate in the Jacksonville market was 6.7 percent in August 2013, compared with 8.6
percent in August 2012. The unemployment rate in Florida was 7.1 percent for August 2013, with the
national rate standing at 7.3 percent (Bureau of Labor Statistics).
Three Fortune 500 companies are based in Jacksonville: CSX (226th), Winn Dixie (363rd), and Fidelity
National Financial (472th).
» » Plan design/premiums:
The health plan segment in Jacksonville is highly competitive, with insurers willing to compete on
price for desirable groups. Florida Blue beat Aetna’s bid for the city of Jacksonville by a considerable
amount for the 2013 plan year, although the rates were only locked in for a year instead of the two years
Aetna offered. Florida Blue remains the city’s health plan for 2014. Florida Blue is also the benefits
administrator for Duval County Public Schools, which employs more people than the city.
Insurers will see in the coming year how responsive customers are to narrow networks. Without one
truly dominant health system, a limited network offered to larger employers may need to be cobbled
from multiple systems. Baptist Health and St. Vincent’s HealthCare are working with Coventry to
market a narrow network product to employers with more than 50 members; the two health systems
combined have two-thirds of the hospital beds in the market.
43

Jacksonville - One Stop Shop

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