Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, September 25, 1994 TAG: 9411050025
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY
DATELINE: LENGTH: Medium
"What's a green-and-yellow-tractor company doing in the health care business?"
Making money, of course, is one of the obvious answers, although it didn't start out that way.
Deere & Co.'s Heritage National Healthplan is one of several that soon will be selling a health management organization - HMO - to businesses in the Roanoke Valley. It added health care to its line of farm machinery when it tried to save money for Deere & Co.
In 1971, the Moline, Ill., company decided to set up a company-insured and -administered employee health care program. By the mid-1970s, the company had put together a health care department. It did so well managing its own health care that other businesses asked if they could get Deere to manage their health care, Hammes said.
In 1980, Deere established the Quad Cities Health Plan for four Moline-area communities with a combined population of 350,000, including 50,000 Deere employees. It set up a second plan in nearby Waterloo, where 30,000 Deere workers lived.
Five years later, the company still was offering its employees 100 percent coverage with no deductibles, and facing simultaneous drains on resources - an aging work force that had greater health care needs and a drop in the agricultural equipment business.
In other words, it needed to do still more to control health care costs. It launched Heritage in 1985 and with that became a serious competitor among HMO providers. In a 1992 survey on HMOs, Consumer Reports ranked Heritage first for overall customer satisfaction.
Hammes referred to the Consumer Reports listing in his talk last week to the Blue Ridge Regional Health Care Coalition and also mentioned other reasons that Deere expects to succeed in this market. He pointed out that Deere's Quad Cities plan is in an area "not dissimilar to Roanoke" and noted that Deere has had a "lot of experience dealing with employers in the heartland of America."
"We understand that health care needs to be delivered locally," he said.
Deere already was operating in nearby Kingsport, Tenn., so movement into Western Virginia was natural, Hammes said. "There's a lot of opportunity in the Southeast and the Midwest," he said. While Deere is branching out into areas such as the Roanoke Valley, it also continues to experiment with health care delivery back home in Illinois. Its latest effort is called the John Deere Family Health Center and is a joint project of Deere, the United Auto Workers union and the Mayo Clinic of Rochester, Minn.
The center, which Hammes calls a "learning laboratory" and a version of "one-stop shopping," has its own 25,000-square-foot building that houses a pharmacy, a laboratory and a staff that includes eight family practice physicians who are employees of the center. The clinic is run by a Mayo administrator.
The physicians - some hired locally, some brought in from outside the community - are the front line of care for all of the plan's 11,000 users no matter why they are seeing a doctor. The plan contracts with specialists and one hospital to provide care beyond the clinic and its staff.
Hammes said the company applies the same quality-assurance principles in providing health care that it does in making tractors. For example, clinic workers meet regularly to discuss ways to save money; a recent suggestion was to call clients and ask them to make use of the preventive-care programs at the clinic. Also, patients review doctors on such details as bedside manner and waiting-room time. In cooperation with the Mayo Clinic, Deere is trying to establish standards for patient care for 20 common illnesses to assure that all patients get comparable care.
The idea also is to eliminate duplicate tests and treatment. For example, until recently a person who needed back surgery might get both a magnetic resonance imaging and a CAT scan, which are similar and costly tests. Back patients now get an MRI.
Despite its success with health care plans, Deere in 1993 paid $235 million for employee health care, up from $20 million in 1971. Hammes thinks it would have been higher, however, if not for the planning.
Deere opened its Heritage National Healthplan Roanoke Valley offices July 18 in Colonnade I Corporate Center in Roanoke County. It has a staff of five. It expects to get its state HMO license soon; it's already negotiating with doctors and hospitals to set up its network needed to meet licensing requirements.
The company wants to be "ready to operate" by the first of next year, Hammes said.
Local doctors and hospitals have been "receptive," he said.
by CNB