Health insurance game-changer?

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The founders of the Evergreen Project believe they have a revolutionary idea that can bring low-cost, high-quality health insurance to Maryland‘s uninsured and under-insured.

Now they just need to find a way to make it a viable business.

Named for the Baltimore coffee shop where the idea was hatched, the Evergreen Project would be a health plan with its own doctors, nurses and clinics.

At the core of its business model would be a “teamlet,” a clinic in a working-class neighborhood staffed with a salaried doctor, a nurse or nurse practitioner and other health professionals. Office visits would be augmented with cost-saving measures like telemedicine — remotely consulting with specialists and others — and preventative measures like wellness programs.

“A lot of this isn’t really advanced medicine,” said Dr. Peter Beilenson, Howard County health officer and former health commissioner for Baltimore. “No component is unique, but putting it together is unique.”

The project is taking advantage of a section of the federal health care reform act drafted to encourage creation of regional nonprofit consumer-operated and oriented plans, or CO-OPs — special nonprofit companies that will expand insurance availability.

The hurdles facing CO-OPs like the Evergreen Project are many, including finding financing to build the necessary infrastructure and uncertainty caused by the government, including lawmakers who have been calling for the repeal of health care reform.

The Evergreen Project’s goal is to create an affordable health plan that would appeal to cash-strapped working families while also providing top-level care — all while trying to carve out market share from the giants of the health insurance world. The group also wants to create a business model that is self-sustainable.

“It’s an audacious undertaking to say the least,” said J. Howard Kucher, executive director of the Evergreen Project. “We’re optimistic, but we understand that it’s not about the big idea, but the big idea that can actually work.”

Making a go of it is no small concern for the steering committee behind the Evergreen Project — business and health experts working to find the right balance between social responsibility and being a viable nonprofit business. The group is still conducting feasibility studies to make sure its business model can succeed.

“All of this is hopes and dreams we are testing,” Kucher said. “But, if the numbers don’t work, then we go home at the end of the day.”

One potential problem arose last week when the $6 billion set aside by the federal government for low-cost loans to help fund the CO-OPs was on the chopping block as part of the back-and-forth budget battle that threatened a government shutdown.

“If the subsidies were cut out, I think the CO-OPs will have a hard time making a go of it,” said Timothy S. Jost, a health law professor at Washington and Lee University School of Law in Lexington, Va., and a consumer representative to the National Association of Insurance Commissioners. “If that were to happen, I think the outlook would be pretty grim.”

Beilenson said he was concerned about the loss of the subsidies, but they were not the sole factor in determining the feasibility of the Evergreen Project.

“Although, clearly, it’s helpful to have the loans for the reserves, we’re intending to do this as a self-sustaining model,” Beilenson said. “It would not kill the CO-OP if they were reduced or removed, but it would make it easier [if they were not].”

The project has its roots in Healthy Howard, Howard County’s novel program that offers basic medical and preventive care to qualified, uninsured residents. The program, which charges a monthly fee to customers but does not offer full coverage, will end in 2014. The Evergreen Project was seen as a way to keep the spirit of the program going.

Under the current federal health care reform law, a combination of subsidies to help pay for coverage are intended to entice people to take out insurance. At the same time, penalties and fines would discourage people from going uninsured.

Beilenson said one situation sure to arise is that families with finances stretched thin will have to choose between paying for coverage or opting to pay a fine, which may be less than the cost of insurance.

“They’re going to be caught between a rock and a hard place,” Beilenson said. “So, they could end up having to pay the penalty and still not have insurance.”

Kucher said the CO-OP wants to price its insurance at more than the amount of the fine but less than what it would cost to go with a large insurer.

Because the Evergreen Project would provide low-cost insurance to the uninsured, Kucher has reached out to philanthropic foundations and socially responsible investors — those willing to invest in companies whose primary purpose is fulfilling a social need rather than being profit-driven.

“We’re looking to build this as a social enterprise rather than make a profit,” Kucher said. “Because of that fact, all of a sudden the capital acquisition becomes very different.”

Evergreen Project leaders plan to decide in October if it is worth taking it to the next step. If all goes as planned, the first prototype clinic could be open by the end of the year.