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Archive for April, 2007

Walk, Stop, Meditate and Celebrate

by Nick Jacobs

As a speaker today at the Consumer Directed Health Care Conference and Expo presented by Consumer Health World, I have been observing a program that is built around medical wellness, convenient care practices, reducing health care costs, medical tourism and the relevancy of blogging in healthcare. Sound familiar?

It seems like only a week ago that we were hearing very similar discussions at the World Healthcare Congress.  How to control healthcare costs, improve employees personal health,  and connect medical records for patient and physician use. The leadership message is the same.  The goals are similar, and the end results would be VERY positive for everyone.

This particular conference is uniquely positioned in Las Vegas where many of the casinos still embrace cigarette smoking and lots of alcohol consumption.  As I walked past my 5th steak house on my way to speak, my mind flipped quickly back to Dr. Dean Ornish’s training and I remember his suggestions that if we could just walk for 45 minutes three times a week, stop eating saturated fats, stop smoking, and carve out about an hour a day to relax, our health care would improve exponentially.

Walk, Stop, Meditate and Celebrate!  Maybe that should become our mantra?  Get healthy through clean living!  Excuse me, I have to hit the casino one more time before I leave!

Another Reason to Adopt Electronic Medical Records

by Scott MacStravic

A recent Accenture survey found that two-thirds of consumers responding indicated that having an EMR system or not played a role in their selection of a physician. Moreover, a little over half of these consumers said that they would be willing to pay a reasonable extra amount to cover the costs of such a system. Despite this consumer preference, only about 10% of practices and 25% of doctors have EMR systems in place. The cost of implementing and maintaining the system is the overwhelming barrier, with 86% of physicians reporting that as a concern. [“Survey Finds Patients Favor Doctors Using EMRs” E-Health Trend Watch Apr 27, 2007 (www.hcpro.com)]

This consumer attitude adds to the many quality and efficiency reasons for physicians to adopt EMR systems. Fortunately, governments, employer coalitions, and hospitals are indicating a willingness to support physicians’ efforts to digitalize their records systems, and laws against hospitals helping are being relaxed. But another reason emerged in a breakout presentation at the World Healthcare Congress this week.

During the presentation of Regence BlueCross BlueShield and the software firm, Kryptiq Corporation, both in the Northwest, the preference of at least that employer for physician practices with EMR systems was made clear. This makes good business sense for Kryptiq, since it is in the software business, but also because of the advantages the EMRs offer in employee health management.

Almost all the current pressure on physicians to adopt EMR systems focuses on their importance in sickness care. They enable physicians to more quickly access information needed to diagnose and treat patients who are ill, to avoid duplication of tests in making diagnoses, and avoid contraindicated medications in treatment, for example. They also facilitate coding and billing, so help practices in managing cash flow.\

Growing importance is being given to the prospect of sharing EMR information across practices, to improve continuity of care when multiple practices are involved in an episode of care, for example. Regional Health Information Organizations are emerging as ways to enable sharing of data by practices when patients seek care away from their usual sources, perhaps in emergencies such as hurricane Katrina.

But EMRs are also excellent foundations for health management, for preventing and catching early risks and diseases that can be managed in ways that reduce direct sickness care costs, but also worker absences, impaired performance while at work (“presenteeism”), disability wage replacement costs and other labor costs to employers. And employers can influence the physician selection of hundreds, even thousands of employees.

Kryptiq considers the presence of EMRs in deciding which physician practices to include in its provider network, for example, and selected GreenField Health System in Portland, OR as a partner in its effort to manage the health of its employees, not simply deliver sickness care. The founder of GreenField Health serves on the Kryptiq board, while GreenField is also a customer for Kryptiq’s secure online communications system for communicating with patients. Such communications improve the efficiency of practices by eliminating unnecessary office visits, while providing the foundation for ongoing health improvement and maintenance efforts.

In addition to using EMRs as one factor in choosing practices for provider networks, employers can use EMR-enabled performance data on how well practices are doing in managing employee health to inform individual employee choices of personal physicians. When employee performance makes a difference to their compensation and career prospects, and health has a significant impact on their performance, this adds another reason for patients to prefer physicians with EMRs.

The landscape of health IT, and interview with Lonny Reisman, ActiveHealth Management

by Emily DeVoto

I’m interested in bringing evidence into practice, and talked with people at last week’s World Health Congress about IT systems and products that provide clinical decision support. Ideally such products are also a way to evaluate clinical quality, and to monitor potential adverse drug interactions and flag them before they happen - or at least in time for intervention.

As you’ll see from other posts in this blog, getting over the barriers to implementing IT is the next big - and hopefully easy - step to improving quality, in part by allowing consumers ownership of their health data. Making such systems interoperable, within the bounds of privacy issues, will be crucial for using these data for the research we need to best evaluate and continue to improve the performance of health systems (think quality measurement, whether for public consumption or for internal quality improvement).

Industry has not waited for government and patients to get over fears of privacy to start developing electronic health records, clinical decision support systems, and the like. A number of IT vendors who’ve been developing such systems in parallel are exhibiting here at the Congress and have been happy to chat about their work, some of which has already been put to use by health systems.

ActiveHealth Management’s products analyze data somewhat downstream from a clinical encounter and send alerts, reminders, etc. to doctors and patients. It’s also integrated with a personal health record, which patients can access through a web portal. It’s also… well, there are a number of other components and products that I’ll not attempt to describe, let alone tie together. Their website is here. Here’s a podcast of an interview I did Monday with Lonny Reisman, MD, CEO of ActiveHealth Management. Not meant to be an endorsement on my part - remember there are lots of good products out there - but a chance to learn about what one such system can (and can’t) do.

icon for podpress  Emily DeVoto interviews Lonny Reisman [19:48m]: Play Now | Play in Popup | Download

Employees Are Health Investors, Too

by Scott MacStravic

Businesses are taking diverse positions on the subject of investing in employee health.  Many are dropping health insurance coverage or cutting benefits, since these directly and immediately cut their labor costs.  But many think of health benefits as investments, with measurable and significant payoff in terms of employee productivity and performance, and thereby improved balanced scorecard performance for the firm.

The challenge for business is often one of timing.  Will the investments they make this year pay off in this year?  Will it take years for proactive health initiatives to affect workers’ health, and thereby productivity and performance?  Will the employees still be working for the same employer by the time investments pay off?  Will the return on investment (ROI) ratios and overall economic impact be great enough to make the decisions (and deciders) look good to boards and shareholders?

While workers, themselves, don’t worry too much about their “profitability”, they are also investors when health maintenance or improvement efforts are made.  They always have to invest their time and effort in any proactive health initiative.  They may also have to invest their cash, to pay for medications that control risks or diseases, to join health/fitness centers, to eat healthy food, for example.  And they are likely to have a similar attitude to that of employers when deciding whether to make and continue investing in such initiatives.

Proactive health may pay off almost immediately.  Getting a flu shot should prevent being smitten by influenza in the same flu season as the shot is given, though the payoff amounts to something that does not happen, so is harder to detect and realize its value.  Taking the medications that help control an existing chronic disease can save patients their own money and time getting care, to say nothing of the intrusiveness into their daily lives that many diseases impose – and these benefits can occur in the same year as patients “invest” in improving their compliance with medications regimens.

But when it comes to managing risk conditions — such as overweight/obesity, high levels of blood sugar, pressure and cholesterol, low bone density, etc. – it is unusual for any significant reduction in illness to occur in the same year that the investments are made.  It may take years, even decades for measurable results, which are also things that don’t happen, so are not very noticeable.

Risk behaviors, when ended, modified, or replaced by healthy alternatives, can produce immediate and noticeable benefits in some cases.  Quitting smoking, for example, can make it easier to get work done, thanks to not having to take smoking breaks all day.  It can save hundreds, even thousands of dollars a year in “discretionary income”, and make it possible to enjoy another use of the money.  Of course, it can also produce “withdrawal” symptoms, increase stress, lead to weight gain, or have other significant “costs” as well.

Most risk behaviors, however, have a long-term payoff, and since by definition “risk” is a statistical probability rather than a certainty, it is difficult for any individual to be certain a given behavior change has had any effect at all.  Some, fortunately, pay off in weight loss, energy gains, feeling better about oneself, or other benefits that may be considered well worth it by individuals, even if they are not certain about the health benefits.

Many employers and policy gurus may feel that the intrinsic benefits of reforming one’s health behaviors — whether to manage a chronic disease, reduce an existing risk condition, or reduce general risk of disease or injury – should be enough to motivate individuals.  But since the benefits thereof often take a while to occur and be noticed, and many may never be recognized, while the investments will always be noticed, the use of extrinsic incentives and rewards may be necessary to achieve a high enough level of motivation to make a difference.

There is also an issue of fairness involved.  If employers and insurers gain measurable financial benefits from changes in behavior made by employees, dependents, or health plan members – is it not fair that those who invest their time and effort to achieve such benefits should share in the results thereof?  The practice of “gainsharing” is already well-established in employee suggestion programs, for example, as well as in capitation and other risk/reward arrangements between payers and providers.

When and because employees or health plan members have to make their personal investments upfront, it is logical for payers to entice them to do so via incentives and rewards, to make the investment both significantly and immediately rewarding.  The intrinsic benefits of changing behavior may be too uncertain or take too long to make them effective justifications or rewards for such change.

On the other hand, extrinsic benefits notoriously lose their impact with time.  Continuous rewards for the same behavior become perceived as “entitlements” after a while, and may have little effect as a result.  Fortunately, at the point where extrinsic rewards lose their luster, it is that much more likely that the intrinsic rewards will be perceived and appreciated by individuals who change to healthier behaviors.  It may turn out that by enabling such people to monitor the improvements in health and quality of life they gain,  by reminding them periodically and encouraging their peers, family and friends to do the same, sponsors of proactive health initiatives can supplement or supplant their extrinsic rewards without reducing individual’s commitments and investments.

Interview with journalist Shannon Brownlee

by Emily DeVoto

Please check out my blog, The Antidote, for an interview with health care journalist Shannon Brownlee. If you like what she has to say, keep an eye out for her book, which is coming out this fall.

Interview/Podcast with Mark Ganz, CEO Regence and Luis Machuca, CEO Kryptiq

by Matthew Holt
This is the transcript from the interview I did at WHCC last week with Mark Ganz, the CEO of Regence, the Oregon based Blues plan that operates in the Pacfic Northwest, and Luis Machuca, the CEO of Portland-based health IT messaging company Kryptiq. Machuca is innovative as both and employer and a technology guy, and Ganz is, shall we say, not your typical insurance company executive! This is crossposted over at The Health Care Blog

Matthew Holt: This is Matthew Holt with the World Healthcare Blog, reporting from the World Healthcare Congress, doing a podcast. It’s kind of funky back here because we are in this glass-enclosed blogger’s corner which they put together at the back of the exhibit hall, but they are still setting up the exhibit hall, so you can hear the vacuum cleaners in the background. But no matter, we are on with the first podcast of the day.

Today we have got some very interesting folks: Mark Ganz, who is the president and CEO of the Regence Group, which is the big Blue’s plan in Oregon and the Pacific Northwest; and Luis Machuca, whose name I just got wrong again. [laughs]

Luis Machuca: Machuca!

Matthew: Machuca! Sorry, my pronunciation is–they never taught you that about proper Spanish accent in the English school I went to. He is the CEO of Kryptiq, which is an IT messaging company. Well, I should let Luis tell you about that. Mark has already been on the podium twice today in two different areas; Luis has just been talking about an initiative that is being run for his employees with Regence. So let’s start there; Luis, give us the quick find out about what are you doing with your employees and how you work with Regence and what innovative things you are doing around employee healthcare at Kryptiq.

Luis: Hi Matthew. So, really what Kryptiq is all about is building tools that enable healthcare transformation. We’ve really, from day one, always felt that transformation starts from the inside out. So before we try to transform the world of healthcare outside, and build tools for them, we wanted to make sure that we were sensitized to the notion of delivering the very best possible healthcare in the most efficient of ways. So we’ve done many things along those lines, starting with reimbursing for email and patient portal enable clinics for employees.

More recently, and why Mark is here really, is to align with health plans who also embrace the notion of transformation and the notion of getting more decision in the hands of the employees, and more tools and information for employees to make the right decisions about their healthcare dollars.

Matthew: So what does that mean in real life? How have you structured your employee benefits so far, and what’s that actually mean? I’ll ask you, and then I’ll ask Mark the other side.

Luis: Yeah, in real life that means, number one, that we want to make sure that employees have easy, highly productive access to excellent healthcare, and thus the email and portal enabled reimbursement for clinics that do that; and two, a high, high component of a mix of an HSA combined with tools from our health plan that allows people to be guided about the decisions that they make, about the choices that they have, about things that are going to work for them, both in a preventive and also once they have some disease.

Matthew: So, are you funding the HSA from the company, or is that sort of more skin in the game from the employee.

Luis: We fund half of the HSA, so we fund half of their limit.

Matthew: Well, that’s pretty interesting. Now Mark, tell me a bit about how it works out from the insurer and the kind of work you are doing with them.

Mark Ganz: Well, one of our core beliefs as a company is that the fulcrum for full healthcare transformation is the individual customer, the consumer; and that if you look at, when they talk in healthcare about the misaligned incentives among the various players in healthcare, it’s because we are not aligned toward a single individual or person that we serve.

Our belief is that if we focus on the needs of the individual and engage that individual to move beyond the sort of state of entitlement that they are currently in, and create a more of a healthcare marketplace that is very responsive to consumers and in which a consumer is able to navigate and make choices, value-based choices, that that will begin the seeds of more fundamental change throughout the healthcare system.

Based on that belief, we’ve started a pilot within our own company with our own 6,000 or so employees, now we are closer to 7,000 employees, focusing on how do we engage them in their own use of healthcare benefits, in their own use of healthcare, so that they have a better understanding of the interconnection and interdependence, frankly, between and among themselves around their use of care and even their desire to remain healthy and not need the care in the first place.

Matthew: What does that mean in terms of - you showed in the last session some of the dashboards, and some of the tools and techniques. Could you go down to the details of what you’re using?

Mark: Sure. What we’ve done is focused around the key outcomes we want to achieve in terms of engagement of employees, and set up a series of programs designed to achieve those outcomes. We measure our ability based on those outcomes.

So, specifically, the first year we were into this, we designed health risk assessments that all of our employees filled out. Based on what we learned from that, from what employees told us they wanted to work on most, we then developed a series of wellness programs that were designed to address those very issues.

So we had a number of employees that smoked and wanted to quit. We engaged them in ways in which they could do this. We had a number of employees - a lot of employees - who were very overweight. In fact, I think they’d been attracted to our company because we had rich benefits and they felt they would be well cared for as employees in our company.

A lot of them were overweight, so we designed a series of financial incentives and programs that were aligned with those incentives to help people lose weight. In fact, we’ve had amazing success.

And what’s really been interesting is that once we created those programs and then helped people engage in them, what we’ve really tried to do is get employees working with each other to carry it forward. We’ve seen this amazing interplay amongst employees in terms of their desire to lose weight, to get more fit, to be more engaged in taking care of chronic diseases, that we aren’t necessarily mediating. We’ve just created the opportunity for employees to talk to one another and support one another as they try to address those issues for those own lives.

Matthew: You come here with a really crucial issue (while we’re doing this someone’s trying to break the door down), which is how do you motivate people, how do you get them to get off the dime and change behavior? And there are a couple of things going on which I think are related which were on the previous panel, with George Halvorson from Kaiser Permanente.

There’s also this move in the information therapy movement which I’m sure you guys are familiar with, talking about some of the stuff that John Wennberg just mentioned earlier about decision aids and people making the right decision about their care. In some ways, take decisions back a bit from some of the excess we’ve seen in the provider community. I don’t want to put those words in your mouth! But we are talking about how we change the behavior of individuals. Some of it’s motivated with money. Some of it’s motivated with almost a community spirit, that you were discussing.

Let’s change the focus a little bit: At the same time, some of us are saying that the move towards HSAs and individual self-directed accounts actually mitigates against that and tends to put the healthy people up against the sick people and then we have the 3% of folks who drive most of the spending as George Halvorson was mentioning, who are absolutely not so amenable that type of approach.

How do you think that this fits in to the chronic care model?

Mark: OK, a couple thoughts. First off, the healthcare system is an inefficient, opaque, paternalistic system.

Matthew: No disagreement. [laughs]

Mark: And that is true no matter whether you are suffering from chronic disease or you have a hangnail. The fact of the matter is that if we’re going to get at fundamental cultural change in the way the system functions, I believe you start with the 80% that use 20% of the care who have the ability to make choices. You can educate them about how they use healthcare and about how their decisions impact the lives of others.

And, frankly, another piece is that how their contribution to the insurance pool is actually helping others out in the community. I think they have to understand both. And it’s amazing how little we understand that in this country. We believe that somehow it’s me against the big machine when it’s time for me to use healthcare. The mindset of people is often, “How can I extract the most value out of the system?” which means “How much can I extract the most value out of the system, ” which means, “How much can I use and continue to use?” They don’t see the relationship about how, when they use care, they’re essentially taxing other people within their community for their use of care.

Trying to get at that challenge — that is one of the key challenges we face. If we are able to get the health-care system to act more efficiently when it’s dealing with 80% of the people it sees, I believe it will act more efficiently when it’s dealing with the 20% of the people it sees who use 80% of the resources. That the system will change fundamentally to become more efficient, and that maybe that 80% who are elective today might be part of that 20% five years from now.

If they change the way they view healthcare when they’re healthy, or relatively healthy, that when they do get to a certain age where chronic disease sets in, they will be more thoughtful about how they use care. So it’s a belief that you’ve got to change the fundamental economic rules of the system. I don’t believe you get there by simply focusing on changing the game for the 20% using 80% of the care. I think you have to take a broader look.

Matthew: Luis, How is that playing out with what you’ve done in your company so far? What are you seeing from your employees so far, in terms of their changing care?

Luis: I want to go back to something Mark said on his speech earlier today, when he talked about an example. He was talking about a person helping his wife go through the final stages of a cancer, and how, in summary, they were almost forced to surrender control in order to really be able to cope with the health-care system’s role or participation at those stages. What we’re trying to do, and what we are all about, is whether it’s through HSAs or some of the things that Mark talked about, that the more that the decisions become available for people to make — whether it be small decisions or big decisions — the more the dynamic will change with the providers.

What we do is we understand that most providers, it’s not that they want to retain control, and it is not that they’re cynical. It’s that, in many cases, they really are unable because they don’t have access to their own data. They don’t have access to the continuity of healthcare to be able to put data, to be able to put the full picture. So they’re only giving an opinion or a prescription based on what’s in front of them.

As a technology company, what we are trying to do is put in the connectivity tools to allow those things that are in the periphery to come in and form a better picture, so people can have more informed decisions — both as providers, so people can give a menu of choices, and then also for the patients, to be able to make better choices.

The way we see that with our employees is our employees have become very discriminating about the providers that they choose, whether it be on the chronic disease pool or not. The chronic disease employees are gravitating much faster to providers who are going to help them manage a compliant state, than who are just going to be there on an episodic basis. Too early to tell in terms of what data is out, but from a behavioral and anecdotal, observational point of view, we are right on track where we want to be.

Matthew: Yeah, and actually this leads us almost to a point which is, I know, a slightly controversial point in the Northwest around managed networks and high-performing networks. [laughs] If this was TV, you could see Mark sort of cringing there.


But it’s absolutely a key issue….

Mark: It’s a hard lesson learned.

Matthew: It’s a hard lesson learned, but it’s a lesson…. In some ways, you could argue what Luis just said was that some self-selection on the consumer side is moving towards the right thing, the right network perhaps.

Mark: I think if you actually educate…. If you provide financial incentive, however that’s structured, whether it be HSA or whether it be the employer specifically putting more money in the pocket of the employee and saying, “This is your money; go spend it wisely.” However you create that incentive, and you educate them how to be good shoppers, you create more of the marketplace economic dynamic that I think will start changing the dynamic of the supplier of healthcare, i.e., the physician, the hospital and the like.

If you look in those areas of medicine that are not subject to the third-party payment mechanism, that are subject to a marketplace dynamic where the individual is spending their own money and the health-care provider is responsive to that economic relationship, what you see over time is costs are stable, and in some cases they even drop.

Let me give you an example: Lasik eye surgery versus cataract surgery. You look at Lasik over the last several years, and you see what’s happened in Lasik. Number one, quality has gotten better. Customer satisfaction has gotten better. Outcomes are better. Prices have dropped. And there are more people available to do it, because it’s a competitive marketplace.

Cataract surgery, which is subject to the third-party payment system — there’s really not much new that’s happened in cataract surgery over the last ten years. But what’s happened there? Prices have gone steadily upward, because there is not a marketplace dynamic. It’s basically “I want cataract on demand.” Physicians, who actually are much more efficient at doing the surgeries, simply do more of them and charge more for doing it. And we, as health plans, all the while are sitting back, patting ourselves on the back, saying, “Aren’t our discounts great!” When in fact, the alpha upon which our discounts are based continually goes upward.

Now, that’s an example where I think you can look at it and say, “If you give consumers the right incentives, and you educate them how to be shoppers, they’ll figure it out.” They will make good decisions and they’ll be more satisfied with the decisions they make, because they feel like they had a sense of taking charge of their own healthcare, as opposed to being run like a rat through a maze. Which is, unfortunately, I think how healthcare works.

Matthew: Let’s just raise that, though. I’m going to try and draw two things together here. The issue of Lasik versus cataracts has come up a lot, and there’s been, as you know, studies going both sides of that equation. But it’s a very definable, neat piece that you can do. Whereas we know, when we talk about chronic care, which is where most of the money is spent, it’s less definable. Part of the problem is something that Luis brought up, which is that the average physician doesn’t have enough information about the patient, the average patient, is seeing how many number of patients?

So let me ask both of you to jump in on this. How far are we along — maybe just here in Oregon and the Pacific Northwest — how far along are we in the integration of information that makes that potential easier? Then the next question is speculate, about the end state and the way that you’re going to be paying for that expensive chronic care, because of stuff that isn’t like Lasik?

Luis: Well I want to stay to your example, because I think that it’s a good place to frame the difference of possibilities. The popular notion is that people think that we want to know who gives the greatest chronic care. “Tell me who the good doctors are versus the bad doctors.”

I think that’s really a bad question to ask, for the following reason. You’re not going to be able to drive the healthcare system with 20% of the doctors, no matter what. The premise of my point is that the data is there to make the overwhelming majority — a very large number, 80-plus, 90% of the providers — to compliance, to manage a chronic disease in a very effective way, both a cost- and outcome-effective way, if they were connected to the data.

So what I want my health plan to tell me, in terms of their network, is not “who are the good doctors and who are the bad doctors,” but steer me to the people that know how to manage to compliance — as opposed to darkness, where I don’t know the difference. I don’t need to know, tomorrow, all of the details about a particular provider versus another one. But I would like to have some qualitative information about: What kind of tools do they have? Are they committed to a compliance management system? Are they willing to take whatever those steps are?

That, to me, is an important question that can be answered by health plans and others, in terms of the managed networks and which are the better networks.

Matthew: And where would you say we are, on a one-to-ten scale? How far down the path are we to that kind of information integration between those providers, which is seriously a lot of the problem that we’re talking about?

Luis: I would say, that’s not going to give you a numerical answer, but I’ll tell you this: the toothpaste is out of the tube. We are headed in that direction; it’s going to happen, certainly within the next five years. Any attempt to suppress it or repress it will result in market uncompetitiveness and either people losing jobs or people going out of business. But I think we’re past the point of no return on that. So I am very optimistic.

Matthew: I love your optimism At Institute for the Future, I remember we always used to say that the electronic medical record, you know, it’s a technology that is five years in the future and always will be. [laughs]

Luis: A very good example, the electronic medical record, you know, 80% of physicians today do not have an electronic medical record, but 95% of that 80% can do an electronic referral or could do an email consult or could send me my lab results electronically. And those get me to my next step in the healthcare chain much better armed and much better informed.

So the electronic medical record is an example of something that I think became a big initiative without a benefit/value proposition that was to the purchaser; unlike this idea where me as an employer, you know, I want to get guidance from my health plan as to where my employee is going to get better disease management for diabetes or hypertension.

Mark: I want to come back to culture here for a minute, because I am leading the effort in Oregon to try to create an interoperable free exchange of data amongst the healthcare providers. We are starting in the greater Portland area because that is where the greatest population center is. We created a committee, a steering committee under the auspices of the broader business community, the Oregon Business Council, which I chair, and we have at the table the CEOs of the major hospitals; and they are the key to making this work.

If they don’t play, because, I think as you know, the value proposition that hospitals have used into selling the idea of EMR to their own boards has generally been that by having EMRs within their own system, that in a sense it creates a higher set of castle walls.

Matthew: Yes, sure.

Mark: They keep patients within the system, they keep doctors referring into the hospital; it’s a way to make sure that the beds stay full.

It’s been an interesting impediment to the conversation that when you realize that when you talk about democratization of that information across hospital systems, that is very threatening to an old business proposition. It was what I referred to, I was trying to refer to, in my earlier speech about how sometimes things that have gotten us here from a profitability standpoint, we have to put at risk, we have to let go of and look for other ways to provide value. And right now the challenge for hospitals is to provide a greater degree of value to the community through the more easy flow of information.

When we did the study to determine where the economic benefit was of that project, the numbers that came back were essentially, the primary economic benefit was in reduced tests, duplicate tests. Because right now, you know, I am being treated at Legacy, I go up to OHSU, OHSU gets to run all the same tests because they can’t get the information from Legacy. If they can get it, they don’t have a reason to do those tests. And that is, I mean, I understand, I have compassion for the CEOs of the hospitals saying “Wait a minute, why is this a good thing for me?”

But I’ve been very impressed with the vision of folks so far, to stay with this and believe that this is the right thing for the community as a whole. And that’s what gives me hope in believing. I’d say, you know, you asked me how far along we are, I’d say we are still, we haven’t reached that tipping point. I’d say, I agree with Luis that the toothpaste is out of the tube. That is going there, but we haven’t quite got to that place where we have everybody fully admitting or fully embracing the notion that the new world around healthcare data interchange is better than the old world of “keep the castle keep strong, build the castle walls higher.”

Matthew: Right, and the last sort of question on this concerns the “Wall Street Journal” article about Virginia Mason a couple of months back, which I’m sure you saw–Starbucks was their driving employer–and went to them saying “could we reduce tests?”. VM was having trouble getting all the health plans to actually reward them in a way that was conducive to that. What do you think? I presume you are still largely a fee-for-service based payer, as it were, what’s your likely evolution in reimbursement?

Mark: We are putting a great deal of focus–it’s one of our key initiatives right now–in fundamental reimbursement–basically, out-of-the-box thinking about how we reimburse. I am convinced that much of the brokenness of the system is a direct outcome of the way we reimburse.

And when George talked today about how fragmented the system is, how it doesn’t respond to diabetics and the like, I think we have to turn around and point the finger at ourselves and say that how we reimburse medicine creates that fragmented approach. Do you think for a minute that if a diabetic who had complete, you know, had the financial resources and that the system was completely accountable to him, do you think for a minute we would continue with this fragmented system? Diabetics, as consumers, would never allow it; and the system would respond to provide more of a holistic, comprehensive way to treat their illness.

I think that we, as health plans, have to change the way, we have to be willing to move away from the discounted, secret, negotiated rates that we have, that in a sense, I think, provide very little value in reality. I mean, is it really a benefit to consumers to have a 20% or a 25% discount off an alpha that is going up at twice inflation every year? I don’t think that we are really delivering enough value there. So we better think about a different way of reimbursing, and then use that opportunity, by the way we reimburse, to change the way that physicians practice.

So for example, if we were to pay on a regular basis for email visits, would we change the efficiency and the outcomes of people’s experience of healthcare? I think we might. On the other hand, it’s very scary to the actuaries and underwriters in our company who say, “Well, if we start paying for that, who is to say that doctors aren’t just going to start billing us crazily for email visits as well as all the other things they bill us for as an alternative too?”

So we’ve put together an interdisciplinary team of healthcare economists, informatics, actuaries, and, well I would just say, creative thinkers; to start working in an R&D kind of context, trying things, seeing if they work and looking at them in the lab, if you will, to say “Could these things work, and would they drive a different outcome? Would they increase people’s experience of healthcare and tend to lower the usage of healthcare?” And if it does, if we can accomplish those things as well as increase satisfaction through that, both of the physician as well as the consumer, I think we are on the right track, and then we can try it as a pilot, and then if it works in the pilot we can take it out broadly.

Luis: Matthew, there is a very good technology example illustration of what Mark just said. The enormity, perhaps all of the software investment that has gone into tools for health plans to date, has been in the claims. How do we pay claims efficiently? And that really gets to the point of Mark, that that happens very late in the process, really at the end of the process, and doesn’t take into account any real intelligence, any real purposefulness as to what are the behaviors that we want to incentivize.

The premise of Kryptiq’s Courier line, for example, is really to go upstream and help a health plan, from a software point of view, connect all those dots that he just went through, so that it can be purposeful and intentional about the decisions they make upstream, and then the claims payment payroll takes care of itself.

So we are seeing that shift as well, not just in the strategy piece, but also in the software investment. So the software investment is also moving upstream as well.

Mark: Yeah, and actually the primary reason that we bought that product from Kryptiq and are working together is because it starts with having a common vision. And that’s what’s made it exciting in terms of working with Kryptiq, is we sort of are coming at this issue, this broad issue, from two different angles, but there are many points where we meet; whether it’s us engaging with them around what they want to accomplish in terms of employee engagement, or they engaging with us in terms of helping us with that upstream process.

Matthew: Fantastic. So the World Healthcare Blog was started because the World Healthcare Congress was interested in looking at more innovation, and there we have a bunch of innovation! Luis, Mark, thank you very much indeed.

Luis: Thank you.

Mark: Thank you.

Paying for a Different “Performance”

by Scott MacStravic

The World Healthcare Congress included a number of discussions of the growing practice of “Pay-for-Performance (P4P).  Feelings about its propriety and effects on the healthcare system varied, judging by comments made by speakers and members of the audience.  One of the major issues raised was whether it makes sense for payers, or patients for that matter, to pay providers more for doing what they should already be doing anyway.

When it is reported that physicians adhere to best practice guidelines and evidence-based medicine only about half the time, should they be paid extra to correct their significant failures, or punished for not doing so?  Given the already burdensome and always growing costs of healthcare, does it make sense to pay providers more, since that would simply add to the costs?

Of course, there is one domain in which P4P should not be an issue – in proactive health management (PHM).  There is little basis for argument that providers are already being paid for PHM, or that it is something that they ought to be doing anyway.  Physicians, for example, have nowhere near the time required to assess their patients’ overall health and risks, much less coach them regularly on how to maintain or improve their health.  To spend even an average of one hour per year on a normal patient panel of 2000 patients would take up a primary physician’s entire work year, and yield almost no revenue under present insurance plans.

But physicians have already found a way to make PHM profitable – through patient-paid “retainer practices”.  Perhaps the best known, and certainly the largest retainer practice organization is MDVIP, of Boca Raton, Florida – where “VIP” stands for “Value in Prevention” as well as the usual interpretation.  A major focus of the roughly 150 physicians practicing in 16 states under the MDVIP banner is on prevention and patient health improvement, rather than just the special amenities, availability and access common in “concierge” practices.

It is necessary for any physicians who charge patients an annual amount in addition to getting paid based on Medicare or commercial insurance payment schedules to identify the specific extra services they offer, beyond those that are covered by health plans.  MDVIP, along with most other retainer practices, offer special health assessments and improvement partnerships, and easily justify their extra fees.

But PHM-focused practices yield significant value to both insurers and employers, even when they receive no payment from these payers.  For example, MDVIP has reported dramatically lower rates of hospital admissions for its patients compared to state averages in four states for which such averages are available.  Its admission rate varies from 62.7% lower in Arizona to 93.5% lower in Virginia.  Its rates for commercially insured patients are uniformly and significantly lower as well, across twice as many states, varying from 36.0% lower in Connecticut to 92.9% lower in Georgia, compared to what are rated the top performing health plans in each state. (www.mdvip.com)

MDVIP already serves employers directly through its Executive Health Plus program, which goes well beyond the traditional one-day-to-one-week-long annual physical to a year’s worth of health maintenance and improvement for executives.  Reductions in sickness absences and impaired performance at work, to say nothing of lower sickness care costs, can easily cover the full year’s retainer for most executives.  The University of Michigan’s Health Management Research Center, for example, found that executives who had even an annual physical had 20% lower sickness care costs and 45% fewer absence days than peers who did not. [N. Santelmann “How the Wealthy Get Healthy” Forbes.com July 21, 2004]

It would be a relatively simple matter for employers, in particular, to contract directly with providers, paying them for such performance as they are able to demonstrate in terms of reduced sickness costs, lower absences, improved performance, and similar value that goes beyond what traditional primary care focuses on.  Such payments would be for a different kind of performance, and one that traditional primary practices are neither paid for, nor usually capable of delivering.

China’s Emergent Public Sphere in Health Care

by Fred Fortin

In a previous post I’ve argued that an activist public sphere squarely focused on health care needs to be mobilize in China. The public sphere is that panoply of independent non-profits, NGOs, advocacy organizations, mutual benefit associations that exists in the critical space between local communities and government. It’s here that the everyday work of reducing social conflict and managing change really takes place.

I’d like to explore this notion a bit further and get your views as to whether it helps us in understanding the unfolding dynamics of China’s health care reform movement. (Shall we call it that, a movement? Is that premature? Maybe this is a related question we have to ask ourselves as well.) The idea of a public sphere has been around for awhile and traces its origins back to Alexis de Tocqueville conceptions of civil society, a classically liberal requirement for thriving democracies.

Will Hutton in The Writing on the Wall sees the public sphere as a place “where a sovereign people thinks out loud” and believes China is in need of a “gamut” of these organizations. He cautions, however, that “getting them is not a matter of organizing a technocratic transplant or copying. It is a matter of revolutionizing Chinese non-market spheres and in particular accepting the idea of a public sphere that is independent of the state and the Communist Party.”

Wang Hui in his powerful book, China’s New Order, questions whether, in fact, mediating spaces exist in China where real social and political critique can take place. He believes that given the state’s inter-penetration of the public sphere, this kind of civic life may too compromised and simply too powerless to effect change.

Certainly we often see evidence that leads us to these kinds of conclusions. Guy Sorman’s recent report in the Wall Street Journal (subscription required) about Hu Jia and his work with those sicken with AIDS in China’s Henan, Province, is a case in point.

“As long as Mr. Hu worked alone to help the sick, bringing them clothes, money and food, the Party left him alone. But he has recently drawn attention to himself by urging the victims to form an organization that can demand more from the government. The Party will sometimes put up with isolated dissent, but it won’t tolerate an ‘unauthorized’ association. Several months ago, the government placed Mr. Hu under house arrest in Beijing.”

With this as a backdrop, it’s no surprise that non-profit organizations established by the government of China are frequently regarded by foreign and domestic critics as fake. But in true paradoxical fashion China has also seen a large increase in grass roots non-profits and foreign NGOs (non-government organizations). The historic relationships between China’s local non-profits and those related foreign NGOs, for example, paints a slightly more optimistic picture. As Nick Young observes, it is not the money that counts, so much as the contribution to the diversity of ideas in China.

“Today, those agencies all talk the language of gender equity, environmental sustainability, rights, community participation and – as a logical consequence of the participatory discourse – ‘local ownership’, localization and civil society development. NGOs have made a very substantial, and quite probably decisive contribution to that way of talking and thinking, about development, both through their own work and through their – sometimes quite fierce – criticism of the official aid community. International NGO programs in China are a significant part of the story of the country’s growing internationalization and opening up to the world.

The future of China’s public sphere is uncertain at best. But one view is of a highly vulnerable and tenuous non-profit infrastructure, with organizations trying to carve a path for health care, trying to see their way clear through some very treacherous political minefields, and tragically taking casualties as they go. As organizations continue to test the limits of openness and control, one hopes a synergy will emerge with health care reform promoting the future development of these organizations, and in turn be driven forward by them as well.

Our challenge, it would seem, is to look directly at the forces for change as well as the risks without either being dangerously naive on the one hand, or so ideologically compromised on the other, that the nuances of progress escape us. We do this, of course, with full awareness that our information is limited and that we may in the position of being objects of manipulation by larger forces. That, I’m afraid, is the hand we’ve been dealt.

The New “Buy-Right” Movement in Health Care

by Scott MacStravic

As I recall, it was sometime in the 1970s when Dr. Walter McClure’s idea of “Buying Right” emerged from the Interstudy think tank in Minnesota.  This was after I left said tank, but when I still had occasional contact with its thinkers, including McClure.  I expressed my doubt at the time that it would catch on, and though it was adopted by many employers at the time, it was ahead of its time.

Back then, the idea was for employers to “buy right” in terms of the best health insurance plans and provider networks, while simultaneously empowering their employees to “buy right” in terms of the most appropriate and cost-effective care and providers for their sicknesses, along with those of their dependents.  This would either drive the “wrong” treatments, plans, and providers out of business, or force them to become more “right”.  Clearly, the idea has had a renewed life in the form of consumer-directed, high-deductible health plans and health spending accounts, with more of the buying right the responsibility of consumers.

But another form of buying right is also emerging, with the label of “Value-Based” purchasing of insurance plans, design of employee out-of-pocket expenses, and integration of employee benefit programs.  And what makes this new approach so different from its thirty-odd-year-old predecessor is that what is being bought is no longer merely sickness care, but an entire armamentarium of benefits, pay-for-performance systems, learning systems, recruitment and retention strategies that are aimed at getting the absolute best employees and getting the most out of them.

Fortunately, the value that forms the major focus for this new approach includes the increased value that employers can gain from the strategy, and the increased value that employees can gain.  Its emphasis in the case of health care is not so much on sickness care as on preventing sickness from arising, or once arisen from needing any more care than is unavoidable.  In effect, what employers and consumers should both be “buying right” is health.

While it has taken thirty or more years to happen, this new buy-right approach seems to have far more support than the original version.  It has employer champions, such as Pitney-Bowes and Dow Chemical, which were major focuses of discussion during the World Healthcare Congress just completed.  It also has provider champions such as Mayo Clinic with its Health Solutions and Embody Health program, and the Centers for Preventive Medicine and The Prevention Plan programs offered by U.S Preventive Medicine®, which recently added USF Health in Tampa to its provider partners.

The poll taken of Congress attendees indicated that employers in the audience strongly supported the idea of employers continuing to play a strong role in the health of their employees, despite proposals for eliminating their “skin in the game”.  And employers see the real potential for partnerships among providers, insurers, employees and themselves, rather than merely careful purchasing, an idea echoed by Wal-Mart CEO Lee Scott at the end of the Congress, as well as by GE Healthcare CEO Joseph Logan.

Frankly, I think the idea was equally good thirty years ago, just not in sync with the market at the time, of either consumers or employers.  But it may be that its time has finally arrived, and that those who were able to hear about it during presentations at the Congress, as well as in private discussions with their peers and vendors who manned the booths, will take away both the motivation and the capability to make buy-right work at last, with the rightness of buying reflected in both health and prosperity for employers and consumers alike.

Paul Levy on P4P

by Emily DeVoto

…not PCP. C’mon.

Paul Levy is CEO of a big Harvard teaching hospital, and he blogs, because he’s all about transparency.

As part of his ongoing conversation with medical students, here’s his take on pay-for-performance.

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