The growing number of hospitals that are engaged in branding efforts at least partly based on their promise to manage health, rather than merely treating disease, are faced with a unique challenge to combine the two in ways that are meaningful and credible to the public, as well as promoting vs. putting their survival at risk. While there are ways by which managing health and treating sickness can be combined in a synergistic fashion, there is always the risk that the former will “cannibalize” the latter to the net detriment rather then benefit of the hospital.

The theories behind hospitals’ getting into the health management (HM) domain, as a community benefit or revenue-generating business, differ depending on which of these two is their intent. Community-benefit-focused HM programs, because they are offered free or at subsidized prices to the medically deprived, add “points” in justifying not-for-profit tax exemption as well as PR, with corresponding financial benefits. They can also have a direct financial benefit by preventing hospital admissions among frail, non-paying or unprofitable patients whose third-party payments fail to cover hospital costs, as is true for both Medicare and Medicaid, in general.

But more recent recommendations for HM strategies have been based on their potential impact in generating both profitable revenue as a separate service line, and additional sickness care revenue due to the employer and employee relations impacts of offering HM services to employers. The hope is that by creating such improved relationships, hospitals that engage in HM will gain enough added sickness care business, from sickness that wasn’t prevented or otherwise avoided by HM, to offset the loss of sickness care revenue due to sickness that was prevented or avoided.

This clearly might occur, if hospitals can both become the facility of choice in their sickness care markets, while also being the provider of choice for HM in those same markets. The clear conflict between the idea of hospitals as places for the very sick and places for the wishing to be more well, may limit the success of such a strategy. On the other hand, doing so would clearly fit the mission and professed values of most not-for-profit hospitals, at least. And there may be synergies in providing both sickness treatment and health management using the same places and people, as many retainer physician practices, particularly those operated on the MDVIP model, are proving. (www.mdvip.com)

The difficulties are more likely to arise from the disconnect between the idea of a hospital as the best-quality place for sickness care, and also the best-cost place for HM, since costs will be a far more important factor in managing health, for all but the most affluent consumers. Hospitals have invested widely and grandly in making their facilities competitive with resort hotels, not merely with their rivals in the same market. And these facility investments impose huge capital costs that add to operating costs, and may push the charges that hospitals will ask employers and insurers to pay for HM uncompetitive.

Fortunately, of course, HM is often, and can usually be “placeless”, with services offered at places other than the hospital, and far more convenient to participating employees or other consumers, including members of commercial or government insurance plans. But traditional physician groups and integrated health systems have had difficulty generating enough savings from CMS-sponsored disease management efforts, where the savings per participant are expected to be very large. Doing so with younger and normally healthier younger workers may be even more difficult.

If hospitals choose to work with chronic illness as areas of their special expertise and connections between sickness treatment and HM, they may find that the potential market is far less than they would wish among employers. When HealthMedia, Inc. Ann Arbor, Michigan examined the productivity impairment impacts of diabetes, asthma, heart disease and congestive heart failure combined over 200,000-plus employees who took its health risk assessment, the total came to only $232.53 per employee (not per affected employee, but across the entire workforce). By contrast, risk conditions such as hypertension and high cholesterol, overweight/obesity, stress and emotional problems, plus risk behaviors such as inadequate sleep, physical activity, and nutrition, along with smoking, caused an average of $1618.63 in lost productivity per employee across the workforce.

A recent article discussed the need for “Living Your Brand Promise” [HealthLeaders News Oct 2007 (www.healthleadersmedia.com)]. Another described how one hospital system is attempting to live up to its brand promise, reflected in its tagline “We Believe in Life Well-Lived”, by initiating its “WellStar Institute for Better Health” aimed at key health issues such as diabetes and obesity for employers and their workforces. [M. Larkin “Is Your Brand a Communications Strategy or a Business Strategy?” Health Care Strategic Management Nov 2007 1-3]

If the adopter of this brand strategy, Wellstar, a five-hospital system near Atlanta, were to make it their business strategy, they might have to shift significant resources and attention in the direction of managing all conditions that contribute significantly to health-related problems for employers, not merely obesity and diabetes. Its website (www.wellstar.com) describes its Institute for Better Health as intended to be “…an advocate of healthy living and a catalyst for change” that “…exists to help you live a more healthy life.” It also says that “Ultimately, the work of the Institute and your involvement in its programs will help change the future of healthcare.”

If such brand promises are to be fulfilled, there will have to be significant, probably dramatic shifts in the way hospitals invest and operate, moving toward the “healthy living” market, which will deliberately and significantly reduce the “sickness treatment” market. The only “current project” mentioned on the WellStar website so far is a “diabetes initiative” that is “coming soon”. But fulfilling the promise will require going well beyond one or two diseases or risk conditions, with correspondingly great impact on its sickness care business. The two are clearly compatible in the sense of using the same resources and expertise, but they are certainly at cross purposes, with expected significant negative impact on the sickness side.