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The Downside of Globalizing Health Care

by Scott MacStravic

The globalization of health care is reflected in at least two trends that are arguably good for the United States, but bad for other countries. The first is the tendency for shortages of health professionals in the US to create large flows of emigration of such professionals from their home countries, which incurred the costs of training them, but get nothing from their investment, except perhaps for money sent home by well-paid immigrants who share their wealth with family left at home.

Huge numbers of nurses and physicians have emigrated in the past, and though visas are tougher to get with homeland security regulations, they continue to emigrate in large numbers. Over half of the primary physicians in this country came from other countries, for example. This necessarily causes shortages of physicians and nurses in the countries that trained them, while enabling the US to get by at least. And while arguably the immigrants and America both gain from this phenomenon, the residents of the countries from which they came clearly do not, rather lose both taxpayer investments that don’t pay off, and sources of care that they need as well.

While we “repay” many such countries to some extent by sending Americans overseas, often to many of the same countries that supplied needed manpower, even that is adding a cost as well. While “medical tourism” is responsible for delivering millions of dollars to foreign countries, such as India, Brazil, and Thailand, for example, it is also using homegrown healthcare resources, and depriving citizens of these countries of sources of care they need as well.

With millions of medical tourists coming to Thailand, for example, from many countries, not merely the US, Thai physicians can make so much more money working for private hospitals that serve this lucrative market that few are willing to work in public hospitals, upon which most Thais depend for their own medical care. Often the “best and brightest” of Thai physicians “defect” from the public system in order to enjoy far better working conditions and incomes in the private sector. [J. Hamilton “Medical Tourism Creates Thai Doctor Shortage” All Things Considered Nov 29, 2007]

To some extent, this may keep physicians at home who would otherwise emigrate, but even if they are at home, they are not necessarily treating local residents. The combination of our becoming an attractive place for trained health professionals to emigrate to, while sending our own citizens overseas where they use local providers to the detriment of local citizens, is a major problem for underdeveloped countries, along with their lack of financial resources to pay for necessary medical care for their citizens. While the revenue impact of both immigrants sending money home and US residents bringing their money with them to such countries may partially mitigate the total impact, it is clear that the net effect on the underdeveloped world is negative.

While we have lots to do in order to solve our own healthcare crisis, it is possible that the efforts and resources we invest to improve the health of Americans will help in both these problems. The fewer sick Americans there are, the fewer immigrant health professionals there will be needed from other countries, and the fewer patients we need send elsewhere to occupy the time of professionals in other countries.




The Profit Motive and the Placebo Effect

by Scott MacStravic

The “placebo effect”– i.e. the extent to which a person’s belief in the efficacy of a substance or therapy influences both the physiological and psychological effects thereof – is mainly familiar because of its use in clinical trials. Rigorous science often requires triple-blind studies, where the patients receiving treatment, the providers giving it, and the analysts evaluating it are not “biased” by knowledge of whether or not the treatment is a placebo, i.e. inert substance or sham treatment.

But there have been increasing arguments against thinking of the placebo effect as merely a “false” result. It clearly demonstrates the “mind-body” effect, i.e. the ability of the mind to influence the body’s responses, which accounts for both the negative and positive effects of stress, as well as the positive placebo and negative “nocebo” effects of treatment (where belief that the treatment will do harm produces harm even when the treatment is inert).

Many have argued that the placebo effect, and the nocebo effect for that matter, are both reflections of “enlisting the mind” in the pursuit of healing. Given the ability of this effect to add to as well as detract from the effects of substances and therapies, the effect, when positive, should include the total mind-body response to either, rather than discounting the effect as merely “humoring” patients into believing they are getting treatment when they really need none.

Since the placebo effect is often as much as or even above 50% of patient response noted, the acceptance or rejection of the effect can make a huge difference to the measured efficacy of a given treatment. In a recent book on the positive as well as negative effects of the mind on the body, its author made a strong case for recognizing the importance and value of the mind-body connection, which has been demonstrated in terms of objective physiological responses through the hypothalamus-pituitary-adrenal glands connection. [E. Sternberg The Balance Within: The Science Connecting Health and Emotions W.H. Freeman 2001]

The placebo effect seems to be particularly strong with respect to pain perceptions by people being treated – with almost anything. Since pain is primarily a subjective perception, rather than an objective metric, people who believe in the efficacy of a drug, herb, or therapy often report as much relief from the placebo as from what is supposed to be an “active” intervention. Sham acupuncture has yielded as much pain reduction as the real thing, for example.

The trouble is that the placebo effect can also be the foundation for immense profits by manufacturers and retailers of substances, and providers of therapies, that have no physiological effects at all, that may be dangerous to patients in either or both of two serious ways. They may cause damage, by being inherently inimical to health – or they may prevent or delay people from seeking and getting truly effective alternatives. They may even cause people to avoid or negatively affect what are proven treatments if people “tar them with the same brush” because of their similarity to unproven or proven-to-be-useless/harmful alternatives.

The general system of homeopathy, for example, has been under attack in the U.K. [B. Goldacre “The End of Homeopathy?” The Guardian Nov 16, 2007 (www.badscience.net)] People still swear by its remedies, because they say homeopathic pills make them feel better. But what if the entire impact of homeopathic medicine is “in the mind”, i.e. the placebo effect? A review of 110 homeopathic and 110 matched conventional medicine trials were compared, with both finding that smaller and lower-quality trials tended to find more benefit than did larger and higher quality, but the overall findings were compatible with the notion that homeopathic clinical effects were due to the placebo effect. [A. Shang, et al. “Are the Clinical Effects of Homeopathy Placebo Effects? The Lancet 366 2005 726-732]

In a recent series of stories, the major newspaper where I live describes a wide range of medical devices being manufactured, sold, and used as “energy” treatments. These machines relied on light, radio, electricity, or electromagnetic forces to “cure” diseases as serious as cancer. While such forces have been proven to have positive effects in a number of medical applications, the machines described in the reports had no demonstrable physiological effect, and certainly did not eliminate the conditions that their users claimed would be cured by them.

In most cases, these devices were used by untrained laypersons, though some physicians, chiropractors, and other health professionals, and at least one hospital also used them. [C. Willmsen & M. Berens “Miracle Machines: The 21st Century Snake Oil” Seattle Times Nov 18, 2007 A1, A10-13; “Public Never Warned About Dangerous Devices” Nov 19, 2007 A1, A8; and “A Patient’s Plea: Please God, No More” Nov 20, 2007 A1, A10] One example involved drawing a patient’s blood, treating it with “photo luminescence” light waves (ultraviolet light), then injecting the treated blood back into the patient. Infections at the injection site occurred, but cures did not. The provider was arrested for practicing medicine without a license, while the patient died the day after treatment. While claiming to be a naturopathic physician, the provider had no training, merely a degree from an unaccredited “diploma mill”.

Another device claimed to cure AIDS, cancer, and other life-threatening conditions with electromagnetic waves, and was being used in five states, including Washington, despite the foundation for its efficacy that “…goes beyond human knowledge” according to its inventor. It got around FDA regulations by claiming it was only being used in “clinical trials”, though providers profited from its use, which was not allowed in such trials. Machines had been sold to physicians, chiropractors, acupuncturists , naturopaths, and massage therapists, as well as people with no training at all, and used for desperately ill patients who feared or had already experiences severe side effects from conventional treatment of cancer, heart disease, ulcers, etc.

An out-of-work former mathematics instructor built a radiofrequency wave machine claimed to diagnose and treat everything from allergies to cancer, was forced by the FDA to leave the US, and now operates from Hungary. He has apparently sold over 10,000 of his devices in the U.S. alone. The idea of electric, light, sound, radio and microwaves being used to treat disease is over 100 years old, and has many proven applications, but probably far more unproven ones, with many dangerous, such as the use of electricity or electromagnetic waves in patients with implanted pacemakers, or simply dangerous machines.

Thanks to the placebo effect, almost any machine, nostrum, herb, or therapy may easily find dozens, hundreds, even thousands of patients who report being cured, or at least having pain diminished or disappeared. And these can be powerful testimonials in media advertising or word-of-mouth, viral and “buzz” marketing. Moreover, the placebo effects are real in many cases, though rarely as reliable or complete as truly efficacious alternatives. And given the profit motive, that can drive both professional clinicians and laypeople to purchase and use such machines, as well as sell them to patients, there are strong financial motivations, as well as gullibility that can drive widespread use.

Americans have not only the most expensive healthcare system in the world, but one of the most promising for quacks and charlatans, as well as misguided, well-meaning practitioners and marketers. The FDA has been criticized for years, charged with inadequate and biased regulation of medical treatments and prescription drugs. It has done far worse in the case of unproven (even as to causing harm) alternatives to these, and thousands of people suffer as a result.

At a minimum people who rely on the placebo effect alone are wasting their money where it could be better spent elsewhere, and at worst, they are delaying or avoiding proven alternatives, and dying as a result. The placebo effect is certainly valuable for those who experience it, but when there are alternatives with proven records for positive clinical effect as well, it a dangerous basis for patient choice, and an inadequate basis for generating profits.




What Will Patients Expect in the Completeness of Their Electronic Medical Records?

by Fred Fortin

Just briefly, I want to talk about the electronic medical record (EMR) from the point of view of patient expectations of how they will be managed. We ‘ve talked about errors in the record, as well as the complexity of the privacy issues. And for the record, I want to repeat what Fred Trotter wrote as it concerned Microsoft’s new Health Vault:

Medical records belong to the patient, except when they don’t. They should be accessible to the patient except when they shouldn’t. The records of minors are always open to their guardians except when they are closed. Segmenting data in order to protect portions of health information is currently an intractable problem of free-text analysis. Tagging patient records with critical information is difficult. Trust is far more complex than is first seems. Finally, patients should be allowed to “control” their own record, except when that control would allow them to do something that would invalidate the record.

But the question I have concerns that of omissions and completeness. Will patients have different expectations of doctors and hospitals once they know they’ve converted from paper to electronic medical records? Will the EMR take on a different status of sorts in the patient’s mind? In the old days (most of which are still with us) the patient knew that his or her paper record was scattered about the different providers, and for most, there was no single, all encompassing medical record. But the vision and the hype for electronic medical records is just that — if there’s an emergency, a hurricane, or you are on vacation without your medication, your info will be at hand through the net.

But as we know, that will not be the case most times. Either by design, incompatibility, law, or systems failure, something will be missing. Will it be important information? Who knows. But the public, as it has with banks, credit cards and other electronic dependencies, may believe it to be complete. They may, in fact, have a view of EMRs that is more in line with the industry’s marketing image than with the intricacies or record-keeping reality.




U.S. Doesn’t Make Top Ten

by Nick Jacobs

According to Reuters today, Iceland overtook Norway as the world’s most desirable country in which to live in the world. Based upon an index blending figures relating to life expectancy, educational levels and real per capita income, the world’s countries were rated. Rich free-market countries dominate the top places, with Iceland, Norway, Australia, Canada and Ireland the first five, but the United States slipping to 12th place from eighth last year in the U.N. Human Development Index. The U.S. scores high on real per capita GDP, which at nearly $42,000 was second only to Luxembourg at a little over $60,000.

Here are a few statistics for your consideration . . .

We have 98,000 unnecessary deaths in our health system from medical errors each year, and we spend $10 a day more on average to imprison someone in the United States than we do for long term care.

Under the category “If I had known that I would live this long, I would have taken better care of myself” . . . If you are a 50 year old woman today, there is a 40% chance that you will live to be 100 years old. If you count all of the people in the history of the world who have ever reached 65 years of age, 65%of them are alive today. In 2012 five years from now, there will be more people in the United States as Social Security beneficiaries than there are working Americans to support them.

If you are a child today, there is a 30% chance that you will develop Type II diabetes. One third of all children today will be afflicted with Type II diabetes and the devastating impact of that disease.

Keep in mind that at least 30% of every health care dollar that is spent in the United States is spent on the last 30 days of life.

It’s also important to reflect on the fact that in 1993, 13.8% of the Gross Domestic Product was dedicated to health care, and by 2015, 20% of the United States GDP will be dedicated to health care. This year we spent $2.2 Trillion on health care and only 4% of that on preventative medicine.

We have 47 M uninsured and 43 M under insured citizens in the United States, and I’m not sure if that includes our illegal aliens.

Okay, how about passing this information on to our presidential candidates for their consideration because, my friends, it’s all about leadership, leadership at all levels.




What Model for Health Care Marketing?

by Scott MacStravic

While marketing in the health care industry has a fairly long history, finally, it is nowhere near as long as that of other, indeed most other industries. The modern discipline of marketing, with market research, customer experience management and targeted advertising is roughly 60 years old, having emerged soon after WWII, while health care marketing is only 30 years old or so. As a result, we have long looked for models in other industries.

As a service industry, it has been natural for health care to look at other service industries for a model to follow, or at least to adapt. The financial services industry has been suggested by many, since it involves a valuable “life asset”, namely wealth, and services that are designed to help people manage that asset, as is somewhat true with another life asset, i.e. health.

Retail sales industries have been suggested as models, since “customer service” is an essential component of health care, in addition to clinical quality. Besides, many marketing gurus have recommended that health care organizations increase their revenue sources by engaging in retail sales of health-related products. And health care has increased its availability and access through “retail” convenience clinics that are located in popular shopping malls, supermarkets, drug stores and superstores.

But there is another possible model available to health care – the automotive industry. It might seem counterintuitive, since that industry deals in a durable good, the automobile, rather than a service, but there is much to recommend the idea. Primarily, it is the fact that the automotive “customer experience” lasts far longer than the purchase transaction. People keep and use their cars for years, if not decades, and the benefits vs. costs of ownership is a major factor in customer loyalty, not merely the purchase transaction.

The auto industry has moved significantly in its marketing, from decades-old focus on the features and attributes of their product to a recent, usually overblown emphasis on the “driving experience” it offers. Prospects are being told that everyone will envy their having a particular brand, want to drive with them, and look up to owners of that car. They are being told that their lives will become better, their stress reduced, their enjoyment and excitement increased, merely because they drive a particular car.

While this marketing could be criticized as ridiculous “puffery”, it at least suggests something that health care marketers could emulate – a focus on what happens to patients after and because of their health care patient experiences and relationships. What “meaning in their lives” do patients perceive as consequences of their hospital stays, outpatient visits and physician relationships? What differences would they expect in their lives if they chose other providers and relationships, if any?

Health care providers become significant partners in a host of life-meaning experiences. From pregnancy and childbirth to menopause and aging to end of life, hospitals and physicians are frequent partners in life stages and events that the majority of patients experience. And the consequences of acute disease treatment and chronic disease management, to say nothing of proactive efforts designed to reduce the incidence of disease and injury in the first place – make major differences in people’s lives.

Until providers expand their horizons to see their “products” in terms of life meaning and impact, health care marketing will be mired in myopia, focused on features and attributes, or rare and episodic encounter experiences. Unless providers recognize and make the most of the life impacts they already have, and on added impacts they might have, hopefully in a more realistic and credible fashion than is true with automobiles, they will miss out on huge opportunities to become major “life partners” with patients, instead of modest sickness fixers.




The “Convenience Continuum” in Employee Health Management

by Scott MacStravic

There are a wide range of options for both employers and employees (to say nothing of dependents and retirees) when it comes to employee health management (EHM). They can be arrayed along a “convenience continuum” ranging from the inconvenience of one site location and limited hours — to many sites and convenient hours – to whenever and wherever the individual employee wants to get them. The placement of EHM options along this continuum will have a great deal to do with how widespread employee participation will be, and thereby how successful EHM investments will be.

Traditional hospital-based programs, such as the U.S. Preventive Medicine “Centers for Preventive Medicine” model, which limits the number of hospitals to which it will offer a “franchise” in a given market, or traditional occupational medicine practices, tend to occupy the low end of convenience, often operating only one location. They can move toward the middle by at least offering services at multiple locations, and broadening their hours beyond traditional 9-5 weekdays, but this only improves their convenience a little.

More toward the mid-point of the convenience continuum are the growing number of “retail clinics” heading toward 1000 or more across the U.S. These are more convenient because of longer hours, short waits, as well as lower prices, compared to traditional providers, and offer convenient parking, as well as something useful to do while waiting when this is unavoidable. Many offer waiting patients a pager they can use while shopping elsewhere in the superstore, supermarket or pharmacy where they are located, for example.

Retail clinics — particularly those close to the RediClinic model that combines “Stay Well” services, such as smoking cessation, preventive screenings and immunizations, to the usual retail clinic array of “Get Well” services – are a good example. A recent study sponsored by the Centers for Disease Control and Prevention, conducted by the New England Complex Systems Institute, reported that retail clinics are “…particularly well-suited to the delivery of preventive care, (which) can produce superior returns in terms of employee health improvements and cost savings.” [“Houston Employers Hear New Research That Supports the Case for Retail Clinics” Resident and Staff Oct 29, 2007]

RediClinics have the added advantage of their own proprietary electronic medical records, that can be used to identify patients that are due for a particular screening, immunization, or preventive service visit. This also enables them to coordinate with their patients’ personal physicians, when such physicians choose to work with the clinics on health management efforts. Some hospitals offer similar convenience when they coordinate and participate in primary physicians’ EHM efforts at practices that are affiliated with or owned by the hospitals.

Further up the convenience continuum are worksite medical clinics, which can offer reactive sickness care as well as proactive health management services to employees, and also dependents and retirees where permitted. These offer greater “place” convenience, and are often free to employees, at least. They are usually not open much before or after working hours, so are limited in “time” convenience, though they may offer an even wider range of EHM services than do most retail clinics. Of course, retail clinics become onsite medical clinics for employees of the stores that sponsor or host them.

Still more convenient are EHM programs — offered by traditional providers, employers, insurers, or specialized suppliers – that offer phone coaching or remote monitoring to participants. Such EHM elements can be offered at times and places participants choose, rather than being limited to clinic locations and hours. Of course, not all such programs offer 24/7 services, since few people tend to opt for late night/early morning communications, and staffing at such hours is likely to be more difficult and expensive than at more commonly used day and evening hours.

At what may be the peak level of the convenience continuum are EHM communications that are provided via e-mail or post, where participants can open messages at their own convenience, wherever they have access to the Internet, or where they get their mail. A similar level of anytime/many places convenience is available with EHM programs that rely on website visits by participants, and anytime/anyplace convenience can be offered through wireless communications, via text messaging, i-Pod podcasts, etc.

While we are far short of a systematic research foundation that has analyzed all kinds of EHM processes and discovered as well as reported which are most effective and efficient, what we do know, at least, is that the greater the level of convenience offered to participants, the more likely they are to enroll, cooperate in, and complete EHM programs. And since these programs are responsible for the behavior and health status changes that deliver desired reductions in the incidence and prevalence of disease, sickness care costs, and impairment in productivity and performance, the more convenient the better.




The Challenge of Eldercare Through 2034

by Nick Jacobs

Why 2034? It’s actually the date that my actuarial has indicated that my individual involvement in this discussion should no longer have any viability. In other words it’s the projected date of my passing, but, believe me, there will be tens of thousands of we boomers contributing to this discussion until then.

A few years ago, during a scientific mission to Boston for a conference at MIT, it was my privilege to participate in a conference directed toward the challenge of keeping our senior citizens viable, active and out of long term care for as long as possible. We met with several health care professionals, engineers, and scientists who had taken on the challenge of miniaturizing every known type of monitoring system for the human body.

They had begun the effort to successfully decrease the size of these devices to the diameter of a nickel, the relative thickness of a potato chip and a cost of about twenty five cents each. We saw demonstrations of some of these miniaturized devices in actual use. They were adapting systems for monitoring the heart, blood pressure, brain function and respiratory system. With all of the flexibility that wireless communication can deliver, the unencumbered participants would be literally, wired for sound, as they moved freely through the special apartment that had been constructed for this research.

Each and every movement could be monitored all day, every day. The signals generated from the participants various organs were sent directly to a computer that was housed at a physician’s office where any missed beat could be reported through an alarm system that immediately notified the physician in charge.

Think of it. Pappy gets up from his chair, feels a little dizzy, sits back down, and the videophone rings with a healthcare professional checking to see if all is well.

Because of the 1984 feeling that some of we 1960’s free spirits might feel from this “Big Brother” type monitoring, it was suggested that the grandparent might also like to have her sibling monitored as well, thus giving the affect that they are indeed checking on each other.

Think of it. This system could very well keep us out of some offensive, under staffed, insufficiently reimbursed nursing home for at least an additional year or two.

In closing, however, I did receive an e-mail the other day with this suggestion. If you like to cruise, it would be more fun to live on the Pacific Princess for the rest of your life than in the Sunset Valley Nursing Center. The cost is similar, and when you trip and break your hip, they will upgrade you to a suite and deliver meals to your room.




Systemic vs Symptomatic Solutions in Employee Health Management

by Scott MacStravic

One of my favorite years was 1973 – I completed my doctoral degree that year, and attended a summer program at M.I.T. offered by its gurus on “systems dynamics”, which I thought was worth as much as my entire previous academic coursework. Jay Forrester was the “father” of systems dynamics, while Peter Senge came out a couple of decades later with his book on “The Fifth Discipline”, which included systems thinking as the fifth and in many ways over-arching the other four.

Systems thinking has far more reasons to be resisted than embraced by managers. It looks for the interconnections across organizational and functional silos, threatening the separate fiefdoms that most managers depend on for their success. It makes planning, strategic management, and even daily supervision much more complex, and threatens to produce the “paralysis of analysis” when a given system’s boundaries, in time and space, cannot be understood.

But it also has a virtue that tends to override the reasons for resistance to it – it often identifies solutions that would never have been imagined otherwise, and thereby produces disruptive innovations that make enormous positive differences in the way things are done. In a recent example, the Health as Human Capital Foundation contrasted systems thinking to “magic-bullet solutions” in the contexts of sickness care and employee health management (EHM). [W. Lynch & H. Gardner “Please Don’t Complicate Things with New Information. I Like the Old (Wrong) Answer Better” Health as Human Capital Oct 21, 2007 (hhcf.blogspot.com)]

The sickness care example cited the discovery in the 1980s that the bacterium H. Pylori was the cause of most ulcers. This meant that traditional care aimed at reducing stomach acids, managing stress, avoiding spicy in favor of bland foods, etc. were made almost immediately obsolete. But this obsolescence, traditional treatment is still “conventional wisdom” due to the unwillingness of people, including physicians, to change their minds, and vested interests in old products and services.

In the EHM context, the magic bullet is any specific program or intervention intended to improve employee health and reduce sickness care, disability, absence, presenteeism, turnover, and other labor costs, while improving workforce and the organization’s performance. If the “problem” were simply a matter of employees not being healthy, such a solution might work well. But the “systems” problem relates to the entire set of dynamics that affect employees’ behavior, not just their health.

Any employers’ combination of all employee benefits, total compensation policies and practices, training and development, including disability and time-off policies tend to create “winners” and “losers” among employees who adopt particular behaviors. I recall when a former employer’s policy of permitting unlimited accumulation of sick leave and vacation time led to its having an obligation to pay one employee more than two year’s salary when he left – not because he had never taken time off, but because the record system showed none.

Employee productivity and performance, the main focuses of EHM, are affected by vastly more factors than their health, and their health is affected by vastly more factors than whether employees have a health spending/savings account, or an opportunity to enroll in an EHM program. The total number of factors that affect employee productivity and performance is huge, and the total value of the effects of these factors is far greater than that of health improvements alone. Without motivation and technological as well as personal capabilities, the healthiest employees may never produce much more than they do now.

The move toward “value-based” benefit design is going in the right direction, though not far enough. The total set of policies and practices that relate to employees, not merely their fringe benefits, will determine their ultimate delivery of value to their employers. Single “solutions” such as pay-for-performance, tele-commuting, EHM, EAP, and other non-systematic approaches to the problem risk not just failing to solve the problem, but making things worse, given the interconnectivity of factors that affect it. Many existing policies and procedures may already be discouraging high performance, and encouraging poor health, as well as meager productivity.

Despite the greater difficulty and time required to engage in systematic thinking, identifying a larger set of causes and effects than one-shot solutions, modern computer capabilities and people trained in systems thinking can make it far more convenient to apply than was true forty years ago. EHM is clearly a promising ingredient of a solution to both the healthcare cost crisis and productivity/labor cost challenges, but it will work a lot better if developed and applied in the context of the full systems dynamics in which it will operate.




Living the “Brand Promise” in Managing Health

by Scott MacStravic

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.




China’s New Minister of Health Wants More International Support

by Fred Fortin

At the recent 11th Annual Global Forum for Health Research meeting in Beijing, Dr Chen Zhu, China’s new Minister of Health said

“Health issues in developing countries have not received due attention or support”. . . As the biggest developing country in the world, China still suffers from wide disparities in the allocation of health resources.”

Dr. Chen Zhu called for greater collaboration and information-sharing in research and more support and funding from the international community for health development.


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