Archive for March, 2008
by Scott MacStravic
March 30, 2008 at 6:55 pm · Filed under Employer CEOs, Employee Health Management, Health Management
The “Customer Advocacy Score” is becoming common as part of marketing and business intelligence for a wide range of firms. It is particularly useful for firms which rely on a large portion of repeat, even continuing customers, in industries where customers are ‘highly involved” in their supplier relationships because of the importance of the products or services provided. Banks and other financial service firms, and healthcare providers fall easily into this category.
In population or employee health management (PHM or EHM), insurer and employer clients are sure to be highly involved in their supplier relationships, because of both the amount of economic impact available through these strategies, and the amount of trust that and cooperation that is essential between them and their supplier. Clients share all kinds of sensitive information with such suppliers, to say nothing of the even more personally sensitive information shared by their employees, where health-plan member or employee trust is essential to gaining adequate participation in PHM or EHM.
A 2007 survey by Forrester Research, Inc. involving more than 10,000 Europeans in seven countries found that only 27% of respondents rated their own banks high in terms of “customer advocacy”, the same percentage as in 2006. Customers that rate banks’ customer advocacy high are far more likely to turn to that bank for other products and services, while banks with high scores outgrow their lower-scoring rivals significantly, without having to rely on mergers and acquisitions. [J. Compton “Advocacy Strengthens European Banking Relationships” 1to1 Weekly, Dec 17, 2007]
The score is based on where customers place their bank on a continuum from “Does what is best for its bottom line, regardless of its impact on customers” to “Does what is best for customers, regardless of its effect on its bottom line”. Firms whose customers’ score them toward the latter pole are considered to have far better scores than those whose customers score them toward the former. [B. Doyle “Customer Advocacy 2006: How Consumers Rate Their Banks, Brokerages, and Insurers” Forrester Research Business View Trends, May 22, 2006]
For healthcare organizations (HCOs)considering entry into the PHM/EHM market, learning how prospective clients, i.e. insurance plans or employers, rate them on customer advocacy, particularly in comparison to other suppliers already active in the market, may help in deciding whether to make the entry, and which prospects to try first. Learning how consumers rate the organization may also prove helpful, since if they don’t rate the HCO well on this dimension, it is unlikely it will be able to enroll many targeted plan members or employees in an intervention program, even if the client is won over. And without high participation, success is both less likely and sure to be less delightful for clients.
Since HCOs have been sources of double-digit inflation in sickcare costs for a long time, both employers’ and insurers’ views of them may be somewhat jaundiced. Employers may be a far better prospect, in any case, since they can gain far more in economic benefits – through improved productivity and performance, turnover reductions, and even increased customer satisfaction and loyalty – while insurers are focused on reducing healthcare expenditures. Moreover, since reducing insurers’ expenditures tends to cost dollar for dollar in HCOs’ revenue, this class of payer is nowhere near as attractive. By contrast, employers gain more by reducing productivity and performance impairment than by cutting healthcare costs, so need not affect HCO’s sickcare revenue nearly as much.
Where HCOs are successful in gaining employer clients, checking their perceptions of the HCO’s commitment to their interests vs. the HCO’s own should be a good predictor for retention vs. defection of these clients. Learning why consumers as well as clients rate the HCO high or low will also help in either maintaining good ratings or improving poor ratings, and thereby gaining an improvement in future attraction of new or retention of current customers. Learning why they rate rival suppliers good or bad on the scale will also provide useful “competitive intelligence” about the market.
In any case, learning how the HCO is rated by prospective clients as well as consumers, will greatly assist in making decisions about the PHM/EHM market. Learning how its own employees rate it on “employee advocacy” can also help in deciding whether to invest in internal EHM, or even in an outsourced program, since trust in the HCO as an employer will be key in achieving high participation in either case. Helping employer clients to check their scores on this same dimension will also help in their decisions, and perhaps justify the high level of employer support required when HCOs are suppliers and the employers the clients.
by Scott MacStravic
March 30, 2008 at 6:53 pm · Filed under Employer CEOs, Employee Health Management, Health Management
It is pretty self-evident that employee cooperation is essential in employee health management (EHM) since employees are the people who must participate in health risk assessments, both baseline and repeated, in order to supply much of the data used to plan EHM strategies, target individuals for specific interventions, and evaluate results thereof. Moreover, employee behavior changes, resulting in either positive health status changes or the avoidance of negative changes, are the source of cost savings, in medical care use/expense, absenteeism/presenteeism, workers compensation and disability expenses, representing the economic benefits measured for most EHM investments in order to determine ROI therefrom.
But employer cooperation is equally essential in almost all EHM applications where employers “outsource” some or all elements of such investments. These elements usually include:
- Initial health/expenditure/productivity-performance assessments, which may involve analysis of claims, risk screenings results, health risk assessment (HRA) surveys, including self-reported productivity impairment
- Efforts to enroll employees (perhaps dependents or retirees as well) in particular EHM interventions aimed at specific health problems or risk/impairment factors
- Conducting specific EHM interventions while retaining as many participants therein as possible for the duration of the intervention, and engaging them as much as possible in making positive health behavior changes
- Evaluating results of separate interventions, as well as the overall EHM strategy, in whatever dimensions are of interest to employers and suppliers
Employers determine or at least influence the extent of success in each of these four elements, even if they outsource all four, along with the supplier(s) to which they outsource them. For example, if they outsource the health/expenditure/productivity-performance assessments element, employers must either supply their own or give their insurer(s) permission and instruction to supply the health claims data and expenditure figures needed for the EHM supplier to analyze. If they outsource the HRA and impairment assessment, employers’ cooperation in enabling suppliers to contact employees, perhaps offering incentives for employee participation in such assessments, is critical in gaining high levels of participation.
The numbers of employees who participate in assessments will both determine how many can be targeted correctly for enrollment in specific EHM interventions. And the number who participate in repeated assessments for evaluation purposes, will often determine the amount and degree of improvement in health behavior, health status, and productivity-performance (PP) the EHM intervention is given credit for achieving.
Employers, after all, decide whether to extrapolate data from employees who participate in HRA and PP surveys to the entire participant population, or to give credence only to results actually reported in such surveys. If only a modest proportion of intervention participants supply results data, the overall results and ROI may be greatly understated, and the supplier may end up being greatly underpaid. It may be that non-participants in the repeat assessments are not as successful as participants therein, but they should be more successful than those who never participated in an EHM intervention at all.
Getting targeted employees (perhaps all employees where a comprehensive, workforce-wide risk prevention, reduction, and disease management strategy is adopted) to enroll and cooperate enthusiastically in EHM health behavior change initiatives is another arena where employer cooperation is essential. While supplying employee names and addresses for enrollment efforts is clearly necessary, enabling EHM suppliers to contact them enough times to ensure adequate enrollment for optimal results is equally important. This may mean no more than giving permission to contact them repeatedly, or include offering incentives for their participation.
Employers also determine the length of the time period used in evaluating EHM results. They may be interested only in short-term results, for example, and only pay for a limited participation of their employee, particularly when the EHM supplier charges per participant. Or they may recognize that EHM results tend to persist and often increase over time, and empower/assist suppliers in tracking longer-term results. In the only published research on long-term results for a specific employee population that I know of, total savings achieved by the employer were only $233 in the first year. But these increased to $375 in the second, then to $944 in the third, and $950 in the fourth year. [G. Stave, et al. “Quantifiable Impact of the Contract for Health and Wellness” JOEM 45:2 2003 109-117]
Had the employer not tracked results at least as far as the third year, it might have made the wrong investment decision by terminating it after the first or second year. Moreover, had it been paying its EHM supplier based on results, it would have severely underpaid if it based its payment only on the first-year results. Even Medicare is relying on three to five year periods in its disease management demonstration projects, recognizing that results often increase with time, and its first-year results have often been disappointing. [R. Brown, et al. “The Evaluation of the Medicare Coordinated Care Demonstration: Findings for the First Two Years” Mathematica Policy Research, Inc. 2007]
Employers can also have a great deal of influence over what results they get, not merely what results they measure. Employers that offer incentives for employee participation, or even better, rewards for employee success, can greatly increase the participation rates and results they achieve. Paying for explicit health behavior changes, and perhaps for validation through biometric screening that such changes have made can both protect them against employees’ “gaming the system”, and provide evidence for the connection between EHM incentives and behavior changes they produce.
Paying employees for specific health status changes can be problematic, where either HIPAA regulations preclude asking employees about them, or federal labor rules preclude “discriminating” among employees based on health status. However, it has always been an accepted practice to discriminate among employees based on their productivity and performance, unless union agreements preclude that, so paying incentives for these kind of results may actually be safer than paying for health status or even behavior change.
For example, federal regulations effective in 2008 seem to require paying employees for not smoking in the first place as much as is paid as an incentive for smokers to quit. By contrast, since quitters should immediately and automatically improve their productivity and performance, if only because they don’t have to take so many “smoke breaks” away from their work station, paying them for the measured productivity/performance improvements noted among them should only involve paying quitters for quitting, not non-smokers for persisting in their absence.
In all four elements of EHM strategy and particular interventions, the extent to which the employer is an enthusiastic partner in the overall effort will have dramatic influence on how successful it is. Unfortunately, the employer’s direct and short-term interests may seem to favor limited “enthusiasm and generosity”, in enabling, promoting and measuring the full results and value achieved, whenever the employer pays more to EHM suppliers for results measured.
For example, if it pays on a per participant basis, in any of the EHM elements, the employer may feel that targeting only the highest risk/reward employees will pay off in the short run, and miss out on far greater savings from longer-range targeting of employees merely at risk. The employer may look only at “hard” or “direct” healthcare, disability and workers compensation expense reduction, and miss out on the employees and EHM interventions that pay off far more in productivity-performance improvements. Or by not offering and paying any or sufficiently large incentives, for participation in the assessment process, or particular EHM interventions, employers may miss out on a greater proportion of potential economic gains than they achieve.
Perhaps most sensitive is the question of promoting and rewarding employees for participation in follow-up assessments. If employers have to pay incentives or added costs merely to measure EHM results, they may decide to save themselves some money by not pushing or even paying for measurement. A recent survey found that only 55% of employers surveyed even measured healthcare expenditures over time, and only 38% measured the ROI they achieved, though this was an increase over 23% that did so in 2006. [“Wellness: Saving Lives and Money” 2007 Willis Survey (Willis Americas Employee Benefits – North America)]
An even smaller percentage of employers routinely and reliably/validly measure employee absences, much less presenteeism or impairment while at work. This means that they may not even know the full extent of their EHM investments’ ROI. [W. Lynch & H. Gardner “Our People Are Our Greatest Asset… But No, We Don’t Track Their Performance or Attendance” Health as Human Capital, Dec 17, 2006] Of course, if they pay their EHM supplier based on value delivered, they may deliberately prefer ignorance of such effects. Of course, EHM providers who guarantee results, or charge at least partly based on results achieved, will understandably insist that all results and value should be measured.
It can only be hoped that employers will recognize their long-term interest in achieving and measuring the total economic impact of EHM, rather than short-term gains possible through limited cooperation in any of the EHM elements. It is rare that ignorance pays off better, in the long run, certainly, than does full and accurate/precise knowledge of the results achieved. And only full employer cooperation will enable achieving the best results and knowing what they are.
by Fred Fortin
March 27, 2008 at 11:04 pm · Filed under Uncategorized, Public Purchasers, Policy Makers
Just returned from a presentation by Dr. Elliott Fisher, Professor of Medicine at Dartmouth Medical School, on “Spending, Quality and the Paradox of Plenty”, where he addresses the problem of rising health care costs, poor quality and declining access to healthcare. His research and association with the Dartmouth Atlas of Health Care Project focuses on examining the differences in spending and medical practice patterns across regions in the U.S..
Not surprising, but always interesting are findings that are counterintuitive to those outside of the healthcare industry. For example, that higher spending regions in the country generally suffer from worse technical quality of care, slightly higher mortality, lower patient satisfaction with hospital care, and patient perceptions of worse access to primary care. Physicians in these regions also perceive greater difficulty in ensuring both the quality and continuity of healthcare.
Fisher argues that “higher spending across regions and physician groups is largely do to overuse of supply-sensitive services — hospital and ICU stays, MD visits, specialists consults; and — at the margin — more is worse.” He also thinks that “overuse is largely a consequence of reasonable differences in clinical judgment that emerges in response to local organizational attributes (capacity, clinical culture) and a national policy and culture that promotes growth and more care.”
Underlying causes include, according to Fisher:
- A lack of accountability for key local determinants of quality, costs and health outcomes
- An assumption that more is better, thus equating less care with rationing
- A payment system that rewards more care, increased capacity, high margin treatments and entrepreneurial behavior
The challenge of “improving health and reducing suffering” requires organizational accountability for quality, costs and capacity, comprehensive performance measures and new approaches to payment, says Fisher.
by Scott MacStravic
March 26, 2008 at 10:59 am · Filed under Health Plan/Payer CEOs, Hospital and Health System CEOs, Business of Health, Marketing
When I began my career in healthcare marketing in the mid 1970s, I thought I was making a significant positive difference to the inaccurately labeled “health care system”. Back then, essentially nobody did, wrote, or even said much about things like patient satisfaction, patient-centered care, etc. nor spent anything remotely resembling the kind of current marketing budgets. In essence, there were no marketing budgets, no marketers, and no marketing in healthcare at all.
I was lucky enough to get in on the early wave of its development and implementation, with two books and a host of articles, as well as some delightful consulting engagement. With nobody else marketing, it was a simple matter to achieve dramatic improvements in market share, revenue, and profits for my clients, simply by doing pretty basic marketing stuff, like devising more convenient and satisfying patients experiences, and doing the same for physicians where referrals were needed.
To describe the prevailing situation back then would make it sound like the Dark Ages, compared to the emphasis on patient and physician experience management, direct-to-consumer (DTC) advertising, the thousands of people now engaged in marketing efforts, and the awareness among executives of the necessity for significant spending thereon. We have come a long way, though I confess, not necessarily in the direction I had anticipated back then.
My original aim was to combine doing a better job of identifying and meeting patients’ and physicians’ needs, wants, and expectations as a way to achieve a truly WIN/WIN result for the healthcare organizations who did so earliest and best. My first consulting engagement in 1974 or thereabouts turned around a failing hospital-sponsored primary care center into what became a highly successful “chain” of such centers and a major boost to the fortunes of the hospital involved. But this was due to making the product, place and price elements of what the clinics offered dramatically better and more attractive/satisfying for patients, not through expensive advertising, which did not even exist at that time.
Since then, marketing has taken off dramatically in health care, and hardly any provider can afford to ignore it. I made an excellent living at it, and have been able to retire in comfort to a life of “freelance scholarship”, with a lot of research and writing, and frequent enough consulting engagements to keep up with its present developments. But it is clear that marketing in health care has had a lot of unfortunate effects that I never considered or anticipated, and we are all suffering from them.
As is pointed out concisely and persuasively in another blog, ”Health Status Is Not the Only Predictor of Medical Costs”. I recall reading about this back in graduate school before the marketing idea emerged, thinking it was an interesting factoid, but not really connecting it to an opportunity that marketing can address. But it is clear that the natural drive for healthcare providers, drug manufacturers, and other purveyors to succeed, has led them to exploit this potential, and not entirely to the benefit of patients.
The blog reminds us that only about 20% of healthcare use is explained solely by health status, though the correlation between status and use is strong, particularly at extreme levels of good or bad health. But people with similar levels of health/illness overall do not use the same levels of care. Their use, the other 80% at least, is more reflective of individual attitudes and preferences, insurance coverage, provider (“supply-based) effects, and economic incentives that apply to remaining at work vs. taking time off. [W. Lynch & H. Gardner “If We Only Consider One Possible Cause, We Will Be Left with Only One Type of Solution” Health as Human Capital, Mar 2, 2008]
Numerous studies have shown that economic incentives and geographic variations in the supply and care philosophy of physicians have yielded enormous variations in how a given patient with a given condition will be treated. Such variations come with very little evidence that more treatment is better, and a lot of evidence that over-treatment makes the patient worse, to say nothing of the added costs that all of us end up bearing, one way or another. And marketing clearly has a lot to do with promoting over-treatment.
It is easy to put a lot of blame on pharmaceutical advertising, which has promoted widespread perceptions in new “diseases” such as “restless leg syndrome” as well as new ways of dealing with old problems, such as “erectile dysfunction”. When I began my career, the only intent in marketing was to win more patients to the providers I worked with, not to drive up demand as a whole.
But to a great extent, it is impossible to separate the two. If healthcare becomes more attractive and satisfying for patients and physicians, it is bound to be used more. And all providers can benefit when a “rising tide” of increased demand “raises all boats” among providers of care. After many years of promoting the ER as a source of convenient care, with guarantees that patients will be seen within 30 minutes, for example, we now have a serious problem of overuse of ERs.
There is a “marketing” solution to this problem, of course, and many hospitals as well as the natural workings of the market have resulted in some significant “solutions”. Hospitals, themselves, along with insurers and employers, have “de-marketed” ER use with information campaigns, (“de-advertising?”), and the creation or support of alternatives, such as “fast-track” options to ERs on hospital campuses, “retail clinics”, and “urgent care centers”, though these often have trouble competing with the overwhelming market advantage that ERs have for patients of not being able to turn away non-paying patients.
The authors of the blog piece noted that they had used regression analysis to “predict” or account for medical costs in a large population, based on age, gender and general health ratings of its members. This combination of demographic and health factors achieved an R2 predictive success of only 11%, meaning that 89% of variations in use were due to other factors. It also predicted the differences in medical costs for employers with two different sets of incentive dynamics, but similar populations and illness. The expected costs of one, based on high-deductible health insurance and a consumer-directed health account, a culture of communicating the costs to employees of their employee benefits, and shared responsibility for time away from work, were over $2000 less per employee per year than costs for the other.
Perhaps more important, even when the second firm has a more educated workforce and more wellness programs, the differences in costs persist, because of the strong impact of the economic incentives on employees’ behaviors. While wellness programs and other efforts to improve employee health have been shown to save significantly through improved productivity and performance, apparently economic incentives can counter or at least reduce their effects.
To the extent that marketing promotes positive attitudes toward health care use over self-management of health and prudent management of one’s healthcare use, along with making one provider more preferred than another, it is part of the problem. But it is likely that altering economic incentives, along with the effective marketing of health and good self-health-management, will be necessary to “solve” the health care cost crisis. Efforts to make health insurance coverage universally available will not solve, but exacerbate this crisis, unless they are accompanied by ways to “de-market” unnecessary and avoidable health care use and expense.
by Scott MacStravic
March 26, 2008 at 1:27 am · Filed under Business of Health, Retail healthcare
In a story appearing Mar 3, it was reported that an idea that is roughly thirty years old in the US has reached Europe, at least to the extent that the UK is recognized as part of Europe despite its maintaining its own currency. This idea is that of the kind of retail medical clinic called “urgent” or “convenience” care when it began in the 1970s here. I remember when one of my students at the University of Washington initiated the first one in the Seattle area after graduation, and later sold out to a large firm for a handsome profit.
The kind of clinic that recently opened in the Manchester, England area, in a Sainsbury supermarket is unlike the ones that have opened in drugstores, supermarkets and superstores such as Wal-Mart here. It is staffed by physicians, and is strictly an “after-hours” option, open only on Tuesday and Thursday evenings 6:30 to 9:30 PM, and Saturday 11:00 AM to 3:00 PM. Here, they are usually staffed by nurse practitioners rather than physicians, and are open during the day as well as after hours. [J. Werdigier “Combining Grocery Shopping with Doctors’ Appointments” New York Times, Mar 3, 2008]
It works by appointment, and will serve only patients who are already registered with local general practitioners, otherwise could not be paid by the National Health Service. It will function as a “covering” service for these GPs, as well as a convenience for those who have trouble getting away for an appointment during working hours. It is called “Doctors in Store”, and was created by Dr. Mohammed Jiva, after finding that his patients were often requesting evening appointments.
Like patients in superstores in the US, patients at Sainsbury’s will get pagers so they can shop rather than wait for the physician if running late, and can get their prescriptions filled in the store immediately after their visit. The location also makes it safer for physicians than if they had to lock up their own offices at night in what are sometimes rough neighborhoods. And it will certainly be convenient for patients as well. [J. Reid “Shoppers to Be Seen In-Store by GPs” Sky News, Mar 3, 2008]
The story in Sky News noted that this is not the first clinic where GPs make their services available in a store, since there are already two examples in Boots drug store chain stores, but these are only open during normal office hours. And a reader commenting to the story reported that there is already an after-hours example in Dublin, though Ireland is no longer part of the UK, of course. The need to be pre-registered with a local GP and the in-store clinic, and to make appointments, as well as the fact that they are staffed by GPs rather than NPs, makes their operation quite different from the US examples, though the idea of adding an option for convenience reasons is the same.
Another reader commented that if the GP in Sainsbury’s recommends a healthier diet to any patients, they will have to skip right by the many unhealthy food and drink options filling the shelves in the store, from sugary drinks to pork pies to alcohol. Though a similar challenge faces all patients served in supermarkets and superstores in the US, it is not nearly as big a challenge as the general one facing the shopper population at large. Judging by the growing rates of obesity in both the UK and the US, it has been a challenge not won by healthy over “comfort food”.
If the first example in Manchester proves successful, it is expected to be repeated in other Sainsbury stores later this year. And if the US example is a good predictor, it might also be repeated in other supermarket chains such as Tesco, which has an ever larger share of the market than does Sainsbury’s. These clinics normally provide classic symbiotic benefits to their host stores, by driving added general traffic shoppers, as well as promoting use of their pharmacy in particular.
In an effort to improve the overall availability and convenience of GPs, the British NHS had already opened a few walk-in centers in railroad stations around London, though these have been weakly promoted, and suffer from lack of continuity of care and patient records with such “drop-in” patients’ GPs. A proposal to extend the hours of GPs, generally, has been rejected by the British Medical Association, making the after-hours model that much more competitive in the UK.
While this development is thirty years late, compared to the US, it does suggest that British patients have similar kinds of concerns over the inconveniences of traditional medicine. The retail clinics in the UK are thoroughly within the realm of traditional physician practices, with added convenience of place and time, and it should be interesting to watch what happens there.
by Scott MacStravic
March 26, 2008 at 1:24 am · Filed under Health Plan/Payer CEOs, Business of Health, Population health management
For many years, the news on “retail clinics” consisted almost entirely of stories of new ones opening everywhere. But recently, we have seen a series of stories of existing clinics closing, in a wide variety of places for a variety of reasons. It may be that, like so many innovations, retail clinics will follow the same kind of boom and bust history that has affected others, due to the fallacy of composition.
While there are many versions of this logical fallacy, its application in this case is the expectation that since the first examples of retail clinics are successful, all subsequent examples will be, also. Such optimism has affected investors in automobiles, where in the early part of the last century, literally hundreds of different companies emerged making cars, with only the “big three” having survived till the present, and their future not guaranteed. While retail clinics started slowly, they have burst into the hundreds with predictions of thousands in recent years.
There had been an earlier “boomlet” in retail clinics starting in the 1970s and 80s, when “urgent care” clinics, staffed by physicians, and operating primarily on evenings and weekends, emerged in many large cities. These served much the same market as current retail clinics, and there has been a resurgence in this kind of retail clinic, along with the ones staffed by nurse practitioners or physicians assistants. Indeed, the most recent example of the Medical Mart’s demise, closing over a dozen clinics in retail outlets if Illinois. Missouri, Utah and Virginia, was a physician-staffed model. [B. Japson “Medical Mart Clinics Close in Suburbs” Chicago Tribune, Mar 12, 2008]
Physician-staffed models have avoided the criticism by physician associations that has affected the NP/PA-staffed versions, since they have physicians present at all times, who can therefore treat all the illnesses they are likely to see, while NP/PA versions have been criticized for their limited capabilities. The trouble is, of course, that physician-staffed models tend to have far more staff on hand at each, often a couple of physicians along with support staff, so they are far more expensive to operate, and therefore far more at risk if they do not attract enough patient volume.
The Medical Mart clinics, for example, had four staff on hand, two physicians supported by two medical assistants or licensed practical nurses. This meant they automatically had over four times as much staff costs, along with larger space they were paying for. Moreover, they typically have the kinds of equipment that physicians want in diagnosing and treating patients, adding still further to their operating costs. Without perhaps five times more patients being seen than needed for NP/PA-staffed clinics, they could not survive.
There has always been a complementary function that retail clinics could serve, one that could offer many more reasons for patients to visit many more times each per year. That is the proactive health management (PHM) function, which consumers are increasingly being expected as well as “incentivized” to adopt. Both the cost shifting by employers and the move toward “consumer-directed health plans”, with their high deductibles and consumer-owned health savings accounts, provide significant motivation for consumers to do more about protecting their health and preventing disease and injury where possible.
While all retail clinics may offer minimal preventive care, including annual check-ups, flu shots and other immunizations, for example, there is already a model for significantly more comprehensive continuous PHM services that has grown almost as fast as retail clinics. So-called “concierge medical practices” most of which include a major PHM component as justification for charging a thousand dollars or more in annual “retainers”, have grown to include over 600 physicians, by my count.
In addition, there is at least one retail clinic chain, the RediClinic examples, that combines what it deems “Get Well” reactive sickness care with “Stay Well” PHM services. Having convenient locations in popular retail superstores and pharmacies, with onsite free parking, as well as something else to do while waiting, when necessary, to see the practitioner, are at least as valuable features for PHM as for routine sickness care. And for patients who really need the coaching of a professional, in person, whom they know and trust, the retail clinic can generate perhaps a dozen or so PHM visits each year per patient, at modest fees, to supplement sickness care visits.
Moreover, in my experience, and as strongly suggested by research, NPs and Pas may be better at delivering PHM services than are physicians, trained as the latter are in the challenging diagnosis and treatment of illness. And they certainly will not need to charge as high fees as are needed to support physicians.
Retail PHM-including clinics can easily combine their PHM services with sickness visits, using these as added opportunities to ask patients how they are doing with their PHM goals, even checking their weight, blood pressure, cholesterol, blood sugar, and similar common biometrics as commonly involved in PHM efforts. Until physicians work out their own competing versions of a “medical home” that can combine reactive and proactive services while generating enough income to support such a model, retail clinics may be in the best position to do so for patients unwilling or unable to pay for the concierge medicine model.
In any case, the success of onsite medical clinics, also staffed by either physicians or NP/PAs, or a combination of the two, in meeting the PHM as well as sickness care needs of employee populations, is a clear indication of the potential. The first “customers” for this combination in currently sickness-focused retail clinics may well be the employees of the superstores where the clinics are located. After all, they are already onsite medical clinics for such employees, and if their employer wishes to contract for free or subsidized PHM services along with sickness care, that will generate a substantial patient volume, by itself.
While the fallacy of composition will still threaten or at least limit the extent to which retail clinics can expand before closures become even more frequent, the option of combining PHM with sickness care should offer another avenue to support as many and even more such clinics as sickness care alone would be able to. The combination may not suit all or even a majority of consumers or employers, but it represents a proven model in its existing forms, and should be at least worth considering where sickness care alone doesn’t provide sufficient success and survival.
by Scott MacStravic
March 26, 2008 at 1:22 am · Filed under Health Plan/Payer CEOs, Policy Makers, Population health management
Despite the continuing pressure on physicians to invest in electronic medical records, only about one-quarter have done so, and usually in large medical groups. There are numerous quality and efficiency of care reasons for making the investment, but these often fail to persuade physicians, who tend to feel that others gain most of the benefits while they suffer all of the costs.
Recently, BlueCross Blue Shield of Massachusetts came out on the physicans’ side on this issue, indicating its belief that the return on investment to physicians would not justify the expense, based on its current bonus program. Its own analysis indicated that physicians gain only 11% of the money saved through EMRs, and that isn’t enough to cover costs what physicians in that state gain under its bonus program. Henceforth, it will not require physicians to have EMRs in order to qualify for bonuses. [PL Dolan “Insurer Finds EMRs Won’t Pay Off for Its Doctors” amednews.com, Mar 10, 2008]
In many, probably most small physician practices, available bonuses and financial/efficiency gains from EMR investments tend to be far greater per patient served than is the case for larger groups. And there simply is no current way to recover the investment costs, even if physicians could afford to spend or borrow the money required. But there may be a way to do so through the growing movement toward “medical homes” and proactive health management (PHM), at least for primary specialty physicians and secondary specialties that are willing to move into PHM for their chronic disease patients.
One of the elements of PHM as practiced by physicians is the need for frequent contact with patients, through individual or group visits, phone consultations, outbound e-mails and other methods used for monitoring and motivating patient adherence to medications and lifestyle change “prescriptions”. Moreover, while EMRs are used mainly as background information in sickness care, they are close to essential for patients and physicians to monitor and make adjustments on an ongoing basis for PHM goals and processes.
EMRs become “personal health records” routinely and easily accessible to both patient and physician, as well as to other practice staff involved in patients’ PHM efforts. They can be the basis for reminding patients when regular measures of their behavior change commitments, when it is time to make a measurement of progress in losing weight, blood pressure/sugar/cholesterol levels, calorie intake, physical activity, etc. They also serve by providing objective data, often including graphic displays, of patients’ overall progress, and can be used by patients involved in employer-based PHM efforts to validate their eligibility for incentive payments.
The MDVIP organization, with over 200 physician practices in 19 states, for example, offers EMRs and patient web pages that are used to track and record patient progress toward whatever personal health goals each is working on. The records, themselves, serve as a reminder of how far each patient has come since initiating each’s health improvement effort, as well as how far each has left to go. They also serve to remind physicians to consider congratulating patients on progress, or adjusting the patient’s support program if progress is slow or non-existent.
MDVIP patients also receive a mini-CD that they can use in their own computers or carry with them when they go to physicians or other providers that are not in the MDVIP system. They have their own web page for their records and MDVIP’s electronic access to health information they might be looking for. In spite of the fact that MDVIP physicians have no more than 600 patients each, this is enough to make having EMRs worthwhile for their PHM-focused practices.
Given the significant value of sharable EMRs in PHM, together with the greater simplicity of the records and applications required therein, before primary physicians make decisions on EMR investments, it might be wise for them to confer with peers who have adopted truly PHM-focused medical home models, such as MDVIP physicians, to get a more complete idea of the advantages vs. costs involved. The investment may not be justified under traditional payment systems, but may be sensible, necessary, and affordable in PHM-focused practice.
by Scott MacStravic
March 25, 2008 at 11:57 am · Filed under Employer CEOs, Policy Makers, Employee Health Management, Health Management
In a cover story in TIME magazine, an interesting if dubious list of “Ten Ideas that Are Changing the World” was described. Included were predictions such as “#8 “The New Austerity” – People will start living within their means”; #4 “Reverse Radicalism” – Talking to retired terrorists will show us how to end terrorism” and #3 “The End of Customer Service” – Sales clerks are being replaced by technology. But of particular interest to readers of this blog might be #9 “Mandatory Health” – Companies are going to make employees lead healthy lives. [D. Wolfe “10 Ideas That Are Really Changing the World” Ageless Marketing Mar 19, 2008]
There are clear indications that some employers, at least, are pushing the idea of a “consumer-based solution” to their already unaffordable and ceaselessly burgeoning healthcare costs. As most already realize, employee health status and behaviors create costs or lost productivity and performance that can be two to five times as much as their impact on healthcare costs, already unbearable. And many favor a common “management” solution to this problem: make healthy behavior and status a requirement, i.e. a condition of employment.
I still recall the time a hospital system CEO for whom I worked at the time included among “company policies” a statement that we expected employees to be loyal to the organization in everything they did. My suggestion that we reword the statement to read that it was our intention to earn employee loyalty, rather than expect it, fell on deaf ears. This was, to me, a position reflecting the attitude of employers during the Depression, when employers felt that they deserved loyalty of their employees for the “favor” of granting them a livelihood, rather than modern realities that employees are valuable, usually essential assets, that need to be attracted, developed, and retained in much the same way that we “manage” our customer assets.
It is understandable, if unfortunate, that it is probably natural that managers who make decisions about employee health feel that managing it is the best strategy, compared, say to marketing it. Many managers still aim to manage customers, for example, and “customer management” technologies, strategies, white papers, and methods continue to sell well, though how well they work is open to question.
But employee health, being something that, in most cases, is “co-managed” when it is managed at all, by employees (dependents and retirees, where applicable) and their chosen health advisers and counselors, with employers well behind in relative influence. Health behaviors, risks conditions, existing acute and chronic diseases and injuries require 24-hour, or at least every-waking-hour attention by employees, and frequent attention by health professionals, while in reality, employers can do relatively little,
Moreover, while employers can enable, encourage, and empower employees, and to far less extent dependents and retirees, via incentives and support devices that may add to their motivation, capabilities and awareness of healthier behavior options, they cannot truly manage such behaviors. When employers have attempted to require a few behaviors as a condition of employment, such as abstinence from tobacco, abuse of alcohol or illicit drugs, they have had limited success, given the difficulties of authenticating compliance with such requirements, to say nothing of federal and state laws plus union agreements limiting such requirements.
Moreover, when they employers restrict their employee hiring to prospects who are already healthy or healthy behaviors, they risk both violation of ERISA, ADA and HIPAA regulations, but missing out on increasingly valuable and scarce talent. One employer might get away with such a strategy, but the fallacy of composition would soon catch up to all if all attempted it. The bright side, of course, is that through employee health empowerment, development, or similar employee-benefit-focused philosophies and interventions, employers have already shown that dramatic savings can be gained with enabling employees to maintain healthy behaviors, reform unhealthy ones, and self-manage their own chronic conditions.
Many employees may be motivated to improve their health, risk behaviors and conditions, and self-management of their chronic conditions. Employer support and recognition of self-motivated efforts need cost little, compared to incentives and rewards (“bribes”) for doing the same. Employees may adopt the “betting” approach to their own health goals, putting up their own money as a self-imposed penalty they agree to pay, but only if they fail to reach goals they set for themselves in an agreed-upon time frame. Such an approach takes advantage of the tendency for people to work harder to avoid losing money than they will to gain some. [R. McKenzie “Dieting for Dollars” Wall Street Journal, Jan 4, 2008.
Any approach to employee health that creates an adversarial relationship between employer and employee is almost sure to end up costing more than it is worth, in one way or another. Taking a partnership approach, such as by investing in worksite support, work environment modification, and ensuring that executives and managers model healthy behaviors and enthusiastic, visible participation in health initiatives, has almost always proven far more effective. Empowerment, per se, delivers the added benefit to employees of enhancing their personal control over their lives and autonomy with respect to their employer. Such added benefit may, by itself, help employers retain the talent they need to survive and succeed, while increasing their productivity and performance at the same time.
by Scott MacStravic
March 25, 2008 at 11:34 am · Filed under Employer CEOs, Employee Health Management, Health Management
We have been moving toward the adoption of health management as at least part of the solution to our “healthcare cost crisis” for decades, though with something close to glacial speed. The growth of health insurance, and its decisions not to pay for the limited amount of health management advice and support given by family physicians had forced that approach out of traditional medicine. Consumers’ belief that we could behave in as unhealthy a way as we liked, then get “fixed” by third-party-covered sickness care when the consequences arose limited personal efforts.
But employers began investing in “worksite wellness” in the 1970s, though their focus was mainly on reducing healthcare costs, with perhaps sickness-caused absences an added idea for some. And as they became slowly aware of the impact of employee health on workforce productivity and performance, not merely health, workers compensation and disability insurance costs, they have become far more likely to invest in health management for their workforces.
Insurers started managing disease, rather than health, once they recognized that roughly 75% of all healthcare costs came because of chronic diseases. But they have also recognized, gradually at least, that preventing the onset of such diseases can save far more than managing them once initiated. And they see health management as a way to attract and keep more employer clients for the added economic benefit to business it delivers.
Specialized disease and health management suppliers have emerged slowly over the past three decades or so, and an increasing number have expanded from limited focus on the most expensive consumers when serving insurers to managing the health of entire populations for employers and the insurers who seek greater economic benefit for their employer clients. They have been joined by employers and insurers, along with traditional healthcare providers offering their own health management services to employers and Medicare/Medicaid beneficiaries.
Governments were the slowest to recognize the health management potential, and have focused primarily on disease management since they function primarily as insurers, and of unemployed populations. They seem to manage to reach equivocal decisions about disease management in general, rather than recognizing that the success of some examples should cause them to focus on the methods that do work, rather than condemn the idea because they all don’t work.
More recently, private enterprises have joined the movement. Concierge medicine began and continues with health management as a major distinguishing focus to differentiate it from traditional medicine. A growing number of traditional practices have become “hybrids” mixing retainer-based, health management services to traditional primary sickness care for a handful or few hundred of their current patients.
Retail clinics such as the RediClinic chain have added “Stay Well” services to their “Get Well” sickness care array. Major pharmacy and retail chains have become hosts to and even owners of retail clinics that end up functioning as worksite health and sickness care sources for their own employees. And most recently, examples such as Wal-Mart and Walgreen have gone a bit further toward health management.
Wal-Mart’s CEO described its plans to help employers (and insurers, as well) cut their prescription drug costs. [“Wal-Mart CEO Lays Out Plans to Help Other Employers Cut Health Care Costs” Workforce Management, Jan 24, 2008] With its long history of working with its product suppliers to minimize their operating costs, it is a natural fit, as is its efforts to promote the development of electronic medical records and other technologies that can be used for managing health, as well as sickness.
CVS had already moved into the pharmacy benefits and retail clinic businesses, and its archrival Walgreen has gone one step further by buying two companies that offer onsite medical clinic services to employers, I-trax and Whole Health Management. [J. Goldstein “Walgreen Continues March into Health-Care Delivery” Wall Street Journal, Mar 18, 2008] With its chain of Take Care Health Centers, along with its worksite centers, Walgreen will have more than 500 locations where it can offer health management services. [B. Japsen “Walgreens Expands into Work-Site Clinics with Acquisition” ChicagoTribune.com Mar 17, 2008]
According to Malcolm Gladwell, author of “The Tipping Point”, a “tipping point” is the stage at which the momentum for change becomes unstoppable. It is bound to be difficult to determine whether this stage is reached before there is a clear “tip” toward change, but the accumulated developments in recent years in health management certainly look close. Recognition is growing that health management is the only way we can afford to pay for sickness care, i.e. by reducing the amount of sickness that has to be cared for. The far greater value of healthy employees and citizens compared to prevailing numbers of sick ones is being recognized by essentially all stakeholders, even hospitals, physicians, other medical professionals and complementary/alternative medicine practitioners, even though they may now depend mainly on sickness care revenue.
Once stakeholders begin to work together on what is becoming their shared goal of reducing the incidence and prevalence of disease and injury, it seems likely that the tipping point will have been reached. And from the kinds of activity mentioned above, that point appears to be at hand, or at least clearly in view.
by Fred Fortin
March 24, 2008 at 1:25 pm · Filed under Policy Makers, International Best Practices, International Health
Bill Hsiao, a respected Harvard China healthcare scholar, along with co-author Winnie Yip, also at Harvard, have in this most recent issue of Health Affairs describe the challenges China faces in healthcare reform very succinctly:
China is at a loss as to how to transform its new money into efficient and effective health care. To tackle the root cause of unaffordable health care—rapid cost inflation caused by an irrational and wasteful health care delivery system, the very same issue confronting the United States—China needs to decide how to reform its health care delivery and payment systems; otherwise, most of the new money is likely to be captured by providers as higher income and profits.
By injecting substantial government funding to provide basic health care universally, China has taken giant steps forward to address its problems of unaffordable access and medical impoverishment. But these initiatives are silent on how China intends to tackle a fundamental cause of its problems: rapid cost inflation and inefficiencies of the delivery system.
The decisions that China needs to make are complex, and there is no silver-bullet solution. In light of the potential scale and magnitude of their impacts, it would be advisable for China to take a step-by-step approach, guided by pilot experimentation and objective, evidence-based evaluation.
As I have argued before, the expansion of coverage without paying serious attention to the outcomes of that care, will be a very expensive and troubling experience for China.
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