Archive for May, 2008
by Scott MacStravic
May 12, 2008 at 12:42 pm · Filed under Employee Health Management, Health Management
In the early days of health management (HM), whether for employees (EHM) or insured populations (PHM), insurers were among early adopters of the outsourcing approach thereto. Since insurance plans had plenty of work to do in marketing their offerings, paying claims, and managing utilization of care, they were quite willing to outsource HM to the growing number of specialized vendors of disease management (DM) or health & wellness programs (HW).
But there are increasing signs that insurance plans are reconsidering this decision, and “in-sourcing” HM as a major strategy and revenue-generating addition to their insurance offerings. For one thing, they have the large populations that can create the kinds of economies and qualities of scale that enable HM to be effective and efficient. For another, they are faced with employer clients who want, even insist on HM as a key element in their relationships with insurance plans.
Both CIGNA and Aetna, for example, have long offered their own in-house HM programs, beginning with DM, and adding on HW and risk behavior/condition management efforts over time. The majority of employers, according to one survey, look to their insurance plan to provide HM services, and employers typically prefer to deal with only one supplier of such services, rather than having to juggle many. [L. Butcher “Wellness Programs: No Longer Just an Add-On” Managed Care Magazine, Feb 2008]
Wellpoint’s president of its Health Management subsidiary considers “health optimization” to be the future of the health insurance industry, according to this article. Employers are making HM a key consideration when they select which insurers to do business with, and any plans that lack a commitment to and capability for HM, with its full effects on healthcare costs but worker productivity and performance even more important, will be at a competitive disadvantage.
Employers often develop their own internal HM programs, but many prefer to outsource this function. For one thing, many are not large enough to have sufficient numbers of employees with similar health issues to enable internal programs to be cost-effective. And for another, employers are barred from knowing as much about their employees’ health, as individuals, which makes it that much more difficult to match their programs to individual risk/reward potential.
This matching challenge is perhaps the key to successful HM strategies and interventions. Unless HM providers can match interventions to the personal characteristics, preferences, and risk-reward potential of individual employees, they are essentially “flying blind” when it comes to ensuring positive and competitive levels of investment returns for their employer clients. And employers are legally prohibited from knowing much of the information needed for such matching.
Wellpoint, for example, has 1500 staff already in its Health Management subsidiary, and has spent millions developing its “360o Health” program. It is intended as a holistic health optimization strategy for employers, and Wellpoint envisions adding another 599 staff to meet growing demand for this service among its employer clients. Health plans are even offering their HM services to employers who are not clients, though this may also be an effective strategy for gaining additional health insurance clients, once these HM services have proven effective.
As one sign of the times, Blue Cross/Blue Shield of Minnesota just announced that it is dropping its contract with Healthways, Inc. Nashville, Tennessee, as it readies its own internal program for rollout next year. The intent is to offer a similar nurse-based phone coaching program, but aimed at not just DM participants, but at employees who are medically at risk, but not yet ill. It will be able to use the BC/BS claims database to identify patients at risk of non-compliance, for example, and intervene immediately to identify and address the reasons therefor.
As in other examples of insurers taking over the HM function, BC/BS will compete with their former HM supplier for its own employer clients, and potentially for other employers as well. While Healthways is large enough to easily absorb the loss of the direct contract, if the trend persists, all HM specialty suppliers may find competition from insurers a major challenge. [S. Alexander “Blue Cross Dropping its Contract with Healthways” StarTribune.com, May 8, 2008]
Like all HM suppliers, of course, insurance plans are faced with the challenge of delivering and demonstrating significant and consistent positive ROI for their employer clients. Employers initially adopted HM investment as a worthwhile idea in its own right, and formal evaluation of financial returns has yet to become universally adopted. But it is clearly headed in that direction, and proving results will increasingly become essential to survival in the HM market.
The HM market is, at present, filled with hundreds if not thousands of different models and techniques for each of its elements, as discussed in the already posted series of articles on “The Name of the Game in EHM is Variability”. But it is certain that there will be intense efforts, by individual employers, consortiums thereof, and institutes developing for the purpose, to determine which are the best practices, and to publish this information for all to see. Then we will learn how well insurance plans compete with both specialized HM suppliers and employers, themselves, some of whom are already marketing their services to their peers. [“Employer Cooperation in EHM” May 5, 2008]
by Scott MacStravic
May 12, 2008 at 11:49 am · Filed under Disease Management, Population health management
Conventional wisdom in PHM has long adhered to the notion made famous by Willy Sutton, the famous robber, who explained his predilection for robbing banks by noting that they are where the money is. Translated into PHM terms, it leads to identifying those people – members of health plans and employees – who cost the most money. This logic became the major reason for the growth of the disease management (DM) industry, once it was realized that people with chronic disease account for roughly 75% of all health care costs.
This was the original logic that prompted investments in DM, and it persists today, despite the fact that federal government studies persist in finding, at best, equivocal or uncertain evidence as to the return on investment delivered by DM providers in practice. An article just last month, for example, noted that “Health plans are not effectively reaching the sickest Americans…” according to the latest Silverlink Healthcomm Behavior Index. It concluded that one recommendation for improving health and reducing costs is to “…focus on those who are most unhealthy. [L. Masterson “Getting Personal Engages Members” HealthPlans.HCPro.com, Apr 30, 2008]
While the idea may seem self-evidently true, or at least logically justified, it is more often blessed with the appearance than the reality of how disease and health management can be best applied. Even in the narrow context of PHM applied to health insurance plan members, selecting the sickest members has not turned out that well for DM providers, at least not in the Medicare demonstration projects that persist in yielding equivocal or disappointing results.
The basis for selecting targets for PHM interventions should be the economic and other value that can be obtained thereby, not simply the severity of the problem individuals may have. In the Medicare examples, often the problems addressed were simply too severe for the solution to fit well with, given the cost of the solution compared to the benefits it delivered. It is the benefit to cost relationship that should determine who will make the best prospects and participants for PHM.
Moreover, the relationship should be benefits minus costs, more than benefits divided by costs. The ROI ratio available from any single prospect or participant, or from a given PHM intervention relative to a population, should only be an indicator of value, not its calculation. The highest ROI ratios, almost automatically, will tend to arise from the lowest cost interventions, merely because their denominator is low. But if we rely on the ratio, alone, it is too easy to miss far greater opportunities for ROI amounts that require a bit more investment to achieve, and deliver lower ratios as a result.
The best prospects for PHM success will be the individuals and health problems that contain the greatest potential for delivering value, not merely reflect the worst problems. Smoking, for example, is often cited as a catastrophic risk factor, considering the great many diseases to which it can be connected. But smokers are often the toughest people to “reform”, and deliver only low economic benefit to payers per participant in smoking cessation initiatives, because so few quit and remain abstinent long enough to deliver significant benefit.
By contrast, some “minor” health problems, such as sleep deprivation or lack of physical fitness may have far higher success rates in PHM efforts to reform them, and deliver far greater benefit faster, with slightly higher costs per participant. Self-service methods such as visiting web sites and support communities may be so inexpensive as to enable practically all members of a population to be directed to use them. This may yield a high ratio based on modest improvement for even more modest cost, but fall far short of a more intensive approach aimed at another problem, or the same problem.
Since employers are not permitted to know much about the health of their employees, only medical care and PHM providers can normally select who are the best prospects among individuals. But populations and problems should be selected based on the overall ROI amounts available thereby, as long as the ROI ratios for the interventions available represent an attractive rate of interest on the money involved. Targeting based on severity of the healthcare costs or productivity/performance impairment levels alone will only yield the best choices by chance, not because they are the worst problems around
by Scott MacStravic
May 12, 2008 at 11:08 am · Filed under Employer CEOs, Health Plan/Payer CEOs, Business of Health, Variability in PHM Series
Given the large number of PHM suppliers already available, and growing numbers of hospitals, physicians, and other suppliers joining still, the number of options across the seven elements of PHM is enormous. If there were as few as five options available for each element, to say nothing of different mixes of elements for the same purpose, there would be 75 = 16,807 different mixes of the options to consider. In practice, of course, insurers and employers, like consumers when faced with too many choices, first strive to limit the number to a manageable few, perhaps no more than five sets.
This may be accomplished by looking for particular vendors, as outsource suppliers or at least basic models for a DIY option. ON the other hand, some PHM investors have divided up the strategy, and even particular interventions among multiple suppliers, using one for the assessment element, and others for interventions, or one for interventions, and another for evaluation. If each different supplier offers different options for each element, that could greatly increase the mix of options available, even if only a few suppliers are considered. Moreover, suppliers are increasingly adding numbers and types of interventions, in order to be able to offer options graduated in cost and effectiveness to the risk/reward potential of different programs and participants.
One development should reduce the difficulty of making choices in this “overstocked” world. Predictive modeling is improving in its accuracy all the time relative to the risk/reward issue. And since different element options, as well as different suppliers, bring with them different charges and typical costs for their clients, these may more accurately be compared to the risk/reward of the population under consideration, and for targeting prospective participants, thereby improving the chances of investments turning out well.
But the biggest boon to payers will come only when sufficient studies are made of the relative cost and returns on investment of the methods available in the market. It may take decades to do this for each option in each element, but it should not take more than a few years of concerted effort to compare different suppliers, along with more successful DIY efforts. The key is to retain a focus on results and returns, rather than be satisfied with thinking that investing in PHM is a good idea for its own sake.
Employers are probably somewhat more averse to “rigorous evaluation”, when it adds significantly to costs, than are insurers, at least as regards PHM investments. Managers spend relatively little time measuring things, as long as the key items in their balanced scorecard are going well. And if they are not going well, they may have to conserve their funds anyway, so would be unable to invest in measurement. Insurance, with its core competencies of underwriting and risk management, are at least more engaged in measuring things.
One study, for example, has found that only a small minority of employers even measure employee absences, much less presenteeism, despite the fact that both cost them a lot and can be reduced, with presenteeism many times more expensive and potentially rewarding than health-related absence alone. [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]
Another found that only 38% of employers surveyed in 2007 measured the ROI at all from their PHM investments, though this was up from 23% in 2006. Many seem satisfied that it is an inherently good thing to do, or are confident that it is yielding a positive ROI, at least in the long run, and don’t wish to waste money proving it. [Wellness: Saving Lives and Money” 2007 Willis Survey (Willis America Employee Benefits North America (request: willisebsurvey@willis.com)]
Investing on faith alone will certainly not last long. Finance executives and governing bodies are sure to begin questioning at least any large investment in PHM, so CEOs and whoever else champions PHM should be prepared to prove the business case. In all the cases where efforts have been applied, the business case has been proven, and usually based on the most conservative figures, such as not including full productivity and performance benefits, or not including healthcare cost reductions. [S. Nicholson, et al. “How to Present The Business Case for Health Care Quality to Employers” Applied Health Economics and Health Policy, 4:4 2005 209-218]
Many results have no doubt seriously understated the full economic value of their PHM efforts because they neither counted productivity impairment or its “non-disease/risk” causes nor invested in interventions related thereto. There is ample evidence, for example, that conditions rarely included in disease management programs, including emotional disorders, allergies, arthritis, and chronic pain cause far more productivity impairment than to the most managed diseases. Moreover, poor nutrition, fitness/activity levels, stress, lack of sleep, poor hydration, for example, have been found to be far more valuable when corrected to productivity benefits than to reduced disease and healthcare costs.
We have a long way to go, and far too many choices of how to get there at the moment. What is needed is a concerted and coordinated effort — funded by governments, insurers, and employers – to evaluate the hundreds of options available, or at least screen for the most probably good ones, then rigorously evaluate these to identify and publish information on what are truly best practices. This may begin with what is already being done in sickness care, measuring and reporting who is best, or least bad in this far too expensive side of “health care”. It would make far more sense for it to be done where health can be improved, along with the quality of life for all people, as well as money can be saved by everyone who now pays for sickness care.
And one thing that is certainly clear, given the enormous variations in how PHM is designed, delivered, and evaluated, is that there is no way on earth to determine scientifically if “PHM works”. The definitions and applications of “PHM” are so variable, and of “works” equally so, making any attempt to arrive at a single conclusion about it ridiculous and impossible to begin with. The same has always been true of its separate components – disease management, health/wellness promotion, risk behavior and condition prevention and correction – in addition to whatever combination of these is included in PHM. It may be understandable that academic institutions and governments strive to “test the hypothesis” of whether PHM works, but any such attempt is doomed by the extreme degree of variation in what “PHM” is, and how “works” is measured.
by Scott MacStravic
May 12, 2008 at 11:06 am · Filed under Business of Health, Variability in PHM Series
To a great degree, the evaluation element in PHM comprises repetition of one or more of the assessments done for the initial baseline analysis. Ideally, this repetition, whenever it is repeated, will identify the changes of concern to payers, at least, while any added tracking of results used to sustain participants in their efforts and changes will do the same for the changes of interest to participants. But saying this, there will inevitably be the complication of making a “business case” that credibly demonstrates that the PHM strategy overall, and its individual interventions, have been the causes of the changes discovered.
Because the value dimensions addressed in EHM efforts and evaluations are major concerns of insurers and employers all the time, it is likely that they are doing something else to reduce costs or improve productivity and performance, beyond the effects of PHM interventions. And rarely would insurers, much less employers be willing to devote an entire year’s financial performance to the effects of a PHM investment alone. So generally speaking, the PHM evaluation should include some effort, at least, to separate out what changes in the evaluation dimensions it addresses that were probably affected by other efforts as well.
One of the best ways to track the effects of PHM is to analyze the tracking data that connects PHM efforts, such as HRA, screenings, and other information that was shared with individual participants in the HRA, coaching interventions used with participants in particular PHM interventions, and participant-reported behavior changes, health status biometrics of self-reports, etc. If this “value chain” of causes and effects can be shown to be connected as expected, that will make a strong case for attributing much at least of measured improvements to the PHM effort rather than “extraneous” causes.
Results such as “yes/no” behavior changes, (smoking, alcohol/drug abuse cessation) or “degree” changes, (increased physical activity, improved nutrition, longer average time slept per night, lower stress, etc.) should correlate with the amount and intensity of interventions, together with participant participation measures. In other words, the more the inputs by coaches and participants, the more the outputs in terms of behavior change, either a higher rate of yes/no changes, or a greater degree of change in continuous metrics.
In turn, the more the changes or progress achieved in behavior, the greater should be the improvements in biometrics, risk/impairment factor status, etc. that are supposed to be affected by each. This should also appear as a correlation between the different kinds of measures. And the measured biometrics, health/risk/impairment factor status should be well correlated with changes in healthcare cost, disability, and workers compensation costs, plus productivity and performance metrics or estimates.
The higher the degree of correlation across these changes, the more likely and credible the causal connection between them is. Only randomized and limited intervention clinical trials will meet academic standards, but demonstrated correlation should provide stronger evidence than simply records of changes in the outcome value, and certainly be better than the most popular approach, which among employers, at least, is not to measure ROI at all.
To determine ROI, of course, it is essential to factor in all costs as well as financial gains discovered in the evaluation. These will include all internal costs for payers who do it themselves, and is likely to include internal costs – for staff efforts, incentives paid, internal promotion of participation, team contests, etc.—as well. The costs imposed in the form of PHM supplier charges should be the easiest to identify, since they involve direct payments. When all financial benefits are compared to all costs, the ROI ratios and net earnings can be calculated.
There is a further complication in PHM, however, because, as is the case with some marketing expenditures, some portion of PHM costs should probably be treated as longer-term investments, rather than this year’s costs. While the published cases of long-term PHM results are few, they strongly suggest that when most of the participants in one year’s PHM efforts remain beneficiaries, members, or employees, the second-year results tend to be better than the first, and the third better than the second. The only case I know of where results were tracked for longer than three years found the fourth-year results essentially flat compared to the third.
This case, however, involved a cohort of employees, roughly 6000, who were continually employed and continuously participating in the PHM program for all four years. The pattern they produced, which was savings of $233 per participant in the first year, $375 in the second, $944 in the third, and $950 in the fourth, counted both medical care and disability/workers compensation expense savings, but not the productivity losses most likely associated. [G. Stave, et al. “Quantifiable Impact of the Contract for Health and Wellness” JOEM, 45:2 2003 109-117]
But chances are, when there are high turnover rates among health plan members or employees, the degree of improvement in that case would not be replicated. “Veteran” participants would too often be gone, instead of in their third or fourth year of improvement. And “novice” participants would have to replicate lower first-year results when it is their first year, even if the fifth or tenth for the payer in terms of PHM program investment. But as long as there is less than 100% turnover in the participant population, there seems likely to be improvement in annual results for successive years, at least up to three or four.
Improvements usually occur both because it takes time for participants to gain confidence in the own abilities. It also may take time for health status effects to occur. Fortunately for employers, many improvements in productivity occur quickly, so this should bolster clients’ confidence. One of the factors that take time is the influence that successful participants have on their peers who chose not to participate when first offered. The examples of successful peers, and the word-of-mouth reports spread by them, can be the most effective, and certainly least expensive approach to promoting future participation and improved results.
In general, it may be the third or fourth year until positive or at least desired ROI levels are achieved. Marathon Health, for example, a PHM supplier in Vermont, guarantees a 2:1 ROI, and often achieves 3:1, though not until the third year. The huge increase in the third year cited above may have meant no significant ROI was achBy contrast, HealthMedia is willing to guarantee the results it measures, though not ROI, for whatever period it uses in measuring them should its clients desire (per e-mail from Ted Dacko, CEO). HealthMedia only has two years* history with any of its results, and less than that for interventions introduced more recently, has not yet reported long-term results, but it makes employers who want quick results happy.
Whatever method for evaluation is used, it should meet at least standards for accuracy, reliability and validity, and avoid at least the most common errors due to self-selection bias and regression to the mean. Measuring ROI is clearly superior to pure credence that PHM works, or even relying on results others evaluate and report. The huge variety of methods currently in use, particularly in what is measured, together with the unavoidable costs of measuring many important sources of value from PHM investments, as well as the need to be able to take a long-term view of such investments, makes choosing an approach difficult, but definitely worthwhile.
by Scott MacStravic
May 7, 2008 at 8:46 pm · Filed under Hospital and Health System CEOs, Business of Health
In a previous article on the move toward increasing the places where health care is delivered, I noted a wide variety of additional locations where health care organizations (HCOs) are making care available. But the trend is even greater than I indicated. As reported in another earlier article by George van Antwerp, at least one new organization is offering health care at anyplace a person desiring it happens to be at the time.
American Well functions as a “broker” of physician services, once consumers have signed up as clients with their health history and payment information, and physicians have signed up to offer care in the form of online consultations. It offers consumers information on the qualifications of physicians relevant to the problems they describe, along with ratings of patient satisfaction among consumers who have consulted with them previously through this online service.
This means that consumers can obtain consultations at their home or workplace, or thanks to wireless communications devices, anywhere they and their devices happen to be. Phone communications can be arranged to accompany the online interactions, adding live audio communications to real time online transactions. American Well advertises itself as creating the same “transaction” opportunities as online shopping services such as Amazon.com and Expedia.com in the retail and travel realms.
It also notes that the care consumers get in this manner can be integrated into other sources that consumers use, including their personal physician, where they have one. Extensive records of the online transaction patients have had with American Well can be communicated to such physicians, with the patient’s permission, of course, as soon as the consultation is completed.
This service also includes information on the prices that will be charged by physicians offering the service, and enables such physicians to link their fees to the level of quality and past patient satisfaction they can demonstrate. Physicians can log on to the service when they wish to be available for consultations, and log off when they do not, meaning they control the amount as well as timing of their availability, based on their personal preferences.
Dr. Robert Shoenberg, co-founder of American Well has noted that current health care web sites offer consumers information, but not any opportunity to turn what they learn into transactions, i.e. actually obtaining care. By signing up both consumers and physicians, and enabling consumers to identify who is available to serve them online at a time and place they wish a consultation, American Well enables them to carry out a transaction in essentially the same way they buy from online retail or travel sites.
Consumers who log on to the American well site are walked through a process of indicating their problem or concern, identifying who is available to serve them, getting advise on how they can get the most benefit from their discussion, select a physician meeting their recorded preferences regarding age, gender, languages spoken, etc. They can access “five-star” ratings of each physician available based on previous consumer ratings of each, and determine the price of the transaction set by each physician.
Physicians can determine what topic(s) the consumer wishes to discuss, and offer the option of seeking care from a different specialist. Patients can see the responding physician online, and augment the online consultation with phone contact through the same computer, while enabling the physician to access an online medical record previously created. Each transaction is followed immediately by a feedback survey of the patient, and clicking a button to send the record of the transaction to the patient’s personal physician, including any needs concerns not addressed during the transaction that the personal physician can take care of at the next face visit.
Insurers can exert some control over use of the service by varying co-payment requirements according to the volume of use for individual plan members. In practice, the ready availability of physician online consultations wherever and whenever members wish them should reduce the unnecessary use of emergency rooms and face visits of other kinds. As such, the online service adds to retail clinics as alternative sources of care that can be coordinated with patients’ regular source of care. Nurses at retail clinics could use the online service as an immediate source of consultation when patients present with a problem where physician input is desirable.
This same service can easily become part of a more consumer-driven approach to health management, where consumers lack resources and programs offered by their employer, insurer, or physician. Ideally, insurance plans will come to appreciate the advantages of online health management consultations, in addition to sickness care transactions, and include coverage for them where they prove to be cost effective. [L. Dunbrach & R. Shoenberg “Health 2.0 – The Transformation to Online Care,” HealthIndustryInsights.com Webinar]
In any case, this is one example of a method for consumers obtaining care and physicians delivering it that falls into what is normally espoused as the “new consumerism”. Consumers have far more control over when and where they get care, while able to select physicians with considerable transparency as to qualifications and performance, as well as price. Dr. Shoenberg considers it to be a truly disruptive innovation. The rest of us will have to wait and see.
by Scott MacStravic
May 6, 2008 at 8:14 am · Filed under Business of Health, Variability in PHM Series
Once targets are enrolled, i.e. as many choose to opt in or fail to opt out, there remains the next challenge of sustaining their participation, in terms of frequency and duration of interactions, cooperation in pursuing the intervention goal, and making behavior changes – and completing or continuing in the intervention, depending on which applies. There may also be a separate challenge to sustain the changes in behavior, health status, and economic benefit delivered, since relapses relative to the behavior change targeted, or “slipping” into risk levels of some other behavior or condition is common.
PHM suppliers and sponsors seem generally to rely on the same approaches for sustaining participation and behavior changes as they do in achieving them. Of course, the least expensive course may be simply to ignore those who succeed, and even those who do not, rather than attempt to enroll them in the same intervention again. Re-enrollment efforts may help for those who failed to succeed or still have plenty of room for improvement, or they may be offered a different intervention, linked by assessment to a comparable or at least appreciable level of risk/reward potential.
For those who have succeeded already, some kind of “maintenance” intervention may work, with a lower intensity and cost to sponsors. Or, since almost every member of the population is likely to have many more than one cost factor present, those who succeed in one may be invited to enroll in another, assuming there remains plenty of room for reducing one or more of the costs involved. It may easily be possible to enroll “succeeders” in both one maintenance-level and one new intervention, without reducing the effects of either.
The most powerful approach to promoting sustained and continuous participation, however, is likely to be paying significant attention to what the participant has gained through past and current efforts. When the PHM intervention involves personal coaching, by phone or in person, it should be an automatically included part of each interaction to check what progress each participant has made in changing behavior, improving health status, reducing healthcare use, or improving productivity/performance, as each perceives such changes.
Their perceptions, at a minimum, can be used to reinforce their confidence in success, and thereby their motivation to persist. If, in addition, an effort is made, such as by asking participants to track for themselves, the health-related quality of life, and perhaps “life asset” impact of their participation so far, and their success once achieved, this should reinforce their persistence even more. Progress and success in changing behavior, health status, and productivity or performance, for example, when participants have their recognition of these prompted or reinforced, should add to their self-esteem as well as self-confidence.
Moreover, such changes may well have measurable impact on their life asset of “wealth” as well as “health”. Quitting smoking can save literally thousands of dollars a year in costs of tobacco, for example. Enabling and reminding participants to track how much they are “wasting” while they still smoke, and “earning” while they remain abstinent, can reinforce their commitment. It has been difficult to get smokers to recognize how much their productivity and performance have been impaired by their addiction, but measured improvement in both can add to their sense of “talent” or performance asset as well. And if productivity/performance improvements have come with increased compensation, reminding them of that should help as well.
Participants, themselves, are most likely to be at least potentially aware of many life benefits they are gaining through participation, if they are asked about them, or encouraged to record them in a personal health log or diary. This may be kept private for the participant’s personal use, or shared with the PHM supplier, as each participant chooses. Those that the supplier knows about can be used to provide periodic summaries to participants, to remind them of their achievements.
For PHM suppliers or programs that include frequent assessments, and I know of one that performs assessments at 30, 90 and 180 days, for example, for some clients, at least, can use these assessments to provide reinforcement effects to sustain participation, if it is intended to be longer than 30 or 90 days for example, or sustain change if repeated again after a year. Having three opportunities for participants to report their progress means they will be reminding themselves every time they are asked. If they also keep a shared log of results, the supplier can add its own summaries to these reminders.
Others, including incentaHEALTH and Virgin Health, use self-service kiosks that employees can use to “check in” with weight and other biometric measures whenever they choose. Each participant registers a confidential ID when using the kiosk, so that each’s efforts and biometrics can be tracked, making periodic reporting of progress and achievement easy for PHM providers.
Of course, like so many of the elements of PHM, supplying extra reminders, even asking separately about participant progress and achievement, may add some costs, so balancing the positive effects or sustaining efforts with their costs will be necessary. I know of no PHM supplier that has separated out such costs and effects, so there is no experience that I know of to look at. But research has clearly indicated that the prospect of future benefits is an even more powerful stimulant for continuing relationships than is recognition of past benefits, so reinforcing both seems likely to help. [K. Lemon et al. “Dynamic Customer Relationship Management: Incorporating Future Considerations into the Service Retention Decision” Journal of Marketing, 66:1 Jan 2002 1-14]
With so little known about how suppliers and clients have sustained participation and success in the past, it is difficult to say how much variations in this element add to the overall variability of PHM strategies and interventions. But when efforts are used, or even if they become only gradually added to PHM efforts, they will likely add to the overall variability, since there is no evidence at all, as far as I know, of which methods work best.
by Scott MacStravic
May 6, 2008 at 8:13 am · Filed under Business of Health, Variability in PHM Series
The range of interventions that DIY payers and PHM suppliers have adopted in seeking desired behavior, health status, healthcare/WC/disability cost reductions, and improvements in productivity or performance is vast – as is the range of costs and charges for such interventions. The least intense, expensive, and unfortunately effective method of which I am aware, used by a vast number of single-problem suppliers, and ranging on costs from free to a few dollars per month per participant, is the automated, standardized e-mail prompt/invited website visit combination.
Since visits to websites cost sponsors little or nothing, and online e-mails reminding participant to make such visits add only a little more, these types of interventions can be marketed to consumers for self-paid efforts. I don’t know if any payers use them, though there is one fitness/weight loss intervention I know of that is sold to employer and insurer clients, for undisclosed fees. It is also marketed to consumers through their primary physicians, for as little as $19.95 per month.
At the opposite end of the spectrum are PHM interventions that rely on face visits for screening assessments and coaching interactions, which often include biometric measurements to track how well the participant is progressing, and supply evidence for incentives that are based on biometric improvements, such as weight, blood pressure, sugar, cholesterol, etc. Such visits can also be used to verify smoking, drugs or alcohol abstinence by checking for traces in the blood or urine.
The cost to participants in time to make visits to individual practitioners, or for practitioners to go to worksites for interactions, tends to make this method the most expensive.
When physician-practice-based interventions were used in one Medicare disease management demonstration project, they came with costs that ranged from $80 to $444 per month for each participant = $960 to $5328 per year! It is little wonder that out of the fifteen providers participating in this project, only two have been able thus far to produce results meeting Medicare expectations, and warranting a bonus to the providers for their efforts. [R. Brown, et al. “The Evaluation of the Medicare Coordinated Care Demonstration: Findings for the First Two Years” Mathematica Policy Research, Inc. 2007.
This example is likely to be an “outlier” in PHM generally, particularly for employers, since it reflects only medical care cost reductions, and high-cost elderly chronic disease patients. Another physician practice has reported offering diabetes DM services that only added $104 in costs to normal patient visits, for example, though it lost money by doing so, because only a minority of patients had insurance plans that paid anything at all for the services. [P. Mohler & N. Mohler “Improving Chronic Illness Care in a Private Practice” Family Practice Management, 12:10 Nov/Dec 2005 50-56]
Visit-based PHM programs are not necessarily the most expensive, however. In many cases, visits to physicians’ offices or retail medical clinics for other purposes can substitute for special trips for PHM interactions. And some retail clinics offer PHM services, at either low fee-for-service prices each, or in relatively low-priced (< $100) packages to patients who use them for sickness care as well, or may even come exclusively for PHM services. Kiosks used to monitor biometrics such as weight, blood pressure/glucose and cholesterol can be offered in retail clinics, enabling practitioners to monitor progress and coach at modest costs.
Many PHM suppliers rely on phone coaching, but both the frequency and duration of interactions can vary, as will the costs, as is the case for visit-based interactions. Phone coaches have to rely on participant self-measurement and reporting when tracking cooperation, behavior change, and biometric improvements, of course, unless participants have remote monitoring devices that automatically upload measures to practitioners, or medications adherence devices that monitor when and how often participants take them. And such devices are expensive in themselves, and normally only used in high-risk chronic disease(s) management.
Pretty close to the low-end website-based interventions are the wide range (ten at last count) of interventions offered by HealthMedia, Inc. (Ann Arbor, Michigan). It offers each of the ten at separate costs per population, but the costs tend to be quite low, particularly for large employers with thousands of employees. It also offers “book of business” data on as many as half a million employees who have participated in one or more of these interventions, so payers can get an idea of what results have been achieved in the past over a very large population. It collects only productivity data, combining absenteeism and presenteeism, but individual employers can supply or analyze their direct costs as well to complete savings calculations.
Its intervention relies on online or paper health risk assessments, which include risk/reward psychographics and productivity impairment questions. The answers to its 30-50-question assessments enable virtually total individualization of both the HRA analysis and feedback to HRA participants, and ongoing communications to each one that chooses to enroll in one of their intervention programs. And since even a question with only two possible answers, when there are 50 questions in the assessment, yield a possible 250 = 1 quintillion (fifteen zeros) possible combinations, so it is unlikely that many if any individual participants get the same communications.
The PHM market, generally, is moving away from the one-size fits all approach, toward customization in both content and cost of interventions. Graduating prospective participants into low, medium, and high risk/reward categories is common, with accompanying graduation in the intensity and costs of interventions tailored to each. Formerly high-end suppliers have merged with or acquired lower-cost suppliers, or developed their own lower-cost options, in order to compete effectively with the vast number of rival choices available. Lower-cost suppliers may create or buy capabilities that have better results, but require more intensive and costly interventions to achieve, to accompany their basic methods.
There is no way of saying what is the best choice for any payer newly entering the PHM market, since the problems and potential for each will likely be unique, as well the economic impact of particular solutions with their populations. The plethora of choices available is reflected in a generally dispersed market, where no one supplier is dominant, particularly since many employers and insurers are in the DIY category. In a recent study of employer-sponsored EHM efforts, for example, out of 96 employers who were investing in such efforts, no one supplier had been selected by more than three of the employers, counting those who were operating their own programs. [Wellness: Saving Lives and Money” 2007 Willis Survey (Willis America Employee Benefits North America)]
But the wide range of choices relative to how PHM services are delivered probably adds the most to the enormous variation in PHM choices, when all seven elements are combined.
by Scott MacStravic
May 5, 2008 at 2:33 pm · Filed under Population health management, Variability in PHM Series
Once members of the population have been targeted for participation in particular PHM interventions, the next step is to recruit as many as possible, or at least as many as will contributable value per participant, to each intervention. Such recruitment may actually be part of the assessment process, when members of the population have to be persuaded to engage in a health risk assessment or biometric screening process, for example. In any case, this element is yet another in which there is wide variability across the methods used by different DIY payers or the suppliers they hire.
One of the simplest is the “opt-out” strategy, in which every member of the population targeted is automatically enrolled without their involvement, once the targeting process is complete. They are usually individually notified of their enrollment, and invited to take whatever the first step in actual participation is. In some cases, they are automatically assigned a coach who will call them, or are automatically sent online or mailed information that is part of the intervention process.
This method often results in 90-95% enrollment, since only those who explicitly opt out are deemed non-participants. But the significance of their being enrolled lies in their active participation, cooperation, and changes in behavior, and the rates of each may be quite a bit lower than when other enrollment strategies are followed. The major two options with “opt-in” interventions are: 1) targeting each for a particular intervention based on the identified most promising PHM intervention for each; or less common 2) asking each target to choose among a number of options based on recommendations customized to each.
The enrollment process has to balance two considerations: 1) which intervention promises the greatest return to the investor; and 2) which has the greatest likelihood of delivering on that promise. The opt-out approach probably is strongest on the first criterion, and weakest on the second. Inviting targets to enroll in an intervention pre-selected for each is probably medium on the first and on the second criteria. The “self-determination” approach would probably be weakest on the first and strongest on the second. So it is a balancing act to select the best approach, and one or two may be tried before the best is identified in each case.
The “style” of the intervention and enrollment effort may also make a major difference to the numbers who enroll, participate effectively, and succeed. Early PHM interventions were mostly “one-size-fits-all designed and implemented by the sponsor or supplier. Increasingly, however, interventions are either partly or totally individualized, by either the person who contacts the target, or the automated online/mail communications based on analysis of assessment information. And the customized approaches tend to work far better.
Enrollment is also influenced by whether or not financial or other incentives are offered – for enrollment, participation, or success. Incentives paid for enrollment should achieve the highest enrollment, but not necessarily the highest levels of enthusiastic participation. Incentives paid for participation in or completion of an intervention may achieve high levels of participation, but not necessarily of success. Incentives paid for success may promote both enrollment and participation, particularly among those with the greatest confidence in their probability of succeeding.
Of course, people often delude themselves. Repeated studies have found, for example, that those with the highest levels of capabilities tend to underrate themselves, while those with the lowest levels overrate themselves. If the assessment process identifies targets based on predicted probability of success, it should be safer to pay incentives for participation, since those with low probability, despite confidence therein, would not be targeted. Those with high probability, but perhaps less confidence, would be encouraged to participate by the incentive, where they might not be as encouraged by a reward only for success.
Since incentives add to the costs incurred by insurers or employers, they have to be used carefully. PHM suppliers or peers who have used incentives, if they share their experience, may provide a basis for choosing which type and amount of incentive may work best, though each population is likely to be unique enough to make actual experience with it the best guide in the long run. The combination of customization and the right incentives is likely to work best, judging by experience in PHM so far.
by Scott MacStravic
May 5, 2008 at 2:33 pm · Filed under Employer CEOs, Population health management, Variability in PHM Series
The first purpose of the assessment process is to determine the size of the PHM challenge and of potential gains from implementing a PHM strategy. The assessment process is then also used in the evaluation process, to identify changes in measured “success” dimensions against the baseline data. But another key use of the data is to identify and select which members of the population make the most promising targets for participation in which PHM intervention, together with how many available interventions will likely justify their investment.
This step begins with identifying the baseline costs, both direct and indirect when applied to employee populations, linked to individuals and the health-related factors each has been found to have. Usually, without extensive multivariate analysis and predictive modeling, the “potential” is estimated based solely on the baseline costs. But the real predictor of potential economic gains lies in the particular PHM interventions that will be applied on a DIY or outsourced basis. And this information is peculiar to each PHM strategy, intervention, and supplier, rather than any generalizable average for PHM as a whole.
Moreover, when measurement problems such as side-by-side comparison “self-selection bias” and before/after “regression to the mean” effects have been overcome, there remains the inherent difficulty of predicting realistic potential cost impacts or other benefits based on past data. While past data may accurately describe the past of the very population to be addressed by PHM, it does not translate easily into predictions of the future. And while a given PHM supplier’s own past performance may be “statistically valid and reliable”, it may not be a sound basis for accurate prediction of results in a new population.
Within these limits, PHM investors and suppliers will want to determine which and how many population members represent the best risk/reward potential for which particular PHM interventions. Some suppliers and employers have employed a completely customized approach to PHM, where each individual either chooses each’s own goals or is assigned a coach who will customize the intervention to the individual’s mix of challenges, and address as many of each’s individual problems as possible. Experience suggests that individuals can handle more than one, but rarely more than two or three, so the number of problems to be addressed is normally small.
In many cases, there is one specific problem that is the basis for the PHM intervention to which members of the population will be invited. This does not mean that the intervention will have a very narrow focus, however, though it may. A smoking cessation program normally focuses exclusively on enabling participants to quit, but may have to address a wide range of perceived barriers and related issues, including stress and weight management along with the smoking behavior, per se. And diabetes disease management interventions routinely include attention to blood pressure and cholesterol levels, in addition to blood glucose.
While the baseline costs linked to individuals may guide targeting to some extent, the psychographic data indicating the probability that each will make a needed change and achieve success thereby, together with PHM suppliers’ demonstrated performance will add significantly to how “informed” the choice of targets can become. In many cases, the supplier may guarantee results for particular population segments, interventions, or success dimensions, making the targeting that much better informed.
Targeting necessarily includes consideration of how PHM suppliers charge, and what additional costs may be incurred by targeting more and particular segments or individuals for interventions. When the supplier charges on a “per population” of flat fee basis, it will not add fee costs to include as many members of the population in any given intervention, though most charge a fee for each separate intervention, which will multiply costs by the number of interventions selected, rather than the number of members participating.
When the supplier charges per participant, perhaps with graduated fees based on the risk/reward potential it determines for each and the different intensity/expense for the graduated interventions, it is the number of members targeted for each intervention that will represent the upper limit on fees. Moreover, payers will likely incur additional costs, per member, per participant, or even per successful participant (e.g. when incentives are offered for success rather than participation alone), which have to be considered as well. And while payers may recommend steps their clients should take that incur costs, the client will have the last word on which kinds of support it provides and what it will pay for what.
There will always be the unknown costs of participation or success incentives that will have to be paid, but this will typically be substantially less than the economic gains associated therewith. The past performance of the supplier applied to the baseline costs and economic value of members of the actual population to be addressed should help in ensuring that the client’s total costs are kept lower than the client’s benefits. Controlling the number of members targeted and number of interventions invested in based on risk/reward vs. predicted or controllable costs, is the best overall approach to take.
by Scott MacStravic
May 5, 2008 at 11:28 am · Filed under Employer CEOs, Employee Health Management
When I began my efforts in employee health management (EHM) fifteen years ago, the hospital system where I was responsible for strategy and marketing began the strategy with onsite health fairs for large employers. These gave us as well as the employers involved their first overall indications of the state of their employees’ health, other than that delivered by their health insurance premium increases and claims reports.
Because a fairly significant effort and expense was required in organizing each health fair, with volunteers and paid staff from our system, plus internal promotion efforts by the employer, the fairs were limited to large employers at first, those with thousands of employees in most cases. But there was also significant interest among smaller employers, with only hundreds or even dozens of employees.
We found it possible to organize reasonably efficient screening and educational efforts for smaller employers by inviting a number of them to participate at the same time and place. By conducting the efforts at large office buildings or campuses, for example, we could serve many employers at once, creating sufficient numbers to make it reasonable, and relying on the identification of the different employers for each employee who participated for analytical purposes.
A recent example of employer cooperation in ongoing coaching and monitoring of EHM participants has emerged in Milwaukee, Wisconsin. The QuadMed onsite clinics, which emerged as a separate business for the Quad/Graphics printing company when its own clinics proved successful are being shared by a number of employer clients in the area. These clinics are owned by the employers, while they are operated by QuadMed at the employer sites.
Quad/Graphics, itself, plus clients Briggs & Stratton Corp. and Miller Brewing Co. are “sharing” their onsite clinics with each other’s employees. This includes both the kinds of primary care services that employees and their dependents may need, and any EHM services offered at the clinics as well. By multiplying the locations available, the arrangement makes it easier for dependents, especially, as well as workers on their days off, to access a site nearest to their homes.
With the high price of gasoline, this also reduces the travel costs and time for employees and dependents, and makes it more likely that they will use early detection services such as mammography, for example. Modest co-payments of $5-6 per visit make these sites highly competitive with either retail clinics or physician’s offices in the area. And the more the onsite clinics are used, the more information is included in QuadMed’s data base about each employee or dependent involved. [E. Sanders “Companies Agree to Share Workplace Health Clinics” Business Journal Serving Greater Milwaukee, Apr 25, 2008]
It would not take much to permit smaller employers to cooperate in an onsite medical clinic located in a large office building or campus in the same way that health fairs are made accessible to them. Employer identification for each patient served would enable the billing of services to the proper employer, while offering convenience of location and minimal lost time from work seeking care in return, for employer and employees.
By aggregating a number of employee populations as potential participants in both normal primary care and EHM services at such a convenient location, employees could conveniently get coaching and risk condition or disease state monitoring services. This convenience is already offered by at least one EHM provider, Sutter Health Partners in Sacramento, California, for example, using visiting coaches and biometric screening. Making it permanently available at onsite medical clinics would be that much more convenient.
Such clinics have already been shown to save on the costs of medical care, per se, compared to emergency rooms or urgent care centers, as well as private primary physicians, to say nothing of the time, travel, and out-of-pocket costs saved by employees who use them. Cooperatively supported clinics could be developed by a group of employers working in concert, or by onsite clinic development and operating firms, such as QuadMed, Whole Health Management, Ceridian Health or CHD Meridian.
In general, results from onsite clinics have proven to be significant and positive, since the nearby convenience both promotes employee participation in EHM and saves time away from work for obtaining routine medical care. The clinics often result in earlier identification and intervention for acute and chronic diseases, as well, because of their convenience for workers. Sharing the costs of operation and calculating the direct and indirect savings achieved will be more complicated with cooperatively owned clinics, but there should be enough economic benefit for all.
A special advantage to onsite clinics can be in verification of workers’ qualifying for EHM incentives. The clinics can test employees to be sure they meet goals relative to health behaviors (e.g. testing for nicotine or drug use) and conditions (weight, blood pressure, sugar, cholesterol, etc.) They should also be helpful in biometric screening and ongoing progress tracking in support of employees’ (and dependents’ or retirees’ where applicable) participation and success.
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