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Change is So Hard

by Nick Jacobs

As a young man it seemed probable to me that life would become better for everyone. After all, our combined annual budgets in the United States and Europe were enough to make the entire world a better place for everyone.  If we had decided to make it happen, there was enough money for every person to have a home, a car and a job.

Vietnam would be our last war ever.  We would find a substitute for sugar so that we would no longer be overweight.  A replacement for butter, trans fat enhanced margarine, would ease the population away from the epidemic of heart disease, and the cure for cancer as declared by President Nixon, was only a few years away.  Finally, we would have a four day work week and spend quality time with our families.

Thirty years later.  One must wonder just exactly what went wrong?

Daniel E. Koshland Jr in his article the Cha-Cha-Cha Theory of Scientific Discovery describes scientific discoveries as “the steps—some small, some big—on the staircase called progress, which has led to a better life for citizens of the world.”

In its purest sense, Mr. Koshland is absolutely correct in his description.  The problem is that we, as a population, as a species, as a herd, tend to fight change at every level at all times.

In the book “Change or Die” the author, Alan Deutschman, discusses the reality that when cardiologists tell patients with heart disease that they have to “change or die,” nine out of ten fail to switch to healthier lifestyles, 90% of us would knowingly select death rather than change.

Truthfully, when you consider how long we have held onto the outdated, inappropriate practices of the Industrial Revolution, it is fascinating to me that science has evolved at all under the current system, a broken system about which I have written numerous times.

So, we go to the question list:  What can be done to change science?  What can be done to change health care?  What can be done to change man’s inhumanity to man?

Short of a national tragedy, like a pandemic of the avian flu, we continue to embrace old realities that are no longer appropriate.

Collectively, however, we are approaching a major paradigm shift internationally that has been fashioned by the enormous technological advances that our world has been experiencing during the previous decade. Predicated upon the fact that we are now totally and completely tied to each other world wide for the first time in history, this transformation could potentially result in the broadest societal change that the Earth has ever faced.

We are hooked up on multiple levels. From the mountains of Afghanistan to the deserts of Saudi Arabia, from the Arctic to Siberia, our fellow human beings have wireless communication devices that provide contact capacity where it had never existed before.

We now have the ability to commune through the Internet, through cell phones, through Treos and Blackberries with almost anyone anywhere in the world. When teenage kids join each other in chat rooms across continents, nothing goes unchallenged. Regardless if it is the misstatement from leaders, from clergy or from a shock jock, they now have the ability to confirm, verify and validate immediately and completely by tapping some keys or simply calling each other.

This quantity of massive change has resulted in anger, fear and a certain amount of chaos as we struggle to define new pathways in our culture.  All of this is because this connectedness has begun to create new truths and new accountability.

What we have experienced over the past several years has been a reaction to this new world order, a very conservative movement that results from that fact that when life becomes more challenging, we tend to go as far back into our conservative past as we can to find whatever we can attach ourselves to so as to protect our future from change to help us cope with the fear of change.

Let’s hold on for dear life and hope that this potential revolution allows us to change the pursuit of truth through science and to allow our health delivery system to evolve into a useful system more appropriately directed toward chronic illness and prevention.



Self-Service in Health Care?

by Scott MacStravic

The very idea of people serving themselves instead of relying on professionals in healthcare has been parodied in a TV commercial where a physician in a hospital is advising a patient, in his home, over the phone, to “Make an incision between the fourth and fifth abdominal muscles.”  Clearly, most sickness care requires professional training and experience, and cannot be replicated by consumers in most cases.

On the other hand, “self-care” has long been the objective of 24/7 phone advice lines, offered by insurers, to enable consumers to determine if they could take care of their own or family members’ symptoms or signs in particular cases.  Self-care medical guides have long been published to offer similar advice entirely via self-service reading thereof.  After all, when self-care is appropriate, it is the most convenient and cheapest alternative for patients, as well as saving considerable money for payors.

Self-service is a growing element of chronic disease management, where patients check their own weight, blood pressure, glucose levels, and other clinical metrics that may indicate progress in getting them under control, or a problem that a professional should handle.  Devices that measure such indicators may be directly connected to professionals for review, as well as uploaded into patients’ records or personal web pages to enable both patient and provider to track progress and evaluate treatment.

A growing number of providers are making it possible for patients to make appointments, obtain health information, arrange prescription refills, etc. online, rather than taking the time of office staff.  Enabling patients to self-serve in terms of learning about the risks and benefits of alternative treatments or medications is a way to at least reduce the time professionals might otherwise have to spend educating them, though patient self-education can also end up costing providers time in explaining why something they may ask for, due to direct to consumer advertising or online information they have obtained, is not really the best choice for them.

But the greatest potential for self-service in healthcare may be in what is truly health, rather than sickness care.  The two biggest challenges in proactive health management (PHM) — whether paid for by consumers, employers, insurers or governments – is to make participation in specific interventions and behavior/lifestyle changes required as easy and inexpensive as possible.  Unless they are easy, convenient, fit participants’ work/life patterns, etc. such interventions rarely attract and retain enough participants.  And unless they are inexpensive enough, they will be rejected by potential and current investors therein.

Self-service in PHM is easily the least expensive approach possible, in most cases.  The question is always whether self-service will be effective enough to yield optimal ROI.  Making the costs to sponsors and participants as low as possible is a great way to minimize the cost denominator in ROI ratios.  But it is by no means always the best way to obtain the greatest ROI net gains.  And unfortunately, people differ dramatically in terms of how intensive, what kind, and how expensive efforts must be to get them to make the necessary behavior changes needed for PHM success.

Involving physicians and nurses, as “promoters” of PHM participation, as coaches and motivators of behavior change, and as sources of needed prescription drug support and lab tests or diagnostic scans needed to monitor clinical measures, has proven to improve results.  But it also greatly increase PHM costs, thereby threatening both ROI ratios and amounts.  Moreover, there are many self-service approaches to PHM that cost very little to make available, accessible and acceptable to consumers, in promoting health, preventing or reducing risk behaviors and conditions, or managing chronic conditions.

For example, a recent webinar sponsored by HealthMedia, Inc. of Ann Arbor, Michigan described how automated, self-service-based PHM programs can address a wide range of individual differences, across the spectrum of behavior change motivations and barriers.  Through automated analysis of online surveys that consumers take, behavior change motivation and barriers are identified and measured, with tailored e-mail or mailed communications aimed at individualizing coaching and support, while keeping costs highly affordable.

Compared to information-only efforts, where medications adherence levels averaged 57.7% when the same information is communicated to all participants in the same PHM program.  By contrast, the customized approach has been found to achieve 75.4% adherence, a 28% higher relative level, achieved at minimal added costs.  Even more positive was the fact that high levels of adherence were reached in as little as 30 days of PHM participation, and declined only a bit after its initial success. Participants’ confidence in their medications, perceived importance of adherence, and refill-on-time behavior actually increased from the 30 to 90 to 180 days participation. [K. Wildenhaus “Improve Medication Adherence: The Missing Link to Better Outcomes” HealthMedia.com Aug 16, 2007.

The use of “custom-tailored” communications is growing among most PHM providers, as they recognize the dramatically lower cost potential in automated communications systems and the potential for self-service inputs by participants to enable these systems inexpensively.  In addition to the reduced sickness costs that are typically achieved through better adherence, participants in the program who also reported an improvement in their health because of that adherence were found to yield productivity-cost savings of $1440 on average.

In order to achieve optimal participation in PHM, and thereby optimal economic value for sponsors, participants must also feel they are gaining something worthwhile, in return for the time and effort they must put into improving their health.  In the HealthMedia adherence study, participants reported an average 27% increased confidence in their ability to control their diabetes, a 15% increase in their ability to manage the emotional issues accompanying their condition, 83% reported being better able to communicate with their provider, and almost twice as many reported a good understanding of their condition.

It is certainly unfortunate that most of the negative press that Medicare disease management demonstration projects have received, thanks to the mixed results achieved therein so far, has come from interventions that were very much on the high side in terms of expense, costing literally from ten to one hundred times as much as automated customization systems may cost.  The full potential of self-service by PHM participants, together with automated communications that can be used as often as weekly, even daily when necessary, is yet to be learned, but the signs so far seem promising to say the least.



Healthcare Providers as Health Managers: Convenience Issues

by Scott MacStravic

Traditional healthcare providers, including hospitals and physician practices have long had an “edifice complex”, expecting patients to come to them for necessary services, to rely on face visits for communications and interactions.  Even today, only a modest proportion of physicians permit online communications with their patients, for example.  Hospitals have relocated or added locations in suburbs rather than the old-fashioned “pill hill” centrality in major cities, but are still losing patients to more conveniently located ambulatory surgery centers and specialty hospitals that established convenient locations earlier.

Convenience of location, hours of availability, and communications is even more important in health management, whether aimed at providers’ own employees or the workforces of employers that are clients for revenue-generating HM programs.  The U.S. Preventive Medicine, Inc. models of “Centers for Preventive Medicine” rely on hospital locations for most of the services they offer, though participating physician “partners” increase the number of locations where patients can obtain services. (www.USPreventiveMedicine.com)

The many hospitals and a few physician practices that offer “executive health” HM programs, which are still the most common example of hospital ventures in this market, almost all offer their major program elements at their own sites, requiring a one-day or longer stay.  While this stay is usually in luxurious surroundings, with “concierge” services to help make it easier for executive and other affluent clients to wend their way through the program, it is still necessary to come to a single location in most cases.  Until recently, most clients had to manage their own lifestyle changes, perhaps with the help of their personal physician back home, though many programs now offer phone coaching follow-up between stays.

By contrast, employers that offer their own HM programs often make them available at the worksite, with a growing number of onsite health clinics that include HM along with traditional occupational health services.  Retail clinics, conveniently located in popular superstores and pharmacies, offer HM services where consumers often shop, and even enable customers to shop while waiting, until a pager notifies them that the provider is available.

HM vendors often offer convenient “kiosks”, where HM participants can have parameters such as weight, body fat and blood pressure checked, in retail stores or worksites, in order to track their progress and qualify for incentive rewards.  Virgin Life Care offers such kiosks (“HealthZone” – www.virginlifecare.com) as does IncentaHealth (www.incentahealth.com).  IncentaHealth also offers daily online coaching for weight loss and fitness improvement.

In the IncentaHealth example, its services are offered mainly through employer-sponsored programs, though it also offers consumer-paid coaching through the New West Physicians in Denver and its Physician Health Coach program.  Participants get physician health recommendations, then IncentaHealth coaching for only $20 per month while they participate.  While these programs are limited to weight management and physical activity, these represent two of the most common health challenges that consumers have.

Whether providers are sponsoring HM programs for their own employees (and dependents, perhaps), for other business clients and their employees, or both – the programs are generally free to participants.  This means that the convenience dimension, i.e. the time and effort required of participants is the major cost to them.  Making it as easy as possible for people to participate, at times and places they find most convenient to participate, with communications channels and timing that fits best into their normal routine, is often the major factor determining the extent of both their participation and success.

Traditional healthcare providers’ insistence on patients coming to their places of business, at limited days and times of access, and communications at providers’ convenience will simply not work in HM, nor can it compete with specialized HM vendors who have already recognized and responded to consumers’ expectations.  Providers wishing to engage as many employees or other consumers as possible, and to promote their continuous and enthusiastic participation, will have to adopt a host of non-traditional convenience tactics in order to compete in the HM market, or achieve optimal results with their own workforce.

As the “new consumerism” increases the power of individuals and their importance in healthcare in general, traditional healthcare providers are already recognizing and responding to increasing consumer demands for greater convenience, even in traditional sickness care.  Providers must be prepared to make even greater improvements in convenience if they hope to achieve optimal results for themselves and their clients in HM, as well.



Healthcare Providers as Health Managers – Choice Issues

by Scott MacStravic

“Customization” of both the HM “customer experiences” that PHM and EHM clients and participants have, and the communications between them and HM providers, is recommended for successful health management.  But the question remains as to which of the parties involved actually does the customization, i.e. who decides what will be customized and how it will be done.

In the vast majority of cases, any tailoring of the HM goals — to external clients and participants, or to providers’ own employees and dependents – is done by the HM provider.  Providers select which health dimensions, risk behaviors and conditions, or chronic diseases will be addressed, and what goals will be pursued.  These goals are by no means solely those of the provider or client involved, since participants must perceive that they will achieve something worthwhile, as well, if high levels of participation are to be achieved.

Decisions regarding the process to be used for different participants are also normally made by the HM provider or client that is paying for the program.  Targets for participation may be risk/reward-stratified into three or more levels for differentiated levels of attention and intensity/cost of interventions, in order to gear the HM investments to the reward potential of different segments.  And processes employed will naturally be differentiated somewhat depending on the specific behavior changes that are needed to make the HM program succeed.

Customization to individual participants may be achieved entirely by the HM provider.  HealthMedia, Inc. and Thomson Healthcare, both in Ann Arbor, Michigan, have capabilities for tailoring communications to individuals via automated computer analysis and generation of mail or online messages to HM participants.  Healthways, Inc. in Nashville, uses nurse health coaches who customize their phone interactions with participants as a natural element in identifying and addressing participants’ concerns at the time of contact.

While HM specialized suppliers have often been accused of using “one-size-fits-all” interventions in their programs, the move has been toward some degree of customization, mainly in communications, based on the health risk assessment (HRA) input that individual participants provide when completing these surveys.  And all suppliers are capable of customization to the particular wishes of their employer or insurer clients, based on the goals and costs each indicates a preference for.

What is rare, indeed, however, is customization of HM goals to the participants in HM programs.  The one example of tailoring the very nature of the HM intervention to individuals of which I am aware is that offered by Duke University Health to employees and dependents who are covered by its self-insured health plans.  Its “Duke Prospective Health” program initiates the HM process by asking (while guiding) participants to create their own personal health vision/mission statement, and select their own specific goals.

Since such goals can vary widely in terms of their significance to Duke, compared to meaning for participants, Duke further tailors the kinds of support it offers to participants based on its own likely benefits.  While all participants are eligible for group education and communications, more intensive interventions such as case management and personal coaching, can be reserved for cases where the employer will gain along with the employee or dependent involved.  Initially, these gains are only sought in terms of reduced healthcare expenditures, though productivity and performance gains may be added in future. (www.dukeprospectivehealth.org)

It is generally the case that the greater the customization, the greater the HM success will be, as is true in consumer marketing in general, and HM, after all, involves “marketing” behavior changes in much the same way that marketing seeks consumer purchases.  But customization also tends to add significantly to costs, though with current computer and online communications technologies, tailored communications can add little to nothing as far as communications costs are concerned.

It is the customization of HM processes and goals to individual preferences that is unusual, and adds the most to both the costs and the variability of reward potential for HM sponsors.  When consumers pay their own way, as with the MDVIP physician practices’ “retainer medicine” approaches to HM, the payments they make can cover a significant degree of individualization, where in payor-sponsored HM programs, most payors might be reluctant to pay the added costs.

Like so many of the decisions involved in planning and implementing HM programs, decisions regarding the type and degree of customization, of the particpant choices permitted and responded to, involve trade-offs between effectiveness and efficiency.  With relatively little published evidence regarding the relative cost-efficacy of different degrees and kinds of customization, and given the wide variations across populations involved in HM programs, as well as payors who sponsor and suppliers or healthcare providers that deliver them, chances are trade-offs, themselves, will end up being customized to individual applications.

The values and challenges that each sponsoring insurance plan or employer is guided by, the preferences of both supplier/provider and client, as well as those of participants will all play a part in customization.  This makes the trade-off challenge that much more complex, though HM decisions that do not at least consider customization options will miss out on the significant opportunities that incorporating some degree of choice in HM program design and execution offer.



Change the World

by Nick Jacobs

I stopped for a cup of coffee tonight and beneath the cardboard heat shield was this saying by Gary E. Knell, the President/CEO of Sesame Workshop, the producers of Sesame Street, “. . . If we can use television to teach tolerance and respect and promote healthy eating, we can indeed change the world.

Earlier this summer at the movie Evan Almighty, I was struck by the plot of this light hearted comedy. In it a young television news anchor ran for the U.S. Congress on the platform, “Change the World.”

Because it tells the story of the phenomenal impact that any one individual can have on this world, I was searching out information on a little video entitled,” The Power of One,” funded through the Heinz Foundation. It was during that search that I accidentally came across this quote from the Heinz Family History, Believing that “kindly care and fair treatment” was the right and moral way to treat employees, rooftop gardens, lunchtime concerts, and weekly manicures for all food handlers were staples at H. J. Heinz.

That was about a century ago, and most companies still haven’t figured that out. Could teaching hundreds of other hospitals how to treat employees well change the world, improve our healthcare system, save a life?

A few weeks ago, a corporate jet flew into our airport with six vice presidents on board. They were from a very large company and were here to explore a possible partnership with our researchers. Could that partnership change the world? Yes, in every possible way. Could discovering a cure for even one type of breast cancer change the world? What do you think?

We’ve all seen what one life can do if inspired, driven or committed to doing good.

We have the power to change the world; like Ghandi, Mother Theresa or even H.J. Heinz. We have the Power of One.

To some of you this may seem just crazy, but that has always been my goal, my platform, my passion and my vision; to change the world. For a lifetime, I have embraced this very simple yet entirely too complex phrase, and believed in my heart that it was my job to work toward that goal.

It is up to us to do something that will forever change the world in a positive way; to make it better, safer, cleaner, healthier or just more fun.

Regardless of your position in life, do something unexpected and nice today. Help someone. Get an animal a cold drink. Visit a sick friend, or discover a cure for cancer.

Change the World.



Healthcare Providers as Health Managers – Communications Issues

by Scott MacStravic

Communication is a major, some might argue the most important element of health management, whether for sickness care cost reduction or productivity/performance improvement, and for traditional healthcare providers own workforce, other employers’ employees, or insurance plan members and beneficiaries.  The chief challenge in PHM and EHM is to achieve behavior changes among individuals and populations, and communications is the major basis for doing so.

The type of communications used vary widely, but generally fall into three categories, depending on whether their purpose is to motivate, empower/enable, or remind/prompt people to initiate or maintain a given behavior.  Unfortunately, professionals in one kind of communication may stress of use only their own kind, rather than considering other applications/reasons for communicating, and other kinds of communication.

For example, professionals who favor education, or what has become recently known as “information therapy/prescriptions (Ix), may rely solely on objective information sent to or shared with targeted HM participants in classes or seminars.  By focusing solely on the motivational power of facts, and on rational edification, the educational approach may fail to engage targets emotionally, and have little effect on enrollment, participation, behavior change and perseverance, all of which are necessary to optimal HM success.

Motivational appeals, for example, have long been understood by marketers to work much better if they engage targets emotionally, which is often sufficient by itself to elicit the desired behavior.  Rational education is often useful in enabling people to change, such as pointing out where help, peer support groups, etc. might be found, and remind people of incentives and rewards available.  But reliance on extrinsic rewards both costs HM sponsors money, threatening their ROI, and can run into trouble in time as rewards become perceived as entitlements, and no longer motivate well.

The absence of reminders for desired behavior changes is frequently absent, when HM providers rely on motivation and capability alone as sufficient.  Unless people can remind themselves, or otherwise remember when desired behaviors are needed, they may simply forget, even when they have both the motivation and capacity to act “correctly”.   Simple reminders, of the problem being addressed, the outcomes that might be achieved, and of the precise behavior needed, to the right person at the right time and place, may suffice for many participants, and cost relatively little when automated phone reminders, e-mails, or wireless communications are employed.

While my bias is understandable, as a career marketer, I believe that the inclusiveness inherent in marketing communications concepts and models will work well in HM, far better than educational or informational models, alone.  Marketing routinely reminds prospects and customers of the benefits to be gained, how to gain them, and when/where to do so, for example, rather than relying on motivational messages alone.

Moreover, marketing, when used to promote and sustain continuous relationships, understands the importance of reminding customers what they have gained, but also what they can expect to gain by persisting as HM participants, and what they could lose if they stop participating in an HM program or persisting in a desired behavior.  The effects of anticipated participation and benefits, as well as anticipation loss have been found, by marketers, to often overpower even satisfaction with past participation and benefits, in determining the continuation of relationships.

At a minimum, HM communication should include and test for the best methods, messages and media for motivating, enabling, and reminding prospects and participants.  All three kinds of communication can be combined in the same interaction when appropriate and efficient, so they need not add to the costs of communication, but they can significantly add to its effects, and thereby to the success of HM investments.

Moreover, the reminding function of communication can help in reducing costs of HM interventions.  By reminding participants of the intrinsic benefits of health and life quality improvement that their HM behaviors and achievements have delivered to them, the need for extrinsic incentives and rewards, with their unavoidable costs, may be reduced, or even eliminated at about the time they lose their impact.  It has often been shown by psychologists that intrinsic rewards are more effective, particularly in the long run than are their extrinsic cousins, and they cost HM sponsors nothing extra.

Perhaps even more important as a communications challenge for healthcare providers is the reminding of their internal and external “clients”, i.e. those who must be convinced of the total economic benefit of HM investments made.  Reminding them of carefully measured and monitored progress achieved can be helpful in maintaining current investments, while reminding them of the total gains achieved can be the source of internal approvals for next years’ investments, and external client retention, and even for results-based payment increases.

Communications strategies adopted by healthcare providers of HM services should be planned, implemented, and evaluated to achieve all the outcomes that everyone involved is pursuing, plus recognition of all it has achieved, and is likely to achieve in future.  This will add significantly to the motivational impact of persuasive communications, as well as add confidence to the capability and empowerment effects of communications used for that purpose.



Healthcare Providers as Health Managers – Causal Issues

by Scott MacStravic

There are two main kinds of “risks” that are frequently reported in the news media, with significantly different significance to those who are hoping to reduce the incidence, prevalence and costs of disease and injury.  The first kind may be a statistical artifact, with little or no practical meaning or value in proactive health management (PHM).  The second is much more difficult to detect and measure, but can be of great significance and value in PHM.  It pays to know which kind of risk is being reported, though this may not be as easy as it should be.

Statistical Artifact

The most commonly reported type of risk is the least useful kind.  It reflects statistical analysis that notes when the chances of finding a particular disease or injury, or generating higher than average levels of sickness care expense, are higher when some other measurable parameter is present.  For example, the chances of pregnancy and of higher than average “sickness” care costs are distinctly higher when a person is of the female persuasion, and in child-bearing years.

This is important to know in underwriting and calculating premiums for sickness care insurance, and is useful in identifying who should be targeted for prenatal care, but is normally not used to reduce the incidence of pregnancy, except through family planning.  There are a host of other risks that are not even useful for these limited purposes, but are merely chance connections, without causal links to disease, injury and expenditures.

These kinds of risks typically emerge from cross-sectional analysis of data about populations, since there are likely to be a host of factors that tend to be more common in people who have higher than “normal” levels of sickness care expenditures.  People who are left-handed, are smokers, overweight, etc. may also have higher than normal expenditures.  But that is not enough to decide whether to target them for PHM interventions, nor to choose what kind of intervention to use.

Cross-sectional analysis can be highly useful in identifying possible causes of disease and injury, but only further analysis, usually of a longitudinal kind is likely to show causality.  The first real question with respect to such “risks” is whether when a change a health indicator (e.g. weight, blood pressure, cholesterol, etc.) or in a health behavior (starting to or quitting the use of tobacco, wearing a seat belt, practicing “safe sex”) leads to higher or lower levels of particular sicknesses or injury later on.

Otherwise, for example, it may be entirely the case that people who smoke are generally also less likely to behave in healthy ways, and any increase in disease, injury and expense is related to other unhealthy behaviors, not to smoking, per se.  Ideally, there should be analysis that shows that smoking leads to an increase in the incidence of conditions such as lung cancer in the absence of all other factors that might have had the same effect.  This usually requires finding and following populations that differ only in their smoking vs. not, since a random controlled trial where samples were assigned to begin smoking would be unacceptable.

Besides, it is not merely the question of whether the introduction of a new risk factor, independent of any other factors that may be deliberately or accidentally introduced, cause the effects to be avoided, but whether eliminating the presence of that causal factor is the most cost-effective way to eliminate the effects.  For example, it might be that far greater reductions in disease/injury and their related expenditures could be achieved with the same investment, but by focusing on a different risk factor entirely.

The potential for a mere statistical risk — the fact that a given factor is more often present with people who have an avoidable disease/injury or expenditure than with those who do not – is very great, since people tend to simultaneously exhibit large numbers of behaviors and measured indicators.  The challenge is to make sure that a statistical risk is both a cause of and a sound basis for preventing specific diseases/injuries and related expenditures.

Precisely the same problem arises with non-disease factors that affect productivity and performance when employee health management (EHM) is being planned.  People who are overweight may well have higher impairment levels than those of normal weight, but will weight reduction make a significant difference in reducing such impairment?  Longitudinal analysis and intervention trials will be needed to answer these pivotal questions, while risk data only identify possibilities.

In one of the classic examples of inadequate analysis, the entire PHM of disease management is based on the fact that somewhere around 75% of all sickness care costs are related to chronic diseases.  This does not mean they are necessarily caused by such diseases, or even related to them.  People with chronic diseases often have other risk conditions and co-morbidities, so any given amount of expense, hospital admission or physician visit may be unrelated to their chronic condition, or even to any of them when many are present.  It takes careful analysis to weed out totally unrelated sickness care use and expenses, such as any related to automobile accidents or natural disasters.

Moreover, if a given disease is managed well, chances are great that the sickness care use and expense of those who have that disease will not decline to the level of people who do not have the disease at all.  The only way to avoid all the costs of a given chronic disease is to prevent it from happening in most cases.  Yet prospects of earlier and surer savings from disease management have often persuaded payors to invest in that form of PHM, merely because prevention may not pay off for the payors because the people involved will probably have switched insurance plans by the time any difference can be claimed to result.

We need far more longitudinal analysis and far more careful reporting of “risks” in the media.  The challenges of identifying and managing the causes of disease and injury, and of reducing their incidence and prevalence thereof, plus the expense they cause, including the impairment of productivity and performance they cause for employers, is only partially aided by simple statistical “risk factors”.  We need to learn much more about the causal connections involved, and about which intervention “causes” actually work.

Healthcare providers may achieve a competitive advantage in the PHM and EHM markets if they better understand, identify, and apply causal connections involved, while avoiding what may be statistical artifacts as necessary and sufficient identifiers of the best kinds of interventions to apply.  Thanks to the rigorous science that is familiar to healthcare providers, they may be better able to avoid mistakes due to such artifacts, and focus their attention where there will be greater success achieved for their own internal applications, for employer clients, and for both internal and external participants in interventions.



Healthcare Providers as Health Managers – “Customer” Issues

by Scott MacStravic

Healthcare providers have always had a problem with thinking or talking about their customers as “customers”, rather than the traditional nomenclature as “patients”.  In the early days of healthcare marketing, physicians in particular, and hospitals in reflection of this, often refused to adopt the customer term, and many still avoid it.  But when health management (HM) is the “product”, rather than sickness care, “customer” is definitely the preferred term.

For one thing, the major customer in HM is likely to be the organization that pays for HM programs, which clearly cannot be deemed “patients”.  And for another, recognizing that individuals who are targeted for and participate in HM initiatives are truly “customers” opens up the potential for application of all the “customer relationship”, “customer experience” and “customer communications” concepts and practices that marketing offers, where “patients” would not.

Like customers in other industries, and for that matter like patients in sickness care, HM depends on, and has to focus a great deal of attention on how organization and individual customers behave.  Where traditional marketing focuses on customer interactions and transaction behaviors, HM depends on these as well, but more on how customers cooperate as “partners” in the HM effort.  And where customer “retention” is a major focus in most marketing, it is far more important in HM, where individuals and organizations that “defect” from existing relationships cost far more than merely lost revenue.

Individual customers in HM are major challenges because of the significant and lasting behavior changes required to make HM succeed.  They must first enroll in HM initiatives, then participate therein, and either complete or continue indefinitely as participants in order to achieve optimal results.  Most must also enroll in other HM initiatives, either simultaneously or in series, since most individuals have multiple health challenges, risk behaviors, risk conditions, productivity/performance impairment factors, diseases, or other problems whose “solution” will add value to both them and the payors who are also HM customers.

Moreover, individuals must adopt and persevere in a number of health behavior changes, in most cases, not merely “buying” the HM product.  In many cases, this involves a lifetime of new behaviors, or at least during the “customer lifetime” that each is a member of the at-risk population involved.  Each must usually cooperate by monitoring and reporting each’s behavior changes, health status changes, and often productivity or other performance changes as well, as part of the HM evaluation process.  Complete, accurate, and timely reporting by participants is essential to HM providers being able to adjust HM interventions as they are implemented, as well as monitoring and reporting progress to payor clients.

Payor clients, in turn, are equally important partners, since they are usually the only ones who can accurately, completely, and honestly gauge and report the progress and results they are getting.  And when these results are the basis for some or all of the determination of their payment obligations for HM programs, achieving and maintaining their continuous and total cooperation will determine the financial fate of the HM provider.  While individual participants often have “perverse” incentives to over-report HM consequences, for example, payor clients have clear financial incentives to undercount and under-report consequences to them.

As is true in most marketing, the most valuable marketing communications sources in HM will be satisfied customers.  Individual customers are ideal sources in promoting HM participation to their peers, and as sources of support and assistance to peers who are participating in the same HM initiatives.  Payor clients are equally valuable as sources of recommendations, case examples and testimonials, as well as support and assistance to their peers, though they may be reluctant to do so when their peers are competitors.  Where HM providers may have thousands of individuals to choose among as sources of such help, they will have only handfuls of payor clients, so every one they can enlist as word-of-mouth “ambassadors” and sources of peer support is that much more valuable.

Fortunately, the benefits to both individual and organizational customers of HM programs tend to persist and grow over time, with full effects of most interventions taking a number of years in most cases to appear, and increasing in the meantime.  This should promote high levels of both satisfaction with past achievements, and confident anticipation of continuing and increasing future benefits, making it that much more likely that they will remain as loyal customers. Anticipation of the loss of such benefits is one of the key “switching costs” that also promotes continued loyalty as well. [K. Lemon et al. “Dynamic Customer Relationship Management: Incorporating Future Considerations into the Service Retention Decision” Journal of Marketing 66:1 Jan 2002 pp. 1-14]

The pattern of continuing and growing benefits common to HM interventions can also mitigate payor clients’ concerns about sharing the results they achieve and helping to promote HM interventions and providers to their competitors.  For example, GlaxoSmithKline has reported its total savings per employee grew from $233 each per year in the first year of its HM program, to $375 in the second, then $944 in the third, and $950 in the fourth.  So even if their competitors jumped on the same bandwagon, they would still be three years behind obtaining the high levels of benefits that it had already achieved. [G. Stave, et al. “Quantifiable Impact of the Contract for Health and Wellness” JOEM 45:2 2003 109-117]

Because the value of customers is so great, and their contributions so important to HM success, managing customer “acquisition”, retention, cooperation and contributions is that much more important in HM planning and operations for its providers.  Healthcare providers that venture into internal, external, or both applications of HM should forgo their sensitivity to “customers” as a way of thinking about them, and master the full range of customer relationship concepts, techniques, and benefits, if they are to compete successfully with the specialized HM suppliers and growing number of health plans already active in the HM market.



Healthcare Providers as Health Managers – Counting Issues

by Scott MacStravic

The three earlier challenges for traditional healthcare providers in health management (HM) pale beside the greatest challenge facing both providers and customers thereof, namely counting the benefits, as well as the costs of HM investments.  While sickness care has devised thousands of metrics for what is accepted as good practice and outcomes for its efforts, the same is nowhere near the case for HM.  Its history has included a lot of over-counting and under-counting of benefits, in particular, though costs are occasionally overlooked as well, particularly costs to HM participants.

The challenge is greatly complicated by the sheer number of consequences that HM can have, the complex “causal chain between particular HM interventions and such effects, and the difficulties in measuring many of these effects, particularly the beneficial ones.  It is no wonder that early HM efforts focused almost entirely on reducing sickness care costs, since these were readily measured, and it seemed thoroughly logical and credible to attribute reductions therein to HM interventions.

But while sickness care, along with workers compensation and disability costs of “unhealth” for insurers and employers have long been counted, even the simple out-of-pocket financial cost savings that HM participants gain have more often been overlooked.  Smokers who quit can save as much as a thousand dollars a year by not purchasing tobacco products, for example, to say nothing of the out-of-pocket savings for those able to overcome substance abuse problems.

Since the first objective of all HM initiatives is to change the current behavior of individuals and families, the first counting problem arises because there are few reliable, simple, and inexpensive ways of monitoring such changes.  When participants have financial incentives to make such changes, there is usually the risk that they will report them as made, rather than make them, or al least exaggerate the extent of the changes they make.  Aside from some chemical checks on behaviors such as alcohol, drug and tobacco use, all of which cost money for testing, there are few objective measures of behavior changes.

Monitoring objective health status changes are also likely to require testing, though this may involve no more than simple monitoring devices, from scales to check weight to simple blood pressure monitors, blood sugar meters, etc.  Many other metrics are routinely part of annual lab tests that measure twenty or more indicators at relatively low costs, but still add to overall intervention costs.  At the other extreme, some continuous monitoring devices can add hundreds of dollars a year to HM efforts dealing with chronic diseases, though such frequent monitoring is also good for managing and evaluating results.

It is when counting attempts to include workplace productivity and performance effects that it becomes really challenging.  Except for a minority of industries and jobs where individual employee output quantity and quality are routinely measured as part of management and compensation, most counting of these effects involves estimation.  Estimates may be based on team objective measures, or individual self-reports, but both are suspect.  Team measures may accurately reflect total output, while missing the contributions of individuals outrageously.  Self-reports, of either current health-related impairment or improvement may be “honestly” biased by low levels of self-awareness, or by the desire to look good, get rewards, etc.

When workers in jobs where their output could be objectively measured, in one example, they reported themselves as having been impaired by an average of 20% due to migraine headaches, far greater than the objectively measured effect, which was only 8%. [G. Pransky, et al. “Performance Decrements Resulting from Illness in the Workplace” JOEM 47:1 Jan 2005 34-40]  In any case, it would be a strange coincidence if self-reported impairment levels were identical with actual objective measures.

This means that self-reported declines in individual productivity or performance have to be converted from their estimates to whatever objective checking shows corresponded to self-reports. For the call center representatives in the preceding example, the “conversion ratio”, from self-reported to actual impairment is 0.40 to 1.00.  Unfortunately, while the average conversion ration works well, once it is determined, for each employer or team where such a conversion is used, for individuals in pay-for-performance (P4P) situations, an individual conversion rate would be needed to apply in individual-based P4P compensation.

Fortunately, healthcare providers already have a strong motivation to develop the best gauges for individual, or at least team productivity and performance, thanks to the growing number of P4P systems that apply to them, and the growing amount of bonus or other performance-based revenue to which they are subject.  Since performance has to be measured in order to be managed, the measurement system that is used for management should be applicable to monitoring and evaluating HM interventions, as well as other efforts intended to improve workforce performance.

In fact, once healthcare providers master performance measurement for P4P reasons, they will be in an excellent position to integrate all employee-focused investments, including all benefits, aimed at improving their performance.  This should make HM efforts more efficient and effective, when they are combined with employee training and development, EAP programs, and other efforts aimed at improving the performance and retention of employees.

Moreover, healthcare providers may be able to become leaders in performance measurement, management, and integrated benefits strategies, which could be added to their HM expertise as a competitive distinction relative to specialized HM suppliers.   In most cases, such suppliers have to rely on either HM participant self-reporting, or on their employer clients’ own systems for measuring performance, while healthcare providers can afford to develop their own affordable and effective measurement systems.

We are only at the beginning of addressing the counting challenge, particularly when it comes to positive market and revenue impacts, such as improved product and service quality, customer satisfaction and loyalty, new business and similar effects that have been traced to HM efforts by at least some employers.  And if healthcare providers master the art and science of counting the full range of HM effects, they will not only be able to rise to the top in terms of their own internal HM applications, but in their marketing of HM programs to other employers, as well.



Healthcare Providers as Health Managers – Cost Issues

by Scott MacStravic

In addition to their credibility as cost-effective sources of health management (HM) services, traditional healthcare providers have the challenge of keeping their actual costs down to a level that will enable them to price such services competitively, and deliver positive benefit for cost results, particularly positive return on investment (ROI).  When considering and designing HM for their own employees, they must compete with outsourcing options in general, and when competing with specialized HM suppliers, they must deliver competitive results.

This will require a wholly different approach to managing costs from what hospitals, physicians, nurse practitioners, etc. are used to.  In sickness care, evidence-based best practices are the standard of care, while extra luxury, amenities, etc. can be offered to affluent patients willing and able to pay for them out-of-pocket.  This is also true for the niche HM market that “boutique” medical practices and “executive health” programs serve, but not for the main HM market, whether for commercial and government insurers or employers.

Fortunately, the employer market and internal applications of HM deal in the highest potential ROI available for HM, so there is in both the greatest potential for covering costs.  Moreover, the full range of HM services have the potential for delivering significant cost-saving, and even revenue-enhancing benefits for virtually every employee, dependent, and retiree that the traditional provider takes on in HM services.  This broadens and increases the potential for positive ROI, as long as costs can be controlled relative to benefits.

The challenge and major difference compared to sickness care relate to the need to treat HM participants differently, depending on their potential return.  It is common practice, for example, to “grade” the risk/reward potential of different HM participation prospects, given their existing health risks, chronic conditions, and potential for change.  High risk/reward participants may require and deliver better results with more intensive HM interventions, while medium risk/reward participants get moderately intensive, and low risk/reward participants get only basic interventions.

If predictive modeling technologies were perfect, HM interventions could be geared to the risk/reward potential of individual participants, in keeping with both their potential and what is predicted to work well enough to enable optimal positive ROI for each.  In practice, however, participant populations are more likely to be approached in segments, based on a combination of their shared risk/reward potential, and their individual preferences, readiness to adopt healthier behaviors, and personality traits that respond to different HM approaches, as well as costs.

Moreover, HM interventions often require frequent adjustment, based on participants’ responses to initial efforts.  Interventions may be reduced or increased in intensity, or modified in approach, depending on what results are achieved in changing their behaviors, improving their health status, and achieving desired financial consequences for providers or their clients.  This type of modification is not greatly different from the kind of adjustments often needed in sickness care, based on patient/family preferences and patients’ medical responses to initial care.  But it must be highly sensitive to the costs that can be afforded based on risk/reward potential, which is likely to vary far more than sickness care payment levels across different payors.

Fortunately, the range of HM interventions is normally far greater than what is available and acceptable practice in sickness care.  For low risk/reward participants, and even for those with higher potential who respond well to them, inexpensive computer-generated and customized risk analyses, recommendations and coaching communications can be generated at costs of a few dollars a month for large populations.  And these often achieve comparable responses among participants to those achieved through face visits and phone coaching.

At the other end of the spectrum, home monitoring of clinical metrics and risk indicators may be necessary and affordable, given the risk/reward potential, for many chronic disease patients with volatile conditions and tendencies.  Congestive heart failure patients, for example, have often been managed with reductions just in sickness care costs of 30-50%, for example, saving many thousands of dollars a year.  Diabetes patients with common co-morbidities such as depression and heart conditions have achieved sickness care cost reductions in the 10-20% range, often amounting to at least a  thousand dollars a year.

But the majority of HM participants will have their major ROI come from improvements in their productivity and performance at work.  For people without existing “diseases”, but the kinds of health risks and problems that affect their value as employees even more, the focus of HM, internal or external, should be on this greater opportunity, though healthcare organizations may not be as familiar with managing them.  The key to all HM is to empower people to make effective changes in their health behaviors and lifestyles, so the basics are the same for all HM challenges.

Otherwise, the benefits from HM interventions will have to be measured in terms of future costs avoided, i.e. the predicted sickness care, disability, workers compensation, and other direct costs they might otherwise have had.  This will always be a “tough sell” compared to measured reductions in costs, or improvements in performance that represent the before vs. after differences made by HM programs.  By developing and proving cost-effective HM interventions with their own employees, providers will be able to learn the best approaches to use in both internal and external applications.

While the cost challenges are quite different in HM compared to sickness care, providers have enough history in cutting costs to take on this challenge as well as the others that pertain to this new market.  And since almost all large providers should be involved in HM for their own employees, it makes sense for them to undertake the learning needed to compete in the larger employer market as well.

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