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Archive for Chronic Care

Who’s going to address obesity?

by Tony Chen

The politics and science around obesity continues to become more complicated and more urgent. Just about everyone sees it as a problem, but no one seems to be addressing it in a meaningful way. Maybe it’s because obesity has emotional, social, psychological, physiological, socioeconomic, racial/cultural, and genetic dynamics all entangled together. As an example, just take a look at the obesity-related news from the last few week:

- HealthAffairs: This is why a fat tax doesn’t make sense - if done the wrong way, it could actually increase the cardiovascular-related death rate. If fatty foods are too expensive, people will just end up buying and eating more salty foods.

- NYT: Apparently, Obesity is socially “contagious”. Do you have an obese friend? Even if the friend lives hundreds of miles away, you are 3x more likely to also be obese.

Obesity can spread from person to person, much like a virus, researchers are reporting today. When a person gains weight, close friends tend to gain weight, too.

The author of the study explains why in this BBC article:

“Rather, there is a direct, causal relationship. What appears to be happening is that a person becoming obese most likely causes a change of norms about what counts as an appropriate body size.

“People come to think that it is OK to be bigger since those around them are bigger, and this sensibility spreads.”

- FOXNews: A Missouri man claims that he was denied adoption because of his weight.

- SanDiego Union Tribune: Maybe this will all be irrelevant if we can all just pop anti-obesity pills. Another potential obesity drug just announced great results - 620 people lost an average of 10% of their body weight in 6 months. Interestingly enough, this new drug candidate is actually a combination of an anti-convulsant and an anti-depressant.

Nonetheless, the word “epidemic” is increasingly being used for obesity (and diabesity). And for an epidemic, it’s not getting enough press. I think the million (or trillion) dollar question is this: How do you get 300 million people to take more walks and eat less?

“I love my job!”

by Nick Jacobs

For those of you who are still non-believers in the power of a healing environment, I just received this note from one of our most outstanding physician healers. Of course this is NOT quantifiable science. It is not about shots, or antibiotics, or standard medicine. It is about human touch, comfort, respect and love. So, all of you who don’t believe it yet, take a moment and read this.

“I see the same, sad and unfortunate situations every time that I admit a patient from many other hospitals into our hospice. They come in facing impending death, and get discharged to their home or a nursing home two weeks later, eating, sometimes ambulating, most importantly COMMUNICATING, and often on no medications. In fact, I am discharging one man today who was SCREAMED at by his PCP because the patient wanted NO MORE aggressive measures done.

His PCP was obviously threatened by this, and the poor man was dismissed from the physician’s service on the spot, and Hospice came to the rescue. The man had respiratory failure, was on at least 10 different medications, and was dying. His daughter said no when the doc suggested a feeding tube, (the man even had a living will), and, as I said, the doc promptly dismissed them all, right in front of the patient in the next bed and right in front of the nurses’ station.

So now, after a few days with us, I am sending him home on nothing but our own hospice blend of flower essences like angel’s trumpet to help to prepare him for the transition into the spiritual world. He is talking, blowing us kisses, and eating pudding. I LOVE MY JOB!”

Corporations Are Waking Up to the Health Care Cost Crisis – Are Health Care Organizations Still Asleep?

by Scott MacStravic

Four years ago, a wake-up call for corporate America was published. It predicted that health insurance benefits paid for by employers would reach the level of $10,659 for family coverage by 2008, up from $6656 in 2003. Employees, themselves, would be paying $3942 in 2008, up from $2412 five years before. This presumed the same level of cost sharing as existed at that time and a conservative rate of 10% annual inflation in premiums. [R. Whitmer, et al. “”A Wake Up Call for Corporate America” JOEM 45:9 Sep 2003 916-925]

The same report noted that 50-70% of the expenditures involved were caused by lifestyle factors such as smoking, obesity, poor stress control, lack of fitness, poor nutrition, and poor levels of compliance in managing chronic conditions such as diabetes and hypertension. Despite that percentage level, less than 6% of all expenditures were being devoted to prevention of all kinds, including efforts to influence lifestyle factors.

It is clear that “corporate America” has awakened to the problem, if only slowly and incompletely. A 2007 study has found that 75% of the large employers surveyed were investing in health management initiatives in order to reduce their sickness care costs. In most cases, in fact 86% of all employers surveyed, the returns on investment from these initiatives had not been determined, but the vast majority of them (70%) were confident that they were getting or would get a positive return.

In many cases, this confidence was based on expected gains in employee productivity, thanks to reductions in both absences and productivity impairment at work (“presenteeism”). But the employers surveyed were only measuring sickness care cost reductions so far, and most found even these difficult and expensive to measure. [[K. Capps & J. Harkey “Employee Health & Productivity Management Programs: The Use of Incentives” IncentOne.com 2007]

Insurers and employers that have measured results have tended to find positive returns on their investments, though not necessarily at once. For example, in a disease management effort aimed at diabetes, reported mean blood glucose levels among diabetics dropped by 0.4 in first year, by 0.3 in fifth, and by 0.6 in seventh. In other words, effects were gradual and inconsistent from year to year – but cumulative. The lower blood sugar levels go, i.e. the closer they get to “normal” or “under control” levels, the more sickness care costs will go down, so that by the seventh year, savings would be many times those of the first year. [N. Beaulieu, et al. The Business Case for Diabetes Management at Two Managed Care Organizations” Integrated Benefits Institute 2002 (www.ibiweb.org)]

A disease management supplier has reported that, on average, the ROI levels it has achieved with its clients have been $1.69:1 in the first year; 2.00 in the second, and 2.46 in the third. [“When It Makes Cents to Back Into the 80/20 Rule” Gordian Health Solutions Oct 3, 2005 (www.healthleadersmedia.com)] One of the few employers to follow the same cohort of participants in an employee health management program has reported savings of $233/emp in first year, $375 in second, $944 in third and $950 in fourth. [G. Stave “Quantifiable Impact of the Contract for Health and Wellness” JOEM 45:2 Feb 2003 109-117]

When reports describe the percentage change for multiple years, they have indicated similar patterns, though not always increasing rates each year. For example, when disability days were tracked by one employer, they fell by 23%, in the first year, then 15% in the second, and 38% in the third; while the number of claims dropped by 6%, then 15%, then 49%. [M. Flinton, et al. “How Do You Know Your Disability Program Is Effective? Joint Forum on Health, Productivity, and Absence Management National Business Group on Health Dec 5-8, 2005 (www.businessgrouphealth.org)

Such percentages are cumulative, though not additive. When the first year reduction is 23%, followed by 15% in the next year, and 38% in the third, the total decrease is the multiplied effect of what remains in each year, i.e. (100% — 23%) = 77% x (100% –15%) = 85% x (100% — 38%) = 62%, or .77 x .85 x .62 = 40.5% remaining, or a total reduction of 59.5%. Disability claims had dropped by (.94 x .85 x .51 = 40.7) so 100% — 40.7% = 59.3%, essentially the same amount, though based on a different pattern.

In addition to efforts to reduce the incidence and prevalence of disease, by reducing risks thereof, as well as improving the management of chronic diseases that already exist, insurers and employers are pushing for the elimination of waste in sickness care, and the improvement of its efficiency. Reforms in the way sickness care is delivered could produce decreases in total expenditures ranging from modest to dramatic.

One reformer suggested that we could save $ 20 billion a year by reducing/eliminating errors that hospitals make in delivering sickness care, for example. [S. Spear “Fixing Health Care from the Inside, Today” Harvard Business Review 83:9 Sep 2005 78] Another more ambitious reform proposal predicted a net reduction in health care expenditures equal to 52.2%, merely from improving the operation of the healthcare “system”. [Capturing Value: Increased Efficiency in Health Care” National Institute for Health Care Management Mar 2006 (www.nihcm.org)]

If the demand for health care could be reduced by as much as 50%, and expenditures by 50%, the sickness care system would not be destroyed, but it would be dramatically reduced in size. The overall effect of two 50% reductions would mean resulting sickness care expenditures would be 50% x 50% = 25% of their former levels. But it is clear that the sickness care system is not behaving as if anything like this will actually happen.

Despite the fact that both the American Medical Association and the American Hospital Association are committed (rhetorically, at least) to promoting the health of the community, the sickness care system is clearly planning for a big increase in demand and expenditures. Hospitals are building new and expanding old facilities throughout the country, while physician organizations call for dramatic increases in the physician supply, and the opening of new medical schools.

This is a clear disconnect, though perhaps an understandable one. Providers have naturally watched past patterns of steadily increasing demand and expenditures, and projected them forward to yield forecasts of dramatic increase in both. The effects of the growing investments in prevention and health/disease management have barely been measured so far, and have not much diminished growth patterns yet.

But as insurers, employers, and governments slowly catch on, identify which prevention strategies yield the greatest savings, and adopt them more aggressively, the disconnect may switch from a philosophical one to a significant gap between the demand and expenditures that providers are counting on and what will actually occur. Moreover, a strong case can be made that the “community benefit” mission and legal commitments of most hospitals, and the professional values of most physicians, should drive them to participate in the effort to improve the health of Americans far more vigorously than they have in the past.

The corporate world, and even federal and state governments have awakened already to the value, indeed the necessity of managing health in order to reduce the costs of sickness. Perhaps it is time that sickness care providers do the same – as employers, themselves, who face the same necessity for controlling their costs, and as providers who are supposed to be in the health, as well as the sickness business.

How is Medicare DM Like Searching for WMDs?

by Vince Kuraitis

There continues to be virtually no evidence of success in Medicare’s demonstration/pilot projects with disease mangement…which, of course doesn’t prove it isn’t there, but….

Mathematica Researchers Summarize Disappointing Results Across 4 Medicare DM Demonstrations

Drug co-pays: How low can they go?

by David Williams

The Wall Street Journal reports (New Tack on Copays: Cutting Them) that employers and insurers are cutting some drug co-pays to a few dollars or even zero. The emphasis is on getting patients with chronic conditions to adhere to drug regimens that promote good health and reduce other medical expenses. The programs typically target asthma, heart failure and diabetes –illnesses where the employer or health plan can realize a return on their investment within the short time a typical employee or member is with them.

The new initiatives are notable for going beyond low co-pays for generics to include low co-pays for branded products that are cost effective.

Behind the about-face is mounting evidence that higher copayments may not make long-term economic sense. While they’ve curbed drug spending in the short run, studies show they’ve also discouraged some people from taking essential medicines. A 2004 Rand Corp. study of more than 80 corporate and commercial health plans, for instance, showed that chronically ill people used to taking regular drugs cut their medications by between 8% and 23% when their copays were doubled.

I’ve written about low co-pays before, and pointed out that generic drugs shouldn’t need insurance coverage at all.

But why stop at $0 copays? Employers are already shelling out thousands of dollars for employees’ health benefits, so why shouldn’t they pay their employees specifically for adherence? In addition to zero dollar co-pays, why not pay employees cash bonuses –or top up their HRAs or HSAs (assuming they can find a way to do so legally)– for staying on worthwhile drugs over extended periods of time?

And there is an opportunity to align the interests of employers, patients and pharmaceutical companies by allowing the pharmaceutical companies to fund these bonuses and contribute ideas and programs that enable adherence. In the absence of new drugs or pricing power the main growth opportunity for the pharmaceutical industry is increasing adherence.

As long as the programs are directed toward reducing overall medical costs then I’m not concerned about abusive promotional practices. And this is where employers can play a big role. Time and again it’s been demonstrated that pharmaceutical benefit managers and physicians are unduly influenced by financial incentives to push particular drugs. (Look no further than today’s lead story in the New York Times (Doctors Reap Millions for Anemia Drugs) to see what I mean.) Let’s see if employers can do a better job of looking out for their employees’ best interests. I think they might be up to the task.
An intriguing aspect of such a plan would be the chance for branded pharmaceutical companies to compete against generics. If the branded company can do a better job of promoting adherence, an employer might find it better to pay the extra cost of the branded product.

Interview/Podcast with Mark Ganz, CEO Regence and Luis Machuca, CEO Kryptiq

by Matthew Holt
This is the transcript from the interview I did at WHCC last week with Mark Ganz, the CEO of Regence, the Oregon based Blues plan that operates in the Pacfic Northwest, and Luis Machuca, the CEO of Portland-based health IT messaging company Kryptiq. Machuca is innovative as both and employer and a technology guy, and Ganz is, shall we say, not your typical insurance company executive! This is crossposted over at The Health Care Blog

Matthew Holt: This is Matthew Holt with the World Healthcare Blog, reporting from the World Healthcare Congress, doing a podcast. It’s kind of funky back here because we are in this glass-enclosed blogger’s corner which they put together at the back of the exhibit hall, but they are still setting up the exhibit hall, so you can hear the vacuum cleaners in the background. But no matter, we are on with the first podcast of the day.

Today we have got some very interesting folks: Mark Ganz, who is the president and CEO of the Regence Group, which is the big Blue’s plan in Oregon and the Pacific Northwest; and Luis Machuca, whose name I just got wrong again. [laughs]

Luis Machuca: Machuca!

Matthew: Machuca! Sorry, my pronunciation is–they never taught you that about proper Spanish accent in the English school I went to. He is the CEO of Kryptiq, which is an IT messaging company. Well, I should let Luis tell you about that. Mark has already been on the podium twice today in two different areas; Luis has just been talking about an initiative that is being run for his employees with Regence. So let’s start there; Luis, give us the quick find out about what are you doing with your employees and how you work with Regence and what innovative things you are doing around employee healthcare at Kryptiq.

Luis: Hi Matthew. So, really what Kryptiq is all about is building tools that enable healthcare transformation. We’ve really, from day one, always felt that transformation starts from the inside out. So before we try to transform the world of healthcare outside, and build tools for them, we wanted to make sure that we were sensitized to the notion of delivering the very best possible healthcare in the most efficient of ways. So we’ve done many things along those lines, starting with reimbursing for email and patient portal enable clinics for employees.

More recently, and why Mark is here really, is to align with health plans who also embrace the notion of transformation and the notion of getting more decision in the hands of the employees, and more tools and information for employees to make the right decisions about their healthcare dollars.

Matthew: So what does that mean in real life? How have you structured your employee benefits so far, and what’s that actually mean? I’ll ask you, and then I’ll ask Mark the other side.

Luis: Yeah, in real life that means, number one, that we want to make sure that employees have easy, highly productive access to excellent healthcare, and thus the email and portal enabled reimbursement for clinics that do that; and two, a high, high component of a mix of an HSA combined with tools from our health plan that allows people to be guided about the decisions that they make, about the choices that they have, about things that are going to work for them, both in a preventive and also once they have some disease.

Matthew: So, are you funding the HSA from the company, or is that sort of more skin in the game from the employee.

Luis: We fund half of the HSA, so we fund half of their limit.

Matthew: Well, that’s pretty interesting. Now Mark, tell me a bit about how it works out from the insurer and the kind of work you are doing with them.

Mark Ganz: Well, one of our core beliefs as a company is that the fulcrum for full healthcare transformation is the individual customer, the consumer; and that if you look at, when they talk in healthcare about the misaligned incentives among the various players in healthcare, it’s because we are not aligned toward a single individual or person that we serve.

Our belief is that if we focus on the needs of the individual and engage that individual to move beyond the sort of state of entitlement that they are currently in, and create a more of a healthcare marketplace that is very responsive to consumers and in which a consumer is able to navigate and make choices, value-based choices, that that will begin the seeds of more fundamental change throughout the healthcare system.

Based on that belief, we’ve started a pilot within our own company with our own 6,000 or so employees, now we are closer to 7,000 employees, focusing on how do we engage them in their own use of healthcare benefits, in their own use of healthcare, so that they have a better understanding of the interconnection and interdependence, frankly, between and among themselves around their use of care and even their desire to remain healthy and not need the care in the first place.

Matthew: What does that mean in terms of - you showed in the last session some of the dashboards, and some of the tools and techniques. Could you go down to the details of what you’re using?

Mark: Sure. What we’ve done is focused around the key outcomes we want to achieve in terms of engagement of employees, and set up a series of programs designed to achieve those outcomes. We measure our ability based on those outcomes.

So, specifically, the first year we were into this, we designed health risk assessments that all of our employees filled out. Based on what we learned from that, from what employees told us they wanted to work on most, we then developed a series of wellness programs that were designed to address those very issues.

So we had a number of employees that smoked and wanted to quit. We engaged them in ways in which they could do this. We had a number of employees - a lot of employees - who were very overweight. In fact, I think they’d been attracted to our company because we had rich benefits and they felt they would be well cared for as employees in our company.

A lot of them were overweight, so we designed a series of financial incentives and programs that were aligned with those incentives to help people lose weight. In fact, we’ve had amazing success.

And what’s really been interesting is that once we created those programs and then helped people engage in them, what we’ve really tried to do is get employees working with each other to carry it forward. We’ve seen this amazing interplay amongst employees in terms of their desire to lose weight, to get more fit, to be more engaged in taking care of chronic diseases, that we aren’t necessarily mediating. We’ve just created the opportunity for employees to talk to one another and support one another as they try to address those issues for those own lives.

Matthew: You come here with a really crucial issue (while we’re doing this someone’s trying to break the door down), which is how do you motivate people, how do you get them to get off the dime and change behavior? And there are a couple of things going on which I think are related which were on the previous panel, with George Halvorson from Kaiser Permanente.

There’s also this move in the information therapy movement which I’m sure you guys are familiar with, talking about some of the stuff that John Wennberg just mentioned earlier about decision aids and people making the right decision about their care. In some ways, take decisions back a bit from some of the excess we’ve seen in the provider community. I don’t want to put those words in your mouth! But we are talking about how we change the behavior of individuals. Some of it’s motivated with money. Some of it’s motivated with almost a community spirit, that you were discussing.

Let’s change the focus a little bit: At the same time, some of us are saying that the move towards HSAs and individual self-directed accounts actually mitigates against that and tends to put the healthy people up against the sick people and then we have the 3% of folks who drive most of the spending as George Halvorson was mentioning, who are absolutely not so amenable that type of approach.

How do you think that this fits in to the chronic care model?

Mark: OK, a couple thoughts. First off, the healthcare system is an inefficient, opaque, paternalistic system.

Matthew: No disagreement. [laughs]

Mark: And that is true no matter whether you are suffering from chronic disease or you have a hangnail. The fact of the matter is that if we’re going to get at fundamental cultural change in the way the system functions, I believe you start with the 80% that use 20% of the care who have the ability to make choices. You can educate them about how they use healthcare and about how their decisions impact the lives of others.

And, frankly, another piece is that how their contribution to the insurance pool is actually helping others out in the community. I think they have to understand both. And it’s amazing how little we understand that in this country. We believe that somehow it’s me against the big machine when it’s time for me to use healthcare. The mindset of people is often, “How can I extract the most value out of the system?” which means “How much can I extract the most value out of the system, ” which means, “How much can I use and continue to use?” They don’t see the relationship about how, when they use care, they’re essentially taxing other people within their community for their use of care.

Trying to get at that challenge — that is one of the key challenges we face. If we are able to get the health-care system to act more efficiently when it’s dealing with 80% of the people it sees, I believe it will act more efficiently when it’s dealing with the 20% of the people it sees who use 80% of the resources. That the system will change fundamentally to become more efficient, and that maybe that 80% who are elective today might be part of that 20% five years from now.

If they change the way they view healthcare when they’re healthy, or relatively healthy, that when they do get to a certain age where chronic disease sets in, they will be more thoughtful about how they use care. So it’s a belief that you’ve got to change the fundamental economic rules of the system. I don’t believe you get there by simply focusing on changing the game for the 20% using 80% of the care. I think you have to take a broader look.

Matthew: Luis, How is that playing out with what you’ve done in your company so far? What are you seeing from your employees so far, in terms of their changing care?

Luis: I want to go back to something Mark said on his speech earlier today, when he talked about an example. He was talking about a person helping his wife go through the final stages of a cancer, and how, in summary, they were almost forced to surrender control in order to really be able to cope with the health-care system’s role or participation at those stages. What we’re trying to do, and what we are all about, is whether it’s through HSAs or some of the things that Mark talked about, that the more that the decisions become available for people to make — whether it be small decisions or big decisions — the more the dynamic will change with the providers.

What we do is we understand that most providers, it’s not that they want to retain control, and it is not that they’re cynical. It’s that, in many cases, they really are unable because they don’t have access to their own data. They don’t have access to the continuity of healthcare to be able to put data, to be able to put the full picture. So they’re only giving an opinion or a prescription based on what’s in front of them.

As a technology company, what we are trying to do is put in the connectivity tools to allow those things that are in the periphery to come in and form a better picture, so people can have more informed decisions — both as providers, so people can give a menu of choices, and then also for the patients, to be able to make better choices.

The way we see that with our employees is our employees have become very discriminating about the providers that they choose, whether it be on the chronic disease pool or not. The chronic disease employees are gravitating much faster to providers who are going to help them manage a compliant state, than who are just going to be there on an episodic basis. Too early to tell in terms of what data is out, but from a behavioral and anecdotal, observational point of view, we are right on track where we want to be.

Matthew: Yeah, and actually this leads us almost to a point which is, I know, a slightly controversial point in the Northwest around managed networks and high-performing networks. [laughs] If this was TV, you could see Mark sort of cringing there.


But it’s absolutely a key issue….

Mark: It’s a hard lesson learned.

Matthew: It’s a hard lesson learned, but it’s a lesson…. In some ways, you could argue what Luis just said was that some self-selection on the consumer side is moving towards the right thing, the right network perhaps.

Mark: I think if you actually educate…. If you provide financial incentive, however that’s structured, whether it be HSA or whether it be the employer specifically putting more money in the pocket of the employee and saying, “This is your money; go spend it wisely.” However you create that incentive, and you educate them how to be good shoppers, you create more of the marketplace economic dynamic that I think will start changing the dynamic of the supplier of healthcare, i.e., the physician, the hospital and the like.

If you look in those areas of medicine that are not subject to the third-party payment mechanism, that are subject to a marketplace dynamic where the individual is spending their own money and the health-care provider is responsive to that economic relationship, what you see over time is costs are stable, and in some cases they even drop.

Let me give you an example: Lasik eye surgery versus cataract surgery. You look at Lasik over the last several years, and you see what’s happened in Lasik. Number one, quality has gotten better. Customer satisfaction has gotten better. Outcomes are better. Prices have dropped. And there are more people available to do it, because it’s a competitive marketplace.

Cataract surgery, which is subject to the third-party payment system — there’s really not much new that’s happened in cataract surgery over the last ten years. But what’s happened there? Prices have gone steadily upward, because there is not a marketplace dynamic. It’s basically “I want cataract on demand.” Physicians, who actually are much more efficient at doing the surgeries, simply do more of them and charge more for doing it. And we, as health plans, all the while are sitting back, patting ourselves on the back, saying, “Aren’t our discounts great!” When in fact, the alpha upon which our discounts are based continually goes upward.

Now, that’s an example where I think you can look at it and say, “If you give consumers the right incentives, and you educate them how to be shoppers, they’ll figure it out.” They will make good decisions and they’ll be more satisfied with the decisions they make, because they feel like they had a sense of taking charge of their own healthcare, as opposed to being run like a rat through a maze. Which is, unfortunately, I think how healthcare works.

Matthew: Let’s just raise that, though. I’m going to try and draw two things together here. The issue of Lasik versus cataracts has come up a lot, and there’s been, as you know, studies going both sides of that equation. But it’s a very definable, neat piece that you can do. Whereas we know, when we talk about chronic care, which is where most of the money is spent, it’s less definable. Part of the problem is something that Luis brought up, which is that the average physician doesn’t have enough information about the patient, the average patient, is seeing how many number of patients?

So let me ask both of you to jump in on this. How far are we along — maybe just here in Oregon and the Pacific Northwest — how far along are we in the integration of information that makes that potential easier? Then the next question is speculate, about the end state and the way that you’re going to be paying for that expensive chronic care, because of stuff that isn’t like Lasik?

Luis: Well I want to stay to your example, because I think that it’s a good place to frame the difference of possibilities. The popular notion is that people think that we want to know who gives the greatest chronic care. “Tell me who the good doctors are versus the bad doctors.”

I think that’s really a bad question to ask, for the following reason. You’re not going to be able to drive the healthcare system with 20% of the doctors, no matter what. The premise of my point is that the data is there to make the overwhelming majority — a very large number, 80-plus, 90% of the providers — to compliance, to manage a chronic disease in a very effective way, both a cost- and outcome-effective way, if they were connected to the data.

So what I want my health plan to tell me, in terms of their network, is not “who are the good doctors and who are the bad doctors,” but steer me to the people that know how to manage to compliance — as opposed to darkness, where I don’t know the difference. I don’t need to know, tomorrow, all of the details about a particular provider versus another one. But I would like to have some qualitative information about: What kind of tools do they have? Are they committed to a compliance management system? Are they willing to take whatever those steps are?

That, to me, is an important question that can be answered by health plans and others, in terms of the managed networks and which are the better networks.

Matthew: And where would you say we are, on a one-to-ten scale? How far down the path are we to that kind of information integration between those providers, which is seriously a lot of the problem that we’re talking about?

Luis: I would say, that’s not going to give you a numerical answer, but I’ll tell you this: the toothpaste is out of the tube. We are headed in that direction; it’s going to happen, certainly within the next five years. Any attempt to suppress it or repress it will result in market uncompetitiveness and either people losing jobs or people going out of business. But I think we’re past the point of no return on that. So I am very optimistic.

Matthew: I love your optimism At Institute for the Future, I remember we always used to say that the electronic medical record, you know, it’s a technology that is five years in the future and always will be. [laughs]

Luis: A very good example, the electronic medical record, you know, 80% of physicians today do not have an electronic medical record, but 95% of that 80% can do an electronic referral or could do an email consult or could send me my lab results electronically. And those get me to my next step in the healthcare chain much better armed and much better informed.

So the electronic medical record is an example of something that I think became a big initiative without a benefit/value proposition that was to the purchaser; unlike this idea where me as an employer, you know, I want to get guidance from my health plan as to where my employee is going to get better disease management for diabetes or hypertension.

Mark: I want to come back to culture here for a minute, because I am leading the effort in Oregon to try to create an interoperable free exchange of data amongst the healthcare providers. We are starting in the greater Portland area because that is where the greatest population center is. We created a committee, a steering committee under the auspices of the broader business community, the Oregon Business Council, which I chair, and we have at the table the CEOs of the major hospitals; and they are the key to making this work.

If they don’t play, because, I think as you know, the value proposition that hospitals have used into selling the idea of EMR to their own boards has generally been that by having EMRs within their own system, that in a sense it creates a higher set of castle walls.

Matthew: Yes, sure.

Mark: They keep patients within the system, they keep doctors referring into the hospital; it’s a way to make sure that the beds stay full.

It’s been an interesting impediment to the conversation that when you realize that when you talk about democratization of that information across hospital systems, that is very threatening to an old business proposition. It was what I referred to, I was trying to refer to, in my earlier speech about how sometimes things that have gotten us here from a profitability standpoint, we have to put at risk, we have to let go of and look for other ways to provide value. And right now the challenge for hospitals is to provide a greater degree of value to the community through the more easy flow of information.

When we did the study to determine where the economic benefit was of that project, the numbers that came back were essentially, the primary economic benefit was in reduced tests, duplicate tests. Because right now, you know, I am being treated at Legacy, I go up to OHSU, OHSU gets to run all the same tests because they can’t get the information from Legacy. If they can get it, they don’t have a reason to do those tests. And that is, I mean, I understand, I have compassion for the CEOs of the hospitals saying “Wait a minute, why is this a good thing for me?”

But I’ve been very impressed with the vision of folks so far, to stay with this and believe that this is the right thing for the community as a whole. And that’s what gives me hope in believing. I’d say, you know, you asked me how far along we are, I’d say we are still, we haven’t reached that tipping point. I’d say, I agree with Luis that the toothpaste is out of the tube. That is going there, but we haven’t quite got to that place where we have everybody fully admitting or fully embracing the notion that the new world around healthcare data interchange is better than the old world of “keep the castle keep strong, build the castle walls higher.”

Matthew: Right, and the last sort of question on this concerns the “Wall Street Journal” article about Virginia Mason a couple of months back, which I’m sure you saw–Starbucks was their driving employer–and went to them saying “could we reduce tests?”. VM was having trouble getting all the health plans to actually reward them in a way that was conducive to that. What do you think? I presume you are still largely a fee-for-service based payer, as it were, what’s your likely evolution in reimbursement?

Mark: We are putting a great deal of focus–it’s one of our key initiatives right now–in fundamental reimbursement–basically, out-of-the-box thinking about how we reimburse. I am convinced that much of the brokenness of the system is a direct outcome of the way we reimburse.

And when George talked today about how fragmented the system is, how it doesn’t respond to diabetics and the like, I think we have to turn around and point the finger at ourselves and say that how we reimburse medicine creates that fragmented approach. Do you think for a minute that if a diabetic who had complete, you know, had the financial resources and that the system was completely accountable to him, do you think for a minute we would continue with this fragmented system? Diabetics, as consumers, would never allow it; and the system would respond to provide more of a holistic, comprehensive way to treat their illness.

I think that we, as health plans, have to change the way, we have to be willing to move away from the discounted, secret, negotiated rates that we have, that in a sense, I think, provide very little value in reality. I mean, is it really a benefit to consumers to have a 20% or a 25% discount off an alpha that is going up at twice inflation every year? I don’t think that we are really delivering enough value there. So we better think about a different way of reimbursing, and then use that opportunity, by the way we reimburse, to change the way that physicians practice.

So for example, if we were to pay on a regular basis for email visits, would we change the efficiency and the outcomes of people’s experience of healthcare? I think we might. On the other hand, it’s very scary to the actuaries and underwriters in our company who say, “Well, if we start paying for that, who is to say that doctors aren’t just going to start billing us crazily for email visits as well as all the other things they bill us for as an alternative too?”

So we’ve put together an interdisciplinary team of healthcare economists, informatics, actuaries, and, well I would just say, creative thinkers; to start working in an R&D kind of context, trying things, seeing if they work and looking at them in the lab, if you will, to say “Could these things work, and would they drive a different outcome? Would they increase people’s experience of healthcare and tend to lower the usage of healthcare?” And if it does, if we can accomplish those things as well as increase satisfaction through that, both of the physician as well as the consumer, I think we are on the right track, and then we can try it as a pilot, and then if it works in the pilot we can take it out broadly.

Luis: Matthew, there is a very good technology example illustration of what Mark just said. The enormity, perhaps all of the software investment that has gone into tools for health plans to date, has been in the claims. How do we pay claims efficiently? And that really gets to the point of Mark, that that happens very late in the process, really at the end of the process, and doesn’t take into account any real intelligence, any real purposefulness as to what are the behaviors that we want to incentivize.

The premise of Kryptiq’s Courier line, for example, is really to go upstream and help a health plan, from a software point of view, connect all those dots that he just went through, so that it can be purposeful and intentional about the decisions they make upstream, and then the claims payment payroll takes care of itself.

So we are seeing that shift as well, not just in the strategy piece, but also in the software investment. So the software investment is also moving upstream as well.

Mark: Yeah, and actually the primary reason that we bought that product from Kryptiq and are working together is because it starts with having a common vision. And that’s what’s made it exciting in terms of working with Kryptiq, is we sort of are coming at this issue, this broad issue, from two different angles, but there are many points where we meet; whether it’s us engaging with them around what they want to accomplish in terms of employee engagement, or they engaging with us in terms of helping us with that upstream process.

Matthew: Fantastic. So the World Healthcare Blog was started because the World Healthcare Congress was interested in looking at more innovation, and there we have a bunch of innovation! Luis, Mark, thank you very much indeed.

Luis: Thank you.

Mark: Thank you.

The inevitability of mortality

by Nick Jacobs

Several months ago I had an interesting experience.  It was my distinct pleasure to escort a distinguished critical care specialist on a tour of our palliative care unit.  This unit has been described by some as the Ritz Carlton of inpatient hospice care.

The physician was appropriately moved by the sum and substance of the unit.  There are balconies for each room, adequate sleeping space in the patient’s room for a family of four, a private kitchen and bath for the families, unlimited visiting hours, live plants, skylights and massage, pet, aroma, and music therapists roaming the halls to care for patient and family.

About half way through the tour, we informed him that the rooms were filled with patients suffering from all forms of advanced, terminal illnesses.  At that point he turned to me and very carefully and quietly lamented the fact that, under our current system of episodic care in this country, our hospital’s admit and try to stabilize; then later admit and try to stabilize again, on and on until death.  He stated his frustration with our current U.S. health system regarding this situation

He then said, specifically referring to the prestigious hospital where he was employed, “If we took a healthy organ from every patient currently being treated in our Critical Care Unit, we couldn’t come up with one survivable human being.”

Okay, here’s a novel, innovative thought.  What if we spent the money currently being squandered on non healing critical care for something good and right?  Currently, that money that is not leading to any better quality of life or additional longevity for the patients.  What if we spent that money on prenatal care, on childhood disease management of diabetes and obesity?  What if we spent that money on thousands of other youth related challenges and appropriate research?

We would be preserving the health care system in a manner that makes sense to us all.

Not unlike the generations before us, we must once again learn to accept death as a part of life.  We must embrace that fact that those 12 additional chemo treatments will not stop our cancer or improve our lives.  We must learn to embrace that transition time called death as a time for healing for families, for loved ones, for us all.

Let the inevitability of our mortality begin, once again, to steer us away from squandering our precious medical dollars, and give Hospice a chance.

Death with dignity, love and concern can be a beautiful transition and a true innovation that could emanate from the Baby Boom generation as we go on to do more and better things from the other side.