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Adapting Einstein’s Formula to Health Management

by Scott MacStravic

Albert Einstein used the formula E = MC2 to describe the conversion of mass into energy, later demonstrated with the atomic bomb.  A similar formula applies to health management (HM), whether applied to consumers paying for their own services, employees, commercial insurance plan members or government plan beneficiaries.  The difference is that the terms are different:

  •     “E” represents effectiveness/efficiency if HM programs
  •     “M” represents motivation in HM participants
  •     “C1” reflects participants’ capability and confidence, self-efficacy
  •     “C2” reflects participants’ consciousness of how/when to act

While a wide range of interventions have been used to promote HM participant “compliance” or “adherence” to medication and lifestyle regimens, they all can be categorized as aiming to achieve increases in motivation, capability or consciousness.  Many focus on just one of these, some on two, and a few on all three.  But experience has shown that the best results are achieved when all three are affected by HM programs, rather than relying on one or two.

For example, a recent report on a diabetes disease management program, used with significant effect by HealthMedia, Inc. of Ann Arbor, Michigan, identified nine keys to success in promoting diabetes patients’ adherence to medications:

  •     Improving patients’ depression and stress coping skills
  •     Fitting adherence into individual patients’ daily routines
  •     Understanding and addressing each’s adherence barriers
  •     Helping them feel accountable for adherence
  •     Strengthening their relationships with providers
  •     Bolstering their confidence in medications and themselves
  •     Moving them toward intrinsic vs. extrinsic motivations
  •     Focusing on their life quality benefits vs. sponsors’ gains
  •     Understanding and communicating with each as an individual

[K. Wildenhaus “Improving Medication Adherence: The Missing Link to Better Outcomes” HealthMedia.com Aug 16, 2007 (webinar + slides)]

All nine of these essentials deal with one or more of the “MC2” factors.  Improving coping skills, fitting adherence into daily routine, addressing barriers, bolstering their self-confidence – all relate to participants’ capabilities.  Fitting adherence into daily routines, strengthening relationships with providers (physicians, pharmacists, nurse coaches), and dealing with them as individuals — all relate to promoting their consciousness of what and when to act.  And helping them take ownership/accountability, strengthening provider relationships, moving them toward intrinsic motivations, and recognizing their unique personal benefits – all relate to promoting their motivations.

Addressing the changes in or reinforcements of participants’ personal and unique levels of motivation, capability and consciousness required for success is first a helpful basis for planning specific steps in an HM intervention.  It is also a useful focus for evaluating the immediate effects of intervention elements – are there noticeable changes in one or more of these three essentials as each reports them.  Unless one or more of these cognitive/emotional factors are increased, or at least reinforced by HM efforts, there is likely to be little if any effect.

By focusing on all three MC2 factors, HM sponsors can also create a “paper trail” that will enable or reinforce conclusions that their HM interventions are responsible for changes noted in participants’ health status, healthcare, disability and workers compensation insurance expenses, absences, productivity, performance, and overall economic impact.  If changes in one or more of these factors are noted after implementing efforts aimed at changing them, then are linked to changes in behavior, health status, and subsequently in desired economic impacts, sponsors can be much more confident that the HM interventions actually produced the impacts noted than if they only measured the impact per se.

By evaluating the particular impact that HM interventions have on motivation, capability and consciousness, sponsors and providers can also learn which of these three factors make how much difference in achieving necessary enrollment, participation, and completion of each intervention, and to each of the many dimensions of cost savings and performance improvement.  This will enable continuous “tweaking” of the HM interventions, themselves, and improvement of the predictive modeling methods used to identify and target prospects for particular kinds of interventions.

This is equally true with identifying the particular types of motivation, capability and consciousness dimensions, such as the nine examples identified by HealthMedia in its diabetes medication adherence program, that make the most difference to results.  Continuous improvement in our understanding of MC2 factors is needed to increase and maintain positive returns on investment from HM interventions in general, and to this key component of the solution of our healthcare cost crisis.

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.

Does “Prevention” Save Money?

by Scott MacStravic

The federal government and various “think tanks” it has hired have consistently found mixed results when asking the question: “Does Disease Management Work?”.  This has always been a ridiculous question to ask, since DM is not a single “treatment” whose efficacy can possibly be gauged in the way that particular drugs or medical treatments can.  DM is a wide range of different approaches, delivered by a wide range of different providers to a wide range of different patients with a wide range of different diseases.

A recent newspaper article attempted to ask and answer a similar question about “preventive medicine”, which includes DM, but goes far beyond that already broad and mixed bag of interventions.  It comes up with a number of arguments, though no data, to conclude that “prevention” will not save money, once its costs are factored in, and certainly will not save enough in terms of total sickness care costs to enable the country to finance insurance coverage for the currently uninsured. [D. Leonhardt “Free Lunch on Health? Think Again”, New York Times Aug 8, 2007]

It notes that the current “system” does not pay providers to keep people healthy, in fact perversely adds to sickness care costs by paying only for treating them once they are sick.  It concludes that studies usually find that prevention makes people healthier, but costs money, not saves it, overall.  After all, physicians and nurses have to spend time to get people to change their behaviors to healthier options.  Moreover, they are likely to be dealing with those who have not been persuaded to adopt and maintain healthy lifestyles through current services and strategies, so they are likely to be the toughest and most expensive to “reform” now.

The author cists a Stanford University School of Medicine study that estimates an anti-obesity program would have to treat five people, with interventions that are not cheap, to prevent just one new case of diabetes.  Prevention has to invest in interventions that will not have any meaningful impact on many of its participants, since they would not have become sick, anyway, while others do so in spite of participation.  Moreover, prevention increases the lifespan of population, and people contract more sickness as they get older, so lifetime sickness costs end up being increased.

In effect, because we have to “treat” many more times as many people through prevention as would have to be treated for sickness in order to prevent sickness, the costs of continuously treating those who would not have become sick overwhelms the savings produced by preventing the few cases of sickness that would have resulted.  The article concludes that: “Preventive care saves real money only when it replaces existing care that is expensive and doesn’t do much if any good.”  And it notes that as long as patients think the care they get will do them good, which they must or otherwise they wouldn’t get it, even preventing such “futile” care is a difficult task.

It quotes Jonathan Gruber, an MIT economist, as saying: “…if you’re going to control healthcare costs, it involves denying people care they want – or things they’ve been trained to think they want.”  Somehow,
”prevention” is equal to “rationing” as defined by the article.  But this is simply a “straw man” definition, as is defining prevention as a kind of medical care requiring the expensive services of physicians and nurses, in the same way as sickness care does.  In effect, the argument is that prevention would simply change what expensive providers do for patients, but still cost as much as treating sickness.

But the article ignores a host of preventive strategies and tactics, and a wide range of interventions, that do not require the use of physicians and nurses at all.  And it ignores the growing accuracy of preventive modeling in terms of identifying which people currently at risk represent sufficient risk/reward potential to warrant which kinds and costs of preventive interventions.  Both predictive and preventive technologies are improving dramatically, and both can often be applied on a population-wide basis, rather than the traditional one-to-one physician or nurse visit.

Predictive models can analyze collections of data on past sickness care claims, individual attitudes and behaviors, personality factors and perceptions, as well as on worker productivity and performance, to identify the risk/reward potential of individuals with increasing accuracy.  Individualized interventions aimed at multiple risk behaviors or conditions, or at preventing the emergence of such behaviors or conditions, can be generated automatically by computers, and communicated online of via mail for ten or twenty dollars a year per participant.

By tailoring prevention strategy and tactics to accurately predicted risk/reward potential and individual receptivity, and doing so inexpensively where necessary, plus intensively where justified, “prevention” can be as cost-effective as it needs to be in order to achieve its intended results.  And when it is applied to workforces, its benefits are often two to five times as great as the value of reduced sickness care costs.  Moreover, if it is applied to the young, it can deliver benefits over a lifetime, not just in the short run.

It is impossible to say that prevention does work, just as it is impossible to say that it does not.  “Prevention” is simply too vast an array of different challenges involving different people and intervention modes plus costs to come to any overarching conclusion.  But that is the point, after all – it is simply a silly question to attempt to answer simplistically and finally.  There have been thousands of successful applications reported, and perhaps as many unsuccessful attempts made but not reported, since failure rarely prompts as frequent and as loud reporting as does success.

We are ill-served by attempts to answer such a silly question, regardless of what narrow evidence and arguments are used to support the answer, since the question simply cannot be answered.  The challenge is not to try to reach a simplistic yes or no answer, anyway.  It is to study, identify, and promote what does work, and continuously improve the science and art of prevention, and continuously monitor/evaluate how much we can improve it and enjoy as a result.

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: Credibility Issues

by Scott MacStravic

There are growing signs that traditional providers of what has long been mistakenly deemed “health care” – mistakenly because while it may aim to restore health, but it deals almost entirely with sickness – are venturing into the health management market.  Primary physicians are among the most interested, with hundreds already committed to managing their patients’ health, paid for by patients, themselves, through “boutique” practice retainers or fee for services.  Many more offer “executive health” services in that niche market, or special health coaching programs to un- and under-insured patients.

Nurse practitioners are even more involved, as hundreds work as “health” and “disease” management coaches, though in specialized health management supplier organizations, rather than traditional practices.  Some are also providing proactive health services in “retail clinics”, at least the minority of them such as RediClinics, that include “stay well” along with more common “get well” services on a patient-paid basis.  Moreover, hundreds are involved in worksite clinics serving employees in the growing number of onsite clinics employers are investing in.

Hospitals are involved in two ways: 1) as “make” suppliers of employee health management (EHM) programs to their own workforces; and 2) as “buy” suppliers, competing with specialized providers in EHM or in specialized, disease-specific programs for patients.  In both cases, they must compete with specialized suppliers, since buying health management services is always an option for internal applications, as well as for the fellow employers they may seek to serve in revenue-generating service lines.

Credibility Challenges

In competing with specialized suppliers, traditional providers have to overcome some significant credibility issues.  Since the business of healthcare providers has for decades been almost entirely dependent on sickness care utilization and revenue, particularly since that is what third-party payors pay them to do, engaging in health management services that reduce sickness is clearly in conflict with their business interests.

Physicians and nurses can easily specialize in health, as many boutique physicians have, emphasizing and demonstrating significant, often dramatic savings in terms of sickness care utilization and expense among their patients.  The MDVIP organization of 150 or so retainer physicians has done so, reporting hospital inpatient and ER use 30-90% lower than in traditional practices (www.mdvip.com), for example.  Since primary physicians are nowhere near as dependent on expensive sickness care procedures as are narrower surgical and medical specialists, and with many already engaged in occupational and corporate medical clinics that are increasingly focusing on health management, they have less of a credibility handicap.

Hospitals have two credibility handicaps.  First, when then have offered EHM services, it has been primarily if not exclusively in the “executive health” mode, which is at the very high end of the cost spectrum, typically priced from a few to as much as ten thousand dollars or more for a one- or few-days’ luxury stay.  And second, their facilities and equipment capital investments, as well as their entire operations are geared to sickness care and specialist medical staffs, where EHM conflicts with both their own and their medical staff’s financial interests.

There are many examples of consulting firms and marketing experts advising hospitals to create closer working relationships with local employers, in order to increase their share of local businesses’ employees who use the hospital for sickness care.  But if it takes significant sickness care cost savings for those employers to become buddies with hospitals, those savings come out of the hospitals’ revenue.  Financial incentives can easily be aligned between employer, physician and patient, but given hospitals’ “inherent need for (people) to use their services and fill their beds”, there is a built in and unavoidable misalignment with hospitals. [L. Butcher “The Workplace Doctor Is In” HealthLeaders News.  Mar 2007 (www.healthleadersmedia.com)

Moreover, many hospitals have already tried, and given up occupational health ventures as not part of their core business.  Worksite clinics take patients and revenue away from the hospitals’ sickness-focused medical staff, although Wheaton Franciscan Healthcare in Milwaukee, Wisconsin has a joint venture with the QualMed subsidiary of Quad/Graphics for sickness and wellness services for city/county employees in Racine. [D. Borfitz “Corporate Clinics: Grounds for Collaboration”, Strategic Health Care Marketing June 2007 1-5]

Many others have tried disease management, primarily with diabetes.  This is a major cause, both directly and indirectly, of a large share of sickness care utilization and revenue, but is a small cause of workforce absence, presenteeism, productivity impairment, and the other reasons that employers want to improve the health of their workforces.  Moreover, hospitals have as often failed to operate their diabetes management programs profitably to begin with, more often relying on charitable donations to keep them going. [I. Urbina “In the Treatment of Diabetes, Success Often Does Not Pay”, New York Times Jan 11, 2006 (www.nytimes.com)]

Of course, specialized suppliers of disease management often fail to achieve the sickness care cost savings needed to satisfy the federal government in its trial demonstrations, particularly when they charge fees that range from $80 to $444 per month, as was true in recently reported disappointing results. [V. Kuraitis “Mathematical Researchers Summarize Disappointing Results Across $ Medicare DM Demonstrations” e-CareManagement.com June 7, 2007]  But given hospital’s reputations for being very expensive places for sick people, they have a handicap in terms of credibility as affordable-cost providers for health management.

Both the inherent conflicts of interest between what makes revenue sense given their dependence on sickness care revenue and what is needed to succeed in employee health management, and their reputations as high-cost providers represent serious credibility challenges for hospitals in EHM.  The credibility challenge can be overcome, as a number of hospitals have already demonstrated, though it is anything but easy.

Evaluating Health Management Results: Therapeutic Specificity?

by Scott MacStravic

When evaluating results of any “medical” intervention, including proactive health management (PHM) efforts involving medical care providers, the question must always be asked: which “results” can logically be attributed to the effort, as contrasted to any number of confounding factors at work?  In the past, both vendors and customers of PHM interventions have tended to ascribe everything good that happens after the intervention to their efforts, where at least some such results may be totally unrelated.

Once the PHM evaluation has avoided or controlled for the most common causes of overestimating results, namely “regression to the mean” with before/after comparisons, and self-selection bias with side-by-side comparisons, a third control is often recommended: “therapeutic specificity”.  This involves making sure that the changes in valuable metrics discovered can logically be attributed to, i.e. have some known connection with the intervention.

The origin of this demand for therapeutic specificity was curative medicine, where rigorous clinical control studies are needed to evaluate new drugs and medical procedures.  Unless the physiological effects of such treatments are known to produce specific consequences, any other consequences discovered in patients so treated should not be considered to result from such treatment.  For example, if asthma patients are found to improve their IQ scores after treatment with a particular drug, this improvement should not be attributed to the drug unless there is an established connection between it and mental performance effects.

In evaluating diabetes management, for example, one proponent of therapeutic specificity made a strong case for not counting among the effects of such a disease management effort any reductions in hospital admissions or other sickness care use and expense not directly linked to diabetes.  Specifically: “It should not be assumed that an intervention targeting one disease will impact another”. [A. Linden “What Will It Take for DM to Demonstrate an ROI?”, Disease Management Colloquium May 2006 (www.ehcca.com)]

When considering the cost savings from diabetes DM, evaluations may focus solely on sickness care use/expense reductions where diabetes was the sole cause, include it plus known co-morbidities, or at least conditions known to be directly related thereto.  But “therapeutic specificity applies to the “therapy” used, not to the disease targeted alone.  For example, diabetes is not merely a disease, but a known risk factor for a host of other disease, of the eyes, hands and feet, kidneys and heart.  For this reason, diabetes DM often includes explicit attention to blood pressure and cholesterol, in addition to blood glucose control.

Moreover, since diabetes is known to be “reversible” through lifestyle changes alone, nor merely medications, diabetes DM often includes lifestyle modification efforts.  If these are successful, patients are often able to control this chronic condition without relying on medications anymore, saving themselves and third-party payors significant prescription drug costs.  The same has been shown to be true for heart disease, and may be true even for prostate cancer. [D. Ornish, et al. “Can Lifestyle Changes Reverse Prostate Cancer?” Preventive Medicine Research Institute April 2002 (www.pmri.org)]

The “rule” of therapeutic specificity is clearly intended to apply to the therapy, not necessarily the disease involved, particularly with diabetes, since it is also a risk factor for so many other diseases.  The focus in evaluation should be ensuring that the DM or other PHM intervention is logically related to any results claimed to be due to it, even when the results are not directly related to the disease specifically targeted.

Moreover, medications often have unexpected, even unintended consequences, that can either be negative “side effects” to watch out for, or “serendipitous” added benefits that add to their value.  For example, many of the statin drugs used in reducing cholesterol levels have been linked to reductions in cancer risk.  Recent research in the UK has indicated that controlling people’s heart disease reduces older people’s cognitive function declines. [A. Harding “Heart Disease Tied to Mental Decline” ReutersHealth.com July 27, 2007]

The rule of therapeutic specificity only argues that no connection between an intervention and a result should be assumed, not that none should be credited to a disease-specific or risk-specific intervention.  Fortunately, there are many good “side effects” of both medical and lifestyle interventions, and both should be counted in both benefits and costs of DM and PHM interventions.  While care is needed to avoid “over-attribution” of positive effects to such interventions, equal care is needed to be sure of avoiding “under-attribution” as well.

If there are effects from treating diseases or risk conditions that go beyond the specific disease being addressed, these can justify counting at least the risk-reduction effects of DM and PHM interventions.  This can easily be expressed as a probable percentage reduction in sickness care costs, absences, productivity and performance impairment related to the calculated risk reduction effects.  While a deliberately myopic insistence on limited effects may prevent over-attribution and over-investment in DM/PHM, a more realistic and open-minded approach can prevent both under-attribution and under-measurement, and thereby under-investment.

Are We Approaching “Critical Mass” in Managing Health?

by Scott MacStravic

I have heard and read reports with a wide range of conclusions regarding the future of managing health, in contrast to and competition with treating sickness.  Some have suggested that the consistently unenthusiastic evaluations of disease management, the most widespread example of managing health, portend the demise of at least this narrow range of “solutions”.  Others have predicted that the “wellness” or “healthy living” market will reach the $1 trillion a year level within the next few years or decade.

Just as the original “health maintenance” and “managed care” organizations ended up focusing almost entirely on managing costs, so managing health has a major focus on reducing costs, though with a far broader range of “costs” than either HMOs or MCOs.  It includes the costs to patients in terms of health and life quality as well as longevity of life, for example.  And it includes the costs to employers and the overall economy of the absences, reduced performance at work, turnover, shortened work life, and other effects caused by “unhealth” in general.

While the “healthcare system”, and hospitals, in particular, are fond of describing the value they represent to their communities in terms of jobs and total economic impact on local economies, which naturally add up to the total costs of the system, over $2 trillion each year.  But the illegal drug industry could as easily brag about its economic impact as well, if only the money involved were used to measure it.  The real point is that the healthcare system has done extraordinarily little to promote the health, prevent and reduce disease risks, and manage patients with chronic diseases so as to reduce the crises, complications, and worsening thereof.

But there are signs that the larger health system, which includes the entire population and its health, all providers, all payers, and all other stakeholders that are affected by and affect the health of the population, are approaching a “critical mass” or “tipping point” level in terms of a far different balance of health management vs. sickness treatment.  Developments in essentially all stakeholder categories are moving in that direction, at least.

For example, “Revolution Health” has most recently partnered with Medco Health Solutions to empower consumers with a personal health record to better manage their own health and healthcare expenditures.  This adds to its investments in health spas, the RediClinic chain of retail clinics, which is the one I know of with a significant focus on “Stay Well” as well as “Get Well” services, and its own online health information memberships. [“Revolution Health and Medco to Partner on New Portal” E-Health Trend Watch July 26, 2007 (www.healthleadersmedia.com)]

Disney has joined in the effort to reduce the promotion of unhealthy behaviors by banning depictions of smoking in its movies. [“Disney Films to Ban Depiction of Smoking” MSNBC.com July 25, 2007 (www.msnbc.msn.com)]  Google and Microsoft are both competing for the e-health market, with Google focusing mainly on consumers, and Microsoft on patient/physician interaction and information therapy. [“Google vs. Microsoft e-Health in Medical Search War for Big Profits” DirectTraffic.org July 26, 2007

Positions on controlling chronic disease costs through disease management and preventing current epidemics in new cases are being taken by both liberals and conservatives.  And most of the daily increasing number of presidential candidates seem to have a position in favor of health promotion and disease prevention, as well as disease management as essential to the solution of the “healthcare cost crisis”. [T. Pugh “Curbing Chronic Diseases New Issue in Health Care Politics” KansasCity.com July 26, 2007]

Canada is taking essentially the same position, with British Columbia complaining how far it has fallen behind other provinces in its investments toward preventing, rather than waiting to treat and pay for sickness. [“An Ounce of Prevention” Straight.com (Vancouver, BC) July 26, 2007]  Employers are shifting toward “value-based approaches to employee benefit design, health plan purchases, which promotes by reducing financial barriers to employees obtaining prevention, early detection and disease management services.

Intel, Inc.’s Digital Health Group is focusing R&D efforts on finding better ways to use computer and communications technologies to enable consumers to protect and enhance their own health over a “health lifetime” as a way to promote both physical and financial independence. [S. Love “Intel in Health Care” Intel.com July 2007]  Cell phones will soon be able to store individual’s medical history for access by providers in both sickness care and health management. [“New Cellphone Projects to Save Lives with Medical History Information” World e-Report/Disease Management Alliance July 12, 2007 (www.dmalliance.org)]  Physicians are poised to join health management vendors and health insurers as providers of proactive health management services, based on the “medical home” model agreed to by primary physicians’ associations. [V. Kuraitis “Disease Management and the Medical Home Model” Disease Management & Health Outcomes 15:3 2007 135-140]

And these are but a few of the literally hundreds of examples of just about every stakeholder in the “system” poised to or already heavily involved in attacking the healthcare crisis proactively.  Some focus just on short-term gains from disease management, while others look longer term at health promotion, risk prevention and reduction.  But all are persuaded that proactive interventions that will reduce the incidence and prevalence of disease and injury, along with the crises, complications and worsening of existing chronic diseases are clearly an essential component of any serious and potentially effective solution to the crisis.  And instead of merely calling for such interventions by others, almost all stakeholders are implementing their own.

Growing Adoption of Health Management Not Evidence-Based

by Scott MacStravic

While “worksite wellness” programs have been around for decades, major investments in employee health management (EHM) are relatively new.  They have been made primarily as a “last-ditch” effort to control employers’ health benefit costs, and involve a mix of insurer, supplier, and self-operated programs.  Many large employers include onsite medical clinics which combine traditional medical care, saving employees time-costing trips to their own physicians, emergency rooms or retail clinics – with wellness, risk reduction and disease management services.

Many such programs offer employees incentives – premium reductions, contributions to health spending accounts, cash, gift cards, or other rewards – for enrolling, participating in and completing such programs.  These range from modest amounts such as $50-100 for completing a health risk assessment up to $600 for completing a disease management program.  Incentives can make a big difference in the proportion of employees who participate, from as few as 10-20%, and often the already healthy ones, with no incentives, to as many as 95% or more with significant bonuses such as $50 per month.

A recent survey by the National Association of Manufacturers and the ERISA Council found that 75% of responding employers, mainly large firms, offer EHM programs to their employees, with 2/3 of those offering incentives for participation, meaning roughly 50% of them offered incentive-based programs.  Of those offering EHM, 88% included general wellness motivation and support, while 70% offered risk condition or behavior reduction, and 52% offered disease management.

They cited as the most important challenges to their success: 1) the difficulties of maintaining employee motivation; and 2) assessing the cost effectiveness of their programs, even though most would be satisfied as long as their investments broke even in terms of reducing healthcare costs enough to cover costs of the program.  This would probably be acceptable because responding employers were persuaded (rating themselves as 8.0 average agreement on a 10-point scale) that in addition to healthcare cost reductions, EHM would also produce improvements in employee productivity.

Despite the fact that assessing and being able to show senior management that their EHM investments deliver positive ROI, the employers surveyed add to the difficulty of achieving such an ROI by adding to program costs the incentives they offer for employee participation.  This automatically decreases the chances of getting positive ROI ratio, though it increases the chances of getting a greater net savings, by increasing the numbers of employees who participate.

And despite the fact that being able to justify EHM investments by showing positive ROI is such a major challenge, the vast majority of employers surveyed have not been able to measure the ROI they are getting.  Even when returns are limited to healthcare cost savings, 62% of those surveyed have not even attempted to measure their ROI thus far.  Of the 38% that had made the attempt, 16% had not yet completed the measurement, 8% had not succeeded, and only 14% had succeeded at the time of the survey. [K. Capps & J. Harkey “Employee Health & Productivity Management Programs: The Use of Incentives” IncentOne.com 2007]

Employer faith in EHM is probably justified, considering the many published and scientifically rigorous studies that have shown positive, often dramatic ROI levels achieved.  Thanks to the fact that employers’ savings include reduced absenteeism, presenteeism and turnover, for example, rather than merely reduced healthcare costs, they tend to save from two to five times as much as do commercial and government insurers in healthcare cost reductions.

But the fact that only a minority of employers are even attempting, and so few succeeding in actually measuring their ROI bodes ill for the future of EHM.  Not only does the lack of measured results make it more difficult to justify maintaining EHM investments – it also makes it impossible to develop evidence on which employee targets, which wellness or risk dimensions or diseases yield the best results, and which approaches to managing them work best.  While faith in EHM’s value seems justified, it is no substitute for useful evidence of why, how, with whom, and through what interventions it works best.

It is an unfortunate, though unavoidable reality that measuring the results and ROI from EHM investments adds to the costs of programs, and thereby decreases the chances of a positive ROI and the net savings achieved.  The difficulty and costs of measuring ROI are clearly the major barriers to rigorous evaluation, and the apparent willingness of employers to continue EHM investments on faith. 

Among employers surveyed that offered incentives, for example, only 8% believed that their investment would yield less than a breakeven return, while 21% expected a breakeven, and 70% a better than breakeven return.  Those without incentives had only slightly less positive expectations, with 5% expecting a loss, 32% expecting breakeven and 63% expecting better than breakeven returns.  But if expectations are relatively low, it is understandable that employers are reluctant to invest even more in measuring results, knowing that the costs of measurement, themselves, could threaten positive returns.

Fear of failure is always a major barrier to taking risks, and one that naturally applies to EHM investment decisions.  The risks include the potential consequences of being wrong: social (they’ll think you an idiot), quality/performance (you won’t get what you paid for), physical (may incur damage), time (lost in getting it right the next time), psychological (you’ll feel like an idiot) and financial (you lose the money you spent, perhaps lose revenue, incur other costs as well), and personal (you may lose your job or career prospects).

In such cases, and when learning the truth will add to costs as well, it is perhaps understandable that only a minority of the employers studied even attempted to measure results.  Moreover, it has been shown in a number of EHM studies that results tend to improve over time, so evaluations after only one year may mislead investors.  One study, for example, found savings of only $233 per participant in the first year, then $375 in the second, and dramatic improvement to $944 and $950 in the third and fourth years. [G. Stave, et al. “Quantifiable Impact of the Contract for Health and Wellness” JOEM 45:2 2003 109-117]

But for EHM to achieve both wider adoption and the most appropriate levels of investment, it must be rigorously evaluated, and as frequently as possible.  With ample cost savings available through reduced absences and increased productivity, to say nothing of positive quality, customer satisfaction and revenue potential, employers should not fear bad results.  Hopefully, more employers will invest in careful measurement and report both which measurement methods and which EHM interventions worked best for all of us to learn from.

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