Archive for Health Management
by Scott MacStravic
May 1, 2008 at 9:12 am · Filed under Business of Health, Health Management
The major emphasis in “consumer-directed healthcare” proposals for reforming consumers’ healthcare behavior – turning them into prudent and well-informed purchasers of sickness care when needed. This would be in sharp contrast to the pattern of purchase behaviors where someone else is responsible for paying, and consumers feel entitled to as much care as they feel like getting, at least if they are insured well enough to cover the costs.
But there is an equal and potentially more valuable effect that may arise from shifting more costs, responsibility and information to consumers with respect to sickness care costs. They may begin to seek, on their own, ways to manage their own health so as to reduce their risk of and thereby expenses for sickness care. Already, employers, commercial insurers and government insurance programs have enrolled millions of people in free-to-participants health management (HM) programs, in any one or a mix of: general health and wellness promotion, risk behavior or condition prevention and correction, and chronic disease management.
While the costs of payor-sponsored HM programs tend to be lower than what consumers could purchase as individuals, this is not always the case, particularly when payors don’t get involved until consumers are patients with complex and expensive chronic diseases or multiple co-morbidities, where costs of disease management can run to over $5,000 a year per participant. Consumers have access to a wide range of differently-priced options if they wish to take charge themselves, and are willing to pay out-of-pocket for that right.
Concierge Physician Practices
“Boutique”, “concierge”, “retainer”, “membership” or “patient-paid” practices were started primarily to offer premium access, availability, amenities, and advocacy relative to sickness care when they were introduced just over a decade ago. But most of the later-introduced examples were started, or have chosen to include major proactive HM services along with sickness care, and a few specialize entirely in HM, offering no sickness care.
These practices charge as little as $50 a month, and as much as $100,000 a year, though most are in the $1,000-2,000 range. The MDVIP practices, numbering over 150 in 16 states cite the fact that “VIP” means “value in prevention”, not merely “very important patient”. And they have proven the value to payors, as well as patients, in their services, with dramatic reductions in hospital inpatient care utilization and expense among their patients, compared to average Medicare patients, and members in the best managed care plans. (www.mdvip.com)
Cash-Only Practices
Some physicians have offered health management services on a patient-paid fee for service basis, rather than annual retainers. These are typically “opt–out” practices where physicians chose to reduce their overhead to a minimum by not dealing with insurance, though they normally provide the paperwork necessary for their patients to seek reimbursement for their payments from insurers. I recall an early adopter of this approach was a practice called “HMNo” in Denver, though it has since changed its name and become a retainer practice.
At the “Beyond Care” practice in Branford, Connecticut, the physician offers packaged HM programs related to wellness, fitness, stress management, nutrition, diabetes/metabolic syndrome, etc. and lasting from three to six months. These programs were offered at prices between $1800 and $2800 when I first encountered them, though a recent visit to the practices website found no prices mentioned. (www.beyondcare.net) The Tempus Clinic in Los Gatos, California offers a wide range of HM programs, including its health club memberships, that were once priced at between $10,000 and $30,000, though a recent visit to its website also found no prices mentioned. (www.tempusclinic.com)
Retail Medical Clinics
The majority of these convenient, low-cost, nurse-practitioner-staffed clinics focus almost exclusively on routine sickness care, at convenient locations, affordable prices, and easily accessible hours. But at least some have added significant proactive HM services to their offerings, in addition to the usual array of physicals and immunizations. These are the RediClinic locations, of which there are seven in five states in the South. These offer a “StayWell” set of services to complement their “GetWell” treatments.
These include extensive health risk screening packages, ranging in price from $39 to $89, as well as traditional physicals. And the clinics also offer a four-visit “Stop Smoking for GoodSM” program priced at $128. And they have recently added a variety of “Cholesterol Challenge” programs at some locations, ranging from $49 to $89 in price. They also offer a “Heart Health” program at prices of $79 or $129. (www.rediclinic.com)
Low-End Options
HM programs that rely mainly on automated analysis of health risks and automated online communications, or website self-service can afford to charge highly affordable prices per participant for payor-sponsored population-focused HM programs. The same options are available for individual consumers, as well. Three physician practices in Colorado offer a fitness/weight management program called Physicians Fitness Coach, through incentaHEALTH, in Denver. It includes physicians, along with e-mail communications, and is priced at only $19.95 per month.
Another Colorado practice, Family Physicians of Western Colorado was able to apply the Chronic Care Model of disease management for its diabetes patients at an additional cost to the practice of only $104 per patient per year. It lost money in this effort, because it could only get one health plan to pay for this program, and that plan covered only a minority of its patients. [P. Mohler & N. Mohler “Improving Chronic Illness Care in a Private Practice” Family Practice Management 12:10 Nov/Dec 2005 50-56] But had it chosen to offer it to self-paying patients, this would easily have represented an affordable option for most patients.
With growing numbers of consumers choosing, or being offered no other choice but high-deductible health plans, these self-paid options are becoming increasingly attractive to many of them. Even the higher-end practices such as the MDVIP examples are attracting middle-income patients, some of whom find their annual retainer is a bargain compared to the deductibles and co-payment costs of their insurance plan. And many such plans permit employees to use their health spending accounts to pay for the retainer.
With other options available at prices as low as $20 per month, the number of consumers who could afford to pay for their own, particularly if they lack insurance coverage, is sure to increase. Whether the number who choose such programs will also increase is another question, however. Many will no doubt prefer to try personal HM on their own, without help. But most such efforts have failed, and in the long run, affordable self-paid options may become widely popular.
by Scott MacStravic
April 23, 2008 at 3:59 pm · Filed under Employer CEOs, Employee Health Management, Health Management
There are four simple ways to deal with any differences between voluntary and default participants, though the effectiveness of each will vary in each EHM situation:
- Minimize per participant costs
- Find out what the different success rates are for voluntary vs. default participants
- Offer success incentives
- Offer choices vs. predetermined EHM programs
1. If default participants deliver lower gains per participant, then EHM providers and clients should make sure that the costs per participant are still less than such gains. One approach is to use charges and costs that apply per population, rather than per participant. When fees are set and costs incurred on this basis, and there are no added costs based on how many participate, increasing participation rates will always end up doing at least as well and usually doing better by using the default option. As long as even one more participant than would have enrolled voluntarily succeeds, results will be better.
On the other hand, if EHM providers charge per participant, then the default option may result in too many participants and too high costs for the average gain per participant to overcome. The provider’s or employer client’s past experience should reflect what the average gains per participant have been under the most common scenarios:
* Voluntary enrollment
* Voluntary enrollment with incentives
* Default enrollment
If default enrollment strategies in the past have reduced the average gain per participant to levels that yielded lower ROI ratios and amounts than the two voluntary alternatives, then either costs/charges per participant should be lowered, or the option should not be chosen.
2. Assuming that EHM providers have worked with both voluntary and involuntary participants before, each should be able to describe what the different success rates for each have been, so that the expected benefits vs. costs for both cohorts can be at least estimated. Providers may be willing to guarantee some minimum ROI, for example, putting the onus on them to make sure that the EHM program works well enough among all participants to achieve desired results.
If past experience has indicated that success rates per participant have been higher for voluntary participants, but the success gains for default participants have been high enough to justify their inclusion, given costs per participant, then the default option may make sense. Basing the decision on the EHM provider’s experience, rather than the client’s means there is the risk that the client’s situation and population at risk may be different, so extrapolation from such experience may be inaccurate. A pilot test of the client’s population may be used to check this possibility, or the provider may be willing to guarantee acceptable results with the default option.
3. The use of adequate success incentives rather than participation incentives should encourage significant effort among default participants. Whenever enrollment in the EHM program is by automatic, default with opt-out choice, paying incentives for participation doesn’t make much sense anyway, while incentives for achieving whatever is defined as success can motivate both voluntary and default participants. Such incentives will add to the costs of each success, however, so their amounts will have to be sufficiently less than the average gain per success to ensure positive ROI ratios and adequate ROI amounts.
The gamble involved in success incentives is that they will have to be paid to those who would have succeeded anyway, as well as those who would not. So EHM providers and their clients should compare scenarios involving only voluntary participants and no success incentives compared to default participation with success incentives to see which delivers the best mix of ROI ratios and amounts. Another option is to base the success incentive on improved productivity and performance, rather than health behavior/status improvements, so that the employer will see that the direct economic gain from success justifies the incentive.
4. Even though enrollment in the overall EHM program may be automatic by default, and the usual choice for employees is to participate or not, the provider and employer client may offer those automatically enrolled a choice as to which of multiple EHM interventions for which each is eligible each prefers. This may mitigate negative effects of “forced” enrollment. Moreover, when employees voluntarily choose a particular EHM intervention, they tend to be more committed to their choice than when they have none. This may improve the success rate among participants, with or without incentives that add to costs per success.
When EHM programs are focused on productivity/performance impairment factors, rather than just diseases to be managed or risks to be reduced, chances are that virtually every employee in the workforce will be eligible for more than one among the combined diseases, risks and impairment factor programs offered. One EHM provider’s database of over 200,000 employees, for example, reflects that only 2.45% of employees had 0-1 impairment factors, while 43.02% had at least one risk or disease condition. [“Productivity Dashboard” HealthMedia.com Jan 23, 2007] Chances are the vast majority of employees can be offered a choice among at least two different EHM interventions, making at least that aspect of EHM participation “voluntary”.
By employing one or a mix of these strategies, any negative effects of default participation in EHM programs should at least be mitigated, if not eliminated entirely. Only one of the four adds to costs, unless the employer has to sign up for more EHM initiatives in order to offer enough employees a choice between at least two when choosing that strategy. And a combination of more than one strategy should improve the overall success rates and ROI outcomes for both provider and client.
by Scott MacStravic
April 23, 2008 at 3:57 pm · Filed under Employer CEOs, Employee Health Management, Health Management
The default option is the technical term for arrangements in which people do not have to actively choose to participate in some program – they are automatically enrolled therein, with the option to decline. This saves the costs of efforts to obtain their participation, and usually results in far higher rates of participation than do arrangements where people have to enroll themselves. It has a number of applications in healthcare, as well as with employees, such as automatic enrollment in retirement plans. [S. Halpern, et al. “Harnessing the Power of Default Options to Improve Health Care” New England Journal of Medicine 357:13, Sep 27, 2007 1340-1344]
This same concept has also been adopted by some EHM providers. It has been highly effective in increasing enrollment in EHM programs, compared to those where individuals must actively opt in. Providers using this approach have reported participation rates in excess of 95%, where rates in most such programs rarely reach even 30% without incentives being offered and paid for enrollment. But incentives add significantly to costs, and make the achievement of desired ROI ratios much more difficult, though they may help with ROI amounts.
As described earlier - Promoting Success vs. Participation in EHM - incentive costs applied to all participants are automatically multiplied by what can be many times, depending on the success rate among such participants, which can vary from 0% to 100% in theory, and often vary by at least half that amount in fact. A $100 incentive paid to all participants becomes an added cost of $500 per successful participant in a smoking cessation where only 20% quit. And since the desired economic gains in a smoking cessation program arise from quitting, it makes it that much more difficult to achieve a positive and satisfying ROI ratio when the ROI denominator increases by $500 per success.
Participation vs. Success
In the evaluation of EHM programs, there has always been the potential for self-selection bias when the healthcare, disability and workers compensation costs, absenteeism and presenteeism rates, and other measures of success among participants are contrasted to non-participants as the basis for gauging the gain made by such programs. This bias reflects the self-evident possibility, even likelihood, that individuals who voluntarily choose to participate in such programs may be more motivated to make the behavior/lifestyle changes needed for success than are non-participants.
This bias can be identified and used to adjust simple side-by-side comparisons between participants and non-participants by measuring the costs of both in both baseline and participation periods. If non-participants’ costs were higher to begin with, and declined even though they did not participate, then only the decline in costs among participants between their baseline and participation periods that is greater than the decline among non-participants should be counted as probable effects of their participation. But if individuals are automatically enrolled, there may be too few people in the non-participant group for statistically significant differences to be found.
It is not the statistical significance that will concern most employers who invest in EHM, however, but the economic significance. If 95% of all employees targeted for participation enroll, and as a result, the total number who succeed in reducing their costs, improving their productivity and performance, etc. the employer is likely to be well pleased, regardless of whether or not statisticians are. It is the potential for the success rate being lower in the “default option’ case that should worry them.
If people who voluntarily enroll in a given EHM program are likely to be more motivated and ready to change, and as a result yield a higher success rate, then it follows that people who are automatically “default” enrolled, with the possibility of opting out, will not be as highly motivated as those who make the effort to actively enroll themselves. In such cases, the success rates of default participants would probably be lower than among those who would have voluntarily enrolled.
For example, those who actively/voluntarily enrolled may involve only 20% of those eligible, but deliver value based on a success rate of 50% among them, while the total of those enrolled by default involve 95% of those eligible but achieve a success rate of only 20%. This overall rate comes from the 50% success rate among those who would have actively enrolled if given the opportunity, plus a lower success rate among those enrolled by default. The success rate for those “involuntarily enrolled” can be determined, given these figures.
If the voluntary 20% of participants achieved a success rate of 50%, and the overall success rate for all participants was 20%, then of the total, 50% x 20% = 10% or half the successes came from those who would have voluntarily enrolled. With an overall success rate of 20%, this means that only 10% or half the successes came from the 75% of participants who would not have voluntarily enrolled, but were enrolled by default. This means that the success rate for those 75% was only 10% divided by 75% = 13.33%.
On the other hand, it may also be the case that those who are most likely to voluntarily enroll are already healthier than the average member of the population, precisely because they are more motivated and concerned about their health. In such a case, the success rate among default participants may be lower, while the success gain, the economic benefit to the employer, may be higher. Since it is the gain due to success, not just the sheer proportion of participants who succeed, that determines the overall economic impact for employers, a higher success gain, even with a lower success rate, may prove to be better than a higher rate and lower value.
In the example used above, if the 20% voluntary participants have a 50% success rate with a $400 average success gain for each, they contribute 50% x $400 = $200 per participant to the total gain. If the 75% “default” participants, thanks to being at higher risk and more impaired to begin with, contribute as much as $200 divided by their 13.33% success rate = a $1500 average gain per success, their gain per participant will just as great as that for the voluntary group. In any case, as long as their average gain per participant is greater than their cost per participant, they are adding to the net value of the EHM investment by participating.
As long as the average success gain among default participants is positive, on average, the EHM client is ahead. By the same token, if the average success gain per voluntary participant happens not to be positive, due to their being “too” healthy in the first place, then their participation can be a drain on the overall gain when a default participation strategy is used. The only way to discover the effects of the default strategy is to use it and compare its results to that of voluntary enrollment options, both with and without incentives.
by Scott MacStravic
April 18, 2008 at 1:24 pm · Filed under Employer CEOs, Employee Health Management, Health Management
There are two major matching challenges in EHM:
- matching intervention to control groups in order to make evaluation of results scientifically valid and reliable; and
- matching the risk/reward potential and preferences of individual EHM participants to interventions that are most likely to deliver the desired results and return on investment (ROI)
To some extent, the two challenges can interfere with each other. When matched control vs. intervention groups are needed, pure science would argue that the population of interest should be split in half in order to achieve comparable samples. This automatically reduces the potential gain through a successful intervention by half, since it would reduce the number participating in that intervention by that much. This would likely be enough to discourage employers from doing any matching, since their success and financial gains would be so markedly reduced.
One employer, at least, got around this dilemma by choosing as its control group employees who were like participants in the EHM intervention in all important respects, save that they worked for another employer. This enabled rigorous matching of controls to the members of the intervention group, while still enabling the vast majority of its employees to participate, thereby maximizing the gain that was found to have resulted. [B. NAydeck, et al. “The Impact of the Highmark Employee Wellness Program on 4-Year Healthcare Costs” JOEM 52:2 Feb 2008 146-156
Matching the intervention to what has the best chance of succeeding with each individual participant, while adding greatly to the probability and amount of gains likely, will also add to the costs of the intervention, hence threaten ROI ratios in particular, and amounts as well, though not as dramatically. To make the best matches, a lot has first to be learned about individual participants. Then, this learning must be applied to customizing the interventions, making it more difficult to achieve economies of scale, as well as threatening the scientific rigor of the evaluation.
The science of learning which prospective participants have the greatest risk of future costs, in both the immediate and long terms, has been dramatically improved in recent years. The science of learning how best to predict the chances of success for individuals, and for tailoring the intervention to a mix of what can be justified considering that chance, and what will most likely realize that chance, is still in the dark or barely light ages.
Fortunately, the examples of the technology being used to predict costs can guide the development of technologies used to optimize chances of success. A host of insurance firms, for example, have decades of history in using technologies to gauge the risk of individuals. This same technology should prove equally useful in predicting the likelihood of EHM success.
Instead of using predictive modeling (PM) to “underwrite” populations, select who should be rejected or charged more because of their health risks, the growing number of insurance firms that are in the EHM business could use it to select the best prospects. PM technologies would have to be further developed to determine the best method for intervening with individuals, predicted costs vs. success, but the technology is certainly capable of doing that.
Tailored interventions have proven themselves, at least in the few cases where they have been tried. A customized asthma intervention program, for example, was able to increase the number of symptom-free nights among participants, reduce ER use by 37%, and enable three times as many patients to have their asthma under control as an undifferentiated educational effort. [“Tailored Asthma Intervention Shows Promise” Yahoo! News, Apr 10, 2008 ]
Tailoring has already been partially applied in EHM, with populations typically divided into low, medium, and high-risk segments, and differentiated interventions based on the costs vs. potential of such segments used in EHM, even with just healthcare cost reductions in mind. Once EHM includes the total economic benefit of its success — counting healthcare, disability and workers compensation claims along with absenteeism and presenteeism reduction, plus productivity and performance improvements – a far more accurate and optimistic expectation of its value should enable better matching.
While matching interventions to predicted gains and participant characteristics that affect their success chances based on a few segments is better than nothing, it is nowhere near as promising as is matching by individuals. There are likely to be far more than three different cohorts of participants, since the factors that determine probability, extent, and best method to achieve success are likely to measure in the dozens, if not more. And differentiating for dozens of segments, or even tailoring to individuals will cost more, it is likely to yield more, as well.
If there are three or even four of five segments, the intervention must be geared to a probable gain that reflects only the average of all. Since half of the members of the segment will normally promise above average returns, while half promise below, the use of the same intervention for everyone within that segment is simply the same as a one-size fits all approach, multiplied by three, four or five.
Using interventions designed for cohorts of one each will have a far greater chance of succeeding, plus should ensure that success for no member of the population never costs more than it is worth. And if the gains for every individual participant exceed the costs for that participant, the overall results must be success, where with segments, it depends entirely on how well the intervention works with the roughly half of the members of the segment who have better than average potential.
The interventions and costs for individuals can be set based on whichever intervention yields the best combination of probability of success times economic gain potential, not simply some standard amount below potential, in order to ensure acceptable results. Planning everyone’s intervention to cost 10%, 30% or even 50% of the potential, while ensuring, in theory, a positive ROI, would simply ensure the precise gain as the ROI ratio chosen delivers. Picking the best combination of gains times probability could do far better, by not ensuring costs must be any set amount.
The technology of PM is already close to being where it needs to be in order to achieve individual participant matching. All that is needed is to learn enough about which interventions work best in EHM based on the characteristics of participants, not just of the interventions. This may take some years to perfect, but it is something that we ought to be working on already.
by Scott MacStravic
April 14, 2008 at 2:14 pm · Filed under Employee Health Management, Health Management
There is a valid argument for conservative approaches to measuring the results of employee health management (EHM) investments. Among employers who at least go as far as formally measuring their return on investment (ROI) from EHM efforts, by far the most usual approach is to look only at healthcare, disability and workers compensation claims expense for savings. These costs are routinely tracked and reported already, and if measurement shows positive, acceptable or admirable ROI levels, why bother to measure further?
Unfortunately, limiting measurement to only the “low-hanging fruit” of claims costs can grossly undervalue the total impact of EHM. Employers that have measured other labor cost reductions — such as lower absence, presenteeism, and turnover – have found net savings that are two to five times as much as those of claims costs alone, averaging three times as great. So any employer measuring only reduced claims costs may under-invest in EHM, even cease investing at all, in the mistaken conclusion that economic gains are not great enough.
Moreover, healthcare, disability and workers’ compensation cost reductions may take years to show up to their full potential, as long as five to seven years in some cases. [P. Gotcher & D. Gresky “How the Natural State (Arkansas) Achieved Supernatural Productivity Improvement” HealthMedia Engage, Apr 9, 2008 (www.healthmedia.com)] By contrast, productivity improvements through reduced absenteeism and presenteeism have been shown in as little as 30, and usually by 90 or 180 days.
Of course, it adds somewhat to costs to add measures such as absenteeism and presenteeism reduction. If an employer wants to look even further in measuring results, by evaluating improvements in technical and service quality of workforce performance, increased customer loyalty and revenue, for example, measuring such results can add further to costs. Merely discovering that productivity and performance measures have improved is one thing. Achieving confidence that they have occurred at least partially, if not wholly, due to improved employee health gained by EHM investments is more complicated and likely to be more expensive.
Decisions regarding whether or not to measure productivity and performance gains, and make a case for them having been caused by EHM investments, can be made on the basis of the marginal costs of such measurement compared to the marginal benefits discovered thereby. After all, there would be no added operating costs or fees charged by EHM suppliers, since there is no added EHM effort per se, only added costs of measuring what it is already achieving. Even if the added measurement costs amount to hundreds of dollars per successful (improved) employee, the added benefits discovered should be in the thousands.
Of course, even if the ROI for measuring more outcomes achieved is positive and high, the costs of measuring, per se, add nothing by themselves. The results achieved were always there – only the knowledge of them is being gained. But this knowledge is likely to be worth far more than the costs of gaining it, since it will enable employers and EHM suppliers alike to gain essential insights into where the best investments are for the future, as well as into where improvements can be made in EHM interventions.
The biggest gain in added understanding of the value of EHM will likely come from identifying factors that are responsible for reduced productivity and performance, even if they do not cause much in the way of healthcare, disability and workers compensation claims expense. Factors such as lack of sleep, smoking, alcohol abuse, unsafe lifestyles in general, poor nutrition and fitness, and particularly emotional problems that fall short of being diagnosed “diseases” can reduce productivity and performance far more than they add to healthcare costs.
Moreover, factors not directly related to health, such as employee motivation, job and life satisfaction, personal competencies and confidence, supervisor behaviors, pride and trust in their employers, for example, can affect productivity and performance far more than health does. By focusing on improving productivity and performance, rather than just claims costs, employers and EHM suppliers can end up improving workforce, and thereby the employer’s performance, far more than EHM per se, by integrating EHM with other means, such as pay for performance, performance management, etc.
While measuring the full impact of EHM investments may add significantly to costs, particularly if the employer is a stickler for accurate, precise, and rigorous evaluation, it will can add dramatically to the overall operational intelligence available to employers. By integrating EHM with value-based benefit design, and a holistic strategy for improving workforce productivity and performance, both the value of EHM and the performance of the organization should be improved, dramatically in many cases.
by Scott MacStravic
April 14, 2008 at 2:21 am · Filed under Disease Management, Employee Health Management, Health Management
The same error in logic keeps turning up in evaluations of proactive health management ((PHM) efforts, with recent examples relative to both disease management and prevention. It is the attempt to reach an overall conclusion about PHM in general, as well as its various components, as if each is a uniform “solution” to a single “problem”. Since this is simply not the case, all such efforts are doomed to failure from the start, but manage to capture headlines when they are reached, nevertheless.
It is difficult, and probably arrogant even to attempt, to conclude whether this consistent pattern is the result of ignorance or deliberate choice, but both the media that report results in such cases, and the organizations that sponsor or conduct the analyses, are prone to the same mistake. Medicare, for example, consistently attempts and publishes conclusions about its disease management (DM) demonstration projects as if DM were one consistent, universal “treatment” to one consistent medical condition.
In a recent example, the published article on the subject reminded us of DM’s failure to save money. [R. Abelson “Medicare Finds How Hard It Is to Save Money” New York Times, Apr 7, 2008] This conclusion is based on results from eight DM suppliers who remain in a demonstration project begun in 2005, addressing different populations with different conditions by means of different interventions. Yet both Medicare and the report strive to arrive at a general conclusion that DM does not save money.
A similar conclusion was reached by another newspaper with respect to the value of prevention, in general. [D. Brown “In the Balance” Washington Post, Apr 10, 2008 (www.washingtonpost.com) ] It cited a series of studies conducted since 1986 that have come to the conclusion that prevention costs more than it saves, citing examples such as costs as high as $160,000 per life saved for men, and $240,000 for women with high levels of risk for heart attack, through conventional medical treatment therefor.
The problem with prevention, in general, is that people vary widely in their risk of actually contracting a disease, even if they have similar risk indicators. It is necessary to treat the risks in many more people than will would have turned out to be sick as a result, so it may be necessary to treat ten or a hundred more than actually deliver the desired savings of not having a disease that they would otherwise have had.
It is an unfortunate reality of the model for evaluation used in such cases that its very rigor in stipulating what is “scientific” works to limit the probability of success in what is evaluated. The best way to succeed in either DM specifically, or prevention in general, is to treat both as a “marketing” challenge – identify which people are the best prospective “customers” for using the proposed “product”, specifically in terms of their potential for success. Then, customize the intervention to match both what such prospects are most likely to “buy” and what is most likely to deliver a positive return on the investment involved.
Such a matching process, i.e. making the intervention fit the individual prospect — in terms of both likelihood of their “buying” or engaging in it, and probability of doing so realizing as much as possible of their individual potential for delivering savings – would optimize the return on investment. Unfortunately, it would also violate the “rules” of scientific evaluation from beginning to end. It would not provide a single form of the intervention, but one that varies by individual, and not to a randomly assigned group, but one composed of people who were “self-selected” to different interventions by design.
Marketers have long understood that this is the best approach to maximizing response among prospects. By at least segmenting populations by purchase potential and propensity, plus tailoring messages accordingly, the success of advertising efforts can be significantly improved. Identifying the best targets for DM or prevention makes equally good sense, in terms of promoting success. Unfortunately, it would require a far more complex application of science to demonstrate this, and too often, only a one-size-fits-all intervention, applied to a heterogeneous population, with no differences permitted is the rule for science.
Even the frequent reports of disappointing or equivocal results from DM and prevention include examples of particular interventions that do work, along with those that do not. It is only the overall picture that is reported, whereas it would make more sense to be delighted by even a few examples that work, in order to determine how to improve interventions, rather than condemn all with the same brush. If the same logic were extended to identifying which are the best prospects, and customizing interventions, the overall picture would probably be considerably more positive.
Moreover, we would learn more about what does work, instead of denying ourselves potential gains because a majority of science-restricted interventions do not. Presumably the idea is to gain success, in reducing sickness care use and expense, improving the quality of life of consumers, saving money and improving performance for employers. The aim for success should be the dominant concern when planning, implementing, and evaluating DM and preventive interventions, not scientific restrictions that reduce the chances of such success.
by Scott MacStravic
April 14, 2008 at 2:18 am · Filed under Health Management
There are a large number of health management challenges that can probably best be handled via national efforts, rather than by individual insurers, employers, or even local governments. Charitable organizations, associations, business alliances, and other non-governmental bodies may work with or without government support on such challenges. But there is likely to be a significant difficulty when evaluating such efforts, whenever there are more than one “solutions” being pursued simultaneously.
One classic example is that of efforts to eradicate, or at least dramatically reduce the HIV/AIDS epidemic that has been endemic in Thailand. The “solution” chosen as most practical and effective was a national effort to persuade men to use condoms when engaging in sexual activities with Thailand’s sex workers. But there were at least two different approaches taken to achieving this change in behavior.
One was aimed explicitly and directly at men, and sponsored by the national Population and Community Development Association (PCDA), a not-for-profit organization founded in the 1970a to promote family planning. Sexual activities logically fit into its larger mission, and a major national effort to encourage condom use resulted. The PDCA used a playful tone in “social marketing” to men, and engaged allies such as the “Cabbages and Condoms Restaurant” in Bangkok to help in the effort.
It included a statue made of a wide variety of colored condoms to indicate that condom use could be discussed publicly. The restaurant, which is owned by the PDCA also uses its profits to fund micro-loans to people with HIV who want to start their own businesses. Thailand has been extraordinarily successful in its HIV/AIDs efforts, with a 87% reduction in new infections. [J. Goldstein “Cabbages, Condoms and HIV in Thailand” Wall Street Journal Online Health Blog Apr 11, 2008 (blogs.wsj.com)]
Meanwhile, a recent book cites Thailand’s efforts to engage sex workers directly in the HIV/AIDs prevention effort. The workers were gathered together in groups for discussion of how they could be key agents in the effort if they demanded that their male clients used a condom whenever engaging in sex with them.
This was a major behavior change for the sex workers, who normally took orders from their clients, rather than giving orders to them. Many were worried about losing clients and thereby reducing their earnings. Only by engaging the vast majority of them in the effort, so that men would get the same message and refusal of services from everyone in the same market, could the effort work. And it did, with the same almost 90% reduction in HIV/AIDs incidence cited as proof. [K. Patterson, et al. Influencers: The Power to Change Anything McGraw-Hill 2008]
Of course, it is mathematically impossible for both efforts to be responsible for the same reduction in new cases. Moreover, unless there were portions of Thailand that were subjects of one of the interventions but not the other, there is no scientific way to determine how the credit should be shared. It may be possible to separate out men who have changed their behavior without having had any contact with sex workers, but visiting sex workers is far more common in Thailand than in the US, for example, and if only such men as had no such contact are counted as “successes” by the direct social marketing evaluation, it may be thought to have made only a small difference.
There is a pure mathematics approach to sharing the credit, which also happens to be the “common sense” approach. If both approaches can logically be accepted as having some effect, and that effect could be anywhere from minimal to all, the best guess for the actual credit due to both would be 50%, an example of “Bayesian” logic, or common sense. If, for example, the estimated savings to the country are a total of $100 million, for illustration purposes, and the costs of both programs were only $10 million each, then as long as either can be credited with at least making 10% of the difference, each could be deemed successful.
Using a “split-test” approach, where half the population, randomly assigned to one or the other, but not both, of the interventions, or better one where there were four groups — 1) getting no intervention, 2) getting the direct social marketing, 3) relying on sex workers as influencers; and 4) using both approaches – might have been tried. But if only one of these approaches actually works, it would mean denying the benefits of HIV/AIDS reduction to three quarters of the population.
There are times, particularly when the problem to be addressed is quite serious, and there is support enough to try multiple approaches, to simply adopt more than one in hopes that there will be more widespread and effective results than would otherwise have been the case. It would normally be better, however, to include at least a modest comparison trial, which may only require a few hundred or thousand people in each, to test which one works best separately, as well as compare results of use of both or all together, since if only one is necessary or effective, it would be wasteful to invest in more than that.
Since the HIV/AIDS example is one involving a “binomial” outcome, i.e. getting the condition or not, the sample size needed to compare the success rates of the different methods can be determined in advance. In the Normal distribution approximation of binomial distributions, the largest standard error for a sample would be that produced by an equal split of yes and no results, when it is 0.50 x 0.50 = O.25 divided by the square root of the sample size.
For a sample of 100, for example, the standard error would be 0.25 divided by 10 (the square root of 100) = 0.025. Such a sample would have over 95% confidence in its result plus or minus two standard errors, or 0.050. As long as the results of different samples of 100 people, where different interventions have been applied, differ by at least 10%, i.e. there is no overlap between the 95% confidence range distribution of both, then the results of even such a small sample may suffice to select the best option.
To achieve 99.5% confidence, samples of 10,000 people with each of the tested interventions would be needed, but even that would not be outrageously difficult or expensive in a large population such as that of Thailand. And even if some might argue for “leaving well enough alone”, it usually works better to know more, rather than choosing deliberately to know less, about how we invest in the health of populations.
by Scott MacStravic
April 11, 2008 at 2:33 pm · Filed under Employee Health Management, Health Management
The EHM Market
The biggest trend relates to the scope of “employee health”, including the number of employees, types of health challenges, and measures of impact that are being addressed. From original modest “worksite wellness” efforts by employers, and disease management efforts by insurers, the scope is moving to “total population health management”, with virtually all employees targeted for some kind of health maintenance, risk condition or behavior correction, or disease management, together with productivity and performance impairment factor reduction. The economic impact for employers is moving toward both “direct” effects: health care, workers compensation and disability expense; and “indirect” effects: workforce productivity, performance, technical and service quality, with overall labor costs as well as revenue effects being discovered.
Together with the broadening of EHM’s scope and success measures is emerging the coordination or integration of EHM strategies and initiatives with overall employee benefits and other management efforts to improve workforce productivity and performance, including pay for performance, training and development, as well as employer internal investments in EHM, as contrasted with outsourcing total responsibility. Where worksite wellness may have been the responsibility of a special wellness director, or Human Resources, the integrated approach that includes “value-based” EHM is more likely to be directed by senior executives and business owners.
Overall, the employer market is bifurcating — between those that are getting out of the employee health benefit business entirely or almost so — and those that are gradually realizing the full extent of economic benefit that is possible through a comprehensive/integrated approach to employee health, productivity and performance. There is still plenty of room within the EHM market for growth, though the competition for it this market is also growing.
Competition
Both the numbers and types of competitors in EHM are growing, as specialized suppliers are being joined by healthcare organizations, by employers that are not simply managing their own EHM programs, but offering them to their peers, by insurers that are offering them to their clients and non-client employers alike. Mergers among all of these keep the sheer number of specialty suppliers in check, but they are getting bigger and moving from limited to broader services and scope in the process.
As many employers look to reduce the number of EHM providers they deal with, the market is shifting to preference for “one-stop shopping” suppliers that can deliver a comprehensive range of interventions, addressing all but the rarest of conditions. Suppliers once limited to insurer markets and disease management, for example, are generally adding in employers and wellness, health risk behaviors and conditions, as well. They are also moving to reduce their overall costs, since traditional DM interventions have tended to be too costly (e.g. Medicare demonstration project failures) for even chronic conditions, and far too costly for wellness and risk management efforts.
Guarantees
In the early years of disease management, specialty suppliers often guaranteed results. They were able to succeed in many cases because they used claims analysis to identify DM targets, and counted after vs. before health care costs as due to their DM interventions, ignoring the effects of regression to the mean among high-cost participants. This practice died out as insurers and employers became more sophisticated about evaluations, but it has returned among at least some EHM suppliers. They tend to guarantee results not in the first year, but more likely in two or three years, however. Thanks to counting productivity and performance effects, this is a lot safer practice than was the case with DM.
Assessment
EHM begins with an assessment of the workforce health and productivity performance situation. There have generally been three basic approaches to this task, involving: 1) claims analysis; 2) biometric screening; or 3) workforce survey questionnaires. Claims analysis is limited to health care, workers compensation and disability claims, and tends to be more reactive than proactive. Biometric screening is more likely to be accurate than survey results, but does not supply productivity/performance impairment data, nor indications of employees’ attitudes and readiness/likelihood of changing their health behaviors. Surveys tend to yield incomplete data, when less than all employees participate, and self-reporting is notoriously unreliable with respect to a lot of conditions and behaviors. The trend is toward combining biometrics and surveys, even including monthly or quarterly claims analysis in order to update targeting. Such combinations can make the assessment more expensive, though more complete.
Assessments are moving in the direction of addressing more of the current gaps between individual and workforce health, productivity, and performance and what could be achieved in optimal circumstances. This means far more use of predictive modeling to identify the risk/reward potential of each individual, or at least of particular segments based on their level and type of risks and problems. This potential is what determines the limits of a reasonable investment.
Engagement
Getting employees to participate continues to be the major challenge, particularly as EHM moves toward including the entire workforce as potential sources of economic gain across the full spectrum of health challenges and productivity/performance benefits. Incentives are largely believed to be essential in achieving early engagement, though critics question their long-term effects, and note they significantly reduce employers’ ROI ratio by adding to costs.
Some suppliers claim that individualized recruitment communications based on HRA surveys can yield high levels of participation at significantly lower costs than is true with incentive-based recruitment. Incentives for making specific behavior changes or achieving specific health status improvements are problematic, given the combination of HIPAA, ERISA, and ADA regulations. Included among them are requirements that if employees are offered incentives for changing unhealthy behaviors, those who already avoid such behaviors must be eligible for similar incentives. The same applies to unhealthy conditions, making the potential costs of incentives that much greater.
Coaching and Monitoring
The technologies used in ongoing coaching of EHM participants and in monitoring/responding to their progress of lack thereof are moving toward lower costs, in order to identify and use methods and costs that are matched to the risk/reward potential of either population segments (e.g. low, medium, high risks, or specific conditions and behaviors) or customized to individuals based on their overall personal risk/reward potential. This requires careful analysis of survey data on individuals or segments, and tends to promote outsourcing of EHM in order to avoid risks and handicaps associated with employee concerns about their employer knowing about their health and impairment.
There is a general belief that some EHM challenges, or at least some of the people who have them, require different types and intensity levels of interventions in order to succeed. Coupled with the widely varying degree of risk and impairment levels across the workforce, this normally means a serious challenge to any one-size-fits-all method for coaching and monitoring. The biggest challenge to both optimizing EHM results and competing with other EHM providers is the need to match interventions with risk/reward potential as much as is feasible and affordable, in order to achieve optimal results for clients.
Monitoring can also be an essential element of incentive authentication = making sure participants qualify for rewards, particularly those that continue as long as participants maintain an improved health behavior, such as tobacco abstinence, or condition, such as weight loss. Employers want to be sure that employees do not “game the system” by claiming eligibility they do not deserve.
Evaluation
As strategy, competition, assessment and coaching move toward more comprehensive involvement of all economic impacts of EHM, to say nothing of other value-based investments aimed at similar results, it is natural that evaluation move in the same way. Evaluation is getting both more sophisticated and complex in methodology, as well as in types of impacts to be measured. This necessarily adds to EHM costs, and requires agreements between employers and suppliers regarding which will do what in the way of evaluation, since employers, themselves, often have the best access to many of the impact measures. It also adds to the complication that employers incur significant costs that must be added to the denominator when calculating ROI ratios and net gains
by Scott MacStravic
April 4, 2008 at 1:21 pm · Filed under Health Plan/Payer CEOs, Business of Health, Retail healthcare, Health Management
Just last week, I described the many developments that, together, may comprise a “tipping point” in the movement toward proactive health management (PHM) as a complement to and means of reducing the need, demand, and expenditures for sickness care. Today, two news stories have described further developments in the same direction.
In the U.K., employers are already ahead of their U.S. counterparts in the use of health management for their employees. Since the government covers employee health care costs through the National Health Service, employers are focusing on even broader ranges of financial advantages from improving employee health. These include: reduced turnover from family or employee health causes as well as improved morale and satisfaction; often dramatically reduced absences; improved customer satisfaction and loyalty; and even new business that results from retained employees and improved service.
And now, the range of providers being enlisted to support the U.K.’s overall health management is being greatly expanded by including pharmacists in such efforts. The Health Minister there is pushing for the inclusion of pharmacists as providers of screening tests and vaccinations, even prescribing some drugs in particular cases. [J. Goldstein “In the U.K., a Push for Primary Care from Pharmacists” Wall Street Journal Health Blog Apr 4, 2008 (blogs.wsj.com/health)] In this, they would be emulating the many examples of pharmacist-based PHM for chronic disease patients, such as the Asheville, North Carolina project that has been successfully doing so for diabetics for years.
Meanwhile, there is another story about the development, in the U.S., of a retail clinic specifically and uniquely for healthy people, where most are intended for those with minor sickness problems. The clinic, called WellnessMart and based in California, describes itself as “The New Way to Healthcare”, and offers health services, health education, and health insurance, as well as health products onsite.
It is owned by physicians, including Richard McCauley, MD, and recently moved from the hallway of a health club to a strip mall in Thousand Oaks, according to this article from the Wall Street Journal Blog: “A Retail Clinic for Healthy People”. It claims to be “…revolutionizing the way America accesses care by making preventive services available through convenient retail stores. These stores are designed to provide healthy people the quick, easy, understandable tools and information they can use to make sure they avoid disease.”
This is in contrast to reliance on physicians’ offices. “Until now, the basic tools that healthy people need to prevent disease have been confined to the doctor’s office, a place designed for sick people.” The “mart” offers free workshops throughout the day to help people understand their body and how it works, to ensure people know not merely what to do in order to be healthy, but why. It offers clients a $100 “Wellness Bucks” reward for every year they renew their health insurance through WellnessMart.
Of course, all retail clinics offer some preventive services, such as brief physical exams for school, common immunizations for flu and pneumonia, for example. The RediClinic chain offers a wide range of “Stay Well” services to complement its “Get Well” services. But the Wellness Mart seems to be the first to focus entirely and exclusively on promoting health and preventing sickness.
It will be interesting to watch the Wellness Mart to learn if this business model works, at least in the California locations where it is offered. The idea of offering a different place for wellness vs. sickness care may be appealing to consumers, or physicians and retail clinics may be able to combine them in a logical and complementary way that works even better. But clearly, the movement toward wellness is growing.
by Scott MacStravic
April 1, 2008 at 11:02 am · Filed under Employer CEOs, Employee Health Management, Health Management
In an earlier posting on “The Challenge of Authentication” (Jan 7, 2008), I noted the importance of authenticating the participation, behavior changes, health improvements, and economic gains achieved by employees in order to make employee health management work better for employers. The payment of incentives without methods to ensure that employees deserve them would be an open invitation to gaming of the system, and underperforming EHM initiatives.
But authentication is equally important to employees, themselves. For example, if employees sense that they can gain incentives, or even if it is only other less honest employees who do so, without making the necessary effort, that can reduce their motivation to invest time and effort in achieving real change. As a result, they will not achieve, or at least achieve less than optimal results for themselves, in terms of personal health and life quality, as the normal “side effects” of improving their health behaviors.
For example, if they do not actually quit smoking, but merely report that they have, in order to gain a few hundred dollars in incentives, they will gain those dollars, but miss the greater financial gains available from not having to buy increasingly expensive tobacco products. These gains can easily amount to a thousand dollars and more in avoided expenditures, which could be tracked and recorded in their personal EHM record of accomplishments.
Qualifying for incentives without having to achieve actual changes in behavior, health status, or productivity and performance at work will also cheapen the value of the incentives, themselves. Since the impact of extrinsic incentives tends to diminish with time, from being perceived as a reward for “good behavior” to merely an entitlement, gaining incentives without actually having to work for them will surely reduce their impact even further.
But the worst impact of being able to gain incentives without authentic effort and accomplishment is likely to be that employees who do so will not actually experience any personal gains except for the incentives, themselves. They will almost automatically have less respect for their employers, who have allowed them, or even their peers, to fool them into paying for nothing. And they will not experience the personal benefits of better health, or the psychological benefits of achieving actual change.
As is described by Chip Conley in his book PEAK: “How Great Companies Get their Mojo” from Maslow Jossey Bass 2007, employees can be motivated, at least minimally, by motives related to their needs for survival and belonging. But to engage them at higher levels of productivity and performance, their needs for success, achievement, self-actualization and personal transformation are more powerful. Emotional competencies are where the full value of human capital tend to lie, and will not be engaged without employees feeling that they are really accomplishing something for themselves, their family, and even something larger, rather than merely winning a reward.
Gaining rewards without actual behavior and health status changes will also not even gain employees the respect of their peers, except for the grudging respect given to those who successfully cheat. And it may even diminish the pride their peers gain from real achievement, once all realize that rewards can be won without it. By contrast, real achievement, authenticated for all to recognize, can gain the respect of others, and is more likely to do so than inauthentic accomplishments.
For firms that still operate in what has been called “theory X” management, where it is believed that employees have to be commanded and controlled, do not really want to work, and have to be “conditioned” by extrinsic cues and rewards in order to do anything, the idea of authentication will fit well. But it is equally important in theory Y managed organizations, where it is accepted that people are naturally motivated to work, enjoy controlling their own environments and achieving personal goals.
While “transactional” leadership (theory X) is still the dominant mode, in spite of strong and long-established evidence that “transformational” leadership works far better (theory Y), authentication is essential in both, though operates differently in each. It is the prospect and satisfaction of achieving personal and social, not merely organizational goals that drive employees to invest their best efforts, whether it is in their work responsibilities or EHM.
It is employees’ unique and normally unrecognized personal goals and values that will drive the greatest engagement and effort in EHM. This includes idiosyncratic aspirations and dreams that employers normally know nothing about, and it is not necessary that they know what they are for individuals. But if employees are encouraged and enabled to set their own goals, and to track their own progress toward and achievement of these goals, they will gain that much greater a sense of self-esteem, self-confidence, and self-actualization as a result.
Achievement of even social goals can be a source of motivation beyond self-actualization. Employees who invest in fitness by walking or biking to work will automatically also be contributing to “saving the planet” by reducing vehicle emissions that contribute to global warming. Some may, if invited, agree to donate some of their employer-paid incentives, or personal savings from such cheap forms of “transportation” to work to causes they deem important, giving both incentives and personal savings another dimension of value.
Such authentic investments and accomplishments can work equally well at the team level, if employees are joined in team efforts and incentive schemes. Such joint efforts will enlist the added motivations of social/peer pressure and support in promoting effort and achievement, as well as adding the impact of competition to authenticated efforts and achievements. They can also enable employers to achieve their goals with lower overall incentive payouts, reducing their costs and thereby improving their return on investment.
While extrinsic incentives are often essential or at least helpful in initial stages of EHM strategies and initiatives, they lose impact, or have to be increased over time in order to retain impact. And they always add to the size of the “costs” denominator or offset to ROI levels. In contrast, personal and social motivations can continue to be as strong as ever over time, as long as employees know they are making progress toward or maintaining such goals.
Personal and group recognition will only have meaning if it is meaningful to employees, and if they know they deserved it by achieving authentic improvements. Just as employees can be motivated by a company mission such as “To restore people to full life and health” (Belken pacemaker firm), they can be motivated by personal and social goals where progress toward them through EHM can be authenticated. If the U.S. Army recruiting slogan “Be All You Can Be” can work to enlist people in an unpopular war, authentication of personal and team progress toward becoming all they can be through EHM should be at least as effective for employees.
In many cases, employers can enable employees to authenticate their own efforts, through devices such as pedometers to track walking or running efforts. Progress toward weight loss and blood pressure or sugar level reductions can be authenticated by scales or home testing devices. It has been frequently demonstrated that employees who are able to keep track of their “scores” or effort in some way are significantly more likely to persist in their efforts, so authentication works in that mode as well.
If employers are able to empower employees to authenticate their own effort and progress, as well as monitor both for their own purposes, they should be able to achieve far more, as well as be more confident in their achievements. While simply believing that progress is being made may be enough in the early implementation of EHM efforts, having authenticated progress, achievement, and value will tend to enable employers and employees, both, to better manage their efforts and investments.
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