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Messiness and Health Management to Change the World

by Scott MacStravic

I was struck by what I assume was an unintended connection between two recent posts to this blog – one by Nick Jacobs on “Change the World”, and the other by Fred Fortin on “Miscellany, Messiness and Medicine”.  To these I add an article noting a plan for fixing health care, published in WIRED in May [K. Philipkoski “Intel’ Andy Grove Pitches a Plan for Fixing Health Care” Wired.com May 2, 2007]

Andy Grove sees information technology as having a huge potential in fixing health care, along with efforts to “shift left” such care by moving it toward care that is not expensive, does not require hospitals and other institutions, but empowers consumers and innovative approaches to serving them such as retail clinics to take on otherwise highly expensive care.  High-tech gadgets can be used to monitor and manage the care of chronic disease and elderly patients at home, keeping them out of institutions.

Retail clinics can provide care in inexpensive “kiosks” or inexpensive retail and drug store space, and keep people out of hospital emergency rooms.  His other suggestion is the use of information technology in the form of electronic medical records which could be made portable all consumers carry their own with them at all times, making access to them when needed universally available, to ensure the quickest and best diagnosis and treatment of patients possible when they need hospital or physician care.

For some reason, however, Mr. Grove has little good to say about “prevention” as a way to fix healthcare, despite wide agreement among both health gurus and presidential candidates that prevention is an essential element for both reducing healthcare costs and enabling universal insurance coverage.  His objection to prevention is that it requires changing individuals’ behaviors, and he doesn’t think we have the capacity to do this yet in a cost-effective manner, although it is, theoretically, at least, in his view “…absolutely the right answer…”.

I can only conclude that Mr. Grove, as CEO of Intel, has not yet encountered the applications of information and communications technologies to prevention, rather than traditional physicians’ annual checkups, immunizations, and usually unsuccessful or overly expensive coaching for patients.  The search for cost-effective prevention has already concluded that technology innovations are essential to its realization.

Fortunately, such innovation is well under way and already in use.  While I know of no healthcare organization, in the traditional sense, that uses such innovations, the new brand of organizations usually deemed wellness, risk and disease management vendors are well underway.  Examples such as HealthMedia, Inc. and Thomson Healthcare, both in Ann Arbor Michigan, are already using online health risk assessments (HRAs) and customized online feedback therefrom to promote wellness, prevent or reduce risks, and manage chronic diseases.

They have also recognized that commercial or government insurance plans are not the best customers for such innovations.  Employers are, because they gain dramatically more positive impact from having healthier employees than do insurance plans from having healthier members or beneficiaries.  Employer gains include the full range of insurance costs combining healthcare, workers compensation and disability.  Moreover, healthier employers are absent less, produce more output and perform better across the balanced scorecard of business performance, realizing many multiples of sickness care cost reductions.

Instead of or augmented by physical examinations and screenings, online HRAs can be inputted directly into computers and automatically translated into individualized feedback, recommendations and continuous coaching, for a few dollars per employee per month in many cases.  These same HRAs can be used to estimate the productivity and performance value, as well as the extent of employee behavior changes and health status improvements.

The technologies used by most vendors, as well as most traditional healthcare organizations, have tended to emphasize, if not be exclusively devoted to professionals interacting one-on-one with patients in managing disease.  This is often cost effective, when the right patients, diseases and professionals are involved, but usually quite expensive.  Witness the costs of fifteen vendors and healthcare organizations involved in a Medicare DM demonstration project whose costs per participant ranged from $80 to $440 per month! and whose effects were generally negative in terms of savings vs. costs.

As far as I know, none of the new-technology-enabled approaches to affordable prevention have been tried with commercial insurance plans and either Medicare or Medicaid beneficiaries.  It may be that vendors who employ such technologies are focusing on employer clients whose pockets can be more generous, given their already demonstrated significant savings, even without counting the full economic benefits of employee health.

In any case, it would be a shame to characterize the entire armamentarium of “prevention” as not yet cost effective.  The new information and communications technologies available include many that are indeed “messy”, including consumer-directed communications with each other in support groups, and by the full array of wireless technologies, not merely the ones most providers seem to have tried.  And this approach to prevention still does have the capacity to “change the world”, since it can be used world wide as even underdeveloped countries are finding at least some of its technologies affordable.



Plummeting health scores…

by Nick Jacobs

Thanks to the Associated Press, our national egos can rest uncomfortably knowing that our health score as a nation continues to plummet.  You’d think that at over $2 trillion in health care expenditures nationally or nearly $6000 per capita, the score card would be better, but we have now dropped to 42nd in life expectancy worldwide.

Drunk drivers took the lives of almost 17,000 on the roads, and an estimated 510,00 are injured annually from alcohol related accidents. That works out to about one person per minute. Another part of the problem may be because we have so many guns. Every year it is estimated that more than 30,000 people are shot to death in murders, suicides, and accidents while another 65,000 suffer from gun injuries in the United States.  Defective automobile tires may have killed about 103 people over a number of years, but firearms kill about 85 people every day in this country.  How about obesity? The AMA estimates that nearly 300,000 people are dying annually due to obesity.

We may also rank 42nd because we have not used enough sun screen, have had too many household accidents and because the vast majority of medical centers are not dealing with their infection rates.  (The national average is a 9% infection rate, our medical center has been below 1% for nearly a decade.  They can be controlled.)

The bottom three spenders in healthcare dollars annually are the United Kingdom, Japan and Finland and Finland, Luxembourg and the U. K. are at the bottom as a percentage of GDP.  Guess what countries are included in the list that do better than the United States?  Remember, 41 countries are helping their citizens live longer than us and a few include: Finland, Luxembourg, Japan, the United Kingdom and Cuba?

The AP article pointed out that the country with the longest life span was Andorra?  Andorra is a tiny country between France and Spain where the people live nearly seven years longer than us.  Of course, the contrast to Andorra is Swaziland where the average person lives to be about 34.

Interestingly enough, after having spent time in Europe recently, It seems relatively apparent to me that the reason we are under performing so dramatically is that we don’t invest in preventative care, don’t really embrace public health and have never had a health policy for this nation.  Only about 4% of our trillions goes to prevention in this country.

Please forward this blog to our public officials.



No Pay for Non-Performance in Healthcare?

by Scott MacStravic

The majority of pay-for-performance systems offer bonuses for healthcare providers that adhere to treatment guidelines and best practices.  In many cases, there are specific outcomes included, such as patient satisfaction, cost reduction, and reduced infections.  This “carrot” approach is intended to reward providers that improve or maintain high quality and efficiency, as defined and measured by specified criteria.

But just as is the case with P4P systems that apply to individual behaviors and health status, there are a growing number of “sticks” being added to systems that apply to providers.  Medicare, for example, has frequently included “budget neutral” policies in its P4P programs, where the extra payments for high-performing providers comes out of the payments for low-performers, in order to keep the total payments the same as usual.

Payers are also beginning to refuse to pay for the care required to address “never events” in medical care, such as wrong-site surgeries.  They argue that when providers cause costs to increase, often dramatically, by making serious errors in patient care, they should not be rewarded for such errors by getting increased payment over what would have been paid had there not been such an error.  While this makes eminently good sense, and will generally not harm providers dramatically, given the rarity of “never events”, this policy could end up having dramatic impact, as the definition of such events changes.

If payors decide that providers should not be paid for what amounts to careless or unsafe practices, for example, rather than egregious mistakes such as wrong-site surgery, they could save significant amounts, while providers could be severely affected.  Already lists of non-payable problems have been created that include quality failures such as decubitus ulcers in inpatients, for example.  The case can certainly be made that such conditions should not occur, since good care should prevent them among bedridden patients, but the effects of non-payment would be far greater than for truly egregious errors.

A recent study, for example, found that hospital-based or “nosocomial” infections have cost between $200 million and $473 million in the state of Massachusetts alone.  This includes extended inpatient stays, and additional costs of treatment for such infections.  While the recommendation accompanying the report calls only for hospitals to publicize their infection rates, it would take little for payors to decide to include them among the events for which they will no longer pay.  In such a case, payors could save hundreds of millions of dollars in dozens of states, and hospitals could be seriously hurt as a result. [“Infections Acquired at Massachusetts Hospitals Cost up to $473M Annually, Report Finds” Kaiser Daily Health Policy Report Aug 10, 2007 (www.kaisernetwork.org)]

Even publishing the different performance levels achieved by providers could severely damage low-performers, by causing patients, providers, and payors alike to avoid doing business with them.  This has been one of the expectations of the “Buy Right” concept originated in the 1970s, though the effects of publishing performance data has, thus far, been minimal.  With more costs and responsibility for sickness care use management being shifted to consumers, and easy Internet access to performance data, the effects of publishing comparative performance may become significant in the current and future system.

Any “punishment” of providers for poor performance will have at least two effects: 1) making it that much more essential for them to correct mistakes and improve poor performance; and 2) depriving them of resources that may be needed to do so.  With many hospitals and physician practices operating at or below minimal survival levels in terms of revenue vs. expense, significant cuts in payment could easily drive them out of business before they are able to improve.

For those who favor a “free market” approach to healthcare reform, this would be a consummation devoutly to be wished, rather than a negative effect.  But when poor performers are the only available or accessible source of care for particular communities or sub-populations, their going out of business would not always be an overall improvement in their healthcare system.  With individuals, “capital punishment” is reserved for relatively rare and truly egregious behavior, not merely lower than average performance, but with healthcare organizations, there could be a far higher percentage of providers so “punished”.

There is also the risk that payors could find the refusal to pay for “never” events could become overly attractive, since it reduces their costs and improves their profits.  In such a situation, the free market may favor payors too much, and cause overly aggressive definitions of such events, and even greater reductions in payment levels, since payors are competing with each other to keep their costs down.  It will always be a temptation for payors to choose not to pay enough for providers to survive, witness the severe underpayment compared to providers’ operating costs that is already the case for Medicare and Medicaid, where these payors can simply dictate how much they will pay.

While carrots and sticks are often effective combinations in achieving improvements in individuals’ behavior and organizations’ performance, the stick carries with it some side effects that should warrant extreme care in its use.  While there may well be a number of hospitals, as well as physicians and other practitioners that should not continue to deliver care, the potential that “No Pay for No Performance” could do significant harm, as well as good, should not be ignored in either public policy or private payment.



Healthcare Providers as Health Managers – Counting Issues

by Scott MacStravic

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

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

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

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

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

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

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

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

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

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

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

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



Medication Errors

by Nick Jacobs

Why do national statistics indicate that thousands of people are killed each year due to medication errors in hospitals?  Because they are.  If pharmacists are careful, you might ask, how does this possibly happen?

Well, there are pharmacy techs and pharmacy aids, and there are poorly written prescription orders, and  busy RN’s, and LPN’s.  There are inappropriately registered patients with similar names.  There are emergency room techs or nurses or physicians that sometimes miss or misunderstand what the patient is saying about the drugs they take at home.  There are patients who don’t tell us the entire story, i.e., like the recreational drugs that they take, just for fun, or are clueless about their drug list.  |

The story doesn’t end here.  There are exhausted employees who misread or misinterpret the prescriptions.  Then there are just intellectually challenged employees who don’t bother to pronounce what they read, don’t pick up what was ordered from the drug cart, and don’t check the patient to see if they are giving the correct drug to the correct patient.

Don’t forget the hassled administrator who has to find a way to keep the hospital open and running.  They have a committee that adopts a formulary of permitted drugs for his or her facility based on  price.  Are they always the same drugs that the patient has taken at home?  No.  Are they sometimes-similar yet different drugs?  Yes. Do they interact differently with the patients other drugs?  Sometimes.  Do the patients sneak in their herbal medicines and laxatives and antacids?  Yes.

Do you get the picture?  It is common knowledge that if you take five or more drugs per day the chance that they will interact with each other in your body is 100 percent.

What Can You Do?

For goodness sake, don’t be afraid to ask.  Don’t be afraid to challenge.  Don’t be afraid to question.  In fact, ask, challenge, and question.  You need more people caring for your personal health than your doctor.  You must be a player.  Your family members must be players.  Your loved ones and even your enemies can help.  Don’t just accept everything you hear or see.   Sometimes top notch, seasoned veterans make mistakes, too.  In fact, they all do. Mistakes do happen.

So, ask questions.  Ask for verification.  Ask to speak to a pharmacist.  Ask for an explanation.  Explain that the drug being given to you because of some hospital formulary didn’t work the time you tried it at home, or that it made you sick, or that it was the one that interacted with your fish oil that made you break out in hives.

Challenge and challenge again.

It is, after all, your life.



The Use of PHMs in PHM

by Scott MacStravic

I recall that in the 1960s, when social legislation and government programs were running wild as part of the “New Society” movement, there was some wag who wrote about “buzz word generators”.  He guessed that there was some device being used to label programs and tools that were all the rage back then, given their amazing consistency.  Such a device took the first word from a list of adjectives or nouns used in an adjectival way.  The second came from a noun list, and the third from a verb form.

This device appears to be still around and busy forty years later, with buzz word labels like customer relationship management, business process outsourcing, enterprise performance management, etc.  But clearly, one of the arenas in which it has been busiest is in generating labels that employ the initials “PHM”.  Just off the top of my head, I can list the following labels:

  • Population Health Management
  • Proactive Health Management
  • Personal Health Management
  • Pre-Emptive Health Management
  • Prospective Health Management
  • Preventive Health Management
  • Productivity Health Management
  • Performance Health Management

All these have been generated by changing only the first word in each three-word label.  The wide range of “Ps” reflect the gamut of approaches to managing health that are currently being championed and used as solutions to the “health care cost crisis”.  All of them envision the same basic concept of managing health in order to reduce the incidence and prevalence of disease and injury, plus managing chronic disease that already exists, to reduce the incidence and consequences of crises, complications and worsening thereof.

But there is yet another example of PHM, applied to a “Personal Health Monitor” that can be used in any one or all of the above PHMs. These devices share in common the ability to be used to measure the status of an objective clinical metric reflecting the state of the disease or risk condition being managed, with many also having the ability to automatically report the metric to a “response team” that can intervene when necessary to keep the disease or condition under control.

Such monitoring devices can be complex, such as those that measure peak air flow for asthma patients, or blood sugar for diabetes patients.  They can also be simple scales, weighing congestive heart failure patients frequently to watch out for sudden increases in weight suggesting dangerous fluid retention, and blood pressure monitors like those sold over the counter in pharmacies and retail stores.  They can be very expensive, suggesting use only for the highest-risk patients, or cheap enough to be used by almost anyone.

The firm iMetrikus, Inc. in Carlsbad, California for example, offers a system for collecting, storing, and sharing measurements from a wide range of devices, including those that measure, as well as manage chronic diseases, such as blood sugar monitors and insulin pumps for diabetes.   They may report data by phone, online through PCs, or through wireless connections.  Its Medicompass system enables the collection and storage, and access by both patient and provider to a series of measures over time, to track progress as well as watch for danger signs requiring immediate intervention.

These PHMs can achieve dramatic improvements in control of diseases, or promote effective control of risk conditions such as “pre-diabetes” and “pre-hypertension”, where the risks of these becoming full-blown diseases is high enough to warrant their use.  In some cases, they can promote the “reversal” of both diseases and risk conditions, through lifestyle improvements alone, where savings to payers include not just reduced use of sickness care, but even of prescription drugs when lifestyle changes, such as diet, exercise and weight reduction can reduce metrics to a “normal” level.

The iMetrikus Airwatch®  device, for example, has achieved dramatic improvements in control of asthma, with resulting dramatic reductions in sickness care use and costs.  This PHM, when used with 26 severe asthma patients was able to reduce ER visits from 84 or 3.32 per patient in the period before use of the monitor and response system to just 1 or 0.4 per patient in the same length period when the system was being used.  Hospital patient days dropped from 114 (4.38/patient) to 3 (0.12/patient).  ER charges dropped from $2656 per patient to $32, while hospital charges dropped from $4380 to $120 for equivalent periods. [G. Doherty, et al. “The Effectiveness of an Interactive Electronic Lung Monitoring System in the Total Management of Refractory Asthma” Disease Management Health Outcomes 3:2 Feb 1998 89-98]

Limitations of PHMs in PHM

While personal health monitors can achieve significant, often dramatic improvements in the health and sickness costs of some patients with some conditions, they have their limitations in population health management.  For one thing, the fact that the devices and the response system needed to make them effective can add significantly to costs will tend to limit their usefulness to more severe risk patients.  But perhaps the most severe limitation is that they deal solely with the measured condition metrics related to the single condition being managed.

This is particularly true for diabetes patients, since diabetes is a major risk factor for heart, circulatory, kidney and eye diseases, as well as being a frequent companion of depression.  When PHMonitors only track blood sugar, the focus may be too much on this risk factor, while others such as blood pressure and cholesterol are also common co-risk factors with diabetes.  Of course, multiple monitors might be used for these added factors, since they can be tested at home (blood pressure), and tracked by blood tests (cholesterol) or survey monitors which as questions about things such as depression, anxiety, stress, etc..

It seems likely that new, less expensive, and more comprehensive monitors will be developed over time, able to simultaneously check on a number of different disease and risk measures, including subjective attitudes and patient behaviors.  As this happens, the cost of PHManagement is likely to go down as remote monitoring and coaching will be much less costly than using personal contacts by phone or in person.  And who knows, there may also be some other meanings of PHM arise to join the confusing plethora already in use.   



The Path Not Taken: Hospitals

by Scott MacStravic

Since I was born and raised in the Boston area, I was naturally exposed to a lot of the poetry of Robert Frost, including his poem about choosing “the path less traveled by”, and how that “made all the difference”.  Hospitals have a choice today of paths, where which they choose could certainly make, if not all, at least a major difference in their future – the option of moving toward proactively managing health and disease, as opposed to mainly or solely reactively treating illness and injury.

Hospitals have always been ‘dabbling’ in proactive health, including offering free immunizations to their employees and communities, along with health fairs and other educational or screening events.  Screening has had the added advantage of identifying people who should be seen by physicians, and often end up needing hospital care, so are at least partly marketing tactics, in addition to delivering “community benefit”.

The option of choosing the proactive alternative more intensively is not merely one of adding service lines to current activities.  Proactive health management (PHM), by definition and intention, will reduce the incidence and prevalence of illness and injury in the populations served by hospitals, and thereby reduce the need, demand, and expenditures for sickness care, and thereby the revenue to which hospitals will have access.

Proactive “wellness” care has often been promoted as a tactic to gain PR value and the interest of employers in hospitals’ markets, and thereby to potentially make up for reductions in the overall sickness care market by winning a greater share of the reduced market.  Since wellness care can generate its own revenue (it has been twice described as a $1 trillion market in its own right), the combination of gaining a greater share of a declining two-plus trillion dollar sickness care market and a significant share of the one-trillion dollar proactive health market could turn out to be a successful strategy.

But PHM can also place hospitals “on the side of the angels” with respect to the “health care cost crisis”, by enabling them to become part of the solution, rather than a major part of the problem.  Sickness care — for employers, insurers, and governments, as well as taxpayers and patients – is a “cost center”, whose benefit has always been difficult to put a value on.  By contrast, PHM is a “cost-saving” center for patients and payers, as well as a potentially “revenue-generating” center for both providers and employers.

As employers, often among the biggest employers in their communities, hospitals should logically be invested in PHM for their employees, since this can save substantially on labor costs.  Not only does PHM reduce sickness care costs, it also reduces worker absences, impaired productivity at work (“presenteeism”), errors and quality problems, and even employee turnover.  It can also improve employee morale and commitment, energy levels and enthusiasm, and thereby increase customer satisfaction, loyalty, and the generation of new business and revenue.

Because the total economic impact of PHM is difficult and expensive to measure, the pattern of past efforts – by employers in general, and hospitals in particular – has been one of measuring only one or a few of the many dimensions that probably have been affected.  In most cases, even a limited measurement effort has found significant returns on the PHM investment (ROI), so has been sufficient to justify repeated or continuous investment, and no additional measurement efforts were needed.

But deliberately choosing to ignore the rest of PHM’s value can lead to reducing or even ending investments that would have been continued if the full benefits were known.  And with the growing importance of employee performance, not merely productivity, given the increasing potential for pay-for-performance (P4P) bonuses and revenue, measuring performance provides both a strong reason for and basis for evaluating PHM’s impact on performance.

Instead of or in addition to measuring a wide range of selected measures of quality, output, errors, efficiencies, etc. as possible effects of PHM investments in employee health, hospitals can focus on workforce performance in the specific dimensions for which it is paid extra under P4P systems, and reported in published performance ratings that affect payers and consumers choices of hospitals to put in their provider networks and use for patient care.  By evaluating PHM in light of performance impact, and by achieving better performance as a result, hospitals can both increase their knowledge of the full effects of PHM and increase the resources available to invest in and measure its effects.

If hospitals choose to invest in PHM as a revenue-generating service line, in addition to doing so as a labor cost saving and performance improvement internal investment, they can use what they learn about the best ways to improve employee performance as the basis for their externally marketed PHM programs.  They can also use the results they have achieved in their own employee PHM efforts as evidence of their success and total economic impact when marketing to employers.

When they evaluate their success in external PHM efforts, hospitals will naturally want to include the net effect of such efforts on their sickness care revenue and overall profitability as well.  The net effect could be positive, if externally focused PHM reduces overall demand for sickness care and revenue derived therefrom.  It could also be positive, if the combination of external PHM revenue and any increased market share gained through successful partnerships with employers produces an overall positive effect.

In any case, the combination of internal and external PHM investments will represent a path not previously taken by most hospitals, and make a big difference one way or the other.  Many hospitals and integrated health systems — including Mayo Clinic and Fairview Health Services in Minnesota, Geisinger Clinic in Pennsylvania, Northwestern Memorial in Chicago, and Duke University in Durham, NC — have already invested in internal, external or both applications of PHM.  All are in the early stages of both application and measurement of results, but are certainly at least partially aware of how much difference this path can make.