TECH/HEALTH PLANS/QUALITY: Lonny Reisman, Active Health Management transcript

Here’s the transcript from the podcast I did with Lonny Reisman, a week or so back. Really interesting stuff for those of you interested in the future of patient care management.

Matthew Holt: So welcome to another forecast here at The Health Care Blog. I’m Matthew Holt, and today very exciting that we’re talking with somebody’s who’s really been a technology pioneer and a medical pioneer in developing tools for active health management, and surprising enough, his company is called Active Health Management and I’m talking with Lonny Reisman. Lonny, how are you today?

Lonny Reisman: I’m well, thank you. How are you?

Matthew: We’re doing pretty well over here. One of the first fall and somewhat foggy days in San Francisco, but at least we’re not going to endure that terrible New York winter you’re going to have to go through [laughter]. Anyway, let me very briefly give a sense to, in essence, what your organization does. And there are a couple of things that people who may or may not necessarily have heard of Active Health Management should know. First off is that you are in the business of taking data, all kinds of different data about medical information about patients, putting it all together and spitting it back out and using it to try and help and inform and change medical decisions by those patients and physicians. And the second one is that you’ve been so successful at that, that last year, Aetna decided to write a very big check, $400 million to buy you, and now you’re part of that large insurance company. So with that it’s a very brief introduction. why don’t you say a little bit about what Active Health Management does, how you got started, and what kind of impact you’ve been having in the healthcare system and the part of it you’re specializing in.

Lonny: Sure. Why don’t I start with my background, which will give you a sense of how we have come to be here. I’m board-certified in internal medicine in cardiology, I’m a physician, and during the 1990s I was leading a bit of a dual existence. I was practicing clinical medicine here in New York City, had a fairly typical practice, but I also was consulting with a large human resources consulting firm, William M Mercer, and was charged with evaluating health plans around the United States, mostly from my perspective on the basis of quality but obviously the premiums and the costs associated for those health plans was a consideration as well. In considering what I was experiencing as a practitioner and what I saw as a consultant evaluating health plans, saw an opportunity to better take advantage of clinical data that were available in the managed care world which weren’t being fully exploited. So specifically as I visited health plans I saw that they had the capacity to collect drug information, laboratory results, information about procedures and diagnoses and basically had the thought that if in fact that information could be used to support doctors and patients in making decisions, that in fact we’d be able to raise the bar with regard to the level of clinical excellence being provided to patients all over the United States. So fundamentally, the observation that I made, which ended up being relevant to what I was experiencing as a practitioner was that to the extend that the care that was being provided by me and others was fragmented, specifically I didn’t necessarily know what other doctors were doing to my patients or for my patients, to the extent that all of the information about a patient or much of it could be aggregated at the health plan level, we decided to take advantage of that.

The other component of Active Health, which again sort of derives from my own experience and perhaps insecurity, is that I recognized early on in my career that it’s very, very difficult to keep up. So there are thousands of articles, relevant articles, published yearly and the issue is how does one not only read and assimilate and remember those articles, but how does a physician relate the information in an article that they’ve read to the particulars that relate to a patient sitting in front of that doctor during the course of an office visit.

Matthew: They can’t is basically the answer, correct?

Lonny: Can’t do it, right, exactly. It’s just too much. So the basic notion and this is as true today as it was in 1998 when we started the company was if in fact you could provide the treating physician with more clinical data on the member than they have access to—again the patients frequently see multiple doctors—and then if you could expose those data to thousands of clinical rules that represent incontrovertible standards of clinical excellence and use technology to highlight discrepancies between what was actually happening to the patient as manifested in their data as opposed to what should be happening as displayed in the literature, we in fact could pinpoint changes that needed to be applied to individual patients by doctors that related to everything from preventive care to diagnostic services to therapeutics to follow-up, and basically started the company with the notion that we would have those data, have a technology that would analyze those data and communicate first with doctors and then over the years with patients in order to again introduce this level of consistency to the healthcare system. And from there we’ve evolved into other sort of disease management like capabilities which I’ll elaborate on. But the fundamental premise behind the company is what I’ve articulated.

Now, that’s really interesting because there plenty of people who have
been saying for years that if we could just get the data and analyze it
and do the right thing we could improve how it comes out in improved
results, and in some ways that was the basic premise of the medical
directors of many managed care organizations in the 80’s and 90’s. But
there are two major pieces that I think you have done somewhat
differently, and the first one is the business about, you know, the
real, for want of a better word — the real time or the active nature
of your analysis. And you know, your goal is to do this quickly and to
do this in real time, rather than to wait three weeks when the claims
data comes in and seeing that retrospectively. So you have a pretty
major technical problem then. Normally, how do you deal with, you know,
putting that data together and figuring out what should be done. You
also have the real basics of getting that data in in a timely manner.
Now, most data you’re talking about is in claims systems and can take a
while to assimilate and there’s problems getting lab data and getting
other data… Now, how did you go about solving that problem?

When I mention the specific streams of data that we have access to and
then explain how we’ve managed to access that information, I think the
first issue is that we’re indifferent as to the adjudication status of
a particular claim, meaning that we don’t really care if it’s a covered
benefit or paid for by the plan. The fact is the patient had or did not
have a particular service or is not taking a particular drug. Might
even be a nutritional supplement which in no case would be covered, but
certainly that information is important to us. So let me, on the drug
side, to begin. We have access to at this point all of the PBMs or most
of the PBMs, pharmacy benefit managers, in the United States. We have I
think very, very positive relationships with them, and essentially,
when a PBM is apprised by the swiping of a card in a pharmacy that a
particular drug has been administered, we in fact get that information
as quickly as a day or as late as a week or so after that information
has been generated.

So one important source of
information was drugs. Another important source of information relates
to laboratory results. And through relationships we have with major
reference labs, not only do we know what tests were done, which is an
important thing, so for example diabetics need to have their sugar and
something called their hemoglobin A1c test performed at least twice a
year to monitor the adequacy of their blood sugar control. Not only do
we know that the test was done, but in many cases we actually know what
the level is, and obviously if the test is being done but the level is
unacceptably high, that would represent an opportunity to in fact
suggest to the physician and/or patient that perhaps something needs to
change with regard to the way they’re being managed. So effectively, in
situations where you have access to laboratory results we can get the
information at pretty much the same time that the doctor does, several
days after the test was actually administered. So we have two important
sources of data, drugs and labs where we get the information pretty

The third source are claims
information, I think what you were alluding to — the difficulty with
claims data—and that would really describe diagnostic information coded
as ICD-9s for those of your listeners who are technologically oriented,
or procedure data CPT4s. Two problems with that: one is that the
information is sometimes late, because the doctor might not submit the
claims in a timely fashion, but also the information may not be
precisely correct from a clinical perspective. What I mean by that, and
this particularly pertains to diagnostic information ICD-9s, is that
the way coding is conducted today there is no distinction between a
rule out  and a diagnosis. I’m thinking, for example, that you have
Burn’s Disease as opposed to you in fact categorically do have Burn’s
Disease. And obviously that does have huge implications with regard to
the accuracy and the specificity of the information that we convey to
doctors. So one of the real challenges for the company has been to
validate and corroborate imperfect data along the lines of the example
I just gave with regard to diagnostic data and translate that into
reliable clinical information which can then be analyzed for the
purposes of communicating a potential discrepancies between optimal
care and what’s happening to patients and physicians. The last source
of data is the patient himself or herself and I’m sure people know very
well about health risk appraisals. There’s a lot of discussion about
the importance of assessing risk and looking at lifestyle factors, we
wholeheartedly agree with that but think that an HRA could be a lot
more valuable in the context of the other streams of data that I just
articulated. Though in fact the member talks about family history of a
particular disease and we see early manifestations of that disease in
say the laboratory data then obviously we can interact with that member
much more effectively, much more aggressively in order to catch the
disease at its earlier period in its evolution as possible.

Now that sounds in principle and theory, the whole thing sounds very
smart and great and I can imagine sitting around late at night when
you’re thinking this thing up going, "Wouldn’t it be great if?" And
some of these data streams obviously are available but at some point
you had to start making these available in early days, and I know that
fairly early on you started working with Empire BCBS. What kind of
share of membership or how many people or I don’t know what metrics you
used, but for how many people were you able to get relatively good lab
data, relatively good drug data, and in the early days they put it
together so you could start saying we’re getting viable decent results,
because that’s kind of the first part you did before. I’ll let you
answer this before the second question which is: now you have to go
convince a bunch of doctors that some third party with a computer is
going to come and influence what they’re doing. So tell me about how
you started and how you got to critical mass.

All right, so the first thing we acknowledged was that we needed at a
minimum drug and claims information so that the diagnostic procedure
and pharmacy information. And frankly it was largely a matter of will
and having great partners like Empire Blue Cross and some of the
self-funded employers who were working with us. And the expectation was
that claims were coming in so we should certainly have access to that
data if these doctors wanted to get paid and empire along with the
employers we were working with certainly had PBM relationships so there
was no reason not to get those data. The labs probably came a little
bit later, but certainly at the outset and even today we won’t do
business with an entity that doesn’t provide at least pharmacy and
claims information. That’s not because we’re obnoxious or smug about
it, its just because we don’t think that we provide value without at
least two of those streams and frankly there’s no reason not to have
that information available.

Matthew: Right.

So that’s what we started with and effectively we had 100% lab data and
pharmacy data when we started the company with probably 2000 or so
covered members.

Matthew: And those were probably either Empire commercial members or self-funded employers?

Lonny: Right, where Empire was the administrator for those members.

Matthew: So you basically had one major client, aggregating data from different sources. That was a good place to plug into.

Right, and the self-funded employers have always been interested in
these types of opportunities, and to this day continue to indulge us as
we come up with new thoughts and new ideas and new approaches to manage
and cure.

Second part of that is now you got some data, you’re running it through
your system, its coming in fairly quickly in terms of you turning
around on it in days rather than weeks. Now, somebody has to get on the
phone or do something with the first doctor and say “by the way, we
know something that you don’t, and you should be doing something that
you’re not doing”. How did that go?

Right, so the first thing we did was we let doctors in communities
where we would be working know that we were coming to town, and in many
cases I’ve actually met with major physician groups or academic groups
to say we’re coming, you may have some misgivings about this managed
care thing based on prior experience. But we think we’ve actually are
doing it well, we think we’re pretty good, we think you’re going to
like what we do, and we think you’re going to regard us as a resource.
So the first thing actually involves demonstrating the technology,
letting providers sort of kick it around and squeeze it and challenge
it, and frankly to demonstrate we are very much of their world. And
we’ve applied the same levels of scrutiny, precision with regard to
false positives, with regard to anticipating contraindications to
certain drugs, those sorts of things, that they would apply in their
own practice. That sort of gets you kind of started, but what’s really
important is the nature of the communications and the value of the
information that we send to providers. And the only way to, in fact,
endear a company to the provider community is to provide real value,
meaning that we’re not generating lists and lists of patients who may
or may not be in that physician’s practice, may or may not have a
particular diagnosis, may or may not benefit from a particular therapy,
particularly when you consider all of the promobidities that our
patients may have. So the way I think we won the hearts and minds of
physicians is by being a resource, by being precise, by not wasting
their time, and by presenting the information with an appropriate
degree of humility, meaning that we don’t know exactly what’s happening
during the encounter with the physician and the patient and there may
be extenuating circumstances. There may be additional information that
we don’t have access to that in fact would basically eliminate the
observation that we’ve made. And over time, we’ve done that well, we
have a feedback mechanism built-in to all the communications as we talk
to doctors. So, for example, if we didn’t know that the patient was
allergic to a certain drug, forever and ever more we will never, once
we know that we won’t suggest that drug. And it’s those sorts of little
issues that are very, very important with regard to, again, winning
over the physician community. I think the best…

Now, if I’m a doctor practicing in New York City, or in one of the
regions where there’s a health plan you’re working with, what do I
actually get? Do I get a phone call? Maybe I’ve been told about this
program, but in terms of the actual scene where there’s a patient in
front of me, or one of my patients comes in – what, actually, do I get?

Right. So what you get – first thing is, you don’t have to do anything.
That’s an important point. We’re not asking doctors to submit data;
we’re not asking questions; it’s not at all like a fishing expedition.
What you get is an explicit communication telling the doctor what our
concern is, and a display of the data that reflects the information
that we used on the member in order to arrive at the conclusion that
we’ve arrived at. Now, in terms of the actual specifics of the
communication, there’re basically two: The first is, if there is an
urgent issue – specifically, we think there’s a life-threatening issue
– we simply have one of our doctors or nurses pick up the phone and
say, "Hey, Doc, from where we’re sitting, based on the data at our
disposal – again, which may be more robust than the data that you have
on this patient – or based on the literature, we think that what you’re
doing or not doing could potentially be lethal for the patient. What do
you think?" And, quite frankly, those generate the best responses of
all, because, again, we do it with precision, and the doctors very much
appreciate it.

The second kind of communication
would be a letter for something, you know, preventive. A screening
test. A mammography or a pap smear. And that’s an area where we don’t
need to yank the doctor out of his examining room, but assume that once
the letter is presented to the doctor and entered into the chart,
they’ll respond to that. And then, in the middle, there are situations
that are highly important – I think most people know about beta
blockers after a heart attack, for example – where you don’t have to
intervene this second, but certainly, within a period of days or weeks,
you’d like to see a change. In those situations, we generally do both
the phone call and the letter, but basically, communicate the
information to the doctor’s staff so as to not unnecessarily alarm them
or disrupt the flow of their work.

So those are the ways that we
communicate, and then, subsequent to issuing one of these – we call
them "care considerations" – we track the members’ data to see if, in
fact, the change that we’ve suggested has occurred, so a good thing
shows up, or a bad thing goes away. And in addition to that, in the
written part of the communication, there’s a survey, where the
physician has an opportunity to say "thank you, " to tell us that our
information is incomplete, to express themselves in other ways, for
example. And, obviously, as we learn more clinical information from
that feedback, that gets built into the system, so as to be able to
more intelligently communicate around that patient, to whatever
doctors, as we go forward.

And, for a typical physician – I mean, they’re presumably not getting
very many of these communications, given that not that many of the
patients they’re seeing will be in the program – but do they get one
every so often

Lonny: Yeah.

So now you’ve got the physician getting information about the patient,
and presumably that’s now in their work for when they’re understanding
it. Tell me a bit about the business side of how Active Health made
money out of this, and then let’s get on the path a little bit about
your working with Empire as your core client, but then you end up
becoming a subsidiary of Aetna. So give me a bit about the story about
how that happened, and what your corporate development was like up
until a year ago.

I think, in the beginning, the reason we were able to get venture
capital funding, and get the thing launched in the first place, was
because there was an interested partner in Empire. And there were also
large self-funded employers who were interested in this sort of
capability, and understood that managed care, certainly in 1998, not
only didn’t have this capability, but, frankly, didn’t have this
orientation with regard to assessing the clinical adequacy of care. So,
basically, it was a combination of Empire’s interest – Mike Stocker was
the CEO of Empire at the time – and his personal interest as a
physician, but also the appeal that the product had to national
accounts, as Empire was building its national accounts business. So it
really worked for all of us. And the fact that we had a big health plan
and major employers interested in this wasn’t lost on the venture
capital community, so we were able to raise money to get it started. As
we grew, we continued to leverage the large self-employers that we had
relationships with, who would then go to other carriers, who they might
have been working with, and said, "Hey, we think this is an interesting
thing. We would like you to implement the Active Health Program for our
employees." And that had two advantages: One, it helped us grow with
the business, and it introduced us to other health plans; and secondly,
as the health plans were observing the experience on these self-funded
lives, they discovered two things: One is that clinical care, clinical
outcomes were improving; and secondly, from a financial perspective, it
appeared that this intervention was actually saving money.

So over the years, it was imperative
– this is an obvious point – that for all the humanistic and
sentimental appeal of this approach, it needed to also save money. And
a number of the plans that we did business with conducted their own
analyses, which resulted in them applying this technology to their
fully insured book – it was their nickel, as it were. And in addition
to that, we actually published a randomized prospective clinical trial
in a peer review journal – the randomized prospective clinical trial
being the gold standard, frankly, in all of science. It’s the sort of
trial that’s applied to, say, new pharmacologic therapies. So, given
what the plans were experiencing with regard to financial analyses,
given what we were able to publish and demonstrate on our own, not only
did we continue to grow among the self-funded employers, but we further
insinuated ourselves into the fully-insured books of the health plans
that we were working with.

Matthew: And how many plans do you have as customers at the moment?

At the moment, we probably have hundreds of employers – again, the
self-funded employers might go to any particular plan, and there are
literally hundreds – and I’d say there are probably 15 or so health
plans that, again, are either using our capabilities in the context of
Medicare Advantage, where they’d be fully at risk; their commercial
fully-insured business, where they’d be fully at risk; or their
commercial self-funded business, where they’re not at risk, but they’re
providing administrative services for planned administration.

Two parts I want to talk about Aetna. The first part is, what decision
did they take, that they wanted to get into the business of owning you,
rather than using your services? And secondly, did that put off a bunch
of their competitors, with them saying, "Well, hang on, now we have
this Aetna unit coming and selling their services, but it looks pretty
close to the core of what we should be doing as a health plan."?

That’s exactly right. So I think the first point – why was Aetna
interested, and why were other plans interested – was because, I think,
the health plans have acknowledged that they have a very important and
potent role to play with regard to care management and promoting the
public health. So I think – certainly, from Aetna’s perspective – this
is fundamental to their mission. One of the interesting, and perhaps
unusual, aspects of the relationship with Aetna is that they have
permitted us to continue operating as a freestanding entity. So
although we’re a wholly owned subsidiary of Aetna we are free in fact
to work with health plans that compete with Aetna. That brings up two
issues which are probably of some interest. One is why would some of
Aetna’s competitors want to work with an Aetna-owned entity and why
would Aetna want to potentially dilute a competitive advantage that
they have in the marketplace. In terms of plans that have continued to
work with us, I think it’s because they have seen the value we provide.
They don’t believe they could get that value elsewhere and to the
extent that their customers and their own internal analyses support the
continued use of active health, why wouldn’t they? The fees that we
generate are not large compared to the premiums being collected by
those health plans so if we can impact their ability to market them or
in control costs, it’s a sensible proposition for them. Having said
that, there are certain plans that have said we’re not particularly
comfortable with this Aetna thing. We’re going to pursue other
directions. Frankly, my expectation is that as long as we continue to
maintain our edge and evolve the products as we have been, those plans
will be back. That’s something we work very hard to do with regard to
supporting the business that we have. But we really do have an
expectation that those who have decided to look elsewhere and might
experience other vendor will eventually return to us.

Matthew: As they say, you had to say that, didn’t you?

Lonny: We actually believe it!

I would hope you would believe it. Let me be slightly cynical about two
things. The first one is I wrote an article earlier this year or last
year called The Yin and the Yang of Health Insurers.
Because you have within health insurance companies people doing exactly
what you do which is looking at the health of the population, trying to
do things better, more cost effectively. And we know that if you look
at the original purpose of the managed care movement, it was, how do
you rein in the practice variation, the bad care and all that stuff?
And given that we don’t have widely distributed electronic medical
records and that the data you’re using is the best data that exists, it
strikes me that what you’re doing is really central and you can point
it out and say this is a great thing and that some of these management
programs really are improving and are conserving costs.

On the other hand exactly the same
health plans have been shown to take similar types of data as you’re
using, look at who is the more expensive group and who do they not want
to insure next year, or use it for underwriting purposes. And they’ve
changed their business model to be far more risk avoiders than risk
takers or risk managers. And frankly, Aetna has one of the worst
reputations in the business for doing that. They literally came out and
said that they went from being a big managed care plan with a market
share focus to getting rid of a significant number of covered lives by
looking at the pricing and the risk they were taking instead of going
down and looking for a more profitable customer. So a cynic would say,
well now they have a great tool for managing care of people they
already have but now they have an even better tool for figuring out who
they should and shouldn’t be insuring. So how do you reconcile that?
You come from the medical management side of the world and yet we look
at the health plan world and we know that this is going on.

I think that the reconciliation is that none of the tools that have
been developed by Active Health are being used for clinical
underwriting or for making distinctions among populations about who to
insure or who not to insure or how much the premiums should be raised.
The way we work with Aetna and with other health plans as well as the
self-funded employers is that we are presented with a population and to
the extent that we can look at the data on that population and do the
types of things that I’ve described that will promote an optimal state
of health for that membership we do it and presumable that results in
lower health care costs. So in terms of the other side of the equation,
that’s not something we participated in and I don’t expect that we
will. We are focusing on the people who are in the plan at the moment.

Well that’s fair enough. You’re staying away from that side. I want to
be open about it. I understand that Jack Rowe when he came into Aetna
in a series of pressures on him and had to do what he did and now Aetna
is a much more profitable organization than it was when he got there.
But as I’ve written and several other folks—Jamie Robinson in Health
Affairs—have written it’s not necessarily an increase in the public
good but that happens to be the way our health care system is set up
and I think many of us in all parts of the political spectrum think
that that may not be a particularly good thing. And there are some
plans—we’ll point out Blue Cross of California—that are doing pretty
egregious things in cancelling insurance. To my mind, we should
separate them away from medical management. The problem that we get to
is that people say, "Well it’s a greedy health plan, and now they’re
using tools like yours to interfere with care decisions.” I can
understand how the politics and PR makes it very tricky to distinguish
those two parts.

That’s why it’s so important that we win the support of the physician
community not by a PR campaign but by virtue of the nature of the
information we send to them a bout their individual patients where
they, in fact, write back to us, "Thank goodness, thank God (literally)
your system is there because I couldn’t possibly keep up with the
literature or a don’t know what the guy down the street is doing with
my patient." That’s been our focus and that’s where the value is. From
the patient’s perspective it’s a similar thing. A couple years ago we
started communicating with the members on these discreet clinical
issues than over the last couple of years have introduced a form of
disease management which is different from the sort of one at a time
approach to disease management. It’s much more multidisciplinary. But
the point is we’ve won the trust of the membership, they understand
what we’re doing with their data and to the extent that they have
appropriate concerns about how else the data may be sued or where else
the data may go, we’ve been very disciplined about security and privacy
and I think we’ve conveyed that and won the trust of the membership. We
probably have about 13 million people on the system currently.

Matthew: Yes, I think it’s a fine
line to walk and you clearly have to be very open about it and clearly
you’re doing the right thing. I might be a bit cynical. The only thing
I say is that if your stuff works it ought to save money but it also
seems to be that in the past few health plans have been doing pretty
well even though health costs have been going up. I’m not sure how that
equation gets squared.

Let me touch on this very last point. Wemberg and a lot of other
people look at the system and say if we did things properly, not only
could we save a few percent here or there, but maybe a third of health
care is waste motion or ineffective. Do you perceive that tools like
yours could create really significant savings? I’m not just talking
about slowing premium increases a bit a year, but making significant
changes in the expense of dealing with populations. Or do you think
that we need another systemic change to get that?

Lonny: I think what we need and I
think that you were alluding to this earlier, is better sources, richer
sources of data. So right now we are not in a position to say that
someone with a headache needs and MRI versus a CAT scan versus a PET
scan versus nothing. We just don’t have enough information about their
headache, their neurological exam, those sorts of issues. As we in fact
begin to hookup with EMRs, as we get involved with regional health
information organizations, which we are doing, as we get involved with
hospital systems, as we launch the PHR and get more specific data about
the member, as we get those richer sources of data, A and B, the
medical community and the health care industry define standards around
many of these issues with greater precision. Right now we are limited
to areas where the evidence is incontrovertible. There are lots of
areas where frankly, it’s not. As we get into better standards and
better data I think we will be able to influence those variations with
even greater results than what we’ve seen so far. I very much view as
what we have done as being significant but really very much a
beginning. I would expect that within the next five years or so with
technologies that we are introducing into the care engine, in terms of
interfacing with EMRs, CPOE systems, getting more information about the
member via PHR, we’ll be able to apply more robust standards with
regards to what is clinically acceptable or optimal to those data, and
I think our ability to significantly shift costs to be greater than
what we have experienced to date.

Matthew: Let’s talk a bit about the
PHR. This is a product you’re releasing that is not actually out and in
use yet. I assume you’ve had it in beta. This is an interesting one. I
have a personal interest because I was involved in a company that sold
these things. Unfortunately we didn’t sell enough of them back in the
2000-2001 period. We were at that point pretty competitive with Well
Med. Your PHR, presumably your first announced client is going to be
Aetna, is that correct?

Lonny: Correct. Then we’ll be launching this in February.

I have a hysterical email from Aetna in 2001 explaining why they
couldn’t possibly talk to us for another two and a half years because
they had all this other stuff to do about here. That was rather
discouraging to get when you are a starving startup that a big company
wants to buy your thing but it will be three years.

Lonny: I can understand.

Empire which is a big client of yours on the care management side has
gone with WebMD’s product, which is their WellMed product with a bunch
of other stuff added on.

Lonny: Also Empire is now owned by WellPoint, so there’s consistency across all the WellPoint plans.

So to be fair, you’ve come to this from a very different angle.
Although there’s still a very low penetration of personal records
amongst Americans, you could argue that there are some very established
players in the PHR market and you are coming somewhat late to the
market. So given that, I don’t know if you were already in the
conversation when Empire went with WebMD in the first place. What do
you bring now that’s sort of better, different, and why have you moved
into this part of the market?

I think the reason we’ve moved into the market is for any number of
reasons, I think most of which are obvious. We need to further engage
the member. We need to engage the member from two perspectives. One, as
an important source of data – all about lifestyle, risk factors, and
family history, over the counter meds and those sort of things need to
be provided to us. But also because we think we have something to offer
the member that the other PHRs don’t offer, specifically that
additional contribution relates to care considerations, these
actionable steps that the member can take once we have in fact analyzed
and interpreted their data. Not in isolation, but in the context of all
the data that we have about them. So as I have experienced other PHRs,
I think they provide certainly valuable services, a data repository,
and information can be distributed and shared and that’s a wonderful
thing except that I believe as I mentioned earlier that the information
still needs to be distilled and analyzed. Frankly that’s the unique
capability that we have. So as a member generates 20 to 30 digital
pages of electronic information about themselves, that will be no
easier to read or interpret by the patient or doctor than frankly a big
fat paper chart with 20 or 30 pages of data in it. So I think the
ability to apply these decision support capabilities to those data and
direct the member specifically to conduct certain actions, either on
their own or in concert with their doctor, is what is going to achieve
a level of stickiness if you will in commitment to using our PHR.

The other component in our PHR, we talked a little earlier about data
lags and delays. The care engine at some point, probably mid-year, will
have the capability – we are data testing on this now, to
instantaneously analyze new data that are presented to it. So if a
patient is sitting at their PHR and they put down that they are taking
St. Johns Wort, or Motrin, or a lot of Tylenol, the system can
immediately tell that member well gee, all that Tylenol in the context
of your abnormal liver function test is probably a bad idea. Go and
talk to your doctor. Here’s a link to content that explains the risks
of Tylenol and hepatitis. What I’m trying to convey here is the notion
of instantaneous feedback that again is specific to the unique clinical
characteristics of that member and give them more advice about
lifestyle or exercise. Those are important of course, but sometimes
people are looking for more and can address other issues more readily
if they do the search of the things that we are providing through the

So it sounds to me, and I may be belittling it a bit here – that where
an organization or a patient for whatever reason doesn’t have a PHR,
and you’re working with a plan that could use one, yours obviously
because it’s built by you in conjunction with your care engine fits
very well into that and can spit data back and forth to the member and
receive information very easily. But also theoretically this could work
very well with another PHR, if one of your customers had another
vendor’s PHR and wanted to incorporate the same sort of data. You could
presumably do this back and forth with them if your clients wanted that
to happen as well.

Lonny: Right.

Matthew: That sounds pretty similar to some of the things happening in the EMR world and some of the other things that you mentioned.

Right, and in fact a certain HRA – Health Risk Appraisal – we are
working with our sponsors or our planned sponsor partners and to the
extent that they are pleased with an HRA they have, but they understand
the point that I just made about presenting that data in the context of
all the other data streams that we have an analyzing it. They basically
get the best of both worlds, they can continue to use their HRA but we
will in fact download the information from that HRA into our system and
do the sorts of analysis that I spoke about.

Matthew: Do you have your own HRAs?

Lonny: Active Health has an HRA, Aetna has an HRA, and then of course we have the relationships that I just alluded to.

Right, so in other words – I may be overstating the case. I know you
want to suggest that your PHR is new and special and different in the
capabilities that it has, but most of the different and interesting
capabilities come from your core ability to put multiple data streams
together and represent that information back to relevant people, be it
the patient, the physician, the plan or whomever else. You’re
essentially building off your core, rather than introducing sort of a
distinct product line.

Yes I think it is very much an adjunct to what we have been doing
before. To be specific, the PHR can’t be purchased without purchasing
the HRA as well. There are other issues, for example there’s a lot
discussed about auto population of data. As I said earlier the data
that are generated by your doctor, particularly the ICD9 codes—not due
to anyone’s fault it’s just an inadequacy of the data and the standards
that have been established around diagnosis—there’s no distinction
between a rule out diagnosis and you’ve got it. It frightens me to
consider that someone might see their data, see some dreaded diagnosis
listed which they don’t have but now believe they have, and you can
imagine the potential consequences of that. I think there’s a real need
to be precise about what you present to the member. In addition to the
analysis of this data, our ability to corroborate and validate
information is very important. That’s just one example; there are
several others that I think once we are out in the marketplace that
will really distinguish us from some of these other offerings.

It will be interesting to see. Lets just pontificate forward a little
bit. We have a world in which the data streams that you talked about,
pharmacy data, labs data, IC9 from claims and hospital data, is the
data we have to work with for most of America. But let’s assume that we
have an uptake in the use of electronic medical records and we have got
one of these large installations in the Kaisers of the world and
clinics but also a gradual growth of EMRs take off from the rest of
providers. Is your vision that down the path for those kinds of
companies that have gone down the path  with a typical EMR vendor like
Epic or Cerner, that Active Health Management is going to be a core
traffic control engine that works within all those other types of
applications. If we go to a world where most physicians are using
clinical records five or ten years down the track for example, being
optimistic, where do you guys fit in?

I’d like to see us if you imagine there are multiple pipes, serving
data to some sort of a centralized depository, I imagine us as kind of
the governor on that pipe with the capacity to analyze information that
is flowing across the pipe as it relates to other similar types of data
on that same patient, to do the same sort of things that we have been
doing but with a much more efficient mechanism for extracting data. So
getting much more complete information from the EMR, from the CPOE,
from a radiology system, but also kind of someone to shake hands with
on the other side at the EMR or the PHR where they can be the recipient
of the distillation of this knowledge that we’ve been talking about. So
information is being exchanged. I think that’s currently what people
talk about most. The real context, what we would like to add to that
health information exchange is this capacity to provide analysis, to
distribute the results of that analysis not only to the appropriate
participants in a community – the doctors, the patients, the physical
therapists, but also to create other links with regards to scheduling,
work flow, plan design, which is another issue we can talk about,
adjusting plan design to work with a patient’s unique needs. But
basically being central to the simulation and distribution of
opportunity that relate from that new piece of information that was
generated a millisecond ago.

I guess the one other point that I’d add to that is that you are also
looking at—the question is are you looking at it, but I assume so. You
have folks like the Continua Health Alliance who are talking about the
massive distributions that we are going to get, maybe not in two years
or five years but in ten or twenty years, from sensor devices in the
home and on patients that are going to be reporting back information
much more regularly, maybe daily or maybe continuously, from all kinds
of different medical devices, like diabetics with their continuous
blood glucose monitoring and that kind of thing, which has all got to
go somewhere, all that data. That’s really not a data stream that
anyone is dealing with at this moment. Shouldn’t you be thinking about
that too?

Absolutely. Biometric devices like in this third feed that we are
already investigating partnerships with. Right now in our disease
management approach, we obtain that biometric information through
either the PHR or HRA as it currently exists, or through interfaces
through the nurses. But imagine the value of not only knowing someone’s
height and weight and BMI but their blood pressure, their peak flow,
their sugar levels, and one can go really on and on. So whether it’s
ultimately genetic information or biometric information, in my dreams I
would love to enhance CPOE on the inpatient side, look at hypo dynamic
data, look at inpatient data, intervene in a positive way being a
resource where patients appear to be misdiagnosed or drugs going beyond
some of the metabolic and drug interaction issues. What I was referring
to before is that we are still at the beginning. Ultimately we are
scavengers for data, we will take as much as we can. We need to be able
to communicate with the appropriate providers. Where I see us
ultimately is being central to a community so we don’t represent just a
slice of a doctor’s proactive but in fact are an integral part of what
they do. In one related issue, as we sort of achieve or obtain
ubiquity, of the malpractice implications. So if in fact we can prevent
some of the errors that translate into adverse outcomes, you can
imagine that leads into a totally different discussion.

Absolutely. I think what you are talking about if you imagine the data
flow and imagine the possibility for essentially changing the way
healthcare is practiced by supporting physicians, patients and everyone
else with all this different data. There is enormous potential and the
role of traffic cop and analyst around that data is going to be very
interesting. You’re obviously in a nice position at the moment and I
look forward to seeing how it all plays out. So my guest for the last
fifty-odd minutes on The Health Care Blog podcast has been Lonny
Reisman, the CEO and founder of Active Health Management. I’d like to
thank you very much for taking part in the podcast and it’s been very
interesting hearing about your organization.

Lonny: Well thank you, it’s been a pleasure talking with you.

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5 replies »

  1. Yes, and the counter-argument is always “but this will let providers make the best, least-wasteful choices in care.” To which I have to say “yes, but experience tells me that quickly decays into ‘least possible payout we can get away with, having calculated the cost of wrongful-death lawsuits.'”
    I really would love that everyone is a good-hearted as this guy, but they’re not. There are enough mean and spiteful and controlling and, yes, greedy people to drown the best intentions in black ink. And yes, that’s on the patient, provider and insurers’ sides.
    If we could count on everyone’s good intentions, then this would be incredibly easy. We can’t. It’s not.
    This is why governments step in: Because someone has to act for the general welfare, and government represents a blur of intent, rather than the sharp point of any given stick. I sincerely hope that never happens. I really hope that we come to our senses. But I doubt it.

  2. I think that Peter expresses a concern that will be widespread. Why would I want my insurance company holding my medical record data? Furthermore, why would I want my insurance company providing advice to my doctor on how I should be treated? I certainly have misgivings about the insurance companies being too closely involved with this type of project. However, I do think that doctors can be aided by better information at the point of service. Maybe Independent Health Record banks are the way to go.

  3. So does all this provide better profits for Aetna AND cost savings for patients? Is this the solution to our blotted healthcare system? I can’t believe that Aetna or any other insurer will be able to resist using all this data to exclude those patients it finds are getting just a little too expensive to insure. And of course they will share this data with other insurers so that the patient will have little choice. I also find it interesting that docs aren’t doing the necessary things to look at the whole patient picture to provide the best and most appropriate care. Does this mean that docs look for volume over quality?

  4. Interesting read. Mr. Reisman is extremely visionary. However, I just don’t see Active Health Management being able to compete with EMR vendors that are going to be in a better position to collect all of the clinical data. These vendors are developing and marketing their own analytics offerings. I think AHM would have been better served, long term, to remain independent of the insurance industry. When EMRs are widespread, the model that I see playing out is that insurance plans will be providing some type of incentive to providers if they are using analytical, rules-based data. Not everyone can own the data, and as trailblazing as AHM has been, ultimately I don’t think they will be the entity that other insurers and providers turn to for data-driven, rule-based medicine.

  5. Not sure if it’s a mis-transcription, but Aetna acquired AHM for $400M not $4M…