“Don’t pull the knot tight,” the philosopher Ludwig Wittgenstein once warned, “before being sure you have got hold of the right end.” Those who hope to sort out the tangle of health care spending would do well to heed his advice.
Clearly, there’s been no lack of solutions put forward since the Clintons first put health care atop the national agenda more than a decade ago. But with health care spending still rising at twice the rate of inflation, few have made any real and lasting impact.
Employers (who still pay the lion’s share of health insurance premiums here in the U.S.) know, of course, that keeping employees from getting sick in the first place—and minimizing the severity and duration of their illness when they do—is the first step in reducing this unwelcome “growth sector” of our economy. They understand, for the most part, that healthier employees equal not only lower healthcare costs but reduced absenteeism and greater productivity for the economy as a whole.
Hence they’ve tried, with varying degrees of success, to engage employees proactively in such programs as risk assessments, biometric screening, disease management, wellness programs, exercise facilities and the like—all of which have the effect of lower health insurance premiums via reduced consumption. And, as an incentive to engage employees in this effort, they’ve offered various financial incentives, including health reimbursement accounts (and the tax savings these generate for employee and employer alike).
Yet for all the ingenuity of these initiatives, they’ve yet to make a much of dent in the budget for the companies that have introduced them, let alone for U.S. health care spending as a whole. Like so much of 21st century medicine, the cure can be as complex and debilitating as the disease. The challenge and complexity of administering the effort’s many components—information systems, social networks, HRA accounting, planning tools and a plethora of wellness options—can be enough to quickly overwhelm capabilities of even the largest H.R. organization.
Moreover, even when employers do succeed in pulling all these loose ends together and delivering them on the company’s web site, the user experience is often the Internet equivalent of a 4 a.m. visit to the emergency room—and just about as enjoyable. Navigating the mishmash of screens and web tools can be difficult for even the most web-savvy of employees. Worse still, internal surveys often reveal that a majority of employees have no idea they even have access to such functionality. Indeed the same companies who spend millions to provide simple and satisfying e-commerce solutions to their customers often have little clue how to deliver the same level of user experience to their own employees.
In their best-selling book, Made to Stick, Chip and Dan Heath set out to answer the question of why some ideas “stick”—are embraced and endure—while others don’t. Their answer? A successful, “sticky” solution is one that makes an audience: (1) pay attention, (2) understand and remember it, (3) agree/believe, (4) care and (5) be able to act on it. Any solution that fails to meet these five criteria—regardless of its intrinsic merits—is likely to fall by the wayside.
If these principles sound vaguely familiar, of course, it’s because they’re the same ones that designers have been using for years to develop successful, category-creating products from the Volkswagen Beetle to the Apple iPhone. People embrace these products passionately, with a zeal that sometimes borders on religious devotion, because they speak their deepest needs, not just functionally and intellectually but emotionally as well. If the user experience is simple, understandable and, above all, emotionally satisfying—whether we’re talking about a heart-rate monitor or a web site—people will be apt to embrace it again and again, to make room for it in their lives.
What this means for health care—and corporate health benefits management more particularly—is that design needs to integrate with technology in a way that dramatically improves the user experience. (Ask yourself: When was the last time you had a really great experience involving health care?)
If the web experience is simple and easy to navigate (think Amazon) then employees (think consumers) are more likely to embrace it and make it their own. (For me, this is more than simply an intellectual argument; it’s a business strategy to which my company, eBDS, has devoted many months of research and product design, the fruits of which will be introduced in the coming months.)
It can be argued that the foundation of modern commercial civilization has been built on successful design—in architecture, fashion, transportation, telecommunications and any number of consumer offerings, from Frisbees to Facebook. Why then should health care be the exception?
I leave that in the form of a question to the readers of this blog.Alistair Rock is CEO of eBDS, a Pittsburgh-based healthcare technology solutions provider for self-funded employers and a Highmark BCBS subsidiary.
Carl Parisien Natick MA but what do patients have to spend? its the expense piece that is missing
I owned a PPO and have done plenty of contracting. That doesn’t change the fact this statement is incorrect;
“so that patients don’t even have the option to pay out-of-pocket.”
A patient can go out of network and pay out of pocket to receive the service. Further I would suspect those limitations are in a minority of contracts. far from being the norm.
Most readers likely know, or realize upon reflection, that the share of your health-care expenses that your employer pays is zero, plus a friction cost for administration. Imagine if the government imposed taxes so that we got housing from our employers, like it has with health benefits. Employers would be trying to figure out how to co-ordinate housebuilding and maintenance between architects, contractors, carpenters, electricians, painters, plumbers, etc., and deluding themselves into thinking they would someday be able to figure out what the residents wanted. We need tax reform so families can buy their own health insurance, and we needed it a long time ago.
“Yet for all the ingenuity of these initiatives, they’ve yet to make a much of dent in the budget for the companies that have introduced them, let alone for U.S. health care spending as a whole.”
Because it all comes down to work and no amount of “stick” will take away the work. It’s work to control eating habits, work to exercise regularly and work to adopt any cultural change that will provide benefit. People don’t like work. So let’s make it simple, tax bad habits and put that money into the healthcare system.
“Employers are in business to make $ which is ok by me. Get them out of health care. Far too important to nest in risky corporate American.”
So are healthcare providers…clinicians as well as medical suppliers, pharmaceuticals, hospitals, ambulatory surgical centers, labs, etc.
Profit unfortunately drives most if not all of the players. Employers, at least, are one of the few players that are advantaged by reducing utilization and cost. Too many other playeres win as costs increase.
“Only a single-payer approach to healthcare reform will END THE INHUMANITY OF OUR FAILED HEALTHCARE INSURANCE SYSTEM, WHERE PROFITS ARE MORE IMPORTANT THAN PATIENTS’ HEALTH.”
For this to be true the profit needs to be taken out of the medical provider side as well. There are far too many players making a profit in the health care system today…there is not one scapegoat.
Nate… if a physician is contracted with an insurer to be “In Network” then the physician is obligated to abide by the terms of the provider agreement with the payer. To take a direct quote from a letter from an insurance company to a provider…
“These services (i.e. 99058, 99444) are considered incidental to other services provided (evaluation and management services, surgical services, and laboratory services) and separate reimbursement will not be allowed.”
Unfortunately, it is often the case that “other services” that can be billed are not actually provided. So, the contracts insurers have with providers usually precludes the provider from being able to use these codes or get payment in any form. I will be pleased to send you copies of some of these letters, and or contracts, if you have doubts.
I don’t believe the Mr. Rock’s comments were limited to employer solutions only. What I took away from his blog was something that I have been writing about for some time. I believe the technologists, in general, tend to overestimate the ability of users to efficiently navigate the tools they create. They tend to overemphasize the power of their product, and under-emphasize the usability of their product.
A timely example is EHRs. I was at a conference in Boston recently where the primary topic was EHRs. One of the particants asked an intriguing question. “What role does ‘design’ take in the growing amount of spending on healthcare IT and specifically, EHRs?” She brought up Apple’s successes at dramatically improving usability through innovative interface design. (Think of the iPod and iPhone.) She expressed her concerns about the potential for overspending on “technology” and underspending on the user interface design that improves both the quality and efficiency of the patient/provider interaction.
I couldn’t agree with her more. I work with health plans who ask me to assist them in communicating the value they provide to their Accounts. Almost inevitably they focus on the need to build a centralized data warehouse. These initiatives are extremely costly and often take years to implement. Often my advice to them is that the better investment would be to leverage existing data assets and focus on improving the way they tell their story with the existing data. This is where business intelligence meets information design.
At the end of my last blog I made the following statement. “I am really hoping that when we spend the last dollar of health care stimulus money that we are not staring at a tangle of computer systems all talking to each other, but saying nothing to doctors, patients, payers, and employers.” I believe one of the best ways to tackle the overutilization issue mentioned by the post by rbar is through improved information design that is targeted (and will “stick”) to doctors, patients, payers, and employers.
“I have observed an increasing tendency for payers to state the use of these codes are “not allowed,” so that patients don’t even have the option to pay out-of-pocket. This limits patient choice, quality of care, and raises the costs for hundreds of thousands of patients on a daily basis. ”
No plan in the country but Medicare can prevent a patient from receiving a service and paying for it out-of-pocket. The way you write seems to imply private insurance companies do this, which is not possible, your either talking about Medicare or NHS in Britian but surely are not speaking of American private insurance.
“For example, they don’t allow certain billing codes such as “OFFICE EMERGENCY CARE” (after hours – 99058). This practice forces patients into emergency rooms that could otherwise be seen in the office.”
Or forces them to a regualar office visit during regualar office hours which from a cost perspective is the ideal sitution. We want to move people away from emergency treatment not incentivise it. If I was an ER doc looking to build a profitable stable flow of income I would love to have a handful of returning patients each day.
“An example of a billing code for this would be – “ONLINE E/M BY PHYS” (Virtual visit – 99444). If a patient requested to have a virtual office visit instead of having to come in to the office and be face-to-face, the code used for billing would be 99444. Unfortunately, over 90% of payers (including Medicare and Medicaid) will not pay anything for this service code.”
What would the reimbursement for this code be? I would be willing to bet 90% of the time lower then the co-pay. Why would any insurance company cover this? Why would any one pay premium for an insurance policy that did? How exactly would you limit people from emailing their doc 10 times a day with routine questions that don’t even require a medical responce and the provider billing for it?
Where did the country go so far off track that people and providers expect someone else to pick up every penny of their care and treatment? Providers use to bill a lot of 11719 which basically is cutting someone’s toenails and finger nails, should we require insurance companies cover that as well?
Just becuase insurance doesn’t cover something doesn’t mean patients can’t or shouldn’t have it done, it does mean economical logic was applied and the person should pay for it themselves most of the time.
I am a little surprised that no one finds this post self-serving, maybe even deceptive.
Tell me if I am misreading the article, but doesn’t Mr. Rock insinuate that today’s grave health care problems in the US could be solved or at least adressed by making employer based solutions more “sticky”? I have no problems with the stickiness itself, but I am afraid it will help little.
But in order to curb the health care cost explosion, it is more important to tackle the issue of overutilization of HC services (both a doctor- and patient problem) and, to a lesser degree, the cultural issue of the sedentary lifestyle. While the latter can be improved with employer iniatives (although a more concerted effort targeting people at an earlier age seem more promising), I do not see how employer initiatives can improve on patient- and provider driven overutilization. But I’d be happy to stand corrected.
Mike S. above–you hit the nail on the head–and the reason is that our country has raised two generations of citizens who have allowed themselves to believe that ours is the best healthcare system in the world, and that their physicians and pharma industries will cure whatever ails them when the time comes. We don’t need better or more interesting software or websites, we need culture change. I believe it is starting to occur, and would cite the relative success in the reduction of smoking, and the negative social stigma now associated with smoking. If we spent more money to push this culture change, our employees would flock to our hokey employee wellness software. A significant aspect of the culture change is leadership. If we could get a Surgeon General (or President) to lead the charge for personal healthcare accountability, it could move mountains. I think people are tired of being sick and fat, and just need someone to lead them.
If providing people with accurate information was enough to change behavior, then as the number of books, tapes, DVDs and magazine articles on weight loss skyrocketed in the past 20 years, the obesity of Americans would have dropped. But it’s RISEN in proportion to the amount of information. Changing people’s behavior is really hard and there’s little, credible research showing that the kinds of programs offered by employers prevents illness let alone improves health.
I once heard a noted psychologist say that the greatest advancement in medical science, the one that would save the most lives and prevent the most disease, would be to figure out how to get people to do what we already know works!
To abstract Brian K’s post, the setting of healthcare – particularly of routine, monitoring & information-exchange-intensive care events – quite likely has a lot to do with how readily such settings are engaged. I’ve heard a few skilled clinicians express the observation even more broadly, to the effect that 80% of useful health care has nought to do, really, with health care.
And while “employer-based or not?” has indeed gotten lots of attention at THCB, it’s worth noting that whether or not health care is “based” (ie, paid for) principally as a function of employment relationships, employers will have an interest in furthering their workforces’ health as long as there is some potential competitive advantage from so doing – which, I’m prepared to wager, will be pretty much forever.
It is difficult to make any innovation “sticky” if there are financial disincentives for patients. Correct me if there is evidence to the contrary, but most of what I have seen supports that a majority of patients usually need some at least a financially neutral offering in order to take advantages of innovation. However, I continue to see more evidence of health care payer disincentives rather than incentives toward innovation in the meeting of patient needs. So, until there is some means to overcome the tyranny of the payment system, innovation is largely thwarted in a majority of settings. For example, many of the physicians I work with are a cut above the average, and continue to seek innovative ways to meet patient’s deeper needs, For example, I am often giving advice and guidance to many physicians in their efforts to offer the types of services that best meet patient needs. Many physicians have recently made investments in software to allow for email communications with patients, and software that will allow patients to have virtual office visits for established, previously diagnosed conditions that need follow up. An example of a billing code for this would be – “ONLINE E/M BY PHYS” (Virtual visit – 99444). If a patient requested to have a virtual office visit instead of having to come in to the office and be face-to-face, the code used for billing would be 99444. Unfortunately, over 90% of payers (including Medicare and Medicaid) will not pay anything for this service code.
In order to decrease emergency room visits, many physicians have made arrangements to see patients in their clinics after hours. However, payers usually do not allow physicians to see patients in their clinics after hours. For example, they don’t allow certain billing codes such as “OFFICE EMERGENCY CARE” (after hours – 99058). This practice forces patients into emergency rooms that could otherwise be seen in the office. In recent months, I have observed an increasing tendency for payers to state the use of these codes are “not allowed,” so that patients don’t even have the option to pay out-of-pocket. This limits patient choice, quality of care, and raises the costs for hundreds of thousands of patients on a daily basis.
Would employers not be wise to first demand insurance products that have appropriate incentives for patients to use innovation? I think so, and then the deliverables can enter the necessary incremental improvements that innovation can deliver.
I have checked the blog Guru. Nice definition!
Last week, we wrote the definition of healthcare system at a macro level on our blog. May be it might need more input to make it complete.
The commentary following this post is focused on the relative merits of employer-sponsored vs. other public sector forms of (e.g., single payer) coverage. We’ve seen these arguments here on THCB many, many times.
But the post’s points were on a different topic entirely, and potentially important. Mr. Rock posits that the ergonomic design of patient tools can significantly enhance the consumer’s experience to create engagement, and that this engagement is independent of how health care is financed.
Health care offers many issues to think through. Sometimes they are different than the one uppermost in our minds, but still very useful.
1. Americans are paying more for health insurance and receiving fewer and fewer benefits
2. Health insurance companies continue to raise their premiums while decreasing and denying coverage
3. Healthcare insurance companies deny healthcare claims on a regular basis, and change their coding schemas frequently to avoid paying legitimate claims
4. Physicians are forced to pay huge administrative costs and employ large staffs to deal with health insurance companies
5. The severe shortage of primary care physicians—due in part to declining reimbursements and impossible administrative hassles from third-party payers — seriously threatens the quality of healthcare US citizens receive now and in the future.
6. Millions of Americans cannot afford or have no health insurance—50 million have no health insurance and 87 million have been without health insurance at some time in the past 2 years.
Only a single-payer approach to healthcare reform will END THE INHUMANITY OF OUR FAILED HEALTHCARE INSURANCE SYSTEM, WHERE PROFITS ARE MORE IMPORTANT THAN PATIENTS’ HEALTH.
Only a single-payer approach will end the current disgraceful practice of insurance companies refusing to pay for medical treatment, denying claims, and engaging in rampant price gouging that discourages patients from going to the doctor and has resulted in 50 million Americans without healthcare and 87 million Americans without health insurance at some point in the past 2 years.
HR 676, The United States National Health Insurance Act, would ensure that every American, regardless of income, employment status, or race, has access to quality, affordable health care services.
The United States National Health Insurance Act, H.R. 676. You can read about it here: http://www.healthcare-now.org/hr-676/
Ask your Representatives to co-sponsor HR676.
If you want to learn more, go to:
“The successful companies out there do value their employees as assets. The ones that don’t have a competitive disadvantage.”
Deron, I want to agree with you but my experience is otherwise. Imagine a continuum of management styles with compassionate and appreciative companies at one end, and indifferent, dog-eat-dog companies at the other. We will find that both flourish in the marketplace. It’s great to work in one of those “100 best” or “most desirable” outfits, but it’s hard to tell one company from another from outside. Journalists love to write human interest stories, but investors don’t give a damn unless they are in public. Even then their money follows the financial statements more than high-sounding prose about anything else.
In fact, you can advance an argument that employee appreciation follows profits rather than the other way around. Blood doesn’t show on a balance sheet.
The one thing I like about the employer model is the fact that work is already a destination for people. They have to go to work, but they don’t have to take some of their free time to go to the gym or to a consult with a nutritionist. If an employer can provide those things in the workplace, it might be able to increase participation. My company is proof that it is possible.
The successful companies out there do value their employees as assets. The ones that don’t have a competitive disadvantage.
Thanks John Ballard
If trust in corporate America is regained it will and should come very slowly
A career in business dealing with the public leads me to agree with Dr. Lippin for two reasons. I have watched efforts to shape human behavior over the years meet with little to no success. And what I have seen of corporate behavior agrees with Dr. Lippin’s observation that “employers still view employees as costs -not assets- on the corporate balance sheet.”
Old-fashioned Southern cafeterias with a hundred fresh choices offer a perfect selection for anyone seeking a nutritionally balanced, economical meal. As the public’s attention turned to “healthy eating” in the late eighties, our company launched an excellent promotion tagged “Build Yourself a Healthy Meal,” complete with broadcast and print ads, daily menu selections, targeted market groups and in-store point-of-sale materials (that would be POS for you guys who love acronyms).
Aimed at an entire calendar year, the program was introduced with great fanfare. But after about four or five months there was no measurable impact on sales, profits or human behavior. As the program was discontinued a handful of people expressed regret, but for the most part no one noticed. We learned that people talk one way and eat another. I have heard customers say at the bread station with no hint of irony, “Oh, no… no bread for me. I’m getting a dessert today!”
I hope the day will come when attempts to guide the public into better lifestyle choices start to work, but like Dr. Lippin I’m not optimistic. I have witnessed the same three decades of empty rhetoric.
As for the corporate part of the picture, the sooner health care is uncoupled from employment the better. As John Sinibaldi described in “A Broker’s Lament” employer subsidized insurance has shielded beneficiaries in large groups from the costs of their medical care. Small businesses and individuals sure as hell get it.
“While the employee of a regional electric utility is complaining about monthly payroll deductions for his family that now exceed $500 or more on a $60,000 annual salary, the longtime employee of a local small electrician is looking at monthly payroll deductions for his family of $1,500 on a $35,000 annual salary. His apprentice is younger, and so is “fortunate” to have monthly deductions for his family of only $900 on a $20,000 annual salary. The electrician’s helper making $9/hr can’t afford even his half of the premium for just himself.
“Individuals on personal health insurance policies are also feeling the ‘pinch.’ Most of my individual clients see increases of 18-25% a year.
“It is all of these folks (and there are tens of millions of them), coupled with those who have already been priced out of the market altogether, who will fuel the fire for radical reform. It is these folks who complain – long, loud and bitterly – that the American dream is leaving them behind. It is these folks to whom the politicians will ultimately listen, because they’re the ones making all the noise. It is these folks who will ultimately define what the next set of reforms looks like – and those reforms will NOT be confined only to the small group and individual markets – nor do these folks give a rat’s rear end if the insurance industry is involved. (After all, we’re doing such a wonderful job for them now.)
“And, in my opinion, rightfully so. The health insurance industry (with lots of complicity from legislators, lobbyists and industry groups like ours) has let them down. Period. We have chased profits, chased commissions, swallowed every piece of spin the insurance industry has fed us, and generally ignored the growing number of folks who are beyond dissatisfied with the status quo. They’re mad, and they’re not going to take it any more.”
Dr. Lippin is right, everyone.
For the most part employers still view employees as costs -not assets- on the corporate balance sheet- despite my hearing empty rhetoric otherwise for 30 years.
Given especially recent grossly irresponsible corporate behavior and a much changed social contract between employees and their employers over the past two decades US citizens should not trust employers with something as important as their and their family’s health care.
Employers are in business to make $ which is ok by me. Get them out of health care. Far too important to nest in risky corporate American.
Dr. Rick Lippin
Most proposals, in my opinion, fall within narrow range and do not address the real issues. For a while now I have tried to suggest a different approach but everybody seems ideologically entrenched and not open to real argument.