Last week two new excellent new reports on health spending asked, do
we get what we pay for?
The answer is, well, sometimes — particularly when you follow the perverse incentives that lead you on the money trail of waste, ineffectiveness and, worst of all, poor health outcomes.PricewaterhouseCoopers’ Health Research Institute and the Center for Studying Health System Change offer their views on this topic with slightly different lenses.
In You Get What You Pay For, PwC examines 20 health systems and finds that managing costs is the top ranked factor for re-engineering payment systems throughout. Costs are put ahead of quality, efficiency, or meeting demand. While prospective payment (a la DRGs) has been adopted in 20 countries belonging to the OECD, and two-thirds of those countries believe their payment methods will change as they’re not stemming cost increases.
"Better informed patients" are seen as an optimal way to manage demand — not increasing out-of-pocket payments, at least not as a strategy on its own.
Consumers, employers, payers and providers agree that information flows are critical to helping stem health care costs. While there is shared concern about health care costs, there is also a shared desire for more, accessible information and better online tools for managing it.
TriZetto’s report, Research Shows Healthcare Market Constituents Seek Information as Key to Solving the Affordability Crisis, surveys the landscape of stakeholders in American health care and lays out a rational approach to what the IT services firm calls integrated health care management.
TriZetto lays out five key themes that drive the imperative toward integrated health care management:
- Health care affordability
- Aligning incentives to change activities
- Information access as king
- The importance of leveraging information technology
- Payers as change agents.
The relationship between patients and doctors is fundamentally changing. Transparency in medical records, patients’ accessibility to health information online, and online social media driving patient-to-patient conversations are some forces at the base of the future of health care.
This, according to a thought-provoking report that addresses the evolving nature of patients vis-à-vis physicians in the National Health Service (NHS) in the U.K. These factors are also driving change in health and health care in the U.S.
The Talking Cure: Why Conversation is the Future of Health Care is an essay published in mid-May 2008 by two smart guys at Demos. As the National Health Service in the U.K. approaches its 60th birthday, the Demos research organization launched The Healthy Conversations project (now known as The Talking Cure) to engage stakeholders in and outside of the NHS in a dialogue of how to move patients to the center of health in the U.K.
The cost of health insurance is the No. 1 problem cited by small business owners. Health costs beat gas prices — the No. 2 most severe problem cited by small business, in a March 2008 survey.
This week, small business leaders convened at the annual National Small Business Summit conference of the National Federation of Independent Business (NFIB).
The report notes the downturn in the economy during the second half of 2007 when the NFIB Small Business Optimism Index dropped to 94.6 in December, the lowest since 2001.
Employees are split on whether employer wellness programs intrude on privacy, according to an Issue Brief from the Center for Studying Health System Change (CSHC).
The report details the results of interviews conducted in 2007 in 12 metropolitan American communities: Boston, Cleveland, Greenville, Indianapolis, Lansing, Little Rock, Miami, northern New Jersey, Orange County, Phoenix, Seattle, and Syracuse.
Employee wellness programs are growing in the marketplace as employers try to stem ever-increasing costs, both direct and indirect. This is real money: a report from the American Hospital Association estimated that three chronic diseases — asthma, diabetes and hypertension — accounted for 164 million days of absenteeism each year which cost cost employers $30 billion.
The return on investment of health care information technology isn’t uniformly positive, according to a recent analysis from the Congressional Budget Office titled, Evidence on the Costs and Benefits of Health Information Technology.
The underlying rationale for the report, which was requested by the Senate Budget Committee, is to sort out the federal government’s role in health IT. The report asks, "Whether — and if the answer is yes, how — the federal government should stimulate and guide the adoption of health IT."
The federal government is already in the health care IT fray. President Bush set the goal in 2004 that every American have an electronic health record by 2014. This was a vision, however, without a funding source. There are also several proposals in Congress that would expand the federal government’s role in health IT by mandating the use of electronic prescribing, provide financial incentives to providers who use health IT, and offer grants to purchase systems for providers.
The CBO report points out a major benefit of health IT that has been largely overlooked: IT’s role in research on the comparative effectiveness of medical treatments and practices. When individuals’ health data is in electronic format, it can be depersonalized, aggregated, and analyzed for a range of uses, such as medical effectiveness, quality, and system efficiency, among other research questions.
One sentence in the 48-page report encapsulates the Mother of All Barriers to Health IT Adoption: "How well health IT lives up to its potential depends in part on how effectively financial incentives can be realigned to encourage the optimal use of the technology’s capabilities."
Consumers, at least Californians, do a lot of looking for health
information on the Internet — but very little health management.
California HealthCare Foundation (CHCF) has taken a snapshot of
Californians’ use of the Internet in health care. The profile is
presented in CHCF’s report, Just Looking: Consumer Use of the Internet
to Manage Care.
Topline: insured, more affluent, and younger people use the Internet in health searching.
As the chart at right details, the most popular care-related uses on the
Internet include searching for information about conditions and drugs,
finding a physician, checking ratings, and looking for claims and
benefit information online.
Some 13 percent of Californians are lucky enough to be making appointments online, and 12 percent are filling Rx’s online.
Wal-Mart continued its first-mover tactics in health by dropping the price of prescriptions again. This time, the target is maintenance meds, which Wal-Mart will price at $10 for a 90-days supply.
This move puts Wal-Mart squarely in the pharmacy benefits management (PBM) segment vis-à-vis ExpressScripts, Medco, and the big PBM players. The three-month mail order med business is the lucrative turf of PBMs. Wal-Mart’s first move into this space was in 2006 when the company priced many 30-day prescriptions at $4, shaking up the industry. I wrote about that market disruption here in January 2008.
Wal-Mart will also offer over 1,000 over-the-counter (OTC) meds for $4 and under. These will all be Wal-Mart’s private labels for popular OTC brands.
As the company with the red bulls-eye did the last time Wal-Mart dropped the price of meds, Target responded as a fast follower by saying they, too, will match the Wal-Mart prices for a 90-day supply of drugs. Target’s program will expand the assortment of $4 Rx drugs and the 90-day supply of these medications for $10 and private-label OTC medications for $4 or less.
Health plan illiteracy is alive and well, according to J.D. Power and Associates. The consumer market research firm’s 2008 National Health Insurance Plan Study finds that one in two plan members don’t understand their plan.
In this second year of the survey, J.D. Power notes that, as consumers understand the benefits of their Benefit, their satisfaction with the plan increases. Thus, there is a virtuous cycle that happens between a plan and an enrollee when communication is clear and understood.
J.D. Power looked at member satisfaction in 107 health plans throughout the U.S. in terms of seven key metrics: coverage and benefits; choice of doctors, hospitals and pharmacies; information and communication; approval processes; claims processing; insurance statements; and customer service. The survey was conducted in November and December 2007.
Last year, Abt Associates found that most insured workers don’t understand simple health plan language. I abstracted some of Abt’s findings in this chart that I use in many of my presentations. Health plan illiteracy goes beyond general health illiteracy — this is people blessed with benefits who don’t ‘get’ them.
Rush-Presbyterian Medical Center’s Virtual Integrated Practice (VIP) is more evidence that remote health care can improve health outcomes.
At Rush, a team has been refining the VIP model for the past four years. The VIP’s objective is to improve chronic disease management for older people by deploying aninterdisciplinary team using communications technology.
The main challenges in primary care for VIP’s target patient population are:
- Multiple chronic problems
- Physical disability
- Functional impairment
- Economic stressors
The Holy Grail here is that when these patients are optimally-managed, VIP can identify missed opportunities for primary prevention and avoid eventual disability.