Validating Health Care Performance

Brian Klepper

Posted 8/20/18 in Valid Points, the Newsletter of The Validation Institute

The beginning of wisdom is calling things by their true names. – Confucius

BKlepperFor purchasers, health care is the Wild West. Vendors of all types – disease managers, wellness companies, care navigation firms, ambulatory surgery centers, benefits advisors, worksite clinic firms, and on and on – have a long history of making exuberant claims about their outcomes and savings. Purchasers – self-funded employers and unions – generally have no alternative but to take those promises at face value, assuming they’re grounded in solid data and hard math. They may be more resigned than surprised when the expected results don’t materialize.

The propensity of vendors in the population health management sector to over-promise and under-deliver became so pronounced that Al Lewis, a nationally prominent health care outcomes analyst, wrote an entertaining book about it, called Why Nobody Believes the Numbers. Why Nobody Believes tells how 12 companies cooked their numbers, and how they mostly thrived despite a flow of bogus results. Anyone familiar with corporate health benefit plans over the past couple decades is aware of the immense popularity of wellness and disease management programs despite skinny evidence showing that they’re effective.

In 2010, Sean Slovenski, then CEO of an Intel-GE subsidiary called Care Innovations (and now Walmart’s SVP & President of Health and Wellness) created a new organization, The Validation Institute, to evaluate the calculation methods of health care organizations making claims about their performance. If their data sources and data are credible, if their math makes sense and if the evaluator find that the intervention has produced the promised results elsewhere, then the product/service would be “validated.” If not, the evaluators provide guidance on how to do the calculations properly.

This approach – independent, objective, highly capable third party review and evaluation – was the right solution, providing a fresh, straightforward way for responsible vendors to be accountable.

For purchasers, validation represents a significant advantage. They can be confident that vendors’ performance will approximate what they promised. By reducing this uncertainty, an increasing number of purchasers, Walmart included, now give validated vendors preferred status in the bidding process.

With rapidly growing momentum and increasing influence, the Validation Institute is poised to close a glaring gap in health care purchasing. Accordingly, every purchaser should insist that every health care vendor become validated and build the validation requirement into its Request for Proposal process. Likewise, the validation process should become a critical step in every vendor’s go-to-market plan.

In a health system awash with excess and opacity, an important first step is a rigorous process that gets to transparent outcomes. In health care, that step starts at The Validation Institute.

Brian Klepper is a health care analyst.

A Blog for Employer and Union Benefits Managers and Their Advisors

Featured

bklepper-111516Welcome!  There are few go-to sites dedicated to the very significant challenges faced by health benefits managers, consultants and other health benefits professionals.

Health care purchasers are under pressure to deliver better quality care at lower cost, but are besieged by lack of knowledge, misinformation, lack of disclosure about conflicts of interest, and intentional obfuscation by brokers, health plans, PPOs, PBMs, wellness programs and other health care interests. There is relatively little evidence-based information about what really works and why, and how you can access those opportunities without disrupting your in-place conventional health plan, especially when it is almost certainly not in that plan’s interests for you to do so.

So Care & Cost will post meaty, useful articles aimed at the health care purchaser community – employers and unions – from benefits managers and advisors who are managing risk and getting measurable results in pragmatic but often unconventional ways.

Take a look and, if you like what you see, pass Care & Cost around to your colleagues. The best way for us to gather the strength that can leverage change is for us first to come to a common understanding of the problem and its solutions.

The Gold Standard for Current Cancer Treatment

Published Online 6/27/2016 in JAMA Internal Medicine.

EandBA couple of months before Elaine died from peritoneal cancer, we hired Anila, a cheerful, hearty Albanian house cleaner. On her first visit, Anila saw that Elaine was bedridden. “Kerosene can save her,” she said. “There is science. Look it up on the Internet.” Later, Elaine and I had a good laugh over it. She said, “Maybe that’s all they have available in Albania.” But in retrospect I’ve thought, “Could it be any worse than the treatment she got here?”

Elaine was a bright light to those who knew her, one of those rare people whose inherent grace put others at ease and made them feel special. A trained pianist, she was also a gifted and productive artist who in her last year painted and gave away more than a dozen original pieces to friends and family. Continue reading “The Gold Standard for Current Cancer Treatment”

Congress’ Drug Addiction

Posted 2/26/16 on Employee Benefit News.

The Congressional committee that recently demanded Martin Shkreli’s appearance must have hoped to spotlight a smug jerk responsible for the outrageous prescription drug pricing that we’re all up against. Of course there are lots of Shkrelis running drug companies, but most are shrewder and less brash, and might not make for such good theater.

Rep. Elijah Cummings (D-MD), one of the Committee’s questioners, seemed to think that his witness could move healthcare forward by disclosing the machinery of the drug sector’s excesses. “The way I see it, you could go down in history as the poster boy for greedy drug company executives or you could change the system. Yeah, you.” Continue reading “Congress’ Drug Addiction”

Will Specialty Drug Pricing Be The Straw?

Published 5/27/15 in Employee Benefit News

ALP_H_BK_0010Over the next few years, drug manufacturers will release a host of new drugs that are more complex and, in many cases, more effective than we’ve had access to in the past. There will be better solutions for common problems, and new solutions for uncommon ones. Specialty drugs, many of them “precision therapies,” will offer tremendous promise for better health outcomes across the breadth of human health and treatment.

Not surprisingly, most of these drugs will have breathtaking price tags, often a high multiple of conventional drugs. Specialty drugs are an exploding growth industry, with spending rising almost 20 times as fast as conventional drugs. Unless something changes, in just another five years we’ll likely spend more on specialty than non-specialty drugs. Or, for that matter, on doctors.

Continue reading “Will Specialty Drug Pricing Be The Straw?”

Developing a Coordinated, Considered Response to Predatory Health Care

Brian Klepper

Posted 9/21/14 on the NBCH Newsletter Blog

ALP_H_BK_0010In today’s New York Times, Elizabeth Rosenthal describes the growing and egregious over-treatment and overpricing practices by physicians and health systems, abetted by health plans.

The excesses detailed in this article are at the core of our national health care quality and cost crisis. The best solutions are collaborative, considered actions by group purchasers, potentially the most empowered of health care’s stakeholders.

When predatory anecdotes like these come to light, the benefits managers – or better yet, the CFOs – of local employers, unions and governmental agencies should immediately call the health plan and demand that the health systems, physicians and other providers involved be removed from the provider panel. (Small communities held hostage by a few dominant health care players are a separate topic that I’ll address soon.)

As Tom Emerick, former VP Human Resources at Walmart has stated repeatedly, health care will not improve until purchasers demand different behaviors from health care vendors, focusing business on organizations that facilitate high quality care at reasonable cost, and publicly avoiding those that do not.

This is a serious issue that demands a coordinated response. It is at the top of NBCH’s agenda. Join with us on this.

Brian Klepper is the CEO of the National Business Coalition on Health.

Getting Beyond Fee-For-Service

Brian Klepper

Posted 12/02/13 on Medscape Connect’s Care and Cost Blog

ALP_H_BK_0010The catchy title of a recent Harvard Business Review Blog post, The Big Barrier To High Value Health Care: Destructive Self-Interest, suggested that the Institute for Healthcare Improvement (IHI) is forging arrangements that can overcome fee-for-service reimbursement’s propensity to drive excess. As the honest broker, IHI could advocate for arrangements of mutual self-interest based on the right care, better outcomes and less money. Employers and unions would get lower costs, with improved health and productivity. Health systems and health plans would win more market share (at their competitors’ expense), realizing longer term relationships that could facilitate sustainability as market forces intensify.

The substance of IHI’s description was less satisfying, though. Their principles – common goals, trust, new business models, and defining roles for competition and cooperation – are obvious ingredients in any workable business arrangement. But the authors never talked about the money. That left plenty of room for skepticism by those of us who have heard more than one CFO ask, “Why should we take less money until we have to?” What, exactly, is the incentive for health care organizations to moderate their care and cost patterns?

Continue reading “Getting Beyond Fee-For-Service”