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
For 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.