The Makings of A Great Outcome

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ElaineLast week my wife and best friend, Elaine, had massive abdominal surgery. We fully expected her to be an inpatient for a week, but she was home in four and half days. To watch her recover was to see what happens when everything converges: the deep knowledge and skills of excellent, humane physicians; a capable, caring clinical staff; wonderful new technologies; and a lifetime of eating right, being fit and tending to one’s health.

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Are We Adequately Securing Personal Health Information

By BRIAN KLEPPER AND DAVID KIBBE

In a discussion about electronic health records (EHRs) a couple weeks ago, one of the Human Resource team members at a prospective client said, “I don’t believe it’s possible to secure electronic health data. It’s always an accident waiting to happen.”

There is some truth to that. More and more, our Personal Health Information (PHI) is in electronic formats that allow it to be exchanged with professionals and organizations throughout the health care continuum. It is highly unlikely that each contact point has the protections to wrap that data up tightly, away from those who would exploit it.

Of course, PHI is among the richest examples of personal data, often with all the key ingredients prized by identify thieves: social security number, birthday, phone numbers, address, and even credit card information. This should give health care organizations considerable pause.

Then consider that, while paper charts contain the same information, electronic files often aggregate hundreds of thousands or even millions of records, information treasures troves for someone really focused on acquiring, mining and making use of the data.

Which is what makes a new health data security survey commissioned by Kroll Fraud Solutions and conducted by HIMSS Analytics, so provocative. As they had in 2008, HIMSS Analytics found that most provider organizations meticulously comply with data security rules and standards. But they’re overly confident about the security that compliance actually conveys. Worse, many remain unaware, until confronted by an event, of the devastating implications of even a minor breach.

And the threat is intensifying as the market and technology evolve. In 2010, 19 percent of organizations reported a breach, half-again higher than the 13 percent in 2008. Apparently, both the complexity of the environment and the interest in the data are growing. Security may be diminishing as a result.

And breaches can be hugely costly. A Poneman Institute study found an average cost of $6.75 million for organizational data breaches. This figure is not limited to incidents with malicious origins or even harmful consequences. In January 2009, the Department of Veterans Affairs agreed to pay $20 million to veterans who could show they were hurt when, in 2006, a VA data analyst lost a laptop containing information on 26.5 million patients, nearly every living veteran. The laptop was eventually recovered without apparent data compromise. The VA is now struggling with a new, serious health data breach.

Nor is the impact likely to be financial alone. The larger cost may simply be in the loss of patient confidence. After all, if an organization can’t competently manage my data, do I want to hand over management of my family’s health?

Perhaps the HIMSS Analytics’ study’s most important and penetrating finding is that “health care organizations continue to think of data security in specific silos (IT, employees, etc.) and not as an organization-wide responsibility, which creates unwanted gaps in policies and procedures.” Nearly 9 in 10 survey respondents said they have policies in place to monitor access to and sharing of health care information. But more than four-fifths of breaches occur in more mundane ways: e.g., lost/stolen laptops, improper document disposal, stolen tapes. In other words, the holes can’t be addressed by isolated approaches.

Security is a process, not a product. This means that certification of PHI security must be larger than merely plugging the security gaps in information technology, and must extend to the ways that people access and use information and the information technology.

It is clear that the answers here involve making heath data security an enterprise-wide responsibility, creating highly aware environments resistant to breach in even the most seemingly insignificant interactions. That will demand a significant cultural shift, critically necessary but, as this survey shows, difficult for many organizations’ leaders to wrap their heads around.

Brian Klepper, PhD and David C. Kibbe, MD MBA write together on health care innovation, technology and market dynamics.

Value Trumps Price in Onsite Clinics

by BRIAN KLEPPER

Onsite health clinics are new territory for most employers. It can be difficult to sort through the different approaches used by different vendors. Worse, in difficult economic times it’s tempting to “get in” as cheaply as possible.

But like many purchases, you may get what you pay for with clinics, especially if you scrimp. Here are three reasons to favor value over price when considering an onsite clinic vendor:

 

  • An investment. Most employers believe their health plan expenditures are high enough already. For them, a clinic represents an additional expense, and only makes sense if it can provide a return on investment that lowers overall group health and occupational health costs. Ask vendors for data and testimonials that their clinics save money and improve the quality of care.
  • Many impacts. Properly configured, clinics do far more than reduce costs for office visits, drugs and lab tests. They can positively impact the chronic diseases that consume two-thirds of a health plan’s costs. They can influence specialty and inpatient care, which the Dartmouth Atlas shows have the highest concentrations of waste. And they can affect the five major areas of occupational health — workers’ compensation primary care, disability management, human resources testing (pre-employment screens, drug screens, Department of Transportation exams), retention/recruitment and lost work time — that, together, cost two to three times as much as a group health premium.
  • Total effectiveness results from a clinic’s component medical management mechanisms. Optimizing quality and cost within the complexity of health care requires assembling an array of tools and programs, each targeted to a specific health care problem. Each approach has dedicated costs, but most also produce savings that outweigh their expenses.

For example, incentives such as free office visits, laboratory tests and free standard drugs, mostly low-cost generics, induce employees to use the clinic and help the primary care staff gain more control over the care process. Physicians cost more than nurse practitioners, but are more likely to create a fully realized medical home and have a better chance of influencing downstream care.

Clinical analysis and decision support tools help identify patients with health risks or gaps in care that deserve attention. Onsite, face-to-face disease management programs have a far better chance of influencing chronic disease costs than call center programs.

Modern clinics are a powerful innovation in an employer’s benefits arsenal. But they must be robust to be effective, integrating a variety of proven mechanisms. With those properly in place, the results can be quantifiable improvements in health care quality, cost and employee morale.

In other words, a clinic’s cost may be important. But the value — the benefit you receive for the cost — should be the reason you implement a clinic. It will certainly be how you’ll judge your investment.

 

Really Managing Care and Cost

by BRIAN KLEPPER

One of my favorite health care stories is about Jerry Reeves MD, who in 2004 took the helm of a 300,000 life health plan in Las Vegas, including about 110,000 union members, and drove so much waste out of that system – without reducing benefits and while improving quality – that the union gave members a 60 cent/hour raise. There was no magic here. It was a straightforward and rigorously managed combination of proven approaches.

Dr. Reeves’ work betrayed the lie that tremendous health care costs are inevitable. To a large degree, the nation’s major health plans abetted this perception when they effectively stopped doing medical management in 1999. (Most have recently begun managing again in earnest.) The result was an explosion in cost – 4 times general inflation and 3.5 times workers earnings between 1999 and 2009 – that has priced a growing percentage of individual and corporate purchasers out of the health coverage market, dangerously destabilizing the health care marketplace and the larger US economy. In 2008, PriceWaterhouse Coopers published a scathing analysis suggesting that $1.2 trillion (55%) of the $2.2 trillion health care spend at that time was waste.

As the chief sponsors for most Americans’ health coverage, businesses have struggled to cope with health care cost while identifying value. Large American businesses, with tens or hundreds of thousands of employees, have recruited high profile benefits professionals – think of Jill Berger at Marriott, Ned Holland at Embarq, Peter Hayes at Hannaford Brothers or (the recently retired) Cecily Hall at Microsoft, each with terrific reputations – who, with their staffs, orchestrate sophisticated campaigns focused on the health of their employees and their families, and on the cost-effectiveness of their programming. Even so, few large firms provide comprehensive, quality benefits at a cost that remains consistently below national averages, and for years now America’s CEOs have routinely reported that their top business concern, health care, is their most unpredictable, large cost.

For mid-sized business, though, – here I’m referring to firms with 200-5,000 employees – the task is significantly more difficult. Health benefits managers in these companies have far fewer resources, typically work alone without the benefit of staff, and are often overwhelmed by the complexity of their tasks. Held accountable for their organizations’ health costs, they often default to whatever the brokers and health plans suggest.

But a few excel. For them, managing the many different issues – e.g., chronic disease, patient engagement, physician self-referrals, specialist and inpatient over-utilization, pharmacy management – is a discipline. A couple years ago, I was introduced to someone like this.

Barbara Barrett was trained as a paralegal. She is now General Manager of TLC Benefit Solutions, Inc., the benefits management arm of Valdosta, GA-based Langdale Industries, Inc., a small conglomerate of 24 firms with 1,000 employees, engaged primarily in wood products for the building construction industry, but also in car dealerships, energy and other concerns.

Valdosta is rural, which puts health benefits programs at a disadvantage. Often there is only one hospital nearby and so little cost competition. Rural Georgians also may have lifestyles that make them prone to chronic diseases, which are expensive. And so on. You get the idea.

Here’s the interesting part. Since 2000, when Barbara assumed responsibility for the management of Langdale’s employee health benefits, per employee costs have risen from $5,400/year per employee to $6,072/year per employee in 2009. That’s an average health plan cost growth of 1.31 percent per year.

I compared Langdale’s health plan cost growth to the average commercial coverage inflation rate for an employer with 200+ employees provided in the Kaiser Family Foundation/Health Research and Educational Trust (KFF/HRET) 2009 Employer Health Benefit Survey. The calculation showed that, in that nine years, Barbara’s management allowed Langdale to provide its 1,000 employees and their families with comprehensive medical, dental and drug benefits for $29 million less than the average of other firms that size. That’s a nine year savings of $29,000 per employee, or an average of $3,200 per employee per year lower than the national average. All without reducing benefits or transferring the cost burden to employees, and while quantitatively improving quality.

So how did Barbara approach the problem? Here are a few of her steps:

  • Under her leadership, Langdale set up TLC Benefit Solutions, a HIPAA-compliant firm that administers and processes Langdale’s medical, dental and drug claims. This allowed Barbara to more directly track, manage and control claim overpayments, waste and abuse.
  • The claims also gave her immediate access to quality and cost data on doctors, hospitals and other vendors. She supplements these data with external information, like Medicare cost reports for hospitals in the region. This allows her to identify physicians and hospital services that provide low or high value. She then created incentives that steer patients to high value physicians and services and away from low value ones. When complex services necessary to treat certain conditions are not available or of inadequate quality or value locally, she shops the larger region, often sending patients as far away as Atlanta, three and a half hours away.
  • She analyzes the claims data to identify which patients have chronic disease and which patients are likely to have a major acute event over the next year. Chronic patients are directed into the company’s opt-out disease management/wellness/prevention program. Acute patients are connected with a physician for immediate intervention.
  • She provides Langdale’s employees and families with confidential health advocate services that explain and encourage use of the company’s wellness, prevention and disease management programs. And she uses incentive programs to reward patients who enter these programs and meet targets.

Barbara has mounted many more initiatives in group health, but her responsibilities also extend to life, flex plan, supplemental benefits, retirement plan, workers’ compensation, liability and risk insurance. The results for Langdale in these areas include lower than average absenteeism, disability costs and turnover costs.

The point is that Ms. Barrett and Langdale have been pro-active, endlessly innovative, and aggressive about managing the process. That attitude and rigor has paid off through tremendous savings, yes, but it has also produced a desirable corporate environment that demonstrates that Langdale values its employees and the community. The employees and their families are healthier as a result, and are more productive at work. This has borne unexpected fruit. The industries Langdale is in have been hit particularly hard by the recession, and the benefits savings Barbara’s efforts generate have helped save jobs.

Barbara Barrett and many others like her on the front line are virtually unknown in health care. Most often, their achievements go unnoticed beyond the executive offices.

But they manage the health and costs of populations in a way that all groups should and could be managed.

Brian Klepper is a health care analyst.

Vote Yes

BRIAN KLEPPER and DAVID C. KIBBE

One of us was at a local diner yesterday, when a good friend and health plan broker walked up to say hello. This guy delivers premium increases every day to employers, and understands how broken things are. “I hope Congress votes yes,” he said flatly. “We’ve got to finally move beyond the status quo and try to change the system.”

As conflicted as we are over it, we agree and we hope it passes. The die is now cast, so there is no point in continuing to urge a different approach. As terribly flawed as it is on cost controls, the bill represents two very important things that, in our opinion, the nation desperately needs.

First, it will significantly open access, bringing America much closer to universal coverage and making personal financial distress a much less likely outcome of sickness or injury. As Nicholas Kristof pointed out Wednesday, that alone will dramatically improve the health of the nation. Widespread uninsurance and under-insurance have been a national disgrace for decades. Passing this bill would be a commitment to move beyond that shame.

Second, we believe the President is attempting to deal with many difficult problems thoughtfully and in good faith within an extremely toxic political environment. We want to see him succeed, because we think that his approach is good for America.

The bill is not what we hoped for. We’re disappointed in the behaviors of both parties. But after a year of wrangling, it is what is possible now. There is no reason the bill’s inadequacies can’t be revisited.

We hope Congress votes Yes on this bill. Making care and coverage more accessible and more fair would be a momentous and long overdue achievement.

The Surprise

Brian Klepper

Check out this March 3rd article – see the image – from the recent HIMSS conference, in which Dave Garets, President and CEO of HIMSS Analytics, “gazes into the future and predicts major trends for the next 12 months.” HIMSS Analytics is the research and consulting arm of the health IT vendors’ association, and presumably on Health IT’s leading edge.

From the article:

“Q: What will constitute the surprise of 2010 – the one technology or policy or X-factor that no one saw coming.”

“A: Clinical groupware in the ambulatory market that may be the disruptive innovation of ambulatory EMRs.”

For the uninitiated, “Clinical Groupware” is a term that is rapidly gaining traction and that describes a new wave of inexpensive, ergonomic, useful Web-based care management tools. David Kibbe coined the phrase and articulated Clinical Groupware’s conceptual framework on this blog early last year – see here and then here. He noted that it:

“…captures the basic notion that the primary purpose for using these IT systems is to improve clinical care through communications and coordination involving a team of people, the patient included. And in a manner that fosters accountability in terms of quality and cost.”

Dr. Kibbe formulated his ideas, not in isolation, but in continual discussions with innovators developing great new care management tools – e.g., Docsite, Keas, Relay Health, VisionTree, Medicity/NOVO, Salesforce, Practice Fusion – that were realizations of the concept in one form or another. A group of these like-minded developers founded the Clinical Groupware Collaborative, led now by Steve Adams, the founder of RMD Networks. If you’re working in this or an aligned area, consider joining.

Which is all by way of saying that it is a stretch to say that “no one,” especially HIMSS, saw this coming. From the moment that HIMSS became aware of Clinical Groupware – it’s newfound religion on Web-based and modular approaches notwithstanding – influential members were concerned about the trend’s disruptiveness. After all, if you’re selling EHRs for $25,000 per physician and a new competitor comes along with complete systems or highly useful modular components for a fraction of that – or even free! – the pricing shift will wreak havoc on your revenue and market cap. It’s enough to give even the most enthusiastic free marketeer the willies.

That concern found expression through HIMSS influence over CCHIT‘s – the Certification Commission for Health Information Technology – certification process. CCHIT’s criteria were initially spun to favor HIMSS members’ products, mostly old-fashioned client-server tools that are complex and not interoperable, and to stifle support of newer, more streamlined solutions like Clinical Groupware. Remember that, early on, everyone thought CCHIT certification would be the criterion for receiving ARRA HITECH stimulus funding, so the criteria could be used to steer the money, conflicts of interest notwithstanding. Fortunately, cooler heads prevailed on the HHS Policy Committee and that heist was averted, or at least it seems so at this point.

The good news is that Dave is right. Clinical Groupware is evolving rapidly and will seamlessly link tools, care teams and patients. It does look disruptive and undoubtedly is the future. If they’re watching, this should give serious pause to all those investors driving up Allscripts stock price.

Because, in the end, many old-guard EHRs – the ones Clinical Groupware will replace – produce dreadful customer experiences like the one described recently by John Moore. His article described a market begging for innovation, where the old guard is locked into its past market domination and excessive pricing, and the users are increasingly frustrated.

Of course the irony here is that Clinical Groupware will most surprise and disrupt HIMSS’ member organizations, the core of Mr. Garet’s constituency, who thought the matter was settled a year ago.

Brian Klepper writes about health care market dynamics and innovation.

After the Failure of Reform

By BRIAN KLEPPER AND DAVID C. KIBBE

The stalemate in the bi-partisan health care summit was cast the moment it was announced. Republicans demanded that the reform process start anew, and Mr. Obama insisted on the Senate bill as the framework going forward. The President may now offer a more modest reform bill that can demonstrate some progress on the health care crisis, but that remains to be seen.

We hoped the White House would seize the opportunity presented by Massachusetts’ election of Scott Brown to begin again, huddling away from the lobbyists to develop a new set of provisions that would include reasonable Republican elements, like medical liability reform, as well as other meaningful cost reduction provisions excluded from the first round of bills: pricing/quality transparency, a move away from fee-for-service reimbursement, and the re-empowerment of primary care.

They took a different path. As Ezra Klein speculated in the Washington Post, Mr. Obama and his advisors may believe that, with the 2010 elections bearing down on Congress, there is too little time to begin again.

But this is a questionable political calculation. The reform process soured the American people and American business on the health care bills. A January 27 Towers Watson/National Business Group on Health (NBGH) survey found that 71% of employers believe the bills “will increase the overall cost of health care services in the United States.” A February 11 Rasmussen survey found that61% of voters think the bills should have been scrapped and the process started over.

And no wonder. Over the past year, the legalized bribery that is special interest lobbying was fully on display, with members of both parties (but led by the Democrats) taking contributors’ money with a gusto unprecedented since the Republican feeding frenzy set off by Newt Gingrich’s K-Street Project. A new report from the Center for Public Integrity shows that “more than 1,750 companies and organizations hired about 4,525 lobbyists — eight for each member of Congress — to influence health reform bills in 2009.” Together, they spent $1.2 billion on health care, more than one-third of the $3.47 billion spent by special interests in 2009 to buy influence over policy.

And then there was the brazen political deal making. Mary Landrieu brought $300 million in federal aid home to Louisiana for voting with the Democratic Leadership, which the GOP promptly dubbed “the Louisiana Purchase.” Ben Nelson got the Feds to pay for most of Nebraska’s Medicaid expansion…in perpetuity. And, on the eve of the Massachusetts Senatorial election, the White House cut a deal that exempted unions from the tax on “Cadillac health plans” until 2018.

The resulting reform provisions – a cynical combination of expert advice, uncompromising ideology and donor quid pro quos – would have extended entitlements while rescuing the industry at the top of a financial bubble, exacerbating the cost growth problem during a recession by replacing dwindling private funding with public dollars. At the same time, the bills specifically avoided committing to approaches that could wring excessive cost from the system.

In truth, either passing or blocking such poor bills would have had little impact on the increasingly threatening crisis. Short of starting over, American health care will continue to face some very harsh realities. More individual and corporate purchasers, particularly small employers, will be priced out of coverage as health care costs explode. This erosion in mainstream coverage is translating to a reduction in total health plan premium – the engine of the health care economy – and to escalating uncompensated care cost loads throughout the system. A plummeting number of insured patients will find it harder and harder to pay for a rapidly growing number of uninsureds and under-insureds.

These are recipes for instability and disaster. And as health care – the nation’s largest economic sector, representing one dollar in six and one job in eleven – becomes increasingly unstable, so does the larger US economy.

Americans are increasingly aware that a government in which both parties are compromised by political ideologies and special interests will likely leave them to their own devices in dealing with health care. American business had, to a great extent, put health care benefits decisions on hold until reform was complete. Now it is resigned to continuing to cope with that burden, but with a renewed commitment to innovation. A February 22nd Towers Watson/NBGH survey found that “83% of companies have already revamped or expect to revamp their health care strategy within the next two years, up from 59% in 2009,” a clear sign that businesses now think they need to act on their own behalves. (Of course, most individual Americans don’t have that latitude.)

One thing is clear. Without reform as it was constituted and the subsidies it promised, the industry faces an onslaught of actions from the marketplace that will focus on its excesses, drive down reimbursement, and hold it more accountable. A long list of innovations – re-empowered primary care; data collaboratives that identify and then create incentives for making the best choices; new technologies like minimally invasive surgeries, point-of-care testing, and clinical decision support tools; medical tourism; clinical groupware; check lists; Health 2.0 business-to-business ventures that streamline health care processes – are now proving they can improve the quality of care while reducing cost.

The result is inescapable. No system this far out of balance can remain unchanged indefinitely. So long as it was influencing the policy process, the health care industry would never course correct in ways that are in our national interest. But as the environment continues to intensify, the market will be driven to embrace and integrate these solutions. One way or another, the health industry is in for real change over the next few years.

Meanwhile, until America meaningfully addresses cost and access through policy, proper health care will continue to be out of reach to many and will threaten many more with personal financial ruin. It will continue to sap the nation’s economic strength, and compromise our efforts to lead and compete internationally.

Which is why the President should begin again, and make achieving serious health care policy reform a dedicated goal. In the process, he could challenge special interest influence over policy, and work to refocus the political process on the common interest. We believe the American people can see how the current paradigm is corroding our nation, and would rally behind this approach. More to the point, this was the premise of Mr. Obama’s election. The American mainstream is waiting for him to assert his leadership in this way.

Health care reform has stalled and possibly failed for the moment. But the stakes are so great for America that failure cannot be an option.