Population Health Insider November 2008
Wellness gains steam
CDHPs, wellness gain momentum
Deliotte report trumpets possible convergence
Most specialties see slight increase
Study: Most-integrated health plans in better shape
LifeMasters: DM’s phoenix rises from failed merger with Healthways
Wellness gains steam
Industry taking broader view of programs
Eight of 10 major health plans and employers who responded to a DMAA: The Care Continuum Alliance survey offer wellness programs, and that number is expected to jump to 91% within the next year.
In what is being called the first state of disease management (DM)/wellness market survey, DMAA’s Disease Management and Wellness: Results of a Market Research Survey sought to gain a complete picture of the DM/population health industry, given DMAA’s expanded focus to population health. DMAA received 114 responses to the survey from companies that are responsible for between 166 and 197 million lives.
This emphasis on wellness makes sense, says Elaine Mischler, MD, cochair of the DMAA Market Analysis Workgroup and independent consultant at Mischler Consultants, LLC, in Madison, WI. Service organizations, health plans, and employers that catch a person before he or she spirals into chronic illness will save money in the long run.
Unlike earlier DM programs, service organizations are offering programs that go beyond a specific ailment, such as heart disease, and focus on the whole person.
“It comes down to you have to change one person at a time. You can talk about the population, but in the end, it’s engaging each individual in their own health journey,” says Mischler.
The results did not surprise those in DM and wellness. “I personally don’t think the report is aimed at the industry. The industry already knows all this. I think the report is aimed at making everyone else, all the other stakeholders, the employers, for example, aware of the impact of wellness,” says Jaan Sidorov, MD, MHSA, FACP, an independent consultant who owns and operates Sidorov Health Solutions in Harrisburg, PA.
Dexter W. Shurney, MD, MBA, MPH, senior vice president and chief medical officer at Healthways in Franklin, TN, says wellness has changed from being thought of as “feel-good programs” to something that improves outcomes and lowers long-term health costs. DM programs aren’t going away, because chronic disease will continue to occur. But wellness programs can help decrease the number of those who sink into chronic illness, according to Shurney.
“It’s only through the wellness programs that we have any hope to stem the [chronic illness] tide,” Shurney says. “I’m a true believer on how this stuff works and needs to work, and if we’re missing the wellness opportunities, then we are really missing the boat.”
Christobel Selecky, president and CEO of LifeMasters Supported SelfCare, Inc., in Irvine, CA, says preventive wellness and chronic care DM programs are needed. “No matter what you do, you can age healthfully, but the reality is we are all aging,” Selecky says. “A lot of people who are now entering the older years have not had the opportunity to take advantage of wellness programs. It’s going to be a long, long time, if ever, before we don’t have people who have chronic disease.”
But there are still some experts who question the cost-effectiveness of wellness programs. Readers can count Ian Duncan, FSA,MAAA, president of Farmington, CT–based Solucia, Inc., a provider of analytical and consulting services to the healthcare financing industry, as one of those skeptics. “DM makes perfect economic sense because the prevalence of chronic disease in the typical employer population is between 5% and 6%; 1%–1.5% have severe enough illness to warrant enrollment in a program staffed by clinical resources.But wellness programs are focused on the remaining 90% or so of the population, and to provide each person with their own health coach is probably uneconomic, unless it can be delivered in an extremely cost-effective fashion,” Duncan says.
Although the DMAA survey reported that 84% of health plans and employers offer wellness programs, service organizations surveyed have not been as quick to implement wellness with DM. Fifty percent of service organizations offer wellness programs and 11% provide wellness support technology, such as health risk assessments and self-directed online interventions.
But service organizations plan to significantly increase wellness investment in the future. Seventy-one percent of service organizations surveyed plan to offer wellness programs within the next 12 months. On the other hand, 14% of those companies have no plans to offer wellness programs in the next two years, according to the survey. (See Figure 1 on PDF.)
As wellness programs gain momentum, DM offerings remain a constant for health plans and employers. Ninety-two percent of health plans and employers offer at least one DM program, and that number is expected to swell to 95% within the next 12 months, according to the survey.
The foundation of DM programs remains diabetes, coronary artery disease, chronic heart failure, chronic obstructive pulmonary disease, and asthma, but companies are increasingly offering depression and low back pain programs.
Mischler says depression often goes hand in hand with chronic illness, and programs tackling mental health have historically been integrated into DM programs. Now, many DM providers have separate depression programs.
“I think, in the future, you’ll see depression start to be brought more and more inside of other programs, and you are already starting to see some of that today,” Shurney says. “Disease management programs are going to have to deal with those issues with members before they can effectively deal with the chronic conditions.”
Employers know that low back pain problems can negatively affect productivity. However, it is difficult to find employees with those issues early and enroll them in low back pain DM programs because of claims lag, says Mischler.
In addition to these findings, the DMAA survey reported that:
Health plans and employers view participant satisfaction with wellness programs as an important measure of success, and 87% of service organizations reported that satisfaction measures are the most common elements in requests for proposals (RFP). DM/population health companies reported that RFPs include a strong expectation of data integration, and more than 60% of service organizations have integrated data systems.
Diabetes, coronary artery disease, and asthma are the top three conditions for DM program enrollment. Health risk assessments (HRA) are the most popular wellness initiatives among employers and service organizations, whereas health plans prefer cholesterol screening and counseling.
Approximately one in five respondents considered physician engagement important to a wellness program’s success, and about 40% of respondents pointed to physician engagement, which ranked third in the survey, as a critical component of DM program success. Getting physicians involved in DM and wellness is a major tenet of the medical home concept that several organizations, including DMAA, have promoted as a way to improve healthcare.
“These findings reinforce the long-held understanding that the key contributor to a program’s success is, in fact, the attitude and behavior of the patients themselves and the encouragement and engagement of their physicians,” the authors wrote.
Physician involvement is not deemed as important in wellness programs as in DM programs. However, the study’s authors wrote that physicians can benefit from promoting wellness programs. “From the patient’s perspective, wellness programs can teach them to make more effective use of their time with their physicians and to better follow their directions. They can learn to be more accountable for their own health outcomes. For the physicians, wellness programs can increase and improve the information they have to understand and manage the patient and result in improved outcomes over time,” the authors wrote.
Most service organizations (69%) acknowledge that physicians view DM programs as interfering with their care. Forty-one percent of service organization respondents said that physicians are not inclined to encourage patients to engage in DM programs.
This disconnect has been an ongoing problem, as the two groups have worked in parallel universes. Mischler says DMAA is trying to bridge that gap and is communicating with physician organizations.
By forging better communication, DM can show physicians that DM programs are “office extenders” that can empower patients and help physicians with efficiency, Mischler says, adding that it will take time for everyone to work as a team and learn to reach the goal of optimal health for the patient.
In the DMAA study, the three respondent groups disagreed about what aspects of a DM program bring the most notably positive results. Health plans and employers pointed to better identification of at-risk members, whereas service organizations said incentives that improve participation are important. “It is interesting to observe that the view of health plans and employers reflect a bias toward the belief that the inherent abilities of the service organizations’ products are key to improved performance, while service organizations attribute the greatest capacity for improving performance to factors controlled by health plans and employers,” wrote the authors.
Mischler says the groups have different opinions because they approach the issue of DM from different vantage points. “It’s from the perspective from which you’re working,” she says. “The important thing is all three are talking to each other and working with each other to accomplish the end goal, which is maximizing engagement and maximizing behavior change that is long-lasting.”
Duncan says he finds it interesting that the three respondent groups disagree. “This is one of the biggest current gaps in DM and needs to be filled.The fact that the three respondent groups essentially point fingers at each other doesn’t suggest we are close to answering this question,” he says.
Employers and service organizations agreed that HRAs get the most eligible members enrolled in wellness programs, but health plans pointed to cholesterol screening and counseling as the way to get the most eligible members enrolled.
Sidorov says HRAs are a baseline offering for any wellness program. “Health risk assessments are a no-brainer. You can’t have a program like that without rolling in health risk assessments. I’m not even sure why that’s necessarily an insight,” he says.
Shurney says HRAs can benefit other programs, such as health coaching. “The whole idea there is to reduce risks for populations. A nice way that can be integrated in a disease management program is that the same health risk assessments act as a feed to your disease management software and program so that the nurses have that information as well, and you can also use that when you do your predictive modeling.”
Some of the more common trends in RFPs for DM/wellness services are patient satisfaction measures, performance guarantees, DM/wellness requirements, and data integration, according to the survey.
Mischler says there is a trend to move away from calculation of individual program element return on investment (ROI) to measuring a reduction in overall trend, adding that this is consistent with the industry moving away from the DM/individual illness model to population health.
Sidorov says there is a change of thinking in the DM industry about the cost savings associated with the programs. “Five years ago, I would have been willing to bet the ranch it saves money,” he says. The previous belief that DM saves money has been replaced by the understanding that, although DM improves health, some DM programs may not provide positive ROI. “Even if [DM] doesn’t save money, for the money you spend, you get great value,” Sidorov says.
“There’s not as much attention to ROI because I think people understand that a lot of ROI might be in the future and not within the first year or second year,” says Shurney, adding that there is a greater emphasis on ROI in programs that integrate wellness and DM.
Selecky says ROI is still used but is now just one of many gauges of a program’s success. Other ways to measure success include engagement level, clinical results, and program outreach.
Integrated data platforms
Service organizations who responded to the survey said integrated data platforms are extremely important. Sixty-one percent of respondents reported that they have an integrated data platform, whereas another 21% plan on implementing platforms in the near future.
Respondents said integrated data platforms are important because they provide a “more comprehensive profile of members. This complete profile is essential for delivering accurate, customized interventions. Individual-specific interventions result in better outcomes and enhance reporting abilities,” according to the study.
These platforms provide real-time information on a patient’s health, meaning DM and health plans can intervene with at-risk patients quickly, instead of having to wait weeks or months for claims data. “The ability to transition members quickly and smoothly impacts the outcomes and value for these programs. Platforms that are not integrated may have a longer waiting period to get needed data, or the data might not arrive until the member’s health has deteriorated,” the authors wrote.
Duncan says he is seeing little integration of wellness and DM and even less coordination via integrated systems. He agrees the goal is to transition members quickly and smoothly, but says he simply isn’t seeing it. Plus, he questions whether companies are analyzing and integrating data collected from HRAs. He says he would like to see results on the efficiency of HRA models versus biometric screening models, as well as results from different coaching methods, such as Internet, e-mail, and telephone.
A lack of PDAs
Mischler says one surprise from the survey is the lack of PDAs in DM programs.
No health plans or employers said they use PDAs in DM programs. Small percentages of service organizations used PDAs, with the highest percentage a mere 9% for diabetes. Mischler says this lack of usage could be due to cost, lack of functionality, and inability to integrate the data. Telephone and mailings topped the list for DM interventions, with the Internet coming in a distant third.
Mischler says DMAA will conduct the survey annually for the next two years, which will allow the organization to track changes in the field and acquire new data to further define the DM and health and wellness industry.
Duncan says he hopes DMAA adds a question about participation rates for wellness programs in a future edition of the survey. “Where there is an employer incentive, it is often so large that the only way it can be justified is as a faith-based program, rather than on economic grounds. One of the challenges for the industry is to find ways to improve participation and persistency without sizeable employer incentives, and there are some interesting experiments going on in this area,” he says.
CDHPs, wellness gain momentum
Employers are increasingly looking to consumer-driven health plans (CDHP) and wellness programs as a way to contain healthcare costs, according to United Benefit Advisors’ (UBA) 2008 United Benefit Advisors Health Plan Survey.
CDHPs increased 43% from 2007 and now comprise nearly 13% of employer-offered health plans. The percentage of employees enrolled in CDHPs rose from 6% in 2007 to 11.2% in 2008. (See Figure 6 on PDF.) In the survey, UBA defined CDHPs as eligible high-deductible health plans with a health savings account (HSA) or health reimbursement account (HRA).
Bill Stafford, vice president of member services at Indianapolis–based UBA, says properly educating members about healthcare decisions and choices is important to CDHP. “I think people are realizing there are huge dollars to be gained, but, to some extent, some people might be missing the boat because they are not recognizing the value of the education process. We’re not going to shift healthcare costs and healthcare behaviors in one year. I think [consumer-driven health] is one way of allowing consumers to get more and more information that they need that will impact behaviors long-term. We won’t see those long-term impacts from year to year,” says Stafford.
Frank Hone, founder and CEO of Healthcentric Partners, a communications consulting and healthcare consumerism training company based in Port Washington, NY, says the findings are part of an ongoing trend. Since CDHPs were introduced in 2002, they have seen steady growth. The findings show that there is momentum for consumers taking charge of their healthcare, but education about consumerism in healthcare is still lacking.
“I think that the main idea is that CDHPs are a first step toward a broader national strategy toward healthcare consumerism, and they are a good step because they address the financial issues, but until the market has better data on price and quality and more transparency in those areas, it is going to be hard to push too much to force consumers to be as good shoppers for healthcare as they are for other products and services. But the trends are definitely there,” Hone says.
UBA found that first-year CDHP premiums decreased by 7.9%, compared to an overall increase of 7.4% when factoring in all plans.
Stafford says that finding is not surprising because CDHPs put more costs onto the member, with the employer chipping in money in an HSA or HRA.
Stafford adds that most of the savings in CDHPs are due to the movement to high-deductible plans and don’t take into account employer contributions to HSAs or HRAs.
Employers are shifting rising healthcare costs onto employees by implementing HSAs and HRAs. Employers chipped in an average of $1,209 for HRAs and $642 for HSAs in 2008, according to the survey. (See Figure 7 on PDF.)
CDHPs increased in popularity, especially in the Northeast. CDHP enrollment rose by 90% in that region, and slightly more than 14% of employers in the Northeast now offer consumer-driven plans. (See Figure 8 on PDF.)
“To see that shift in one year caught us by surprise,” says Stafford.
PPOs remain popular
Preferred provider organizations (PPO) remain the most popular health plans. (See Figure 9 on PDF.) More than half of all employer-offered plans are PPOs, and more than 60% of employees are enrolled in them.
In contrast, HMOs saw their numbers slip, now representing slightly more than 21% of employer plans with about 13% of employees enrolled.
Stafford says the move away from HMOs and toward CDHPs is a migration from limiting options to giving consumers healthcare choices.
PPOs and CDHPs are more attractive to consumers than HMOs because there is more flexibility, according to Stafford.
“As long you can make an informed choice, you’re going to be better off. The HMOs did just the opposite of that. It removed virtually all the choice from the menu,” says Stafford, adding that he expects to see continued growth in CDHPs. “I think [employers] are taking their fiduciary roles fairly seriously.”
PPOs remain the comfortable health insurance offering, Hone says, but he thinks CDHPs will gain a greater share of the market.
“I think PPOs have a very solid place in the health insurance framework and it will take a bit of time for that to subside, but I would envision CDHPs to continue to grow in favor as healthcare consumerism becomes more important and individuals are willing to take a larger component of risk about their own health,” he says.
Hone says employers must go beyond the 30-day open enrollment healthcare education process and educate employees about their healthcare choices, how health insurance dollars affect business, and how an educated consumer helps the bottom line of the business, as well as the employee’s health.
“That part of a shared commitment is really important for employees to move off the idea of getting everything paid for and getting into an era of price and value shopping for their healthcare, which really coincides well with the national trend toward healthcare consumerism,” Hone says.
With the greater movement toward prevention, employers are increasingly providing employee wellness programs. Nearly 10% of employers are offering wellness programs this year, compared to 7.4% in 2007, the survey found.
Rather than making major plan design changes as a way to save money, Stafford says employers are viewing wellness and disease management programs as options for containing costs.
The movement to wellness programs did not experience as much of a jump as from 2006 to 2007, but there was still an increase of more than 30% from 2007.
“I think you will continue to see growth there, because employers are seeing hard dollar returns implementing those programs over a three- to five-year period,” says Stafford.
Of those wellness programs, more than three-fourths of employers provide health risk assessments, one-third present seminars and workshops, and more than one-third offer on-site or telephone coaching to high-risk employees. (See Figure 10 on PDF.) More than half of employers with wellness programs give employees incentives for participating.
The move toward wellness programs will likely continue, since companies view prevention programs as cost-effective alternatives to future chronic care. Stafford says the biggest challenge is getting people to improve their health and not partake in unhealthy lifestyles. “If you are not changing behaviors, we’re going to keep getting the results we’re getting. I think employers are finally agreeing,” says Stafford about the wellness movement. “So much of our overall healthcare dollars are spent on items that are behavior-based that we can’t continue to ignore that ... We still have well over 50% of our healthcare dollars going to behavior issues that can be easily changed.”
Jaan Sidorov, MD, MHSA, FACP, an independent consultant who owns and operates Sidorov Health Solutions in Harrisburg, PA, says research shows wellness programs decrease healthcare costs, lower absenteeism, and improve presenteeism. With the current state of the economy, some companies may cut wellness programs, but Sidorov says he believes employers will ultimately understand that wellness programs are an important way to control costs and improve productivity. “The worst-case scenario, with the economy being the way it is, is there will be a downgrade, but in testimony to its resiliency, I don’t think it’s going to go away. I don’t think it’s the first thing people will toss out the window,” he says.
Costs on the rise
Healthcare costs continue to rise. The average annual health plan cost per employee is $7,327, with employees picking up $3,210 of the costs and the employers forking over the remaining $4,117. The average monthly premiums for all plans were $370 for single coverage and $901 for family. (See Figure 11 on PDF.) The average employee share of monthly premiums is nearly 28% for single people and 46% for family plans. (See Figure 12 on PDF.) Regarding wellness programs and incentives, more than half of respondents said they use gift certificates and health club dues payment as incentives. (See Figure 13 on PDF.)
The survey included responses from 18,019 health plans sponsored by 12,860 employers who employ more than 1.9 million people and insure about 4.4 million people. The survey included nearly 10% more respondents than the 2007 survey.
Retail pharmacies, DM
Deliotte report trumpets possible convergence
A relatively new healthcare player may have a future in disease management (DM), according to a recent Deliotte Center for Health Solutions report.
Retail pharmacies (also called retail clinics) have grown from a handful of locations to more than 1,000 in a mere three years. Supporters praise the clinics’ convenience of care and lower overhead costs compared to physician offices, and Deliotte suggested the clinics’ future may see them going beyond basic acute care.
In its report Disease Management and Retail Pharmacies: A Convergence Opportunity, Deliotte predicted that retail pharmacies may expand their offerings to DM. The authors noted that the convergence makes sense because retail pharmacies are conveniently located, offer extended hours, sell pharmaceuticals and health products, and enjoy brand-name recognition.
Paul Keckley, PhD, executive director at Washington, DC–based Deliotte, says the movement toward retail pharmacies is a switch from the old ways of offering health services. “If you think of organized medicine as Marcus Welby, that’s probably not the reality going forward,” Keckley says.
Patient self-care is a critical component of DM. For those with chronic illness, retail pharmacies will provide greater flexibility to see a healthcare provider at a retail clinic, the authors suggested.
Nearly 40% of the U.S. adult population has one or more chronic diseases. Yet less than half of those Americans are enrolled in a DM program that tackles chronic illnesses such as asthma, diabetes, congestive heart failure, chronic obstructive pulmonary disease, and coronary artery disease.
Retail pharmacies could also see DM as an opportunity to cross-sell and expand their reach as trusted health information advisors. “Conceivably, it has the potential to create a comprehensive local primary care health system alternative to traditional physician-owned entities. Health plans, employers, and consumers likely will be receptive; the challenge will be the development of appropriate relationships with hospitals and specialists and the fierce public relations battle traditional defenders of primary care are likely to wage,” the researchers wrote.
In its report, Deliotte said two forces will drive the DM/retail pharmacy convergence:
Major national pharmacy chains, such as Walgreens, Longs, and CVS, have enough capital to invest in DM, the most notable investment being information technology (IT) platforms that will help clinics implement electronic medical records, according to the authors.
Future of DM?
More than 160 independent providers offer DM services, and the U.S. DM market is expected to reach $30 billion by 2013, given the nation’s aging population, bulging healthcare costs, and increased rates of chronic illness.
Deliotte wrote that DM’s current business model faces challenges in scalability. Patients are disinterested in voluntarily enrolling in the programs, some coaches have trouble engaging patients, and physicians are not involved in the programs.
The following trends will make DM services more popular, according to Deliotte:
Payers see clinics as a less costly care setting. Keckley says 40% of primary care visits are not for physical care, but for services such as prescription refills. There are more effective ways to refill prescriptions and utilize physicians’ time—and retail pharmacies are one option.
Tine Hansen-Turton, executive director of the Convenient Care Association in Philadelphia, says retail pharmacies already partner with providers and health plans, adding that managed care companies appreciate retail clinics because they see their value and lower costs. In fact, a recent Health Partners study reported that the average retail clinic visit costs $75, whereas a trip to the physician’s office costs $127, and an emergency room visit costs $345.
Since the first clinics entered the scene a mere three years ago, the retail pharmacy market has exploded, despite some concerns raised by primary care physicians and some government officials. That resistance has not stopped the momentum. Convenient Care Association, which represents organizations that operate more than 950 clinics in 28 states, has seen the market swell from about 150 retail pharmacies to more than 1,000 in two years, says Hansen-Turton. “From my perspective, it’s about convenience, and it’s easy, accessible, and affordable care,” she says.