Reducing Healthcare Costs Through Company Wellness Plans

Employers have seen their health care costs rise dramatically over the years. To compensate, they have expected employees to pay an increasing portion of the healthcare insurance premium, expected employees to pay significant co-pays with each physician visit and have purchased policies that restrict individuals to a narrow network of doctors and hospitals. Largely these have not worked. They have offset some of the expenditures but it has not done much to slow the inexorable rise of health care costs. The reason is because they attack the wrong “problem.” What is needed is to institute approaches to improve health and maintain wellness of the employee (and the employee’s family) and to assure that the employee (and family) get outstanding primary care including proactive population-style health care. Add to this patient engagement – a stake in the financial arrangement. That combination will reduce costs considerably. Here is one approach that progressive companies are following.

Large companies such as General Mills and Safeway have demonstrated the utility of wellness programs. Employees are invited to voluntarily participate in company sponsored programs that are designed for behavior modification such as nutrition, fitness, chronic stress reduction and smoking cessation. The employee (and sometimes the employee’s family members) who participate are rewarded with a reduction in their share of the health care premium. Given that employers are continually increasing employee share, this reduction can be a real benefit to a person’s paycheck. Large corporations often create these programs in house but smaller and many larger companies can turn to wellness companies such as Orriant that will do a turnkey approach for a single larger company or a group of smaller companies in a defined geographic region. Workplace wellness programs logically should improve employee health but until now results were mostly anecdotal; there was no definitive proof. Now, evidence has been published in the International Journal of Workplace Health Management that an opt-in program encompassing biometric testing and a personal wellness profile to guide individualized telephonic health coaching combined with financial incentives led to improved health parameters, improved health age and reduced healthcare costs. The authors concluded that “health coaching effectively improved biometric scores among high-risk individuals and narrowed the difference between current health age and achievable age, more so among those with the greatest health risks at baseline.”

Here are some of the specific findings: Compared to nonparticipants, the participant’s claims paid increased at a lower rate and they had fewer claims per person. For those with elevated blood pressure, the average systolic pressure was 170 mmHg which was reduced by 34 over the three year study; for diastolic it was 105 down by 18 mmHg. For those with elevated glucose the starting average was 164.4 and dropped by 31(58%) over the three years. Those at the greatest risk for cancer improved their lifestyle score by nearly 32 points, or 41%.

According to those in the company wellness field, there are few key ingredients that make for a successful wellness program. The majority of employees (and spouses) need to be working one-on-one with a health coach to develop their own self-directed plan for behavioral improvement. Individual care and concern by the health coach is the most effective intervention. Employees need to like their coach (which I interpret to mean they trust their coach.) Coaches need to be well trained with a significant healthcare background. Individual accountability needs to be an integral part of the program. This implies that the participant needs to call the coach; not the other way around. That is part of accountability. The focus needs to be on those with health risks, which most Americans have. Getting the men in the company involved is important; women are more likely to volunteer early so there has to be extra effort to attract the men.

Some readers will not like the idea of health coaches “meddling in their affairs.” But no
one is obliged to join into the wellness plan; it is always an option although for
sure the employer often offers a financial incentive to do so. Whether in a
wellness plan or affiliated with your PCPs office, health coaches (when properly trained and focused) have been found to be powerful advocates for improved health.

Major health risks from life style factors are being overweight (two thirds of the American population), lack of adequate exercise (probably more than half of people), chronic stress (it seems like everyone is stressed today) and smoking (still about 20%.). High blood pressure can be in part lifestyle directed as is obesity. These in turn lead to chronic illnesses such as heart disease, stroke, chronic lung and kidney disease – just the diseases that account 75-85% of all claims paid by healthcare insurance.

The cost of wellness programs, whether done in house or with a consultant, can be self-funding, i.e., those who opt in get lower premiums and those that do not have higher premiums. But the larger more valuable benefits accrue to both the employer and employee. Staff become healthier – that is good for them. But healthier employees use less total healthcare resources. This in turn lowers company insurance costs or at least slows the growth of premiums, often dramatically. The employee benefits from better health, will likely be more productive, will have less absenteeism and will have greater job satisfaction. That is a win-win for employee and employer alike.

My next few blogs will relate what some companies are doing to offer a complete package of wellness, prevention, consumer-directed insurance, on site primary care clinics, prefunding a HSA or HRA, price transparency and more to manage costs while improving employee health.

[Note: A look at the Orriant web site will show that I am quoted. I am a proponent of wellness programs but I have no financial or other association with the company. If you go to the link for the article on wellness plans noted above you will find that you need to pay to read more than the abstract. I read it and thought it was useful information which why I used it here. You can also find the details on the Orriant web site. As with any study there can be criticisms but I think it was pretty well done. The graph is  claims paid per participant]

A “Grand Bargain” To Improve Quality and Decrease Medicare Costs

There are just a few key reasons why Medicare has become inordinately expensive. There is no end in sight for cost escalation. But there are some obvious solutions and they all begin with chronic illnesses.

Chronic illness – diabetes, heart failure, cancer, chronic lung disease, etc. – are increasing at exponential rates; are caused largely by lifestyle behaviors; and consume 70-85% of all claims paid. Medicare enrollees tend to have chronic illnesses; 85% have at least one and 50% have three or more and many are taking 5-7 prescription medications. Any attempt to control costs must begin with chronic illnesses. 

Is there a good solution to the Medicare cost rise issue? Are there approaches that could be instituted now that would have an immediate impact on improving quality of care and thereby reduce costs? There are and could be the basis of a “grand bargain.” Here are five workable suggestions. 

1) The first recommendation is to recognize that one is never too old to benefit from sound preventive measures. Most chronic illnesses are related to excess calorie consumption, lack of exercise, chronic stress and tobacco. And aging leads to impaired mobility, vision, hearing, dentition and cognition. So Medicare should strengthen the wellness, health and preventive programs with specific funding to PCPs to engage in detailed, in depth preventive care. The new annual preventative care session built into the Affordable Care Act (ACA/Obamacare) is a good start in this direction but it must be augmented since a single yearly session is not sufficient to deal with the serious lifestyle issues leading to and exacerbating these chronic illnesses. This will improve health now and substantially bring down costs in the longer term.

2) The second recommendation is to recognize that older individuals with multiple chronic illnesses on multiple prescription medications who may have visual, hearing, mobility and cognitive impairments cannot be effectively diagnosed and treated in short time periods. There must be time – to listen, think, prevent and treat. This means adequate reimbursement per visit to spend the time required. And it means Medicare must pay the PCP sufficiently and specifically to provide chronic illness care coordination. This must be done in a way that is a quid pro quo – higher reimbursements but only in return for the care the patient needs and deserves. This will markedly improve quality, substantially reduce costs and do so immediately. It means the PCP must substantially reduce his or her case load from today’s 2000 plus to no more than 1000 (and preferably substantially less) so as to have the time required for each patient. (Many believe that it best to convert from a fee for service to a fixed reimbursement system, capitation system or a salaried approach. That is probably a good idea but only if the system grants the PCP the critical needed time per patient, i.e., assignment of a limited number of patients or a large enough payment per year per patient so as to keep the total number of patients under care low enough to give the time needed.)

3) The third recommendation is that Medicare should reconsider its approach to hospital care alternatives. For example, today a patient becomes eligible for nursing home care only if he has been hospitalized for three or more days. Costs could be dramatically reduced if a patient could be sent directly to a well-qualified nursing home by his PCP who certifies in writing as to appropriateness. Similar consideration should be given to home antibiotic administration and other home care alternatives which mean better quality and lesser costs. 

4) The fourth recommendation, somewhat of an alternative of the second, begins with the realization that primary care is generally not expensive. Indeed when Medicare originated, it was the patient’s responsibility to pay for primary care and should be again. Medicare should institute high deductibles with the opportunity for a health savings account (HSA) to pay for primary care with tax advantaged dollars. Patients begin to ask questions and challenge recommendations when they are paying for primary care directly. They can request more time per visit and pay for it through their HSA. Both have the result that the care quality goes up and the overall cost to Medicare goes way down because the patient gets the time needed by the PCP to give good care, avoid excess testing and avoid the reflex to refer to the specialist unless really appropriate. The patient-doctor relationship is corrected to being a direct contractual relationship leading to better care at much lower cost. Most studies suggest that the deductible needs to be high enough to be meaningful, often about $1000 or more. This could be reduced for those of lesser means. Given the importance of preventive care, that might be excluded and continued to be paid for by Medicare. High deductibles will be politically difficult. But high deductibles are available thought the private plans for Medigap and for the Part D prescription drug policies so the precedent is there. This would lead to a much more responsible use of the entire system with better care and much reduced costs.  

Meanwhile, many PCPs are switching to a direct pay system where they no longer accept Medicare and either expect to be paid per visit by the patient or be paid a flat annual amount (retainer). Medicare is losing these physicians now who are providing better care but at a cost to the patient. Better that Medicare reexamines its policies and adapts now. 

5) The fifth recommendation relates to end of life care. Americans believe in individualism and the right to whatever care is available, damn the expenses. And physicians are trained to treat death as an obstacle to be surmounted rather than to be accepted as ultimately inevitable. This plays out eventually towards the end of life where “one last” drug, procedure, etc. is proposed or requested or both. Generally this occurs because the physician has not engaged in a constructive, honest and empathetic conversation with the patient well ahead of time and ongoing. This is fundamentally irresponsible use of the medical care system by both patient and doctor. Much better is reasoned, empathetic discussion between patient (and family) and the doctor followed by humane, compassionate active support and emotional care – in other words, death with dignity. End of life discussions are not only logical but humane. And it must be stressed that this recommendation has nothing to do with so called “death panels” or some nefarious means of rationing care. 

Each of these recommendations incorporates a balancing of rights and responsibilities. The first offers the enrollee added wellness and preventive services but it must come with the responsibility to use them effectively. The second grants the PCP added revenue per patient but only for the commitment to take the needed time with patients and of offering extensive preventive services and chronic illness care coordination. This of course means limiting the total number of patients under care per PCP. The third grants a new approach to paying for alternative care but only provided that it is certified as appropriate. The fourth places the responsibility for first dollar coverage on the patient/enrollee but with it must come a right to a better doctor-patient contractual relationship – one that the patient can void if the response is not adequate for the dollars expended. And the fifth recommendation places a responsibility on patient and doctor alike to have in depth and rational discussions regarding end of life options and needs while expecting Medicare to pay not only for the discussion time but also for the option selected. 

These five recommendations could have a major impact on Medicare expenditures, beginning immediately. The real benefit of course is that these recommendations will improve health care quality while leading to more satisfaction by patient and doctor alike. It would be a valuable “Grand Bargain.”

 

 

A Vision For Health Care In America

In researching  The Future of Health Care Delivery – Why It Must Change and How It Will Affect You, I had in depth interviews with over 150 leaders from across the country including hospital CEOs and COOs, practicing community and academic physicians in both primary care and specialty areas, pharmacists, nurses, insurance executives, health care consultants and many others. But I found what I think is a very good vision and resulting model right at home in Howard County, Maryland.

County Executive Ken Ulman and former health officer Peter Beilenson, MD, MPH created “Healthy Howard” to assist those without insurance.  Their concept was to provide primary care access for all, an extensive network of specialists, community and tertiary care hospitals and a basic electronic medical record. Methods were built in to maintain costs as low as possible. But part of the basic premise was that with these “rights” for the patients came certain “responsibilities” – some limited payment participation and some requirements toward practicing healthy living as well as compliance with treatment recommendations. It structured a good balance between patient rights and responsibilities, between care delivery and a working payment system, between access and effective care.

Howard County, between Baltimore and Washington, is a fairly affluent county with excellent providers and a highly regarded community hospital. Despite affluence, there are uninsured individuals and families. Some could afford insurance but choose to spend their dollars elsewhere. Some are the young invincibles who don’t feel they need it. Others work in the service industry where their employer does not provide insurance and they cannot afford to carry the entire burden. And some are simply indigent.  The question was how to provide for this disparate group in an effective yet equitable manner that would render good quality care at a moderate cost.

Healthy Howard is a county-assisted, community based not for profit organization which collects a modest fee, on a sliding income scale, from its members. In return, each individual gets unlimited access to a primary care physician (PCP). The office employs a care coordinator who works with the PCPs to assist those patients who have complex chronic illnesses such as chronic lung disease, cancer, or diabetes with complications. There is also a pharmacy benefits manager located in the PCP office to assist patients find drugs at the most reasonable price in the community. They work with the physicians to find generics, discuss other effective agents with the doctor or even contact the manufacturer if appropriate to get a reduced price for an indigent patient.

Of course some patients will need to see a specialist physician. Healthy Howard has developed an agreement with the county’s specialists to accept, gratis, these patients with the understanding that the program will allocate the patients across all the specialists in a given field (e.g., cardiology or orthopedics) so that no one physician has an excessive burden.  Howard County General Hospital, being part of a unique system in the state of Maryland, has always accepted indigent patients but under the agreement with Healthy Howard, the hospital forgoes any attempt to collect from these patients.  Further, since the hospital is part of the Johns Hopkins Health System, an agreement was reached with Hopkins to accept any patient that needs tertiary care at no charge.

These might be termed the “rights” of the patients. But there is also some participation required in order to be part of Healthy Howard; these are the corresponding “responsibilities. In addition to the modest sliding scale fee, each patient is assigned a health coach with whom he or she must meet on a regular basis. The coach works with the patient to develop a plan for healthy living. This might include attending a smoking cessation program, attending a gym for exercise or working on a diet plan. Together patient and coach develop a plan of action with benchmarks at various intervals. The patient meets with the coach periodically to compare actual results to the benchmarks.

The coach is there not just to measure results but to assist and to help break down barriers. Sometimes just some encouragement is all that is needed; sometimes referral to a specialist such as a nutritionist is helpful; and sometimes a more involved approach is required. As Mr. Ulman described to me, imagine an overweight lady who wants to participate in a fitness program at the local health club – to which Healthy Howard has worked out a special free arrangement. But she says cannot attend because her daughter is a single working Mom and so she, the grandmother, must babysit the child. No problem, the coach finds a fitness center that also has built in day care, breaking down the barrier that had to date prevented success.  The idea is that the plan will help overcome barriers yet still expect responsibility to meet objectives.

Healthy Howard, as its name implies, will mean healthier participants a few years down the road. The primary care physicians, with help from the coaches, will give attention to prevention thus lessening the burden of chronic illness in the future. And they will give careful care coordination for those with chronic illnesses now- thus lessening the current cost burden by reducing the need for specialist visits, excess tests and imaging and unnecessary drugs

And it worked. Now a few years in, there has been a 35% reduction in ER visits and a 50% decline in hospital admissions. Enrollees are healthier and more behaviorally motivated to maintain good health. Sufficient success to substantiate the awarding of a federal contract to utilize these principles  to create a state-wide consumer operated health insurance plan (a CO-OP) for the ACA Maryland insurance exchange based on the principles of 1) having the vast majority of care provided by primary care, 2) using bundled or capitated provider compensation and 3) using evidence-based medicine.

Healthy Howard, as its name implies, means healthier participants. Its great value is as a vision of health care delivery that incorporates improved quality, reduced costs and excellent access in return for a modest fee and a commitment to living a reasonably healthy lifestyle. Rights and responsibilities working together. It is a good vision to use as a starting point.

America Has a Medical Care System Not a Health Care System

As Americans we believe we have the best healthcare system in the world. But think again, it’s really not the truth. Health care delivery is dysfunctional. 

We do have superb medical schools, very well trained providers, superb science and technology but the delivery of medical care is just not what it should be. We spend more for healthcare than any other country does on a per capita basis. And yet when we compare ourselves to other countries, especially developed countries, our outcomes are not better.  

Our life spans are somewhat shorter than countries such as Japan and our infant mortality is somewhat higher than countries like England and France. We tend to focus on disease and injury but not so much on illness prevention and health promotion. We all recognize that as a society we have some adverse lifestyle behaviors such as overeating a non-nutritious diet, being fairly sedentary, having chronic stress and having 20% of us still smoking. It’s quite clear that the best chance we have for increasing our life span and overall improving our health is to adjust our personal behaviors and to do so at an early age. 

We often think of heart disease, cancer and stroke as the major causes of death and, as diseases that cause death, which is correct. But what if we go back further and look at what caused those diseases. The rank order of causes of death according to a study from the Centers for Disease Control in the Journal of the American Medical Association lists tobacco, poor nutrition, lack of exercise, alcohol to excess, infections, toxic agents, motor vehicle accidents, sexual behaviors and illicit drug use as the primary predisposing factors to the diseases that cause death. A look at that list shows that the ones at the top of the list and a number of others all relate to our behaviors.   

The diseases that occur have changed substantially over the decades. At the beginning of the 1900’s it was infectious diseases that caused most deaths. Over time they came under reasonably good control with preventive techniques such as immunizations, sanitary sewer systems and clean water systems and then, of course, antibiotics. Meanwhile chronic illnesses such as coronary artery disease became much more prevalent. Even though fewer people smoke than a few decades ago our obesity and our lack of exercise have led to rapid increases in diabetes, heart disease, stroke, high blood pressure and many other chronic illnesses that last a lifetime. Insurers note that it is these diseases that account for about 70-85% of claims paid.  

Our medical care system does not deal with health; it really concentrates on illnesses or trauma. It is a “sick-care” delivery system. In addition more and more illnesses today are chronic and complex, lasting a patient’s lifetime and bearing very high costs. The best way to care for these chronic illnesses is with a multi-disciplinary team approach. This is just not the typical way our medical care delivery system is organized. We tend to have a system that relies on a single provider treating an illness – the internist gives an antibiotic for pneumonia and the surgeon cuts out the diseased gall bladder. But patients with chronic illnesses really need multiple providers. For example, the diabetic may need in addition to a primary care physician, an endocrinologist, an exercise physiologist, a nutritionist, an ophthalmologist, a vascular surgeon, a nephrologist, etc. But to work well, this team needs a coordinator or quarterback and this is preferably the primary care physician. Good care coordination can direct the patient to the care he or she needs while reducing the number of specialist visits, procedures, tests and imaging -- with the result that the quality of care goes up and the cost of care goes down substantially. Unfortunately, PCPs who are mostly working in a non-sustainable business model have all too little time to give this needed care coordination; that is a topic for a later post. 

So we have a medical care system not a healthcare system. What we need in America today is a focus on health care meaning a greater focus on disease prevention and health promotion beginning in childhood and a recognition that chronic illnesses are the ones that not only last a lifetime but are also the diseases that are driving the high cost of care. These costs can be brought down and can be brought down quite substantially through a better approach to patient care, one that coordinates the care intensively while using a multidisciplinary team approach.  

America needs to shift from a medical care to a health care system that focuses on health and wellness and for those with chronic illnesses cares for them with a well-coordinated multi-disciplinary team. The result would be greater satisfaction for patients and providers alike, higher quality and lower costs.

 

Check out The Future of Health Care Delivery- Why It Must Change and How It Will Affect You from which this post was adapted.

 

 

 

A Disease Industry vs. A Healthcare System

Today America does not have a true healthcare system that focuses on wellness and disease prevention. Rather it focuses on disease diagnosis and treatment paid for on a unit basis. Each visit, each procedure, each test, each drug, each hospitalization is charged for. The result is more and more units of care are given rather than a focus on how to give good preventive care and how to coordinate the care of those with complex chronic illnesses. As long as we have a disease industry – driven by our current payment system – we will have rising costs. It is inevitable because providers (and the affiliated hospitals, pharmaceutical firms, medical device manufacturers and others) will find new ways to diagnose and treat – and although these new approaches might be an improvement over what we have today it will also be much more expensive.

Eventually, as pressures mount, there will be a push for a change to a true healthcare system from the current disease-based system. This will probably take a fair length of time given that Congress did not address the payment system in the healthcare reform legislation. Basically on this point, they left it as just more of the same.

But there could be a breakthrough. Some group, some organization or some jurisdictions might create a model, gain some success and that might lead to wider adoption. Some of the large multidisciplinary “clinics” like Mayo, Geisinger, Dean and others which have contracts for “covered lives” have had success in giving more comprehensive care yet reducing costs. And some insurer/provider combined organizations – such as Kaiser-Permanente – have shown the same beneficial effects. Perhaps others will begin to adopt their examples toward better health care at lower cost.