David Williams: This is David Williams, Co founder of MedPharma Partners and author of the Health Business blog. I am at Consumer Health World in Las Vegas where I spoke today with David Hom, Chairman of the Board of the Center for Health Value Innovation.
David and I spoke about value based insurance design and health care consumerism. Hom would like to see consumers become CEOs of their own care, and he believes we are at the cusp of using information technology effectively to enable consumers to adhere to therapies. The Center’s approach represents a clear departure from business as usual, but the concepts are strongly rooted in improving the existing employer based model rather than overthrowing it.
David, thanks for joining me today.
David Hom: You’re welcome, David.
Williams: What is the Center for Health Value Innovation, and who is involved in it?
Hom: The Center was established to share best practices with employers, both large and small, both state and private. We have at the table all the key players in the health system, from health plans to insurance brokers to health systems, physician groups, employers, business coalitions and unions.
Williams: What was the impetus to get all of those groups together?
Hom: The impetus was really simple. It’s how do we create a safe environment for these organizations to share best practices, to innovate in health care in order to reduce the rate of health care inflation primarily through improving patient adherence to treatments for chronic conditions?
Williams: Who has an interest in doing that? Often, you hear about adherence as being something that’s pushed by the pharmaceutical companies as another form of marketing, but this sounds like something.
Hom: Absolutely. The ones that have been most upset about this are the health plans, physician groups and hospital systems. What this will do is it will reduce the level of intensity for ambulatory services. At the same time, it will reduce ED visits and hospitalization costs for payers.
Williams: You have the word “value” in the name of your organization. Value is a term that is being thrown around a lot in health care these days, starting with the Secretary of Health and Human Services. Can you tell me what you think about when you use the term value?
Hom: We define value from a payer perspective, which is how do we measure the dollars spent in health care? What does it do to employee productivity? How does it drive higher employee engagement and thus reduce disability days for organizations?
Williams: Is that a concept that people can agree on, or do people come at it from different angles?
Hom: I think, most people understand the concept of ‘an ounce of prevention is worth a pound of health care.’ They get through the solution multiple ways, but by and large people focus on this concept around data, aggregating data and then understanding what are the patterns within the data. What are the barrier issues for access to care? How do you remove the barriers –whether admin barriers or financial barriers? Then, how do you track the ROI? How do you measure the return on investment of those dollars?
Williams: How good are the data today that are being used? I’ve heard about value based insurance design, which seems to be mainly about reducing co pays in certain situations. Is that done in broad strokes? Will happen on an individual person basis or a dynamic basis over time?
Hom: We see this concept happening at the population base level, looking at what the patterns are, what the barrier issues are, and how to manage those issues. However, when you set your designs up, it drives individual consumer behaviors. That’s the most powerful thing.
When someone is highly compliant with their regimens –taking their annual physicals, doing their pap smears, doing their colorectal exams– they tend to be CEOs of their own health, which is what you want them to do.
Williams: What are you finding in terms of the evolution of consumerism in health care? How much credit do you give consumerism, and how much potential is there for consumerism to resolve some of the cost and quality issues that exist today?
Hom: In terms of consumerism, we are at the cusp. We are at the cusp of using emerging technologies to provide information on a chronic to the patient and guiding them through the health care system in an effective way.
The example I use is that when you go to the doctor, the doctor spends six minutes with you. You get a set of directions. You walk out saying, ‘What am I doing? How do I do it and when do I do it?’ And you get confused. We want to use technology as an enabler to train patients one at a time to adhere to what the physician recommends.
Williams: What sort of evolution is required of the typical physician, and does the Center play a role in that?
Hom: We work with a number of physician groups. The concept is to align pay for performance –which is how you assess physician practice patterns– to this concept of benefit design. If you are going to lower the barriers to access care, then how do you hold physicians accountable for the management of their diabetic patients, for example? And then, how do you steer patients to those physicians, and how do you modify the reimbursement rates to those physicians to pay for the appropriate care?
Williams: It sounds like what you are doing is mainly within the construct of the current system, the current private payment system whereas a lot of what’s being discussed on the campaign trail sounds pretty radical. Even the Republican, John McCain talks about blowing up insurance coverage from employers. How does that fit in with what you are doing, and do you think there is an opportunity to preserve the private system?
Hom: Absolutely. People often talk about health care from 30,000 feet. What we’ve learned is that not only is health care delivered locally, but health care decisions are made locally, too. You have to create successful case studies within geographic areas, test the hypotheses, roll out the interventions, measure them and then scale them to other organizations.
Williams: We’re here in Las Vegas at the Venetian Hotel at Consumer Health World 2008. I believe you are running a workshop this afternoon as part of the National Conference on Health Care Consumerism. Can you tell me about that? Who is participating? What are you hoping to get out of it?
Hom: We have a great panel today. We’ve got 10 folks representing insurance brokers, health plans, physician groups, hospital systems, PBMs, employers, business coalitions, really talking about health care innovation from a pay perspective. We’ll discuss what they have done to a) identify the problem; b) solve the problem; and then c) measure the results.
It is very action oriented. It includes case studies, and it will create tangible results for people to walk away with versus talking heads.
Williams: I have been speaking today with David Hom, Chairman of the Board of the Center for Health Value Innovation. David, thanks for speaking with me today.
Hom: Thank you, David. I appreciate it very much.