Podcast interview with Bob Stone, co-founder of Healthways –Part II (transcript)

Bob Stone is EVP at Healthways, a pioneering disease management company he co-founded in 1981. In Part I of our interview I asked Bob to share his views on health care reform.

In Part II, Bob discusses disease management, the medical home, and opportunities Healthways expects to pursue in the coming years.

David Williams: This is David Williams, co-founder of MedPharma Partners and author of the Health Business Blog.  This is part two of my podcast interview with Bob Stone, Executive Vice President and co-founder of Healthways, a leading disease management company.

In the first part of the interview we talked about health care reform from an historical perspective and heard Bob’s perspective on what’s likely to happen next.  In this part of the interview we’re going to talk about disease management, specifically and also about the medical home concept.

Bob, you co-founded Healthways back in 1981, and are known as one of the pioneers of disease management, but disease management perhaps not surprisingly hasn’t been all that popular with physicians during that time.

But lately I’ve been hearing growing enthusiasm about a concept called the medical home.  Can you tell me what the medical home is from your perspective and what the relationship is with disease management if any?

Bob Stone
: Disease management was not particularly well received by physicians in all cases, particularly in the early days of the disease management industry.  There were disease management organizations that actively crossed the line from support into the area of medical decision making.  So there were programs out there that would have changed medications, changed dosages on the authority of their internal medical directors and their protocols without even the courtesy of consulting the patients’ physician.  That earned a response that you would anticipate!

There are other organizations, I’m proud that Healthways is among them, that have recognized that the fundamental interaction in health care is the one between the patient and physician and that the real role of the entire rest of the systems is to make an interaction more efficient, more effective, or both.

So there were companies who actively reached out to physicians to make them, if not parts of the process, certainly to make them aware of what the interactions with the patients were, what the clinicians and the disease management organizations were finding.  Reaching out to the physicians for support in helping the patients make and sustain the kinds of behavioral changes that are necessary for effective self-management of most of the chronic diseases that the industry was involved in.

Over time the industry sorted itself out into players who survived and players who didn’t. I think at the practicing level physicians came to understand much better what the role of disease management was and how it can actually help them in trying to achieve the end points and the plans of care that they had developed for their patients.

That being said, I think that there is a bias in this country and it’s either a bad bias or a good bias, I think it’s just a fact.  In the best of all worlds, assuming that all of the resources and infrastructure to deliver scalable solutions were in place, it really would be nice to have a health care professional, in this case the physician, at the center of what’s going on with each individual as they choose to interact or need to interact with the health care system.

If I go back 50 years when my grandfather was a physician in New York with his office in the apartment and my grandmother was his nurse and receptionist or back even further when a significant part of the population was, if not suburban, rural and there were one or two physicians in the county and medicine was very local and community-based, and you ran into the doctor everywhere and everybody knew everything…

You had an environment in which the physician had that level of interaction and knowledge about the individuals in their community.  They knew what was going on with them.  While they didn’t have all of the scientific tools and knowledge that have developed over the last 50 years, within the scope of the knowledge and tools that they had to practice with, it was a very personal thing.

There also wasn’t a whole lot of specialization.  There wasn’t a lot of coordination that needed to occur in that model of 50 years ago.

We forward to today and the average individual who needs to interact with the medical care system doesn’t have that kind of relationship.  Even if they have a primary care physician they may not be able to depend on that physician’s knowledge for effective navigation as they might have to interact with other parts of the health care system.

But more importantly you only go to the health care system when you’re sick.  In fact, you spend a lot more of your waking time interacting in other environments that can have an equal, if not more profound impact on your overall health and wellbeing as you go through life.

The medical home conceptually is an individual physician or practice setting that knows everything about you as it relates to your health and wellbeing and every interaction you are having in every environment with respect to your health and wellbeing who can guide, direct, and coordinate you through the entire spectrum of services as you come to need them.

Setting aside the issue that in this country, most physicians’ practices are still made up of one, two, or three physicians and the ability to develop scalable systems to do that is accordingly very difficult.  The reality is that if I were to ask you or any of your readers or listeners where do you go to get your health,  the answer most likely wouldn’t be the doctor, the pharmacist, the dentist.  The answer would more likely be the acupuncturist, the personal trainer, the spa, the gym, the massage therapist.  Any of those alternative providers, who we spend out-of-pocket, $60 billion per year to access.

So that’s another environment that people are actively pursuing in search of health and wellbeing, that needs to be taken into account into whatever coordinated solution we find and we’ve called that and we’ve given it a name.

The next place that we need to think about interactions that can positively or negatively affect health or wellbeing… is the workplace, at least for the portion of the population over 18 who is working.  We spend 50% – 60% of our waking hours in that environment. The direct costs are for the most part, employer borne for health issues. The indirect costs — productivity loss associated with health or wellbeing– have direct impacts on the profitability of the American enterprise.

So we ask the question and employers ask the question: “What are you doing organizationally to promote improved health and wellbeing?”  We’re beginning to see a number of studies coming out that directly correlate both the direct and the indirect cost and the productivity and profitability of American business with organizational initiatives that are focused on helping every employee and their dependents achieve the best possible health and wellbeing status.  We call that one, this will come as no great shock, “the work home.”

Then finally when you’re not at work and you’re not asleep and when you’re not in the gym and you’re not at the doctor, you still have a number of interactions, which is what we’ve called: “the personal home.”  Who you associate with, what you do with your free time, who you hang out with, where you go to church, all of these can have an impact on the lifestyle behavioral choices that you make that can impact your ultimate health and wellbeing.

This is a long answer to what I’m sure you thought was a very simple question.  The medical home has a real role to play.  But it is probably insufficient and ultimately incapable at least on a scalable basis across the country of coordinating all of the interactions that we have individually and all of the environments where what we do, who we see, how we behave is influenced by the choices we make and the inputs that those environments provide.

In the disease management world we’re already seeing an expansion of the approach to include both the healthy and the at-risk to an extent that we never have before, along with those who are already in need of the support that disease management programs provide for the behavioral aspects of health and wellbeing.

I think we’re going to see a dropping over time of disease-specific programs in favor of population-wide programs.  I think we’re going to see solutions evolve that basically say to the sponsor, be it an employer or health plan or government, give us a population, let us assess all of them in terms of their health status broadly into those three categories.

Let us organize and bring together the resources necessary to impact that population and all of the homes in which it exists and let us build the infrastructure to make sure that those who are responsible in each of those homes understands what’s happening, not only at the individual level, but also with respect to their interactions in all of those environments.

David: What growth opportunities do you expect Healthways to pursue over the next couple of years?

Bob: It’s pretty clear to Healthways and for everybody who is part of the health care and health industry that the opportunities are not getting smaller.  We have significant challenges at a systemic level.  We have significant challenges at a financial level.

We have significant challenges in the fact that we are creating new demands and we have an entire generation that is about to turn 65 and increase the demand on governmental programs by about 25% over the next ten years.  I think if you listen carefully to the President and to Peter Orszag, Director of the Office of Management and Budget, the scope of the financial implications of our not beginning to address the issues of health and health care in this country make the total of the bailout bill cost look small by comparison.

The estimate is that we’re going to spend 2.4 trillion dollars on health and health care services this year.  That number is expected to go to 6 trillion dollars within the next eight to ten years.  That’s the size of the bailout every year for the foreseeable future with no end in sight.  We can’t sustain that.  There is just no way even with a moderately growing economy that we can sustain that.  The sad part is we’ve known that for years.

One of the things that I enjoy most is that I go around and have the opportunity to speak at conferences. I put together a video tape that runs about two minutes of every President going back to Richard Nixon saying we have a serious problem with the cost of health care and now is the time for us to fix it.  Of course over the last 40 years since Nixon was president, we haven’t.

Our growing economy provided some cover for us.  So while the percentage of GDP grew represented by health care grew from 4.5% in 1960 to an estimated 17.6% in 2009, the growth of the economy was large enough that we were able to subsume that without significant amounts of pain.  Everyone that has looked at the situation tells us: “That’s over!”

So there is plenty of opportunity. Our hope is both as a company and as citizens and consumers and an interested party in health care policy, that the direction we take as we try to deal with this issue is one that is aligned around the outcome of keeping people as healthy as possible for as long as possible because in the final analysis healthier people cost less and are more productive.

David: I’ve been speaking today with Bob Stone, co-founder of Healthways and Executive Vice President there.  Bob, thanks for your time today.

Bob: Thank you David.  I appreciate it and have enjoyed the conversation.

May 7, 2009

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