David Williams: This is David E. Williams, co-founder of MedPharma Partners and author of the Health Business Blog. I’m speaking today with Cyndy Nayer, President and CEO of the Center for Health Value Innovation.
Cyndy, thanks for being with me today.
Cyndy Nayer: It’s my pleasure David. Thank you for inviting me.
Williams: Tell me about the Center for Health Value Innovation. What is it?
Nayer: Our tag line is “the information resource for value-based benefit design.” We identify value and share the innovation that is getting the value so that employers, purchasers, health plans and patients get the most for every dollar they spend on health care.
Today we can all agree that we have not produced a healthier America. Yet we spend more than any other country in the world. For that reason, we came together as a multi-stakeholder organization to begin to say, “How can we do this better? What’s the thinking? What’s the measure? How can we begin to identify innovations and then bring the stories of innovation and value to the general marketplace?”
So that’s who we are.
Williams: You talk a lot about value-based design. It’s kind of a buzzword in the industry. But what does it really mean?
Nayer: I’ll start by telling you what it doesn’t mean. It doesn’t mean free drugs for diabetes. As late as this morning someone said, “Oh yeah, that’s the story about free drugs for diabetes.”
It was never about that. Value-based benefit design identifies what parts of my population are at risk and guides the implementation of either an insurance plan design or a suite of incentives or both to engage the member population, the providers and the purchasers.
But let’s focus on the population for a moment. Engaging the population in managing their health better can mean being compliant with their program of care. But more importantly, as our latest research shows, it’s much more important to be compliant and persistent with prevention and wellness.
In other words, it’s always easier to stay healthy than to get healthy. That’s what we’re working on now: how do we design a broader care continuum to keep people as healthy as we possibly can?
Williams: One of the elements that you need in designing or implementing a system like that is good access to information. There’s certainly a lot of emphasis on health information technology these days, but how is health IT playing into value-based design?
Nayer: It’s critical. And it’s much more than the electronic medical record, which seems to be the focus of all the HIT at least in the press. It’s really important that we get electronic medical records in place so that are transportable with patients, and quite frankly the patient needs to own his or her data.
But beyond that, health information technology can integrate different data sources, such as health insurance claims, pharmaceutical claims, lab data, appraisal data, electronic medical records at the population level –not the personal level. That information can be leveraged to understand the different risks and begin to group different risks.
We can identify the kinds of interventions that we might do to get better engagement and better outcomes. It can be done on a personal level but it’s much more powerful when it’s done on a population level. And as you can understand it would be less invasive of privacy if it’s done on the population level.
That’s the importance of health information technology. We need to be able to bring it in from many different sources and integrate it. Part of the work of the Center is identifying the disparate information sources and allowing others to benchmark against what we’re doing. We have worked very hard over the last 18 months to be able to put together a platform that we could benchmark against and we have more of that kind of information coming out over the next 18 months.
Williams: You mentioned that the Center is a multi-stakeholder organization. What kinds of stakeholders do you have at the table?
Nayer: At the beginning we recruited renegades who were in large companies that I had worked with, companies such as Caterpillar, Whirlpool and Quad Graphics/QuadMed. Very quickly the health plans began to come on board and then we began to attract physician organizations, hospital systems, and benefits consultants.
Our latest research was through an alliance with Buck Consultants, a national consulting firm that shows the impact of value-based benefit design.
The reason it’s so important to have multiple stakeholders at the table is because you want to do your best when you’re identifying populations at risk and the kinds of interventions that you might do. You want to do your best to not cause unintended consequences. This gives us an opportunity to say, ‘Well if we try to put this kind of incentive into place and do this kind of engagement, what might happen over there and how do we get ahead of that so that everybody is aligned in outcomes?’
The outcome is a healthier consumer. It is not a lower cost. Sometimes it actually costs more but in the long run we get a healthier workforce, a healthier consumer and particularly a healthier community. Right now we’re recovering from the economic tsunami that hit us. It’s incredibly important that we focus on healthy communities.
I should also add that we represent well over 40 million covered lives now. So our depth and breadth of accumulating information and data is pretty big. We can answer some pretty provocative questions and actually play it out because of the folks that are at our table. They’re an elite group of innovators and integrators and that’s what we look for. This is not a general membership organization. We want the best of the best and we do have them at our table.
Williams: How well placed are the traditional health plans to incorporate value-based concepts into their products or offerings?
Nayer: The first iteration is typically around pharmaceutical coverage. If you give people free drugs and get them compliant with their drug therapies, particularly in chronic care, that’s a huge win because we do see total costs and total work performance improving. But all of us around the table know that it’s much more than just the benefit design for drugs. It requires service providers, health information technology, and an enormous amount of communication delivered in multimedia.
As an example, if you want to communicate with me, I want to be communicated with through e-mail. If you want to communicate with my daughter you’re going to communicate through text. If you want to communicate with my husband, he wants print.
We have to be able to reach people with the message that they want at the time that they need it and with the method that they want. Otherwise we miss the opportunity to do behavior change and achieve better outcomes.
The health plans understand this. There is an incredible dichotomy however. The difference is the amount of resources that the payer or purchaser is willing to commit in order to get those outcomes. It requires a complete educational program so that a small employer understands that if you want to get people engaged and compliant, it’s going to cost a little bit more money for a couple of years until you begin to see the return on your investment.
We are walking that finite path: We can do better. We know how to do better. Are you willing to pay for it? That’s a hard question to ask because peoples lives are at stake. We all understand that and the health plans understand that. Some of the folks on our panel look like very conservative folks. There are clear renegades doing clear “renegadish” kinds of work with us and we enjoy that.
Williams: You have new members coming to the table. Last month TriZetto joined. I think of them mainly as a core claims processing system although I understand they’re probably branching out into other areas.
Can you tell me a little bit about the story behind that one?
Nayer: We’re really excited to have TriZetto on board. Last year we began –under a confidentiality agreement so that they could understand where we were going– to detail each other on what their vision was for integrated health management and how that would fuel where we were trying to go.
Let’s be sure to explain who TriZetto is for those who don’t know. TriZetto adjudicates the claims for about 48% of the Blues plans around the United States, which gives them a pretty big footprint. They have been following value-based design and found that we had the most experts. I was clearly one of the most vocal people and they came to me.
We met for a long time. At the first meeting they said, ‘Cyndy, where are you going? What are you leading? Who is on board? What are they thinking?’
We didn’t reveal any proprietary information at that moment but we have been working very hard so that one, to your point, they are expanding beyond just claims adjudication, but two, they’ve developed a competency to what I call ‘adjudicate on the fly.’
Typically when you look at claims, there is a 60 to 90 day lag, so you’re always looking at lagging indicators of population health management. They’ve managed to get up into real-time speed and they’ve shared with us what the output would be. Now we’re working towards how to measure and get the right incentive to the right person and how we bring that to market.
They have some very interesting protocols in place. They have some very innovative tests that are going on. We are in constant contact with each other to be sure that we are dovetailing. They want to be where we are leading and we want to be where they are innovating so that we can bring this to the market.
I want to be really clear, I’m not just promoting TriZetto. Obviously they are very large, but we have several innovative technology companies on our panel.
It’s exactly that kind of thinking we want to engage in: how do we get ahead of where the crowd is going? Or as one of my colleagues said: we want to skate to where the puck is going to be, not to where it is. I think Wayne Gretzky said that.
Williams: Wayne Gretzky said that and Professor Clayton Christiansen picked up on it in one of his articles.
Nayer: Peter Hayes, formerly of Hannaford and now secretary of our Board of Directors says it all the time. I want to give credit where credit is due. He is the one that taught me that. We want to skate to where the puck is going to be and if we can, we want to be the one who pushes it out there. We’re working very hard to keep pushing the envelope so that more people can get accessible, affordable and meaningful care.
That’s the other piece of the puzzle. We want good care that’s meaningful to me and my family.
Williams: We’ve just had this big fight over health care reform. It’s now passed and presumably will be implemented. How does that fit into what you are doing?
Nayer: It’s been an interesting 15 months. Over the last 40 days as this has come to an end and then during the vote, I’ve been doing quite a lot of public speaking. The day after the vote I was speaking at a large conference of about 200 people and I said: ‘How are you all doing?’
They said ‘okay’ and I said, ‘Do you all feel like you’ve been running a marathon?’
And they said, ‘Yes.’ Then I said, ‘Well here’s the good news, you’re halfway done.’ They really wanted me to say they were all the way done.
The reality is now that the legislation is in place at least we know what we have to work with, even though it will change over time. Now the question is how do we optimize? None of us ever thought this was only about insurance reform but okay, that’s where we are. So we’ll start there.
Now let’s work as a team and begin to build the vision of America as the healthiest community on earth. We certainly have enough money in the system. The people around our table are working very hard and sharing the kinds of information and integration and innovation that they can without divulging proprietary secrets. We’re doing a lot of thinking, what we call ‘beyond out of the box.’ We’re thinking outside of the building.
We are saying, ‘Okay, in three years what will this look like? Where do we think the pressure points will be?’ This is what we’re now doing behind closed doors and we’re bringing the information forward as quickly as we can. The biggest change that we’re going to see is a focus on health related work performance and the concomitant or the correlated outcomes-based contracting. You’re going to see this marketplace move very quickly to outcomes and away from widgets. We intend to be the strongest proponents and the strongest teacher of how that gets done.
Watch what we’re doing because we are moving fast. This is the time now to change the dynamic and that’s how it will change.
Williams: I’ve been speaking today with Cyndy Nayer. She is President and CEO of the Center for Health Value Innovation. Cyndy, thanks so much.
Nayer: It’s been my pleasure David. Thanks for inviting me.April 28, 2010