Resolving the ROI Debate – A Call for Transparency

Editorial

What if your car buying experience went something like this?

Car manufacturer A says: “Our car does 0 to 50 in 5.3 seconds and our crash test showed that occupants had a 98.3% chance of survival”
Car manufacturer B says: “Our car does 0 to 80 in 9.8 seconds and our crash test showed that occupants had a 97.4% chance of not sustaining serious injuries”

How could you possibly compare these claims? You couldn’t. Yet, this is what its like to buy disease management (DM) and other population health services today.

In the car buying example, unbiased, independent organizations like Consumer Reports and the Insurance Institute for Highway Safety give us confidence that we can make informed car buying decisions. They provide standardized methods (car crash tests conducted under consistent conditions) and standardized metrics (measuring acceleration by using 0 to 60 mph) so that buyers can make informed decisions.

DM buyers have doubts. The “ROI debate” – the issue of whether DM provides return on investment and creates economic value – threatens the growth and perhaps survival of DM. It doesn’t have to be that way.

This editorial dissects the ROI debate in DM and suggests that we need a Consumer Reports-type organization for population health management programs – in this case the non-profit Population Health Impact Institute. The debate is most intense around DM, but all population health programs (e.g. case management, benefit designs, P4P, wellness programs, local physician lead programs) have similar issues. Here’s a brief overview:

1. Buyers of DM have doubts whether DM creates economic value. Recent reports have reinforced those doubts.
2. The DM industry does not have standardized methods or metrics to provide scientific evidence to the ROI debate.
3. The lack of standardized methods and metrics is a rate limiting step in resolving the ROI debate.
4. DM buyers and sellers have common interests in resolving the ROI debate.
5. The Population Health Impact Institute offers a viable approach toward an evaluation framework for DM.

Let’s take these one at a time.

1) Buyers of DM have doubts whether DM creates economic value. Recent reports have reinforced those doubts.

First, the good news. Everybody agrees that there is strong evidence for the clinical and health benefits of DM. However….

The buyers of disease management and other population health services have doubts whether they are getting economic value for their dollars spent. Buyers (health plans, employers, government & others) strongly WANT to believe that DM provides economic value — they recognize that the current health care system is broken and believe that DM is one remedy.

Over the past year, a stream of reports has served to reinforce their doubts. The most visible of these was the 2004 Congressional Budget Office Report which concluded “there is insufficient evidence to conclude that disease management programs can generally reduce overall health spending.”

In articulating the concerns of employers, the Institute for Health and Productivity Management stated in March 2005:

“Importantly, the CBO report, the position papers of the AHIP [America’s Health Insurance Plans] and the DMAA [Disease Management Association of America], and our own review cited here, all have one thing in common: they do not include an objective assessment of the ‘strength of evidence’ of the methods employed in the economic impact studies they cited. Without a systematic approach assessing the quality of the methodology used, we cannot be confident about published evaluations, whether or not they appear in peer-reviewed journals and whether or not they are conducted by academic researchers, DM vendors, or health plans.”

The dialogue around the issue has become defensive, rather than constructive. The discussion between DM buyers and DM sellers has the ring of children arguing:

“We’re not convinced whether there is economic value for DM”
“There is so”
“We’re still not convinced”
“Is so”

It’s important simply to acknowledge the perception of buyers. Acknowledging the existence of someone’s doubts does not acknowledge the validity of the doubts. Buyers of DM (health plans, employers, governments and others) question whether they are getting value. Period.

2) The DM industry does not have standardized methods or metrics to provide scientific evidence to resolve the ROI debate.

Having acknowledged buyers doubts, we’re still left with figuring out the plan to address their doubts.

In a November 2004 article in the Joint Commission Journal on Quality and Patient Safety, eight industry thought leaders recently described the state of measurement in DM:

“In spite of a growing effort to standardize thinking regarding measurement and evaluation principles within the managed care and DM industries, there is no standard or agreed-on methodology by which to evaluate defined population based solutions for health improvement and cost reduction, nor has DM been scientifically validated.”

3) The lack of standardized methods and metrics is a rate limiting step in resolving the ROI debate.

The buyers of DM are asking some very straightforward and reasonable questions:

“Are DM vendors using valid methodologies to calculate ROI?”
“Do different methodologies yield different results?”
“How do we compare the results generated by vendor A to vendor B if they used different methods and metrics?”

Using the car buying example, they are asking questions like “Did vendors use valid methodologies in their crash tests? Were the crash tests conducted under comparable circumstances? How was “injury” defined? How can I compare acceleration if one manufacturer talks about 0 to 50 and another talks about 0 to 80?”

How will the ROI debate get resolved? There is no plan.

What about the companies out there trying to set their own methods and metrics as the “industry standard” for DM? This just won’t work. Hell will freeze over before other companies support anything that looks like an endorsement of a competitor’s solution to the standards issue….and buyers are still left with their questions about comparability and objectivity. Metrics and standards that are specific to only DM won’t work either. DM — as a specific kind of strategy –needs to be compared to other strategies (chronic care improvement, benefit changes, wellness programs), perhaps even more than the need for DM programs to be compared to each other.

4) DM buyers and sellers have common interests in resolving the ROI debate.

The future of the industry is at stake. Buyers and sellers have common interests in developing a common framework to evaluate DM programs and setting standards for methods (HOW to measure) and metrics (WHAT to measure):

First, the ROI debate creates uncertainty and risk. In the face of uncertainty and risk, buyers put off purchase decisions, sales cycles lengthen, nothing happens. Buyers don’t get to buy solutions to solve their problems, and sellers don’t succeed at selling.

Second, the ROI debate drains energy from innovation. Look at this issue in terms of energy wasted — time spent debating the ROI issue is energy NOT spend buying, implementing and improving DM programs.

Third, resolving the ROI debate will improve trust and credibility. Without commenting on the merits of the case, the allegations raised against CorSolutions in a law suit brought by one of its former employees are troubling. The allegations fuel buyers’ worst fears — that DM companies change the numbers in the back room to demonstrate positive results. The entire DM industry would be in a much stronger position if they could say “Our methods of measuring DM results are transparent. We used agreed upon credible methods and metrics in calculating our outcomes and ROI and we welcome our buyers to replicate our studies.” While standards of measurement are not a guarantee against misrepresentations, they would go a long way toward reestablishing trust. The “transparency” point is critical here.

5) The PHI Institute offers a viable approach toward an evaluation framework for DM.

The Population Health Impact Institute (PHI Institute) offers a viable solution to develop a common evaluation framework for DM and other population health programs. Headed by respected epidemiologist Thomas Wilson, PhD, DrPH, the PHI Institute is the best solution on the horizon to address the ROI debate.

Dr. Wilson notes that “An evaluation framework, and standards that evolve from it, should be managed by a non-profit entity, an entity without inherent conflicts-of-interests, an entity that is agnostic with regard to the intervention (various flavors of DM, other forms of population health management), an entity that gives all comers (methods and programs) a fair shake.”

I encourage the sellers and buyers of DM to sign on to the PHI Institute Code of Ethics, thereby, expressing their desire to strive for objectivity and “transparency” of interests and methods. I also encourage buyers and sellers to work within the framework of the Five Evaluation Principles to move toward their goal of “Generally Acceptable Evaluation Principles” including methodological and metric standards.

Buyers and sellers in DM need a Consumer Reports-type organization to develop information for informed purchasing. The PHI Institute is our best bet.

Vince Kuraitis
Principal
Better Health Technologies, LLC

Healthcare Unbound II Conference

In 2002, Forrester Research coined the term Healthcare Unbound — technology in, on, and around the body that frees patient care from formal institutions.

Forrester has projected that the Healthcare Unbound market will reach $34 billion by 2015, 80% of which will be concentrated on technologies assisting patients in managing their chronic conditions. According to Forrester, the healthcare unbound market will experience slow but steady growth through 2008, and then surge to $34 billion by 2015, following the entrance of third-party payers, like the Centers for Medicare & Medicaid Services (CMS).

The Center for Business Innovation (TCBI) invites you to attend:

The Second Annual Healthcare Unbound
July 11-12, 2005
Fairmont Copley Plaza, Boston, MA

For information on speaking, sponsorship/exhibition and or registration, please contact TCBI:
Ph: 310-265-2570 Email: events@tcbievents.org

Healthcare Unbound is a conference and exhibition on the convergence of consumer and healthcare technologies, with a special focus on remote monitoring and telehomecare.

This year’s Healthcare Unbound conference focuses specifically on the use and adoption of remote patient monitoring/telehomecare technologies in disease management, wellness promotion, and pharmaceutical clinical trials. The program takes an in-depth look at these technologies — and the impact their adoption will have on hospitals, integrated delivery networks, long-term care providers, home care agencies, health plans, insurance companies, disease management companies, pharmaceutical companies, medical device companies, IT vendors, as well as telecom/wireless companies, consumer electronics companies, and the financial community. The program will also explore the concept of the smart home, with an emphasis on healthcare applications.

Join hundreds of fellow senior-level executives in business development, operations, technology, marketing, IT, R&D, and medical management this July in Boston for an exciting, thought-provoking conference and exhibition.
Keynote Speakers Include:

• Thomas C. Nelson, COO, AARP
• Vince Kuraitis, JD, MBA, Principal, Better Health Technologies, LLC
• Astro Teller, PhD, CEO, Bodymedia, Inc.
• Michael J. Barrett, Managing Partner, Critical Mass Consulting
• Elizabeth W. Boehm, Senior Analyst, Healthcare & Life Sciences, Forrester Research
• Herschel Q. Peddicord, III, President & CEO, Honeywell HomMed,LLC
• Joseph C. Kvedar, MD, Vice Chairman & Associate Professor, Dept. of Dermatology, Harvard Medical School & Director, Partners Telemedicine
• Jeremy J. Nobel, MD, MPH, Faculty, Harvard Medical School & Harvard School of Public Health
• Eric Dishman, General Manager, Intel Consumer Health Platforms, Director, Intel Proactive Health Research & Chair, Center for Aging Service Technologies (CAST)
• Stephen Intille, PhD, Technology Director, House_N Consortium, Dept. of Architecture, Massachusetts Institute of Technology
• Jay Mazelsky, General Manager, New Ventures Business Unit, Philips Medical Systems
• Donald Jones, Vice President Business Development, QUALCOMM

Medicare Health Support (formerly Chronic Care Improvement Program)

Medicare Health Support Programs
Alliance to Improve Medicare; March 11, 2005
PowerPoint presentations by:
Sandra Foote, Director, Chronic Care Improvement Program, Centers for Medicare & Medicaid Services
(CMS)Randall S. Krakauer, M.D., National Medical Director, Retiree Markets, Aetna Health Management
Bob Stone, Executive Vice President, American Healthways

PowerPoint Presentation
Medicare Chronic Care Improvement Program (CCIP): Update & Implications
Vince Kuraitis, Better Health Technologies, LLC
National Managed Health Care Congress, Washington D.C.
March 9, 2005

Some Firms Will Use Pharmacists in Medicare Chronic Care Project
American Journal of Health-System Pharmacy; May 15, 2005

Coordinating Care for Medicare Beneficiaries: Early Experiences of 15 Demonstration Programs, Their Patients, and Providers Appendix
Mathematica Policy Research, Inc.; May 2005

PowerPoint Presentation
Health Care Disparities in Medicare Health Support
Michael F. Montijo, MD, MPH, FACP
Senior Vice President – American Healthways
Annual Leadership Summit on Health Disparities
April 27, 2005

Technology & Care Management

eHealth: Achieving Mainstream Acceptance
eHealth Institute, May 2005

3 Outstanding Reports On Chronic Disease/Condition Management
California Healthcare Foundation, June 2005
Helping Patients Manage Their Chronic Conditions
Patient Self-Management Tools: An Overview
Using Telephone Support to Manage Chronic Disease.

Health Information Online
Pew Internet & American Life Project; May 17, 2005

Consumer Driven Health Care: The Changing Role of the Patient
National Center for Policy Analysis, May 2005

Continuous Glucose Monitoring: Innovation in the Management of Diabetes
New England Healthcare Institute; March 25, 2005

Worth Reviewing!

International Disease Management Alliance [IDMA] Formed to Address the Increasing Global Burden of Chronic Disease
IDMA Press Release; June 3, 2005

DM Firms’ Margins to Fall as Payers Eliminate Financial Performance Guarantees
Inside Disease Management; June 6, 2005

Is There Time for Management of Patients With Chronic Diseases in Primary Care?
Annals of Family Medicine; May/June 2005

Evolving benefit designs throw disease management a curveball
Health Leaders; May 19, 2005

The Care Management Institute: Making the Right Thing Easier to Do
The Permanente Journal, Spring 2005

From Evidence to Outcomes: Implementing Clinically Effective and Cost-Efficient Population-Based Interventions
The Permanente Journal, Spring 2005

Florida Disease Management Program Provides Key Insights for New Initiatives in Medicaid and Medicare
The Health Strategies Consultancy; May 29, 2005

Chronic illness: epidemiological or social explosion?
Chronic Illness, March 2005

The personal and political dimensions of ‘chronic disease’
Chronic Illness, March 2005

E-CareManagement News is a complimentary e-newsletter sent to over 3,000 worldwide readers courtesy of Better Health Technologies, LLC.

For business and clinical decision makers who are developing innovative approaches to managing chronic diseases, Better Health Technologies is an eHealth and disease management consulting company that can assist you with strategy/business planning, finding financing, finding customers, and developing key partnerships.

Disclosure — No clients were mentioned in this issue.

You may copy, reprint or forward all or part of this newsletter to friends, colleagues or customers, as long as the use is not for resale or profit and the following copyright notice is included intact. Copyright © 2005, Better Health Technologies, LLC. All rights reserved

We welcome your opinions and comments. Write or call Vince Kuraitis JD, MBA at vincek@bhtinfo.com, (208) 395-1197