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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.
View The Conference
Agenda
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
Services 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 <http://www.bhtinfo.com/>.
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 |
