Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types

Other

to

June 18, 2009

Purchasing High Performance Archive

Purchasing High Performance was a bulletin for employers and others interested in promoting value in health care. It was produced in partnership with the National Business Coalition on Health.

Yes
Welcome

Newsletter Article

/

Welcome to <i>Purchasing High Performance</i>

A publication designed for employers and coalitions seeking value in health care.

Any conversation about health care this month might start with “How is health care reform likely to affect…?” We are, at least potentially, on the verge of a system-wide overhaul. But no matter what happens on Capitol Hill, there will still be a place, post-reform, for conscientious employers to use their savvy and sway to increase value in the health care system. Purchasing High Performance is designed with that goal in mind. Every issue will bring you innovative purchasing strategies, benefit design ideas, and news you can use to make the most of your health care dollars.

Purchasing High Performance is a collaboration. The newsletter is produced by the National Business Coalition on Health (NBCH) and The Commonwealth Fund. NBCH is a coalition of coalitions—a group that’s dedicated to advancing value-based purchasing and advocating for changes that will speed the nation's progress toward a safe, efficient, high-quality health care system. The Commonwealth Fund is a private foundation that supports research and makes grants toward the same goal: moving the nation toward a high performance health care system. Local business coalitions are helping make sure this online publication gets into the hands of the employers for whom it was created.

The organizations behind Purchasing High Performance are certain of one thing: what happens on Capitol Hill will not, by itself, define the health care system of the future. You will play a leading role. Employers, working in concert with consumers, physicians, health plans, and others at the local level, will determine how the policy framework of the future plays out in communities across the country. But it’s important to understand what that framework might look like, so each issue includes a Perspectives on Policy piece designed to cut through the dizzying array of proposals and rhetoric to give you an idea of what lawmakers are considering and, better still, to show you how to get involved in the health care reform debate.

Each issue of Purchasing High Performance will also feature at least one best practice case study from an employer on the front lines of care. This issue includes two: the first explores an initiative at General Electric that tested whether incentives are an effective tool for encouraging smokers to quit. The second looks at how one coalition built a clinic and hospital report card that enjoys near universal support in the community. Use these case studies as models for your own efforts, or as inspiration for other initiatives. Also included are articles on such diverse topics as comparative effectiveness research, the value of health IT, value-based benefit design, and why the problem of the uninsured matters to you.

We hope that you will find this newsletter to be a useful resource as you work to make the most of your health care dollars and improve the health and productivity of your workforce.

To tell us how we can improve this newsletter, please take a short survey. And if you know someone who would like to subscribe to this newsletter, please forward it to them.

Sincerely,

IMPORTED: __media_E34DD915E7F24F328AD7BFA39BE54F08_h_46_w_150_as_1.jpg IMPORTED: __media_AFA036203FB941188A09A726A6FD26A0_h_45_w_159_as_1.jpg
Karen Davis
President
The Commonwealth Fund
Andrew Webber
President and CEO
National Business Coalition on Health

 

Publication Details

Featured Articles

Newsletter Article

/

Can Employers Really Make a Difference in Health Care Costs?

The menu of options for controlling costs expands.

The menu of cost control strategies available to benefits managers has historically been just two items long: cost shifting (making employees pay more of the cost of care) and wellness programs (trying to keep employees healthy). The list isn’t just short, it’s frustrating: cost shifting has a potential downside (employees may skip needed care) and wellness programs are, at best, a good way to save money in four or five years. But the range of options is expanding; companies across the country are experimenting with new and innovative ways to control costs and improve health care quality.

Tiering Physician Networks

One of the lessons of cost shifting efforts is that employers can indeed influence employees’ health care choices, and not always in beneficial ways—raise the copay and employees will fill fewer prescriptions; increase the deductible and visits to the doctor will drop. But there is a productive way to apply this lesson in human behavior to physician networks: make proven, high-quality physicians cost less and unproven or low-quality physicians cost more. This does employees a favor by steering them to physicians with expertise in treating their particular condition or illness. Tiering a network in this way turns the patient’s wallet—that ever-present advisor on big decisions—into a sort of value detector, able to communicate, very clearly, “This is the right doctor for you.”

IMPORTED: __media_EC3A42281830427393A7F95A025666BB_w_250_h_166_as_1.jpg In 2004, Gulfstream Aerospace Corp. designed a tiering effort that designated local doctors as "distinguished quality physicians" if they met certain care standards for diabetes and women's health, including maximizing the prescription of generic drugs. Physicians who met these and other standards would receive a bonus equivalent to 20 percent of office visit charges billed that year for Gulfstream employees and their dependents. To further sweeten the pot, Gulfstream lowered the office visit copay for employees seeing distinguished physicians, thus helping to ensure that more employees sought out those doctors.

In the tiering program's first year, only 10 percent of local primary care physicians qualified for designation, and the company paid a mere $18,000 in bonuses. But by 2007, 44 percent of local primary care physicians qualified, and the bonuses reached roughly $250,000. The program produced a 21 percent decrease in the average medical costs of employees with diabetes covered by the plan.

Another noteworthy initiative is Bridges to Excellence, a national pay-for-performance effort that rewards doctors for demonstrating excellence, generally in the treatment of certain chronic illnesses. In a given geographic area, local employers and health plans typically collaborate to steer patients to “recognized” doctors and fund an incentive pool. Doctors can be recognized in several clinical areas: diabetes, hypertension, coronary artery disease, chronic obstructive pulmonary disease, asthma, congestive heart failure, back pain, ischemic vascular disease/stroke, depression, and medical home. If physicians meet the criteria, say, for diabetes recognition, they become eligible for a bonus of between $80 and $200 for every diabetic patient they see who is employed by one of the sponsoring companies. Those bonuses can add up: to date, more than $2.5 million in incentives have been paid in Massachusetts alone. But the upside for employers is larger still; a Bridges to Excellence study found that an effort to steer diabetic patients to recognized physicians in New Jersey will save area employers $60 million a year in related health care costs.

Incentives

Physicians aren’t the only ones who respond to rewards, of course. A growing number of employers now offer financial incentives to encourage healthy behavior. Safeway Inc., a nationwide grocery chain based in California, has been offering employees a discount on their insurance premiums if they maintain a body mass index of 30 or less, do not smoke, and keep their blood pressure at less than 140 systolic/90 diastolic with or without medication. To qualify for the discount, employees also must keep their cholesterol levels within certain guidelines if they have two or more of the following risk factors: they are a man over the age of 45 or a woman over the age of 55; they smoke; they have hypertension; or they have a family history of premature coronary heart disease, including heart attacks or strokes. The insurance rebate for each of these criteria is calculated separately, but if an employee and his or her spouse both meet all four measures of the voluntary program, they would save $1,560 per year on an annual premium of $4,628.

To encourage healthier behavior, the company allows employees who don't meet some or all of the measures but who demonstrate improvement over the year to recoup the relevant portion of the insurance rebate. The employee's physician can request a waiver or an alternate standard to the program.

Safeway management believes that 70 percent of all health care costs are driven by behavior, and that obesity is a significant driver of these costs. "If we can't get our arms around that, we don't have a chance of reducing health care costs," says Kenneth Shachmut, Safeway's senior vice president of health initiatives.

Changing behavior shouldn’t just be a matter of providing the right incentives or designing the right program, says Paul Keckley, executive director of the Deloitte Center for Health Solutions, which studies health-related behavior among other things. "It's cultural. It's not programmatic," he says. "There needs to be an unspoken expectation that people don't smoke, that people are going to walk at noon, that they work out on weekends and don’t pile up French fries on their plate. Living a healthy lifestyle needs to be part of the culture and for employers, that means leading from the top down."

The list of innovative strategies for controlling health care costs goes on and on, of course.

This article was adapted from an article by Sarah Klein that appeared in the Commonwealth Fund’s March/April 2009 issue of Quality Matters.

Publication Details

Newsletter Article

/

Doctors vs. Doctors with IT Support—Who's Better?

New Study Shows the Value of Health IT

The next time one of your employees goes to the hospital or clinic, it’s likely that the only computer they’ll see is the one used by the billing department to make sure their health plan picks up the tab. And what’s wrong with that, you ask?

IMPORTED: __media_6D1D4541A6854E27B5562B721C62BE49_w_250_h_166_as_1.jpg Everything, says research by Ruben Amarasingham, M.D., assistant professor of medicine at the University of Texas Southwestern Medical School. Focusing on a diverse group of hospitals in Texas, Amarasingham’s study found that facilities that use automated support systems such as electronic notes, test results, and decision support provide, on average, much better care at a lower cost. Translation: wiring the health care system can save your company money.

Some of the differences between wired and unwired medical institutions are striking. Wired institutions produce:

  • a 15 percent lower mortality rate among cardiac patients; 
  • a 16 percent overall reduction in complications; and
  • savings of $100 to $500 per patient per episode of care.

Why does health information technology (IT) make such a difference? Consider the physician’s daily challenge: keeping abreast of medical advances; matching therapy to patient; coordinating drugs; and communicating with the treatment team. Now multiply that by a caseload of 25 or 30 patients per day, and the size of the data management and communication challenge starts to come into focus.

But for computers, this sort of data management is a snap. Do you need to know something about a particular illness? Or a patient’s medical history? Or whether the nurse gave your patient his meds last night? A well-designed health IT system can answer questions like these, sometimes when they’re not even asked.

“Making good medical decisions requires that a physician know everything about a patient’s illness, everything about available treatment options, everything about the patient’s medical history, and every action taken by other members of the treatment team. It’s just not realistic,” said Amarasingham. “But the right IT system can put all that information at their fingertips right when they need it.”
 
Such systems exist but, for the most part, not in the U.S. The rest of the developed world has a big head start in terms of integrating information technology into the practice of medicine. In tiny New Zealand, for instance, 87 percent of physicians already use health IT. In the U.S., the figure is 17 percent.1

But that may be about to change. The Obama administration’s American Recovery and Reinvestment Act calls for a $19 billion program to support improvements in the nation’s health IT infrastructure, with some of that money going directly to medical groups to help defray the cost of purchasing such systems.

The potential upside of widespread adoption of health IT is significant. A RAND study estimated annual savings of $77 billion upon full implementation of a health IT system in the U.S.2 And of course people will get better care and live longer, healthier lives too.

Purchasers of health care have a simple mechanism by which to encourage the adoption of health IT—steer employees toward health plans, hospitals, and clinics with better health IT.

“Implementing a comprehensive health IT system takes an enormous amount of money and organizational energy,” said Amarasingham. “We need to reward organizations for making this kind of an investment.”

Citations:
1 Retrieved May 23, 2009 from Commonwealth Fund Web site http://www.commonwealthfund.org/Content/Charts/Report/A-High-Performance-Health-System-for-the-United-States--An-Ambitious-Agenda-for-the-Next-President/W/Where-Is-the-U-S--on-Health-IT.aspx 
2 Hillestad et al., "Can Electronic Medical Record Systems Transform Health Care? Potential Health Benefits, Savings, and Costs,” Health Affairs, September/October 2005 24 (5):1103–17.

Related Links:

  • For a synopsis of Dr. Amarasingham’s study, click here.

Publication Details

Newsletter Article

/

What Works in Health Care? What Doesn't?

With dozens of treatment options for even the most routine issue, who’s to say which one’s best? Turns out, it’s science.

Physicians have a dizzying array of choices for treating any given illness or condition, and sometimes their training and professional judgment aren’t much help in selecting among the options. Would a compression bandage or a below-the-knee cast be the right choice for that severe ankle sprain? Should a patient with back pain be recommended for surgery, or would it be better to wait and see? Which of the dozen or so available statins is right for a patient with diabetes? Does anyone know?

The answer—to a large degree—has been: not really. Employers with geographically diverse operations can see evidence of this in their claims data—rates for various clinical therapies differ by factors of three, four, or even five from one part of the country to another. The same goes for surgeries, prescriptions, tests, talk therapy, and other interventions.1 So where are employees getting the “right” care and where is the waste?

IMPORTED: __media_BE2C2A1451094DA6A2C7ACD28F141BED_w_133_h_200_as_1.jpg Enter comparative effectiveness research. Comparative effectiveness research is just what it sounds like: the study of what works best. For example, a comparative effectiveness study might compare competing antibiotics, the merits of the 111 different treatments available for autism, or even whether surgery and drug therapy or diet and exercise work best for a particular cardiac condition. Such analyses typically focus on the relative medical benefits, but costs may be considered as well. Is a pricey new statin sufficiently better to justify the cost premium, or could a cheaper, older drug do just as well? More sensitive studies also can help target particular interventions to particular populations. For instance, surgery might be a poor option for back pain for one population, but an ideal choice for another.

Perhaps the best known comparative effectiveness study to date was a 2003 analysis by the National Institutes of Health that found that, for pennies a day, thiazide diuretics were more effective than much more expensive drugs at reducing cardiac risk in older patients.2

Some comparative effectiveness research already takes place in the private sector, though not much compared with the apparent need. The Blue Cross Blue Shield Association’s Technology Evaluation Center produces 20 to 25 new assessments of drugs, devices, and other medical technologies each year. Kaiser Permanente has a similar effort and academic medical centers such as Tufts–New England Medical Center’s Cost-Effectiveness Analysis Registry also do work in this area, but according to recent congressional testimony from Office of Management and Budget Director Peter Orszag, “the private sector will probably not produce as much research on comparative effectiveness as society would value.”

Fortunately, in a boost to such studies, the American Reinvestment and Recovery Act of 2009 appropriated about $1.1 billion to fund comparative effectiveness research from the budgets of three different federal agencies. The Act also established the 15-member Federal Coordinating Council for Comparative Effectiveness Research, a body that will help set priorities and coordinate research efforts.

No one expects that comparative effectiveness research will prove to be a cost control silver bullet, but rather a tool that will help employers, health plans, and the government spend health care dollars more wisely. And while using comparative effectiveness research to guide health care decisions may still be a novel concept in the U.S., it’s old news elsewhere; Canada, Australia, Germany, France, and notably the U.K. all have well-established comparative effectiveness programs tied to their national health care systems. According to many sources, these countries all rank higher than the U.S. in terms of overall health care quality.

It’s no coincidence that the surge in interest in comparative effectiveness research comes just as health care reform is being so hotly debated. Many on Capitol Hill see comparative effectiveness research playing a pivotal role in future payment decisions. For instance, should Medicare continue paying for interventions deemed less effective than available alternatives? What about those deemed not effective at all? Critics worry that research-driven payment rules might lead to impersonal, one-size-fits-all medicine, with only the least expensive therapies approved for reimbursement. But those critics largely equate comparative effectiveness research with cost benefit analysis, which it isn’t. In fact, most comparative effectiveness studies don’t even look at cost issues.

“Comparative effectiveness studies tell you what works and for whom,” said Elliot Fisher, M.D., of Dartmouth Medical School. “You need to know that before you can even start to think about costs, but much more importantly it allows you to think about improving care. That’s what comparative effectiveness research is all about.”

Citations:
1 Tracking the Care of Patients with Severe Chronic Illness: The Dartmouth Atlas of Health Care 2008
2 Furburg et al., "Major Outcomes in High-Risk Hypertensive Patients Trial," Journal of the American Medical Association, 2002 (288):2981–97.

For more on comparative effectiveness research check out:

  • OMB director Peter Orszag’s 2007 testimony to Congress on the issue.
  • This excellent overview piece from Newsweek.
  • An article in Health Affairs by Gail Wilensky about establishing a center for comparative effectiveness research.
  • A webcast of a Chamber of Commerce presentation, “Comparative Effectiveness: New Solutions to Address Complex Health Issues,” featuring former HHS director Mark McClellan. Also, view the related PowerPoint presentation.
  • This seminal NIH study showing that low-cost diuretics are just as effective (if not more so) at treating high-risk hypertensive patients than much more expensive drugs, "Major Outcomes in High-Risk Hypertensive Patients Randomized to Angiotensin-Converting Enzyme Inhibitor or Calcium Channel Blocker vs. Diuretic: The Antihypertensive and Lipid-Lowering Treatment to Prevent Heart Attack Trial (ALLHAT)," in Journal of the American Medical Association, 2002 (288):2981–97
  • Or this article on autism treatments from Slate.com, which makes a very clear case for comparative effectiveness research, without even bringing up the topic.

Publication Details

Newsletter Article

/

It's All About Value...Based Benefit Design

What if the way you structured your company’s health benefits could encourage employees to make better health care choices?

Americans have (at least) two big problems when it comes to health care: they get too much, and they get too little. Often, we insist on inappropriate care, as in the case of a sympathetic parent pleading with a physician to prescribe an antibiotic for a child with a cold. But far more often, people skip essential screenings or treatments due to cost or inconvenience. The bottom line: Americans receive only about 55 percent of recommended care, while at the same time, “as much as $700 billion a year in health care services are delivered in the United States that do not improve health outcomes.”1 That is, to understate the matter, A LOT of underuse and A LOT of overuse.

Nowhere do employers have a better opportunity to address both overuse and underuse of health care than when designing their health benefits program. Thoughtfully designed benefits with the right mix of incentives and disincentives can discourage employees from seeking unneeded tests, point them to quality providers, and help them better manage chronic conditions.

IMPORTED: __media_E40CE90FE588469AA45317F4BA153461_w_200_h_200_as_1.jpg Using incentives to encourage employees to make choices (among treatments, tests, physicians) based on value is broadly referred to as value-based benefit design. The way it works is simple: useful interventions or tests, as well as doctors who have demonstrated high quality, cost less for the employee; unnecessary interventions and unproven providers cost more. For instance, thinking of getting a flu shot? It’s on the house. Considering a generic alternative to an expensive prescription? You’ll save a bundle. But if you want an MRI to diagnose a routine backache, it’ll cost a small fortune.

While value-based benefit design makes intuitive sense, the real question is, “does it work?” According to dozens of employers that have already embraced the concept, the answer is yes. A few examples:

Gulfstream Aerospace Corp., located in Savannah, Georgia, dropped its copay for flu shots and generic drugs for certain chronic diseases to zero. Overall, pharmaceutical costs dropped significantly as the effort yielded a 98.4 percent generic substitution rate.

Pitney Bowes, a Stamford, Connecticut–based manufacturer of mailing and shipping software and hardware, established a three-tier pharmacy benefit designed to steer employees toward generics and needed, high-value medications for diabetes, asthma, and hypertension. Not only did net pharmacy costs decline, but among diabetics, emergency room visits declined 35 percent and overall medical costs decreased 6 percent.

Colorado Springs School District 11, with 3,400 employees, made an aggressive push to discourage open surgery when minimally invasive (laparoscopic) alternatives were available. The district targeted five common surgeries and provided incentives to members that opted for laparoscopic vs. open surgery. Employees responded enthusiastically and the district saved at least $1 million on hospital and surgical costs. Continued savings of about 2 percent of overall medical costs continue to accrue.

Dozens of complete case studies and additional details on some of the examples above are available at the Center for Health Value Innovation. The Center also offers a useful roadmap for adopting a healthy culture and implementing wellness programs.

Citations:
1 McGlynn et al., "The Quality of Health Care Delivered to Adults in the U.S.," New England Journal of Medicine, June 2003 348(26): 2635–45; Orszag, The Underuse, Overuse, and Misuse of Health Care, Testimony before the Senate Committee on Finance, July 2008.

Resources:

Publication Details

Perspectives on Policy

Newsletter Article

/

Health Care Reform Is Not a Spectator Sport

June 2009 is no ordinary month in the decades-long pursuit of meaningful national health care reform. Both the U.S. House of Representatives and Senate are working feverishly to mark up reform bills that, if successfully reconciled and enacted into law, will rewrite the fundamentals of U.S. health care; everything from who gets care, to what services are provided, to how it’s paid for will (potentially) change. The stakes for employers are very high.

Many employers may already know that the Obama administration and congressional leaders have made a very public commitment to build on the existing employer-based insurance system. But that’s not the end of the story. The reforms being discussed on Capitol Hill will affect employers. To understand how, let’s look briefly at what’s on the table.

IMPORTED: __media_988E80F06C774654BDA5433A907FC560_w_300_h_210_as_1.jpg Coverage for all. Almost everyone agrees that reform won’t accomplish its goals of better health and lower costs unless all Americans have health insurance. That’s good news for the nation’s 48 million uninsured, but it’s also great for employers, who can look forward to a healthier, more mobile workforce once reform is enacted. It will also mean that the cost of uncompensated care will be lifted from the shoulders of employers.

A new market for health insurance. Likewise, most Democrats and Republicans agree on the need for a “health insurance exchange,” through which individuals and small employers could compare plans and shop for coverage. Details on how this might work are still spare, but preexisting condition exclusions would certainly disappear and individuals would be able to carry coverage from job to job. Federal employees enjoy just this type of marketplace already under the highly regarded Federal Employees Health Benefits Program.

A coverage mandate. In order to make the health insurance market work, most Democrats and Republicans have agreed on the principle of “shared responsibility”—everybody gets coverage, everybody pays, and everybody wins. In practice, shared responsibility means a mandate of some sort: individuals must obtain coverage, while employers must offer it or participate in the health insurance exchange. The President recently said such mandates might be waived or modified for low-income people and small employers.

Taxes. If you thought spending cuts and savings gleaned from eliminating waste and improving quality might be enough to pay for all of these changes, think again. Most estimates of the cost of the reform proposals now on the table put a $1.2 to $1.6 trillion federal budget price tag (over 10 years) on the effort. To pay for it, President Obama has included $634 billion in his proposed budget for next year. But more money will be needed. Some in Congress are now exploring limiting the tax exclusion on health benefits provided through employers, particularly for high-priced policies. The potential revenues are enormous: even if Congress decides to levy a tax only on plans in the top quarter of the price range, it would raise upwards of $330 billion by 2019.

A public plan. Is the hour at hand when doors to a public plan will be opened to everyone? Maybe, but establishing a public health plan to compete with private insurers remains extremely contentious. Some argue that it would help cut costs and increase access; others are concerned that a public plan would lead to cost shifting to the private sector and an uneven playing field. One recently proposed alternative to a government-sponsored public plan option is the establishment of state or regional nonprofit health cooperatives that would compete with private insurers. This idea is beginning to collect some support on both sides of the aisle, and co-ops of various kinds do have a proven track record in the market—hundreds already exist.

It is still too early to predict how health care reform debates will play out, but that makes it a good time to revisit the five things we need most out of whatever health care system is to come:

  • Improved Access – All Americans need and deserve health care coverage. A system that leaves 48 million Americans without coverage, ranks last among a survey of 19 developed countries in terms of mortality amenable to medical care, and spends twice per capita what other major countries spend is unacceptable. No American should be forced to put off needed care or decline a promising new job offer or enter into bankruptcy for want of health coverage. The problem of the uninsured impoverishes us all and constitutes a national disgrace. 
  • Real Cost Control – We need to end the overuse, underuse, and misuse of health care that by some estimates eats up 33 cents of every health care dollar.1 We need better health information technology to support doctors in their decision making. We need objective comparative effectiveness research to help establish guidelines to reduce wild variations in care patterns and ensure that every patient gets the right care at the right time and in the right setting.
  • Payment Reform – Across every health care setting, we need to start paying for value and stop paying for volume. We can no longer afford counterproductive payment practices that make us less healthy and cost us more money by rewarding mistakes. Medicare is already leading the way in this regard with its new practice of not paying for preventable mistakes or infections. The rest of the health care system must follow suit. 
  • Accountability – Standardized measurement and public reporting across the health care system is a moral imperative and a precondition of building feedback loops that will help doctors, clinics, hospitals, and health plans improve as they move forward. Employers and consumers must be empowered to make informed health care decisions based on quality and value. 
  • A Focus on Prevention and Wellness – We need to develop an infrastructure that makes it possible to diagnose and treat populations before they get sick, when treatment is cheapest and most effective. And as part of this effort, we need to build a culture that rewards living well and staying healthy.

One thing that is very clear at this point is that what happens on Capitol Hill will not be the last word in health care reform. Legislation can only provide a framework for the health care system of tomorrow; what happens in your community is still up to local actors.  

So it's important to find out what is at stake in national health care reform. One way to do that is to join your local business coalition on health and read whatever policy material they have available. Or visit www.house.gov or www.senate.gov to find contact information for your representatives in Congress.

As an employer, you should also take the time to consider whether you’re making the most of your current benefits program. Are you steering people toward needed care or quality providers? Do you encourage health providers to invest in health IT? Do you have a position on covering the uninsured?

Finally, and above all else, participate in the debate—the health of the nation depends on it.

Citation
1 Peter Orszag, Congressional Testimony to the Senate Finance Committee, delivered September 2008.

Links:

Publication Details

Interview

Newsletter Article

/

Peter Lee of PBGH Talks about the Uninsured

By Brian Schilling

PBGH Executive Director of National Health Policy Peter Lee Talks About the Uninsured, Health Reform, and What Employers Can Really Do

Peter Lee oversees the Pacific Business Group on Health’s efforts to shape national and state policy. He is a sought-after speaker and testifies regularly on health quality issues and on the employer’s role in promoting affordable, accessible care.

IMPORTED: __media_C82F606632DA4BB08851976933C1F0A7_w_180_h_200_as_1.jpg Q: In the journal Health Affairs, you and Intel CEO Craig Barrett wrote about the crucial role employers can and should play in bringing about needed health reform. Do you think they’ll really step up to the plate?

A: Yes and no. Some employers are stepping up, but there’s a divide between employers who are fully engaged in reform efforts, between the relatively small number who are actually doing meaningful things to improve the delivery system or address quality issues, versus the majority who are rightly nervous when they hear the word reform and immediately start wondering, “How is this going to affect me?” Employers need to be looking at both issues and all too often we look only at “playing defense.”

Q: Do you see a big opinion gap between large and small employers on the issue of health reform?

A: Yes. Large employers look at this from an entirely different perspective—they want to know how it will or won’t affect their benefit offering and their efforts to promote productivity. I think a lot are skeptical that it will lead to real changes in cost trends. Remember we’ve been through this before. Nothing got fixed. In this economy, small employers aren’t thinking about what reforms might be needed to realize a higher-value health care system, they’re just trying to make it through the day. We’ve reached the point where a majority of very small employers don’t even offer health coverage. For them, the issue is what would a new mandate mean and how will they pay for it.

Q: Do large employers think about health benefits as a way of distinguishing themselves in the market for workers?

A: With regard to the core health benefits, large employers don’t generally distinguish themselves from one company to the next. But they do distinguish among themselves based on a range of wellness programs and other benefits.

Q: So wouldn’t employers just as soon have the government take over the job of administering benefits to everyone? Why isn’t there more support for single payer?

A: The main reason there’s concern among many employers is that it would mean handing this over to government. You would need to convince a lot of employers that it is within the government’s core skill set to administer health benefits to an additional several hundred million people in order to make employers happy with ceding responsibility here. The employer perspective is: while administering health benefits might not be what I’m in business for, I do an OK job and at least have my hands on the reins; I’m not ready to hand it over to government. No one trusts the devil they don’t know. That’s why everything the Obama administration says starts with, “Don’t worry, you keep what you have—we aren’t swapping you out with a government plan.”

Q: But do you think there is a chance that what we’ll really see is an effort to start phasing out employer-sponsored insurance?

A: The 160 million people who have employer-based insurance are pretty happy with it. They’re insecure that they might lose it. No one is going to ignore them and force a single-payer plan down their throats. My very strong sense is that the Obama administration is made up of economic pragmatists. A pragmatist is going to approach this from the standpoint of, “How can we preserve the present system, but improve it and expand access?” It’s the only approach that’s politically or economically feasible.

Q: You’re a vocal critic of the current system as being full of waste, inefficiency, and poor-quality care. Does it make sense to think about expanding access now, or do we need to fix the flaws in the system first?

A: The issues of cost and efficiency and quality need to be addressed first or at the same time as addressing access. To some extent, creating efficiencies is where the money for expansion of coverage will come from. If we don’t make the system more efficient and stem the really atrocious cost increases, it’s not possible to get everyone in the tent. We don’t get to a higher-quality, lower-cost system by expanding access.

Q: OK, I’m a small employer that doesn’t compete internationally with companies for which this isn’t an issue. Convince me that I should care about the uninsured.

A: If you’re one of the 50 percent of very small employers that doesn’t offer coverage, you care because there are real consequences that flow from your employees not having coverage. They are going to get sick and miss work more often, and they’re going be looking for other jobs that do offer coverage. And, as a small employer you’re probably perpetually worried about what it would cost if you did decide to offer health benefits. If you’re one of the other 50 percent that does offer coverage, you’re at a massive cost disadvantage when you compete with the company down the street that doesn’t. Or you might have an employee that you really want to leave, but he or she can’t because they’re afraid to lose their health coverage. It’s a rotten situation for everyone.

Q: What can—or should—an employer do to help promote meaningful health care reform, besides worry and be sympathetic?

A: Join a coalition. And make sure your voice is being heard. No purchaser, not even Medicare, is big enough to change the system on their own. And, it is clear that employers need to learn about and lobby for the range of elements that will promote value, such as payment reform, better provider-level measurement, and comparative effectiveness research.

Q: If everyone in the U.S. got health insurance tomorrow, how do you think it would affect the average company? What differences would they see right away or over time?

A: The mere fact of having health coverage for 50 million additional Americans will not necessarily make much of a difference at all to the average employer. There may be a minimal decrease in cost shift [from the uninsured to employers], but it would not plug the holes in the sinking ship of the American health care system. That will only be accomplished by applying comparative effectiveness research, payment reform, better information technology, and accountability and reporting.

Q: If you could wave a magic wand and change one thing about the system, what would it be?

A: I’d change the incentives for those that who deliver and receive care. I’d want to eliminate the whole pay-for-volume approach to compensation that we have now and establish incentives for physicians to provide the best and most efficient care. At the same time, we need to pay physicians or nurses for time spent coordinating care for the chronically ill—that’s often either not paid for or under-funded. Payment reform is the first and biggest piece of the puzzle that we need to put in place. One way for employers to learn about these issues is through the work of the Center for Payment Reform, a recently formed collaborative that is promoting transformational payment change. And I’d do the same for consumers: we need to expand the application of value-based benefit design to provide substantial rewards to consumers who adopt healthier lifestyles, like stopping smoking, and choose higher-value providers or treatments.

Q: Do you know anyone who is presently or who has recently been uninsured?

A: Yes, this is personal for me—my nephew went without coverage for a while. It’s very unsettling. I actually provided financial support to help him get coverage.

Q: You’re an advocate for using public policy to help people lead healthier lives. Can you give me an example of a policy or two that would make a real difference?

A: An easy one is dramatically increasing the tax on tobacco—it’s an easy way to provide a real significant financial incentive for people to quit smoking. One of the reasons California has one of the lowest smoking rates in the country is that it raised its tobacco tax, in concert with embarking on a broad campaign. Employers, though, will always have a role on health and wellness as well. Having effective smoking cessation benefits is an important way private policies can complement public policies.

Q: How healthy a lifestyle do you lead?

A: If you ignore the stress that comes with trying to address the shifting tides of health reform, I have a very healthy lifestyle. I exercise four to five times per week, don’t each much red meat, and don’t overeat. I generally practice what I preach.

Q: OK, so what did you have for breakfast this morning?

A: I had toast, a banana, and coffee—followed by a “chaser” of my morning swim.

Publication Details

Case Studies

Newsletter Article

/

What Happened When GE Paid Employees to Quit Smoking?

By Brian Schilling

Summary

In 2004, researcher Kevin Volpp at the University of Pennsylvania School of Medicine and Wharton School secured a federal grant to test the effectiveness of financial incentives on smoking cessation. The General Electric Corporation, which spends tens of millions of dollars each year on smoking-related illnesses, volunteered to help design and host a clinical trial.  The trial was extremely successful, with incentivized participants giving up smoking at three times the rate of their non-incentivized peers. Subsequently, GE has decided to launch an incentive program for all of its 152,000 U.S. employees.

Background

IMPORTED: __media_60F222D3617F43698D0C5404E7B2D698_w_150_h_150_as_1.jpg There is perhaps no commercial product in the U.S. that is so universally loathed—by its users, by lawmakers, by the public health community—as the cigarette. Even cigarette manufacturers are trying to help smokers quit. And no wonder: small, fragile, and unassuming, the cigarette has killed more Americans than all our wars combined (by a wide margin). By some estimates cigarettes are as addictive as cocaine or heroin. And the annual health care tab for cigarette smoking in the U.S. is upwards of $75 billion.1 Does a smoker work for your company? Set aside an additional $3,400 next year; that’s the dollar value of the added health care and lost productivity attributable to the average smoker annually.2

The U.S. Centers for Disease Control and Prevention (CDC), the federal agency that champions public health, takes a dim view of cigarettes as well. The agency touts the recent tripling of the cigarette tax as a public health victory on its Web site and makes regular grants to researchers studying smoking cessation. In 2004, one of those grants, for a little over a million dollars, went to Kevin Volpp, M.D., Ph.D., associate professor of medicine and health care management, University of Pennsylvania, School of Medicine. Volpp contacted Robert Galvin, M.D., executive director of health services and chief medical officer at General Electric Corporation (GE), to inquire about hosting a clinical trial, and a soon-to-be-fruitful collaboration was born.

Like most employers, General Electric ranks cigarette smoking near the top of its list of health care concerns. About 20 percent of the GE workforce smokes, the same as in the population at large.3 The company estimates that it spends tens of millions of dollars each year on smoking-related illnesses—a galling sum not just because it is so large, but because every cent is an avoidable cost. If only the company, and others like it, could find a way to convince its employees to quit smoking they could reap significant savings. Surveys generally find that about 70 percent of smokers want to quit smoking, but that only about 2 to 3 percent succeed in any given year.4

The literature on smoking cessation is not rife with success stories. Initiatives that succeed in getting smokers to quit for a full year (a good benchmark because smokers who quit for that long tend to stay off cigarettes indefinitely) are rare. Efforts that increase the quit rate by a single point (say, from 3% to 4%) are considered noteworthy and, in terms of percentage increase, they are. In particular, the literature on using financial incentives to separate people from their cigarettes is not particularly compelling. A recent opinion piece by columnist Alfie Kohn in USA Today noted that, generally, “paying people to become healthy simply doesn’t work.”  

“On some level I share that columnist's skepticism—incentives probably aren’t always the best way to modify behavior,” said Galvin. “But the truth is that incentives haven’t been studied enough to rule them out as a behavior modification tool. And GE is just like every other large employer—we’re getting crushed by smoking-related health care costs. So we thought it made sense to participate in a well-designed clinical trial to see what the evidence, versus opinions, actually showed.”  

Objective

GE and the University of Pennsylvania had few preconceived notions about what the study would find. Lead researcher Volpp had estimated that quit rates might jump to around 9 percent, but the objective of the study was to more firmly quantify that bump and see how long it might last. Armed with that knowledge, future trials might be developed to help answer other important questions:

  • What is the optimal incentive level?
  • Over what time period should incentives be available?
  • Do incentives work equally well for all populations?
  • Are heavy smokers good candidates for such a program?

Billions of employers’ health care dollars ride on the answers to these and other such questions.

Before the GE trial, most of the skepticism about using incentives to curb smoking was based on relatively small studies or trials that used small incentives, in some cases as little as $10. The GE study promised to shed new light on whether larger incentives might be more useful in encouraging smokers to quit.

What Did They Do?

Volpp, Galvin, and a team of researchers began recruiting study participants in February 2005. Potential participants were identified via a survey that consisted of just three main questions (Do you smoke at least five cigarettes a day? Do you use other tobacco products? Would you like to participate in a university study about smoking cessation?). The survey was distributed at about 85 different GE sites.

Ultimately, about 1,900 individuals expressed some interest in participating. No mention of any incentive was made to the potential participants. “In running a study testing the effect of incentives,” explains Volpp, “you’d prefer not to entice people to join based on the premise that they might get an incentive—then if they get put in the control group and don’t [get an incentive] they’re immediately disappointed and drop out.”

About half the applicants were excluded for various reasons (insufficient tobacco use, planning to leave GE, etc.) and the remaining participants were “randomized” and put into one of two groups—a control group or an incentive group. The control group was given information about community-based smoking cessation resources, essentially a list of stop-smoking programs within a 20-mile radius of their work site as well as online resources. The incentive group was given the same information, but those individuals were also told that they were eligible to receive up to $750 in incentives.

The incentives were structured as follows: $100 for completing a smoking-cessation program; $250 for demonstrating (via a biochemical test) that they were cigarette-free after six months; and $400 for remaining cigarette-free for the following six months. Only those who quit in the first six months were eligible for the $400 bonus. Both groups enjoyed the same generous GE health benefits package, which covers tobacco cessation pharmaceuticals but does not pay for smoking cessation programs.

Concurrent with the study, GE introduced a wellness program directed at smoking cessation. This consisted of education about the harmful effects of smoking and links to community programs. However, all employees, whether study participants or not, had equal access to these programs.

To validate self-reported claims of abstinence, at six-month intervals participants were given a cotinine test, which required providing a saliva or urine sample that was then analyzed for signs of cigarette use. Participants’ identities were confirmed and samples analyzed at an independent lab.

After follow up with all study participants concluded in the summer of 2008, data analysis began in earnest.  

What Happened?

The results of the incentive trial surprised the team of researchers. The odds of quitting among incentivized participants reached 15 percent and were 3.28 times higher than among non-incentivized employees. No one had previously found financial incentives for smoking cessation to be anywhere near this effective. The numbers actually bear repeating: 5 percent of the control group quit, while about 15 percent of the incentivized group did. In a field where small increases are noteworthy, a tripling in quit rates was earth-shattering. USA Today, the Wall Street Journal, and the New York Times covered the story, while the BBC and other international media offered glowing accounts. Had a more effective path to helping smokers quit actually been found?

Perhaps, but to some, Volpp among them, achieving a 15 percent quit rate is still not entirely satisfactory. “Fifteen percent is impressive at the same time that it is insufficient,” he said. “I feel that once we are able to experiment with incentives in combination with other cultural changes or highly effective quit programs, we’ll be able to push this rate higher still.”

Still, the results of this trial were striking enough to convince GE that it should offer a smoking cessation incentive program to all of its employees. The program, which is still being fine tuned, will begin in early 2010. It will not be exactly the same as the trial; incentives may differ in size and with respect to timing, and some smoking disincentives may be introduced for those who fail to kick the habit after a long period of company-funded encouragement. GE expects the effort to pay for itself immediately and deliver a return within three to five years. And if health-related absences are included in the calculations, it’s likely there would be an immediate return.

Notably, not all participants went about quitting the same way. A significant percentage of successful quitters used nicotine patches, and others used the drug Zyban, which fights irritability that sometimes comes with attempts to quit. But some relied on will power alone.

For instance, one longtime GE smoker told the Associated Press that he quit smoking on his own while a participant in the study, despite having failed to quit on several previous attempts.  The worker credited the incentives, which came as a surprise to him, with making the difference. “I got paid for doing something I should have been doing anyway,” he said.

Lessons Learned

The trial offers four main lessons.

  • Sufficient incentives can help encourage smokers to quit. Whether $750 is the “sweet spot” (or even if there is one) with respect to incentives remains to be tested empirically, but that amount does appear to motivate smokers to quit. Whether this finding has implications beyond smoking remains to be seen, but the optimist would hope so—up to 40 percent of all premature deaths in the U.S. are related to unhealthy behaviors. At the very least, these findings suggest the need for further research. Might other behaviors be influenced as well? Still outstanding are questions about whether the results will be long lasting. The 15 percent quit rate for study participants in the incentive group suggests that they might be—about 95 percent of individuals who refrain from smoking for a full year will continue to refrain for at least 20 months.
  • Incentives can save employers money. While no rigorous cost-benefit analysis has yet been published (investigators are currently working on this), GE’s informal analysis of the study came to the conclusion that expanding the initiative made good financial sense. No surprise, really, when you consider the estimated $3,400 an employer saves annually (in increased productivity, lower absenteeism, and lower health care costs) every time one of its employees quits smoking.
  • Timing is critical. Unlike many previous incentive studies, the GE trial paid out the incentive over a full year, requiring participants to modify their behavior over a relatively long period of time, during which the necessary restraint presumably became routine rather than goal-oriented. Studies with quick payouts for short-term accomplishments have tended to show high rates of recidivism in the period following the payout. However, this study did reduce procrastination by only making employees eligible for the largest incentive—$400—if they quit smoking in the first six months following enrollment in the study.
  • Incentives aren’t sufficient on their own to tackle a problem like smoking. The pessimist’s view of a 15 percent success rate is that it's really an 85 percent failure rate. Further research is needed to determine if more finely tuned incentives—possibly paid out over an even longer period of time—coupled with cultural changes and specific medical and/or other interventions could ultimately lead to even higher quit rates.  

Citations

1 Cigarette Smoking Among Adults – U.S., 2000, Morbidity and Mortality Weekly Report, Centers for Disease Control and Prevention, April 12, 2002 51:642–5.
2 Annual Smoking-Attributable Mortality, Years of Potential Life Lost, and Productivity Losses – U.S., 1997–2001, Morbidity and Mortality Weekly Report, Centers for Disease Control and Prevention, 2005 54:625–8.
3 Gallup poll, July 25, 2007.
4 Zhu et al., "Smoking Cessation with and Without Assistance: A Population-Based Analysis," American Journal of Prevention, 2000 18:305–11.

Publication Details

Newsletter Article

/

A Coalition Builds a Report Card

By Brian Schilling

Summary

The Puget Sound Health Alliance is a Seattle-area coalition of payers, purchasers, providers, and consumers that work together on efforts to improve health care quality and control costs.  In 2005, the group began work on an initiative to make information about the quality of care at area hospitals and clinics readily available to consumers. In September 2008, the Alliance launched the “Community Checkup,” a free, online comparison tool with more than 20 different performance measures. The effort enjoys broad community support and is widely cited as a model public reporting effort.   

Background

IMPORTED: __media_76452C949D8843598D070856C35D9993_w_228_h_46_as_1.gif The Puget Sound Health Alliance, formed in 2004 to address health cost and quality issues, counts among its members more than 150 different public and private employers, health plans, physicians, hospitals, and consumers.  These organizations represent more than 1.5 million people in Washington State's Puget Sound region, or about one of three residents. Every health plan in the state participates, as do most major clinic groups.

The collaborative, inclusive nature of the Alliance reflects the vision of its founder and first president, Ron Sims, now deputy secretary of Housing and Urban Development in the Obama Administration.  Sims formed the Alliance and recruited its initial members in early 2005, several years into his tenure as King County Executive—during which he watched area health care costs skyrocket. 

“Alliance leaders know that we can accomplish far more together than any single health plan, medical group, hospital, employer, or patient could on their own,” said Mary McWilliams, executive director of the Alliance. “We encourage everyone to participate, from the largest employers to individual consumers who want to help improve health care in the region.”
The organization has established an impressive track record in its first four years:

  • Care Guidelines -- One of its initial efforts involved reaching community agreement about the national evidence-based clinical guidelines that should be used in the region to ensure effective treatment of diabetes, heart disease, back pain, asthma, and depression. These guidelines ultimately became the basis for the measures in the public Community Checkup report. 
  • Health IT -- The Alliance has successfully pushed for greater adoption of health information technology, and has been involved in awarding more than $2.5 million in grants to clinics and hospitals for adoption of such technology.
  • Audience-specific Information -- The Alliance also provides a wide variety of information resources to promote evidence-based medical care.  Consumers, for example, can find tips and advice on managing their health in the form of one-page fact sheets on certain common illnesses.  Similar materials are available for employers and providers to distribute to their employees or patients.

A longstanding goal of the organization was to produce a report comparing health care provided in the region's medical groups and hospitals.  Such efforts are rare in the U.S; only a handful of regional models, in Minnesota and Wisconsin, exist. One reason for the paucity of such "report cards": they’re tough.  Clinics and physicians tend to focus on what’s being measured and how, insisting on fair, objective metrics that support improvement efforts; consumers tend to gravitate toward simplified reports or rankings; and employers may prefer different metrics altogether, focusing on cost and value.    

What Did They Do?

Initial Discussions: In keeping with its commitment to collaboration, the Alliance’s first step in producing a comparison report was to discuss it among the growing number of organizations at the table.  Once the draft approach to developing the report was defined, the Alliance sought input from area physicians, purchasers, health plans, and the public to refine the approach. More than 40 presentations were given to physician groups across the five counties to pose specific questions and give doctors the opportunity to weigh in. 

The Alliance hoped to get about 30 clinics to step forward. Instead, once certain medical groups volunteered, others followed suit. The inaugural report, launched in January 2008, showed results for more than 80 clinics in the region. The second report, published in November 2008, had results for more than 170 clinics.

Limiting the Report’s Scope: One of the first decisions the Alliance made was a pragmatic one: limiting the report to measures that could be calculated using claims data.  That decision didn’t limit measurement options as much as it might sound. Claims data can reliably show whether patients received various needed tests (cancer screening, cholesterol checks) and whether unnecessary tests were avoided (antibiotics for the common cold)—making it possible to assess care for everything from diabetes to heart disease to depression to asthma. Over time, the Alliance intends to expand the Community Checkup to include measures based on data from registry software, labs, and patient satisfaction surveys.

Ultimately, the group selected 21 measures of medical group care and 41 measures of hospital care to include in the report card.  The medical group measures focus on issues such as prevention (cancer screening); overuse (prescriptions for antibiotics); generic drug use; and certain chronic conditions (asthma, depression, diabetes, and heart disease). The hospital measures focus on care related to heart failure, pneumonia, surgery, and patient satisfaction.  For the medical group results, local physicians validated the draft results, which were calculated using measures or guidelines developed by the National Quality Forum, the Institute of Medicine, and/or NCQA’s HEDIS.

Getting Consumer Buy-in: To ensure the report meets the needs of consumers, the Alliance vetted an early draft with its Consumer Advisory Group, a 15-member panel of area patients that initially met monthly to advise the Alliance Board.  Feedback from that group helped cement the Alliance’s decision to use a Consumer Reports™–style approach to presenting the results.  Full, half-full, or empty circles are used to indicate whether a clinic or hospital is above the regional average, at average, or below the regional average on a given measure. 

“Patients and other consumers play a big role in their health and health care, so to get people to use the report it must be user-friendly for the average person,” said Diane Giese, Alliance director of communication and development. “Other comparison reports exist, even in our region, but they’re often complicated and difficult to navigate.” 

As user-friendly as the comparison report is, the Alliance is careful not to oversell it.  The report notes that there is more to quality care than what it measures and that people should not use the report to choose a doctor, but rather to improve their relationship with their doctor.

Ensuring Provider Support: To ensure provider support for the effort, the Alliance sought out the input of the Washington State Medical Association on the proposed reports.  Feedback convinced the Alliance to produce an entirely separate, more detailed report for use by clinics. Those private reports include physician-level data, which enables the clinics to target interventions and refine practice patterns.  The same data, however, could be easily misinterpreted by consumers.

“A practice manager has the context to know whether a physician’s very high or very low rate on a given measure means what it looks like it means,” said Karen Onstad, director of health information for the Alliance.  “Even with our large multi-payer database, when results are attributed to a specific clinician the amount of data upon which the result is based can be very small, so it’s important that the person doing the interpretation understands statistical validity.” 

Data Gathering and Analysis: One of the decisions the Alliance made early on was to negotiate individual data sharing agreements with each of the 14 health plans and self-insured purchasers that contributed data to the effort.  The process was described as gut wrenching, but ultimately a key success factor.

“If we had attempted to apply a uniform agreement to the disparate organizations that supplied their data, we may not be enjoying the continued and strong support we have today,” said Onstad. “Going slow and working with each organization separately helped us address everyone’s concerns and get stronger buy in.”

Data aggregation and analysis are conducted by a third-party vendor, Milliman, Inc., a highly regarded actuarial and consulting firm with roots in the Seattle area.  Milliman was selected in part because the firm does more than just number crunching, and has the expertise necessary to advise the Alliance on developing a planned next-generation report card featuring data derived from electronic medical records.

A Paper Version: Before the online version of the report was launched, a paper version was released.  Well before then, clinics and medical groups privately received their own draft results for review, comment, and, if necessary, correction.

Promotion: With no real budget for promoting the public report, the Alliance relied on its member organizations and the local media to raise awareness about the launch of the report.  Member organizations were given talking points and encouraged to highlight the report in company newsletters and at appropriate gatherings.  At the Alliance, Giese spent the weeks leading up to the launch pitching the story to area media, many of whom jumped at the story.   

What Happened?

In its first month, September 2008, the Community Checkup Web site drew about 5,000 unique visitors. That ticked up to 7,000 by November.  In a typical month, the site now draws about 1,000 visitors.

The fact that 35 percent of the site’s visitors come from participating organizations is good news. One of the main goals of the report has always been to support quality improvement efforts, and that so much traffic is coming from participating organizations suggests they are looking at the data carefully.  Anecdotes suggest the same thing.  One clinic noticed that it was scoring below average on all four generic prescribing measures and responded by implementing a plan to be more conscientious about prescribing habits. The group also began tracking progress on the measures through its electronic medical record system.  Another clinic reported accelerating plans to transition to an electronic medical record system, and another launched a breast cancer screening awareness campaign to help improve its scores on related measures.

“What we’ve heard from medical groups, hospitals, and other organizations about how they are using the report confirms that everyone is committed to making changes to improve patient care,” said McWilliams. “Not until the Alliance existed did we all have a way to agree on what was needed and then take coordinated action to improve health care value.”

Local media have embraced the report.  Every major paper in the region has run articles or editorials lauding the effort and some have done so more than once.  National Pubic Radio, the Associated Press, and several professional journals also covered the launch of the report card.

The Future

The Alliance is presently working to develop ways to measure and report on "resource use" or efficiency, a special area of interest for the public and private employers involved in the effort.  It is also working on the best way to gather data to measure and report on patients' experiences in medical groups.  Further in the future, the Alliance expects to incorporate measures based on data from electronic medical records and possibly expand the report to feature Medicare data.

Annual fees from members and other general Alliance support so far have been sufficient to fund the reporting effort, but producing and maintaining such a report is not cheap; the Alliance estimated that it spent about $1.1 million in 2007 alone (much of it for start-up costs) to get the comparison report up and running. Annual operating costs—to collect data, maintain the Web site, refine the report, etc.—will be some fraction of that amount, but significant nonetheless.

Lessons Learned

  • Collaboration is critical. Giese traces the success of the Community Checkup effort to the culture that was established at the Alliance from the outset. “Getting everyone to the table and building trust is absolutely imperative,” said Giese. “A comparison report that will be trusted and used has to be a collaborative effort.” 
  • Don’t be afraid to take the difficult route. The Alliance’s experience with respect to negotiating data-sharing contracts was particularly educational. Rather than attempt to apply a uniform agreement, the Alliance negotiated all 14 initial data supplier agreements separately.  The individual attention was appreciated by participants and helped cement relationships during the early stages of the effort. 
  • Don’t let the perfect be the enemy of the good. The Alliance has never been afraid to point out the limitations of the Community Checkup report.  It views the effort as a platform on which to build even better versions of the report (with more data, more measures, and more frequent updates) in the future.

Publication Details

News Briefs

Newsletter Article

/

Tax Incentives for Wellness Programs?

If the Healthy Workforce Act winds its way through the legislative process and becomes law, employers will have yet another reason to add disease management and wellness programs to their benefits packages: big tax incentives.  The bill, introduced simultaneously in the House and Senate in April, calls for a tax credit of 50 percent of the cost of a qualified employer health promotion program up to $200 per employee for the first 200 employees and $100 per employee thereafter.  Employers whose employees access wellness programs through their health plan may be eligible to deduct the corresponding portion of their premiums.  The bill was introduced by a bipartisan group and has won the early support of hundreds of employers, health advocates, associations and others.  To track progress on the bill, visit www.govtrack.us and search under Bills and Resolutions for S.803.

Related link:
For more detail on the bill itself, visit this summary on the U.S. Workplace Wellness Alliance Web.

Publication Details

Editorial Advisory Board and Steering Committee

Newsletter Article

/

Editorial Advisory Board and Steering Committee

Editorial Advisory Board

François de Brantes, M.B.A. , Chief Executive Officer, Bridges to Excellence
Paul Fronstin, Ph.D., Director, Health Research & Education Program, Employee Benefit Research Institute
Robert Galvin, M.D., Director of Global Health, General Electric
Cheryl Koopman, Vice President, Human Resources, Richards Industries 
Peter Lee, J.D., Executive Director, National Health Policy, Pacific Business Group on Health
Laurel Pickering, M.P.H., Executive Director, New York Business Group on Health 
Martin Sepulveda, M.D., Vice President for Integrated Health Services, IBM

 
Steering Committee

Andrew Webber, President and CEO, National Business Coalition on Health
Barry Scholl, Vice President for Communications & Publishing, The Commonwealth Fund
Stephen C. Schoenbaum, Executive Vice President for Programs, The Commonwealth Fund
Sharron DiMario, President & Executive Director, Employer Health Care Alliance
Carly McKeon, Director of Membership & Communications, National Business Coalition on Health
Brian Schilling, Lead Writer
Amanda Jo Greep, Communications Associate, The Commonwealth Fund
Doug Ward, Web Developer, The Waters Ward Company, LLC

Publication Details