Quality
Will the Government Reevaluate its Role in Enabling Lifestyle Diseases?
Tom’s Comments:
As we have discussed in prior issues of the Quarterly, per the Center for Disease Control, lifestyle related diseases (e.g. heart, diabetes, cancer, etc.) impact anywhere from 50% to 70% of our healthcare costs. More importantly, these lifestyle diseases have a major negative impact on the quality of life of the inflicted. Lifestyle diseases, by their very definition, are developed or aggravated, as a result of individual’s behavior. Examples of “bad” lifestyle behavior include: smoking, alcohol and drug abuse, lack of exercise, diet, etc.
Much of the discussion relating to healthcare reform has focused on changing provider (primarily hospitals and physicians) reimbursement methodologies to financially reward wellness and prevention activities as well as reward collaboration between providers of care. Recent legislative proposals also focus on providing tax credits to employers who implement wellness programs for their employees. While these fundamental changes to provider reimbursement and financial wellness incentives to employers are critical, there also needs to be a focus on individual accountability.
Individual accountability for lifestyle choices is a key ingredient to a sustainable strategy to address lifestyle diseases. While genetics play a role in many diseases, individuals in most cases have the ability to mitigate health issues to some degree. Employers, managed care organizations, and Medicare and Medicaid need to also foster an environment of personal accountability to ensure sustainable success against lifestyle diseases. Historically, the federal government, rather than being a catalyst for individual accountability, has been an “enabler” of bad lifestyles.
Over the years the true intent of the American with Disabilities Act (ADA) has been expanded (see article below titled,” EEOC Says that Mandatory Health Risk Assessments Violate ADA”) to encompass activities that are truly not disabilities. The Health Insurance Portability Accountability Act (HIPAA) has also played a role in insulating individuals from their poor lifestyles (See the article below titled, “Congress Plans Incentives for Healthy Habits”)
The articles noted below appear to cite a trend that hopefully will foster an environment that will incent increased accountability by the individual. Employers continue to push the card relating to increased incentives and sanctions linked to programs that help address lifestyle disease in a proactive manner through wellness and disease management initiatives. The key to success of any of these initiatives is patient compliance. Employers are increasingly motivated to implement wellness and disease management programs for their employees in order to address the high cost of healthcare. The value of these investments is eroded when employees do not take ownership of their own lifestyle.
As noted in the article below titled, Moving Boldly to Stem Health Care Spending, “Strategic companies will redesign their incentive plans to either make participation in health-related activities mandatory or increase employee contribution rates and allow employees who stop smoking to fill our risk assessments and commit to health behaviors to “earn back” those contribution increases.”
Not everyone agrees with programs that incent increased accountability for lifestyle diseases. In the article below titled, Congress Plans Incentives for Healthy Habits, Lewis Maltby, president of the National Workrights Institute, a research and advocacy group, said “Financial rewards and penalties were often a form of lifestyle discrimination.” Per Mr. Maltby, “You are supposed to be paid on the basis of how you do your job, not how often you go the gym or how many cheeseburgers you eat.”
While I respect Mr. Maltby’s opinion, eating too many cheeseburgers can have an impact on both employers’ and employees’ financial wellbeing. The following is an example I have used in class which has real world implications related to it. Small companies which have been especially hard hit by the high cost of healthcare. Only a few “high risk” individuals employed by a small company can negatively impact its insurability and overall healthcare costs. Let us assume there is a small company (e.g. 20 employees) struggling to financially survive on a daily basis in a very competitive market place. Let us also assume there is one employee at this company who is very overweight. This employee also smokes two packs of cigarettes a day, and has already had one heart attack. We will also assume that this employee eats fast food for lunch every day, usually two large cheese burgers with a large fry. This employee also refuses to participate in any wellness or disease management programs, since it is his right as an American,
Now let us assume you are one of the employees of that company who is struggling to support your family. The lifestyle decisions by your fellow employee will either result in your company paying higher healthcare costs, which in turn increases healthcare costs for all of its employees (including you), or possibly results in your employer not being able to afford health insurance for its employees. While this is a fictitious case, it is also too real of a scenario. There is definitely a role for increased accountability in this all too real example.
As the laws are written today, many of the proactive strategies that employers would like to implement to incent compliance with wellness and disease management programs are greatly limited. Can rewards and penalties be used in an ethical manner to ensure personal accountability as it relates to lifestyle issues?
Per the article below titled, Congress Plans Incentives for Healthy Habits, “Federal officials insist that the rewards and penalties can be used in ethical ways. Ethics experts at the National Institute of Health have developed guidelines for assessing workplace wellness programs. In a recent issue of the Journal Health Affairs, the experts, Steven D. Person and Sarah R. Lieber, say the unhealthy behavior of some employees can affect co-workers by driving up costs for the group as a whole.”
“The core ethical justification for the penalty programs is that employees should be held responsible for voluntary actions that cause harm to others,” they write. But, they add, employees should be exempt from penalties when it is “unreasonably difficult or medically inadvisable” for them to meet a particular standard.”
Finally, as discussed in the commentary below relating to Clinical Effectiveness Research, an independent agency could play a proactive role in evaluating best practices (e.g., evidence-based medicine), that would have a positive impact on preventing and managing lifestyle related diseases. Clinical Effectiveness Research can also help develop the guidelines that would prevent discrimination relating to the diseases, etc. that are truly genetically based.
This is obviously a political sensitive issue, but if the government is sincere in its fight against high healthcare costs and for better quality, it needs to address this issue in a proactive model. A key component of fighting lifestyle diseases is finding ways to incent increased accountability (not enable it) in order to optimize the success of wellness and disease management initiatives. Remember the ultimate goal of wellness and disease management programs is a “win-win:” a “win” for the employer in lower healthcare costs, but more importantly a “win” for the person that is struggling with health issues.
Moving Boldly to Stem Health Care Spending
Most finance executives recognize that there are two parts to the health-care cost equation: management of the supply side of care; and management of demand for care. Over the last five years, organizations have been successful at holding overall health-care cost increases to single-digit levels by tightly managing provider networks, holding down provider reimbursement levels, pushing for increasingly deeper discounts and taking other steps to drive cost-efficient delivery of health care services.
And while a 6% to 7% annual rate increase represents a victory of sorts after the dramatic 12% to 15% rate of cost growth seen in the late 1990s and early 2000s, it’s still twice that of the CPI – far too high for a recessionary economy.
While organizations may be able to wring additional cost efficiencies from the supply side, far greater savings opportunities exist for employers that can reduce the demand for health care services.
Getting employees to take on the increased responsibility required for success is not easy. And some organizations have worried that mandating changes in employee behavior with too heavy of a hand would alienate – rather than engage – their workforce. But as financial pressure on employers increase and labor trends turn in their favor, employers are well-positioned to be much bolder in defining and drawing the line on, how and when they spend health care dollars on behalf of employees.
According to Towers Perrin 2009 Health Care Cost Survey, only 28% of respondents use health-risk assessments to a large degree and only 22% emphasize health improvement initiatives such as smoking cessation and weight management. When they do make these programs a focus, employers tend to extend attractive “carrots,” such as $100 awards, to encourage employees to participate.
Going forward, however, employers will become far more aggressive in ensuring employee participation in these beneficial activities. Hundred-dollar incentives will become less common. After all, why should companies spend scarce dollars encouraging employees to do something proven to be in their best interest and the organization’s best interest? Many more organizations will make risk assessments mandatory, or require higher contributions levels from employees who continue to smoke or engage in other unhealthy activities.
Strategic companies will redesign their incentive plans to either make participation in health-related activities mandatory or increase employee contribution rates and allow employees who stop smoking to fill our risk assessments and commit to health behaviors to “earn back” those contribution increases.
Overall, organizations that employ strategic thinking and innovative solutions to address both the supply and demand sides of the cost equation can achieve competitive advantage and deliver measurable value to the organization in the short and long term. (“Moving Boldly to Stem Health-Care Spending,” Dave Guilmette and Ron Fontanetta, Financial Executive, January/February 2009)(www.financialexecutives.org)
EEOC Says that Mandatory Health Risk Assessments Violate ADA
Many employers are implementing wellness programs that include health risk assessments, sometimes offering inducements to complete these assessments. In an informal letter, the EEOC said that making health risk assessments a prerequisite for health coverage would violate the Americans with Disabilities Act (ADA) but confirmed that certain voluntary wellness programs are permissible under the ADA. Although the letter does not constitute an official opinion of the EEOC, it does reflect the agency’s current thinking on the issue. “EEOC Says that Mandatory Health Risk Assessments Violate ADA,” Buck Consultants, Buck Research,
Volume 32, Issue 26, May 14, 2009) http://www.buckconsultants.com/buckconsultants/spanidNavServicesspan/tabid/133/Default.aspx
Congress Plans Incentives for Healthy Habits
In its efforts to overhaul health care, Congress is planning to give employers sweeping new authority to reward employees for healthy behavior, including better diet, more exercise, weight loss and smoking cessation. A web of federal rules limits what employers and insurers can do now.
Congress is seriously considering proposals to provide tax credits or other subsidies to employers who offer wellness programs that meet federal criteria. In addition, lawmakers said they would make it easier for employers to use financial rewards or penalties to promote healthy behavior among employees.
Frank B. McArdle, a health policy expert at Hewitt Associates, a benefit consulting firm, said, “Wellness and prevention programs have become mainstream part of the benefits offered by large employers, and it’s virtually certain that Congress will include incentives for such programs” in its bill. The goals of such programs are to help people control blood pressure, fight obesity and manage diabetes and other chronic conditions.
Under Senator Harkin’s (D – Iowa), employers would obtain tax credits for programs that offer periodic screenings for health problems and counseling to help employees adopt healthier lifestyles. Programs could focus on tobacco use, obesity, physical fitness, nutrition and depression, he said.
Lewis Maltby, president of the National Workrights Institute, a research and advocacy group, said financial rewards and penalties were often a form of life-style discrimination. “You are supposed to be paid on the basis of how you do your job, not how often you go the gym or how many cheeseburgers you eat,” Mr. Maltby said.
But federal officials insist that the rewards and penalties can be used in ethical ways. Ethic experts at the National Institute of Health have developed guidelines for assessing workplace wellness programs. In the current issue of the journal Health Affairs, the experts, Steven D. Person and Sarah R. Lieber, say the unhealthy behavior of some employees can affect co-workers by driving up costs for the group as a whole.
“The core ethical justification for the penalty programs is that employees should be held responsible for voluntary actions that cause harm to others,” they write. But, they add, employees should be exempt from penalties when it is “unreasonably difficult or medically inadvisable” for them to meet a particular standard.
If an employer offers financial incentives to employees for lowering cholesterol, losing weight or stopping smoking, the amount of such rewards generally may not exceed 20% of the cost of coverage. Many employers would like to offer larger incentives, and many in Congress want to let them do so. (“Congress Plans Incentives for Healthy Habits,” Robert Pear, The New York Times, May 10, 2009) (http://www.nytimes.com/2009/05/10/health/policy/10health.html)
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What is the Role of Clinical Effectiveness Research?
Tom’s Comments:
As noted in the article below, “The $787 billion economic stimulus bill approved by Congress will, for the first time, provide substantial amounts of money for the federal government to compare the effectiveness of different treatments for the same illness.”
“Under the legislation, researchers will receive $1.1 billion to compare drugs, medical devices, surgery and other ways of treating specific conditions. The bill creates a council of up to 15 federal employees to coordinate the research and to advise President Obama and Congress on how to spend the money.”
“The program responds to a growing concern that doctors have little or no solid evidence of the value of many treatments. Supporters of the research hope it will eventually save money by discouraging the use of costly, ineffective treatments.”
The last issue of the Quarterly (January/February of 2009) included an Issue Brief from the American Academy of Actuaries (“Health Insurance Coverage and Reimbursement Decisions,” Issue Brief: American Academy of Actuaries, September 2008, http://www.actuary.org/pdf/health/comparative.pdf) on Clinical Effectiveness Research.
The authors of the Issue Brief stated, “Comparative effectiveness research can not only help in determining what treatments are most effective but, linked to the most appropriate clearinghouse, information could be made available to and used by clinicians in a timely manner.” Currently, per the authors, “Studies indicate that an average of 17 years passes before research-generated knowledge, such as that from randomized clinical trials, is incorporated into widespread clinical practice—and even then the application of the knowledge remains uneven.”
As the authors further stated, “New comparative effectiveness research can add more value and improve upon the information already available by increasing the body of primary research of head-to-head trials that compare new treatments and technologies to those already existing. It can provide insights into whether certain treatments are more effective than already existing options.”
“The research also has the potential to provide information on which patients respond better to specific treatments. Because much of the health care currently provided does not have an underlying evidence base, new comparative effectiveness research should also include studies of existing treatments and technologies. Such analyses could lead to a greater development of evidence-based treatment protocols and a reduction in practice variations.”
The fear of some of the healthcare stakeholders (e.g. pharmaceutical companies, etc.), is that the outgrowth of this research would be incorporated into Medicare payment policies which has the potential of creating financial havoc for those companies’ products that don’t make the “preferred list.” These fears are not necessarily unfounded since many countries (e.g. Great Britain) have incorporated clinical effectiveness research into reimbursement decisions relating to their national health plans.
There is also a legitimate concern, not necessarily only driven by self-interest, that if comparative effectiveness gets incorporated into Medicare’s payment policies, that it could actually stifle innovation. The rationale based on this fear is that if risks increase as a result of possibly “not making the cut” from a clinical effectiveness perspective, only those organizations that are well financed would invest in innovative drugs, devices, etc. that could be the next block buster.
While I can understand this potential negative impact on innovation if clinical effectiveness research is tied to Medicare’s payment policies, I do not believe that this should be a reason to block the development of a Clinical Effectiveness Research institute. We cannot keep our heads in the sand, when it comes to finding better approaches to quality cost-effective care. One of the major priorities of such Clinical Effectiveness Research would be to focus on the healthcare cost disparities in the U.S. that have been well documented by research published in the Dartmouth Atlas of Health Care.
Dartmouth Atlas of Health Care has over a 20 year track record of investigating health cost disparities in the U.S. We dedicated a large portion of one of our prior issues of the Quarterly (May/June 2008 – See commentary and journal article titled, “Tracking the Care of Patients with Severe Chronic Illness” to dissecting the Dartmouth research. It is estimated that over 30% of our healthcare costs could be reduced with no negative impact on quality if we practiced evidence-based medicine as a nation.
To illustrate this case, I was recently forwarded an article from one of my Health Care MBA students relating to healthcare cost disparities in the U.S. The article was written by Dr. Atul Gawande in the June 1, 2009 issue of The New Yorker (http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=all)
The article provides the reader with some interesting insight into healthcare cost disparities by initially focusing on a poor border town of McAllen, Texas which was the country’s most expensive place for health care.
U.S. to Compare Medical Treatments
WASHINGTON — The $787 billion economic stimulus bill approved by Congress will, for the first time, provide substantial amounts of money for the federal government to compare the effectiveness of different treatments for the same illness.
Under the legislation, researchers will receive $1.1 billion to compare drugs, medical devices, surgery and other ways of treating specific conditions. The bill creates a council of up to 15 federal employees to coordinate the research and to advise President Obama and Congress on how to spend the money.
The program responds to a growing concern that doctors have little or no solid evidence of the value of many treatments. Supporters of the research hope it will eventually save money by discouraging the use of costly, ineffective treatments.
The soaring cost of health care is widely seen as a problem for the economy. Spending on health care totaled $2.2 trillion, or 16 percent of the nation’s gross domestic product, in 2007, and the Congressional Budget Office estimates that, without any changes in federal law, it will rise to 25 percent of the G.D.P. in 2025.
Dr. Elliott S. Fisher of Dartmouth Medical School said the federal effort would help researchers try to answer questions like these:
Is it better to treat severe neck pain with surgery or a combination of physical therapy, exercise and medications? What is the best combination of “talk therapy” and prescription drugs to treat mild depression?
How do drugs and “watchful waiting” compare with surgery as a treatment for leg pain those results from blockage of the arteries in the lower legs? Is it better to treat chronic heart failure by medications alone or by drugs and home monitoring of a patient’s blood pressure and weight?
For nearly a decade, economists and health policy experts have been debating the merits of research that directly tackles such questions. Britain, France and other countries have bodies that assess health technologies and compare the effectiveness, and sometimes the cost, of different treatments.
Hillary Rodham Clinton, as a senator, was an early champion of “comparative effectiveness research.” Mr. Obama, who is expected to sign the stimulus bill Tuesday, endorsed the idea in his campaign for the White House.
As Congress translated the idea into legislation, it became a lightning rod for pharmaceutical and medical-device lobbyists, who fear the findings will be used by insurers or the government to deny coverage for more expensive treatments and, thus, to ration care.
In addition, Republican lawmakers and conservative commentators complained that the legislation would allow the federal government to intrude in a person’s health care by enforcing clinical guidelines and treatment protocols.
The money will be immediately available to the Health and Human Services Department but can be spent over several years. Some money will be used for systematic reviews of published scientific studies, and some will be used for clinical trials making head-to-head comparisons of different treatments.
For many years, the government has regulated drugs and devices and supported biomedical research, but the goal was usually to establish if a particular treatment was safe and effective, not if it was better than the alternatives.
Consumer groups, labor unions, large employers and pharmacy benefit managers supported the new initiative, saying it would fill gaps in the evidence available to doctors and patients. (“U.S. to Compare Medical Treatments,” Robert Pear, The New York Times, February 15, 2009)
http://www.nytimes.com/2009/02/16/health/policy/16health.html
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