Some Areas We Covered in May Monthly

Earlier this year Chilmark Research launched its latest service, the Chilmark Advisory Service (CAS). One of the benefits of CAS is that subscribers receive a continuous feed of our research, from major annual reports such as the recently released 2012 HIE Market Report, to Quarterly Reports (e.g., mHealth Adoption for Patient Engagement) and exclusive to subscribers, the Monthly Update. Of course, subscribers also get unfettered access to our analysts to answer any specific questions they may have.

For the merry month of May, the Monthly Report touched upon four topics that are abstracted below:

Social Games for Wellbeing, Courtesy of Your Health Insurer
Much of this story was pulled from the forthcoming report that Cora is authoring that takes a close look at how payers are adopting consumer technologies (social media, gamification, mobile apps, etc.) to more effectively engage their members in healthy behaviors. This story looked at the current initiatives of Aetna, Blue Cross of California, Cigna, and Humana, each of which is taking a slightly different approach to more actively engage their members.

When Behavioral Health Goes Mainstream Will Technology be Ready?
This year, five states received grants of $600K each to explore how they would integrate behavioral health data into their statewide HIEs.  Analyst Naveen interviewed several stakeholders about how they would actually address the technology and policy hurdles to incorporate such data into an HIE. One of his findings, which he details in this story, is that current technology offerings from HIE vendors are ill-prepared to address this growing need to fold in behavioral health data into the HIE. Secondly, there remain significant policy issues that need to be addressed as behavioral health data is some of the most sensitive and protected health data.

Filling Gaps Separating Behavioral Health from the Healthcare Continuum
We had another story on the relative state of technology adoption within the behavioral health community. Our interviews with several stakeholders uncovered a market that is even further behind (at least 10-15 years) the rest of the medical community in IT adoption and use. As public health officials, healthcare organizations and others come to the realization that a significant proportion of chronic disease patients have a co-morbidity with a behavioral health issue, they are also coming to the realization that more effective care coordination must also occur with behavioral health specialists. John (the younger) takes a close look at what may develop in this market to fill the current gap.

Feds Look to Tighten Privacy & Security of HIEs
This last story took provided subscribers an assessment of the current Request for Information (RFI) for the Nationwide Health Information Network (NwHIN). The RFI was released on May 10, 2012 and is the an attempt by the U.S. government to establish a clear set of governance rules for the sharing and use of patient data within an HIE, and of course more broadly across the U.S., via the NwHIN. While the objectives are noble and to some extent needed, our assessment is that in several areas the RFI goes too far and will significantly hinder HIE innovation, deployment and adoption.

If you wish to learn more about CAS, please head on over to the Research Services page and towards the bottom there is a slide deck that provides a prospectus on CAS. If that piques your interest, drop us a line and we’ll be more than happy to answer any further questions you may have regarding the service.

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Sex Sells (or at Least Leads to Some Interesting Analytics)

One guarantee in the healthcare sector is that when it comes to personal health information (PHI), there is no lack of issues and pundits to discuss security and privacy of such information/data. If one does not jump up and down bleating on about the sanctity of PHI and the need to protect it at all costs, well then you may be labeled a heretic and burned at the proverbial stake.

Now don’t get us wrong. Here at Chilmark Research we firmly believe that your PHI is arguably the most personal information you have and you do have a right to know exactly how it is used. Whether or not you own it remains to be seen for we have seen, read and heard on more than one occasion – some healthcare providers believe that it is their data, not yours, and may only begrudgingly give you access to some circumscribed portion of your PHI that they have stashed in their vast HIT fortress, or worse, scattered in a number of chart folders.

But where we do differ with many on the sanctity of PHI is that the collective use of our de-identified PHI on a community, regional, state or even national level can give us some amazing insights into what is working and what is not in this convoluted thing we call a healthcare system in the US. Using PHI for such purposes needs to be strongly supported. Unfortunately, we do a terrible job as a country in educating the populace on the collective value of their data to understand health trends, treatments and ultimately ascertain accurate comparative effectiveness. This leaves the door wide open for others to use the old FUD (fear uncertainty and doubt) factor to keep patients from actively sharing their de-identified PHI.

One of the more popular and edgy online dating sites, OK Cupid, has done some great things with the data they collect on their users. They take the vast amounts of data they collect and do some pretty fantastic and fun (fun is good, fun is engaging) analysis to understand their users and what makes them tick. For some reason, the healthcare industry just doesn’t do fun things with the data – always so morbid!

Imagine if we could collect similar data on health, or heck, even better, imagine taking some of OK Cupid’s findings on body image and sex drive, (see chart 7 & 8) and using that to educate the public on why it may be in their best interest to keep their weight in check. Sure doesn’t seem like the threat of diabetes, heart failure, etc. is doing the trick to lower obesity rates, maybe hitting them below the belt will work.

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mHealth: There When You Need It

A couple of weeks back, Neil Versal wrote an interesting article for mobihealthnews on mHealth App development and adoption trends. While agreeing with some of the thesis of his argument, that many Apps have little relevance to the broader populace and seem to be more focused on the Quantified Self geeks, there are a couple of points he made that give a false impression of what our research and personal experience have found in this emerging market.

First, there was the argument that those who may be in the greatest need of using an mHealth App to manage a chronic condition may not have the wherewithal to identify and use an App. This is true for pretty much the entire population and not only those with a chronic disease. Our research for the upcoming report, mHealth for Provider-Patient Engagement, found a market where most mHealth App developers struggle to get users, particularly those with chronic illnesses, to continuously use an App.

Where an mHealth App has seen success is when it becomes a critical component of a care management process and a patient receives periodic feedback from a clinician. Such was the case in an urban, predominantly poor neighborhood in Washington D.C. wherein diabetic patients actively engaged in the use of an App to record their glucose readings for they were getting feedback from clinicians. Therefore, our thesis is that the issue is not whether the App has been designed for a given populace but its potential use (success) rests more with how and more importantly who deploys the App. The vast majority of the populace needs that clinician guidance and support in use of an App to manage a chronic condition – it will not work in a vacuum, it must become a part of the care management process.

However, in our conversations with a number of physicians we found a common theme that most are struggling to figure out how enabling their chronic disease patients with such tools and follow-on monitoring will fit into their existing workflow. We see this as code for: “How will I be reimbursed for this effort?”

Good question. The impending changes in reimbursement and subsequent move towards capitation may provide the path forward without the requisite CPT codes. There remains the challenge of how EHRs may accept such patient entered data from an mHealth App as today we do not know of any that can support this capability but that is a topic for another post. The important point we wish to make is that mHealth can play a role an important role in the care process, it just needs a advocate to drive its use, that advocate being a clinician/care management leader to help guide and support he patient.

The other issue we wish to raise is the oft-cited numbers that are thrown about of how people download various mHealth Apps and then rarely, if ever use them.

All of us who have a smartphone likely have a few Apps that we have maybe used once or twice and have forgotten about or tossed them for they did not appeal to us. But that does not necessarily mean lack of use equates to lack of value. Some Apps are not meant to be used frequently, iTriage is one of them, but I sure am glad I have it on my phone.

Now I have been a fan of iTriage from its early founding and was happy to hear that they found a willing suitor in Aetna when they were acquired last year. Their solution, while a little intimidating at times, is one of the better mHealth Apps out there in doing self-diagnosis, which is what I had the opportunity to do last month when visitng my parents.

Late one evening (actually about 3am) I awoke not feeling quite right. Next day I learned that I was not the only one as both my sister-in-law and father where also feeling under the weather. After a couple of days, my sister-in-law and I began to feel better. Such was not the case for my father. After some exploratory questions, came to the conclusion that we all suffered from some form of food poisoning. As my father’s health declined I asked him more specific questions about his symptoms. He was suffering from loose stools, weakness, fever and painful urination (sure sign of UTI). Using the iTriage App I triaged my father eventually settling on the likely culprit: E. Coli poisoning.

Knowing this was a very nasty disease (yes, it kills), you don’t waste time getting treatment. Took father to the local ER where they immediately put him on an intravenous feed of some pretty strong antibiotics and to hydrate him. The attending physician took a culture and stated they would have an answer  in some 36 hrs as to what was at the root of his symptoms. Sure enough, when the physician got back to us he confirmed that it was indeed E. Coli poisoning.

Prior to this event, when was the last time I opened up the iTriage App? Really can’t recall but it was likely to demo it to someone and probably more than six months prior. But this is not an App designed to be opened and used frequently, it is designed to be used when you need it. And that is part of the problem with a lot of these broad pronouncements about the use, or lack thereof, of mHealth Apps: some of these Apps simply aren’t meant to be used frequently but you’re sure glad you have them when you need them. The mHealth App market is far more nuanced and most do not dig deep enough prior to making broad pronouncements instead painting the whole sector with one stroke of the brush which is a disservice to this emerging sector.

As to my father, he has made a full recovery and one of the first things he asked me when he got home from the hospital was: What was that App you used? Can I put it on our iPad? Done. Now if only iTriage would make an iPad version of their App then my father, and maybe others would be even more delighted.

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Hurdles to Accessing One’s PHI

What is a fair price to charge a consumer to provide them a copy of their records? That is a question I’ve been pondering since a friend of mine showed me the bill from the local Steward IDN which is owned by private equity fund, Cerebus.

My friend is switching doctors due to a change by her employer in health plans. As a result, she requested a copy of her records to bring with here to her new physician. Seems like a pretty simple, straight-forward request. Steward was more than happy to provide those 10 pages of records and following is the cost breakdown they wished to charge her:

Clerical fee: $18.04
Cost/pg: $0.61
Mailing cost: $1.16

Total Cost:  $25.30

Two dollars and fifty cents a page – Outrageous!

When I asked for a full copy of my pet’s records, about 20pgs, the Vet was more than happy to oblige, for free. When I asked for  full copy of my car repair records (5yrs worth) as I was selling the car, my local mechanic was more than happy to oblige, again for free. So why is that when one asks for a copy of their medical records, which frankly they already paid for in their office visit charges, a company like Cerebus/Steward feels they have the right to charge such an exorbitant sum? Creating such hurdles to a patient’s ability to access their own personal health information (PHI) does nothing to improve healthcare delivery. Its time to put an end to such charges once and for all.

Sad thing about this whole story though is that under Massachusetts statute, Steward is allowed to charge up to $25.00. They discounted the bill $0.30 and lowered the bill to $25.00  Needless to say, I advised my friend to ignore the bill.

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Forecast and Ramifications of Payers in the HIE Market: Part Two

(Note: This is the second of a two-part post.)

Keeping it Local

This is most representative of the status quo and the most realistic path forward for the vast majority of payers who typically operate at the local level. In this scenario, one or more health plans in a regional market partner with other community stakeholders to co-fund and sustain a regional HIE. These stakeholders typically include large corporations with a large local employee base and/or provider organizations. Successful examples of such multi-stakeholder HIEs include the Louisville HIE (Humana, Anthem, Ford, Yum! and Kroger), and the Rochester RHIO, where payers (Aetna, BCBS, MVP) and hospitals share a 2/1 split of all operating expenses on a transaction model.

The benefit to payers in participating and most often funding the majority of such an HIE is three-fold. First, partnering with other organizations in the region contributes to a greater “fabric of trust” between the HIE and physicians within the region leading to greater physician participation. Secondly, by partnering with others, the payer is able to share HIE operating costs with other stakeholders. Third, physicians actively exchanging patient data can prevent some hospital readmissions and decrease duplicative lab and imaging tests, thereby lowering a payer’s total coverage cost in the region.

Conclusion: As HIE’s unfold at the community scale, local and regional stakeholders will share the operating costs and governance. As far as payer support for HIE’s goes, Chilmark predicts continued growth of these types of HIEs, particularly in less urban communities. We also predict that there will be significant growth in enterprise HIEs that are partially funded by payers, ultimately in support of a payer-provider partnership to establish an ACO. (Again, look to the recently announced NaviNet-Lumeris deal wherein three regional payers also played a role. For those payers, it’s all about making the provider transition to ACO/PCMH models as frictionless as possible.)

Real Challenges Remain

Despite a seemingly straightforward path for payers to get involved with HIE’s, there remain a number of challenges. These are two-fold in nature: Regulatory and Marketplace. On the regulatory front, the list of challenges is long and familiar: ICD-10 (while it seems like there will be another delay, much to the chagrin of the AMA this isn’t just going to go away) and HIPAA 5010, health insurance exchanges and other health reform mandates. (On the plus side, health information exchange-related spending counts favorably towards new medical loss ratio (MLR) rules).

However, the marketplace is where the true challenges lie, as there is hardly a guarantee that payers and provider groups will play nice with each other. Nowhere is this more evident than in the Western PA market, where a sort of fisticuffs have been going on between Highmark BCBS and UPMC.  Without going into the sordid details, Highmark (who just bought Pittsburgh’s second largest hospital network, West Penn Allegheny) and UPMC are now building competing HIEs in the same region because of a longstanding spat over contract negotiations. To hospitals who are now faced with participating in two separate HIE’s, this does not make much sense.

For the payers however, it does make sense when cast against the backdrop of rising competition. (Chilmark noted this challenge after attending the AHIP confab last summer.) Insurers are fighting with each other to keep their networks competitive. Providers are fighting with each other to secure preferred referral status, i.e. patient volume. Introducing an HIE in the middle of this environment has wide reaching implications for where patients are sent as well as who accrues and shares the savings. Throw in the variable of different reimbursement rates for commercial, Medicare and Medicare Advantage patients and you can see why partnering up to set up an information network is more than simply writing a check.

2012 and Beyond

So what does this all mean for a huge guest who’s seemingly unwanted at the party? Ultimately, payers’ involvement boils down into a few categories:

  • In the light of the tighter margins imposed by health reform, insurers who can afford it will diversify their business. The national health plans will be looking to acquire their own platform ala Aetna and UHG, with the additional hopes of squeezing cost savings out provider users and building a more favorable MLR. The main considerations in predicting this shift include vendor consolidation and the readiness of existing provider networks to collaborate.
  • Regional Insurers, such as the Blues and other statewide or multistate networks, have the wherewithal to setup and license their own platform for exchange either through payer-payer partnerships or on their own. The recent NaviNet deal seems to be more of an ACO play, but indicative of the business strategy of this class of payers who are willing and able to be flexible in how they approach their role as stakeholder in information networks.
  • Local Insurers who have fewer resources and who operate directly in the tides of market competition will opt for a ‘safer,’ multi-stakeholder approach in their communities. Partnerships will be heavily influenced by network dynamics, reimbursement channels and existing arrangements, such as burgeoning accountable care communities.

So, as rosy as information exchange seems on paper, it is permanently changing the way that provider and payer groups do business. From where Chilmark stands as an observer of the market’s evolution, it is all too clear that payers and providers ultimately have little choice but to work together. Payment reform and millions in IT incentives have already begun to influence the way that the delivery and payment markets work; the future of accountable care, proactive population health management and ‘smart’ health care delivery all depend on willing and trusting partnerships.

Unfortunately, as is too often the case, patients and other stakeholders get left out of the decision calculus. Pittsburgh residents will hardly benefit from the competitive business posturing there. We hope the folks deploying HIE’s over the coming years will put as much of an emphasis on leadership and governance as they do on technology and of course, the health of their business.

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Forecast and Ramifications of Payers in the HIE Market: Part One

The numerous changes in the healthcare sector are forcing stakeholders to develop new business models to prosper, to survive. Among health insurers, this means one thing: diversification. Health reform was the nail in the coffin of yesterday’s business model, a model that had no restrictions on margins, a model where payers sold to businesses, not individuals. Tomorrow’s strategy for payers is still a work in process but one thing is clear, its foundational elements will be consumers, technology and data. The emerging world of big data in healthcare is providing payers with new potential ways to make profits. Beyond the promise of efficiencies, some payers are beginning to look closely at harnessing the flow of clinical, claims and administrative data to allow for the creation of stand-alone business opportunities.  Specifically, information exchange will grow in importance in 2012 and beyond as value-based payment models rely to increasing extents on the availability of diverse types of data at the point of care.

So why have payers been so cautious to jump on board and fund HIE’s?

The answer is multi-faceted. First and foremost is simply the issue that many a provider is uncomfortable with a payer having direct access to clinical data and is thus unwilling to share such data with an HIE that has payer involvement. Second is the business uncertainty at this early stage of HIE maturity. The HIE market remains very dynamic and there is a lot of uncertainty as to where this market will eventually lead. Before putting some parameters around the direction of payer-involvement in the HIE market, it bears a quick run-through of what the different models of payer involvement look like today.

Infrastructure Play
Axolotl and Medicity are the clear leaders in the HIE software market. Both were acquired in 2010 by big insurers (Axolotl by United Health Group, which was folded into the Optum Division and Medicity by Aetna) and continue to dominate the HIE landscape. Both UHG/Optum and Aetna are clearly looking to build out new lines of business, in this case healthcare IT, where the opportunities for future growth and expansion are promising. Their investments are already paying big dividends: In a telling sign of the direction of this market, Optum has actually begun to grow faster than UHG’s main insurance business.

The investments these insurers have made in HIT are significant and ones that only the biggest national players will have the appetite for. Kaiser’s walled garden, in-house approach effectively rules them out of this kind of play. Other payers have not shown signs of moving towards owning their own HIE solution, or making other major bets on HIT…yet. Humana and Cigna have only helped out by funding pilots to date. Despite a national brand and association, the Blues fit into their own category because of the state-based nature of their business structure. They are certainly not slouching in the HIE race though as the next section explains. Chilmark has also heard murmuring around the water cooler about some potential partnerships on a more national scale in 2012, so again only time will confirm these rumors.

Conclusion: It may be too late for other payers to get in on the HIE market via acquisition of a leading vendor as few independent vendors remain. Lumeris, with three regional Blues acquired NaviNet this week. This acquisition may provide a non-traditional route to the same end-point, purchasing the network to build-out future pipes for numerous data types. Further crystallization in the HIE marketplace as well as more evidence from operational systems will help them make a bet on a particular vendor.

Entirely Payer Funded
These are HIE’s that are exclusively funded by payers. As it stands now, this is a pretty lonely space, as providers continue to be skeptical of payer intentions and there remains a dearth of conclusive proof of return on investment (ROI), more studies like Humana’s with WHIE will only help. However, some early movers have already tasted success with this approach, the most prominent being Availity, a Florida-based collaboration between two Blues plans, Humana and WellPoint. Their business model is simple: Payer contributions help to get the data flow and integration efforts underway, providers receive a base set of information access services for free, and pay for premium business services such as revenue cycle management and practice management tools. The value equation for providers has been enough to keep Availity in the black to date. They’ve gone one step further and it looks like Availity will be licensing this to other Blues plans around the country as well. While this work is certainly laudatory, Chilmark is skeptical that this level of collaboration will occur widely today (Availity began in 2001). While it’s possible for a national payer to partner with local plans to get an HIE off the ground, these typically include other intermediaries for purposes of getting buy-in from other stakeholders (these are insurance companies, after all), skin-in-the-game and governance. Moreover, because the ROI in HIE can be somewhat invisible, appearing in efficiencies and reduced costs for payers and providers, payers feel more comfortable sharing the investment.

Conclusion: Aside from emerging collaborations between Blues plans and some provider organizations (e.g. Catholic Healthcare West and Blue Cross of California), we foresee little progress here. For big payers considering an acquisition play, investing in one-off models is quickly becoming redundant; for local plans it makes more sense to share the load with non-payers.

In Part Two will look at local support of HIEs, challenges and what lies ahead for the future.

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