Archive | February, 2014

NantHealth and Other Health Mashups

I’m always thinking about different ways to blend companies through acquisitions or partnerships.  The announcement by NantHealth the other day at HIMSS got me thinking more about it.  They are an interesting company from what I can tell although I don’t know anyone there.  

I’ve talked about Google and all their health assets although they’re not actively trying to integrate them.  I also think that there are some investment firms like Sandbox Industries that have their fingers in lots of interesting healthcare companies.  

So, what would some other interesting opportunities (M&A, partnership, JV) be (ignoring size, valuation, ownership, and likelihood):

Of course, I’ve talked about different PBM plays recently, and I think healthcare has become such a front page issue that companies like McKesson, GE, AT&T, Emdeon, Cisco, Apple, and others are waiting to figure out how and when to buy up some technology plays.  I could easily see McKesson jumping in to buy several of the adherence companies that I highlighted a few weeks ago like Proteus.  And, I’m sure there’s more from this list of fastest growing healthcare companies that will get snapped up or create some interesting partnerships.  

I also believe that health reform will drive some consolidation on the provider and payer side.  A friend on Wall Street predicted we’d get to 6 national health insurers.  I still think that’s possible – United, Aetna/Cigna, Wellpoint/BCBS, Kaiser, Humana, and ??

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A Few Corporate Wellness Tips

While Al Lewis has become the industry antagonist (in a good way), he makes a lot of great points that anyone working in the industry should understand and consider.

If you haven’t read some of Al’s articles, let me point you to a few:

His writing reminds me of some of the things my former boss pointed out several years ago about the disease management industry.

In one of his posts, he makes several points that I wanted to discuss here:

  1. You should use a source like the US Preventative Services Task Force (USPSTF) as the evidence-based reference for appropriate screenings – frequency, age, gender.  Of course, I agree with this.  We need some common source that we all can use that’s based on best practices and evidence.
  2. He argues that you should stop weighing people.  I’d argue that knowing your numbers is important.  As a country and a world, we’re seeing massive growth rates in obesity which is linked to numerous diseases.  We need people to be more conscious of this risk factor especially in our sedentary work environments – see sitting disease infographic.
  3. His third point is about targeting and nudging the right population versus over-sampling everyone.  I couldn’t agree more.  This should be what the Big Data push in healthcare gets us.  How to build predictive algorithms to identify people with multiple risk factors.  How to identify people with gaps-in-care.  How to figure out what someone needs to take an action.  I always say there are 3 factors to consider:
    • Is there value in the intervention?
    • What channel / method is going to get the consumer’s attention?
    • What information is going to get the consumer to take an action?

To follow-up on my points above, here’s some information on obesity and it’s link to other diseases.

The CDC says that obesity is linked to:

  • Coronary heart disease, stroke, and high blood pressure.
  • Type 2 diabetes.
  • Cancers, such as endometrial, breast, and colon cancer.
  • High total cholesterol or high levels of triglycerides.
  • Liver and gallbladder disease.
  • Sleep apnea and respiratory problems.
  • Degeneration of cartilage and underlying bone within a joint (osteoarthritis).
  • Reproductive health complications such as infertility.
  • Mental health conditions.

And, for a fun video by Mayo Clinic on Knowing Your Numbers watch this:

Who Is The NetFlix Of Healthcare HR?

I was sent this deck a few weeks ago.  It’s been out there for a few years.  It’s the HR / Human Capital strategy for Netflix.  Netflix has been known for things like no vacation policy (i.e., take what you need).  This gives much more insight.

It’s not really an industry that I’m focused on, but I’d love to find a healthcare company with this approach to human capital.  That would be a company worth following and working with.

Forbes “Most Promising” Companies – Healthcare

Whenever I see lists like the Forbes list of America’s Most Promising Companies, I like to look through the list and pull out the healthcare companies.  They say these are private companies that standout because of their growth and outstanding management.

#4 – Evolent

#24 – 24HR HomeCare

#28 – CareCloud

#39 – Intersect ENT

#41 – Therapearl

#95 – Boston Heart Diagnostics

If healthcare is 20% of the GDP and with all the mHealth and HIT spending, I was hoping to see a few more companies on this list.

Interview With Michael Dermer – Chief Incentive Officer at Welltok

I had a chance the other day to interview Michael Dermer (@rewardforhealth) who is the Founder of IncentOne and currently the Chief Incentive Officer at Welltok.  I’ve known Michael for a while and wanted to learn more about how he saw the market now that he’s sold IncentOne and has launched his blog – www.michaeldermer.com

As the pioneering Social Health Management™ company, Welltok is revolutionizing the way population managers optimize consumer health by aligning activities and behaviors with the right incentives and rewards. CaféWell, the company’s Health Optimization Platform™, drives engagement and incentivizes healthy behaviors though a novel combination of social, gaming and personalized activities. Welltok provides population health managers with a Platform as a Service solution that enhances revenue growth, increases administrative efficiencies and delivers health care value.

The first thing we talked about was trends in the incentive market.  He said that incentives have become an accepted part of the strategic assets that a payer can use to drive behavior change.  That was validated by Obamacare where it allows for increased use of incentives tied to outcomes.  He also pointed out that you’re seeing a jump in dollars allocated to incentives with companies spending $500-$1,000 per employee on incentives. 

Another point he made is that you’re just starting to see more sophisticated incentive program design.  He estimated that we’re at a 2 out of 10 in terms of sophistication.  We traditionally saw companies providing incentives linked to actions like taking an HRA or participating in a wellness or disease management program.  Companies are now looking for a more immediate and predictable ROI which will likely lead to a mix of actions for which consumers can earn incentives. 

He made a really interesting point about the “retailing of healthcare” which we’re seeing even with the healthcare.gov debacle.  The reality is that healthcare is moving towards more consumer responsibility with HDHPs (high deductible health plans), CDHC (consumer driven health care), transparency, and exchanges. 

The big question is whether incentive will be a differentiation point in health plan selection.  For credit cards, we’ve certainly seen the value of the incentive program be a huge focus.  There are numerous TV ads pointing to this.  Michael sees incentives creating this differentiation over time. 

I asked Michael about mHealth since I’ve seen numerous mobile solutions and web vendors showing me how they’ve integrated incentives into their program.  In his view, mobile is simply a new channel, but it’s not a disruptive force for the incentive market.  It provides a way to track and view rewards, and it will generate data to provide rewards for (e.g., steps). 

We also talked about another topic that I always struggle with which is the challenge of sustained behavior change versus a one-time boost.  I think incentives are great to open the door and get people to take an action, but after I’ve gotten my incentive, what keeps me involved.  This is where he linked back to the complexity of the program.  He suggested that incentive programs need to be dynamic.  They need to evolve both over the years of the program, and they can’t be a big bang (i.e., $500 for your HRA and nothing else).  They need to link into activities and actions throughout the plan year. 

I asked him what tips he would give to someone new to incentives.  Here was his list:

  1. Reverse the traditional order of focus.  Create a program that gets “points” on the board quickly with an immediate ROI.  Focus on the outcome-based, long-term changes second. 
  2. Weave the incentive program into the company culture.  You need to communicate about the program and link it into the company brand. 
  3. Understand the theory of relativity…which means
    • The relative dollars year over year.
    • The relative dollars per activity.  (i.e., should you get the same incentive for taking an HRA as you do for reducing your BMI by 3 points?)
    • The relative dollars compared to the average employee’s salary.
    • The relative dollars compared to the level of effort and value. 

On the flipside, I asked him what to avoid.  He had two very straightforward points:

  1. Having too many activities for too few dollars.
  2. Having a great program with no awareness. 

So, in wrapping up, I asked him why did they sell to Welltok.  He pointed out several opportunities that he saw in the combined entity:

  • The combination of engagement and incentives is foundational to healthcare success.  This is true in social, mobile, gaming, and platforms. 
  • They offer a platform as a service where different programs can be combined in different configurations. 
  • They offer a Health Optimization Hub which will optimize the efficiency of programs and maximize incentives and engagement tools. 

The Boston Physician Dilemna

I often wonder why so many healthcare companies are in the Boston area.  These two set of statistics from the Merritt Hawkins study on physician appointment wait times paint an interesting picture.

First, you have the fact that Boston has the highest ratio of physicians per 100,000 people.  Almost double the US average.

Screen Shot 2014-02-01 at 6.51.20 AM

On the other hand, it takes you the longest time to get access to a physician.

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I’m a simple person.  This doesn’t seem to make sense.  I could say that lots of them are working in academia or in companies and not actually seeing patients.  I’m sure that explains some of it, but I can’t imagine all of it.

It’s also interesting that Boston also rises to the top of the list in terms of Medicare acceptance.

Medicare acceptance rates by city

Is There Evidence To Support How Often To Go To The Doctor?

I didn’t even think this was a big question until I read an article in the AJMC (American Journal of Managed Care).  I just assumed that there were clear guidelines (evidence-based) that would say a diabetic should see a physician every X months, a hypertensive every Y months, etc.  Of course, every patient is different and their situation unique, but I thought there would be a starting point.

According to the article and the meta-analysis they did, the evidence doesn’t exist.  If that’s true (which I believe), then this could be a significant factor in overutilization.  

According to the National Health Statistics Report for 2009, there were nearly 1 billion office visits in 2009, 30% of which were  for routine follow-up of a chronic problem and an additional 26% of which were for preventive care or follow-up of an acute  condition. The remaining 42% were for the evaluation of a new problem or an exacerbation of a chronic condition.

In their example, they model that moving hypertension follow-ups from 6 months to 9 months would save $1.5B a year in healthcare costs.  

The same scientific rigor that guides therapeutic decision making should be used to optimize chronic disease management. Rational choice of follow-up intervals is a crucial step in adjusting current utilization patterns to maximize the quality of patient care while minimizing unnecessary costs.


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