Health Affairs Blog (May 24) – Paying Fo

Health Affairs Blog (May 24) – Paying For Value: Perspective From The Front Lines
This article proposes that in a true pay-for-value system, a national payment rate should be established and rooted in reality (e.g., based on the costs of the top performing health care delivery organizations) and adjusted for three factors: a) risk of the patient population, b) geographic variation in the cost of doing business, c) patient outcomes. A detailed set of recommendations to setting the payment rate is provided.

To read more on this article please visit:

PPH Solutions, LLC is at the forefront of the pay for value transition in healthcare providing the infrastructure for primary care practices to move from fee-for-service to value-based payment systems at no expense to the practices.


The Health Care Blog (May 25) – A Realit

The Health Care Blog (May 25) – A Reality Check on Workplace Wellness
Today’s American workforce is anything but healthy. Poor health is overwhelmingly the result of unhealthy lifestyles, and it inflicts incredible damage on employers and on employees and their families. Yet, there are those who suggest that we not only give up on trying to improve unhealthy lifestyles, but also that we give up on workplace wellness altogether. The wellness industry must learn from its successes and failures, and press forward WITHOUT ABANDONING THE ENTIRE PREMISE THAT GAVE RISE TO WORKPLACE WELLNESS IN THE FIRST PLACE.

To read more on this topic please go to:

Per the article, the author focuses on the declining return on investment occurring with workplace wellness programs. PPH Solutions, LLC improves the ROI rapidly by addressing the high cost chronic population that doesn’t participate in workplace health but costs the employer dearly.

Per the article

A Reality Check for Workplace Wellness

In 1971, President Nixon declared a war on drugs, and decades later our country’s efforts to battle drug addiction remains largely a failure. Even here on idyllic Cape Cod, we see deaths by overdose and suicide in numbers that are horrifying, particularly with our youngsters.  This epidemic shows little sign of abating as communities grapple with the scourge of runaway drug addiction and its gut-wrenching consequences.

So, it’s fair to ask: given our societal failure to stop drug abuse, should we throw in the towel because it’s, as we say here in Massachusetts, wicked hard? Is it acceptable to let drug users spiral downward with predictable ruinous consequences, because to intervene and provide programs that might help could be called invasive or ineffective?  Of course not.  Because we cannot and will not abandon people with serious health conditions who, on their own, cannot recover.

The workplace and its wellness are not so very different.  Today’s American workforce is anything but healthy.  Poor health is overwhelmingly the result of unhealthy lifestyles, and it inflicts incredible damage on employers and on employees and their families. It’s a national tragedy, and frankly, it’s a disgrace that we have not had the collective will to do more about it.

Yet, there are those who suggest that we not only give up on trying to improve unhealthy lifestyles, but also that we give up on workplace wellness altogether. I categorically disagree.

Just as with our drug policy’s successes and failures, the wellness industry too must learn from its successes and failures, and press forward WITHOUT ABANDONING THE ENTIRE PREMISE THAT GAVE RISE TO WORKPLACE WELLNESS IN THE FIRST PLACE.

In this, the first of a series of articles, I will outline some fundamental Premises that compel the conclusion that we must double down on workplace wellness.  Subsequent articles will expand on those Premises, explore weaknesses and flaws of some programs, and suggest strategies that can achieve the full benefits of workplace wellness, including lowering coverage costs.

PREMISE 1:  Corporate America has a responsibility to help employees improve their health and wellbeing.  This is not about rampant paternalism. We’ve made access to quality healthcare a fundamental right of every man, woman and child legally in America.  We have compelled businesses to buy healthcare coverage for their employees.  At least 97% of today’s healthcare actually is sick-care, treating already-acquired conditions rather than preventing them.

Is that where our obligation ends?  If so, employees will keep getting unhealthier, and even the best healthcare system can do little to stem the tide of bad health much less reduce costs.

Unfortunately, the wellness industry is under attack like never before, and an emerging sense of angst over the seeming lack of progress in workplace wellness is palpable. A recent observable trend of commentators and the workplace wellness industry in general is to give up on changing the unhealthy lifestyles of employees and reducing the cost of healthcare coverage (ROI).  “ROI” means per-employee claims expense savings that exceed the cost of a wellness program.  “VOI” (Value of Investment) means any “non-financial” improvements that result from workplace wellness activities, such as boosting productivity, morale, reducing absenteeism, etc.

Two recent articles are symptomatic of how workplace wellness is increasingly viewed as a failed concept and may represent an emerging consensus to give up on efforts to achieve ROI by improving unhealthy employee lifestyles altogether.

Should Employers Give Up On Wellness ROI?” consists of an interview of Dee Edington, a practitioner in wellness for over 40 years.  Mr. Edington states that, “Yes, [ROI] is dying…”  He conditioned that remark with several “ifs,” but concluded that “[t]he most obvious misconception is that a wellness program will generate a positive ROI, anywhere from 1.0 to 6.0.”  He concludes by saying that corporate wellness has a bright future IF it embraces the shift of focus away from ROI to VOIs.  He was more direct in a 2009 conversation:  “Wellness programs have been focusing on behavior change, and I’ve come to the conclusion that that’s been a waste of time.”

With respect (and with the realization that Dee has been doing this much longer than I), I emphatically disagree.  Cost of coverage MUST remain the focus.  To reduce cost, we must reduce chronic illness.  According to the US Centers for Disease Control and Prevention (CDC), chronic illness is mostly caused by unhealthy lifestyles and accounts for 75% of US healthcare expenditures.  And chronic disease is the most preventable of diseases.  The CDC states that the key to reducing chronic illness is to address unhealthy lifestyles.  To follow Mr. Edington’s  suggestion means an abandonment of attempts to reduce chronic illness, the most preventable of illnesses, and to reign in costs.

The second article is representative of an even more radical approach, namely, doing away with workplace wellness.

Playing Doctor” is written by Al Lewis, the CEO of and the author of “Surviving Workplace Wellness,” a title that pretty much sums up his view of workplace wellness. Mr. Lewis’ viewpoint, characterized by militant and high visibility opposition to workplace wellness, reflects the far end of the spectrum of anti-workplace wellness sentiment.  He is oft-cited, and it seems he has not seen a wellness program or a positive ROI computation that he has liked.

“Playing Doctor” focuses on the EEOC’s final rules  regarding wellness program incentives and penalties, which Al uses as a springboard to repeat his mantra that the wellness industry hides data, misrepresents results such as ROI, and not only fails to improve employee health, but actually exposes employees to significant potential harm in order to maximize revenues. His suggestion is to steer employees to safer hospitals and educate employees how to purchase healthcare wisely, something that his company, Quizzify, purports to do.

Educating people on how to better access our dysfunctional healthcare system should be part of any comprehensive workplace wellness program.  But if that is all we do, it perpetuates smarter purchasing of sick-care by sick people rather than well-care, prevention, and healthier lifestyles.  That, in turn, will only perpetuate an increasingly unhealthy and unproductive workforce, driving costs of coverage higher and higher.

Mr. Lewis and I have commented on each others’ articles in the past, and I commented on this one, asking “[a]re you saying we throw in the towel on changing unhealthy lifestyles…”?  His response was, “…yes, I throw in the towel until, to mix cliches, someone invents a better mousetrap.”

I believe that commentaries such as these are leading corporate America down the wrong path.

If followed, this will divert us from the single most important thing that must be accomplished to obtain ROI or VOIs:  healthier employee lifestyles.  We cannot be diverted from this inconvenient fact.  Without improving unhealthy lifestyles, none of these goals is accomplished.

PREMISE 2:  The workplace is not only an appropriate venue, but the best venue to facilitate wellness and wellbeing.

On the issue of appropriateness, the cost of healthcare coverage is one of corporate America’s top concerns, as is an unengaged and unproductive workforce.  It is hard to identify a more appropriate workplace activity than directly addressing those issues.

Employee engagement is greatly affected by health and wellbeing. A 2012 Gallup State of the American Workplace study confirms how a healthier, more engaged employee population can bring huge returns. Another study by Willis, Towers, Perrin supports this finding that more employers enjoy major financial returns and competitive advantages through higher employee engagement, productivity, and workplace morale. Yet, we cannot significantly improve employee health and wellbeing without long-term improvement of unhealthy lifestyles.  It’s that simple.

As the largest aggregator of adult work-aged Americans today, the workplace is also the best venue to affect and improve employee lifestyle changes. Millions of Americans show up for work each day focused on their work and its environment.  Employers already have their attention. Messages are sent and received.  If employers can link wellness to employees’ personal and work goals, they can create the opportunity for behavior change on a scale that dwarfs any other platform.

We cannot abandon that opportunity.  Dr. Toby Cosgrove, CEO of Cleveland Clinic said it best:  “only private business…can solve America’s epidemic of obesity, chronic disease, and runaway healthcare costs by investing in the health…of their employees.”

PREMISE 3:  Workplace wellness need not be offensive or inappropriately invasive.  We have interventions in many areas when lifestyle threatens life or good health.  Do we throw up our hands and do nothing about the opioid epidemic that we are experiencing because of some suggestion that recovery is not something you “do” to someone?  Make no mistake about it.  Most of us understand from our own experiences that to facilitate long-term lifestyle change, some method of gentle or firmer intervention is needed to change the status quo.

Are there poorly designed programs that do more harm than good?  Unfortunately, yes.  Are there incentives that are ill-disguised stratagems to increase employee shares of health coverage costs?  Yes.  Are there examples of invasive use of employee data?   Yes.  Can there be over-testing that some describe as “bad medicine?”  Let’s assume there can be.  And have most wellness programs failed to produce a positive claims ROI ?  That is correct (Rand Study, EBRI Study, and Pepsico), and  claims of Harvard researchers of ROIs of $3.27 from traditional wellness programs have been proven suspect.

But does this imply that we get out of workplace wellness altogether? I suggest that it is quite possible to design and implement programs without being insensitive or downright stupid, nor should we be scared off by strident accusations to the contrary. Accordingly, this is not about whether we do this; it’s about how we engage employees and their families in a supportive, positive way consistent with their life goals.

PREMISE 5: While VOIs are achievable and valuable, the cost of coverage is still the single most critical issue facing corporate America today.  Wellness ROI can be achieved.

While VOIs are indeed valuable “returns” on workplace wellness programs, we are at risk of abandoning ROI. This must drive CEOs and CFOs crazy.  They are in essence being told to abandon precisely what they need most to continue to provide comprehensive employee coverage.  Ignore unhealthy lifestyles??  Other than our dysfunctional healthcare delivery system, unhealthy lifestyles are the biggest cause of our of control costs and an unsustainable trajectory.

Accordingly, it is not time to withdraw.  It is time to  double down on ROI.

America has a tradition of meeting crises head-on. There have been seemingly intractable issues that we’ve overcome by thoughtfulness, persistence, funding, and a will not to give up.  Our environmental legacy has shown that to be true.  Have we reached the finish line on the environment?  No.  We can and will always strive to do better.

I too want “a better mousetrap” for corporate America. Because while we’ve spent a bucket load of money on wellness, we haven’t put in the effort, thought, and leadership that this fundamental issue requires. It’s time to change that, and in my following articles, I will outline how we can do just that.

Paying for Value Perspective from the Front Lines

The concept of value-based health care is rapidly gaining traction in the U.S., yet implementation remains a significant challenge. For example, the current Medicare “shared savings” payment approach penalizes high-value providers, while rewarding historical inefficiency.

As stated by Ginsburg and Rivlin, “Part of the difficulty involves provider benchmarks that reward improvement rather than level of performance.” This is further complicated by the constant downward pressure on payment benchmarks, which not only reduces or erases any prior gains, but also threatens to put the already high-value providers out of business. Additional issues observed (and described previously) include inaccuracies with patient attribution, inconsistently set cost and quality targets, and the near-complete lack of patient involvement.

We propose that in a true pay-for-value system, a national payment rate should be established and rooted in reality (e.g., based on the costs of the top performing health care delivery organizations) and adjusted for three factors: a) risk of the patient population, b) geographic variation in the cost of doing business, c) patient outcomes. A detailed set of recommendations to setting the payment rate is provided below.

Global-based payment systems more conducive to higher value health care

While all of the provider payment mechanisms, including fee-for-service (FFS), have some merit and potential use cases, we believe that global-based payment systems (e.g., bundled payments, full capitation) are best positioned to move the U.S. health care system toward high-value health care for all. Under the current reimbursement structure most services are paid for separately, which results in limited or no financial incentives for different parts of the system to work together and create value around the patient. Moreover, acute episode prevention and care coordination are not rewarded in the current FFS environment.

While shared savings, reference pricing, and varied provider payment updates are steps in the right direction, if these payment approaches continue to be based on the FFS model, they will be subject to the same limitations and not result in significant movement toward high-value care. In turn, as we move forward toward more global payments, a previous Commonwealth Fund report noted that in order to succeed in promoting high-value care, “payment levels must be carefully calibrated to ensure providers’ financial viability while providing incentives to reduce costs and safeguards to ensure high quality.”

Key components of a successful global-based payment model

As noted above, the implementation of a given payment approach, and specifically how reimbursement is set for a given service, is a major issue that can either facilitate or significantly hamper an organization’s ability to deliver high-value care. We have identified the following elements as key to establishing a global-based payment model that is likely to promote high-value care:

1. Reality-based pricing

Payments should be based on reality, i.e., not defined by complex formulas that are often incorrect and tend to reward the delivery organizations that get the worst outcomes. Instead, we feel the approach should be one suggested by Dr. Harold Luft. This approach would determine what delivering care actually costs in delivery organizations that get the best outcomes (i.e., actual provider cost, not what Medicare currently pays).

Moreover, the cost we are referring to here is total cost of care over time (e.g., episode, one year), rather than cost per line-item of services provided. In our example (see Exhibit 1) the base payment amount could be set at the 90th percentile of the high value quadrant delivery organizations, i.e., hospitals that get better than average quality at lower than average total cost per case.

Therefore, all delivery organizations that had costs to the right of the dotted line would now have incentives to become more efficient. Recognizing that organizations with higher than average present costs will have a hard time adjusting to such a large upfront reduction, we recommend that this payment approach be done in a phased-in manner over three years. A phased-in approach will also benefit payers, Medicare in particular, given that its current payment rates are often below the cost of delivering care. Thus, Medicare could start by setting its rates at the Medicare national average and gradually evolve toward actual costs of the high value quadrant providers.

2. Bundled payment and Per Member Per Year (PMPY) reimbursement

Payments should be further adjusted for population characteristics (risk), the cost of doing business (regional differences in wages and non-labor costs), and patient outcomes (quality). A risk-adjusted quality component/withhold is warranted to ensure that we do not sacrifice care effectiveness in the name of efficiency, i.e., patients are not denied appropriate care.

For example, instead of receiving 100 percent of the base payment amount, delivery organizations would initially receive 95 percent of the base payment amount. Providers with above average outcomes would receive the full amount (95 percent + the 5 percent quality withhold). In turn, payment to providers with below average outcomes would remain at 95 percent of the base payment amount (they lose the 5 percent quality withhold). The quality withhold could be set at a higher percentage and could also be scaled.

3. Margin

Once you have established the baseline bundled payment/PMPY for a given provider, add 2-4 percent margin, as without a small margin even a not-for-profit organization cannot stay in business.

4. Secondary re-insurance

There should be an option to purchase secondary re-insurance to account for catastrophic events. This is particularly important for small and critical-access care delivery organizations.

5. Patient involvement

Patient benefits must be aligned with payment approaches in a way that allows for both patient choice and patient responsibility. Consumer choice has long been a key component of American society and consumer involvement is key to ensuring appropriate levels of health care utilization. Since the advent of the third party payers in the 1940s and further coverage expansion in the 1960s through Medicare and Medicaid, patients have been increasingly insulated from the true costs of care.

Not surprisingly, those with health care coverage have little incentive to limit their utilization of health care services. Consumer Driven Health Plans (CDHP) with Health Savings Accounts (HSA), preventative care covered at 100 percent and no co-pays or co-insurance for visits to a coordinating primary provider, present a potential option to accomplish both objectives. Such plans can accommodate low-income individuals by placing a government contribution directly into the individual’s HSA.

Finally, we believe that a good place to start is by focusing on areas of the health care system where we are likely to achieve the biggest impact. Given the high concentration of health care spending on a small group of highly complex patients (20 percent of patients account for 80 percent of the cost), we feel that these novel payment approaches should be first designed and deployed to address the care and needs of those high-need, high-cost populations, rather than serving as a payment approach “for all.”

Exhibit 1: Setting the baseline payment amount


Note: The information contained within this post grew out of a forum, “The times they a’ changing – How are you leading” (held in Breckenridge, CO on February 23-24, 2016), which featured presentations by and discussions with leaders of seven organizations with demonstrated success in delivering high-value health care to the patient populations they serve.

2016 Population Health Management Snapshot

2016 Population Health Management Snapshot: Most Interventions Telephonic and 9 More PHM Trends

Thursday, May 19th, 2016
This post was written by Patricia Donovan

The majority of outreach in the burgeoning field of population health management is delivered telephonically, according to 84 percent of respondents to an April 2016 Population Health Management (PHM) survey by the Healthcare Intelligence Network.This third comprehensive PHM assessment also determined that data analytics use in population health management continues to rise, though more slowly than it did from 2012 to 2014, when EHR and registry use tripled.

Additionally, the survey found that 70 percent of respondents have committed to population health management, up from 56 percent in 2012. At the same time, many lament payor reluctance to cover essential PHM services like health coaching and group visits they see as critical to PHM success.

To accrue clinical and financial gains from PHM’s data-driven, risk-stratified care coordination approach, 90 percent provide chronic care management (CCM) services, a strategy that results in PHM ROI between 2:1 and 3:1 for 12 percent of these CCM adopters.

In condition-specific PHM metrics new for 2016, diabetes tops the list of health targets for PHM interventions, say 88 percent.

A health risk assessment (HRA) remains the primary instrument for identifying individuals for PHM interventions, say 70 percent, up from 64 percent in 2014.

Also paramount to PHM success under value-based healthcare reimbursement is strategic oversight of the ‘rising risk’— individuals with two or more unmanaged health conditions. One quarter of 2016 respondents focus PHM attention on their ‘rising risk’ populations, the April 2016 survey determined.

In recent years, population health management (PHM) has ranked as the healthcare space richest with opportunity, according to HIN’s annual industry trends snapshots.

Download an executive summary of 2016 Population Health Management survey results.

CMS launches largest ever multi-payer initiative to improve primary care in America.

The Centers for Medicare & Medicaid Services (CMS) today announced its largest-ever initiative to transform and improve how primary care is delivered and paid for in America. The effort, the Comprehensive Primary Care Plus (CPC+) model, will be implemented in up to 20 regions and can accommodate up to 5,000 practices, which would encompass more than 20,000 doctors and clinicians and the 25 million people they serve. The initiative is designed to provide doctors the freedom to care for their patients the way they think will deliver the best outcomes and to pay them for achieving results and improving care.

To Identify Patients for Care Management Interventions, Look Beyond Big Data

 5% of patients incur nearly 50% of United States’ health care costs, and there is growing evidence that investing resources in these individuals can improve care while decreasing costs. In kind, provider organizations are increasingly adopting high-risk care management, a strategy that relies on coordinated outpatient care to reduce costly emergency department (ED) visits and inpatient admissions. However, complex care management programs are costly in themselves, so it is important to select patients who are not only high risk but are also most likely to benefit from such programs. We now have a wealth of clinical and financial data coupled with an expanding list of analytical solutions to facilitate these choices. However, to best identify the right patients for targeted population health interventions, we need to consider other data sources as well, particularly provider insights and patient-reported data.

Less than 3% of Americans…..

According to a new study, less than 3% of Americans have a healthy lifestyle or even meet the measurable characteristics that can reduce a person’s risk for heart disease, according to a published research article in the journal Mayo Clinic Proceedings.

Projections on Remote Patient Monitoring

By the year 2020, just 5 short years, Berg Insight projects 36.1 million patients will be being monitored annually from their home.  This will generate over $28 billion in annual revenues.  This is way up from the 2015 number of 4.9 million patients resulting in a compound annual growth rate (CAGR) of 48.9%.