Proving the profit

Health care reform may soon happen, but it will take more to make us healthier [From our print edition featured in Monday's City Paper]

Email | Print By Walker Duncan

Despite much of the drumbeat rhetoric that’s been bandied about in recent weeks and months, our health is our own responsibility.

While he was speaking in the context of cutting unneeded expenses out of the U.S. health care system, that’s largely what Congressman and noted health care sage Jim Cooper said last week in this paper. To hear him tell it, health care reform and the shape it takes will be, over this summer, our responsibility.

It’s a given in the debate that our current system is woefully fragmented and, largely, broken: Cooper wrote that the United States might be wasting up to $700 billion a year. The quality, efficiency and quantity of care provided to patients vary wildly from community to community.

Those differences have long been known and documented by companies like DataAdvantage — run by longtime local exec Hal Andrews — which regularly releases studies showing huge gaps in the quality of care from state to state. More recently, market watcher Atul Gawande wrote in The New Yorker about the huge variance in health care costs in McAllen, Texas, as a result of an overactive approach to care.

What so often gets lost, however, is the patient’s place in the cost equation. Amid the questions of payer and provider reform, the question that remains is: Will a ‘fixed’ health care system fix the health of the nation? Our health, it would seem, is dependent on more than our doctor visits.

Historically, the U.S. health care system has been reactive and focused on caring for the sick; spending on preventative care accounts for a tiny share of overall costs. Basically, the system is there to fix us when needed. Most, if not all, reform thinkers agree that an overhauled system must place a greater emphasis on primary and preventative care to keep the healthy patients healthy.

Even with a preventative system, the vast majority of patients’ lives — provided they don’t have a chronic condition of some kind — are spent outside the health care system. And the behavioral choices made there have a vast impact on the cost of care.

A return to the old days

In a recent interview with Health Business blogger David E. Williams, Healthways co-founder Bob Stone described the Medical Home concept and touched on the financial consequences of many Americans’ unhealthy behavior.

The idea of the Medical Home concept is a popular one among those seeking to overhaul the delivery of care. The central concept represents, in some senses, a throwback to the old model of rural doctors who knew all their patients and their complete medical histories well.

Adapted to the 21st century, a Medical Home is a practice setting that would help guide the patient through the health system with more oversight, coordination and knowledge of the patient’s full history. That would stand in sharp contrast to the current system that has them bouncing from, say, urologist to radiologist to surgeon and back again with, in many cases, disconnected communication between physicians. Essentially, the Medical Home seeks to reverse the fragmentation that has come with medicine’s increasing specialization.

But while this idea could be a massive improvement over the current care delivery system, it doesn’t get at the whole problem. We’re simply not at the doctor’s office all that much.

“We spend 50 percent to 60 percent of our waking hours in [the work] environment. The direct costs are for the most part, employer-borne for health issues. The indirect costs — productivity loss associated with health or well-being — have direct impacts on the profitability of the American enterprise,” said Stone.

Other factors he noted impacting those bottom lines ranged from activity levels down to personal associations, both of which affect behaviors that ultimately will play a large role in the cost of care for that individual.

America’s love of television, huge portion sizes and ever-rising inactivity has been widely documented. What has evidently been overlooked, or underserved by our system, is the promotion of general wellness. But while it hasn’t yet made it to the forefront of the debate, some in the health care industry and the government are calling for that to change.

Healthways Chief Strategy Officer Anne Wilkins told the Post last week that those in Washington are beginning to take notice. Representatives from her company recently met with members of the Democratic Blue Dog Coalition to advocate for a focus on well-being as part of any health care reform plan.

The costs of not doing so are obvious.

Growing waistlines, growing spending

In recent years, estimates have shown that obesity alone accounts for north of $93 billion of the annual national medical bill. Smoking accounts for a similar number. But while the prevalence of smoking has steadily declined in recent years, waistlines have continued to expand at an alarming rate.

On its Web site, the Centers for Disease Control and Prevention, has a color-coded map that tracks obesity rates by state year over year between 1985 and 2007. The map begins the slideshow with 1985, dotted with refreshing shades of blue indicating rates ranging between 5 and 19 percent.

As the presentation progresses, obesity rates rise and new colors enter the picture. By 2007, the only remaining blue state — i.e. the only one with a rate lower than 20 percent — is Colorado.

Tennessee ends the slideshow as an heavy shade of maroon, indicating that more than 30 percent of its residents are obese.

As with most health-related data, the figures are a bit dated, but the trend is obvious. The $93 billion cited above, which at the time represented roughly 10 percent of our national medical bill, has grown and will continue to grow.

More current data on general wellness comes from Healthways, which earlier this year joined with noted polling outfit Gallup in a 25-year partnership to track Americans’ well-being month to month. Even just a few months in, the data has begun showing various trends in certain areas.

As the economy has soured, so have the “healthy behaviors” numbers in the survey, which take into account factors such as diet, exercise and smoking. Other factors such as “life evaluation,” which asks survey participants to simply rate their quality of their current life and their outlook for the next five years, have risen, possibly showing signs of a changing tide from the doldrums currently being experienced by much of the country.

“In some ways, it’s a measure of hope,” said Wilkins. “An increase could be an early indicator that things are turning around.”

It’s apparent that tracking this data — whether done by Healthways or any other organization — must be a component of future reform. America’s health continues to decline despite having one of the most advanced health care systems in the world.

Wilkins said the meeting with the Blue Dogs showed signs that Washington is taking note of the trends. Cooper praised Healthways for having played “a key role in the current political discussion by enriching our understanding of America’s health — or lack thereof.”

The company exhorted the lawmakers to create incentives for employers, employees, Medicare and Medicaid beneficiaries and federal workers to maintain their health. It may be cynical to say so, but those incentives — in a country where surveys have shown that people would lose 10 pounds and keep it off if offered $225 — will likely be necessary to urge adoption of such programs.

Healthways now offers a raft of wellness programs on a monthly fee basis to large employers and health plans. They include everything from smoking cessation programs to stress management and nutrition counseling. The per-participant-per-month fee structure is far simpler than the disease management portion of Healthways’ business and appears to be working.

Stone told Health Business that his company is seeing studies “that directly correlate both the direct and the indirect cost and the productivity and profitability of American business with organizational initiatives that are focused on helping every employee and their dependents achieve the best possible health and well-being status.”

That positive data is rolling in is a good thing for wellness advocates, but only time will tell how profitable the wellness market can be — and thus how widely it might be adopted. In its most recent quarterly report, Healthways said that its revenues are likely to drop this year in part because “a larger proportion of our revenues will come from wellness and prevention products, which generally carry a higher cost of services as a percentage of revenue.”

While narrower margins are not necessarily terrible, they do require broader adoption to keep the business going. And that requires employers and workers to feel it in their wallets. In short, private-sector health care has to produce more evidence that keeping people healthy can be profitable.