Should Healthcare Run More Like Airlines?

While most people dread flying during the holidays, it’s hard to ignore how efficiently the airlines are able to move millions of people across the country.  While we tend to dramatize issues with flying, today I want to appreciate the tremendous job the industry has done to create an effective (and dare I say friendly?) member experience that healthcare could learn from.

Flight Purchasing

How The Airlines Do It: How do you like to buy plane tickets?  Some people use a travel agent, some people call the airline, others buy online (either directly from the airline or from flight comparison websites).  Airlines give customers several channels to buy tickets by creating their own infrastructure, but also opening up their data for other companies to use.  Freeing up their data also creates price transparency, leading to greater competition and lower prices.  While everybody hates the new fees airlines tack on, decoupling extras (e.g., checked luggage) can also lower costs or keep them steady since only the people who use these services are paying for them.  Finally, customers can also get lower prices through group buying, using companies like Egencia that exchange volume for price.

What Healthcare Can Learn: Right now, you have very few choices about how you can pay for healthcare – given the high cost, insurance is the only route for most people, and that’s often tied to your employer.  This may change with the individual exchanges, as employers may drop coverage and folks will get to choose which plan is best.  As a result, insurance companies will need to create more customer-friendly plans and interfaces to help customers understand their choices in a much more competitive market. 

While healthcare is mostly fee-for-service (i.e., you’re only charged for what you use), there remains a lack of price transparency – do you know how much your x-ray costs?  While new startups have emerged to address this (e.g., Change Health, Healthcare BlueBook), we need to continue to create easier tools and better incentives for people make the right treatment decisions.  Finally, group buying has existed in groups such as Pharmacy Benefit Managers, but newer incentive-based models (e.g., ACOs) have the opportunity to be scaled up.

Pre-Flight Experience

How The Airlines Do It: Airlines have embraced technology to make the pre-flight experience better.  First, airlines use code sharing agreements to fill less crowded flights on other airlines or transfer frequent flyer points across multiple carriers, completely blind to the customer.  Second, airlines have embraced newer consumer technologies – for example, United and American are two of the first businesses to work closely with Apple to integrate their apps with their mobile payment service, Passbook.  Finally, security, one of the most important parts of the operation, is handled by a centralized agency, the Transportation Security Administration, meaning airlines can focus on what they’re good at rather than the complexities of security.

What Healthcare Can Learn: The code sharing agreements are akin to hospitals and doctors seamlessly transmitting patient information across systems.  While hospital systems do this today, it needs to be more portable and touch more patients, possibly through larger alliances that cover more health systems using the same technology.  I also like how airlines are working closely with mobile companies on cutting edge consumer technology – major health systems may benefit from tighter alliances with those major tech companies.  Finally, ceding certain activities to a single group takes healthcare companies out of what their bad at (e.g., data management).  EHRs may be a good example – does it make sense for the industry to name a single standard, and then allow health systems to outsource the work to dedicated vendors?

In-Flight Experience

How The Airlines Do It: Sure, the seats are cramped and the food is mediocre (when there’s food at all), but airlines have done some things right.  First, any in-flight purchases are cash-free, limiting the payment options, but simplifying the process to make things more efficient.  Next, airlines have created partnerships with movie and television studios to present current entertainment options or started handing out tablets to personalize the experience.  Finally, frequent flyers are often rewarded in-flight through a variety of special perks (e.g., free checked bags, automatic upgrades).

What Healthcare Can Learn: Efficiencies gained through limited payment systems would be a clear benefit to healthcare (i.e., eliminating the complexities of the fragmented insurance system means less admin headaches for providers).  The entertainment partnerships are vaguely similar to ACO’s, where there’s an incentive to produce and deliver high quality products – in this case, the airline benefits from having an engaged, happy flyers, and the studios have a captive audience to pitch their best shows.  Finally, I’ve written about “frequent flyer” healthcare programs in the past – integrating something like this into a hospital system could be an effective way to gain loyalty with select consumer segments.

These are certainly pipedreams with a multitude of complexities and challenges, but after flying this past week, I’ve come to appreciate what the airlines have done in the face of tremendous challenges and I’m hopeful healthcare can do the same.

What Can Anthony Bourdain Teach Us About America’s Attitude Towards Healthcare?

If I could trade places with one person for a day, it would probably be Anthony Bourdain.  His shows allow him to travel to far flung regions and showcase culture beyond the landmarks.  Wrapped in beautiful cinematography, he often goes below the surface to uncover engaging people and stories better than any other travel show.  This past rainy weekend was the perfect opportunity to catch up on his recent trip to Paris, which showed a contrast to the US that I haven’t been able to shake.

One of the episode’s recurring themes was the newish trend of brasseries focusing on local, sustainable products, pushing aside traditional French recipes and preparations.  To accommodate this shift, many of these restaurants had prix fixe menus that changed daily, a concept Parisians were tolerant and accepting of.  This is no small task, since it requires diners to enter a restaurant blindly and trust that the chef will deliver something memorable.

A similar concept crossed my mind a few years ago when I visited Europe and was shocked to find art museums handing out iPods to visitors as audio guides.  It struck me that there was an implicit handshake between the museum and its visitors saying that the iPods would be returned unscathed, something that I couldn’t imagine seeing in the US at the time.

We may have iPods in museums now, but I believe we see less of this trust between authority and individuals in the US, substituted for rugged individualism and a need for personal control.  To illustrate using the restaurant industry, look first at the fast casual concept, which has experienced huge growth over the past few years.  Their business model (use Chipotle as an example) is that the customer can create and customize their meal however they want, no questions asked.  Many restaurants also now have open kitchens, allowing the diner to see what goes into their food preparation.  Finally, there’s been a big debate in the food community about substitutions, with many saying that chefs must accommodate a diner’s request even at the fanciest restaurants.  In all these cases, rather than trusting the chef or the kitchen, the diner has seized control back into their own hands.

While you can see this everywhere in the world, I think there’s a bit more of this in the US, the result of capitalism and our unique history of self-sufficiency.  We have been taught through history classes and the media that we need to act as an individual and control as much as possible, not letting others dictate how we should think or, in this case, eat.

I believe this ethos also extends to healthcare.  Recent areas of innovation have been focused on consumer empowerment as we plod towards exchanges and the internet becomes a bigger source of medical information.  Putting aside politics (e.g., the wisdom of the single payer system), is this a good trend?  Put another way, is our fear and mistrust of central authority, combined with the democratization of the digital age, a good thing for the US health system?

Think about the challenges a doctor faces.  After four years of med school, four years of residency, and countless more years practicing, patients now feel “empowered” to undermine, or worse ignore, a diagnosis or treatment.  At a higher level, I see this every day when our customers want us to customize our member engagement campaigns, outreaches that have been tested and tweaked to maximize their effectiveness.  Rather than trusting our approach, our country’s staunch individualism has made evidence and expertise seem like a bad thing.

Since when do we know better than experts?  In order for consumerism to be successful, I think we need to figure out how to marry up expertise and individual decision making so that we make the right decisions.  This starts with a fundamental conversation about our culture and authority – maybe in this case we need to be just a little more French.

“So, What Exactly Do You Do?”

I dread that question.  Insurance is unsexy, much less drug insurance which is obscure and sounds even more boring.  Then throw on top of that my actual role (product strategy and marketing), which is unique for our own company and tough to understand.  So even after I give the condensed version (“I help people get their drugs at the right place and at a low cost”), I still get quizzical looks before the conversation comes to a grinding halt.

Since the shortened version doesn't work, this week’s post is dedicated to the longer version, which also connects back to how the healthcare system needs to change and what small part my company is doing to help.

At a very high level, my group does three core things:

1) Create Network Products: Employers and health plans (“clients” in our terms) come to us because they don’t want to manage drug spend for the people they employ or cover.  Our company provides this service by acting as a middleman between the clients, their members, pharmacies and pharmaceuticals.  We negotiate drug discounts with pharmacies and drug companies that are then passed back to the client and members through other discounts and lower copays. 

My group specifically analyzes and markets the best combination of pharmacies and discounts to save clients the most money, while still giving members access to get their drugs.  For example, a client can choose to let members fill prescriptions at more pharmacies, making it easy for their members to get their drugs.  However, the client saves money by cutting out duplicative pharmacies and only allow members to fill at selected retailers (i.e., clients can save more money by cutting out the CVS or Wagreens that are within 5 miles of one another).

2) Create Incentives: In addition to choosing what type of pharmacy network they want, clients also need to create incentives for their members to use these networks and continue taking their medication.  These incentives are usually either financial or hard stops.  For example, to encourage folks to use the smaller pharmacy network, we can increase the copay for their drugs by $10 if they fill at a non-preferred retailer – some people will pay that penalty, but many will switch over to our network.  If a client is really serious about saving money through these restrictions, they will put fill limits in place, which means a member’s prescription is not covered if they try to fill that Rx outside of their plan.

3) Encourage Usage: While the incentives are the dollars and cents, we also develop consumer marketing materials to take a softer approach.  These come in the form of letters or calls or emails that tell you how you can save money and the importance of staying on your medications.  They are also used in conjunction with the incentives to make sure we avoid as many rejects and unhappy members as possible.

These efforts result in saving the client and member money by passing along the discounts from these restrictions. At the same time, our company makes a very small profit by charging dispensing fees for each drug processed or a small spread between what the pharmacies pay and what the client pays.  Some argue that we’re increasing the cost of drugs, but without taking advantage of our size (we’re the second largest purchaser of generic drugs in the country), we couldn't get these discounts that far outweigh the fees.

So what does my group teach us about the healthcare system as a whole?  First, there’s real value in intelligently limiting healthcare choices.  By changing the pharmacies a person can fill at, we can recognize up to 10% savings across all drug spend – combine that with other programs (e.g., drug formularies, clinical programs) and we’re talking serious money.  On top of that, our customer satisfaction is at an all-time high, meaning people are not up in arms about having fewer choices.

Second, this is a delicate system that requires incredible coordination.  If any one of these systems breaks – fewer clients come to us for drug benefits, pharmacies start playing hardball, members stop taking their drugs – we will not be able to provide the same services and everyone will be worse off.  Prime examples of this are the spat between Walgreens / Express Scripts and the argument for the individual mandate (i.e., if everyone doesn't participate, then we can’t pay for the people who use the most care).

Finally, it’s going to take a lot of smart people to get out of this mess.  I work with some very intelligent people, yet we’re only impacting a very small part of the healthcare problem, and imperfectly at that.  If we’re going to keep our country healthy, we need a lot more brainpower and energy behind big ideas that are going to make real change.

Can Shock and Awe Tactics Work For Healthcare?

One of the highlights of my Chicago summer is the Air and Water Show.  Every year, the city brings out stunt planes and jets to put on a big spectacle along the lake.  Regardless of whether I’m at North Beach or sitting in my apartment, I feel like I’m part of the action if for no other reason than the sound of these planes invading our city.

Listening to the jets in my apartment this year reminded me of the early tactics of the Iraq War.  At the beginning of the conflict, the US flew these same planes overhead and remotely bombed cities to scare Saddam Hussein and force him to surrender.  This “shock and awe” tactic certainly scared me into paying attention to the show this past weekend – could it do the same for patients?

A great example of this already in place are the cigarette pack labels that either warn smokers about the dangers smoking or show graphic images of its effects.  Another example is the annual drug or drunk driving seminars for middle and high school students, complete with a totaled car for dramatic effect.

But could this tactic be put in place for less severe problems and a more sophisticated group?  Let’s say we want to target heart disease.  While we read stories about it every day, people may benefit by seeing, firsthand, the impact of poor nutrition, low exercise, and not taking medications. 

For example, a company could require all employees to view an annual seminar on the topic, where they bring in a motivational speaker directly affected by the disease to talk about its impact on them and show how the disease has ravaged their life.   To get people to attend, the employer could provide insurance credits or a reward through attendance.  The seminar would be sponsored and facilitated either by the employer or their insurance company, who would both realize cost savings through better behavior.  At the end of the day, this type of event could promote better health by exposing realities first hand at a relatively low cost.

The tough part of this analogy, however, is that the tactic didn’t work in Iraq or with cigarettes.  While they both initially opened people’s eyes, these sounds and images became too commonplace, so people made it part of their daily routines and started to ignore them.  That’s why I think the key is limiting this type of marketing and making it as shocking and controversial as possible.  This solution would also need to be part of a larger effort that rewarded behavior rather than just scaring, but it could send a strong message like jet engines in Chicago each summer.

What Are Some New, Exciting Technologies With Potential Healthcare Applications?

For anybody with an interest in retail, I’d encourage you to check out PSFK’s Future of Retail Report, which has a lot of great quick hits on retail strategies.  One technology that I was particularly interested in was an app from Neiman Marcus that alerts sales associates when a customer visits a store.  The associate then has access to sales history and customer preferences, while the customer can access product information at their fingertips.

Let’s apply this to healthcare, where a patient might be able to broadcast medical history or preferences to different stakeholders.  At one end of the spectrum, a patient could list their health-related questions or ask for assistance through an app at a pharmacy or health provider, creating a better, more personalized experience.  At the other end, an electronic health record could be built into a phone and be able to be broadcast to or downloaded via secure line at a hospital when the patient enters.  Biggest hurdle is security and privacy, but could be overcome in the future.

The second technology, also via PSFK, is an extension of my fridge magnet idea from a previous post.  The Virtual Fridge Lock attaches to a refrigerator and monitors when a person opens it.  If that person uses it during an unauthorized time, the fridge sends a message to their social networks and gives friends the chance to comment (with either encouragement, similar to the Nike+ running app, or criticism).

This idea uses all the great elements of gamefication and social motivation, although I wonder how many people will invite this self-induced criticism.  Given that people use social networks more than ever to shape their personal image, will they be willing to admit weight is a problem and shame themselves to lose a few pounds?

What Can Travelling Through America Teach Us About Healthcare?

Every major company has a dedicated consumer research team that can conduct research on its own or let another company take the lead.  Unfortunately, this approach relies heavily on surveys and focus groups, which are notorious for capturing consumer preferences, but not explaining or predicting actual behavior.  Retrospective studies, especially data driven ones, can see what people are actually doing, but only for a single point in time and may miss nuances or actual causes of this behavior.  Is there a better way?

I've always loved the idea of tagging along with a patient or family to see how they really act in the real world, which is why I’m intrigued by The Odyssey Initiative.  This program will send three teachers across the country to the best schools to document what they do right, culminating with them taking these lessons to open a new school in 2014.  The group will also post videos and best practices online, creating a robust resource for other education leaders.

Let’s be honest: this is pretty ridiculous.  This group will spend a year on the road capturing anecdotal information and then try to connect these observations together to create a successful model.  This goes against the traditional model of collecting as much data as possible at the lowest possible cost (through surveys and focus groups) and drawing conclusions from that.  They think they can walk into a bunch of schools then create the ultimate school?

That’s what I love about this idea, that it’s so contradictory to our notions of consumer research.  This group is taking the hardest possible approach by visiting face-to-face with teachers around the country.  However, I think they will find insights and best practices that may apply to a single classroom or the entire system, but may not have been captured through traditional research.

And why can’t this same approach apply to healthcare?  A travelling team sits in doctors’ offices to understand how to improve the patient experience.  A team could embed themselves with the healthiest and unhealthiest people to understand how they make decisions.   Given all the changes in healthcare coming down the pipeline, a team like this could draw insights radically different from what we know today and create the next big idea because we haven’t taken the time to truly listen.

Why Isn’t Everyone Talking To Their Doctors On The Phone?

Imagine being sprawled across your bed with a cold compress to relieve your throbbing headache.  You haven’t eaten for days and every muscle in your body feels like it’s been through a heavyweight bout.  You know you should see a doctor, but that requires energy that you can’t muster up.

This is the dream scenario for Ringadoc, a startup I recently ran across that lets you call a doctor to diagnose your issue for a flat fee.  Telemedicine has the potential to play a significant role healthcare delivery, filling a gap in primary care that may not be covered through general practitioners and retail clinics.  But despite the explosion of smartphones and tablets, why don’t I know anybody who has used or considered this type of service?  There are a few hurdles for the industry:

1) Accurate Diagnosis and Patient Trust: My wife recently had a skin issue and, because of her busy schedule, was only able to talk with several doctors over the phone.  They recommended some topical solutions and suggested she needed to reduce her stress.  After three weeks it was clear that wasn’t working, so we went to a retail clinic where she was diagnosed immediately, given antibiotics, and felt better in a few days.

Medical diagnosis is a very intimate process and often requires more than just descriptions or pictures to be accurate.  I think the public recognizes this, which is why many folks may feel uncomfortable with this process.  Until telemedicine provides and communicates accurate diagnoses on a regular basis, the public may be reluctant to give it a go.

2) Seamless Technology: To assist in these diagnoses, doctors may also require data such as blood pressure, glucose level, etc.  While the technology to do this over your smartphone exists, it would require a whole other set of devices for the patient to own, be accessible, and be able to use correctly.

On top of that, in order for telemedicine to provide significant value, there needs to be greater connectivity.  For example, if my wife had been accurately diagnosed over the phone, she still would have needed medication, requiring the doctor to send a prescription to the pharmacy.  I’m unclear on whether this connection or the ability to pass along data to specialists or a hosipital exists, but I suspect it’s several years out. 

3) Cost: Of course, looming above everything else is cost.  Telemedicine solutions can range anywhere from multimillion dollar, state-of-the-art labs (as I Simon Cowell plunked down for his tour bus) to Ringadoc’s $40 per call model.  However, until this is promoted or supported through insurance, likely reducing costs and giving the industry more credibility, I’m not sure we’ll see stronger adoption.

That’s not to say the industry isn’t looking at this.  Recently, my company has thought about virtual pharmacies, complete with live connections to pharmacists over video.  While this solution has been well-received, it will be years before we roll this out due to the scale and complexity.

Like the newer retail clinic model, I see a lot of potential for telemedicine to play a larger role in healthcare delivery.  However, there are still several fundamental patient issues to work out before it’s normal to talk with your doctor on your bed.

Are Health and Social Awareness Campaigns Helpful or Harmful?

Today is the Chicago Pride Parade, an annual celebration of the LGBT community where a diverse crowd lines the streets of Boystown to speak up for gay rights.  This culminates a weekend of events and is part of the larger LGBT Pride Month, which celebrates achievements by gay activists and provides awareness and education for the community.

This is just one of what seems like an endless supply of social awareness campaigns aimed at educating the public about an issue, raising money for a cause, or both.  These events can be large in scope (e.g., Breast Cancer Awarenss month and all related events organized by the Susan B. Komen Foundation), have a smaller scope, but impact the social zeitgeist (e.g., yellow Livestrong bracelets, Save the Ta-Tas merchandise), or be extremely localized (e.g., any of the dozens of campaigns found on a college campus each day).  While it’s hard to argue many of these organizations are successfully getting out their message and raising money to support efforts, are these campaigns good for their causes or more harmful?

Increased awareness certainly has many benefits, especially when taking a controversial or taboo issue and removing the stigma – think AIDS and cancer.  Awareness events are snappy and create a sense of urgency, developing a community that feels more comfortable sharing their issue and changing the cultural landscape.  But at the same time, short sound bites about a cause can distort the message.  Two examples are Prostate Cancer Awareness month, which encourages men to get their PSA screening even though there is evidence that the test is flawed and leadsto overtreatment, and Kony 2012, which got the public’s attention despite Joseph Kony being a marginalized political figure. 

Then there are the challenges that fundraising present.  Susan B. Komen is a great example of when monetary decisions compromise the integrity of the organization and lead topublic outrage.  At the same time, just because a non-profit or awareness campaign is fighting a good cause does not mean they are spending their money efficiently or that every dollar raised is going back to advancing the cause.

Am I against awareness campaigns?  No - I think they can be beneficial as long as they are part of a larger education campaign and don’t just rely on emotional pitches to rally support.  I also worry about having so many messages coming from so many different sources that they all lose their meaning and do not engage enough people.  My hope is that people enjoy events like Chicago Pride Parade or other health-related events, but continue to educate themselves about the cause long after the rainbow flags are removed from Broadway.  And, if these messages are becoming watered down or distorted, I hope organizations have the self-awareness and lack of pride to reallocate their resources elsewhere to achieve better results in another way.

What Does An All-Inclusive Resort Teach Us About The Healthcare System?

Several weeks ago, I visited an all-inclusive resort In the Caribbean.  While I should have been relaxing and disconnecting from work, my mind kept drifting back to how this model reflected the challenges of our current healthcare system:

1) Overuse of benefits: Anyone who has been to an all-inclusive resort or cruise knows that there is an endless supply of food.  I found myself grazing on snacks throughout the day and having multiple meals even if I didn't need more food.  Although those meals provided no additional benefit (and probably hurt me – did I really need that last plate of nachos?), I ate and drank because it was there and it was free.  Similarly, people with more generous insurance benefits may use more than their fair share of services, which is costly to the system and does not always mean better outcomes for the patient.

2) Subsidizing high cost consumers: Given that a lot of people were eating a lot of food, how do these resorts stay in business?  Serving low cost products is one answer, but they also benefit from the people who don’t consume as much.  These guests are far less costly, but still pay a similar, flat price, helping to subsidize the other guests.  Insurance companies do the same thing, offsetting older, sicker, more expensive patients by balancing their risk pool with younger, healthier, and cheaper consumers.

3) Misaligned incentives for healthy behavior: The resort also offered excursions like scuba diving and zip lining that sounded like a lot of fun.  These trips could have been the best part of our trip, but we chose not to participate.  Why?  It took extra effort to book the trips (we wanted to make as few decisions as possible), they weren't pushed aggressively by the resort (they were provided by other companies), and they cost extra money. 

The public makes similar calculations when deciding between healthy or less healthy behavior.  For example, cooking healthy (or cooking at all vs. going out to eat) requires planning, time that many people may not have or want to invest.  Health foods are also marketed far less aggressively than fast food and processed meals (especially to kids), meaning consumer awareness of their options may be lower.  Finally, anything “healthy” has a stigma (whether true or not) of being more expensive, which dissuades people from making these better decisions even if it’s better for them in the long run.

Interestingly, all of these issues are addressed in the Affordable Care Act (i.e., eliminates Cadillac plans, requires individual mandate to pay for higher risk individuals, allows for free preventative services).  I’m not advocating for or against healthcare reform, but I do think addressing those problems moves our healthcare system away from being a hedonist escape for a select few towards a more balanced, sustainable model.

How Can Facebook Use Its Resources To Improve Public Health?

This past month, the big news out of Silicon Valley was the Facebook IPO, when they agreed to trade more access to capital for more public responsibility and scrutiny.  While most of this responsibility is financial, it’s hard to ignore the opportunities to improve social welfare.  Given how much data they collect and how many people they influence, it’s fair to ask if they should use that information to benefit health causes.

Facebook has already taken a first step with their organ donor initiative, which gives users the ability to sign up to become a donor and share their decision online.  In the first day, state registries saw nearly 15 times more people enroll than on a typical day and over 33k new members registered in the first week.

While some people may question the effectiveness and ethics of this, I think it’s a good illustration of how massive tech companies such as Facebook and Google can use the core foundation of their products (users and data) to benefit healthcare.  Broader opportunities for Facebook may fall into a few categories:

1) Resource Portal: With a dizzying array of healthcare non-profits, for-profits, government agencies, and homegrown support groups, Facebook could act as a curator for indexing user resources.  While this idea is very Web 1.0, having a personal improvement / health portal could spark greater awareness by promoting these links rather than relying on users to find them using Facebook’s clunky search tool

2) Personal Data Management and Analysis: Given the wealth of user data, Facebook could act as an aggregator of personal health information and predict future outcomes.  Privacy concerns aside, algorithms could analyze changes in behaviors based on posts or user-generated data and provide advice if that person was looking to change health behavior.  Google tried to collect digital health records with Google Health, but it required active management by the user.  By making it passive (i.e., collecting data already entered into the system), Facebook could build a large user base that might gain traction

3) Engagement Support for Healthcare Companies: Facebook is just beginning to realize its potential as an effective outreach tool, but there are some basics that healthcare companies need to understand to be effective.  As a public service, Facebook could offer free courses on the best way to utilize their tools to more effectively engage users

Obviously there are concerns and issues with each of these ideas and a strong business case against pursuing them.  But as their influence and scope grows, and as the healthcare landscape evolves, it will become more critical to harness their product to influence health changes

What Can Employers Do To Encourage Healthy Behavior?

While traditional wellness programs are firmly embedded in corporate culture, a couple articles reminded me there are still a lot of innovative ideas for supercharging health in the workplace:

1) The Wall Street Journal spotlighted the gamefication of wellness program from companies such as UHG, Humana, and Aetna.  As I’ve discussed in the past, the ability to quantify and track progress to a goal, while wrapping in social communities, can make fitness fun. 

However, I’m still not convinced these are good investments.  First, as the article states, the research on these games is thin.  While anecdotes suggest they are successful, we can’t say with certainty if they drive better behavior, especially for people who need it most and may not be participating.

What I find more challenging is the incentive structure.  While a lot of people participate to improve their health, others are drawn in by the giveaways and prizes.  Arguably, the bigger the incentive, the more people who will participate, which is how employers will generate the most savings.  But a bigger prize also means more people may try to game the system (most of these programs are self-reported) or be less than honest about their progress.  The article mentions some programs require special equipment (e.g., a pedometer), but that may dissuade employees, especially those on the fringes, from participating. 

I’d be interested to see a business case comparing the value of the prize to the number of people participating and their average health improvements.  I would be curious to see if there is some prize level that encourages so many people to participate that their benefits, no matter how small, outweigh the costs of others trying to outwit the system.

2) Another article via PSFK highlighted a meeting table withbicycle pedals attached, allowing employees to exercise and generate electricity.  Similar to the hotel concept I previously discussed, I love this idea for a few reasons.

First, it brings fitness into the everyday work environment, but is less awkward than some solutions (e.g., standing treadmill desks), and offers the benefits to a wider range of employees.  Second, it brings a little green energy into the office and encourages environmental conservation.  Finally, from a more practical standpoint, it can cut down on meeting times, which has its own benefits for employees.  In fact, I’ve heard of one other company that has been successful by having only standing tables in meeting rooms. 

Sure, there are some practical concerns to implementing these bikes (e.g., price, worker buy-in, hygiene), but I could see employees of all shapes and sizes using this for the novelty and health benefits.

Can Technology Help Us Shop For Cheaper Healthcare?

Medical cost transparency is the holy grail for keeping our system in balance.  Any high school econ class will teach you that a market functions best with data, so it’s easy to understand why healthcare has continued to be inefficient – it keeps its customers in the dark about prices.  There are products today that force consumers to think more about costs and potentially shop around (i.e., individual health accounts like HRAs and FSAs), but without knowing how much they’re going to spend for treatments, people still can’t make the best decisions.

In light of this, I applaud the Castlight Health and their new app that gives consumers healthcare pricing and quality info on their phone.  By collecting claims data, negotiated rates, and quality metrics, the app and accompanying website show information about doctors in the area and expected costs for services.  The article highlights how the app is especially good for travelers, which help them make on-the-go decisions.

While I love the service, I struggle with the bigger question of how to change mindsets and encourage people to take price into consideration when working with a doctor.  This is especially challenging for patients who have seen the same physician for a long time.  Not only will they be reluctant to talk about prices, but they will also resist building a relationship with a new doctor who, at a lower cost, might be viewed as lower quality (even if data says different).

However, if we’re to rein in costs, patients shouldn’t blindly stick with one physician, or accept their prices, if there are others nearby that provide good quality at a lower cost.  Like any negotiation, the patient needs to be willing to walk away, but this can be a hard mindset to take when this is new territory for patients.

Maybe this will be solved as this generation, which is more comfortable with shopping around for price and understands the healthcare crisis, makes up the bulk of the patients.  I’d also be interested in seeing what Castlight is doing (e.g., member education and communications) to encourage customers to seek lower cost physicians.  Regardless, they have fired the first shot against healthcare price opacity, and I’m excited to see how this plays out.

Can A Fridge Magnet Promote Better Health Behavior?

One challenge healthcare providers face is cutting through the clutter to deliver targeted messages. I’ve talked about dedicated healthcare devices, so I was intrigued by a fridge magnet from a restaurant in Dubai. Red Tomato provides this Bluetooth-enabled device that connects wirelessly with a customer’s smartphone and allows them to easily order a pizza.

Obviously this is great branding, positioning the company as cutting edge and convenient, while building awareness through this unique product. However, I’m more interested in the technology, specifically syncing this device to provide a service. I could see a few applications in healthcare:

- A direct application of this technology would be a device that, at the push of a button, can call a doctor or emergency vehicle – think Life Alert without working through their call center

- This type of device could also collect and display information, connecting with a website or app and transmitting medical information to promote optimal behavior. For example, after entering medication information into your computer, this device could alert you when you need to take your drugs or when to get a refill. Similarly, after entering the dates when you last visited the doctor, the device could alert you when to schedule a new appointment

- Following the fridge magnet approach, this device could be a dedicated food tracking device and barcode scanner. There are lots of smartphone apps that allow you to track calories, but making it convenient by keeping the device close to where you eat and more accurate by scanning barcodes could drive more adoption and interest

There are plenty of challenges. First, this would appeal to tech savvy consumers who aren’t the people who may need this information the most. Second, the device itself would be challenging to create – it would need to be easy to use, have a long battery life, be inexpensive to produce, and address privacy concerns. Finally, there’s the issue of who pays for this – consumers, healthcare providers, or another third-party? If someone is able to solve these issues, I believe this could be a game-changing device that makes healthcare as easy as ordering a pizza.

How Can The Government Improve Smartphone Health Apps?

Every week I see a flood of new smartphone apps hitting the market that help users make better health decisions. And every week there are some great ideas I want to write about, but I’m dissuaded by two things:

1) The apps are usually micro-targeted towards a certain consumer and do very specific things

2) I’m overwhelmed by the number of apps and how many of them feel like clones of each other

This is why I’m intrigued by a new program from the UK’s National Health Service, which is recommending 500 apps and tools for doctors to prescribe to patients. As I mentioned in my last post, we need more health curators to guide us to the best solutions. While you can argue whether or not the government should be recommending services (although, at 500, it’s tough to say there’s any conflict of interest or they’re limiting choices), they have two big advantages that can improve public health:

1) Scope: Unlike other public health organizations, the government can reach all doctors and patients

2) Credibility: The government seal-of-approval gives users confidence that these apps have been vetted by health experts and are provide value

Now, I’m not advocating the government go into the app business - attempts by our government can be mixed at best (see TSA app – functional, but not innovative) and they’re served best by leaving development up to private companies.

But they can play a powerful role by leading people to the most promising solutions. By highlighting the most functional products, these apps may build a user base and encourage their designers to continue innovating. It would also be great to see the government providing small grants or awards to select companies to help fund this expansion.

Ultimately, I think the industry needs to consolidate so smart engineers and health professionals can concentrate efforts on the apps that work. One day, I hope I don’t have as many choices because a smaller number of apps provide the range of services I need and do it best. And I think government can help catalyze this process through similar recommendations.

Can Independent Health Advisors Help Consumers Make Better Decisions?

I attended a presentation this past week discussing health plan reactions to reform. One of my key takeaways was how new consumer attitudes and beliefs were driving change in the industry. A man-on-the-street video highlighted, among other topics, the diverse views around selecting health insurance and the trade-off between quality and price. While there was no consensus around what plans should specifically do, it was clear that consumers yearn for more empowerment as they make decisions about their health.

One of the new solutions described was deploying insurance-backed advisors to help patients choose the right coverage, especially in exchange markets. I think this is a good idea – having a representative walk consumers through the wide range of products can help match a person’s needs to the right product.

However, I’m not sure this model will work for all consumers, especially younger patients. The Internet has created savvy consumers, and any whiff of bias could turn these people off. I like the concept, but I think it could be taken a step further by creating health advisors independent of the industry.

I see this working like financial advisors today (or even rolled into existing financial services). These people would answer basic health questions and help improve health care literacy, whether it’s selecting the right insurance, settling a hospital bill, or understanding preventative medicine. While this could range in engagement (from an annual “checkup” to a 24/7 concierge service), the main focus would be to make healthcare understandable, especially the financial side that is rarely discussed.

The challenge is the business model. A fee-for-service model seems most logical, but could put this out of reach for many Americans. Any sort of rebates or kickback from insurers defeats the purpose and savings calculations, whether it’s vs. their previous plans or vs. expected medical costs, seem complex. Regardless of how this makes money, I think this hands-on service is the right way to customize healthcare to the individual and provide the empowerment consumers are looking for.

What Does The Weather Teach Us About Improving Health?

It was a beautiful day in Chicago and running outside this afternoon reminded me how much weather can impact health. As I observed people walking around, it struck me that this phenomenon is probably motivated by a few things:

- After being cooped up indoors all winter, people are anxious to get outside and change their routine

- Nicer weather leads to shorts and t-shirts, meaning people need to look better as they start to shed the bulky coats

- Sun provides vitamins that folks have been deprived of during the cold winter

Obviously the combination of these factors creates a perfect storm to motivate people to run or bike outside, but there may be lessons health companies can take from this. For example, gyms could have special events that change up routines, encourage people to try a new type of exercise, and even tap into that summer anticipation to reinvigorate folks. Similarly, health insurers could host exercise or social events to get people moving during the winter by encouraging them to prepare for the event by taking steps to look good around others. Finally, providing support for Seasonal Affective Disorder (e.g., having sun light therapy at gyms) could be a differentiator and contribute to improved mental health.

Do Consumers Lose Out If Healthcare Companies Don’t Speak Plain English?

A recent article in BenefitsPro discusses how the current administration may reverse course on a popular provision in the Affordable Care Act. The requirement forces healthplans to simplify plan language and give examples of coverage options by this fall. I imagine this will resemble credit card offers that have a table highlighting key components (e.g., APR) and put everything into plain English.

However, insurance companies are pushing back, saying that this would be expensive – a trade group puts the cost at $382 million over the first two years. The author contends the White House may buckle under this pressure, hoping to appear business friendly heading into the November elections.

Overall, I disagree with the insurance trade group assessment. There will definitely be an upfront cost, but they don’t talk about the potential benefits from this transparency. For example, this education may allow the customer to choose a more efficient plan that puts limits on coverage or helps them understand those limits better, both of which help healthcare dollars be spent more efficiently and lower costs.

While I think transparency benefits the system by helping consumers make better decisions, my faith was shaken by a Freakonomics podcast that discussed financial literacy education. One of the guests argued against this (there’s a great debate in the middle of the podcast), saying that a little education…

1) …can give consumers overconfidence that leads to more reckless behavior – a healthcare analogy is a patient who visits a doctor armed with online research that complicates the diagnosis and treatment options

2) …shows no evidence of positive behavior change. She says that studies show people like learning about finance, but didn’t necessarily change their habits

3) …isn’t sufficient to address the complex financial products available - healthcare insurance definitely has a similar complexity

This isn’t a perfect comparison and educating people on their plan options, not how to use the plan, are two different processes. Nevertheless, while I support greater transparency and providing greater consumer choice, the outcome of this regulation, if it survives, could be a little more uncertain.

How Can People Learn About Health Through Pictures?

At my current company, we spend a lot of time analyzing how to communicate with members. Typically, this means sending letters to patients reminding them to stay on their medications or highlighting savings if they switch treatments. Two innovators are taking a different approach to member education by literally illustrating their messages.

The first company, theVisualMD, recently introduced "The 9 Visual Rules of Wellness", a website that uses video and interactive displays to deliver wellness education. Each of the rules has a set of chapters that guide the audience through what healthy behaviors are and how to achieve them. As opposed to dull wellness sites that just tell you what to do, theVisualMD encourages better behavior by developing a narrative around what it takes to stay health and creating an interactive environment akin to walking through a museum (which isn’t all good – the website can feel academic at times). I like this conversational approach and can see user experience improvements making this more appealing in the future.

The second innovator is an MIT economist that wrote a graphic novel eschewing superheroes for healthcare reform. The book breaks down the major provisions of the Affordable Care Act into easy-to-digest pieces and eliminates some of the complexity around this policy. The author’s goal was to provide an honest assessment of the bill and help readers understand what it is and what it isn’t. I haven’t read the book, but I like the concept since learning about policy can feel overwhelming. By breaking it down into this format, people may be more willing to invest the time to understand this bill.

My struggle with these innovations is that they appeal to a narrow audience. theVisualMD requires time and commitment to scroll through the various chapters and, while the website is well constructed, it can feel too much like a textbook and turn people off. The graphic novel, while much more effective in communicating complex policy, runs the risk of oversimplifying the issue and turning people off with the format (i.e., will people take you seriously if you say you learned about the ACA through a comic book?). While both are very niche, I like the project goals – taking steps to simplify and demystify healthcare through a more visual experience. The question is how do we scale these ideas up to appeal to a wider audience?

What Challenges Do New Healthcare Delivery Startups Face?

Last week I was confronted several times by new ideas for healthcare advice and service delivery. First, I read about a service in NYC that gives patients access to healthcare professionals 24/7 and helps them navigate the New York medical system (hence the name Sherpaa). There were also a couple articles on The Health Care Blog - one described a number of online health communities, while another questioned the viability of the doctor-patient forum HealthTap. Finally, I heard a speech from Dr. Andy Sussman, President of MinuteClinic, who described the strategy and expansion plans for CVS’ onsite clinics.

I’m encouraged by these developments. The shortage of primary care physicians over the next decade is well documented and it’s great to see solutions helping fill that void. While they may not replace the existing medical establishment, they can serve as a safety valve for our growing healthcare demand.

I’m intrigued by how people will respond to these tools and if they’ll be widely adopted. Right now, I think these companies face two obstacles before these services reach their tipping point: trust and scale.

First, these new tools need to make patients feel like they’re getting quality advice and treatment, then deliver on that promise. Unlike other online forums or retailers, healthcare services require a much higher level of trust from a consumer before they’re willing to try something new. Even if a company gets that trust, one wrong move and they lose all credibility (e.g., imagine the backlash if HealthTap gave advice that kills a member). However, once that trust is established, that patient will likely be very loyal.

Second, I think these tools need much greater scale to be effective. While the internet enables folks to create niche communities, I think patients would benefit more from the resources and reach of larger, brand name enterprises. For example, I think of all the smaller social networks vs. Facebook – while the startups provide great new features, none of them can match the user experience and development opportunities that Facebook provides. The market is so fragmented right now that most solutions, no matter how great they are, will never get significant traction and may ultimately leave the people they serve behind.

Don’t get me wrong – I’m really hopeful that these solutions can address our growing medical needs. What will separate the successes and failures are their ability to confront these two challenges.

Should Patients Be Rewarded For Visiting A Hospital?

In my past life as a consultant, I was a slave to reward points. I would make every effort to fly a certain airline or stay at a particular hotel, even if it was completely illogical.

This is why my ears perked up when NPR highlighted efforts by hospitals to reward frequent customers. The article describes how these hospitals provide valued customers with perks ranging from free parking to gift shop discounts to exclusive classes on healthy living.

Their efforts seem well meaning. In an environment where hospitals are fighting to fill beds, it makes sense to build loyalty and relationships with people who they frequently see. The “rewards” themselves also sound worthwhile – educational programs and social events can be positive reinforcements for this at-risk population.

Despite these benefits, something doesn’t sit right with me. It is one thing to reward people for choosing to use a certain product or fly a particular airline, but it’s another to reward them for something they have limited control over. Patients want to avoid the hospital as much as possible, but these programs send mixed signals, i.e., we’ll teach you how to avoid hospitals, but when you need one, come to us (almost like the ‘Most Interesting Man in the World’ commercials – “I don’t drink beer, but when I do…”).

On top of that, I’m not sure how much choice a patient has in where they can be treated – the patient may be limited by either geography or insurance. Maybe this is a differentiator that can be applied to highly competitive geographies, but I see limited real-world application for this type of program.

Can Groupon Replace Health Insurance?

A recent article by BenefitsPro highlighted the growing trend of uninsured using daily deal sites for healthcare. You don’t need an article to know that this is on the rise – my inbox is regularly flooded with dental offers, skin care regiments, and other health services. In fact, the article says nearly 10% of daily deals last November were health or medical related.

There are certainly benefits to these deals. Consumers, especially those without insurance, have access to common healthcare procedures at a lower cost. As with any daily deal, businesses also benefit by using this as a platform to find and retain new customers.

Unfortunately, I see plenty of disadvantages that could hurt the customer in the long run. First, while customers clearly benefit from lower cost preventative services, many of the deals are for more expensive treatments or cosmetic procedures (e.g., laser eye surgery). These may require the customer to have screenings and a full understanding of the treatment. But with a ticking clock urging them to buy before the deal expires, some customers may make impulse decisions. Best case, they’re out several hundred dollars. Worst case, they put their health at serious risk.

Second, a doctor or center that agrees to discount services may not have a high degree of quality or experience. Clearly customers need to have the right expectations for what they’re getting, but there’s also a moral question of whether deal sites have the responsibility ensure their products meet certain standards.

Third, one benefit of insurance is that the provider can use data from doctors to track a patient’s health and proactively screen for any issues. When a consumer relies on Groupon, they are bypassing this system by running from doctor to doctor. Obviously this is tricky as is with the uninsured, but could be more so with these price sensitive customers.

That said, I think the daily deal model could work under the right circumstances. I could see something like this being valuable for the individual exchanges that will be created through the Affordable Care Act. Customers going through these exchanges will already be cost conscious, and, if the individual mandate stands, they will be forced to purchase insurance. A provider could partner with a daily deal site and promote offers targeted to its members that go above and beyond their coverage, providing more value to the customer. This type of arrangement could provide the oversight and quality assurance missing from daily deals today while not eliminating any of the benefits.

Do Studies Support Legislation To Reduce Childhood Obesity?

I recently ran across a couple interesting articles examining the relationship between junk food and childhood obesity, with implications on legislation. Somewhat surprising findings:

1) A study by the American Journal of Preventative Medicine found that fast food restaurants did not have the intended response to a ban on kid’s meal toys. The study was based in Santa Clarita, CA, the first city to pass this type of ordinance, and found that restaurants responded by eliminating the toys and promoting existing menu options rather than retooling meals to allow toys to remain on the menu. While there are a number of reasons to choose this strategy (e.g., long lead time to revamp menus, extra costs associated with toys), it demonstrates that the legislation failed to deliver more healthy meals. What will be interesting to see is the impact to sales and how much demand they toys accounted for.

2) Another recent study from Penn State took the blame for poor nutrition away from school and placed it on the home. The study showed that while access to junk food at schools rose between fifth and eighth grade, obesity rates among the students in the survey declined. This led the team to conclude that obesity was influenced less by school choices than by other factors. While this finding isn’t groundbreaking, it does bring into question investments being made to reduce junk food at schools and improve nutrition. If access at school has limited impact on obesity rates, would energy and resources be better spent on parent education and access to healthier foods at home?

You could argue these measures were successful because they eliminated a marketing gimmick targeted towards kids and reduced exposure to unhealthy foods. Some restaurants, potentially spurred by this type of legislation, are proactively taking new measures to improve kid’s meals (e.g., McDonalds will be automatically adding apples to Happy Meals starting in March). But these are great case studies on how legislation may not be an effective tool if businesses can work around the rules or the real issues are outside the scope of the law.

How Can Sex Games Lead To Safer Sex?

A recent ad campaign in Sweden managed to shatter a stigma by tapping into the male competitive spirit. To promote safe sex, an ad agency handed out 50k condoms, each with a QR code that installed an app to measure how good you are in bed. After instructing the user to put on the condom, the app measured various factors (e.g., sound, duration, rhythm), then uploaded the data to a central server. Users could then see their own performance and compare with others across the country.

You can call this crude or tacky (especially if you were an unwilling partner), but I think it’s brilliant. This ad agency was able to reach a captive audience by helping users to quantify something every guy wants to brag about, then giving them a semi-voyeuristic view into where they stack. Enabled by technology to collect and share this information, this campaign allowed the agency to attach a relevant message regarding safe sex and address a social issue.

Are there other groups of people or conditions that could benefit from a similar program? Could diabetics monitor how stable their glucose levels are then compare with other users? How about tracking Facebook or general computer usage to highlight behavior traits (e.g., user spends 30 mins per day updating statuses, 45 mins per day viewing friend profiles) and discourage people from spending so much time in front of the monitor?

How Can Fantasy Football Create Healthier Lifestyles?

A friend recently told me about a Biggest Loser-type challenge that he started with his family. They were inspired by his father, who recently had heart issues, and saw this as a way to collectively support his new health routine. Although it was spawned by an unfavorable situation, this is a great example of how group challenges can be used to change behavior:

1) Rallying Cause: Experiencing a powerful event or situation can provide the catalyst to start and maintain a healthier routine. In addition to triggering the new behavior, this story can help publicize the cause and reinforce the goal, similar to people who shave their head in solidarity with a cancer-stricken family member. Unfortunately, the majority of these triggers are negative events – are there positive motivators that can create the same sense of urgency?

2) Competition: Adding competitive elements keeps people motivated to stay on course and outperform. As much as I hate recent gamefacation trends, these social motivators can be valuable as long as the goals remain realistic and no one person gets too far ahead or behind to be a disincentive

3) Measurement: Like the Biggest Loser, my friend’s challenge is measured using weight loss. Having an easily quantifiable goal gives each of the participants a simple way to gauge their progress

The bigger question is how to scale these types of challenges up. The most successful model could be to align people with similar goals into small group challenges. A fantasy football model could work – a person can join a private or public challenge that is moderated by an individual, who puts various rules and tracking metrics in place. Tracking could be done by the individual or integrated with other existing apps (e.g., Nike+, Runkeeper) based on the challenge, and could include a reward system (e.g., Nexercise app). The best example of this model currently in development is Keas, a social health and wellness network, which is a little broader and primarily aligned with employers and employees.

Can the Healthcare Industry Improve New Year’s Resolutions?

The New Year brings an opportunity to reflect on the past 12 months and set goals for self-improvement. Most of us will dust off old resolutions given that most end in failure (almost 90% according to one study). Considering half of people will make a health resolution this year, there is a huge opportunity for healthcare companies to engage an unusually captive audience to keep them on the right path. I believe they can get involved in three ways:

1) Goal Setting: Using industry research or proprietary data, healthcare companies may be able to identify improvement areas, provide specific guidelines to set realistic targets, and clearly illustrate how achieving the goal will improve the consumer's life. For example, a health insurance company may use data to identify specific risk factors and potential behavior changes for a member (e.g., Patient X needs to lose weight based on BMI). Based on their research and Patient X’s profile, they can calculate the optimal amount of weight Patient X should lose over a year. Finally, by demonstrating the insurance premium savings and added life expectancy, Patient X may feel motivated to set these goals

2) Program Development: Users need to develop a realistic action plan and healthcare companies can help users create a timeline and provide advice. For example, after Patient X decides to lose weight, milestones can be set throughout the year (e.g., how much weight should be lost each month) and the company can provide advice on steps to take each month. While Patient X’s insurance company may not provide the services it recommends (e.g., gym memberships, health food providers), the company could partner and offer discounts with other suppliers

3) Program Tracking: Users also need an easy, unobtrusive way to track their progress. This tracking could be through a smart phone app or website, but would ideally be linked to the custom timeline and provide reminders / motivation to the user

The challenge with these solutions is that they require significant infrastructure and data, and ROI could be difficult to calculate. If this is appealing, however, a company could start with program tracking – there are some apps and websites dedicated to monitoring progress (e.g., Big Change). By partnering with one of these developers, a company could start helping customers achieve their existing goals and gradually roll out other features over time.