Health Dialog Diary

08 October 2007

Health Dialog is the national leader in collaborative Shared Decision Making^® for health plans and employers. In this process, skilled healthcare professionals use a wide range of educational tools to help patients fully understand the treatment options, risks, benefits, and possible outcomes relating to the disease with which they are afflicted. Health Dialog's program leads to more carefully focused and more appropriate care of serious medical conditions.

Product Innovations

Chronic Condition Management Program

Crossroads Patient Guide

Shared Decision-Making Coaching

Integrated Treatment Model

Average employee health benefit costs rose 6.1% in 2006 and are expected to jump another 6.1% in 2007. Health Dialog addresses both the quality and cost of healthcare.

Total health benefit cost per active employee

historical data: William M. Mercer, Inc.

*2007 projection internal estimate

Strategic Alliances

Important Links

Accenture

American Hospital Association

Healthwise

National BlueCross BlueShield Association

Health Dialog Briefs

Latest entry 122

Health Dialog home page

Foundation for Informed Medical Decision Making

The Dartmouth Atlas of Health Care

CollaborativeCare.net

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Publisher's disclosure

Offices & Coaching Centers

Boston Headquarters
Sixty State Street, Suite 1100
Boston, MA 02109
Tel: 617-406-5200 Fax: 617-406-5201
email: info@healthdialog.com

Pittsburg
Penn Center West
Penn Center Boulevard
Building 4, Suite 326
Pittsburg, PA 15276
Tel: 412-788-9025

Scottsdale
16425 North Pima Road, Suite 300
Scottsdate, AZ 85260
Tel: 480-473-5910
 

Health Dialog Briefs

In a recent Wall Street Journal Opinion piece, Bill Gates put his blueprint, and by association Microsoft’s, on how to improve our nation’s health-care system at a time when “knowledge . . . is expand(ing) at a speed that is without precedent in human history.” He notes that despite the expanding knowledge, our inability “to deliver consistent, high-quality care” has led to “billions of dollars spent each year on redundant tests and prolonged illnesses and avoidable injuries that result from medical errors.” Pointing to an Institute of Medicine study “urg(ing) swifter adoption of information technology and greater reliance on evidence-based medicine,” Mr. Gates sees an “information-dependant,” “data-rich industry” crying out for information technology solutions that would make it possible “for your doctor to assemble a complete picture of your health and make fully informed treatment decisions.”

Acknowledging that informed patients are equally important to informed doctors, Mr. Gates writes, “What we need is to place people at the very center of the health-care system and put them in control of all of their health information.” He further states, “Putting people at the center of health care means we will have the information we need to make intelligent choices that will allow us to lead healthy lives -- and to search out providers who offer care that does as much to help us stay well as it does to help us get better.”

Health Dialog is committed to improving the flow of information to patients, including via the Internet, in order to help them become better, more informed consumers of the many choices being presented by our advancing health care industry.

Health Dialog will begin providing whole-person care management services to 113,000 commercial and Medicare members and dependents covered by Capital Health Plan of Tallahassee, Florida. Services include Health Coaches, “nurses, dieticians, and respiratory therapists, who work with individuals and their family members telephonically and online to help them manage chronic conditions, significant medical decisions, and general health and wellness concerns. Using a Shared Decision-Making® approach, Health Coaches are available 24/7 to help individuals understand the total picture of their health, as well as risks, benefits, and outcomes of various treatment options, so they can gain the skills and self-reliance necessary to work more effectively with their physicians.” Members will also have “access to award-winning educational resources in

print, audio, video, and online. The Dialog CenterSM, Health Dialog’s member-facing website, provides individuals with a variety of tools, including detailed health information through the Healthwise® Knowledgebase, decision aids to support assessment of treatment options, and a suite of online health & wellness modules that address issues such as back pain, smoking cessation, nutrition improvement, weight management, fitness and exercise, and stress management.” Physicians will have access to Health Dialog’s industry-leading SMART® Registry tool. This reporting component provides primary care physicians with actionable clinical information. Reports generated for physicians through the SMART® Registry include patient reports, practice reports, and peer-comparison reports.”

Health Dialog has announced that it will be joining forces with the Rand Corporation in order to bring to market “a new provider performance measurement system that will provide best-in-class capabilities for measuring quality and efficiency in the U.S. healthcare market.” In 2003, the RAND Corporation published in the New England Journal of Medicine a landmark “study of the quality of health care provided in the United States.” Resulting QAScoresTM were derived that essentially found “that adults in the United States receive only about half of the recommended, evidence-based care for the leading causes of illness, disability, and death.” According to the agreement, Health Dialog will be

licensing the “vast repository of quality measures and the associated scoring and attribution methodologies developed by RAND.” According to George Bennett, Health Dialog Chairman and CEO, “This alliance brings together two organizations that are leading efforts to improve the quality and efficiency of healthcare in the United States and abroad. The integration of our respective knowledge, research, and experience will enhance our best-in-class healthcare-related measurement tools and further strengthen our ability to continue to bring innovative and differentiated care management products to our clients.”

Health Dialog has announced that the three founding partners of Crimson Health Solutions and the company’s intellectual property has been assimilated into Health Dialog’s health and wellness initiative, Healthy Living Solutions (HLS). HLS uses telephone, online and print resources to “support behavior change management” in order to “lower the risk of developing costly medical conditions.”

Dr. Elizabeth Barbeau, Crimson’s CEO, Gary Bennett, PhD, who served as Chief Scientific Officer, and Cathy Hartman, MS, Crimson’s Chief Operating Officer founded Crimson Health Solutions based on academic research conducted at the Harvard School of Public Health and

Dana-Farber Cancer Institute. They will “bring a wealth of knowledge in the field of wellness research and behavior change.” George Bennett, Chairman and CEO of Health Dialog, believes that Crimson's “whole person philosophy make(s) it a perfect match for Health Dialog.”

Healthy Living Solutions “follows the same basic tenets as (Health Dialog's) total care management solution - whole person, total population care management solutions built on the underlying philosophy that informed, motivated individuals who fully participate in their own health management are critical to affordable, high-quality healthcare, as well as improved health status and productivity.”

The New Mexico Public Schools Insurance Authority (NMPSIA) has decided to continue offering Health Dialog’s “whole person care management services, including Health Coaching support, to more than 60,000 employees and dependents.” Sammy Quintana, Executive Director for NMPSIA comments, “Our employees tell us they are quite pleased with their health coaching interactions, and continue to become better educated about taking a proactive role in their

healthcare. Our continued collaboration with Health Dialog supports our mission to provide quality, cost-effective benefits to our employees.” Health Coaches use Health Dialog’s Shared Decision-Making® methodology “to help individuals understand the total picture of their health, as well as risks, benefits, and outcomes of various treatment options, so they can gain the skills and self-reliance necessary to work more effectively with their physicians.”

The Boston Business Journal has named Health Dialog one of the fastest growing private companies in Massachusetts with an overall seventh place ranking among companies with more than $100 million in revenues. The award was based on Health Dialog’s 265% sales growth rate from 2003 to 2006, and it was the second year in a row Health Dialog was spotlighted. The company’s Chairman

and CEO Mr. George Bennett commented, “Our company’s success is based on the idea that when people are empowered with tools that enable them to actively participate in their healthcare, they will make educated choices that will improve their health. This honor is a testament that what we are doing is working for both our clients and their members.”

Wellness programs are offered by insurance providers as a means of encouraging healthy behavior and lifestyles. Initially, such programs were offered to smokers and others who might benefit from noticeable changes, but programs are expanding to cover those who are already living healthy lifestyles. Part of the expansion is due to the government getting involved and formulating a number of guidelines to ensure fairness and non-discrimination. But the larger driver is economics.

As M.P. McQueen reports, “More companies are adopting wellness programs as evidence mounts that the programs can help control overall health-care costs.” Dr. Brent Pawlecki of Pitney Bowes is quoted, “This is our first year of doing this. But we have been able to show that for every dollar we have spent on health-improvement programs we save $2 to $3 in health-care savings and productivity costs.”

Wall Street Transcript recently published an in depth analysis of the Health Facilities and Services industry, including the disease management sector. In a brief excerpt from the report, Brooks O’Neil of Dougherty & Company, LLC comments on the “number of new initiatives in the marketplace that we think have the potential to drive really substantial changes in the way health care is delivered in this country.” He offers the overarching perspective that there’s a general trend toward more individual responsibility indicative of a “consumer-driven system.” He sees it as a “fundamental change and it is one that will continue to ripple through the health services over the next five or 10 years.”

Another major trend is the growing acceptance that something has to be done about the fact that “a small percentage of the people drive the lion's share of cost in health care today. Specifically, the data suggests that 5% to 10% of the people account for 70% of health spending annually. So 5% of the

people account for a little over $1.4 trillion of spending each year. It is not always the same people, but the data suggests that the majority of those people are affected with chronic as opposed to acute illnesses. These are illnesses such as heart disease, diabetes, cancer and asthma - illnesses that affect individuals both today and over the rest of their lives.” He notes that a number of companies are developing new ways to support patients with chronic conditions, including greater prevention. Mr. Brooks estimates that the commercial U.S., government U.S. (Medicare/Medicaid) and international sectors represent annual markets of $8 billion, $12-$15 billion and $20 billion, respectively. He believes that “identifying the people who are the heaviest health services utilizers and working very diligently to figure out how to deliver high quality care to them more cost effectively is necessary. I absolutely believe it is an enormous market opportunity.”

Steve Lohr of The New York Times considers Microsoft’s acquisition of Medstory as but the latest evidence of companies trying to capitalize on the “rising traffic at consumer health sites on the Web.” Medstory is developing “search software that applies artificial intelligence techniques” in an effort to pull together pertinent health information. Others in the Internet healthcare space include WebMD, RevolutionHealth.com, a start up financed by Stephen Case of AOL fame, Healthline Networks, a creator of search sites for Merck, PacifiCare and others, and Google. They are all seeking to capitalize on what is referred to as

“consumer driven healthcare.” Mr. Lohr describes consumer driven healthcare as a trend, driven by “shifts in demographics, economics, technology and policy” whereby individuals will take an increasingly larger role in their healthcare decisions. “Aging baby boomers, accustomed to personal choice and to technology, tend to want a say in their treatment decisions.” The Internet, already an important resource, will play an increasingly important role in helping patients with their healthcare decisions. Health Dialog has integrated the Internet into its service offerings.

While much of the debate surrounding healthcare focuses on insurers and doctors, Laura Landro points out in a recent Wall Street Journal article that hospitals are also finding the benefits of better educated consumers. While most acknowledge that Hospitals have given lip service to consumer satisfaction surveys, only recently have hospitals begun to really implement changes focusing on consumer satisfaction. Using a “family-centered care” model, hospitals are seeking ways to better inform patients about treatments and provide follow-up contact after patients have arrived at home. This model of better informed patients and active outreach by providers appears to be gaining

momentum. Ms. Landro writes, “Increasingly, the survey findings are leading hospitals to adopt the family-centered-care approach, which advocates building strong partnerships with patients and their families to improve care.” Some of the impetus for improvement is coming from a federal government requirement that requires hospitals for the first time to participate in a patient satisfaction survey in order to receive full reimbursement from Medicare. But there is also a simple recognition that the environment is increasingly competitive and “evidence that recommendations from friends and family influence health-care choices.”

The Health Care Blog (THCB) was started in October 2003 by Matthew Holt, an experienced healthcare industry observer who’s garnered a reputation as an insightful industry researcher and forecaster. According the web site, “The Wall Street Journal calls (THCB) “among the most widely read insider publications in the field.” WebMD calls the site “a free-wheeling discussion of the latest healthcare developments.” Recent entries that have attracted attention include pieces on the Bush and California health plans. Following is an excerpt from another entry written for ABCNews titled, “Why is Fixing American Health Care so Hard?”

Reforming Care Delivery?

Meanwhile, the health care provider industry is currently awash with new ideas about improving the quality and cost-effectiveness of the care it delivers. It is well-known within academic health care

circles that somewhere between one-third and two-thirds of all care delivered is inefficient and unnecessary.

A huge body of research conducted at Dartmouth under John Wennberg shows conclusively that patients with similar conditions receive significantly different treatment depending on which area of the country they live in and which doctors they see. Even worse, it appears that the more that gets done to patients, the worse are their outcomes. But, of course, no physician or hospital believes that it is the one providing the inefficient or unnecessary care — it's those other guys who are at fault.

Meanwhile, the medical industrial complex continues to invent more and more high-tech procedures, devices and pharmaceuticals — all of which come at a higher and higher cost. And why not, as the people who write the checks keep paying.

As healthcare costs have risen to “16.5% of the nation’s economy,” employers are “urgent . . . to squeeze out the waste connected with middleman – without squeezing the valuable services they can provide.” And, indeed, they can provide valuable services, including combined purchasing power, “harvest(ing) data to uncover” valuable new procedures and a general expertise beyond employers’ capabilities. Structural issues also encourage the use of middlemen such as their use by Medicare and the healthcare industry’s fragmented nature leads to a need to deal with multiple providers. But some companies are fighting to control costs with some success.

Contracting directly with hospitals and doctors is an option for those companies who are sufficiently

concentrated in and important enough to the local community. Perdue Farms is one example; they’ve been able to corral costs by dealing direct, including the offer “to pay bills within eight days, much quicker than the 60- to 70-day norm in healthcare.” It also uses “in-house clinics” to help identify employees with chronic diseases such as Diabetes and high blood pressure. As a result, their healthcare costs are “rising more slowly than other employers and run(s) less than half of the national average.” Others are demanding greater transparency from their middleman; Caterpillar was able to reduce its spending on pharmaceuticals by over 5% by asking their pharmacy benefits manager to provide transparent drug costs.

Mercer Health & Benefits recently reported that a three-year trend that saw the growth rate in employer health care costs decline came to an end in 2006 when the “total health benefit cost rose by 6.1% … to an average of $7,523 per employee.” Employers expect health care costs to jump an additional 6.1% in 2007. The Annual Mercer survey, “With nearly 3,000 employer participants,” is the “largest and most authoritative annual survey(s) on” the cost of healthcare. Among the highlights, Mercer points out that small employers were hardest hit by a 7.0% rise, and enrollment in “consumer-directed plans triple(d).” Mercer also spotlights a trend toward “employers … breaking from traditional cost-shifting (to) focus on tactics to

improve employee health and make them better health care consumers.” In 2006, employers increasingly embraced the use of “health risk assessments, now offered by 22% of all employers and 53% of large employers.” Fully 79% of employers who’ve attempted to measure their return on investment in care management are “satisfied or very satisfied.” “Asked to rate the importance of six cost management strategies to their organization over the next five years, care management and consumerism were each rated important or very important by 43% of all employers (and about two-thirds of those with 500 or more employees).”

Health Dialog has agreed to provide care management services to Integrated Healthcare, a provider of a “fully integrated, point & click-based consumer-driven health platform for small to mid-sized companies.” Health Dialog’s Health Coaches, decision support videos, Healthwise Knowledgebase, member web site, and audio programs “will be integrated with other information tools and financial

incentives such as health savings accounts, health risk assessments, smoking cessation programs, and weight management.” Daniel Boisvert, President of Integrated Healthcare, comments that by combining his firm’s “innovative consumer-driven healthcare platform” with Health Dialog’s “state-of-the-art care management services, we’re setting the standard for produce offerings in our industry.”

November 28, 2006 release:

Blue Cross Blue Shield of Florida (BCBSF ) has expanded its affiliation with Health Dialog by agreeing to make Health Dialog’s whole person care management services available to all of its “two million commercially insured members.” The agreement will increase the number of participants by 400,000. According to Bill Kerr, MD, Vice President and Chief Medical Officer of BCBSF, the decision to renew was based on “clear” evidence that Health Dialog’s Health Coaches, steeped in the firm’s Shared Decision Making approach, are “effectively support(ing) our members” with a “multi-cultural outreach strategy (that) effectively engage(s) individuals within the context of their own culture.” George Bennett, Chairman and CEO of Health Dialog, is “excited” about building on the last four years that have seen Health Dialog and BCBSF work together to improve healthcare quality while reducing costs.

November 29, 2006 press release:

Health Dialog has expanded its role in demonstration projects sponsored by the Centers

for Medicare and Medicaid Services via its agreement to support Massachusetts General Hospital (MGH) in a project targeting high cost Medicare beneficiaries. “The three-year demonstration is intended to test the ability of direct-care provider models to coordinate care for high-cost/high-risk beneficiaries by providing them with clinical support beyond traditional resources.” In addition to training MGH’s case managers in Health Dialog’s whole person collaborative care approach, Health Dialog will also be assisting with data analysis and reporting. According to Dr. Timothy Ferris of MGH, the focus of this program is to improve the care and control the costs of addressing a broad spectrum of healthcare needs, “especially critical when dealing with Medicare beneficiaries facing multiple, complex medical issues. We hope to make great progress with these patients through regular communication with nurse case managers to ensure that their many needs are being met. The ability to collect, organize, analyze, and report the information will be essential to determine the impact of this effort.”

In a review of a “clinical study at the University of Pittsburgh School of Nursing, funded by the National Institutes of Health,” Wall Street Journal reporter Andrew Lavallee speaks to the potential advantages of better informed patients; in this case, by patients availing themselves of private message boards via the Internet to stay in touch with doctors and nurses. The study is focusing on patients with ovarian cancer due to its lower survival rate than more prevalent cancers such as breast or cervical cancer, and it has a high level of recurrence and multiple symptoms. As a result, ovarian-cancer

patients stand to benefit from having 24/7 access to qualified nurses who are ready to go beyond the “typical 15-minute clinic appointment” where doctors are more focused on the diagnosis and treatment of the actual cancer. Issues of fatigue, mouth soreness, hair loss and general issues relating to quality of life can be more fully pursued via the online communications. Heidi Donovan, an assistant professor at the school and head of the study also suggests that there might be cost savings should fewer and more productive “calls and appointments with doctors” result.

For The Wall Street Journal’s Health Journal section, Tara Parker-Pope reviews a diagnostic, healthcare web site created by the Harvard Center for Cancer Prevention; www.yourdiseaserisk.com. She writes that in addition to providing the generalized disease information of many web sites, the Harvard site, “has found a way to provide customized information to help patients better understand their personal health and risk for disease.” Furthermore, it generates “a tailored action plan on ways to lower risk for health problems.” The American Heart Association and the National Cancer Institute offer risk calculators, but they fall short of the scope of the Harvard site

that extends to “healthful behaviors like exercise, fruit and vegetable intake, and regular wine consumption.” Ms. Parker-Pope notes that, “The Harvard Web site allows users to calculate their risk for developing 12 different cancers, as well as heart disease, stroke, diabetes and osteoporosis.” She concludes with the “best thing” about the site, it provides “a customized action plan showing how you can alter your risk through lifestyle changes, such as increasing vegetable consumption, exercising more, taking calcium supplements or a multivitamin, stopping smoking or changing alcohol habits.”

Erik Eckholm writes in the New York Times on the emerging trend in hospitals toward preventive care. Hospital administrators, seeking ways to slash the costs of providing treatment to the uninsured, are beginning to embrace the quality improvement and cost savings that accompany preventive care, particularly when there is active outreach to help patients understand and implement their course of treatment. The Seton Family of Hospitals, for example, was able to reduce one patient’s medical bill by more than 45% or $86,580 over an 18-month period by providing preventive care,

including an insulin pump and “access to an endocrinologist and home counseling …” In a Seton program to “educate 631 asthma patients, (they) saved the plan $475,000 in one year.” The Denver public hospital system has found “that for every dollar they spend on prenatal care for uninsured women, they save more than $7 in newborn and child care (costs).” Health Dialog provides a wide range of tools, including experienced Health Coaches, that facilitate collaboration between patients and doctors that leads to improved outcomes and cost savings.

The New Mexico Public Schools Insurance Authority (NMPSIA) has chosen to make Health Dialog’s “whole person care management services, including Health Coaching support across a broad spectrum of healthcare needs,” available to its more than 60,000 members and dependents. According to Sammy J. Quintana, Executive Director of NMPSIA, “Health Dialog is providing us with a truly

impressive program. Employees and dependents covered by the program can benefit from a broad array of care management resources, designed to motivate and educate them to take a proactive role in their healthcare. Our collaboration with Health Dialog supports our mission to provide quality employee benefits in the most cost-effective manner.”

On August 15, Health Dialog celebrated the one-year anniversary of its participation in a Medicare pilot program being offered to more than 20,000 Medicare beneficiaries living in western Pennsylvania. According to Mark McClellan, Administrator of the Centers for Medicare and Medicaid Services, “This program is designed to help the chronically ill stay on a healthy path to managing their diseases effectively. By providing them with regular one-on-one interactions with nurses, beneficiaries can prevent many ill effects that may result from not managing their health. This, in turn, saves on healthcare costs by keeping the chronically ill healthier and out of the hospitals.” The program, expected to go for three years, is already meeting with encouraging results. According to

George Bennett, Chairman and CEO of Health Dialog, “We are more than pleased with what we have seen in the first year and are confident this trend will prove even stronger as we continue our focus of strengthening patient-physician communication and improving beneficiaries’ understanding of chronic conditions and treatment regimens.” And according to one beneficiary’s spouse, "Since the start of the program my wife's Health Coach has helped her understand and comply with her physician's plan better. Every little thing you do matters. Her Health Coach helps her know what she has to accomplish and if you have a goal to reach, you can reach it! It is excellent that Medicare offers this program."

Health Dialog will begin offering its Health Coaching and support services to nearly 500,000 members covered by the State Health Plan of North Carolina. Health Dialog’s whole-person, care-management services, according to Nancy Henley, MD, Medical Director for the State Health Plan, “gives our members the support they need to understand all of their conditions, including how they may interrelate, so that they can become more

skilled and confident in managing their healthcare.” Whole-person services include access to trained Health Coaches – nurses, dieticians, and respiratory therapists – as well as online, print, audio/video, and DVD educational resources. George Bennett, Health Dialog Chairman and CEO, observes, “With the amount of information available today about conditions and treatment options, healthcare consumers can easily become overwhelmed.”

Health Dialog has agreed to begin offering “a range of customized innovative risk-based care management products to health plans, self-insured employers, Medicare and Medicaid plans, and Section 646 plan providers” of American Re HealthCare, “a division of American Re-Insurance Company, a member of the Munich Re Group

(and) one of the world’s largest reinsurance organizations.” As part of the alliance, American Re will insure/reinsure Health Dialog’s clients that promised levels of medical cost and quality outcomes will be achieved, thus providing “additional assurance to Health Dialog’s clients that targeted performance savings will be realized.”

In a recent report on changing healthcare standards, Forrester Research has highlighted new metrics being used to evaluate patient care; particularly as relates to the evolution from Disease Management (DM) to Integrated Health Management. The report contrasts a “one-person, one-illness paradigm” of DM with a broader program that “integrate(s) data from disparate sources, coordinate(s) communications across health, wellness, and lifestyle programs, and deliver(s) interventions that address members' whole health needs.” The report highlights the contributions of Health Dialog, commenting that the company has set a “high bar … with its innovative practices.” Health Dialog’s peers have identified the company as one that is well along the “learning curve.” Specific capabilities/techniques that help Health Dialog differentiate itself include a whole-patient approach that engages patients via coaches that “deliver interventions on members’ most pressing health and lifestyle issues, regardless of what

disease bucket they fall into. Another is the ability of members to track their care treatment programs, in what Forrester refers to as “visibility,” by being able to exchange data files with plans and/or other partners and by facilitating client access via a health coach dashboard. Health Dialog plans on rolling out new visibility capabilities in the fall of 2006. Coordinating with other, third-party providers is a third area of differentiation. “Health Dialog uploads partner files directly into its system and uses this data to help determine member inclusion, exclusion, and priority outreach.” Forrester also highlights Health Dialog’s ability to use real-time data in order to improve “timeliness” and its relationship with HealthMedia to better target high- and low-risk members for better “cost effectiveness.” Generally speaking, prospective healthcare partners need to be open to sharing data and be capable of leveraging the data to better effect healthcare outcomes.

In one of several articles that BusinessWeek online recently published on the state of the nation’s healthcare system, John Carey summarizes the findings of The Dartmouth Medical School’s and Dr. Elliot S. Fisher’s research into the “paradoxical conclusion” that more medical care does not correlate with better patient outcomes. In fact, Dr. Fisher states “it looks like there is a substantially increased risk of death if cared for in high-cost systems.” According to Mr. Carey, George Bennett, CEO of Health Dialog, a company that helps individuals better understand their medical issues and become more engaged in managing their healthcare with their physicians, suggests a supply-driven problem by commenting, “A large portion of those extra costs are due just to proximity to health

care.” Dr. Jack Paradise, a professor of pediatrics and otolaryngology at the Pittsburgh School of Medicine and Children's Hospital of Pittsburgh, suggests, in addition, that one cannot rule out the inherent conflict of interest created by “enormous financial incentives to provide more and more care.”

According to Mr. Carey:

“Researchers at the Center for the Evaluative Clinical Sciences at Dartmouth Medical School have looked in detail at what happens in the last six months of life at 77 top hospitals in the U.S. The results were startling: The average number of days spent in the hospital during the last six months of life was 10.1 days at Stanford University hospital compared to 27.1 days at New York University Medical Center. The average number of doctors visits ranged from 17.6 to 76.2, with NYU at the top.”

Health Dialog’s rapid growth, sales growing 179% for the two years 2003 to 2005, placed the company 18^th on the Boston Business Journal’s annual list of the fastest-growing, private Massachusetts companies. Health Dialog’s 2005 revenue of $136 million also earned it a position on the Journal’s list of the states 100 largest private companies. “Founded in 1997, Health Dialog provides customers, such as health plans and self-

insured employers, with innovative care management solutions, including telephonic Health Coaching and population analytics. Health Dialog’s whole person services -- meaning they address the total picture of a member’s health rather than addressing one discrete issue at a time -- are designed to improve clinical outcomes, contain rising healthcare costs, and achieve high member satisfaction.”

Health Dialog will begin providing care management services, including access to its Health Coaches, to members of Fallon Community Health Plan. In addition to having telephone access to Health Dialog’s Coaches – nurses, dieticians, and respiratory therapists steeped in the firm’s Shared Decision-Making approach – Fallon members will be able to interact online through Health Dialog’s

secure website, Dialog Center. Members will also “have access to award-winning educational resources online, in print, and through audio and videotape.” All these resources are designed to encourage members to become “more engaged in their care,” resulting in “improved satisfaction, better outcomes, and cost-savings.”

According to the Centers for Medicare and Medicaid Services, “patients with five or more chronic conditions account for 23% of its beneficiaries but 68% of its spending, seeing an average of 13 different doctors and filling 50 prescriptions a year.” Ms. Laura Landro points out that the elderly are most at risk, but she also reminds us that the baby boom generation is increasingly at risk. She reports studies suggest that “by the year 2020, 25% of the American population will be living with multiple chronic conditions, and costs for managing them will reach $1.07 trillion.” The opportunity for mistakes, overlaps, and conflicting procedures and medications is substantial.

While some health plans and large employers are inducing greater doctor oversight via financial

incentives, the Centers for Medicare and Medicaid Services has a pilot program that utilizes care coordinators such as Health Dialog’s Health Coaches. Health Dialog, along with seven others, will be participating in the pilot program that will coordinate care for 100,000 beneficiaries. The programs will be targeting what Ms. Landro relates as the root of the problem, “a reimbursement system that pays doctors to treat illness and perform procedures, but provides no incentives for better preventive care or keeping patients out of the hospital.” According to Herbert Kuhn, the director of the Center for Medicare Management, the Medicare program will seek to cut costs by $30 billion by “reorient(ing) the way Medicare looks at care, and focus on prevention and the coordination of care.”

Health Dialog has expanded its coverage of Medicaid patients by contracting to provide access to the company’s Health Coaching services to Network Health’s MassHealth recipients. “Health Dialog’s whole person Health Coaching offering will inform and support Network Health members telephonically and online so they can understand and manage the total picture of their health and engage in more productive dialogs with their physicians.” Health Dialog’s Chairman and CEO George Bennett comments, “Health Dialog has served this population for some time and this new initiative with Network Health speaks to the value

we are able to deliver to this population in particular.” Health Dialog’s ability to predicatively model a patient universe in order to identify those who’ll most benefit from active outreach and guidance through the healthcare system was an important element in closing the deal. According to Pano M. Yeracaris, MD, MPH, Network Health’s Chief Medical Officer, “When Network Health members are more aware of their health care conditions, and more informed about their health care options, they are more apt to understand the issues they are dealing with and make decisions that are right for them.”

Health Dialog announced that it has partnered with HealthMedia, a developer of online services designed to help enhance the effect of counselors in managing patients’ lifestyles. Via the partnership, “Health Dialog’s whole-person care-management offering, which includes telephonic Health Coaching across the spectrum of healthcare needs, will be enhanced with HealthMedia’s online health-management modules, equipping individuals with a greater depth of information and support throughout the healthcare process.” Health Dialog’s Chairman and CEO, George Bennett, comments, “Our

whole-person, whole-family Health Coaching model of engaging, educating and motivating individuals to “get smart” about their health is complemented by HealthMedia’s behavior-focused online health management programs.” Ted Dacko, President and CEO of HealthMedia, believes that the partnership “provides an opportunity to partner our solid suite of online behavior change programs with their proven Health Coaching success. The combined result is a more seamless member experience and improved client usability.”

Health Dialog has recapitalized its financial structure with the infusion of $170 million from a number of existing investors, “including the British United Provident Association (BUPA), HarbourVest Partners, Arcadia Partners, and Spencer Trask investors,” and “funding from new investors, including venture capital firm Oak Investment Partners and American Re, a member of the MunichRe Group and one of the leading providers of reinsurance in the United States.” This new financing, allowing some early investors a return on their investment, is recognition of Health Dialog’s

rapid growth and provides the financial underpinnings for its “next phase of growth and expansion,” according to George Bennett, Health Dialog Chairman and CEO. Andrew Vallance-Owen, Group Medical Director, BUPA, remarks, “By addressing the whole person, Health Dialog is able to uncover multiple opportunities for positive impact. We fully support such a patient-centered approach and as an international healthcare organization, we envision further successes using this approach both in the U.S. and abroad.”

The National Committee for Quality Assurance (NCQA) – an independent accreditation organization that has come to be recognized as a trusted source about healthcare quality – has afforded Health Dialog with “full patient and practitioner-oriented accreditation.” “Health Dialog’s high scores in this voluntary review process have earned the company three-year, renewed accreditation of its asthma, coronary artery disease, chronic obstructive pulmonary disease, congestive heart failure, and diabetes programs, which were initially accredited by

NCQA in 2002.” “The reaccreditation requires effective performance in six major areas, including program content, patient services, practitioner services, clinical systems, measurement of quality improvement and program operations.” Health Dialog CEO George Bennett comments that the “accreditation validates our efforts to deliver industry-leading results for individuals with chronic illnesses such as asthma, diabetes and heart disease.”

Health Dialog will begin offering its Collaborative Care program to eligible participants in Health First Health Plans' Commercial, Medicare, and Self-Insured Employer populations. Collaborative Care is a whole-person, care-management program that “includes Health Coaching support for chronic conditions, significant medical decisions, and general health and wellness needs. Health Dialog Health Coaches are specially trained healthcare professionals, such as nurses and dieticians, who educate and work with individuals to help them become more active and effective participants in the management of their health.”

using a Shared Decision-Making approach. Health Dialog’s Chairman and CEO George Bennett commented, “By implementing this program, Health First Health Plans has made a commitment to helping members sift through all of the available information so they can make the healthcare decisions that are most appropriate for them.” Health First Health Plans’ Vice President and Medical Director Joseph Collins, MD, adds, “Through this offering we will be able to provide individuals with access to a service that has been shown to have a real impact on quality of care, satisfaction, and costs.”

Health Dialog announced today that it will begin delivering its Collaborative Care health services to 36,000 members of the FELRA & UFCW Health and Welfare Fund, “a multiemployer fund that provides health and welfare benefits to grocery store employees primarily in the Baltimore and Washington, DC metropolitan areas, but also in regions of Virginia, Pennsylvania, North Carolina, and West Virginia.” An integral component of Collaborative Care is the use of Health Coaches,

specially trained professionals that follow Health Dialog’s Shared Decision Making framework to “encourage individuals to learn about their conditions, consider their treatment options in the context of their values and preferences, and engage in more constructive dialogs with their physicians.” Mr. George Bennett, Health Dialog Chairman and CEO, comments, “To be selected by such a multi-employer fund demonstrates that our model can deliver value to a broad variety of organizations.”

Health Dialog has announced that it will begin providing whole-person care-management services to 212,000 members of the Capital District Physician’s Health Plan. In addition to accessing Health Dialog’s Health Coaches to support a range of chronic conditions, “including coronary artery disease, congestive heart failure, chronic obstructive pulmonary disease, and diabetes,” participants will be able to “obtain information and support across

the spectrum of healthcare needs, including support for significant medical decisions and general health and wellness concerns.” Health Dialog’s Shared Decision-Making framework of encouraging participants to become “more active and effective participants in the management of their healthcare” was “developed in collaboration with the Foundation for Informed Medical Decision-Making.”

Health Dialog announced that its 327.6% three-year growth rate of sales led to its being named to Inc. Magazines’ list of 500 fastest growing private companies for the third year in a row. Mr. George Bennett, Health Dialog Chairman and CEO, comments, “Health Dialog’s placement on the Inc. 500 for three consecutive years is largely a result of our ability to reduce healthcare costs and improve healthcare quality for health plans and self-insured employers.” The full list can be found in Inc.'s

November issue. According to the release, “This year, Inc.com is offering readers an expanded series of online features to supplement the print edition of the Inc. 500. Launching October 19, the website will feature:

• Interactive maps allowing for quick insight into regional and industry trends

• A complete, sortable list of this year’s winners

• Slide shows of Inc. 500 CEOs past and present"

Sir William Castell is President and Chief Executive Officer of GE Healthcare and Vice Chairman of the Board. According to GE, “Prior to its acquisition by GE in April 2004, Sir William was Chief Executive of Amersham plc. During his tenure with Amersham, he successfully oversaw a major expansion of the business through organic growth and acquisitions, culminating in 1997 with the mergers of Amersham International with Pharmacia Biotech and Nycomed asa. The resulting business, Amersham plc, was a world leader in in vivo medical diagnostics and life sciences research technologies.”

William Dunk Partners writes, “GE, by and large, grows its own top managers internally, and this is another departure on the part of Jeffrey Immelt, who is now chairman and who is putting heavy emphasis on innovation. … Already Castell has charged his executives to think bigger and longer, going beyond GE’s 3-to-5 year planning timeframe, and looking out 10 to 15 years. … This will amount to moving GE more fully into the biotech revolution

that is now underway.

We turn now to a July 12 Manager's Journal article in The Wall Street Journal written by Sir William Castell wherein he provides an eminently sensible recommendation on the long-term outlook for the nation’s healthcare system. There is little question that great strides have been made in pharmaceuticals, therapies, and medical devices and instrumentation that “have saved, improved and extended the lives of hundreds of millions of people.” But, "Today, our model is based on allowing ourselves, through lifestyle, environment, and latent genetic predisposition or simple ignorance, to develop serious disease.” He terms it a “Late Disease” model. To move forward in the 21st century, he postulates that “The key is to adopt a holistic view of the individual’s health and to act early, before symptomatic disease is allowed to gain the upper hand,” a process he calls “Early Health.” He argues that biology, bytes, and broadband will facilitate Early Health, a model that “may actually be less expensive.”

Though most everyone knows that healthcare costs continue to escalate, consuming ever increasing portions of our incomes, most obvious solutions seem “to involve painful tradeoffs.” But as Mr. Adler points out, that needn’t be the case. He shows that, “Increasing the efficiency of the health-care system could reduce costs while at the same time maintaining or even improving quality.” This “free lunch” is supported by data dating back to the 1970s when John Wennberg, Jonathan Skinner, Elliott Fisher and others at Dartmouth Medical School began documenting the variations in medical care in different parts of the country, even among “the best U.S. hospitals.” They also noted a huge disparity in per-capita spending. As recently as 2001, “Costs for a Medicare patient in Miami … are more than twice as high than those for a similar patient in Minneapolis.” And, most discouragingly, those in Miami suffered statistically worse outcomes. The primary cause: supply. If an area has a resource – specialists, hospital beds, etc. – they

tend to use them. Patients also suffered a lack of collaboration with doctors on procedures, such as lower back pain surgery, where it is important for patients to be involved in the decision making process.

Noting “huge impediments to change,” Mr. Adler asks, “Is it actually feasible to get rid of these inefficiencies?” Many are struggling to define quality and provide incentives, but measuring quality is quite difficult. Mark McClellan, administrator of the Centers for Medicare and Medicaid Services which controls 40% of total health-care spending in the U.S., “believes that we can identify and get rid of some of the inefficiencies in the U.S. health system.” In addition to developing evidence to support standards of care, Mr. McClellan is “giving Medicare a more preventive focus.” He’s high expectations, in part due to the belief “that 30% of Medicare spending is wasted.” But beyond saving money, it can be argued that, “We will also save lives.”

If you’ve clogged arteries, stents are called for; and if you’ve serious blockage, bypass surgery is the ticket, right? Well, according to a July 18 BusinessWeek article perhaps it may not be so. Though 400,000 bypass surgeries and some one million angioplasties are performed annually, there is actually quite a bit of disagreement among professionals as to the efficacy of invasive procedures. Experts can be found on both sides of the debate, but evidence suggests that “except in a minority of patients with sever disease, bypass operations don’t prolong life or prevent future heart attacks.”

Those questioning the usefulness of invasive procedures run up against cultural norms that suggest most any aliment should be treated aggressively; and the press, ever looking for a story, is sometimes, according to Dr. Nortin M. Hadler, professor of medicine at the University of North Carolina at Chapel Hill, “too quick to talk about the latest widget and gizmo without asking what it is and does it work.”

Dr. Elliot S. Fisher, professor of medicine at Dartmouth Medical School, has demonstrated that, by examining variations in regional expenditures on healthcare, more is not always better. Dr. Fisher concludes, “My data suggest that we are wasting 30% of healthcare spending on stuff with no benefit and perhaps causing harm.” International studies have corroborated Dr. Fisher’s findings. Those paying the nation’s healthcare bill are taking notice.

The latest debate centers around the difference between the effects of plaque accumulation on narrowing passages versus unstable plaque that breaks off and causes clots. Fundamentally, how one perceives the greatest risk can determine the course of treatment. Invasive surgeries are shown to reduce angina pain and shortness of breath, but a recent study using a control group who had a sham operation showed as much pain reduction and improved heart function as those undergoing invasive procedures. There are also questions being raised about drug-coated stents. “What worries some doctors is that people getting the new stents might have higher risk of clots.” Substantial studies are on