Friday, March 21, 2008

Healthways Tells Us About the State of the Disease Management Industry

Ben Leedle, Healthways’ CEO, recently completed that quarterly ritual known as the Earnings Call. The Disease Management Care Blog looked past the nascent optimism and went for the story behind the transcript – it makes for interesting reading because it tells us a lot about the disease management industry in general. I’ve culled telling (if sometimes awkwardly worded) parts of the transcript below and paired them with my industry insights. See if you agree:

The DM market is more than just outsourcing vs. not outsourcing by individual insurers - insurers are seeking to do both:

‘we believe the best in class solutions for health plans will always be a combination of in-source and out-sourced capabilities that are well-knit together.’

The U.S. business environment for DM is good:

‘continuing success in g rowing [sic] our domestic business can be found in the more than 200 contracts signed year-to-date.’

One reason it’s good is because there is demand for wellness intertwined DM:

‘we are seeing is a very strong shift and a rapid move for disease management and wellness programs to be integrated.’

Another reason why it’s good is because health plans want to use DM to avoid becoming commoditized and just paying claims:

‘pressure on the health plans to show their relevancy to do just that. So I think it is going to press them, as we’ve said for a long, long time, that at the end of the day it will be about outcome and that the market will pursue at a higher rate of expectation that you can deliver and improve those outcomes.’

And international markets too:

‘Our second central growth initiative is to expand our addressable market beyond our domestic business. One way we are doing this is through our international initiative…with DAK, the second largest statutory insurer in Germany….Brazil became our latest new addressable market with the signing of a ten year disease management services agreement with Fleury FA'

As far as we’re concerned, the debate about the science is over:

‘Twenty-one significant publications, nearly one-third of all the published peer reviewed outcome studies in our industry over the past ten years have evaluated our solutions and proven the value of the work that we do with our customers. Sixteen of these studies evaluated our disease management outcomes. Five evaluated results of health improvement solutions.’

Turning terabytes of data to information and information to insight are an emerging and important part of the business model:

'Gallup will make at least 365,000+ annual surveys for the next 25 years. Coupled with the deep clinical, behavior change and claims data Healthways will provide, the Gallup Healthways Well-being Index will…measure the health and well being of population(s) to guide strategies for improvement and to evaluate the effectiveness of selected solutions….We leverage one of the largest and diverse databases for health improvement on the planet. We maintain more than 200 terabytes of consumer data across claims, clinical, utilization and intervention support categories.'

What was not said:

Chronic care model, medical home.

We’re from the government and we’re here to help you with timely access to data, following the intent of Congress and complete transparency, not:

'What we don’t know any more than you do is where that data came from or have the opportunity for CMS to share with us how they came to those conclusions…we went public with a statement about request for that clarification….I think the one thing to keep in mind is the difference between any kind of financial reconciliation related to the Cooperative Agreement and the construct and concept and work that will be done to evaluate the performance of these pilots consistent with the way that the Statute was written. I think there is still confusion in the marketplace around the difference in those two things and it is going to be really important that you keep that in mind….I can’t draw any conclusion around it until I understand directly from CMS how they arrived at those numbers and for what time periods they arrived for it and what was their work done in being able to calculate relative trend lines and the rate of change that has to occur with remaining months.'

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