Healthcare reform discussions have focused mostly on covering the uninsured, but as Massachusetts has found out, a major reform package without cost controls is simply punting the larger problem.
The Bay State is facing that issue now as health leaders look for ways to control costs that threaten to cripple the reform effort. Massachusetts has discovered that extending coverage to more people is the easy part of healthcare reform—the real problems come when it's time to talk cost controls.
Federal lawmakers are exploring one idea that has been tested in the commercial setting as a way to both cut long-range healthcare costs and improve patient outcomes. Value-based insurance design (VBID) takes quite a different approach than what has become common in these cost-shifting days of high-deductible health plans. The concept of VBID is that lowering medication and service costs for clinically beneficial services for patients with certain chronic illnesses, such as diabetes and hypertension, will remove cost barriers, and improve compliance and patient outcomes.
One example is a health plan that removes copays for evidence-based diabetic drugs. VBID addresses both the objectives of cost containment and quality improvement by promoting fiscally responsible, clinically-sensitive cost sharing.
VBID has been successful in the commercial market. Early pioneers of VBID, such as Marriott and Pitney Bowes, have cut costs to diabetes medications, and achieved positive cost and quality outcomes.
UnitedHealthcare is also testing VBID in the self-insured (large employer) market with its Diabetes Health Plan. Diabetics and pre-diabetics who follow their treatment plans and evidence-based guidelines receive incentives, such as free services and medications, online monitoring, wellness coaches, and self-management programs. VBID has been successful in the commercial setting, but the concept can also have a place in a public program, such as Medicare, says one of the creators of the concept: A. Mark Fendrick, MD, co-director of the University of Michigan's Center for Value-Based Insurance Design in Ann Arbor.
"While there are major initiatives to cut, cut, cut, we have the ability to preserve the baby while throwing out the bathwater of waste and inefficiency," he says about VBID.
Some policymakers agree and are looking at the option for both the Medicare and the Department of Veterans Affairs populations. In fact, Sen. Debbie Stabenow and Congressman John Dingell held a briefing at the Capitol to discuss the concept last month. VBID advocates and policymakers think the concept could be a winner in the Medicare population because of the chronic illness epidemic. Twenty-three percent of Medicare's 26 million beneficiaries have five or more chronic conditions and account for nearly 70% of the program's spending.
Costs can create a barrier to medication compliance for beneficiaries. The Medicare Part D population takes five prescription drugs per day, on average, and nearly 20% of them are not able to fill a prescription or delay filling a prescription because of cost, according to a recent white paper by Avalere Health and the Center for Value-Based Insurance Design at the University of Michigan that analyzed whether VBID could be used within the current Medicare Part D structure.
Policymakers could immediately implement VBID in both Part D, which provides prescription drug benefits coverage of most outpatient drugs, and chronic special needs plans, which cover dual eligibles—those who are institutionalized and have severe or disabling chronic conditions.
Researchers said the two public programs and VBID have the same goal: promote better medication use for beneficiaries with chronic conditions.
They tested five options and found that Medicare could implement three of the options now:
Reduce cost sharing for specific drug or drug classes
Exempt specific drugs or drug classes from 100% cost sharing in the Medicare coverage gap
Reduce cost sharing for chronic special needs plan enrollees based on the plan's target condition
Though the research shows that Medicare could implement VBID, there are still questions as to whether it would work in the senior population. However, the recipe of spiraling costs, a sputtering economy, and the need for major healthcare reform is just the combination that should spark government officials to test VBID in Medicare.
Les Masterson is senior editor of Health Plan Insider. He can be reached at lmasterson@healthleadersmedia.com.Note: You can sign up to receiveHealth Plan Insider, a free weekly e-newsletter designed to bring breaking news and analysis of important developments at health plans and other managed care organizations to your inbox.
The name of the game for many of today's consumers is fast. Look at fast food; the quicker and easier the better! But, of course, they also want quality. When it comes to the ER, patients and consumers have those needs in common. A recent campaign from Catholic Healthcare West, a system with facilities throughout California, Arizona, and Nevada, managed to successfully marry the two concepts in an interesting and unique way.
There was a need in Catholic Healthcare West's regional market. Thirty-minute clinics were popping up and the focus was primarily on door-to-doc time. Needing a way to meet consumer needs as well as to communicate back to the public, Catholic Healthcare West did extensive research and found ways to completely redefine the way its ER was operating.
"We went from three-hour wait times to three minutes," says Paul Szablowski, vice president of marketing, communications, and public relations for Catholic Healthcare West. "What we found is that sometimes we were asking for a patient's name and insurance 10 or 15 times . . . so we streamlined that process from an operational perspective."
Once new procedures were in place and door-to-doc times had been dramatically reduced, a multi-layer campaign was launched to increase patient volumes. "We wanted to take the time to raise consumer awareness before a situation arises," says Szablowski.
The campaign that Catholic Healthcare West launched stressed to the consumer that making a fast choice is important but making a "good choice" is critical. This was done using a unique creative strategy that visually molded the ad's copy to the shape of various fast-food items—stressing the visual association and stressing the meaning of "fast."
"Anyone can guarantee fast service," says Szablowski, "but can you guarantee efficient practice? Shorter wait times are great but we wanted to stress that you should look at the depth of specialty as well." The message "Nobody chooses to have an emergency. But choosing the right Emergency Services can make all the difference. Expect More" was also used throughout the various materials as a way to tie the concept together in a meaningful way.
"The campaign is edgy, it's very different, but the proof is in the pudding," says Szablowski. ROI analysis showed that the campaign helped Catholic Healthcare West to see a 27% increase in patient volume numbers over the previous year.
Kandace McLaughlin Doyle is an editor with HealthLeaders magazine. Send her Campaign Spotlight ideas at kdoyle@healthleadersmedia.com If you are a marketer submitting a campaign on behalf of your facility or client, please ensure you have permission before doing so.
The healthcare industry might not be getting Federal bailout money or handing out executive bonuses or booking Sheryl Crow to sing at Hollywood fêtes. But Americans are angry at businesses, industries, and institutions. And if you're not careful, they might start to look at your hospital or health system with the same critical, distrustful eye.
The controversy over salaries and bonuses and business relationships couldn't come at a worse time for healthcare organizations, as the government, the press, and the public scrutinize the spending of non-profit hospitals with the help of the revised IRS form 990 schedule H. On that form, hospitals must not only report community benefit activities such as charity care, but also list the salaries and bonuses of their top leaders and highest-paid employees.
Kind of a touchy subject right now.
World-wide, trust in businesses plummeted in 2008, according to the 2009 Edelman Trust Barometer. About 62% of informed and well-educated adults aged 25 to 64 said that they trusted businesses less than they had a year ago, according to the survey, conducted by the Edelman public relations firm. No doubt the economic crisis influenced the results—the poll was conducted in December 2008.
The study also illustrates the impact bad relationships have on consumers' interactions with organizations. In one scenario, for example, respondents were asked to think about two companies—one they trust; one they do not.
Among the consumers who trusted a company:
91% will buy their products or services
76% will recommend them to family and friends
42% will share their positive experiences online
And 55% will pay more to do business with companies they trust
Guess how many customers said they'd pay a premium to do business with a company they do not trust?
Of those that distrust a company:
77% refuse to buy their products or services
72% will criticize them to family and friends
34% will share their negative experiences online
And, of course, none said they would pay more for the products and services of a company they do not trust
Sounds like a good time to polish up that reputation.
Three tips from the sources I interviewed for the story:
Robert Pascasio, CEO, Bayside Community Hospital: Identify your place in the market. "If you haven't gone out in the world and attempted to identify how the community perceives you, you need to do that and determine where to go from there. If you don't structure who you are and offer services the public wants, needs, and will pay for, then you're wasting your time and everybody else's."
Jim Banahan, president, Banahan Communications: Build relationships with physicians. "Medical centers or hospitals are really missing it by not building a stronger rapport with their physicians." But don't overlook direct-to-consumer marketing; it is possible to educate patients to self-refer or self-select.
Rhoda Weiss, healthcare consultant: Advertising won't necessarily increase profitability, awareness, and reputation. And it won't help build relationships. "It's not about the big ad; it's about the big idea . . . Healthcare organizations need to tell their stories. They need to tell their communities what they have and what they have to offer."
Your organization might deserve awards for citizenship. Trust in and loyalty to your organization might be sky-high. And your executives likely earn every penny of their compensation. Of course you would never pull so stupid a stunt as to, say, fly a private jet into Washington to ask for a handout.
But Americans are angry right now. You have to do everything you can to prevent that economy-fueled anger from trickling down onto you and your organization.
The economic crisis is presenting leaders with unforeseen challenges. Many of those leaders are not prepared to respond effectively. They have either never been trained to do so, or they have no real-life experience on which to draw to help them navigate their way through this crisis. Unfortunately, this is exactly the time when these leaders need to lead.
A former boss used to tell me that "every crisis is an opportunity." I've had a lot of opportunities since my entire career has been spent in healthcare, an industry that has been in crisis mode for the past 20 years. In that time, I've learned how to turn a crisis into an opportunity. Here are five actions that enable leaders to do the same:
1. Focus on the problem at hand. An organization can only have ONE No. 1 priority. Today's economic crisis is clearly that priority, which means we have to temporarily stop focusing on less-important things. We can't afford distractions. Look at your organization's strategic plan, objectives and timeframes and decide what the organization will stop doing. Look at your calendar and decide what you will stop doing. Time is a leader's most precious asset. During a crisis, many leaders will keep their normal schedule and just add more hours to their day. This is a short-term strategy that is not sustainable over the long haul. Once you have narrowed the priorities for you and your organization, share this information with your organization.
Don't hide from a crisis and hope it will go away. No matter the strength of your organization's balance sheet, the economic climate can quickly turn assets into liabilities. Every day you do not focus on this crisis and its impact on your organization is another day further behind you'll be in responding.
Employees and key partners are waiting for decisive action, both from the organization and from you. They will welcome and respect your decisions. Success will take your undivided attention.
2. Stick to your guns. Never compromise on values. In a crisis, you may be tempted to do things that are not consistent with your values. Your honesty, integrity, courage, and commitment to excellence are critical values that can guide you through uncertain times. One reason we are in this economic crisis is because many leaders focused on achieving quarterly earning projections or their own incentive compensation goals and they bent the rules to achieve the desired results.
Studies confirm that employees do not trust or think highly of their leaders. That doesn't mean employees and key partners still don't look for someone they can believe in.
I have witnessed the power of leadership integrity in my own career. Years ago I was a new CEO of a hospital that had to lay off 120 people. I called a town hall meeting to announce the job cuts. Keep in mind that the employees had a reputation for being very "anti-administration." During the meeting I shared the current financial situation and the impact the layoffs would have on the future performance of the hospital. At the end of my presentation there was silence, then a question or two. Finally, an employee said to me that "this was the first time someone has told us the truth so we can understand our situation." What followed was a complete surprise – applause! From that moment on my executive team enjoyed a great working relationship with the employees because they felt we could be trusted.
3. Stop digging. It's an old saying–"When you are in a deep hole, stop digging." During an economic crisis you need to learn which products or services are profitable and which are not. For the money losers, find out what's causing the problem (don't guess!) and address the issues. Make the hard decisions to correct what can be corrected quickly. The longer you delay the more cash you will burn through.
Most organizations have kept certain products or services around too long. Eliminate these first. Those that have recently turned unprofitable and whose potential for future profitability is low should also be quickly eliminated. Do it at once so the organization can grieve the loss of the employees associated with those services and move on. Incremental elimination of programs or services will confuse employees and create unsettling conditions.
4. Every crisis is an opportunity. Think growth! What products and services can be created or expanded to help grow your way out of the current crisis. I once heard someone say "you can not shrink yourself to greatness." There is only so much expense you can take out of an organization. The future of your organization's survival depends upon growth.
In the book Results Based Leadership, the authors identify three ways to grow: expand your geography, offer new products/services, or offer additional services to existing customers. To expand geography, understand where you draw your customers from and why. Using market research, decide where to expand to draw new customers for existing products and services.
This is an excellent time to innovate because customers always want timely and cost-effective new products and services. For example, develop and offer a new type of surgery that was approved by the federal government to be offered in only a handful of hospitals throughout the nation. Being the first will definitely help gain new market share as long as the hospital successfully produces high-quality outcomes.
Finally, offering additional services to existing customers can be easy to do since you already know your target audience. Too often growth is not considered during an economic crisis. Courage to take a risk and innovate can be just what your company needs to survive and thrive.
5. Communicate, communicate, communicate! Be open, brutally honest and answer any and all questions from your key constituents, especially your employees. Many leaders hold back on providing information during a crisis either to protect the organization's reputation or so as not to look bad if they cannot answer a question. Employees are not stupid. They know things are bad. What employees appreciate is honest, accurate and timely information. They also want to know how this crisis is going to affect them personally.
When sharing information with employees, remember to anticipate questions about how your decisions will affect them in terms of job security, benefits and work schedule. If a question is asked that you can not answer, don't be afraid to say you do not know. Promise to get the answer and then follow up in getting the answer. Finally, share that answer with everyone, starting with the individual who asked the original question. This simple approach will help the leader develop additional credibility with the employees.
One more important message for leaders to provide during a crisis is a vision for the future. In a recent Harvard Business Review article titled "To Lead, Create a Shared Vision," authors James Kouzes and Barry Posner point out that 72% of colleagues and 88% of senior executives want a leader who is looking forward. Key constituents want to know where the organization is going and how they fit into that plan. The authors say that the best way to connect with employees in the future is to spend time with them in the present. Get out, make rounds, ask questions about the future and most importantly, listen!
Profound lessons can be learned from leading during crises. Awareness of these five steps can help you not only survive today's economic meltdown but be well-positioned for growth when the economy recovers.
Dan Sinnott is president of Sinnott Executive Consulting. He may be reached at Dan@Sinnottexecutiveconsulting.com.
For information on how you can contribute to HealthLeaders Media online, please read our Editorial Guidelines.
It was decades before George W. Bush entered the White House—before he was born, actually—but humorist Will Rogers could have been speaking of the future 43rd president when he reputedly said that the motto of the Republican Party was "Boys, my back is turned."
I was reminded of that with the news last week that the U.S. Justice Department had intervened in a 4-year-old whistleblower suit filed in New Mexico against Franklin, TN-based Community Health Systems Inc.
What's interesting is not so much the content of the suit, but the fact that the Department of Justice has climbed aboard, something that many observers say didn't happen very much in the eight years that Bush occupied the White House.
"The Justice Department has a backlog of some 500-600 whistleblower and false claims cases in the healthcare industry that have not been taken up by the Bush administration," says Bruce Cranner, a board member of the Defense Research Institute, and a partner in the New Orleans firm of Frilot, LLC. "What does a 500 case backlog tell you about the Bush administration's attitude about pursuing these cases?"
"Now we see the Justice Department jumping in to a significant whistleblower case. That has a lot of ramifications in terms of what the new Obama administration and the new Justice Department will be looking for going forward," Cranner says.
According to the Justice Department, the suit alleges that CHS and three of its hospitals in New Mexico knowingly presented false claims for federal matching Medicaid funds, a violation of the False Claims Act.
A Justice Department media release did not detail how much money was at stake, but NashvillePost.com reports that a former employee in CHS' revenue management department—whistleblower Robert C. Baker—claims that $47.5 million was improperly collected from Medicaid in the form of disproportionate share payments.
According to DoJ, Baker's complaint alleges that beginning in the summer of 2000, CHS and its three New Mexico hospitals improperly obtained federal funds through the New Mexico Sole Community Provider Fund and Sole Community Hospital Supplemental Payments Medicaid programs. Baker alleges that CHS and its hospitals gave money to New Mexico counties which would be used by those counties and the state to claim and obtain triple that amount in federal funding that was then paid to the hospitals under the SCPF and SCHSP programs.
Included in the suit were three CHS hospitals: Eastern New Mexico Medical Center in Roswell, Mimbres Memorial Hospital in Deming, and Alta Vista Regional Hospital in Las Vegas.
CHS issued a statement denying any wrongdoing and says it "views this issue as a funding dispute between government agencies." While pledging that it has cooperated with the government, CHS also says it is "disappointed" by the government's decision to join the suit and will "vigorously defend itself."
Cranner says the CHS case may set a precedent in how Obama's DoJ pursues whistleblower cases. "If I were called by a healthcare entity who is being sued in a whistleblower case I would look very carefully at the factual and legal elements of this claim before I made a decision about how to defend," he says. "Its characteristics will tell us something about what the Justice Department will be doing and that they will be acting to collect in cases that it thinks are strong, and clearly it thinks this case is strong, or it wouldn't be there."
Let me be clear. I have no idea who is right or wrong in this suit, or whether any of the charges leveled against CHS are justified. They deserve the chance to make their case. But, whether intentionally or not, by jumping on this lawsuit less than two months after the president took office, the Obama Justice Department is sending a message to the healthcare sector that there is a new sheriff in town.
John Commins is the human resources and community and rural hospitals editor withHealthLeaders Media. He can be reached atjcommins@healthleadersmedia.com.
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In this economy, healthcare marketers are watching their budgets more closely than ever. Hospitals endure rising costs, pressure to increase access, and let's face it, they'd rather spend money on the latest CT scanner than media or creative talent. In response, marketers are finding that they can achieve great creative work and get more for their money by creating their own virtual agency.
Create your own agency
The virtual agency model differs from hiring freelancers or using a traditional ad agency in several ways. First, unlike an agency, you choose each team member. In addition, unlike freelancers, there's an ongoing, high level of collaboration. Resources may be freelancers, owners of small shops or even agency talent. Best of all, you pay a fraction of what a full-service agency would charge—and can still get great work.
Having worked at a healthcare ad agency and well aware of high agency fees, Mary Zokan turned to former colleagues for creative work when she became Director of Marketing at Rush-Copley Medical Center in Aurora, IL. With a small internal staff, she also added a freelance copywriter, designer, and media buyer for marketing campaigns and collateral projects. Later, she added two more former colleagues for TV, videos, and Web work.
Like Zokan, Marty Beerman, vice president of marketing and community relations at Children's Hospital in Omaha, NE, has an internal staff to handle the everyday marketing functions, but relies on an outside team for branding programs, advertising campaigns, and other projects.
Hungry to shift the strategic message, Beerman shopped for an ad agency, but decided that his freelance copywriter, paired with a design group he'd worked with in the past, and several other pros, could best accomplish his goals. Together, they determine strategy and then the creative team collaborates just as an agency's team does. They even hold weekly meetings.
Curb costs, not quality
One of the biggest benefits to creating your virtual agency is cost savings. No retainer fees. No markups. There is no overhead. No fancy building. No layers of account people logging hours. In fact, Tom Comes, director of marketing and public relations at Borgess Health in Kalamazoo, MI, estimates he spends about 50%–60% less than he would for an agency—and the hospital has won their share of awards. Plus, the virtual agency makes it easier for marketers to ensure brand consistency.
Like some hospital marketing directors, Comes had agency experience when he landed his current position, so he knew the process. He created his virtual agency when a marketing survey showed he needed to reestablish the hospital's brand. Frustrated by the prospect of reeducating an agency to the hospital's tone and processes he began working with an outside strategist, a media planner, two art directors, a producer for TV and radio, and four writers.
"I've worked with multiple, full-service agencies," Beerman says, "but the virtual agency model enables me to cherry-pick the best talent for a fraction of the cost." In fact, Beerman estimates he's saving more than 50% for the same quality work that an agency would deliver.
"The creative talent and strategic skills I have with my virtual agency is on par with any agency specializing in healthcare on a national level," says Zokan. "My key players have years of experience working for a national healthcare agency and I constantly rely on their professionalism, creative talent and strategic insight. Our work has consistently yielded top awards at state and national competitions."
These marketers also say the lack of layers inspires ownership of the work—among both internal and external staff. "Everyone here feels it's our work, so recognition is team-building," says Beerman.
Ultimately, the virtual agency model gives the marketing director more control over the brand, which produces better results. Plus, easy access to team members and quick turnarounds don't hurt either.
So what's the catch?
The only drawback Beerman sees is a little extra coordination. But for a person who enjoys participating in the creative process, he's not complaining. Likewise, marketers need to understand the process that goes on behind the agency's doors to know which skill sets they need. If they don't, they can recruit someone who does.
Even those who manage a large scope of activities appreciate the virtual agency model. In her position, Zokan manages marketing, advertising, public relations, community relations, and Web functions for a hospital, a medically-based fitness center, a group of multi-specialty physician practices, and a healthcare center in a neighboring community—all with her virtual agency.
"Team members need to understand and embrace their roles," says Zokan. "They know their limitations and they're the first to admit they're lacking a particular skill set. Then we find the right person. This is a loose, but fun and vastly different approach."
So when is it a good idea to use an ad agency? An agency might be helpful if you need a fresh direction or a project requires substantial hours. However, your virtual agency can be as full-service as you can build it.
Expect results
Expect the level of ownership and brand consistency to pay off in results. Since Zokan took her position six years ago, she has exceeded every marketing goal.
Beerman has similar results. In the year and a half since Beerman arrived at Children's, calls to the physician referral line jumped from 10 to 140 per month. Web visits increased 20% in the past year. Plus, Children's scores well on preference and awareness in its market—all without an increase in the media budget. Likewise, Comes reports that his virtual agency has helped increase ER volumes by 30% in less than three years.
"We all have had a tremendous stake in the results, so we feel a greater sense of responsibility—and accomplishment," says Zokan. "The virtual agency really puts me and my team on the line, but from a satisfaction and ownership standpoint, I wouldn't have it any other way."
How to Create Virtual Agency
It's easier than you think. First, identify the skill sets you need. Recruit former colleagues, your staff's contacts, and word-and-mouth recommendations. You want experienced professionals who may have previously worked for an agency or experienced freelancers. Choose people you like and respect. After all, this should be fun, right? Bring them all together, check the egos at the door, trade contact info, set your plan, and go.
Emily Thornton Calvo is a creative director/copywriter on Rush-Copley Medical Center's virtual agency team, which also includes Petrolis Design, Kinney/Kusek Marketing Communications and One57 Media.For information on how you can contribute to HealthLeaders Media online, please read our Editorial Guidelines.