The Future of the Healthcare Sector: Richard Migliori, Keynote Speaker

Uploaded by stanfordbusiness on 31.05.2011

We share with you the perspective, United Health Group on
innovation in healthcare and it's probably shared by many
peers, but I would contend that it's also shared across our
industry in including
[inaudible]. Innovation in healthcare space, you know, is
our life blood, particularly United Health Group. It's our
basis for maintaining an adaptive capability so that we can
weather the storm and also anticipate future trends and then
be proactive and help shape trends. For us, the innovation
has to be-have three components. 1) it's got to be
strategic. What I mean by that, it's got to be able to
improve clinical or economic outcomes, improve access or
improve patient experience. 2) it's got to compliant, and I'
m not just talking about regulatory compliance or compliance
with information. It also has to be compliant with evidence
based medicine; after all, we're in the healthcare business.
Then the third component, it has to be scalable. We serve 70
million people; there are 313 million Americans. In order
for these types of programs to have merit, they can't be
nurses on phones. It's got to be something that can spread
and to create. The final aspect of things, if we're going to
be true to our soul, is that we have to leverage our core
competencies of which we have three. One is the ability to
organize and to manage within a healthcare delivery system
of providers; we work with 85% of America's healthcare
delivery providers, hospitals, physicians, pharmacies, etc.
The second, it can leverage technology for transactions. We
manage some 52 billion transactions a year. So, we have to
be able to have that kind of ability and that experience
could help drive some of our thinking and then the final
component, it has to be able to leverage knowledge. It's no
longer just good enough to keep all of your claims in a shoe
box so that you can pass a claims audit. Those claims tell
you something; they tell you about consumption in
healthcare; who's getting it, what are they getting and how
effective it's being delivered, but let's get to that first
point. Let's be strategic.
Healthcare reform brings us great promise. It already has
clear pathway to expanding coverage to more people. What it
doesn't have to date is a pathway to sustainability and that
sustainability is only going to come by the ability to
manage costs. This is work that comes from LA Fisher, it's
out of the Dartmouth Group, and it demonstrates for you a
couple of things. 1) that there's a dramatic variation;
disparity and the cost of care per capita across the United
States. The fact is that there's a two fold difference
between Minneapolis and Manhattan and they can see scattered
across the country different levels of expenditure. That
expenditure, first and foremost, not just a reflection of
the unit cost per service, it's far deeper than that; but in
all areas, it continues to grow at some 3 to 4% per annum
over the course of this 14-year-period. The driving focus of
that comes from this dynamic. It's the decisions made on a
day-to-day basis in the exam rooms, in the emergency rooms
and the operating rooms across America between these two
people, and that decision that they're about to make is
fully dependent upon the quality of information they have
about the patient, the physician's awareness and willingness
to employ evidenced-based medical standards, and third,
their ability to track progress or even compliance. When you
start looking at the American healthcare system's ability to
make decisions, however, you find the source of the
variation that Eliot Fisher was showing. This is work that
goes back to Jack Wenberg and it gets repeated on a regular
basis. The only thing that changes about these charts is
that the absolute number of cases per year grows. These are
America's ten most common surgical procedures, and what they
represent are regional variation in the utilization rates of
these procedures where this is a community or hospital
referral region of-in Louisiana versus in Minneapolis for
doing angioplasty. I know this data is a little dated; this
is getting repeated year over year. There's a
[inaudible] difference here in the likelihood that this
procedure will be performed. That is not driven by
differences in the presence of disease or the epidemiology
of those communities. That 12 fold difference is small area
variation, driven by the decision-making processes that are
different than those environments. Let me say it a little
differently. In this country, you are more likely to have
your plan of care influenced by your zip code than the stage
of your disease. We have an issue with utilization, we have
an issue with utilization driven by decision making, when
you talk to Elliot Fisher, his estimate is that 30% of our
expenditures could be reduced it we would have more of a
normalization of this type of variation.
Now, some other evidence about decision-making quality in
the country is here. This is Elizabeth's McGuin's work where
she looked at tens of thousands of decisions in her clinical
practice and found that 45% of the time, the decisions made
by the practitioner had no basis in science. In fact, in 11%
of those decisions, they are actually potentially harmful.
Here's the other person in the room; the behavior of the
individual. We talked about the 55% being coherent with
medicine, however, 1 out of 5 people handed a prescription
never fill it, though they come back and tell the physician
that they did. Of those people who do fill it, 50% of them
will stop taking it within six months, particularly if it's
for an asymptomatic cause and they can see that the
expenditures, and this is probably an underestimate of
hospitalizations in this country because of poor compliance;
then we have this influence on the decision-making
processes. About half of the growth in the healthcare
expenditure over more broad indications of price than CPI
comes from new innovation, but unlike what you probably
would anticipate coming out of me, this is an absolute
necessity. We cannot continue to sustain the healthcare
system without the introduction of these new technologies.
We have to be able to achieve outcomes at a lower cost, and
you're only going to get there with better tools than we
have currently, but it does provide a new air of complexity
for people making decisions. So, as we started looking at
creating solutions around this area, we recognized we needed
to achieve three things. One of them, we had to make the
healthcare-we need to work to make the healthcare system
more connected; it's far too fragmented and I won't go into
much more than that. Certainly, we have to make decision-
making processes more intelligent; better information and I'
ll get into that in a second and certainly, we need to have
all participants, whether they're consuming care, delivering
care, paying for care or adding new devices or pills or
whatever to the system, or even regulating it, getting
people aligned is going to be ultimate. So let's go back to
that exam room. There are going to be three things that we
felt that we could bring to the table, one of which is if we
could use our data gathering capabilities to help inform
this dyad better so that they know what's going on in this
guy's background. Second, if she's out of medical school
more than five years, medical information is probably
doubled. While she's been working on her patient base, she
may not be keeping up with her knowledge base and we can
automate that for her and finally, the ability to track
what's happening because we saw the issue
[inaudible] dietary restrictions, he may not be taking his
pills. In order to do that, we built out a system, a
platform called Esync. What Esync does is it looks at our
entire population as 70 million Americans and collects all
data that we have on them, whether it's claim data, whether
is pharmacy data, whether it's clinical laboratory data,
whether it's medical notes, etc., and bills for each
individual, a composite view of their lives, and then we use
analytic tools through our rules engine to first organize
that data to infer what conditions this individual may have,
building out their problem list and then examining using 950
evidence-based rules, what we-for each condition will look
at what kind of care they had delivered and where, versus
what was expected on evidence-based rules and then for
errors of omission, errors of commission and billed out for
each individual something called a personal action plan,
which shows the opportunities to develop more conformity
with evidence-based standards. Well, in order to get that
play to do something, we ended up finding that we are most
effective if we were sharing that with the consumer
themselves, things for them to do, but also share that same
to do list with their physician, all of them, and if we're
involved because we have nurse managers in the like than
with their own staff, so you everybody working on the same
concurrent platform. Everybody on the same prioritized to do
list. When we did that as we demonstrate in blue, the
likelihoods of conformity to evidence-based standard
improved an incremental 20%. So we can influence the power
of a decision. The issue that we face, however, is getting
people to adapt it and to adopt those changes so they can
adapt their behaviors. People are different and one of the
things that we recognized that we need to become more of an
intrical part of people's lifestyle. We have all of this
data, but to get people to look at it, we realize we have to
be different. Whether we are reaching out to them by having
our nurses reaching out to our sick and most ill people, or
gaining other people who may be interested themselves in
portals or getting into their lives with mobile applications
or for those who still find themselves a victim of snail
mail, to be able to reach them that way so that everybody
gets to see that personalized to do list. Let me give you a
couple of examples of that. This is the nurse's desktop.
When they go in in the morning, they get to see who their
patient is and then they start looking at some opportunities
to change behavior. The type of behaviors that we look for
are things they can be doing about are they seeing the right
type of doctor, are they on the right medication, are they
on the right care platform or even are they living the right
lifestyle. In this case, let's look at an example where the
nurse's decided that we're going to look at the physician
that they've chosen for the problem. This person has
diabetes; clearly this person did not have an internist. One
of the things that the system does is to generate internists
who are nearby and also provides quality ratings, based on
our experience. What's this physician's natural history of
conforming to evidence-based standards in their practice and
doing it efficient and in so selecting physicians and
helping the patient by providing them, mapping instructions
and then we'll even go so far as to make the appointments
for them. But if we're going to do that, we also need to be
able to provide that in the hands of individuals who do this
themselves, who can only reach out to as many as maybe 5, 6
or 7% of the population who are driving 40%. For the rest of
the population, it's self service and encouraging people to
do so, requiring the way in which we present data online,
one of the things we've done is to be able to show people
that their personal action plan-by showing them where they
stand. What is their medical history and putting in front of
them in the
[inaudible], the things that they need to do to correct it
and the layer called I do, and then what we're seeing more
and more from employers and even governments, is applying
the layer that shows tracking with financial incentives and
a variety of other incentives based on some sound behavioral
economic theory to get this I am, I do, I get philosophy so
we can drive behavior and it's had some rather encouraging
results, but we also have to be able to get to people and
share this same personalized action plan, things they can do
to make better decisions by putting it in their pocket. One
of the things to do is to take that very same physician
identifying thing, and put it right into a mobile
application. In fact, this is available for you if you want,
just merely load it down in your app store, whether you're
in a Droid or a Blackberry or an Apple phone, this
application is free. It will show you whether you're looking
for a physician facility or a healthcare center, the list of
physicians by specialty and their
[inaudible] will make the appointment for you if you're one
of our members. But we also wanted to be able to get into
lifestyle and this is a new platform that we've created
again being driven off those same personalized action plans,
it's called optimize me, it is also free, you can download
this thing, it's on Droid based as well as on the Windows
phone 7; it's a way in which people socialize. One of the
things we recognize that if people's relationship are
important, social distances are important, the framing
[inaudible] study even showed it; well it showed that if you
have a first degree contact that is a family member, or a
close personal friend who becomes obese, your chances of
becoming obese go up 57%. This isn't that fat people get
together, this is that if there's a change in behavior in
somebody in your group, there's a 57% chance change in that
behavior. It goes likewise the other way. People losing
weight will create a collective. So what this is, is a way
of creating for people challenges that's a four squares
game, it's a platform that shows a variety of challenges and
badging and a variety of other things, but as also in a
means by which people can administer incentive plans through
their employer for wellness activities. The final thing that
we're doing is moving into this space, create a greater
connectivity between patient and their physician, with the
evolution of a variety of the different tablet devices and
in smart phones; the ability to connect patient-centered
activity with physician under the patient's control where
they can release data going forward. As this evolves, it
gets us to go to one last place that I'll finish up with, is
the ability to take this intelligence and technology and use
it to solve a problem with access. We are going to be 45,000
primary care physicians short in this country by 2015,
according to the American Association of Medical Colleges.
There's not enough healthcare access to go around. Look at
what's being reported now in Massachusetts. Massachusetts
Medical Society recognizes now that when they increased
coverage around this plan, one of the things that happened
is that the waiting time for physicians extended
dramatically and emergency room utilization went up. It now
takes 49 days to get a primary care appointment. The
healthcare system cannot grow fast enough to accommodate the
new of demand that's going to be uncovered with the
expansion of coverage. We need to find new solutions. One of
the new solutions is to take people with current clinical
licenses and increase their game. How? By sharing
information; by sharing technology using mobile
applications, using telemedicine solutions as we've started,
and as well as even making these things as a rotating
service. The ability is to provide a remote clinician at a
given level with support of a more specialized clinician in
a more centralized setting and by using telecommunications
to spread that intellect.
[inaudible] opportunities for collaboration of partnership
between medical device and payers. In the background here,
we have a speaker that comes to our class. He worked on the
payer side then he moved to the medical device side, and he
used to say-his joke that when you're on the payer side you
look into the medical device industry and you're thinking
that oh geez, here's another expensive technology that is
going to drive our costs up. If you are on the medical
device side, you are looking to the payers and you're
thinking, oh boy, there are other people out there with all
these rules that are making things difficult for us. So,
[inaudible] actual collaboration as opposed to the
[inaudible] between payers and medical devices
Well, I'll take a shot at it first. I guess my direct answer
would be yes. There's clearly the opportunity in thinking of
how technologies, once they've passed the FDA approval
process where safety and effectiveness have been
appropriately reviewed to actually move in a collaborative
fashion towards showing cost effectiveness. I think clearly
there may be some technologies which increase cost, but if
they're deemed to be cost effective, whereas opposed to just
raising the overall costs, they're actually doing so in a
manner in which the effectiveness in terms of patient
outcome is improved. I think one of the most frustrating
experiences is I hear from clinicians as well as hospitals
is when a therapy is made available by virtue of an FDA
approval but the reimbursement has not yet been established
or not yet appropriately
[inaudible] to determine its cost effectiveness because it's
in that in between category where it puts tremendous
pressure on healthcare systems where physicians want to
utilize the technology in the best interest of the patient,
but the reimbursement structures have not yet been set up to
appropriately value the technology.
Well, I would agree with everything that John has said. The
needs and the necessities and the point where we are now,
what we got to create is sustainability for this healthcare
modernization are required of us of sitting on the same side
of the table. It's not just, can we get along, and it's an
absolute necessity. We do not have the capabilities and
skills that we need or the technologies that we need to go
even further. Look at any other industry, the investment
industry, technologies to make it go better, faster, more
effective and more timely, etc., are things that medicine
needs right now. Let me give you a case in point. There's a
drug called Glevec. It costs $36,000.00 a year. However,
what's happened is it's taken a disease that effects 4,500
Americans called chronic myelogenus leukemia and is
essentially curable, provided you take the pill everyday.
The problem is that when you look at a $36,000.00 drug, if
you had just a plain old view and say how can you spend that
much on pharmacy, you start looking at it from a very
different perspective and we start looking at what happened
to the total cost for these individuals. People who are not
on the drug cost about $110,000.00 a year and they died.
Their costs were going into ICU visits and were going to
bone marrow transplants. When people are fully compliant
with a drug, the cost of the care was cut in half. Now
granted, $36,000.00 is going to
[inaudible] but that's okay because the cost of care and the
survivorship for the individual is dramatically improved. We
now have people dedicated to making sure that anybody saying
no is on the damn drug and is taking it.
Good morning. Is this on?
I think so.
This is for Mr. Migliori, and I'm curious what the reception
has been from physicians in terms of how well they've been
adapted to the remote medical monitoring, so whether you've
had any issues with them being proactive in looking at
patient records and how you've been able to incent them to
do so.
One of the-that's a great question. So, how do physicians
react to having somebody helping them make decisions? What
we've learned is that we really had to take different
perspectives ourselves. We used to inspect decisions in our
industry, now what we're doing is trying to support them.
We're trying to be a good
[inaudible] to that dynamic that I was point out. One of the
things that we do for physicians is to provide them with
accessed information that would otherwise not have. Their
information in their exam rooms is going to be far more
detailed than we would ever have, but what they don't have
is did that patient go to the pharmacy or is that 1 in 5
that never fills or is that 50% of people who stop taking
things. By providing them with that information, the
decision to stop a medication or not is at least something
that's visible, and it's something that is deliberate, and
that it's not an accident of bad behavior.
Thank you.
Hi, this is also for Mr. Migliori; I'm looking at this
picture and seeing a whole range of innovations that a lot
of healthcare systems, county health departments, that we
work with would like to implement and I'm curious given that
you're able to look at this from a global United Health
Group perspective, how do you think about the return that
you're looking for when you put one of these innovative
programs out and how do you kind of work that through and
what, if anything, have you been able to share about he
return you all are seeing given the data capability that you
have from some of these innovations within your system.
Thank you for the question. One of the things-we're still in
a learning phase here. Our first-this has been going on for
about 24 months, the last 18 months or so, we've really been
defining what the scope of practice of telemedicine is;
working with Cisco, working with AT&T, Verizon and a few
others, we've been able to start looking at how much of
medicine can be practiced here. The second place thing that
we've done is looking at what kind of installations make
sense? One of the places where it makes immediate sense we'
re using ourselves, and that's for onsite clinics for large
employer facilities, and what it does is allow a nurse to be
mindful of a practice, do acute care and follow-up care and
even some wellness care, but when they need it to be able to
summon a physician in variable cost basis, to come and co-
manage the patient. Another application is what we're doing
in Colorado in where we have four rural clinics that hook up
with the Centura Health System in which the primary care
physician can get on the device, on the telepresencing
capability, supplemented with the digital diagnostic
equipment can summon any type of specialist they need so
that they can have a three-way consultation with a patient,
the primary care physician locally and the specialist
virtually. What this has allowed for is for us to be able to
recognize when there's a need to transfer the patient, when
there's a need to be able to retain somebody at home, or
certainly to bring in that intellectual capacity. The
economics of these models
[inaudible] the end is too small, but certainly we see
broader and broader applications for this. One simple
application is putting this through a secure web enablement
to allow families to access this on an on demand basis and a
self-pay basis out of their home.
Frank Engle, newly retired from Boston Scientific. I would
like to ask a question for each of you about what your plans
are for the next ten years or so given that the federal
government doesn't have enough money to continue to pay
Medicare, for example, at the rates that it's paying now,
companies have increased insurance rates, and individuals
have lower incomes. This collision represents a loss of
income for someone; how is this going to work and how are
you making plans for the future for your own businesses?
Well I think the-first off, the answer in the context as a
global company, one recognizes that the challenges here in
the U.S. are affecting generally the United States. They do
have the same challenges in some European countries but when
we look at how we have structured our business and where we
see growth going forward, we're becoming less and less
reliant on that growth coming here in the U.S. and I know
that's not what we as U.S. patients want to here, but that's
clearly how companies are responding to globalization. I
think I still come back to the focus on technologies that
not only can improve outcomes for patients, but can improve
outcomes with demonstrated cost effectiveness, so even
though there may be the challenge of our overall healthcare
environment, it does say that if there's a dollar to be
spent, that dollar, however large or small that dollar may
be over previous years, that dollar should be spent on the
most cost effective therapies there are available to
patients, so I think our strategy continues to be the focus
on not only bringing those technologies to market, but in
bringing them forward with the appropriate data to show
their utilization. That may mean that we have circumstances
where technologies are iterating internationally and they're
gated to be different here in the U.S. and I think we may
see, and as I was pointing out, technology is taking bigger
steps forward in the U.S. separated by more time than
perhaps the iterative cycles, which may occur outside the
United States where technologies are moving much more
rapidly and the U.S. has access to those in a more gated
It's a great question. If you look on macroeconomic basis,
if you look at doing the things that we talk about doing
within healthcare, we are going to see a reduction in
utilization, is largely going to hit the hospital the
greatest because what we're talking about doing is minimally
invasive interventions to manager coronary artery disease,
preventing readmissions for the 1 in 5 Medicare
beneficiaries that gets readmitted to a hospital within 30
days because of some error at the time of transition to the
home setting. It's going to be on relying more heavily on
experts in given areas of surgical complexity so that you
can mitigate the risk of complications in the like, but when
you look at the system in general, you will look at the
stuff that Elliot Fisher was pointing out with those
surgical differences, it's going to hit the hospitals the
greatest, and we can't have that happen in just a linear
fashion. It's going to call for us to be looking at
reimbursement models that are different, more episode based
payments for care, so that way, just as Michael Porter
talked about in his redefining healthcare is that when you
start to build a episode based reimbursement, those people
supplying care, whether they are the professional clinician,
the institution, the pharmaceutical agencies, the medical
device manufacturers, if they can share in the savings that
are created by the investments they're making, we're going
to have for a better system. This pay as you go, pay for
complication system we have is something that's going to be
a deterrent.
Hi, Sheen Kim; I'm wondering what innovations you are
putting in place to increase preventive care prior to
Okay, preventive care-one of the innovations that we've had,
and it's been a focus, is to get people engaged. If people
understood four numbers in their life and they control four
numbers, you'd see a dramatic improvement in health status.
Those four numbers are body mass index, blood pressure, LDL
and fasting blood sugar. As John had mentioned, there are 25
million diabetics. There are more than twice as many pre-
diabetics; 11% of those people convert to full diabetes. One
of the things that we put into the system for our own
employees, we test everything on the 90,000 of our employees
and the 130,000 dependents, is to put in a program in which
your payment for your health coverage, your premium that you
pay out of your paycheck for your health coverage, is
influenced by whether you had the testing for those four
items, and if you had those four items, if any of them are
abnormal that you're in a program to mitigate that risk.
When we did it, we found some very interesting things. 1) We
found that we had 7,007 diabetics out of 100 and 28,000
covered lives. 77,000 adults, okay. If 443 of them didn't
know they had it, as a result of doing that and getting
people into weight loss programs of which we have a 600%
increase, because they know if they didn't join, they're
going to spend $900.00 more dollars next year for their
health insurance, we end of having 45% of those people lose
on average, 5% of their body weight, we end up spending 19.
6% less that year for diabetes expenditures, we had 10%
fewer more cardio infarctions, we had 30% increase in people
going to their primary care physician, we had a 15 to 30%
increase in people getting the various types of cancer
screenings that were indicated.
Maybe if I just ask a question of the audience, and raise
your hand, how many of you know your four numbers? So it's
about 10%, 20% of the audience, so the challenge is not,
think of us as we're not your average consumer of
healthcare, because virtually every one of you being here,
we're above average in terms of our appreciation, not only
of the issue, but our overall, whether you call it economic
or educational status, and the challenge is in this room,
only 20% of you know the four numbers. The challenge is how
do we get the vast majority of patients and people across,
not only the U.S., but globally, understand their four
number; I understand only 20% of you do. Given that our
healthcare system is the most expensive in the world, where
are we and where are we going with regard to proactively
looking at those countries that have the most efficient
healthcare systems adopting their best practices.
So let's start of with the premise first. Per capita
expenditure is one of the highest in the world, but it's not
the highest. When we talk about efficiency, we also have to
talk about what expectations are for the community that we'
re being served, but one of the things that would make the
change to become "efficient" is to change what American
society expects out of healthcare, and that's a societal
question that I don't think has been wrestled to the ground
yet. We can become more sufficient, but to become like
somebody else, from our own experience and our own work, we
have 10% of our employee base is out in the rest of the
world providing consultation to health systems that think
they need to improve. I won't be in a position where I would
naturally impugn what we're doing in this country as
Americans compared to what's happening elsewhere. There are
things that we need to fix. One thing that we are bringing
to life, is something called imperative effectiveness
research. What people actually get to see, not just whether
or not a device or drug is safe and effective, but how it
compares, and what's the comparative cost? Now, one of the
things we could do in this country is to do what happens to
some places in Europe where they draw the line for you and
below that line you cannot have access to that item. I don't
think American society will tolerate that. I think what
they'd rather do is to be able to make choices based on
what's available and to use that as a basis; let's use
comparative effectiveness for transparency, rather than for
limitation and restriction.
Hi, I'm Christina with Novartis, I have a two part question.
My question is given the gap in the physicians over the next
decade, how do you see other healthcare providers such as
nurses and physician assistants playing a larger role in our
healthcare system and for manufacturers such as Avid and
Novartis, how do you see the commercial business model
changing to address the changing healthcare provider
landscape? Thank you.
Let me address the latter part of your question first. I
think one of the areas we've looked at is its-you know, we
look at safety and effectiveness as an outcome frame
therapy. I think we also need to look at the overall
efficiency of providing that therapy to a patient, so I use
it in the context, whether it's the emulsification of an
intraocular lens prior to replacement or emulsification of
your lens prior to an IOL implant, how do we improve the
predictability of the procedure in terms of its overall time
because clearly, for ophthalmologists who are very busy, the
through put of their facility, one could look at it in the
following way. If I could improve the through put of a
physician by 10%, I'm as effective as increasing perhaps the
number of physicians by 10% and generally, there's two ways
one can look at that, is how do I bring the procedure time
down while maintaining the same degree of safety and
efficacy, not only bringing down the time on average, but
reducing the standard deviation of the variability of the
procedure because as many of you know that may work at a
hospital, it's not the mean that kills you, it's the
standard deviation when you're scheduling OR time. So,
whether it's angioplasty or ophthalmology or any of our
technologies, I think one needs to focus on not only safety
and effectiveness, but also start to look at the overall
efficiency, which may mean some of our therapies can be set
up prior to the physician becoming involved by a nurse or
other associated healthcare professional.
We have a wealth of unused expertise in this country because
we do not ask non-physician clinicians to practice at the
full capability of their license. This kind of capability is
something we think that can help address it. We will not be
able to train primary care physicians fast enough to keep up
with demand. We really do have to change these models. Some
of the things you're seeing around these accountable care
organizations and primary care medical homes, they're great
means, but what's fundamentally different about them is that
the work process and the coordination of care is something
that is a more shared practice where people get to maximize
their privileges with what they're given and their licensed
accomplices. There is plenty of capacity within the system,
but it causes us to change the model and we very much
encourage it.
Okay, great. Thank you both for a great presentation and for
your answers to these though provoking questions.