Aetna’s acquisition of ActiveHealth Management is part of a growing trend wherein large health plans are seeking to mine their data for better ways to manage cost and care and enable their providers to better utilize “evidence-based medicine”. ActiveHealth has strong assets in these two primary areas, both based on their CareEngine technology.
In part, the acquisition reflects an understanding and appreciation on the part of Aetna senior management that the present use of medical guidelines and pathways is not working. Companies such as Interqual/McKesson, Milliman and Robertson, and IDG all promote their clinical guidelines, and most providers and payers use some form of guideline in the delivery or management of care. However, payers are noting:
– the health care inflation rate is twice that of overall inflation;
– provider practice pattern variation continues to frustrate regulators, academics, providers, and payers alike:
– providers continue to voice their displeasure with what they perceive to be overly-intrusive “management” by “bureaucrats”;
– the chief complaint from providers is the present guidelines are “cookbook” medicine, which treat all patients alike regardless of individual characteristics; and
– the “return on investment” of utilization review and case management continues to diminish (in general).
In addition, payers are finally starting to understand that one of their key assets is the data resident in their claims and managed care information systems. Leaving aside the (rather significant) issues of data accuracy, consistency, and completeness, one of, if not THE key asset of most payers is their database of information on how providers treat, which providers have better outcomes for which types of patients and diagnoses, billing practices, and the like. This asset has been underutilized, to say the least.
If managed care companies/health plans/HMOs are going to be successful, they are going to start utilizing their data to determine the best way to deliver care, and utilize technology similar to ActiveHealth’s to assist in that care delivery.
What does this mean for you?
If Aetna, UnitedHealthGroup, and others are starting to finally take meaningful steps, perhaps you should too. If you are a provider, you would do well to follow this trend carefully, because there is no doubt you will be affected by it.

If health insurance premiums continue to increase by 10% annually, the percentage of working adults in California with employer-based coverage will decrease from 58% to 53% within five years. The finding, from a study by the University of California-Berkeley, also noted:
— for every 10% increase in premiums, 910,000 Americans lose employer-sponsored coverage
— of those who lose coverage, 75% are uninsured and 20% are insured by Medicaid
— the average premium increase over the last five years has been 11% nationally
According to the Contra Costa Times, 6/2Anthony Wright, director of Health Access, said, “We’re getting close to the tipping point. … Employers who do provide coverage (now) won’t because no one else is”.
I’ve been noting the convergence of a number of factors that seem to indicate growing pressure to come up with some national consensus on health care coverage reform. When middle class voters start to lose their health insurance, the “tipping point” will be reached. And when that happens, there will be reform.
What does this mean for you?
A reform that includes universal access would have relatively little impact on total medical costs (less than $90 billion annually) with significant improvements in health status of the presently uninsured. In addition, there would likely be less incentive for providers to cost-shift, thereby reducing the “hidden tax” inherent in today’s dysfunctional health care funding mess.

The Piper Report has an excellent summary of state health care initiatives. These include plans to encourage employer-based funding of health insurance; reform payment mechanisms for uncompensated care; create better care management for high cost Medicaid patients; and new (and old) pharmaceutical purchasing programs.
States are often the best labs for health care reform, and those states with particularly attractive results (financially and politically, that is) often see their governors move into national roles (see Tommy Thompson and Mike Leavitt, ex governors who went on to run HHS).

In a refreshing acknowledgement of reality, a top Federal official noted that “if there’s one thing that can bankrupt the country, it is health care. It is out of control.” US Comptroller David Walker made this statement while referring to the growing US budget deficit in a speech in New York last Wednesday.
Walker’s comment came during a talk on the budget deficit where he referred to the health care system and federal government health care programs as key contributors to last fiscal year’s $412 billion budget deficit.
Why is this obvious statement of such interest to your author? Because it is the first public acknowledgement by a Bush official of the primacy of health care over Social Security (although Walker did not mention SocSec specifically) as a threat to the economic wellbeing of the nation. It is likely Walker’s comments were not officially vetted, but regardless, they are one of those “emperor has no clothes” statements that may add a level of urgency to the health care debate.

One of the newer ideas to hit employee benefit health plan design is tiering copayments according to the quality of the provider accessed by the insured. United Healthcare and Medica are two of the health plans that have introduced these plans.
The idea is simple in concept – insureds’ copays are higher for those providers deemed to be less than optimal. The issues lie in the criteria and methodology used to determine the rankings.
A critic, Al Eldendary, president of the St. Louis Metropolitan Medical Society, notes that UHC uses bills and claim data instead of medical records, and therefore the assessment of quality is not based on a complete picture of the patients’ situations.
United’s head of clinical strategy noted that the analytics uses survey as well as patient data, and also acknowledged that the criteria also includes some cost data.
Fof those of us who have been criticizing medical treatment guidelines, provider profiles, and clinical pathways for years, this is another piece of evidence casting doubt on the entire process and the results thereof. Few would dispute that medical bill data is rife with errors of accuracy, that diagnosis and procedure data is not only inconsistently coded but reflects a desire to maximize reimbursement and not to accurately represent the actual care delivered to the patient. Moreover, there is no assessment of the patient’s functionality at the end of treatment.
How can any reimbursement system that supposedly focuses on “quality” fail to consider whether the patient got better, died, returned to full functionality, or was partially disabled? After all, is not the goal of health care to ensure the health and wellbeing of the patient?
What does this mean for you?
Be very wary of medical guidelines, provider reimbursement schemes, and profilign activities that do not take into account the patient’s functionality. Without that end point, you are just looking at the left side of the equation, as the result is unknown.

The Center for the Study of Health System Change is a non-partisan organization that is focused on finding intelligent, practical means of improving the nation’s health care system. Under the leadership of Dr. Paul Ginsburg, CSHC provides a forum for discussion of topics ranging from pharmaceutical issues and the problems of uninsurance, to macro trends shaping health care policy.
CSHC has an excellent seminar planned for July in Washington. Here’s the details:
HSC’s Wall Street Comes to Washington Conference Scheduled for July 13
The 10th annual Wall Street Comes to Washington conference will be held on Wednesday, July 13. The conference will feature roundtable discussions with Wall Street health care industry analysts and Washington health policy analysts. A partial list of panelists includes:

An interesting post in HealthSignals New York addresses the “problem” of seniors hiding or transferring assets to qualify for Medicaid reimbursement for nursing home care. According to a study done by Georgetown University, the problem is not nearly as pervasive as one might think, nor does it have much of an impact on total Medicaid expense.
However, the caveats are that the data used are somewhat dated. Nonetheless, this may be less of a problem than politicians’ rhetoric indicate.
To quote HealthSignals New York:
“As they say, “absence of evidence is not evidence of absence.” This report is helpful and it sets a balanced tone, but by no means does it end the argument.”
What does this mean for you?
Probably not much, but it does indicate how important it is to look beyond the rhetoric to the underlying data.