Employers, governments, and other health care payers have implemented systematic programs designed to reduce anticipated health care costs and improve health status, either by managing chronic conditions (such as asthma or back pain) or by encouraging behavior that minimizes the likelihood of future illness or injury.  These programs may also be used by employers to improve employee morale, or by insurers to customer satisfaction.

These initiatives are generally grouped into two categories:

• Wellness:  A wellness program encourages “healthy lifestyles” and the avoidance of future injuries and illnesses. 
• Disease Management (DM):  DM is a set of techniques designed to improve outcomes and reduce costs for chronic medical conditions. 

 

The two categories share some common characteristics and techniques, but have different goals:  Wellness plans seek to avoid future medical conditions, while DM programs seek to more effectively manage conditions that already exist. 

Wellness Programs

Wellness programs are designed to educate a pre-designated population about behavioral changes they can make in order to avoid future health problems.  They are therefore primarily, but not exclusively, educational in nature.  Wellness education may be targeted to the entire population, or to sub-populations that are identified through screening tools such as HSAs (“health survey assessments,” or health screening surveys.)  Weight reduction, smoking cessation, and exercise regimens are typical of behaviors encouraged by wellness programs.

As an alternative to the education model, some wellness programs involve workplace-based exercise programs, including company gyms and exercise programs.

 

Disease Management (DM)

DM programs were originally funded by pharmaceutical companies, on the (unproven) premise that preventive use of drugs for certain conditions could avoid decrease future medical costs.  The first DM programs consisted of educational programs that encouraged asthma patients to check their breathing and use their medications regularly.  The intent is to avoid doctor visits, hospitalizations, emergency room usage that result from inadequate compliance with physician instructions.

The DM industry has grown rapidly, from $85 million in 1997 to over a billion dollars (est.) in 2006.  There are DM programs for a variety of physical conditions, as well as for mental health and substance abuse.  DM programs typically integrate educational tools (print, Internet, etc.) with counseling programs and other forms of human intervention.  In addition, DM programs often include treatment guidelines for health practitioners.

 

Population Management

The term “population management” has been used interchangeably with DM, and also used at times as a synonym for wellness programs (sometimes as “population health management”).  This and other terminology issues, together with the gradual expansion of companies from one space into the other, has led to a blurring of the boundary between the two program types.

Formerly American Healthways, this is the first, largest, and best-known disease management company.  Healthways has sold DM services to a number of major insurers, HMOs, government entities, and others.  It has also expanded into the Wellness arena.

Medi-Fit provides health promotion services in the workplace, including exercise, gym location, and work retraining for injured employees.  In addition, Medi-Fit provides some remote ‘virtual’ training and exercise services.

Richard Branson’s Virgin Group sponsors “Virgin Health Miles” (aka “Virgin Life Care”), which provides discounts on a variety of services – including air travel and insurance coverage – for people whose gym usage improves their fundamental health as measured by standard health indices (e.g. body mass index, blood pressure).

The original program design included the use of “body pod” kiosks to measure these health indicators, as well as other innovations that have yet to be widely adopted since the plan’s inception in September of 2005.   Virgin partnered initially with Humana to introduce this product, has marketed it to large employers, and is planning to introduce a program for individuals.

They have described it as “a frequent flier program for health.”

Wellness and DM programs have traditionally been built around the following assumptions:

• Educational and preventive services reduce overall medical costs, providing an incentive for payers to promote them.  There is no conclusive evidence to support this assertion, and indication the opposite may be true.
• Wellness and DM services are attractive to employees/health plan members.  There is some evidence to suggest that this is true, although not to the extent originally believed.
• Wellness and DM services improve medical outcomes.  There is evidence to suggest this is true in some instances, but no proof it is true globally.

 

Businesses in this category have therefore based their business model on a ‘win-win’ assumption:  Individuals will ‘win’ because their healthcare will improve, and payers will ‘win’ because their overall costs will be reduced. 

As these assumptions face more skeptical scrutiny, this business model will become more difficult to sustain.  In the long term, it is more likely that investigators will discover that elements of these programs are effective, but that the overall concept has been ‘oversold’ as a cost-saving tool.

Similarly, it is likely that these programs will be found to have improved health outcomes in some circumstances, but not universally.

The other, less quantifiable benefit of these programs – employee or plan member satisfaction – are probably going to hold true over the longer term. 

Over the long term, it’s likely that the business model for these programs will change from a cost-containment approach to one that emphasizes satisfaction, retention, and to a lesser extent improved medical outcomes.

Speaks to multiple leverage points.

• Integrity in calculation of risk
• May alter expected healthcare costs for individuals
• May be misapplied in calculating costs – savings are assumed but unproven

• Healthcare defined as a public good leading to new social contracts
• Exercise and good self-care are perceived as ‘public goods’ and valued by our culture
• The exchange of goods & services (Virgin) or financial incentives for healthy behavior are examples of this leverage point in action