Published on May 30, 2014
Lee Stephenson, Senior Market Strategist, Verisk Health Everyone Is an Architect: How to Build Better Health Decision Environments for Consumers White Paper Data. Analytics. Answers.
2 | Data. Analytics. Answers. email@example.com | 866.292.6971 | veriskhealth.com Introduction One of the most heralded aspects of capitalism is freedom of choice. In a true free market system, choosers understand available incentives and make decisions based on the economics of cost vs. benefit. Dr. David Blumenthal, president of the Commonwealth Fund and former adviser to President Obama, recently pointed out that “in the U.S., we like to consider health care a free market. But it is a very weird market, riddled with market failures.”1 For example, it is common for both patients and doctors to seek and perform services without knowing the cost of that service until after an insurer adjudicates the claim. And even then, the price may remain unclear. As Dr. Blumenthal suggests, the US healthcare system is not actually behaving like a free market because it is full of failures and aberrant incentives. It is no surprise that consumers have a hard time making intelligent choices about their health. In order to correct these market challenges, it is critical to ensure that patients understand the incentives that govern their healthcare decisions. Unfortunately, the healthcare industry is currently facing a crisis of cognitive overload. Doctors are unable to keep up with the thousands of clinical journal articles published each year. Patients are unaware of the details in their insurance plans and distracted by an abundance of (often conflicting) web-based advice. Almost all stakeholders in the system pay very little attention to price prior to receiving or administering treatment. But there is good news: each entity that touches the healthcare space, whether public, private, or nongovernmental, has an opportunity to reduce systemic complexities and simplify the decision-making process through what behavioral economists, Cass Sunstein and Richard Thaler, call “choice architecture.” As described by Sunstein and Thaler in their book, Nudge, choice architecture is the organization of an environment or context in which people make decisions.2 Choice architecture exists in all institutions that interact with consumer behavior and is most relevant to industries in which there is an overabundance of information that one might use to influence decisions. Today, every institution in the healthcare space is already exerting either intentional or unintentional behavioral influences over those who benefit from their services. This means that all of these entities also have the opportunity to be more effective when designing the architecture that supports their influence. They all have the opportunity to be not only health choice architects, but better health choice architects. Sunstein and Thaler note that good choice architects do not make decisions for people, but rather they create environments that make people “far less likely to choose badly.”3 They propose several tools that can help construct better decision environments, as depicted in Table 1 below. Table 1: Selected Tools of Choice Architecture Tool Example Defaults Anchors Mapping Record, Evaluate and Compare Alternative Prices (RECAP) Creating an option that the chooser will obtain if he/she does nothing Using known information as a reference for evaluating some unknown value or information Making the information about various options that surround a choice simpler and more intuitive Enacting mild disclosure legislation that ensures that consumers have access to all the information that they need to make a decision
© 2014 Verisk Health, Inc. All rights reserved. | 3 Using examples from a variety of different touch points throughout the healthcare space, we will discuss how these tools can be applied to simplify the consumer decision-making process. Let’s begin with one of the most commonly used tools of choice architecture: defaults. Defaults: Helping Consumers Adhere to Treatment Choices Take a minute to think about the difference between Mr. Spock and Homer Simpson. Spock is predisposed to rationality above all else, whereas Homer Simpson is famous for his impulsive decisions. Choice architecture recognizes that there are both rational and irrational consumers in the marketplace and accounts for irrational human tendencies like procrastination, forgetfulness, and absentmindedness. It considers both Spock and Homer. Among the tools of choice architecture derived from behavioral economics, defaults are perhaps the most successfully employed in consumer decision making today. Defaults account for the differences between rational and irrational consumers and the behaviors that subsequently result from both. And all defaults, according to Sunstein and Thaler, are therefore “selected to make the chooser’s life easier or better.”4 Therefore, the best defaults account for irrationalities, like forgetfulness, and seek to make the consumer’s life easier. In today’s healthcare environment, some of the most effective defaults have been applied in the pharmacy benefits space. Pharmacy is the most frequently used health benefit, so it makes sense that Pharmacy Benefits Managers (PBMs) have led the charge to analyze consumer data from a behavioral perspective. For example, Express Scripts’ has “Consumerology,” which is their term for the application of behavioral science to understand how and why consumers make healthcare decisions. For example, one Express Scripts “Consumerology” initiative helps seniors avoid potential Medicare fraud by understanding the behavior that makes them more susceptible to criminals and helping them navigate confusion during the Medicare sign-up process. Another PBM, CVS Caremark, launched the Behavioral Change Research partnership to study consumer data and implement improvements in the consumer decision- making process. One of the most successful case studies was designed to determine how patients make healthcare choices related to prescription refills. The study showed that if a consumer is proactively presented with the option to select automatic refill before filling a prescription, they are twice as likely to choose the automatic refill option as those who were asked after receiving the prescription. CVS Caremark embraces the results of the study through the understanding that many healthcare decisions are unnecessarily complicated by confusing and unclear language. The ongoing work focuses on simplifying the communication related to automatic refills to better encourage patients to adhere to medications prescribed by their physicians. Anchors: Helping Consumers Identify the Right Health Plan Imagine that you decide to make a donation to your local public news radio station. You go online and see four donation suggestions in the amounts of $25, $50, $75, and $100. This year, your budget has been a little tight, so you elect the $25 donation option. But, imagine that you had seen the following four options instead: $50, $100, $200, and $250. Would you have simply chosen not to make a donation in the absence of a $25 option? Probably not. By providing slightly higher suggested donation amounts, the public news station created an “anchor” or a starting point for your thoughts. This anchor simplifies the thought process associated with making a donation and leads to higher revenue for the news station. Anchors can be applied to help guide healthcare decisions. For example, consider the open enrollment process for health insurance. Today, consumers typically see a variety of plan options, including a preferred provider organization (PPO) option, a health maintenance organization (HMO) option, a HMO saver option, and a high deductible plan with a health savings account (HSA). Employees often do not know which plan is most suitable for their health
4 | Data. Analytics. Answers. firstname.lastname@example.org | 866.292.6971 | veriskhealth.com needs. Instead, they often select the plan with which they are most familiar. What if the company’s HR director published a report of historical plan selections by age group and made the information available at the start of open enrollment? If the report is not a recommendation, but shows that most employees under the age of 30 have chosen the HMO saver plan in the past and most employees with children have chosen to open an HSA, the employer is facilitating a starting point for its employees’ decision process. A 27-year-old female is more likely to orient her thought process around the knowledge that many of her peers have chosen the HMO saver plan. Likewise, a 36-year-old father of two is more likely to begin his decision process with the knowledge that individuals within his demographic group commonly prefer an HSA option. Even though the HR director wasn’t directly recommending a plan for an employee, she anchored the thought process on parameters that made it more likely for employees to choose a health plan that is best suited to their particular needs. Mapping: Helping Consumers to Make Sense of Their Care Options Consider the following two decisions that most people make during their lifetime: choosing a new flavor of ice cream and selecting a medical treatment. The choice of ice cream flavor can be assessed relatively quickly. A consumer can try a few samples and then purchase a cone in the preferred flavor. The welfare of a medical treatment choice is much harder to determine. Patients encounter many unanswerable questions about cost, quality, and potential risks of divergent treatment paths. In this example, ice cream connoisseurs benefit from a choice architecture method known as mapping, or simplified information that enables consumers to gain a more intuitive understanding of the “options that will make them better off.”5 However, in healthcare, patients have a hard time benefitting from mapping because a comprehensive snapshot of the cost and quality of the total patient experience does not exist. For example, selecting a doctor can be a very intensive process for a prospective patient. In the past, patients were often referred to a doctor though word of mouth. It has also been common to seek out advice on primary care providers from family and friends who could provide trusted assessments on the quality of the provider’s care. However, relying on family and friends for recommendations on a provider’s fees has become an increasingly tenuous source of information. How does one make a good choice regarding their primary care physician without meaningful knowledge of both price and quality? Recently, new startups have attacked this mapping problem with consumer-friendly, data-driven insights that provide meaningful information about the cost and quality of physicians. For example, Castlight Health provides pricing and transparency tools to help direct employees to high-value, high-quality care. Castlight illuminates previously opaque pricing information to allow a patient to compare costs before actually visiting a physician. Another company making strides to increase consumer access to useful clinical insights is ZocDoc. ZocDoc provides crowd-sourced quality ratings of primary care physicians, specialists, and dentists, as well as a physician search engine that considers categories such as location, insurance carrier, and specialty. Just as Yelp helps consumers choose a good restaurant, ZocDoc provides an intuitive rating system of physicians that uses quantitative and qualitative peer review data. At the same time that consumer-focused startups are concentrating on cost, access, and quality, providers and payers are also using more sophisticated cost and quality metrics. For example, provider organizations are tracking and analyzing compliance vs. evidence-based care guidelines, in order to identify individual patients that need attention, as well as drive out unwarranted variation across practices. And payers—especially in Medicare Advantage—are working to direct patients to high-quality providers by using analytics to inform network design. We are still in the early phases of innovation for these types of metrics, particularly those that provide insight into quality. You need to be a sophisticated consumer to understand
© 2014 Verisk Health, Inc. All rights reserved. | 5 the implications of existing quality metrics. But future innovation will help address this and nudge consumers to make better choices related to their doctors, the quality of their care, and the cost of their treatments. RECAP: Helping Consumers Navigate the “Fine Print” In many consumer markets, like financial services and telecommunications, better cost and quality choices are often times obscured by the “fine print:” additional fees, limitations, and terms and conditions that are often presented obliquely. Take the cell phone market, for example. A consumer selects a plan that costs $59.99 per month with unlimited text messaging included. This plan appears to be suited to his cost requirements and usage needs, until he sees an unexpected international texting fee in his monthly bill. He recalls that he had texted his wife while on a business trip in London, but had not realized that the unlimited texting plan was only applicable in the U.S. In healthcare, there are many similar instances in which “fine print” obscures decision making. Plan members are often unaware of the details of their policy benefits. There are countless examples of situations in which patients were unable to afford a lifesaving organ transplant or a costly prescription regimen because the plan that they selected didn’t provide adequate coverage. Consumers’ eyes often glaze over when they encounter a lengthy description of the side effects of a new prescription drug, but that fine print contains key information about avoidable potential adverse effects. To aid consumers in the navigation of fine print, Sunstein and Thaler propose a mild form of government regulation that they call RECAP, an acronym that means Record, Evaluate, and Compare Alternative Prices.6 In the cell phone market example, phone and plan vendors would be required to disclose all fees associated with phone ownership so that consumers could compare fine print fees between different vendors. Today, we are starting to see the concept of RECAP being applied in the design of Affordable Care Act (ACA) public exchanges. The federal government has set a standard defining how plans will be compared by assigning a plan-level rating system: platinum, gold, silver, and bronze. The ratings, matched with high and low deductible options, create a better architected environment by providing a cost and quality framework for consumers to navigate the details of their health decisions. We see an opportunity for private exchanges to apply a similar concept. According to a recent prediction by Ezekiel Emmanuel, an architect of the ACA and author of Reinventing American Health Care, “fewer than 20 percent of workers in the private sector will receive traditional employer-sponsored health insurance.”7 Employers who elect to shift employees into private exchanges will have to figure out a means by which to align their employee population to this new reality around maximizing benefits from a cost and quality perspective. For employers, it becomes a matter of determining the fine print, or the relevant pieces of information that employees need to know in order to make sound decisions about price and quality. One way to apply the principles of RECAP is by creating a data-driven pathway. Consider the asset management service, Wealthfront. When signing up for a Wealthfront account, consumers enter their demographic and historical investment information. Based on this information, the service assigns a risk profile and provides the user with a customized asset allocation, which is personally diversified and automatically rebalanced. Imagine if private health exchanges created a similar data-driven pathway to determine a consumer’s healthcare risk profile and select the appropriate asset allocation for the consumer. Using predictive modeling, this exchange pathway could generate a risk profile using a similar process of collecting demographic information and historical observations related to an individual’s clinical profile. After guiding the consumer through a pathway of questions regarding their risk profile, it might be determined that based on past cost, they will need $3,500 next year to cover health- related expenses. Therefore, the consumer can determine the appropriate asset allocation (ostensibly, money set aside for an HSA or a
6 | Data. Analytics. Answers. email@example.com | 866.292.6971 | veriskhealth.com plan deductible) based on the knowledge of their risk profile. Architecture: The Devil Is in the Details Whether a payer, a provider, or an employer, health choice architects must pay attention, first and foremost, to the framework that consumers use to make decisions. When that framework cracks, as is the case in the healthcare system, architects must look for ways to apply data-driven insights to mend what is broken. Sometimes, the data will reveal an opportunity to fix what is broken through simplification. For example, architectural design switches the order of options on a consumer- facing prescription management website, such as in the case of CVS Caremark. Other times, as revealed through the ZocDoc example, an effective architectural choice is one that structures information in a way that is more comprehensive and intuitive for consumers. One thing is clear: in order for consumers to benefit from these insights, healthcare stakeholders will need to ground applications of choice architecture in the rapidly expanding pool of healthcare data. The most successful choice architects will apply data-driven insights to correct market failures that prevent consumers from intelligently making decisions about their health. In a system riddled with failures, there are plenty of opportunities to use existing data to generate more of the solutions that we’ve explored above. The data is out there. Let’s get building. References Rosenthal, E. (2013, June 1). The $2.7 Trillion Medical Bill. Retrieved from http://www.nytimes.com/2013/06/02/health/colonoscopies-explain-why-us- leads-the-world-in-health-expenditures.html?pagewanted=all&_r=1& Sunstein, C. A., & Thaler, R.F. (2008). Nudge: Improving Decisions About Health, Wealth, and Happiness. Penguin Books. Mandelbaum, R. (2014, March 26). Why Employers Will Stop Offering Health Insurance. Retrieved from http://boss.blogs.nytimes.com/2014/03/26/why- employers-will-stop-offering-health-insurance
Verisk Health is transforming the business of healthcare by providing data services, analytics, and advanced technologies that answer the industry’s most complex challenges. With a focus on reducing risk across all domains of healthcare, Verisk Health’s broad solution suite is designed to help health plans, employers, providers, and other risk-bearing entities improve the quality of healthcare delivery, reduce costs, optimize risk-adjusted revenue, ensure payment accuracy, and support compliance. From effective population health management, quality reporting, revenue accuracy, and chart retrieval to tackling fraud, waste, and abuse, Verisk Health is committed to answering the unique challenges of its clients. Verisk Health is a subsidiary of Verisk Analytics (Nasdaq:VRSK). For more information, please visit www.veriskhealth.com Join the Conversation Connect with us to learn how we’re transforming the business of healthcare. Your Questions Lead to Our Answers Email, call or visit us online to learn how we can help you. Slideshare BlogYouTubeTwitterLinkedIn firstname.lastname@example.org 866.292.6971 veriskhealth.com
Mitos y realidades de las sustancias psicoactivas
Mitos y realidades de las sustancias psicoactivas.
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