The man who heads McKesson Health Solutions, the third largest disease management program in the country, says it's time to roll out a new model
Emad Rizk, MD, joined McKesson in the newly created position of president of McKesson Health Solutions in 2003. In this role, he heads McKesson's health care payer business, including the nation's third-largest disease management vendor, which provides DM, triage, and informed decision support services and programs to Medicaid, Medicare, and commercial customers.
Rizk says that he is on a mission to promote connectivity, economic alignment, and transparency of information. He believes that this is best done one market or region at a time.
Rizk has more than 20 years of health care experience, working with providers, payers, and pharmaceutical organizations. As a senior partner with Deloitte Consulting, he served as the lead partner and global director of medical management/pharmacy. His clients included several of the largest health plans and hospital systems in the country. Previously, he held positions as vice president of medical operations, chief medical officer, and worldwide medical director in a large global organization. Rizk was vice chairman of the National Clinical Advisory Board; he currently serves on many boards, including the Disease Management Association of America and the American Journal of Medical Quality. He spoke recently with Senior Contributing Editor Patrick Mullen.
MANAGED CARE: What's the outlook for the employment-based health benefit system?
EMAD RIZK: Consumer-directed plans are the latest in a series of three or four major disruptions in the employer world. In the '80s, everybody moved away from full indemnity and climbed onto the HMO bandwagon and costs came down temporarily. Facing a consumer backlash, HMOs gave way to PPOs and point-of-service plans in the mid '90s that promoted choice, which drove up premiums again. Several years ago, we began to see consumer-directed products, which are just another mechanism of cost shifting. I see two problems with just giving an individual $1,000 or $2,000 in a health savings fund. One, it is difficult for individuals to make appropriate decisions without informed decision support tools. There's data that show that depending on their education and knowledge, people sometimes will not make the right choices. Someone may not have the education to know that failing to manage hypertension, which is asymptomatic, could lead to kidney failure, an MI, or a stroke. They feel fine so they don't worry. Two, if you're a person over 50, evidence-based guidelines say that you need a stress test, potentially a colonoscopy or a full work up. You just burn through your $2,000 because none of that is covered in the first generation products.
MC: How do you see these products changing?
RIZK: Two things will happen. Number one is you won't just receive a flat $2,000. If you go to the best-performing doctors and hospitals, your copayments and out-of-pocket expenses will be less. Two, if you're a 45-year-old male or a 50-year-old female, the diagnostic and preventive tests and procedures you need will be 100 percent covered. People who achieve the health status that they and their physician set as a goal will see their copayment reduced or eliminated. We also have to think about who signs up for these plans. We know that 60 percent to 65 percent of the population drives less than 2 percent of costs, while 30 percent of the population drives 90 percent of costs. If you offer a consumer-directed product to millions and millions of people, the first people to sign up will be healthy 20- to 30-year-olds who don't cost you anything to begin with. There has to be a shift in thinking to engage the rest of the population.
MC: Will there be a distinct disease management business in a few years or will it be absorbed into broader medical management?
RIZK: I have a strong opinion that many of my colleagues and others in disease management don't share. I believe the old definition of disease management, which often boils down to a nurse call center, has run its course. There will be a merging of technology, products, and services, to create a new disease management paradigm. The new model that will evolve is a fuller medical management utilizing multiple interventions and technology, including personal health records and electronic health records. We're starting that now. After going from DM to medical management that's integrated with electronic health records, the next step will be integration with benefit design and network management. We'll begin to have economic alignment with the consumer, the provider, and the payer. Consumers will bear a burden with appropriate tools and payers will provide consumers with incentives to make the right decisions based on data. Consumers will have a list of hospitals, the number of procedures they do, the cost of those procedures, and outcomes of those procedures. Providers get information that compares them to similar hospitals across the country and across the region and drills down to the physician level. Your hospital's length of stay for a CABG is nine days versus the national average of three versus your region,which is four. Your cost is $50,000 versus an average of $30,000 that is risk adjusted. And, your quality outcomes are not aligned with best practices. All of a sudden the employer and benefit managers will decide on certain payments to providers that the payers contract with. This level of connectivity and transparent data flow will drive appropriate incentives and economics. This could be five years out nationally, but I think it could be two years out in a region. Or it could be one year out in a small community in Chicago for example.
MC: If you were restructuring the health care system, where would you start?
RIZK: First, we have to focus on the local and regional level; the national level will be like boiling the ocean. Second, achieve critical mass in the two areas that I mentioned earlier and focus on execution and driving results. This has been my focus and mission. I am convinced that connectivity, transparency/integration of data and economic alignment is the only way to truly transform health care. Unless we fix those, I don't know how we're going to accomplish things like predictive modeling, pay for performance, cost management, or quality outcomes. When a patient goes into an emergency room right now, the physician starts from scratch, gathering information about that patient. When that patient leaves the emergency room and goes upstairs, they start asking the same questions all over again. That's inefficient. If you're hypertensive and you switch from payer A to health plan B because your employer got better pricing, the fact that you're hypertensive gets lost completely. Suddenly, you've turned into a healthy individual because you have not generated any claims with the new company. There needs to be an industrialization of health care data processes and a connectivity of health care data, and that's very hard to do all at once on a national level. You can try to create an electronic medical record in every physician's office but if those records don't speak to each other, you're back where you started.
MC: A consistent stumbling block is agreeing on who will pay for new technology.
RIZK: That goes to economic alignment with accountability. Every city and state has payers and provider organizations, hospitals and physicians, each with different economic incentives depending on their business model. Payers get squeezed by employers to control the medical cost ratio, so they push the burden onto hospitals and physicians. Providers try to create more value underneath whatever payment mechanism exists. If they're contracted by length of stay, which is a per-diem, or if they're contracted by the DRG, the diagnosis-related group, their behavior changes in terms of how long they keep someone in the hospital. In one of our programs we created a three-tier pay-for-performance program. First we get physicians to identify a patient that has a specific disease and get that information into our database. So, Emad is hypertensive and here are the clinical findings and the drugs that he is taking. We pay the physician to populate our database with that clinical information.
MC: If the physician does not identify a patient, how do you know that you've missed someone?
RIZK: There are only three ways to identify someone who has had an interaction with the health care system: claims, clinical information from an interaction with a provider, and prescriptions and lab tests.
MC: What's next after identifying that a patient has a disease?
RIZK: Once the physician has populated the integrated database with clinical data, the second thing is to put a care plan online, and the third thing is to hold the physician accountable for the outcomes. Over the next few months, the hypertension needs to be controlled and the diabetic needs to get an HbA1c test and needs to get the blood sugar down to a reasonable level.
MC: If the outcome is reached, there's a financial benefit to the physician. Is there a negative consequence if the outcome is not reached?
RIZK: No. Pay for performance should almost be called pay for participation. I think it's important to use carrots instead of sticks. We need to build the infrastructure and the foundation for trust. Financial penalties would cut already-low provider margins even more. Providers will argue that they don't have the appropriate funds to manage their patients well. So, instead of giving providers a 7-percent increase in their premiums, you give them 3 percent with the chance to earn the next 4 percent through specific metrics. That leads us to payers. It's in payers' interest to invest in technology and connectivity, just as we've seen some organizations around the country invest in electronic prescribing and laptops for physicians. The benefit is that physicians and providers are no longer looking at patients in a blind way. We're testing a system as one part of the work we're doing with the Illinois Medicaid program that provides ER doctors access to a patient database. When a Medicaid patient goes into an emergency room, physicians can look up the patient's history. If that person is unconscious, they can figure out if he or she is a diabetic, a hypertensive, or has congestive heart failure, if they've been hospitalized, and which medications they're on. The Illinois Medicaid program is probably the most comprehensive disease management program we've launched to date. We're leveraging a lot of technologies. Our vision moving forward — and we're not there yet — is to create a database that has clinical and claim data that is multipayer and multiprovider. An important distinction is that data in themselves are not valuable. In the past CHINs — community health information networks — collected a great deal of data but lacked tools to utilize them. They lacked sufficient clinical content, rules to channel data, and business intelligence behind the data so that people could actually gain access to what they need. Without those things, you have a static database that's not interactive. It's one thing to know that a patient with a biometric monitor has his blood sugar go up. What's the importance of that? That information needs to be routed to the right person to respond the right way. It prioritizes and restratifies information on an ongoing basis. If the sugar went up only 1 percent to 10 percent, that's a phone call. If it went up 100 percent or 200 percent, that might be a visit, but if it went up even further so that the patient is potentially in a hyperosmolar coma, that would get routed to the physician's office immediately. This is where we fell short before. Data and evidence-based guidelines are valuable but become much more valuable when they're actionable. As part of our work with the Illinois Medicaid program, we have multiple caregivers, including pharmacists, social workers, health coaches, and psychologists for behavioral issues. The clinical guideline tells you how evidence-based medicine says you should manage clinical depression. The clinical rules turn those guidelines into actionable steps at the appropriate level of care, to provide the right care and right treatment at the right time.
MC: Why is it taking so long for this to become standard practice? What are the obstacles?
RIZK: The first obstacle is funding. No one wanted to step up and pay for it. In Europe, it was left to the government to pay for stuff like this. The second obstacle is that people look at data repositories as just a data warehouse capability, without much actionability, and without screens to get the right data to the right person. Physicians, pharmacists, social workers, nurses, and hospitals are interested in different things. So we're working on products that give each user what he needs without having to navigate through other data. A third obstacle is the lack of local focus in specific geographic regions. There's a lot of talk about financial savings funds where people start to take responsibility and accountability for their health, about the need to invest in technology and create electronic medical records in hospitals and physicians' offices. These are worthy goals, but won't happen or will happen very slowly if we only focus on huge transformational national initiatives. I feel strongly that success will begin with local kernels of cooperation between payers and providers. This needs to be a grass roots transformation that will produce broad national transformation. Once we get incubations that work in the trenches, we'll begin to see the industrialization of medicine in the same way that every other industry has been transformed.
MC: Thank you.