MANAGED CARE November 2008. ©MediMedia USA
The man credited with health care innovation at IBM warns against any overhaul that would make companies disinclined to participate
Credited with saving IBM millions of dollars in health care costs through wellness and health management programs, Martin Sepulveda, MD, then accepted the challenge of leading the company’s overall health benefits programs globally. Today, as IBM’s top physician executive and vice president for integrated health services, he draws on wide-ranging experience and IBM’s leverage to work toward health care reform — including a greater emphasis on primary care — in the United States and around the world. Sepulveda, who has been with IBM since 1985, earned a bachelor’s degree in Latin American studies at Yale University and an MD and a master of public health degree at Harvard University. He completed residencies at the University of California San Francisco and at the Centers for Disease Control in the Epidemic Intelligence Service and the National Institute for Occupational Safety and Health. He also completed a fellowship in internal medicine at the Carver College of Medicine at the University of Iowa. He spoke recently with MANAGED CARE Editor John Marcille.
MANAGED CARE: How has your job at IBM evolved?
SEPULVEDA: My role is to advance IBM’s business success through the health of the workforce. That hasn’t really changed for as long as I’ve been here, but the territory over which I’ve been privileged to do that has grown significantly over the course of my career here.
MC: You are overseeing more activity?
SEPULVEDA: The growth has been twofold. I have assumed responsibility for the health of our workforce worldwide in terms of fitness, productivity, and resilience, and I have folded in the health insurance coverage aspect of the company’s investments in its workforce. That has been an enormous challenge.
MC: Has the growth in the scope of your responsibilities been driven by your success in health management and wellness?
SEPULVEDA: Yes. It’s a consequence of the success that my team had early on in workplace safety, injury prevention, and health promotion in the United States and then outside of the United States. When, at the turn of the century, prices in health care really began to manifest in our premiums and costs, we recognized the opportunity to leverage the kinds of processes and skills and the perspective that my team had. Having me take on health benefits was a natural progression toward the culture of health that we’ve been working on for decades at this company.
MC: What did you learn globally with wellness that you brought to your expanded position?
SEPULVEDA: We have been a global company for decades, but in the late 1990s and early 2000s, we opened or greatly expanded manufacturing operations in Asia, Eastern Europe, and Latin America. I was at the forefront of that transition to ensure that as we came into those parts of the world the emphasis on health in our workplaces was identical to that in Western developed countries. That was a big challenge given that in some countries the infrastructure that we take for granted to help us achieve that didn’t exist. For example, in the United States, if somebody has an acute emergency, you dial 911 and an ambulance arrives and helps you manage that. In a lot of places, that doesn’t exist. So I had to talk with a lot of people and learn a lot about health care in other countries. I found those lessons very valuable in thinking about health care strategy and how we manage insurance coverage.
MC: What were the main things you focused on?
SEPULVEDA: It was very clear to me that the way people think about health care has a lot of universality to it. It crosses cultures. People place a very high value on access to and receipt of health services. It may not be so universal that people are actively engaged in understanding what their risk factors are and are doing things for themselves — that’s a challenge we face. But people value health, people value access, people value receiving health care, people value relationships in health care. It has been quite striking to me how important the relationship between the individual receiving care and the person delivering the care is. What people understand and what they are willing to do is greatly influenced by that interaction. Another thing is that the indiscriminate provision of health care services — absent efforts to help people understand how to use those services — will lead to voracious appetites for consumption of health care services that add little value but a lot of cost to the individual, the company, and society.
MC: That is true in the United States?
SEPULVEDA: Absolutely.
MC: How did you apply that knowledge at IBM?
SEPULVEDA: It dawned on me that if we were going to develop a worldwide health care strategy, we had to build on those universal values, and we had to do that in a rapid-growth country with poor infrastructure, in a socialized country like France, and in a free market country like the U.S. What does that mean? It means that all other things being equal, we want to put a third of our chips on prevention. Second, we want to put a lot of emphasis on primary care. And third, we want to encourage our employees to be engaged in their health and with the health care system and to take accountability for their health. It also means that we want to ensure our policies are implemented around the world. For instance, in China the prevalence of hepatitis B virus infection is enormous, so we address the issue of HBV infection in China to ensure that from a workplace policy standpoint this is not a factor in whether or not we choose to employ an individual. In China employers can discriminate in hiring people in that way, but we came into that market and we said, “No. We’re not doing that.” We hire people because of their talents, their commitment, their enthusiasm, their flexibility, and their creativity, and we take these individuals with whatever else they come to the table with, including chronic diseases.
MC: Has it been easier to make those ideals such as prevention and accountability stick in developing health care systems? Turning the Queen Mary around quickly in the United States and European countries seems like a very tough task.
SEPULVEDA: It took us a while, but we have made the transition in places like the United States, France, Spain, and Italy by convincing employees that it is far more valuable for us to provide adult immunizations and to talk with people about diabetes or asthma than it is to give them free access to health care for whatever reason and whenever they wanted. That was a big cultural change. We’ve gone into other parts of the world without a lot of that baggage, because they’ve never had that kind of access to services. Yet things were evolving rapidly in those countries, and we could see that all other things being equal and left untouched, those environments were going to end up in the same place that we are at today in the United States, which is not a good place. Because we are a larger purchaser, we were able to work with partners to help us achieve our objectives. In India and China, we were very successful in driving marketplace reform. We have seen phenomenal traction around the ideas of prevention, accountability, and partnership with your employer in places like Brazil, China, India, and Hungary.
MC: But you said you have made that transition in the United States, too?
SEPULVEDA: Our investment in this goes back many decades — when you walk into this company, health awareness is all around you. You see your leaders doing things that are healthy and you see your coworkers doing things that are healthy, and it’s an environment that advances you along the path of change. But we have had to transition from the notion that an employee could be safe and healthy at work and then go home and not wear his seatbelt, not get his immunizations, buy a pack of cigarettes, and eat unhealthy food. Those things are more important than being safe at work.
MC: Have wellness efforts failed in any important way?
SEPULVEDA: Two things worry me about wellness efforts. One is that health promotion doesn’t really reach the disenfranchised, and second, despite the best efforts by employers of all sorts, behavior change associated with wellness programs in the best case scenario is about 30 percent to 40 percent. So when people ask, “What’s the single biggest challenge to better health status and better health outcomes for the population?” Getting care in an environment where relationships with providers are deep and very trusting would make the biggest difference, because it’s in that context that people can be motivated to change.
MC: But you haven’t given up on wellness in the workplace?
SEPULVEDA: No. It’s very important, but is also a long-term investment and it has to be sustained over time. Health promotion has become a big business in our nation, and I’m worried that it has been oversold in terms of what can be expected over time. I worry that if a salesperson walks in and makes promises to a small-business or a medium-business owner who may not see the results, or if the changes a company makes work and are taken for granted, then the investment will stop and the problems will recur with a vengeance. We have to be forever mindful that the reason we don’t have a problem anymore is that we have successfully addressed it to a level that we’re all quite comfortable with and we don’t let up on the investment.
MC: In creating a culture of health at IBM, how important have the efforts of the company been compared with the efforts of the health plans you contract with?
SEPULVEDA: We brought our health care partners to the table to describe what this new environment was and to tell them that we expected them to be extremely aggressive in this area. I make a couple of points to all of our health plans. The first is, “Don’t walk in here and tell me how much money you are going to save me. I don’t want to hear that. What I want to hear is how you are going to help improve the health status and the experience of our beneficiaries.” The second thing I say is, “You see these other guys sitting around the table? They’re not your competitors anymore. They’re part of the team that is going to work here with me to accomplish specific goals. We’re all partners and we’re all equal.” That made a lot of people very uncomfortable at first, and some people lost our business as a consequence of their inability to function in that fashion. But if they were able to work with us, they could then go out into the market with some very innovative ideas.
MC: So what have health plans and other companies learned while working with you, and what has been the propagation of those ideas throughout the market?
SEPULVEDA: Well, I’ll give you an example. Five years ago disease management was very new in the marketplace. Disease management firms were fledgling companies, and many people doubted the benefit of being able to provide this service and realize both health and economic benefits. It was my view then that this made all the sense in the world for the subset of our population with the highest needs for health care and with the highest per capita consumption of care, so we sought a partner to provide the kind of condition management that we envisioned. We then put a lot of our own expertise along with Matria’s for research, development, and execution. Matria Healthcare is now part of Inverness Medical Innovations. We’ve become a very desirable client to work with because we have all of these ideas that our partners end up taking to the marketplace. So we’ve set up a different set of ground rules for our relationships with insurers and other partners. It hasn’t all been smooth — we’ve had a lot of bumps in the road — but we have done a lot of things that have benefited IBM and our partner companies.
MC: What current projects are in the early stages now and might turn out that way?
SEPULVEDA: You’re asking what’s going on in the R&D lab right now, and because it is an R&D lab, I can’t talk about everything. But let me tell you about a very powerful game changer we’ve been working on for the last three years. It was based on an observation that was so simple and obvious that I was embarrassed when I started to talk to people about it because I’m an internist, a specialist in primary care and public health. When you look at the health of populations and ask, “Who does well?” and “Who doesn’t do well?” and “What are the characteristic environments in which people tend to do better?” one of the recurring themes is that health care systems that are more balanced in terms of primary versus specialty care do better. People have been tracking this for decades, and those populations did better 20 years ago and they did better one year ago. They do better every time. Health outcomes are better, costs are lower, and people are happiest with their care in strong primary-care-based systems. That observation led to IBM talking directly to the primary care provider community about a new form of primary care. There was an enormous amount of synergy between what we were interested in buying and the kind of care they wanted to provide. Those conversations were the spark, if you will, that catapulted the patient-centered primary care reform initiative and the primary care medical home concept that you’re hearing so much about now. That’s another example of working with partners — in this case with their ideas — in a way that benefits us and benefits them, and in this case the “them” is not just the care providers. It’s the health care system in general.
MC: I can see where primary care physicians would have been receptive to your pitch.
SEPULVEDA: Quite frankly, three years ago no one was listening to the primary care physician organizations because they were erroneously viewed as just wanting higher levels of reimbursement. Their story about transforming primary care practices was lost. Our partnership created a receptivity to their idea of transformation and today there’s probably more than a billion dollars in demonstration projects, both public and private, going on in the United States around the concepts of the medical home. And that’s really cool.
MC: It is cool. And I have to admit that when I first heard about this I was very skeptical about the motivation of primary care physicians, even though the concept seemed reasonable. So things are on track for implementing the new model?
SEPULVEDA: Those experiments are under way, but this is the United States, and we have a geography and a heterogeneity that create enormous challenges for delivering services of any kind nationally. We’re going to need a variety of models to achieve something like medical homes. We will need creative ideas about how to deliver this model in all of the micro-environments that we have in our country. The experiments are addressing that. They are happening in big cities and rural areas, in open and closed delivery systems, and in Medicare and the private sector. The early results are pretty impressive. We’re extraordinarily excited about it, but it’s a work in progress.
MC: I’d like to switch gears a bit and ask, in reforming the health care system, which ideas do you think would be counterproductive?
SEPULVEDA: That’s a very interesting question; I’ve never really thought about it that way. Let me start with keeping employers in the game. If we give employers disincentives to offering health care, we will lose the single biggest source of innovation in health care. In the last five or ten years, employers have really engaged the subject of health care out of necessity, and they have brought a lot of talent to bear on many components of our fractured health care system. Employers have been at the forefront of bringing adoption and active engagement around things like measurement, transparency, reporting, and performance. They have been leaders and innovators in wellness and health promotion. Employers were really foundational to managing disabilities in an integrated fashion. And employers have been very innovative in thinking about value-based purchasing and how to design health care insurance in ways in which you don’t cut off your nose to spite your face. If you cut employers out of the game right now, that would be an enormous loss. Why risk not having that kind of creativity involved in helping to solve the nation’s health problems?
MC: That would be your advice to the new president?
SEPULVEDA: I would also make this point in the following way: Diversity is at the foundation of our culture in America, but diversity cuts both ways, particularly in a place like health care. It can be a strength and it can be a weakness, and we need to focus on the strength of diversity. We need to ensure that there’s an environment where innovation can thrive in all sectors, so that states can innovate, employers can innovate, and all parties can innovate. On the other hand, we don’t want diversity in certain other areas of health care, such as technology standards. With information systems and managing and using all of the data that are needed to support doctors and patients making good decisions, you don’t want diversity. We need standards and consistency.
MC: Would you like to add anything else?
SEPULVEDA: One last thought about health care reform. Like wellness in terms of unrealistic expectations, I think there are unrealistic expectations about this thing called evidence. We all talk about improving quality, eliminating errors, reducing variability, and reducing cost based on people practicing evidence-based medicine.
MC: Right. It’s a big deal now.
SEPULVEDA: Yes, but I think evidence is oversold, overstated, and exaggerated in that we have a lot of evidence about how the human biological system works and a lot of evidence about treatments. But we have very little evidence about the behaviors of practitioners and patients and how to take those insights into the real world of practice so that they result in good health and behavior change. We need a better balance in generating evidence about how things can really be made to work in real practice settings and in how care providers and individuals receiving care can interact in ways that allow both to change their behaviors in ways that deliver better outcomes. In the end, that’s what’s really important.
MC: Thank you. This has given us quite a bit to think about.
SEPULVEDA: Thank you. I’ve enjoyed it.