Information aggregation: Safe harbor allows companies to model strategies that drive value

July 1, 2008

The need to not only provide greater value, but to document that value in a tangible way, is what led to the creation of the Center for Health Value Innovation in January 2007. The not-for-profit center represents industry stakeholders committed to sharing the evidence that value-based designs improve health status and reduce health cost inflation. Its members consist of large- and mid-sized employers, health plans, integrated delivery systems, self-funded unions, municipal and state governments, medical management firms, broker/consultants, pharmacy benefit management companies and vendor organizations. "Health plans are like other businesses, which means they often are segmented into different channels," says Cyndy Nayer, the center's president and executive director and one of the founders.

AS MANAGEMENT GURU PETER DRUCKER once famously said, "You can't manage something if you can't measure it." And healthcare certainly is no exception. For years, the industry has struggled to find consensus for measuring returns on healthcare investments, and in today's shaky economy, the pressure on costs continues to build.

"Health plans are like other businesses, which means they often are segmented into different channels," says Cyndy Nayer, the center's president and executive director and one of the founders. "They have an actuarial channel, a disease management channel, call centers, claims adjudication, medical management ... Often, those channels don't talk to each other."

Q Specifically, what industry developments led to the creation of the Center for Health Value Innovation?

A Our emphasis is on business-based evidence, not necessarily peer-reviewed or research-based outcomes. We recognized the industry's need to identify and validate evidence that value-based design improves health and reduces healthcare spend.

To achieve improvement, organizations need to make investments-and thus they need indicators of how those investments are doing and metrics that show the impact they have on costs over time. They need to focus on the people so that their models for management become solutions for improved health and not for cost compression.

Q The center provides a 'safe haven' and a 'concept studio' for health value designs. What do those terms mean?

A It's similar to what automakers do with their concept cars-they create something that others can actually touch, feel and experience. You can't drive that car out of the show room, but you can sit in it and see how it feels. We created a similar experience in which stakeholders can talk about their experiences: what problems were they trying to solve, how did they design the plan, what were their communication strategies, etc. Other members add data and insights from their own experiences in an attempt to compare and, hopefully, improve their outcomes.

And that's why it needs to be a safe haven: Some of our member companies are competitors. I have a history of pulling competing organizations together to solve a given problem and to do that, you need to recognize where their biases and fears are. For example, a health plan might say, 'We recognize that other stakeholders want this kind of information, but our systems can't provide it.' That isn't something they can say in public, but it is a situation that needs to be addressed if we're going to solve some of the industry's problems. That's why it's so important for discussions like that to be held in a safe, constructive environment.

We need to focus on delivering healthier people, and lower claims are not the end goal. They are the means to the end: financial solvency in health management.