Ron Geraty on Healthcare Reform

OurBlook interview with Dr. Ron Geraty, CEO of Alere.

Auto insurance goes up or down depending on your behavior ... down if no accidents, up if you have one. But most health insurance stays the same no matter what you do. Would it be a good idea to promote the use of incentivized health insurance plans that emphasize preventive medicine (i.e., individuals are rewarded with lower premiums for good behavior such as weight loss, nonsmoking, etc.)

RG: The issue of personal responsibility ... and specifically if “healthier” individuals should receive discounts on health insurance ... is one of the hottest in healthcare. Most recently, Sen. John Ensign (R-Nev.) introduced legislation that would allow employers to incentivize healthy workers who get involved with improving their health. This approach is currently being debated as part of our healthcare reform package.

At Alere, we recognize the importance and value of good health to employers, health plans and of course individuals and the entire nation. We also recognize the concerns regarding fairness of those who purposefully make healthy lifestyle choices.

However, we must also recognize that the issue is not entirely black and white. Should people with illnesses or diseases caused by genetics or environmental factors be penalized for their conditions? What about the overweight individual making a conscious effort to change? We believe that if you reward people only for results, you may be penalizing people who don’t have the ability to achieve positive health results. Therefore we think a better approach is to reward effort ... specifically to provide incentives for those who participate in healthcare programs proven to improve outcomes.

We believe so fully in this concept that as a company, we are putting our money where our mouth is and changing our own benefit design. We are adding a Consumer Driven Health Plan (CDHP) option that gives our employees $500 to spend on preventive healthcare benefits and that has a deductible of $2,000. The premium for this plan is 40 percent lower than the other plans we offer.

The incentive for employees is that “if I stay healthy, I can save considerable dollars.” We do have criteria for participating ... employees must have a BMI of 30 or less and be non-smokers. However, those who do not meet one or both of the requirements can participate as long as they are enrolled in weight-loss and/or smoking cessation programs.

(Editor's note: BMI means Body Mass Index, a measure of body fat based on height and weight.)

Bearing in mind that marathoners have keeled over from heart attacks during a race ... no matter how healthy we may be or how hard we might try, can't any of us eventually contract a chronic disease such as cancer, diabetes, cardiac ailments or stroke? To what point are such diseases preventable?

RG: Diseases such as cancer, diabetes and heart disease have environmental, lifestyle and genetic components.  But we can’t negate the influence that lifestyle choices and behavior have on health.  There is some interesting data attributed to the Department of Health and Human Resources that we think help to really highlight the role of choice in the onset of chronic illnesses.  For every 100 employees . . . [1][1][1]

• 60 are sedentary
• 25 smoke
• 10 have diabetes
• 50 have high cholesterol
• 24 have high blood pressure
• 27 have active cardiac disease

It’s estimated that a significant percentage of those employees have healthcare expenditures attributable to preventable illness and some 40 percent have healthcare expenditures attributable to modifiable risk. These are all costs that can be lowered or averted through an emphasis on wellness and prevention and the implementation of targeted healthcare programs.

So, while it’s true that healthy people can have heart attacks, clearly the far bigger issue is finding ways to help those individuals who are making the decisions that lead to poor health and that ultimately drain the profitability of employers, cost taxpayers money and lead to poorer quality of life for individuals.

Viewing the healthcare reform debate more broadly, does any of the main legislation deal with preventive medicine competently in your opinion?

RG: Alere has spoken with a number of Congressional leaders over the past year and shared our insights as a health management company working with some of the nation’s top employers. We are definitely on the right track with healthcare reform. We believe the proposed legislation from Sen. Ensign and a new proposal from Sen. Tom Harkin (D–Iowa) recommending tax credits for businesses that offer wellness programs also hold tremendous potential and should be seriously considered.

Our primary concern is that current reform efforts don’t go far enough. When we first began discussing healthcare reform several years ago, the focus was on health reform. Then the discussion progressed to healthcare reform. Currently, the debate has reached a stage where even the administration admits we are discussing health insurance reform; that’s a step that must be taken, of course.

However, we think the focus should go back to health reform. As a country, we must change the way we eat, step up our exercise and disengage in unhealthy behaviors such as smoking. To be truly effective, at some point, healthcare reform simply must address those issues. In fact, it’s estimated that only about 10 percent of costs can be controlled through insurance reform ... the rest must come from preventing and reducing chronic illnesses and other fundamental changes that address current shortfalls in the system.

The U.S. is No. 1 in the world in terms of healthcare expenditures, yet in numerous international comparative studies we rank well below most other developed countries, and even some developing countries, in quality of health indicators. That includes aspects such as life expectancy, infant mortality and rates of disease. We will continue to lag behind other industrialized nations until we find ways to help people make meaningful changes in their personal health behaviors. Our current healthcare reform effort is a step in the right direction. But we’ll need to do more if we hope to decisively and effectively address the issues driving costs and affecting our overall quality of life.

Are there any other provisions you feel are musts to have, and if so which ones and why ... or any of the discussed main provisions not to have?

RG: We need to consider programs that pay physicians and providers for their outcomes, not for individual procedures. We need to find ways to reform malpractice so that physicians don’t conduct tests simply to avoid lawsuits and so that good doctors aren’t forced out of the system. Providing incentives that encourage everyone ... not just younger and healthier people ... to make better lifestyle decisions should be part of our strategy.  The way our nation eats, exercises, and our attitudes about health are not encouraging healthy behavior ... that is clearly a significant portion of reform that is not being addressed. However, we cannot be discouraged ... we recognize that current reform efforts are a process and this is a good start.

Is there anything else you'd like to say about chronic disease, preventive medicine or the healthcare reform issue?

RG: The current healthcare bill in the Senate primarily looks at prevention at the tertiary level. We believe much more attention should be paid to prevention at the primary level ... that is, changing the way we live ... encouraging young people to eat healthy, exercise and engage in lifestyle choices that prevent the onset of chronic disease. We must also focus on secondary prevention ... specifically identifying people at risk and giving them the programs and personal health support to help them change behaviors. This will help change the incidence and prevalence of illness.

Another issue we believe should be acknowledged is the importance of chronic disease management. More than 63 percent of health care cost increases over the past five years are due to chronic illnesses.[2][2][2] In all, chronic disease accounts for 70 percent of all deaths and 83 percent of all medical/Rx costs, and an astounding 45 percent of the population has or is at risk for a chronic illness.[3][3][3]

Alere works with a number of large employers and leading health plans to develop tailored programs designed to improve clinical outcomes and decrease costs. What’s really different about our approach is that we believe the way to help people change their behaviors is to offer customized personal health support ... programs that don’t dictate but that find out what the health concerns are of the individuals ... what they are willing to do ... and then provide the education and support to get them to make those changes.

The importance of personal health support also highlights another area we need to address at the health plan level and even within reform efforts ... the need to look beyond traditional treatment paradigms. New advances in technology, the Internet, social media and telemedicine are all opening up new doors to help meet people’s needs in ways that are convenient, meaningful, cost effective and sustainable.  We are spending a lot of time focusing on reforming the existing healthcare delivery system. We think it would help the nation to also focus on revolutionizing the healthcare delivery system through technology that can help build a culture of health in homes and workplaces.

(Editor's Note: Dr. Geraty earned his medical degree from Loma Linda University and completed his adult, child and adolescent psychiatry internship and residency at LAC/USC Medical Center, Los Angeles . He has been on the clinical faculty of Harvard Medical School .)

About Alere

Alere (www.alere.com) is a wholly-owned subsidiary of Inverness Medical Innovations, Inc. (www.invernessmedical.com) (NYSE:IMA). Alere, a Latin verb, meaning “to care for” or “to support”, offers the most patient-centered health management services available from a single provider in the industry. Alere services provide health interventions that are designed for the entire lifespan from pre-cradle (high-risk pregnancy and NICU management) to end-of-life care (complex care) as well as the continuum of health from wellness (health and productivity programs) and prevention to total health management of the individual for those having various chronic illnesses.

[1][1][1] Source: Thomson Reuters  - National Health Center for Health Promotion and Disease Prevention

[2][2][2] K.E. Thorpe, Health Affairs 24, no.6 (2005): 1436-1445; and K.E. Thorpe et al., Health Affairs 23, no. 6 (2004): 480-486

[3][3][3] Source: Thomson Reuters  - National Health Center for Health Promotion and Disease Prevention

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