Improving Healthcare for Older Adults Project Foci

1. Behavioral Economics to Increase the Effectiveness of Prevention + Patient Engagement Interventions

The emerging field of behavioral economics can yield important insights into how individuals make decisions that can be applied to improving their health. Studies show that individuals often have difficulty making wise and informed choices. Decision errors are particularly likely when faced with choices that involve uncertainty, tradeoffs between current and future costs and benefits, or significant complexity. Decisions relating to healthcare exhibit all of these attributes. Yet, the insights from behavioral economics have only recently been applied to the study of healthcare and health improvement.

The behavioral economics literature shows that individuals often err in assessing probabilities. One important and undeveloped area relates to consumer decision-making with regard to investments in prevention and adopting healthy behaviors. Complexity arises because these investments require incurring costs today (e.g., time, effort, pain, money) to produce future benefits (e.g., longer life, improved functional status). This is true for routine preventive care, as well as more costly and invasive procedures such surgery to reduce cancer risk among high-risk patients. Behavioral economics has found people tend to invest too little in activities like these because they put too much weight on costs today and too little weight on future benefits. Individuals tend to under-consume preventive care or defer health improving lifestyle changes for reasons explained in part by behavioral economics.

Under the Improving Healthcare for Older Adults project, our research partnership will use a behavioral economics framework to develop and test how small subsidies targeted directly at patients and healthcare consumers should be structured. We will be developing and testing a mix of behavioral economics-based incentive models to determine whether seniors respond to different behavioral incentives to actively participate in their own health and care management and, in so doing, improve compliance and participation in their care plans, resulting in improved outcomes. A population of particular importance and interest is high-risk diabetic seniors. Research has shown that when patients are able to control their hemoglobin A1c levels (glycosylated hemoglobin), their health status improves and their need for healthcare services declines. However, there has been limited success to date in developing interventions that result in Medicare populations effectively controlling HbA1c levels on a regular and consistent basis.

Early research suggests that there may be a set of preventive, lifestyle and patient self-management activities where under-consumption largely occurs because the benefits are not immediate, but that by subsidizing them (e.g., through small financial incentives), it is possible to induce patients to adopt the healthy behavior. Gathering information on the effects of behavioral interventions can help to inform health education and health policy design by taking into account not only provider behavior, but as importantly, consumer behavior.

2. IVR (Interactive Voice Response) and Other Mobile/Digital Communications to Improve Chronic Disease Management

Increasingly, healthcare organizations are adopting and investing in digital communication technologies in the hope of improving care coordination and care management. With this approach, frequent and tailored remote communication with patients is used to identify pre-acute trends and early de-compensation, gaps in care, and patient symptom assessment or noncompliance. Information gathered can lead to greater care personalization and improvements in care coordination that can also have system effects, such as reduced hospital readmissions. Yet little quality, independent research has explored how to effectively integrate remote communications and other emerging digital technologies into the healthcare delivery system serving seniors.

The Improving Healthcare for Older Adults project will undertake research, pilot study evaluations and dissemination activities to add to the knowledge base that is being accumulated regarding the effectiveness of IVR and emerging patient interactive communications for Medicare patients. Our project partner has already successfully piloted and evaluated an IVR intervention with a small sample of non-Medicare patients with congestive heart failure (CHF). The project will enable launch of a remote monitoring pilot program using IVR to help expand clinical capacity and improve the application of user-friendly technology for older, chronically ill patients. Because remote monitoring technology is proactive, it can detect a patient’s disease symptoms earlier and trigger proactive intervention.

There has been a growing need on the part of health plans, providers and policymakers to better understand the potential value of communication and remote monitoring technology. This need can be expected to accelerate. While payers have always had motivation to reduce costly inpatient admissions, the onus has been shifting to providers. Medicare, for example, no longer reimburses hospitals for certain preventable readmissions within 30 days of discharge. In addition, development and implementation of accountable care organizations and other forms of payment bundling as part of national healthcare reform provides new incentive to improve patient health status.

Effective, low cost patient communication mechanisms can serve as a key strategy to manage the health of patient populations. Health IT can engage and support patients in health-related decision making and management of their own personal health information, and automated communication systems can simultaneously encourage patient engagement and assist healthcare providers in meeting targeted quality and cost goals.

3. Prospective Identification of High-Risk, High-Cost Medicare Patients

A key component of successfully managing care for high-risk seniors is the ability of care teams to identify patients whose costs may be low in the present, but can be expected to increase in a future period. And if a goal of policymakers is to direct intervention strategies towards high-cost beneficiaries and change their use of Medicare services, then it is important to consider patterns in Medicare spending over relatively long periods of time, not just over one year. Do individuals who make heavy demands on the Medicare program in one year continue to do so in subsequent years? Or do the high-cost beneficiaries change each year? If there is high turnover among high-cost beneficiaries, intervention strategies designed to change their use of Medicare services could be difficult to implement successfully because the time available to affect their spending may be limited.

The Improving Healthcare for Older Adults project offers an opportunity to investigate these questions and others, using data drawn from both Medicare Advantage and Medicare fee-for-service beneficiaries over time within a large integrated medical group setting in Southern California. A key objective of our research is to construct and analyze an integrated, large scale database that includes data sets from different sources, including administrative and claims data, as well as clinical and electronic health record (EHR) data.

Initial research will include a series of descriptive analyses to document patterns of utilization and expenditures over time for the overall sample population and various sub-segments (e.g., racial or ethnic minorities). Subsequent research will explore models to prospectively identify patients likely to become high-risk and high-cost in the future. These findings will be used to understand the implications both in terms of clinical systems, as well as development of interventions to reduce the probability that predicted high-risk patients will actually become high-risk and high-cost in the future.

According to the CBO (Congressional Budget Office), the costliest five percent of beneficiaries enrolled in Medicare’s fee-for-service (FFS) sector accounted for 43 percent of total spending, while the costliest 25 percent (defined as the high-cost group) accounted for fully 85 percent of spending. The CBO estimated that the average annual spending for the top five percent of beneficiaries was almost ten times that of the Medicare population average. Given this vast differential, interventions that can reduce spending for the top five percent by even as little as 10 percent offer potential for substantially improving outcomes and producing savings for patients and organizations caring for and paying for the Medicare population.