Health Care Needs More Mavericks at Work. Here’s Why.

The Keynote Speaker this year at the Visa Prepaid Card Forum was William Taylor, Founding Editor of Fast Company Magazine and author of the current best selling business book, Mavericks at Work; Why the Most Creative Business Minds Win, about 32 businesses that have broken the mold to find success.

“We are living in an age of disruption.” said Taylor. “Originality has become the acid test for a successful strategy.”

Taylor noted that one thing that all Mavericks have in common is a Disruptive Point of View. “Most successful companies today,” he said, “try to redefine terms of competition.”

Taylor pointed out that two-thirds of front-line employees in corporate America cannot answer the simple question, “Why should I do business with you rather than your competitor down the street?”

In today’s environment, Taylor said, there is an opportunity for businesses to introduce a new set of ideas. Each organization, he said, must be the most of something. It is no longer an option for companies to try to be good at lots of things.

“What happens when you look at an industry with fresh eyes is an ING Direct,” said Taylor. “Founded in September 2000, the originators envisioned a new way to be a bank. Now they are adding 100,000 new customers and $1 billion in new deposits every month.”

In addition to being web-based, Taylor said what really makes ING Direct a success is their unique point of view and a value system that is most important to them.

“They are on a mission to lead American’s back to saving,” said Taylor. “They want to make saving money cool again. They are to banking what iPod is to music and what Southwest is to airlines.”

The ING model, according to Taylor is easy. It is a simple product offering with no fees, no paper-based checking accounts, and no credit cards. He calls them intentionally edgy and colorful in stark contrast to traditional banks.

“They take so much pride in their way of doing business that ING Direct fires over 5,000 customers each month,” Taylor said.

How do you manage to get fired as an ING customer? Make too many calls to customer service, have too many transactions in and out of the account, demand products and services that are not part of the simple product offering.

According to Taylor, ING Direct is simply not prepared to change from their focus and the customers that their platform is built to serve.

“The only sustainable form of business leadership is thought leadership,” said Taylor.

He challenged companies to see things in their space that competitors do not see and to ask themselves the question, if I went out of business tomorrow, would anybody miss me?

So how does a company cut through the clutter? Taylor suggests the best way to stand out is to emotionally and psychologically charge whatever it is you do. ING has found a way to do this in banking, and has found the formula in the business of selling shoes.

Taylor said that the Henderson, Nevada, based is now doing $1 billion in annual shoe sales over the web. Yes, shoe sales. The one piece of clothing that you really need to try on and wear before you buy. So how are they dong it?

“It is all about customer engagement,” said Taylor. “A real person comes on the phone when you call the company, and they will spend an unlimited amount of time with you helping you go through the largest selection of shoes available anywhere.”

Additionally, the company will ship you several sizes of the shoe you want and so you can find the best fit. There is no charge for shipping the shoes to you, or for returning the ones you do not want to keep.

Taylor says that one of biggest worries today is making sure that they continue to staff their company with people who drink the Kool-Aid. In fact, they are so committed to weeding out those who are not destined to become superstars in their organization, that they offer new employees $2,000 in cash to leave the company after they have finished an extensive training program. Apparently, they are not getting enough takers, and that worries CEO, Tony Hsieh.

So, how can this learning apply to the health care industry and especially health insurance plans? Currently, it seems that most health plans are trying to be good at a lot of things: individual insurance, group insurance, ASO, consumer-directed health plans, Medicare, Medicaid… Where the disruption? Where is that company who is re-defining the competition? Who is the ING Direct of the health insurance industry? Maybe one large insurance company does come to mind. Can you quack like a duck?

Can your organization’s front line employees explain why your customers should do business with your company rather than the one down the street? How are you redefining competition? What is your company’s unique point of view, what’s your emotional and psychological passion? What is your company doing the most of? What thought leadership is your company providing to the industry?

These are all good questions to ponder at a time when the health insurance industry is under a great deal of scrutiny from several sectors. This is the time when innovators and disruptors that can emotionalize their brand will come to the forefront.

Random Notes From the Health Care Sessions at the Visa Prepaid Forum

I mentioned earlier this week that I would be in Scottsdale attending the annual Visa Prepaid Forum. This is the event hosted yearly by the people at Visa who work to bring us those stored value cards like the gift cards that look and operate pretty much like a bank debit card. The Forum has attracted over 300 participants from banks, merchants, card processors, and others involved in making pre-paid cards work.

On Day One of the forum, I attended breakout sessions especially geared to the use of health care cards attached to HSAs, HRAs and FSAs.

Here are some random notes from Day One of the Visa prepaid Forum:

  1. There is still plenty of opportunity to convert paper-based medical payment systems to electronic, card-based methods of payment. In 2007, only about 11% of medical payments were made via debit card vs. 49% still being made by checks.
  2. Of the payments made via debit card, more than 80% were at the point of service vs. post visit payments to pay for remaining balances.
  3. IIAS is now up and running in more than 25,000 locations.
  4. By 4Q09, after drug stores and pharmacies go on the system in July, it is predicted that nearly 80% of FSA/HRA card transactions will auto-substantiate via IIAS.
  5. Almost 100% of current IIAS-qualified transactions are going through the system correctly.
  6. Over 600 of the largest merchants can now handle partial authorization on health care cards allowing transactions to be split between the health card and another form of payment.
  7. Health care spending placed on HSA debit cards increased by 69% in CY08.
  8. Unaided awareness of HSAs is approaching 50%
  9. A Visa debit card remains the most popular way to access HSA funds, according to research.
  10. Acceptance and safety are strong motivators for using the Visa card to access HSA funds.

Visa Pre-Paid Forum will Address use of Stored-Value Cards in Health Care

pjLater this afternoon I will be making my way to Phoenix for the annual Visa Prepaid Forum. This is the event hosted yearly by the people at Visa who work to bring us those stored value cards like the gift cards that look and operate pretty much like a bank debit card. The Forum will attract banks, merchants, card processors, and others involved in making pre-paid cards work.

Among this group will be a smaller subset of health care people who will break out after the General Sessions to focus on the use of stored value cards to facilitate the use of various account-based health plans including Health Reimbursement Arrangements (HRAs) and Flexible Spending Accounts (FSAs).

The big topic of discussion over the past couple of years, and the one likely to dominate the discussion this year as well, is how to make these cards compliant with IRS guidelines. As of January 1, 2008, the IRS required ‘non-healthcare’ retailers, such as supermarkets, grocery stores, discount stores, warehouse clubs, and mail-order merchants, that sell medical goods and services to maintain a point-of-sale system that effectively identifies eligible transactions when consumers use flexible spending account (FSA) and health reimbursement arrangement (HRA) debit cards.

Fort the past couple of years, the Special Interest Group for IIAS Standards (SIGIS), has worked to develop its a voluntary industry standard solution to meet IRS requirements for operating an inventory information approval system (an “IIAS”). IIAS-compliant transactions enable real-time, auto-substantiation for eligible medical items purchased with an FSA/HRA payment card. For more information see:

Visa Healthcare has been a driving force in the development of the IIAS Standards and will no doubt have new information to present during the forum.

Time permitting; I will be blogging from the conference, so check here for updates.

Winning the Battle of the Bulge can be Harder than you Think.

Marty's Current Tummytar.

My Current Bellytar.

I have been invited to play a game on Facebook called Battle of the Bulge. No, this is not some WWII adventure game. It is a game where I try to keep extra weight off my waistline. Ah, sort of like real life.

I started out by answering a few humorously posed questions about my eating and exercise habits and my body type. From there, I was presented with a slightly overweight Avatar (aka the Bellytar) whose weight I must now manage by making good choices when presented with diet and exercise options. To make it more fun, I can share some of my losses and gains with my Facebook friends who are also playing the game. And if I am really successful, I can end up on the Champions of Chunk page were I am ranked with other top players based on the number of days that I have been able to maintain my ideal weight. Right now the leader has a string of 99 days going and a very buff looking Bellytar. Im jealous.

So who is behind this slightly addictive and educational Facebook application? It is actually the Louisville, Kentucky – based health care company, Humana, Inc., though there is no mention of the company on the game app.

Greg Matthews, director of consumer innovations at Humana says, 2009 is the year of the game. The consumer innovations team is working on ways to use social media to get people more engaged in leading healthier lives.

What we are attempting to do, Greg said, is change peoples behavior by taking something that they are already having fun doing, like playing with Friends on Facebook, and making it more healthy.

Battle of the Bulge, which launched to the public just before Christmas, already has over 700 players ranging from Microsoft employees to Major League Soccer players.

Greg explained that the Battle of the Bulge game on Facebook is part of an ongoing exploration process the Humana innovations team has undertaken to discover the best ways to use evolving forms of media to engage an increasingly web-savvy public.

So, after playing the game a few times over the last couple of days, I have drawn a few conclusions that seem to also apply to real life.

  1. Getting to my ideal body weight is not going to be easy. Just when I think I have it all figured out, I hit a roadblock by making a poor choice.
  2. Getting to my ideal weight is dependent on several factors including diet, exercise, and even the behavior of my friends.
  3. Once I reach my ideal weight it will take dedication and consistency to stay there. The good news is that I should have figured out the correct answers to all the questions by then, so it will mainly mean that I need to hit the site application once a day (like a gym) to stay where I need to be. But watch out! I am sure that missing a few days will have consequences.

Well, if I am any indication, this stuff can be effective. Now if you will excuse me, I need to shed a few more pounds. Humm can any one tell which burns more calories: A) planting begonias or 2) polishing my phatmobile with a diaper. Ahgg I dont feel much like doing either one. Do I smell pizza?

Diabetics Using Twitter to Track Sugar Levels.

When I first conceived of writing about how health insurance plans were possibly using social media technologies like Facebook and Twitter to engage their members to seek better health, I was expecting to find more applications like the one at

Now diabetics can quickly add sugar and med entries via Twitter direct message to the ss1 Twitter account. SugarStats is a simple and easy-to-use interface to allow individual to input and access their data from home, school, work, even while on the road.

The application, which can also be accessed via a mobile device application, the web and through Endo, is operated by SugarStats LLC, a small company based out of Hawaii.

A free account can be established by going to Once the account has been set up, data can be entered using Twitter and a variety of other portable input devices. SugarStats will track your sugar glucose levels along with the elements that affect those levels such as medication, food intake and physical activity. Users can then easily share this information with their health care professional, family and friends to get further consultation, support and advice to lead to better health.

According to a blog established to promote the service, tracking diabetes is a simple as logging on to and posting a short message like this:

d ss1 bg 108 Good pre-meal BG, I’m feeling great this morning!


d ss1 med rap 6 Trying 6 units of NovoRapid to cover dinner

Then an entry of 108 goes directly into your SugarStats account at the date and time of the message.

If you want to share your sugar info with your Twitter circle you can enable the option within SugarStats to have new entries posted to your Twitter account, otherwise it is confidential and can be accessed in the form of graphs and charts by logging onto your account at

For all the details and instructions check out

Humana Innovation Center Using Social Media to Engage Consumers and Broaden the Meaning of the Brand.

This is the second post in my occasional series in the use of social media by health plans to engage their members to become healthier and better consumers of health care services. By social media, I am referring to activities that integrate technology, telecommunications and social interaction, and the construction of words, pictures, videos and audio.[1] In short, I am talking about blogging and the use of web sites like YouTube, MySpace, Facebook, and Twitter.

Recently, I had the chance to talk with Greg Matthews, Director of Consumer Innovations at Humana Inc. Headquartered in Louisville, Kentucky, Humana is one of the nation’s largest publicly traded health and supplemental benefits companies, with approximately 11.7 million medical members. Humana offers a wide array of health and supplemental benefit plans for employer groups, government programs and individuals.

Greg said that one of Humana’s most widely-used social media programs has been the use of YouTube to host a number of videos that take a light-hearted approach to explaining complex health insurance plans and concepts. The channel called Stay Smart Stay Healthy contains links to a number of short videos with titles like Why is Health Care so Expensive? (202,000 views), and How Does Health Insurance Work? (79,000 views). So far, all the videos combined have been viewed over one million times. A similar program was launched in December to educate pre-retirees about their health care options. This retiree planning community is called REAL, and can be found at

However, according to Greg, most of the social media experimentation currently taking place in the Humana Innovation Center has more to learning and more broadly branding the company than it does with specifically engaging with plan members to achieve tangible results.

For example, this past summer, Humana introduced Freewheelin. Jason Falls, the director of social media at a Louisville ad agency, writes extensively about Freewheelin in a post on his blog. In his post, Social Media Case Study: Humana’s Freewheelin. Jason described Freewheelin as “…a bicycle sharing program with a community of green- and health-friendly participants at its core. It’s not just a set of stations where you can rent a bike for a few hours in big cities. It’s that, but with the fundamental higher purpose of promoting better health for humans and the earth as the fabric that ties its users together.”

The program was kicked off this summer in Louisville and also during political conventions in Denver and Minneapolis. Greg’s group used a wide variety of social media vehicles including, a Facebook page, its own blog and a Twitter stream to build buzz about the program. And it worked; Greg told me that over 2,200 news stories were written about the program. But, as Jason Falls noted, it was really about more than just creating hype. The efforts in the convention cities alone resulted in eight days of rides, over 7,500 total rides, 41,000 miles ridden, 1.2 million calories burned and carbon offset of 14.6 metric tons.

I’ll share more of my discussion with Greg Matthews in upcoming posts. In the meantime, Greg and his colleagues are blogging about healthcare innovation at

[1] Wikipedia:

Social Media is Hitting the Mainstream. How are Health Plans Adapting?

This is the first post in what I hope to make an occasional series in the use of social media by health plans to engage their members to become healthier and better consumers of health care services. By social media, I am referring to activities that integrate technology, telecommunications and social interaction, and the construction of words, pictures, videos and audio.[1] In short, I am talking about blogging and the use of web sites like YouTube, MySpace, Facebook, and Twitter.

It seems to me that 2009 promises to be, for these forms of media, what 1996 was for email. Prior to 1996, I remember being hard pressed to find anyone with an email address, and if they did have one, they rarely checked it. Likewise with cell phones, how many people could you reach on a cell phone in 1996? Not many, I’ll bet. Yet a few years later everyone was driving down the road chatting to their finds and business associates.

Similar to these other communications technologies, the so called social media channels are going mainstream and corporations and non-profit organizations alike are making an effort to understand this new media and how to use it to engage customers and clients on a level that could never occur in the one-way information flow of traditional advertising .

If you are still a social media skeptic – it’s just for kids – consider this. A recent survey by Deloitte & Touche found that 43% of Internet users over 61 spent time sharing photographs with people. 36% watched and read personal content created by others. The average blogger is a white, 37-year-old male. 38% of Facebook users are over 35. More than 67% of MySpace users are 26 or over.

This might explain while Barack Obama had over 165.000 “Followers” on Twitter when he posted his last “Tweet” the day after he was elected President of the United States. It would explain why organizations from Starbucks to the animal shelter Wayside Waifs have thousands of people following their updates on Twitter and Facebook.

Now the question becomes, if Starbucks can use Facebook to influence me to do some volunteer work in exchange for a free cup of coffee, and if Wayside Waifs can Twitter me into believing I should adopt a homeless dog, can my health plan convince me to drop a few pounds, lower the cholesterol, and check my blood pressure?

That’s what I hope to find out. I have scheduled a series of interviews with people at the county’s largest health plans to learn what, if anything, they are doing to use social media to engage their members. It should be interesting, so check back soon for the next installation.

Up next: Innovation at Humana.

[1] Wikipedia:

Blue Cross Blue Shield of Massachusetts signs Innovative Contract with a Hospital and Two Physicians Groups

Sometimes health plan innovation comes from the product people, sometimes it comes from technology, but sometimes it comes out of the provider contracting group. This is one of those times. Blue Cross Blue Shield of Massachusetts has signed an innovative contract with a hospital and two physicians groups that they say will slow the rate of medical cost increases while rewarding top-performing doctors with bigger paychecks.

The Boston Globe reported that Mount Auburn Hospital in Cambridge, MA, and its affiliated doctors and Hampden County Physician Associates of Springfield, MA, signed the so-called Alternative Quality Contract, which offers the possibility of higher payments over five years if doctors meet quality and efficiency targets.

According to the Globe, Blue Cross’s new program gives providers a flat payment based on the number of patients they treat. The payment increases annually based on inflation. Physicians and hospitals can earn more over time by cutting costs – in part by restricting treatment – and by earning bonuses if they meet targets for better care. For instance, the Globe says, hospitals will be evaluated in part based on how many patients get infections during their stay.

The Globe reports that Blue Cross expects the new approach could change the way medical payments are made and cut annual increases in payments in half, to about 5 percent, by reducing hospital expenses for care and procedures.

Health Plan Innovation Take: While this provider contracting approach may be touted as new, it sounds to me a lot like the capitation system that was used by many managed care plans at least a decade ago. That system worked because plan members had to select a primary care physician (PCP) who managed that member’s care and controlled access to specialists and hospitals. In turn, the physician received a monthly payment for each member who had selected them. Individual physicians could also usually also earn bonuses if they met certain cost and quality standards set by the health plan.

The “pay for performance” system put in place by this Blues plan appears to be a bit different than the PCP-based capitation systems of the past, but the anticipated cost savings is huge – cut the trend line in half and improve quality.

It will be interesting to see if the results match expectations and if the health plan will be successful in extending this type of contract to other physician groups and hospitals in their service area. So far, this has been a problem for the plan. In fact, a number of New England Quality Care Alliance (NEQCA) physicians affiliated with Tufts Medical Center have notified the plan that they will no longer participate in the HMO and PPO provider networks, effective February 1, 2009. (Click here for more details.)

If Healthcare Were Run Like Retail – It Can Be.

I read an interesting post over on the Action For Better Healthcare blog today that caused me to stop and actually leave a comment. The blog which serves as an advocate for non-profit hospitals and the value of those hospitals, featured a post by Kester Freeman, the retired CEO of the largest integrated healthcare delivery system in South Carolina, Palmetto Health.

In the post titled, “If healthcare were run like retail…” It isn’t, nor can it be, Freeman takes on one of the icons of consumer-driven health care, Regina E. Herzlinger the Nancy R. McPherson Professor of Business Administration Chair at the Harvard Business School. She was the first woman to be tenured and chaired at Harvard Business School and the first to serve on a number of corporate boards. She is widely recognized for her innovative research in health care, including her early predictions of the unraveling of managed care and the rise of consumer-driven health care and health care focused factories, two terms that she coined.

In what will be a five-part series, Freeman promises to dissect Herzlinger’s recent article for BusinessWeek, If healthcare were run like retail…, in which she argued that a consumer-driven system would cut costs and improve service.

It the fist of the series, appearing today, Freeman takes on the first point in Herzlinger’s ideal world scenario: “Consumers tailor their own healthcare coverage, navigating in a national insurance market.”

While the Business Week article does not go into any detail about what the professor means by this statement, Freeman writes,

I think it’s rather unrealistic to believe that consumers have the in-depth knowledge required to accomplish such a feat. As Eugene Borukhovich wrote in a January 3 blog entry, most people have yet to establish a personal health record (PHR), such as Google Health or Microsoft HealthVault. Even if set up, the lack of providers that are technologically advanced to synch up with these PHRs makes true accessibility near impossible. Additionally, data and information on procedures, costs, and payer reimbursement that can be obtained by consumers through simple Internet searches has yet to exist. Patients aren’t doctors. Patients aren’t insurance companies. How can a patient-or in Herzlinger’s words, consumer-be expected to intelligently navigate such extensive choices and clinical detail with limited information and knowledge?”

That is where I had to clear my throat and leave a comment. I mean what does tailoring health care coverage have to do with PHRs?

Here’s what I wrote:

I think the issue of being able to tailor one’s own coverage by navigating a national health insurance market is being misconstrued and overcomplicated in the above post. What this really boils down to is having the choice about what you as an individual want to have covered. Today, in addition to basic coverage, each state Department of Insurance mandates all sorts of medical procedures be covered in policies sold in that state. Not to pick on anyone, but mandated coverage for chiropractic visits is a good example, and these mandates add to the cost for everyone. I for one have never been to a chiropractor. So, if given the choice not to buy this coverage, I would forgo it for the premium savings. Or, maybe choose to spend the savings on increased vision benefits because my back is fine, but my eyes need help. This is not that much different than deciding whether to add towing to your car insurance. I would think most people with a high school education can reasonably be expected to be able to make that kind of choice.

I attended the New Product Design & Development in Chicago this past October and heard first-hand several major health plans report on how they have already developed the ability to deliver just such tailored products.

The technology is there, the market demand is there, now all we need are willing DOI’s and health systems.

A Role for Consumer-Directed Plans in Achieving Universal Health Coverage

Over on the Market to Market blog today, Mark Reiboldt posted a summary of the event he chaired today on behalf of the Technology Association of Georgia, which explored the impact of the financial crisis on the healthcare industry.

Mark wrote in his blog that he posed a question to the panel them asking whether or not consumer-driven healthcare (CDH) will berelevant under a universal model, as proposed by Barack Obama, Hillary Clinton and most Democrats in Washington.

Mark writes that Dr. Bill Custer, who is a healthcare economist at Georgia State University’s Health Policy Center responded by saying that CDH will be relevant; however, not in the way that we have seen it thus far. Mark writes that Custer more or less argued that Health Savings Accounts and other products of the consumer-driven healthcare movement will likely not emerge as a competitive product or have a significant role in the model that is likely to emerge in the near future.

I disagree with Custer’s assessment of the role that CDH and Health Savings Accounts can play in achieving universal coverage. In comments I left on the Market to Market blog, I noted that as an executive with a national HSA administrator, I am seeing a very large number of HSA accounts being opened this January, so the rate of adoption seems to be picking up. I think these types of plans will continue to be relevant as we try to move toward universal coverage and while we continue to struggle to bring down costs.

As long as employers are involved in paying the bill, they will continue to look for ways to engage employees in helping to control the costs. This is the major premise behind consumer-driven health plans.

If, on the other hand, an individual mandate is the route taken, most individuals will no doubt be looking for the best coverage at the lowest cost – the way they do today with auto insurance. Where we seek a balance between what we are willing to self-insure (deductible) and what we want covered (catastrophic).

I think the future can be good for these types of plans as we work toward universal coverage, and I still believe that the competitive market forces that consumerism brings is the fastest way to make the health care system more efficient and effective.