With its Healthy Nevada initiative, Cerner Corp. cultivates a culture of health

Cerner Corp. employees started visiting Nevada, Mo., in 2011, looking to adopt a community as a testing ground for theories to control skyrocketing medical costs.

At the outset, “our discussions were marked by a lot of confusion,” recalled City Manager John David Kehrman. “We thought of Cerner as a data company. We didn’t understand what they wanted.”

The North Kansas City-based company, grown to global prominence by selling health care information technology to hospitals and doctors, aimed to reach a broader audience with a message: You have to take more responsibility for your own health.

Now, nearly all Nevada residents know that Cerner wants them to practice healthier habits, from welfare recipients who get advice about healthier food to students at Benton Elementary School who have walking time built into their lunch breaks.

The message certainly reached Kehrman’s kindergarten daughter, who got in the car one day after school and announced, “I have to limit my screen time.”

It’s all part of Cerner’s business-development model. The Healthy Nevada prototype may expand and eventually produce consulting revenue for Cerner.

But the company’s bigger evolution is that it’s investing millions in its next-generation software, dubbed Healthe Intent, which tracks individual and group health and treatment results. It re-imagines jobs in the health care industry and eventually will reach into patients’ homes.

If the initiatives blossom, Cerner executives believe they will boost the company’s revenue by billions of dollars a year.

“It’s in the DNA of our company to have the vision and passion to fix what’s broken in health care,” said Matthew Swindells, Cerner’s head of population health and global strategy. “We’ve solved the data problem. Now, it’s not about what the doctor does. It’s about what the individual does.”

It’s also forward thinking. The market for the major health IT systems that fueled Cerner’s growth is maturing — Cerner actually envisions “paperless hospitals” soon. Future growth requires new markets.

That means Cerner intends to reach out and touch you — through hospitals, workplaces and where you live. Like earlier software, Healthe Intent is marketed to care providers, but it expects to link your home into the system.

You might, for instance, be identified as an at-risk heart patient who’s asked to step on a wireless scale so that care providers can monitor daily weight changes. If the vision takes hold, you may one day have a personal case manager who flags problems, maybe before you know you have them.

And you won’t just be discharged from the hospital with a prescription; you’ll be tracked to make sure you follow instructions. The system will send computer or phone reminders about medications, schedule doctor’s appointments, remind you to exercise, and even help a relative keep tabs on you.

It’s a vision that faces tough competitors and some skepticism, but it’s embedded in a concept called “population health.” The discipline, a big part of the Affordable Care Act, says we’ve focused too much on paying doctors and hospitals for providing expensive care for acute illnesses.

Instead, to really get a grip on health care costs, experts say we need to keep the U.S. population healthier in the first place and pay better rates to care givers who produce the best health outcomes. Population health emphasizes: Stay out of the hospital to avoid expensive care.

Thirty-five years ago, when Cerner’s founders started the company, they wanted to tame medical costs by improving the efficiency and accuracy of health care through better recordkeeping.

The company’s technology is now in more than 14,000 hospitals, doctors’ offices and other health care facilities worldwide. Cerner logs nearly $3 billion a year in revenue, employs more than 14,000 and has become one of the Kansas City area’s premier corporate citizens.

But digitizing health records hasn’t cured medical cost inflation. And that hasn’t set well at Cerner.

“Cerner’s founders never saw themselves being a health care IT company,” Swindells asserted. “They saw themselves fixing health care.”

One health care IT industry analyst, Eric Coldwell at RWBaird, agrees with many stock traders that Cerner is an industry leader. He’s impressed with “their diverse business model, their execution, their financials,” and thinks the company will continue to take market share in its basic IT business.

But, Coldwell wonders: “Other than goodwill with the client, I’m not sure how they get paid for thinking about real-world population management.”

So far, they don’t. Yet Cerner executives say they’re comfortable with their investments into population health. Drawing from the company’s deep pockets, they’ve paid for about two years of population health programming — with no appreciable return on investment yet.

Al Lewis, one of the nation’s most vociferous critics of the “wellness epidemic” spreading through corporate America, said he’s still on the fence about population health. He wants proof it won’t cost more than it saves.

And he notes that no one company can bend the health care cost curve. Even within the health IT industry, hundreds of companies compete to sell the products they believe will make a difference. And Cerner and its main rival, Epic, haven’t joined hands in pursuit of the same goals.

But along with its Nevada project, Cerner is plunging ahead on other fronts:

• With several large Kansas City area companies it’s pushing employees to get regular checkups and take better care of themselves.

• It has made its own workplace a test kitchen. Cerner has onsite gyms and pools, employee health clinics, a focus on healthy food in the cafeterias, weight-reduction incentives, and repeated wellness and medical cost education.

• It has two, soon to be three, major partnerships with hospital systems to install and work toward the full Healthe Intent vision.

“It’s absolutely on the right track where the industry needs to go for the next several years,” said Mike Englehart, president of Advocate Physician Partners in Chicago, where 11 acute-care hospitals plus a children’s hospital are implementing Healthe Intent.

The health IT industry is sizzle-hot, thanks partly to a 2009 federal law requiring digitized and “interoperable” health data that can be exchanged among doctors and hospitals using different computer systems and software.

It’s also booming because of federally mandated shifts in insurance and Medicare reimbursement formulas. The Affordable Care Act of 2010, known as Obamacare, changed the reimbursement system from “pay for quantity” to “pay for quality.”

Instead of paying flat rates for procedures, rates are based on healthy outcomes. Providers who post lower infection rates, fewer hospital readmissions and use electronic records get paid more.

Health care providers are scrambling to create “accountable care organizations” and other vehicles to help meet those mandates. Cerner’s own experience suggests the cost controls can be realized.

“In the last five years, our health insurance premiums are up 1.6 percent, total, versus the national average of 7 to 10 percent a year,” Swindells said.

And the self-insured company’s total health care spending per covered employee and dependents per month has fallen 15 percent.

“We’ve kept people out of emergency rooms, diverted them from high-cost venues, and layered on wellness incentives. We’ve renegotiated our health networks at lower cost,” said David Nill, chief medical officer for the “Cerner Healthe” employee initiative. “We’ve created a culture of health.”

Healthy Nevada is a long-term project for the town of 8,300, the county seat of Vernon County.

Efforts in subsequent towns are unlikely to get the same capital investment from Cerner, which spent $750,000 to remodel the top floor of the town’s public library as Healthy Nevada headquarters. A half-dozen Cerner employees work there, building partnerships with employers, churches and social service providers.

Cerner also financed a pedestrian and transportation study. It found that residents didn’t walk or ride bikes because Nevada’s sidewalk and trail system was poor, and scary dogs ran free. In short order, some sidewalks and trails were improved, a leash law was adopted, the City Council passed a “PedNet” plan, and every zoning or development decision in Nevada now must consider pedestrians and cyclists.

“Dollars didn’t flood the community, but our focus changed,” City Manager Kehrman said. “Healthy Nevada created an interaction between public policy and personal behavior.”

That meant adapting police work to better deal with mental health problems and creating a mental health court. It meant using city and county health departments to not just give free flu shots but educate about healthy diets. It meant school kids exercising and vegetables growing in the downtown garden.

“Sure, we hear pushback,” Kerhman admitted. “The status quo is easy. This can’t be about forcing change.”

Indeed, smokers pushed back when they heard that smoking might be restricted in public places. Change has to include something people want, Kerhman acknowledged. But he said Cerner’s prototype project has taught the town that “if we’re not thinking about hypertension, diabetes and our ability to get and keep good employees, we’re setting our population up for failure.”

Cerner may one day find a revenue stream for sharing population advice to communities. For now, chalk the effort up to research and development.

Kehrman estimated it will be four or five years “before we can see if we’ve moved the health needle. But little victories are happening. I think it’s truly impacting a population in a meaningful way.”

Lewis, the outspoken critic of some population health efforts, thinks community programs like Nevada’s may in the long run rein in costs. He’s more skeptical about employer-based wellness programs.

“You can have too much prevention,” contends Lewis, author of “Surviving Workplace Wellness.” “The insured population involved in workplace wellness is getting over-diagnosed, over-medicated and over-stressed. The issue is that they’re getting too much medical care, not too little.”

Lewis said he’s researched instances in which employer-based screening programs and high-risk diagnoses received by employees did more cost and emotional damage than help.

Other disagree. Count Hallmark, Deffenbaugh Industries, JE Dunn, the cities of Lenexa, Riverside and North Kansas City, Children’s Mercy Hospitals and American Century among Kansas City area employers working with Cerner on some level of employee health, ranging from electronic “health portals” to on-the-job health clinics.

Hallmark enlisted Cerner’s counsel when it reviewed its medical claims data and found a glaring barrier to its long-running wellness efforts: Half of its employees didn’t have a regular primary care physician, said Anne Steffes, a human resources manager.

Such employees had more and higher medical claims. They weren’t managing chronic diseases, such as diabetes, or they were sicker when they finally were diagnosed. So Hallmark staged workplace health screenings, aimed to match employees with physicians, and designed incentives for participation.

According to the Kaiser Family Foundation, nearly half of U.S. companies with more than 200 employees now ask workers to submit to annual screenings to measure weight, blood pressure, blood sugar, cholesterol and other health indicators.

Despite the aggressive push, Hallmark got only 31 percent employee participation in its lab screenings last year. This year, the goal is 50 percent; they’re at 42 percent with a week to go in the campaign.

Hallmark and Cerner officials acknowledge that many workers are busy people who don’t get around to making appointments. Other workers are dubious, or afraid, of having employers pay attention to their health. Few workers want their bosses to know details about their personal health.

The American Psychological Association’s 2014 Work and Well-Being Survey found that about one in four workers said they don’t trust their employer and only about half believe their employer is open and upfront with them.

At Hallmark, “the best we can do is repeated messaging about how we get claims data in the aggregate, never identified to individual employees,” said Colleen Meurer, a human resource director. “Our interest is helping them understand that their relationship with a family physician is the most important way to mitigate costs and be healthier.”

It may be a while before employers find a return on their population health investments. Soeren Mattke, managing director of the RAND Health Advisory Services, recently reported on a study of 600,000 employees at seven firms.

“We found that lifestyle management reduced health risk, like smoking and obesity, but no evidence that it lowered employers’ health care spending,” Mattke wrote.

Another RAND analysis, looking at 10 years of data from one Fortune 100 employer, found a savings of about $30 a month in health care costs per covered employee and dependents. Disease management was responsible for 87 percent of the savings, Mattke said.

Clients and prospects can see Cerner’s Healthe Intent vision on display in the company’s headquarters, but its bells and whistles are proprietary and protected in the fiercely competitive health information software industry.

The next-generation software system currently is in use by only two hospital systems — one in Chicago and one on Vancouver Island, Canada. Cerner is equipping them with patient history data and “surveillance solutions” to monitor real-time health information from patients.

Cerner’s Swindells said the system at Advocate in Chicago has reduced emergency readmission rates by 20 percent after just a few startup months.

“We’re doing that by running sophisticated algorithms to identify patients in danger of readmission,” he said. “The nurse spends more time with those patients to talk about their meds and follow-up practices. We’re using data to predict what will happen and intervene before an expensive health crisis.”

The first step at Advocate was introduction of “platform agnostic” software that eases communication among four different health IT providers in Advocate hospitals. The next step was redeploying about 100 Advocate employees to be case workers outside of the hospitals, to help patients manage their care at home.

Ahead later this year: moving technology into individuals’ homes, starting with people who have chronic conditions such as diabetes, to help them better manage their diseases.

Early adopters emphasize that the system’s ability to predict patient outcomes, though data rich, is still in its infancy. To work as envisioned, it requires a wholesale buy-in by physicians and hospitals. That goes far beyond just entering patient information on computer screens, a big enough challenge in many care settings. It requires redesigning job descriptions and getting patient follow through.

Cerner thinks it’s making a good case. It’s preparing to announce that a third major hospital chain, in the southern United States, has become a Healthe Intent client.

This story was originally published May 10, 2014 at 11:31 PM with the headline "With its Healthy Nevada initiative, Cerner Corp. cultivates a culture of health."