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American insurers talk innovation at Davos forum

At the World Economic Forum (WEF) in Davos, Switzerland, a handful of American health insurance companies publicized their focus on issues like payment reform and the link between exercise and diabetes.

Executives from Aetna, Cigna, Humana, Kaiser Permanente and UnitedHealth Group joined about 2,500 other corporate and government leaders from around the world at the Swiss Alps resort, where the idea of aligned incentives has emerged across industries and countries, under the official theme of "resilient dynamism."

In the fall of 2011, Cigna CEO David Cordani visited a dozen cities in the United Kingdom, Belgium, Turkey, South Korea, Taiwan and China, the Hartford Business Journal reported, as the firm transitioned to what it calls a global health service company.

Cigna also saw large growth in 2012, including the $3.8 billion purchase of Medicare Advantage insurer Health Spring. In an interview at Davos with Bloomberg Television, Cordani said he was optimistic that accountable care provider-payer arrangements will be both profitable and productive in terms of improving health and utilization. "Insurance is necessary but no longer sufficient, because insurance is the financing of sickness or the financing of disability," Cordani said.

"We need to add the services that work to keep people healthy in the first place... Engage individuals, pay physicians based on quality of outcomes, not volume of services, align incentives for both individuals and physicians."

Cigna now has more than 50 accountable care arrangements, including many with Medicare Advantage members, and Cordani called them the "biggest innovations" the company has developed recently. "We want to pay the highest performing physicians more, and the lower performing physicians less, like every other industry would do."

As Cigna and other insurers partner with physician practices and health systems – and as more insurers open their own clinics – providers and commercial payers may be leaving behind acrimonious claims battles. "How much should a pediatrician make a year?" Bloomberg Television's Tom Keen asked. "Depends on how well they're doing," Cordani said. "The highest performing pediatricians could make a half a million dollars; the lower performing pediatricians should be making under a hundred thousand dollars."

In addition to arrangements with providers, insurers and employers have increasingly been trying to bring health interventions into the workplace, as part of the patient engagement movement. Humana did a health survey of its 40,000 employees, and shared some of the results as part of World Economic Forum's workplace wellness group.

In the late 2000s, Humana conducted a health risk assessment of its employees, matching survey data with health and pharmacy claims data, and found "that unhealthy weight was not only a widespread issue internally, but also a major contributor to healthcare costs."

Humana's study found a lack of physical activity correlated with one or more chronic conditions, with employees not meeting standard exercise recommendations having average annual medical costs about $1,000 higher than employees who regularly exercised. Humana employees 60 or older who didn't regularly exercise consumed an average of $3,609 more per year.

With ongoing internal weight loss contests and wellness benefits programs, Humana says it is trying to create a corporate community around nutrition and weight loss and also promote the ideas among members, primarily seniors with Medicare Advantage. Humana partners with Wal-Mart for pharmaceutical benefits in some markets, and it recently launched an online health coach and reward program called HumanaVitality, in partnership with the South African firm Discovery Health.

Humana also earned accolades at Davos in the 2013 corporate sustainability rankings. Consulting companies KPMG and RobecoSAM named named UnitedHealth Group as a healthcare "sector leader" and Humana as a "sector mover," for focusing on "preventive medicine and services, better compliance, continuous improvement in customer-oriented services and strategic alliances across traditional business boundaries."

So far as Davos attendees and the global economy is concerned, healthcare is navigating a complex problem in trying to address the relationship between disease, diet and exercise. As Reuters put it: "One look at the list of the strategic partners of the WEF shows how many vested interests are at play -- food and drink companies are blamed for feeding the crisis, while drug manufacturers profit from soaring rates of diabetes."

With an estimated 350 million people globally suffering from diabetes and 1.4 billion suffering from obesity, WEF economists estimate that over the next 20 years, $47 trillion of global economic output could be lost to chronic non-communicable diseases, with obesity contributing to nearly half of all diabetes costs and about 20 percent of heart disease costs.

The WEF is hosting a private meeting on "healthy living," with executives from the food, healthcare and agriculture and government health officials, Reuters reported. While some public health advocates support stricter regulation or taxing of soda or sugar, some government officials and food companies like Nestle are looking to establish voluntary industry agreements to reduce sugar in their products.

"It's not education alone, it's not diet alone," Paul Bulcke, CEO of the Swiss-based Nestle, told Reuters. "It's all that, plus healthy physical activity."

"It is hard to get people to eat healthier, but we can get people to walk. All they need is shoes," George Halvorson, CEO of Kaiser Permanente, told Reuters.

There is a new, seemingly facetious war on sitting, with physical inactivity being so pervasive in American office workplaces. A cottage industry for standing desks and treadmill desks has evolved, and the U.S. Surgeon General is launching a "call to action on walking."

Halvorson himself spends at least 30 minutes a day walking on a treadmill, and he's been a longtime proponent of walking as a sort of formula for prevention. He cites studies from the mid 2000s finding that one hour of walking per day five days a week cut the likelihood of diabetes in half, and in a YouTube video produced for the EveryBodyWalk campaign, Halvorson says: "There's almost nothing we can do for our own personal health that creates more personal benefit than walking."

[See also: Wellmark partners with local gov't, employers on healthy choices project]

As the U.S. starts addressing chronic conditions like obestity, some have worried that the American predilection for junk food and inactivity will be adopted by growing consumer classes in Asia and elsewhere, with fast food chains experiencing huge growth in China espeicially.

Growing economies like China are also beckoning American health insurers like Aetna, as Aetna CEO Mark Bertolini said at Davos, in an interview with Fox Business Network.  

Citing the Chinese government's officials plans to promote domestic consumption (after so many years of export-driven growth) Bertolini sees the 1.3 billion person country developing a robust health insurance market.

"A big thing that the Chinese save for is healthcare," Bertolini said. "We can build a healthcare system in China -- create a safety net -- that frees up disposable income to go into domestic consumption."

Also noting that the Chinese typically do not buy insurance through employers, Bertolini predicted that U.S. health insurance is gradually shifting to a consumer-centric model, even within the confines of employer-sponsored health plans.

"I think we're seeing the beginning of it with the exchanges that will come up in 2014," Bertolini said. "For the last five years, employers have passed off 50 percent of the increasing healthcare costs to their employees. Very slowly, but surely, employees are picking up a larger and larger portion of their healthcare...So even if there is employer-sponsored insurance, individuals will be shopping. They will be looking for the best deal, so we'll have a consumer marketplace regardless."

A sign of the consumerization of healthcare and insurance, Aetna recently launched individual health plan products for Costco members in California and says it will be expanding the offering around the country.

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