We have a brand new episode of The Value-Based Healthcare Podcast! Our guest for episode 17 is Karen Horgan, CEO and Co-Founder of VAL Health. Karen discusses her career start from her business background to her segue into healthcare, adapting to new work from home routines amid the COVID-19 pandemic, how behavioral economics can be the last nudge for people to transform healthcare and more!

Click play below or the platform links underneath the video to listen to the entire podcast. Scroll down to read the transcription.





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Podcast transcription: 

Jay Ackerman:
Hello, I'm Jay Ackerman, CEO of Reveleer, a software company committed to providing health plans with innovative technologies to maximize the return from quality, risk adjustment and compliance initiatives.

We're back again with yet another installment of the value based healthcare podcast, where we engage with thought leaders and visionaries working across the healthcare ecosystem. Through our podcast we aim to widen the visibility and voice of people working to change how healthcare is provided and the impact it has on all those who participate in the care delivery chain. Let's get started.

I'm thrilled today to be joined by Karen Horgan. Karen is a thought leader in the application of behavioral economics and an expert in developing high impact engagement programs to drive health-related behavioral change. Karen Horgan's passion for health and belief in evidence-based approaches led her to co-found VAL Health, the leading health behavioral economics firm. Karen was Chief Marketing Officer at Keystone Strategy, a consulting firm affiliated with experts from Harvard, University of Pennsylvania and MIT, where she led global client engagements to develop R&D and innovation solutions for Fortune 500 companies including Pepsi, Microsoft and JNJ. Karen holds an MBA from the Harvard Business School, a BA with Honors from the University of Pennsylvania and a BS with Honors from Wharton School at the University of Pennsylvania.

Karen, let's begin with a few questions on how you're adapting to this COVID-19 work from home model. So first, why not let's spend a minute or two on what is the operating model look like for you during this pandemic?

Karen Horgan:
Jay, thanks for having me. The operating model, I would say, is still evolving. We are based outside of New York City, so we're about seven weeks into the adaptation. And so, as a consulting company, on the one hand, it works great because we can be virtual, everyone can work from home. On the other hand, we typically would go see clients and have meetings and do discovery. And so that we've all had to adapt to new technologies.

With one client we actually, instead of doing a tour of their facility, they took us around on FaceTime and we had a virtual tour. So, we're getting creative outside of what everyone else is doing. But I think the most important thing is everyone's being healthy and safe. And we're really taking the physical distancing very important. And we are all trying to support each other mentally as well because mental wellbeing is critical.

And understanding what the work from home challenges everyone has, whether it's childcare, whether it's the dog barking, whether it's working in a one bedroom, New York City apartment where your desk is your kitchen, which is everything. And so really we've had to accept that productivity may decrease a little bit, but mental wellbeing is really critical to keep the team up throughout the coming months.

Jay Ackerman:
That's super, Karen. Anything you want to share that you've learned about yourself or your team in this seven plus week work from home model?

Karen Horgan:
I've learned that I have a very disciplined team and that we all like routine. And so we've created some new routines in terms of we have Monday morning kickoffs with all of us on Zoom, just to talk about what's coming for the week.

We've created buddy programs, where each week each team member is teamed up with somebody else just to get to know each other more personally and talk about anything except work. And then we've done just some of the spontaneous coffee breaks or cocktail hours, whatever the team needs based on the mentality. So on one hand we want routine, but on the other hand we need to create some irregularities.

Jay Ackerman:
Those are great, I may have to steal that buddy system.

Karen Horgan:
It's actually worked out surprisingly well, to be honest people were a little reluctant at first. And the only guardrail or rule was, you have to connect with the other person each day and you cannot talk about work. So, it could be IM-ing, it could be texting, it could be FaceTime, whatever people wanted to do. And so, it became very ad hoc in that sense. Like two people they did, each morning they did the same workout, not together, but then they talked about it later on. And so, people come up with different things.

Jay Ackerman:
That's fun, really organic. All right, so let's talk about yourself and your journey into the healthcare system. So, can you give us a little sense on what got your career started in health?

Karen Horgan:
Yeah. In some ways I stumbled upon it. In some ways I could say it was very well planned. I've always been passionate about health and wellness and I have a business background. And about 10 years ago I reconnected with my two co-founders, Dr Kevin Volpp and Dr David Asch, they were writing a lot of academic papers published in JAMA, New England Journal, all around behavioral economics and healthcare. And they were getting contacted by organizations asking if they could do some work to help a client.

And being wonderful academics they were like, well, we can write white papers, we could do all of that. But they recognized that to really create actionable solutions in the setting wasn't their forte. And so I got together with them, bringing my business side with their academic research and we created VAL Health to take the behavioral economics science and apply it in healthcare.

And so it was actually great for me to have my passion of health and wellness come together. And before that I had spent a fair amount of time working in the technology sector, which on the one hand, not healthcare, but on the other hand is really valuable because I'm not stuck in the ways of ‘healthcare has always been like this’ or ‘well, we do it because that's how it is.’ So constantly questioning the why and the why and the why. And behavioral economics which understands the rationalities and how to drive behavior change can really push that forward.

Jay Ackerman:
What have you found to be the biggest challenge in building your consulting firm?

Karen Horgan:
Hiring. To be very honest. It's finding the right people, the right mix of people who have behavioral economics knowledge, healthcare knowledge, a passion for health and wellness. The people who aren't just do-gooders, people who aren't just about public policy. It has to be those who can think strategically and develop new solutions. And so hiring and recruiting has been one of our biggest challenges.

Jay Ackerman:
Well, I think there are, for companies in growth mode, one of the upsides coming out of this pandemic may be an opportunity to go after and attract some more senior talent.

Karen Horgan:
Yes. We've actually already started pursuing some of that.

Jay Ackerman:
Fantastic.

Karen Horgan:
We want to hire, but obviously cash is king in this day and age, but we do recognize that someone's unfortunate situation, you can turn it into fortunate for them and for us.

Jay Ackerman:
Yeah. Fabulous. All right, so let's talk about the industry and some of the change unfolding. What industry trends do you see that are beneficial to healthcare organizations?

Karen Horgan:
I'm going to go with my default of behavioral economics. So as I mentioned before, behavioral economics, for your listeners I'll give a little background. The science of understanding that humans are irrational. We have biases present, which is why we'll eat the chocolate cake. We have aversion to loss and regret. We don't like too much choice, when we're overloaded with choice we shut down. And there are all these innate behaviors within us.

And what we do is we harness them. And rather than asking people to change, we bring that into programs. So for example, one state Medicaid agency, they wanted people to complete a health risk assessment, and they asked us how much do we have to pay them? The ultimate answer was we changed the journey, so people answered the questions at different times. And we went from 8% to 96% completed. We played on the fact that people are just going to have inertia and keep answering questions. Doubled the enrollment in diabetes management programs by changing from just information to presenting as exclusivity and social proof.

So there are all these ways that you can harness the way people are going to react and use it to get people involved. And so I bring this up because I truly think one of the big trends that we're finally seeing in healthcare is that behavioral economics can be this last mile for healthcare transformation and adoption. And so we know we're going through tons of change in healthcare, even pre-COVID. And this is for consumers, physicians, staff. And we don't like to make change happen, and so if we can use the science to nudge people that really can transform healthcare.

Jay Ackerman:
So what do you see as some of the greatest barriers or challenges in trying to drive behavioral economics in the healthcare system?

Karen Horgan:
There's several, one is people think that they... In healthcare we, as a system, are very guilty of just doing things the way we were doing it before. And so, there's an aversion to change. Now one benefit of COVID, and I try and find positives in this, is look at tele-health and how suddenly tele-health is out there. We spent years trying to drive tele-health adoption and there were all these hurdles that in one fell swoop were torn out. Providers didn't want to do it. It changed the way they practiced. Well, now they have no choice. Financial incentives weren't there. Well, now they're getting reimbursed. Consumers were questioning it, well, don't I need to go into my doctor and have them touch me and get the blood pressure. Well, that's not a consideration for them.

So there's technology where, well, it's like HIPAA is kind of on temporary hold in a sense for many providers. And so, if you eliminate all of those challenges in one fell swoop you've got tele-health. So I bring that up not because that's the challenge for behavioral economics, but shows how we focus on what the hurdles are and how you can eliminate the hurdles using behavioral economics.

Jay Ackerman:
COVID-19 has been this watershed moment for tele-health, and for all the reasons you just highlighted, but I hadn't really thought about some of the financial incentive changes and how just the consumer mindset has shifted. But post-COVID lock down, any thoughts on how we don't step backwards on that front? Because I think many would say, that that is something that's a long time in coming, and it's opening up opportunities for providers. It's opening up opportunities for members to get care easier. So how do we not step backwards?

Karen Horgan:
So assuming that we need reimbursements to stay in place. From a consumer perspective it's something called the endowment effect. Once you have something you don't like to lose it. And in talking, for example, with my parents or people who might have been very reluctant to use tele-health, they're suddenly like, this is great, I don't have to go to my doctor to get my test results. And so, they are going to expect that they can have this going forward. And not want to go in for just conversations with their doctor.

And this is going to be something that doctors are going to have a big challenge with because reimbursements will stay there. But also, particularly PCPs or even specialists, when they're overworked and they have a limited amount of time during the day, when you're in person and you've got your seven-minute doctor visit, the doctor comes in, they're done. He or she does the body language of, I'm leaving now to signal it's done. It's much harder to do that on the phone or even in video. And so, there's going to be a lot of changes that have to happen there. But I truly think that once a consumer has this, they're not going to want to lose it and that's going to drive change.

Jay Ackerman:
So as you think about how COVID-19 is changing the way health plans think about their members and how they drive behavioral change, what advice might you have for these executives in navigating the industry, now in this environment and in coming out, although the coming out I think will be a very slow drawn out affair?

Karen Horgan:
I agree that coming out will be a long drawn out affair. So there's going to be a whole new sets of challenges that organizations are going to face. So for example, preventative screenings are plummeting. I just read today that breast and cervical cancer screenings fell by 94% in March compared to where they're supposed to be. And colon cancer screenings dropped by 86%.

And so healthcare executives are going to have a whole new set of behavioral challenges that they need to tackle. And the way that we suggest you focus on it is, what are those behaviors that need to change? And what are the hurdles to doing that? And don't try and do too much.

Because we know, this is Strategy 101, but it's also Behavioral Economics 101, that if you give people too much information, they're going to shut down. And what we really have here is a behavioral deficit that we need to overcome, not an informational deficit. And so it isn't focusing on what are the right behaviors and not just giving people information about them, but truly trying to judge what those are.

Jay Ackerman:
I don't know if you spend much time thinking about CMS in your line of work, but I'm going to throw it at you anyway. So what regulation changes would you like to see from CMS that would be most beneficially impactful to the members covered by health plans?

Karen Horgan:
Yep. So I'm definitely not a CMS expert, but I do have some thoughts on that. One is tele-health, keep in place what they've done to reimburse. Because they could overnight again turn that off. I also think that there should be more flexibility for payers to be able to spend money on social determinants of health. Because we know that that is a big factor. Is someone not going to their doctor because they don't have transportation. They're not taking their medications because they don't have a refrigerator. It is do you need to just have general other ways that you can address social determinants of health which will impact physical and mental wellbeing.

The other one would be, which we see a lot more often, is on flexibility in patient communications. Oftentimes if we want to change the way we're messaging to Medicare members, it has to go through this laborious review. And our payer client will be like, well, I've got to get that to CMS, it could take us two months, six months. Just broaden the guidelines on words that can be used with members and not be so fixated on that. And that would be really helpful.

Jay Ackerman:
Great suggestions. All right, let's talk about recommendations for the public regarding their own empowerment and ownership of their health.

Karen Horgan:
This may be a controversial answer, but I don't think the public want to be empowered and own their health. I think this is one of the biggest problems we have as a global society, and particularly in this country. I literally want my cake and I want to be able to eat it too. And I don't want to have diabetes or high blood pressure.

And so people are looking for the doctors to come with a magic pill. They're looking for the doctors/experts to advise them, but they don't always want to hear that. And so there are people, maybe like me and you, who want to truly be empowered to own our health. I see you've got a, I don't know if that's a Fitbit or the equivalent of a digital watch, I want to know all of this. But we are not the target audience for some of the challenges that need to be addressed.

And so where instead, I would say, if you go back to what the healthcare executives that we want them to be doing is, how do you make the right path the easy path for a consumer or a member to do what it is that you want them to do?

Like the Subway sandwich shop, our team wanted to influence the number of calories people were purchasing. If you put low calorie items listed part of the day and high calorie items listed in the other part of the day, people purchase 25% fewer calories when low calorie items are listed first.

Jay Ackerman:
Fascinating.

Karen Horgan:
So you can nudge people. And they still have choice. But they're not being empowered or owning their health. And so again, that's making the right path the easy path to try and get healthier.

Jay Ackerman:
Yeah, well, I guess that's why VAL Health is doing what you're doing.

Karen Horgan:
We have fun doing it.

Jay Ackerman:
Yeah. Yeah. Fabulous. Let's start to bring this to a close. So those are great thoughts on the industry, on the individual, on the regulatory body of CMS. So let's talk about you as we bring it to a close, what keeps you up at night?

Karen Horgan:
Aside from the dog barking during thunderstorms, it would be, how do you keep people healthy? Things that we were talking about, like what creative hacks can you do? And in particular right now, to be honest, it's with COVID. I hear all about these essential workers who are on the front line. And I really appreciate that the nurses, doctors and staff, shout out to any of those that are listening, but I think those that are in the manufacturing, those that are keeping the supply chains alive. And how do you keep them safe? How do you help them in the workplace be able to come home at night to their kids and not feel like they're transmitting the virus? How do you get them to feel like they can have their livelihood and anything that you can do around that?

Jay Ackerman:
When you are restless at night, what book might you grab from your nightstand?

Karen Horgan:
I'm a big believer in Daniel Pink's book, When, it truly has transformed the way I manage my day. Like even right now, when we're doing the podcast, when we were suggesting times I made sure I wasn't going to be in my trough. We're in my creative time slot right now.

Jay Ackerman:
Yeah. Beautiful. I actually think I've got a Daniel Pink book right here. I had gotten from my team.

Karen Horgan:
You do have.

Jay Ackerman:
Yeah.

Karen Horgan:
That's a great one. I have read that one.

Jay Ackerman:
Yeah, To Sell Is Human, it's a great book for anybody.

Karen Horgan:
Yeah.

Jay Ackerman:
But it's not about me, let's stay with you. So how about your favorite app on your mobile device?

Karen Horgan:
That's a tough one for me. I'm going to cop out and say, it's my health app. For two reasons, one, I like to track because we've already talked about that. But what I like about it is it passively captures the information that I can look at at a future time. I don't have to launch it. I don't have to tell it what I want to do. It is tracking my steps. It's tracking all of that and what I'm doing. And so that way it's making the right path the easy path for me.

Jay Ackerman:
There are people that are religious about Fitbit versus their Apple Circle, so which one is it for you?

Karen Horgan:
None of the above. I don't have either of those. I probably just, if you notice, I'm standing, I do the standing desk. I do all of that just naturally.

Jay Ackerman:
All right. How do you invest in yourself?

Karen Horgan:
There's two ways. I would say in my physical wellbeing, exercise, get up every morning, rain, snow, shine, whatever, and work out. And then I find mental wellbeing is really important. I find, well, normally I would take vacations, but right now that's not possible. But I find even during the day, just taking a mental break and going for a walk is absolutely critical. Because if we try and do too much and we try to not take those mental breaks, it influences our work, it influences our home life, it influences the way we interact with people.

Jay Ackerman:
For me, it's been one of the blessings of this lockdown is the daily walks. And I just keep trying to think through, how do I allow that to stay alive when we go back to a regular office environment?

Karen Horgan:
So one thing I do is, and my team knows this, is I do walking meetings with my team virtually.

Jay Ackerman:
Beautiful.

Karen Horgan:
If there is not something I need to be in front of a computer for, and it's like a development discussion or something else, they know that we will be outside walking during it.

Jay Ackerman:
Beautiful. That's great. All right. What's the most creative thing you've done during your stay at home period?

Karen Horgan:
Ooh, that's a tough one. I would say I've gone back through photos and done that creatively. And then I've tried some new recipes. None of which I would recommend because none of them were good, but I try to cook.

Jay Ackerman:
Excellent. Well, Karen, thanks again for your time and your openness.

Karen Horgan:
Thank you, Jay, this has been fun.

Jay Ackerman:
Yeah, this has been super, thank you. It's my first podcast since we've been in lockdown. So thanks for bringing me and this podcast out of hibernation.

This will bring our value based healthcare podcast to a close. Please follow Reveleer on Facebook, Twitter and LinkedIn. You may also follow me on Twitter @AckermanJay, over and out.

Thank you for joining us today. Listen to more episodes at reveleer.com or find us through your favorite podcast platform. For episode updates, follow Reveleer on Twitter, LinkedIn, or Facebook.

About The Author

Reveleer is a healthcare software and services company that empowers payers in all lines of business to take control over their risk adjustment and quality improvement programs. The Reveleer platform enables payers to independently execute and manage every aspect of provider outreach, retrieval, coding, abstraction and reporting – all under one single platform. Leveraging its technology, proprietary data sets, and subject matter expertise, Reveleer also assists payers with full record retrieval and review services to support financial performance and improved member outcomes.