Health 2.0: Introducing the Healthcare FICO Score

FICO Score (fĭk‘o skôr) n.

1. Financial instrument used to assess the risk of credit applicants
2. A risk-based score system used to determine the probability of a borrowers risk of default

I have been talking quite a bit about the convergence of health and wealth in recent months. I am continually reminded of how much healthcare has to learn from the financial services industry. It is an analogous industry with an incredible amount of information, incredibly complex transactions, and significant privacy/security issues of very personal information. The Medical Banking project, which I have discussed before, is a very good start on introducing financial best practices into healthcare. The “information liquidity(this was the buzzword of the day at the conference) achieved in the financial services industry is one of the primary drivers of our unprecedented 25 year run of prosperity according to Alan Greenspan.

Crossing over to healthcare, I have been mulling over a concept for several months which I have termed “The Healthcare FICO Score”. Given that the closing reactor panel at the Health 2.0 Conference mentioned it several times (thanks Esther and Jay!), I felt that it is time to put my intellectual stake in the ground by defining the term first (a Google search of the term as of 5 PM PST did not reveal any hits).

The FICO score is a financial instrument developed to assess a credit applicants degree of risk when considering the extension of credit. The concept of credit risk scoring was originally developed by the Fair Issaac COrporation (FICO) and was the basis for a computerized risk-based scoring system to determine the possibility that the borrower may default on financial obligations to lenders. This scoring system has since become the leading indicator of financial risk (or worthiness as the case may be), and is used pervasively throughout the financial services world. Everything from home loans, to credit card applications, or other lending situations are based on your personal score. The actual scoring is somewhat mysterious in that it is a mix of your net worth, current income, current credit, past performance, and probably several other metrics that are leading indicators of your financial health. Three companies have been authorized to be the definitive source of the FICO Score and literally hundreds of companies (case in point – look at their banner ad!) have sprung up to help people manage and improve their scores in order to obtain credit.

I believe the corollaries are obvious and have been hiding in plain site for years. Health Insurance is currently a mathematical analysis of actuary tables and past claims experience. To my insurance plan, I am just like any other 38 year old white male. However, I am not your average 38 year old male (thank you very much). I don’t drink or smoke, I don’t do drugs, I am happily married for 16 years and have four beautiful children. I enjoy being active, hiking, surfing, and working out as I am able. I weigh 190 pounds, have less than 9% body fat, cholesterol less than 150, and have enjoyed very good health. My family history has remote cancers but all my immediate relatives have lived very rich and rewarding lives into their late 80’s. On the negative, I keep impossible hours, travel way to much, don’t get enough sleep, and need to work out more consistently to actually get back in shape.

So given all of this, what’s my true heath insurance risk – My HealthCare FICO Score? My insurance company has no idea. I get pooled with every other obese, smoking, drinking, pimping, clubbing 38 year old yokel. We can do better than this.

Think about how much better it would be if there was a HealthCare FICO Scoring system in place and a health plan that actually rewarded and incented me to take care of myself. In this scenario, I would be seeking a long relationship with my health plan, independent of my employer, because I might be switching jobs over time, moving, or a host of other things that disrupt that relationship and my insurance. Because of the longer time horizon, my health plan would really invest in getting to know me because our relationship would actually matter. I would take a health risk assessment, a basic laboratory panel, perhaps some physical fitness test, and in the future apply genetic forecasting as well. I would also have a health counselor work with me to determine my real age, which would include reducing my life stressors, improving my health, and applying all the best-practice, evidence-based, preventive medicine practices we currently know. In fact, there might an entire secondary industry built up around “repairing” your HealthCare FICO Score through a boot camp approach to improving your health. My Health Plan would be my advocate and I would pay them money to keep my HealthCare FICO score as high as it can be.

In this scenario, the insurance or payment component might need to be separated from the Health Plan to remove any perverse incentives. Because my health plan is paid to keep my HealthCare FICO score elevated, their incentives are aligned with mine. They, in turn, can shop my HealthCare FICO score around to insurers who like my risk profile and can continue to apply their mathematical formula’s to my scoring – albeit, my scoring now really means something, and Scott Shreeve, MD the 38 year old white male has a much more transparent and defined risk. I get rewarded for my good choices with preferred rates, ongoing assistance to improve my health, and a long, health, and hopefully happy sojourn on spaceship Earth.

I believe this is where it is all going. While many people talk about the concept of a healthcare tipping point, I believe we can go faster by looking at the “CrossOver” between industries to learn and apply what is already known in other industries to the healthcare problem. The Health 2.0 Conference really brought this home to me because it was a gathering of the healthcare intelligentsia, and not the entrenched healthcare illuminati who are incentivized toward maintaining the status quo. I believe we can build from the conference, by continuing to attract the attention of the bourgeoisie (employers) and ultimately the proletariat (the rest of us) with the ideas, technology, products, and services that will truly impact the way that healthcare is delivered in the United States and beyond.

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6 Comments

Filed under Conferences, Consumerism, Health 2.0, Innovation, Transparency

6 responses to “Health 2.0: Introducing the Healthcare FICO Score

  1. Archana

    Great job moderating the Tools panel. Nice to meet you at the conference.

    FICO score, Genome, DNA direct and the likes provide negative reinforcement to the average patient, who is already aware that he/she is failing in many more of these scores like BMI, Lipid panel, Hemoglobin A1C etc. To bring the change is so overwhelming for a patient that he gives up and spirals down to poor health.

    In this Health2.0 generation we need to approach this with a disruption. Empowering patients with self care attitude and developing a happiness index as a score. This might ease out the stress of ‘stress management’. This needs to parallel the example of healthy unconditional parenting where bribes or time-outs have a limited role and making the ‘right decision’ itself is the incentive.

    So before we bring out these FICO scores to the table please think what really works for you.

    Archana Dubey, MD
    blog.healdeal.com

  2. Bob Coffield

    While traveling back to Charleston from Health 2.0 I picked up your post further exploring the Health FICO concept.

    Since leaving the conference I’ve been thinking about the concept and believe this might be a catalyst to create change (disruption)to the traditional model of Dyson’s calcified health care. However, any change has to incorporate an overhaul of the current reimbursement system focused on “per click” rather than preventative care. I would like to see a world where we reward (reimburse) physicians at the end of each year for raising the FICO scores of his/her patients.

    I’m also uncertain how we address the mass of Americans who are old, poor and unhealthy (physically and genetically). Under your concept their FICO score would make their premiums skyrocket and as a result they would likely fall into the uninsured category. Changing health (y) behavior is a monumental chore and often only works when the individual is faced with a crisis. Also what do we do with employers who only want to hire high FICOs and pay for their insurance. Do we create a social net to cover the uninsured, elderly population? I would also stress that any concept along these lines has to focus on the younger generations (kids). Here in West Virginia there has been a study that shows that directing efforts to change the patterns of adults doesn’t work — but if you get the kids on board then the parents will come along. (Think seat belts as an example – adult never wore a seat belt but when your kid in the back starts saying dad why don’t you have your seat belt on — dad buckles up. What if that concept applied to healthy eating and exercise).

    More thinking going on in my brain – but only time to write this short comment for now. Look forward to continuing to carrying on the conversation.

  3. Anonymous

    Scott,(from Jos – Matthew’s ”Dutch” correspomdent )

    Just back from the energizing Health 2.0 event , reading your post re. Hcare FICO . Actually , a similar service does exist in The Netherlands – as a semi government health agency ( Institute for Prevention and Early Diagnosis ) pilot , with some VC co funding .The original objective was to carve out the high risk population and make screening much more effective and efficient at an early stage . The program is highly successfull – not suffering from some of the negative side effects Archana refers to in her comment to your post .

    Through web questionaires and simple lab tests ( urine,stool,blood in a do it yourself at home kit sent to a lab a la DNA direct ) , the subscriber gets a personal health ( risk ) profile , updated yearly , on a personal and encrypted web page . It is called the ” Prevention Compass” – including other than your web page a card to entitle for an array of various incentives/discounts with 3rd parties in the wellness and lifestyle business . Other than the trivial tracker stuff for weight etc , the web page does include extensive recommendation how to go about changing behaviour , anf if the risk profile so indicate , refers to a ”checkpoint” next where you live with GoogleMaps to meet with a provider face to face .
    At the time of that checkpoint visit , a lungfunction test and EKG are performed – becoming part of the profile .

    The information is shielded from the govt ,employers and insurance companies – in fact , some employers and/or payers will compensate in full or partially the annual subscription fee .

    I suggested to Matthew to include in the upcoming 2008 Health 2.0 event some best practices from outside USA – this might be a good candidate . Unfortunately , the URL of this service is in Dutch – but then , you may have people around who can decipher that .

    http://www.preventiekompas.nl/index.htm

    regards

    Jos Bakker
    Senior Director, Global Strategic Mkt & Business Dev’t
    Healthcare Informatics, Philips Medical Systems

    Phone +31 (0) 40 276 2508; Cell +31 (0) 651799553
    jos.bakker@philips.com

    The information contained in this message and its attachments is confidential and may be legally privileged.The message is intended solely for the adressee(s).If you are not the intended recipient,you are hereby notofied that any use,dissemination or reproduction is strictly prohibited and may be unlawful.If you are not the intended recipient,please contact the sender byreturn email and destroy all copies of the original message


    Scott Shreeve, MD
    (949) 235-9375
    scottlshreeve@gmail.com
    http://scottshreeve.blogspot.com/

  4. This is a very nice idea. We can even have health bureaus like credit bureaus, some institutions authorized by the federal government to give out people’s health Fico Score.

  5. Pingback: The Vitality Index: The Return of the Health Care FICO Score « Crossover Healthcare

  6. Thank you very much for your help, this has been a great break from the books,

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