TrestleTree Sprouts Savings Via Webcam

TrestleTree Inc., a self-described “health transformation company” in Fayetteville, has initiated a national rollout that it predicts can save corporate America $5 billion by 2010. Ted Borgstadt, the company’s president & CEO, said TrestleTree is leveraging Webcam conferencing technology to connect chronically ill patients with “personal pharmacist coaches” for monthly one-on-one consultations.

The aim is to affect change where traditional health care has failed — in the everyday behavior of patients. Borgstadt and psychologist Clint Gabbard, the company’s chief operating officer and cofounder, say their interactive model is the best way for self-insured companies to close the growing gap between health care costs and what they can afford to pay.

Hewitt Associates LLC of Lincolnshire, Ill., a human capital management firm, published a national study in February that surveyed more than 700 corporations about health care inflation. The report said the average company can afford an 8 percent annual increase in health care costs.

Costs actually rose 11 percent on average in 2000. And the trend for this year is closer to 13 to 15 percent, according to The New York Times. During 2003, the 1.3 million-member California Public Employees’ Retirement System (CalPERS) predicts health care costs will rise 20-25 percent.

“Health care has traditionally been good at telling someone what to do, but not very good at holding their hand and helping them do it,” Borgstadt said. “Change is hard to do on your own. But our pharmacist coaches influence people toward healthier behaviors.”

TrestleTree, which started in 2000 with $1.2 million from 11 “angel” investors, works primarily with employees afflicted by one of the four chronic illnesses that account for the majority of corporate health care expenses — diabetes, high blood pressure, high cholesterol and asthma. Many national health studies show that the 20 percent of an employee base that’s likely to suffer from these diseases usually accounts for 80 percent of a firm’s health costs.

Hunt for health

There is already some evidence to back up TrestleTree’s claims.

The company will soon complete a yearlong beta test project with J.B. Hunt Transport Services Inc. in Lowell. Mark Greenway, Hunt’s vice president of human resources, said when the freight carrier looked at the market for disease management companies, no one was as proactive as TrestleTree. He added that Hunt has already seen positive feedback.

“Ted and the TrestleTree group are the first ones to bring to us a solution that really truly tried to change people’s behavior,” Greenway said. “It’s a different paradigm for the way disease management programs are run and administered …

“The employee response has been phenomenal. We initially had concerns that employees would be reluctant about some of their personal health conditions with a stranger or someone who they’re not familiar with. But what we’ve seen is that people are really hungry and desperate to talk to someone.”

About 700 Hunt employees volunteered to participate. Several of them have given testimonials and raved about the program. Some diabetics and high blood pressure patients have lost 22-80 pounds. One asthmatic patient gave an emotional account of how TrestleTree has improved the quality of his life. The common theme expressed was appreciation to TrestleTree for getting involved with their health, and to their own company for being so focused on employees.

Borgstadt said a study by Watson Wyatt Worldwide of Santa Clara, Calif., is also being done to certify the “hard dollar” savings for Hunt.

“We’re committed to the quantification of savings for clients,” Borgstadt said. “A lot of disease management firms infer savings on the soft dollar side, but we only quantify the impact in hard dollars. [Hard dollars] are what has the attention of every board room in America.”

Branching out

TrestleTree is going after a massive market. About 95 percent of the Fortune 1,000 firms are self-insured, mostly because it makes actuary sense for companies with 200 or more employees.

It’s that kind of market that prompted Diamond State Ventures in March to pony up $1.5 million in venture funding for TrestleTree. Joe Hays is manager of Diamond State, which is a member firm of Arkansas Capital Corp. Group in Little Rock.

Competitors to TrestleTree include publicly traded American Healthways, not to mention nearly every health plan, pharmacy benefit management company and most hospitals. But Hays said Borgstadt and Gabbard are onto something.

“In the past we really haven’t seen programs that had enough backbone to them to [inspire] people to really stick with a plan for better health maintenance,” Hays said. “But the direction TrestleTree is heading is where people are going to go to reduce expenses.”

According to an October report by the American Journal of Health, 25 percent of the total dollars spent on health care in the United States goes toward treating illnesses and diseases resulting from unhealthy habits and other modifiable health risks.

Borgstadt said the reason TrestleTree is achieving success is because it gets in the trenches with people and their day-to-day habits.

“TrestleTree jumps in at the point where the participant is starting from,” Borgstadt said. “It’s not a shame or guilt-based model. It’s an empowerment of people to change their health care behavior themselves.”

The Trestle model

Borgstadt, 41, previously spent 17 years in health care as the owner of The Medicine Shoppe pharmacies in Rogers, Springdale and Siloam Springs. Gabbard, 43, received his Ph.D. in psychology from Notre Dame where he worked on athletic-performance enhancement. He later served for a decade as director of psychological services at Purdue University in West Lafayette, Ind.

The duo played football together at Evangel College in Springfield, Mo. In recent years, both had conveyed an interest in taking health care in a new direction.

The company name comes from old sailing ship trestles, the tall wooden extensions used to hold up sails. Gabbard, who trains the company’s pharmacists to build relationships with and motivate enrollees, said the name conveys TrestleTree’s mission of support.

“Psychology struggles with how we sustain change in people,” Gabbard said. “It’s a marvelous opportunity to take folks who have struggled with their health and give them an opportunity to improve. We just did a spot check at J.B. Hunt, and 80 percent of our enrollees there have begun a consistent form of exercise.”

TrestleTree uses 15 video conferencing setups made by Polycom, PictureTel and Tandberg. The equipment ranges from $3,000-$6,000 per set up. Enrollees get one-on-one counseling with pharmacists each month when they set goals for improvement.

Gabbard said the company uses licensed pharmacists as consultants because of their medical expertise and the fact that prescription drug costs are the fastest rising pressure on health costs.

T-Rx bites drug costs

T-Rx, pronounced like the carnivorous T. rex dinosaur, is a proprietary software program being developed by TrestleTree to help drive down prescription costs even more. Traditional prescription drug cards us several tiers of co-payments as a formulary.

T-Rx will help enrollees make more use of generic prescriptions when possible. Borgstadt said the difference in cost between brand name and generic medicine is often a factor of four.

“Our coaches act as medical librarians,” Borgstadt said. “You don’t always know if the information on the Internet is accurate, so we distill down articles and sites and links that are good … Studies show that in 1960 doctors saw 18 patients per day, but now they might see 40. All we’re doing is giving patients more face time than the four to seven minutes they’ll get at their doctor’s office.”