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Express Scripts 2013 Drug Trend Report

I always enjoy reviewing the PBM Drug Trend Reports.  Even though these past two years I’ve been focused more on the care management side of healthcare, I continue to see these two paths colliding in interesting ways in the near future. 

Here’s my big takeaways from the report some of which you can get in their Executive Summary

(I’d also encourage you to look at Adam Fein’s review…where he unfortunately beat me to the punch again.)

  • Overall trend was 5.4% which they did a nice job of breaking out according to different lines of business.
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  • They also showed the breakout of trend comparing specialty drug trend versus traditional oral solid medications. 

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  • Specialty trend was up 14.1% based on a 2.5% increase in utilization and an 11.6% increase in unit cost.
  • A key point is that specialty now makes up 27.7% of the total drug spend for a payer (and that doesn’t even count the ~50% of specialty drugs billed under the medical benefit).
  • Diabetes was the standout category within traditional drug classes with increased utilization and price increases.  [Which isn’t surprising to those of us working on the clinical side that see huge innovation and investment in the diabetes area – Omada Health, Telcare, and Welldoc (for example).]
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  • While they make a key point with data that member cost share is going down and actual out-of-pocket costs are only going up marginally, I think it ignores the reality that consumers are feeling the pain of out-of-pocket spending more especially with all the High Deductible plans out there.
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  • They do reinforce their previous messaging around waste and also introduce their Health Decision ScienceTM approach.  (I personally would have liked to see more on this.  How is the blending of Consumerology and the Therapeutic Resource Centers impacting utilization, adherence, waste, clinical outcomes, patient satisfaction, or other key metrics?)
  • As always, you can dig into their forecasts by drug class.  I choose cancer as one area to look at.  (While this is focused on the basics, I would have loved more about what’s going on around cancer.  How are genetic tests impacting use?  What about survivorship?  How do Centers of Excellence affect outcomes, drug selection, pricing, and adherence?)
  • On top of being able to drill down on Medicare and Medicaid, you can also look at a Worker’s Compensation specific version of the drug trends.  This is interesting since that business is different than the traditional PBM market and is an area that Express Scripts has gone aggressively after in recent years. 
  • One thing I couldn’t find in the document (which is hard to read in the current format) is the average number of Rxs PMPM or PMPY which is just a good stat that I personally track. 
  • One note I will offer on methodology is the definition of specialty drugs.  This could lead to some differences between PBMs as we try to compare their trend numbers.  Here’s the definition Express Scripts offers:

“Specialty medications include injectable and noninjectable drugs that are typically used to treat chronic, complex conditions and may have one or more of the following qualities: frequent dosing adjustments or intensive clinical monitoring; intensive patient training and compliance assistance; limited distribution; and specialized handling or administration. – See more at: http://lab.express-scripts.com/drug-trend-report/appendix/methodology#sthash.dhJhFIZs.dpuf” 

 

#mHealth and Innovation – 2 Recent Reports

We all know that healthcare is clearly one of the darlings in the market right now.  One doesn’t have to look any further than these stories:

You can see companies building innovation teams and innovation labs within healthcare.  You see lots of new entrants trying to figure out how contribute in this space (e.g., Qualcomm Life).  But, some of these just become ivory towers where they pontificate and put out cool ideas.  Others disappear because they can never be commercialized.  Others fall into the “fast fail” bucket of companies, and only a portion of those actually innovate well.

Of course, it begs the question of “What is innovation?”  Is it:

  • Something completely new
  • Something re-engineered
  • The same thing delivered differently
  • Combining of multiple things (i.e., product with services)
  • Solving old problems with new technology

With that in mind, I was reading two reports which I thought I’d share with some initial reactions.

The Boston Consulting Group report “Fulfilling the Promise of mHealth Through Business Model Innovation”.

This is a nice report, but it’s a little too high level for me.  It has some great frameworks about what to do and some nice graphics, but it’s not operationally practical (although that may not have been the purpose).  Here’s a few things I highlighted:

  • “Mobile Health – The use of mobile applications and devices to deliver medical information, access or record data, or provide clinical services – has the potential to revolutionize patient care.”  [good definition]
  • “The gap between the current market size and five-year projections is significant.”  [so is it a warranted gap or will it get closed…I think it will be a challenge to meet expectations.]
  • Their big example of success is Welldoc’s BlueStar “mobile prescription therapy”.  [it’s an interesting product with some interesting studies, but I’m not sold yet…will the Rx process work for a device?  Can they justify their price?  Will buyers do more than pilot?]
  • They hold out 3 barriers – entrenched behaviors, reluctance to pay, and fragmented infrastructure.  [I would agree but how do I work through these...they provide some thoughts.]
  • They talk about creating a “must-have app” that would consolidate multiple offerings into a single solution.  [I don’t even think this silver bullet approach should be considered…It won’t happen.]
  • They seem to fall into the traditional trap that people other than the payers and employers will fund these programs (telcos, pharma, device companies).  [Everyone wants that, but I think that’s the wrong framework.]
  • They talk about an option of creating and charging a premium for mHealth offerings because some of them “deliver objectively better outcomes or lower costs compared with traditional health-care offerings”.  [Really?  That’s great news, but I wouldn’t consider that a fact.  I’d say we’re seeing some promising studies.]
  • They talk about “an orchestrated ecosystem” and integration of data.  [This would have been a perfect time to highlight what Vladic is doing or what Dossia is doing.]

There were some things missing that I personally would have called out.

  • What about learnings from prior models like electronic prescribing?
  • What about things like EMR integration and the difficulties there?
  • What about the issue of privacy and security?
  • What about the fact that people abandon devices and apps very quickly?
  • What about learnings from gamification or incentive management?
  • What about prescribing apps to patients? (like Happtique or IMS)
  • What about the whole issue of FDA approval of apps and devices?
  • What about what the large companies are doing – Aetna, Cigna, CVS, Walgreens, WalMart?  I think understanding their view of this market is so critical.

Triple Tree report “Connected Health”. 

It starts with a great tag line from IBM – “Does Your Kid Have Better Technology Than Your Business?”  They reference Steve Case’s framework from a presentation he made (see below):

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What I liked about this report is that it’s based on lots of real world examples.  (It’s still not operationally helpful, but these are investors not consultants so it met my expectation.)  They certainly could have gone deeper to explain why certain companies they highlight got acquired such as Diversinet, Epocrates, BodyMedia, CardioCom, Healthagen, Vitality, and ConsultADoc.  But, if I look at their list of companies, I see a lot of the innovative companies that I would have on my list – Proteus Digital Health, Healthrageous, iTriage, TelaDoc, Telcare, Eviti, Change Healthcare, and Asthmapolis.  (I know Healthrageous shut down – see postmortem – but I think they had some great vision.)

I also think they’re list of major inhibitors to growth was very believable:

  • Physician adoption
  • ROI
  • Regulatory hurdles
  • Security and governance
  • Lack of standards

The report shares an interesting stat that 45% of the companies that applied for their rewards were led by MDs in 2009 while it’s only 21% now.  To me that shows the movement of IT and business executives into the healthcare space.

Triple Tree does talk about remote monitoring and CMS which I think is important.  While the Veteran’s Administration was mentioned in the BCG report, I think that the government efforts here and influence was generally overlooked.

Overall, two interesting reports.  Worth a read although I would choose the Triple Tree report over the BCG one if I had time to only read one.

Two other places that I would recommend going if this topic is interesting are:

Why Should Grocery Stores (and Retailers) Be In The Healthcare Business

Short answer = they appear to understand the customer experience.

Obviously some companies like CVS and Walgreens are both retailers and pharmacies.  They are clearly in the healthcare business and with CVS stopping selling cigarettes, they are clearly trying to show their commitment to healthcare.  

Other retailers like Walmart are clearly in the pharmacy business.  They’ve also done lots of different programs around healthcare, and there are always rumors of more.  And, they are also in the grocery business.

Target is an example of a retailer that has gotten into the pharmacy and clinic business and now in the grocery business.

Kroger is a very traditional grocery store company who has had pharmacies (like about 50% of grocery stores) and has made several steps to get into the healthcare space.  

I tee this up because whenever I see the Temkin Experience Ratings I’m always amazed that the grocery chain with the worst experience rating is similar in value to the best healthplan experience.  

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I think by now we all understand that the healthcare experience actually matters…and will matter even more in an exchange world where they have more freedom to find a plan that works for them.  

We’ve  seen some companies focus on this (e.g., Cigna with their Chief Experience Officer who is now the Chief Experience Officer at Prime Therapeutics).  You can see PWC’s report on this and also compare different industries to healthcare.  You can go and visit this deck on 13 great healthcare experiences.  At the end of the day, the healthcare experience is one leg of the Triple Aim and is a key opportunity for differentiation.    

My Interpretation of the RiteAid and Walgreens news from this past week

If you’re like me, you were probably surprised by both of these articles:

  1. RiteAid acquires Health Dialog
  2. Walgreens to merge Take Care Clinics with CHS in new company

So, let me share my thoughts.  

The RiteAid acquisition of Health Dialog symbolizes several things for me:

  • BUPA (who bought Health Dialog) probably realized that coming into the US market is harder than they thought.
  • Health Dialog which was once one of the big leaders in condition management has probably seen a lot of competition in the past 5 years as big payers were insourcing their business and smaller start-ups were pulling business away from them.
  • RiteAid likely saw a unique opportunity to act more like a health services company and less like a pharmacy (making them a better acquisition target).  [see my presentation from the CBI conference on this]

At first, when I read the Walgreens headline, I thought they were getting out of the clinic business which I thought would be a huge mistake.  I think the future role for clinics and kiosks like SoloHealth is huge.  But, as I read the press release, here were my takeaways:

  • Walgreens is getting out of the onsite clinic business (i.e., not in the stores) but yet gets minority ownership and a board seat in the new company.  This is likely a focus back on the core business.
  • On the flipside, Walgreens has invested a lot in getting outside the core into readmissions, ACOs, and selling direct to employers.  Will those areas lose focus also?

I think what you’re seeing is lots of moving pieces in healthcare today.  This is great opportunity for people to make moves.  The market is shifting.  New technologies continue to evolve.  New players are entering the market with lots of money to spend (e.g., NantHealth).  More consumers are entering the healthcare market thanks to the exchanges, and more companies are becoming patient centric (e.g., Sanofi’s new Chief Patient Officer).  

The Case For Beyond The Pill Strategies In Pharma

You’ll hear this buzzword – “beyond the pill” – come up every once in a while in a discussion with a pharmaceutical manufacturer.  As the drug pipeline has dried up and generics have become the norm for oral solid medications, the question is how do these behemoth companies “pivot” to leverage their massive global footprints, their feet on the street, their deep disease specific insights, and their medications. 

“In population health, what once drove revenue becomes a source of cost. If products, services, and therapeutics don’t lower costs, meaningfully improve outcomes, and help better patient experience, population health managers simply won’t use them.” Jerry Cacciotti, Partner, Health & Life Sciences, Oliver Wyman (source)

I’m a big believer in this strategy.  Imagine what they could do in terms of services to wrap around obesity drugs.  Imagine how they could support patients with diabetes or with cancer.  While the short-term view is that these actions might help differentiate them from a formulary or specialty pharmacy perspective, I would argue that they might actually come out with new business models like Merck is doing with Vree Health.

Ultimately, it all begins with an understanding of several issues from the outside-in:

  • What is the patient journey?
    • How do they experience the healthcare system? (e.g., clinics, MDs, pharmacists, family)
    • How or what influences their experience? (e.g., Dr. Google)
    • How do their experiences change over time? (e.g., newly diagnosed versus chronically sick)
    • Which experiences do they remember? (or as one of my clients call it – the Golden Moments)
  • What does the patient really want or need?  (think about Maslow’s hierarchy of needs)
  • Where is the patient (especially from a digital perspective)?
  • What are the patient’s expectations for you (pharma) or another entity?
    • How do they feel about you?
    • Do they trust you?
  • How do the other constituents in the care team interact with you?  With the patient?
  • How do you create a culture of empowerment, consumer focus, and transparency to really understand the needs of different constituents, react to them internally, and embrace issues dynamically?

In this consumer experience space, I often look to Bruce Temkin’s work and research.  He does a great job at a cross-industry perspective.  In healthcare, I’ve been very motivated by the work of Ingrid Lindbergh who was at Cigna and then moved to Prime Therapeutics.  She’s my role model for what I want to do in a large healthcare company. 

Two things got me thinking about this topic.  First, I was struck this weekend that there was research showing that people who struggle to buy food for their families are non-adherent.  I really hope that anyone in this field wasn’t surprised by that fact.  Of course, the struggle is that everyone working in the field is often constrained by their view of the world which often doesn’t include much experience with poverty. 

Second, I was sent a new research piece by Accenture called “Great Expectations: Why Pharma Companies Can’t Ignore Patient Services”.  It made me think about Dennis Urbaniak’s move from Sanofi where he was leading a lot of innovation to a Managing Director at Accenture.  Perhaps, he will bring some of this type of innovative thinking to more pharma companies. 

Here’s two infographics from the Accenture report which I think help hammer home the point of why beyond the pill is necessary:

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International Differences In Wellness Programs

I was looking for a statistic today on wellness programs when I came across this 2010 survey on global wellness from Buck Consultants.  I found the geographic differences really interesting, and I thought I’d share a few of the charts here.

Intl Drivers of Wellness strategy Buck

Top wellness programs by region buck

Wellness Program Objectives - Buck

If you want to see their 2012 report on what’s next for wellness, you can go here.

Several Great Presentations To Share

I try not to do a lot of promotion of things within the company.  (This is not a corporate blog.)  But, I’m always happy to share cool things that are in the public domain that catch my eye. 

Our sister company – GSW Worldwide - has been putting out a lot of new things on a blog, through their innovation lab, and through their SlideShare channel.  I thought I would highlight a few of those here.  Leigh Householder, Chief Innovation Officer, along with Ritesh Patel, Global Head of Digital, are driving a lot of this along with others on their teams. 

 

Why Do We Let People Pick The Wrong Health Plan?

I was reading some of the research by McKinsey this morning on the individual market enrollment and the overall exchange product benefit design.  It got me thinking about the issue where consumers choose the wrong plan design based on their personal utilization of healthcare.  Why do we let that happen?

I know some of you are thinking “let that happen”…we don’t do that.  Others who work in the industry may be thinking that consumers can make good decisions. 

But, we know that consumers don’t spend enough time evaluating their options.  We know that consumers are overwhelmed by all the information they get about healthcare.  We know that consumers don’t have access to all their data.  And, we know that consumers can’t understand all the healthcare mumbo-jumbo that we use to explain what we do. 

“The ACA deals with the problem of consumer misunderstanding by requiring insurance companies to publish standardized and simplified information about insurance plans, including what consumers would pay for four basic services,” noted lead author Loewenstein. “However, presenting simplified information about something that is inherently complex introduces a risk of ‘smoothing over’ real complexities. A better approach, in my view, would be to require insurance companies to offer truly simplified insurance products that consumers are capable of understanding.” (source of this study)

This study from a few months ago predicted that over half of consumers would choose the wrong plan thereby causing them to spend more money out-of-pocket annually for their healthcare.  Companies understand this.  There is an initiative called Putting Patients First which created a cost estimation tool – http://www.puttingpatientsfirst.net/.  This conceptually helps.

But, the reason I say “let” is because the healthcare companies all have our data.  They know our medical claims.  They know our pharmacy claims.  They have our lab values.  Everyone has predictive risk models now.  If that data could be downloaded to a Personal Health Record (PHR) and then used to model our costs under each of the benefit plan options, we could make an informed decision. 

And, no…this isn’t just a healthcare.gov issue.  Most employees have had access to multiple plan options at their employer for years.  Sometimes all under the same health plan and sometimes with multiple health plans.  I’ve talked about this for a long time.  This would be relatively simple for an IT team to build and deploy.  It could also be a huge catalyst for the PHR movement to get data into the hands of the consumers and give them a reason to do this.  If I knew I could save $500+ per year by tracking and using my data, that should be a great reason to take action. 

Fail Fast To Succeed Sooner – The Big Company Challenge

I was reading an article this morning about asking the question “are you afraid to fail?”  It’s an article about innovation which reminded me of one of my favorite quotes from David Kelley at IDEO.

Fail Faster

It also reminded me of another article from 2006 in Business Week about How Failure Breeds Success which was when I left Express Scripts to pursue several entrepreneurial opportunities.

Stefan H. Thomke, a professor at Harvard Business School and author of Experimentation Matters, says that when he talks to business groups, “I try to be provocative and say: ‘Failure is not a bad thing.’ I always have lots of people staring at me, [thinking] ‘Have you lost your mind?’ That’s O.K. It gets their attention. [Failure] is so important to the experimental process.”

BW Failure Cover

It also got me thinking about success rates in companies.  We all hear so much about the success of entrepreneurs and these 20 year old billionaires.  Is that reality?  Here’s a few stats from an article in the WSJ and a study by the Census Bureau.

  • 80% of companies make it to year one
  • 60% of companies make it to year three
  • 50% of companies make it to year five
  • 35% of companies make it to year ten

Sounds pretty depressing.  What about the fact that according to the WSJ article, only 5% of them achieve the projected ROI and 30-40% of them liquidate all their assets returning nothing.

“People are embarrassed to talk about their failures, but the truth is that if you don’t have a lot of failures, then you’re just not doing it right, because that means that you’re not investing in risky ventures.  I believe failure is an option for entrepreneurs and if you don’t believe that, then you can bang your head against the wall trying to make it work.” (David Cowan – Bessemer Venture Partners in WSJ article)

Just watch the show Shark Tank sometime.  There are amazing entrepreneurs with interesting ideas who have sacrificed so much to try to make it work.  I always try to tell people that it’s not just about passion and hard work otherwise people would succeed all the time.  Some things you do learn from Shark Tank along with the book The Art of the Start is how to frame and present your ideas.

So, why is this so important?  We’re on the the verge of huge transformation in the healthcare industry.  I think Oliver Wyman did a good job of discussing this in a whitepaper last year.  You can read article after article about mHealth, telemedicine, and remote monitoring.  (I’ll point you to Rock Health or The Center For Connected Health as two starting points.)

Of course innovation has been the buzz for several years now.  I think Jim Collins does a good job of teeing up this issue in discussing churn in the Fortune 500 list.  With the technology and VC crowd, the more recent term for business model innovation is “pivot“.  I think you’ve seen a lot more Chief Innovation Officers and innovation labs in healthcare companies these days.

I came across an interesting blend of technology consulting, investing, and innovation last night in the BCG Digital Ventures group.  In watching part of a YouTube video by their CEO, I think he does a great job summarizing how consulting maps to the investment paradigm.

  • Innovation is like seed capital
  • Product development is like venture capital
  • Commercialization is like growth capital

Interestingly, I probably get 1-2 calls a week from people in big companies that really want to get out of the big company and come work in the exciting start-up space.  I always tell them that the grass always looks greener on the other side of the fence so be careful.  It can be great, but it can be really tough.  It’s just a different type of risk and not everyone can take the emotional and potentially financial risk.  On the flipside, I also get people that look at the different entrepreneurial things I’ve done and say “why?”  They want to know why I didn’t just stay in a F500 company.  Sometimes, I think of this 8 years as a boomerang where I’ll end up back in a F500 company, but I’ll be a much more valuable product development, strategy, and innovation executive.  [This idea of boomeranging was one that Gensler introduced me to years ago in architecture where they encouraged people to work at different companies and come back if relevant.]

Depending on the day, I also think about what I’ve learned since I’ve never had one of those huge exits that everyone talks about.  I’m not cashing in on all my options to make money.  I’ve summarized many of those learnings on the blog, but here’s a few that I’ll call out.

  1. Firepond was my first venture into this space.  It was a 20-year company that General Atlantic had invested in to turn around as a product configurator in the CRM space.
    • Learned about CRM (customer relationship management) technology.
    • Learned about how to develop, structure, and manage alliances.
    • Learned the importance and how to structure offshore deals.
    • Learned about global sales and embedding technology into different solutions.
    • Learned about evaluating and buying companies.
  2. CentralScript was my second venture I started it from an idea I tried to sell at Express Scripts (and later was suggested to them by Clayton Christensen).
    • Learned about writing a business plan and financial modeling and projections.
    • Learned about the legal structure of businesses.
    • Learned about raising money and how to work with and evaluate angels and VCs.
    • Learned about building a team and structuring contracts with them.
    • Learned about selling and evaluating partners.
  3. Talisen Technologies was my third venture which was another turnaround where I worked with a friend of mine who had raise some private equity to do a technology services consulting roll-up.
    • Learned about Business Process Management technology.
    • Learned about how to build support companies around a technology platform.  (The opposite of Firepond where I was the technology company.)
    • Learned about the difficulties of transforming an existing company and evaluating new companies.
    • Learned about how to use blogging and create exposure using social media.
  4. Silverlink was my fourth venture (and most successful experience) and first real start-up where it wasn’t trying to turnaround an existing asset but building off what the founders had built.
    • Learned about how to present to and work with the Board of Directors.
    • Learned about managing a sales force.
    • Learned about product development, training, documentation, and product lifecycle.
    • Learned about sales and marketing and being responsible for growth and a team.
    • Learned about account management.
    • Learned the value of using thought leadership, social media, and the press to drive awareness and pipeline.
    • Learned how to develop competitive analysis and differentiation.
    • Leraned about pricing and analytics.
  5. inVentiv Medical Management is my current venture which is part of a broader entity, but it’s still the same concept which is a 20-year old company that we’re transforming into a new platform and new business model.
    • Still in-progress so more to come…

So, I wrote all this to make the point that innovation is difficult.  You have to take some risks.  Like the article said upfront, you have to believe you can fail.  You have to have a plan for what to do if you do fail.  Big companies should provide a safety net to people to fail fast.  I think I’ve learned a ton that I wouldn’t have learned staying in the big company.  At the right time, that will be a huge asset as I look to help drive the transformation and pivoting of a larger entity!

Gimme My Damn Data Win – Labs; Will Clinical Trials Be Next

It’s been really interesting over the past few years to watch the discussion about who should get data and when should they get it (see ePatient Dave post).  Lab data has been the perfect case study. 

In the traditional model:

  • We (consumers/members/patients) go to a physician who writes up a lab order.
  • The physician may draw the blood or send you to a hospital lab or you might go to a LabCorp or Quest facility.
  • The lab values are returned to your physician.
  • You may or may not ever hear about your results especially if they’re normal.

This traditional model begs two questions:

  1. What should you do to get access to the results? (see Trisha Torrey post on this)
  2. If the physician doesn’t have time to get to them and call you, should you get them directly? (see KevinMD post on this)

Fortunately, HHS made a decision last month to require lab data be available to patients directly without the physician gatekeeper.  Of course, they have 30-days to comply with the patient request, and it still requires the patient to request it.  But, it’s a start. 

This is like the Open Notes project that made physician notes available to patients. 

“They found that when patients have access to their doctors’ notes, they feel more in control of their health care, better understand their medical issues, and report they are more likely to take their medications as prescribed.”

As we think about patient engagement, this type of transparency is important. 

The next area of discussion might be around clinical trials.  The people over at PatientsLikeMe just published an article discussing this topic and sharing how patients are working around clinical trials to identify themselves.  I’m sure that most pharma companies and clinical trial companies will view this as heresy.  But, it’s a modern day reality in terms of mobile and social technology.  The question is how will this change clinical trials and will it improve results. 

I certainly think that the data coming out of P2P (peer-to-peer) companies like PatientsLikeMe or CureTogether is really interesting. 

9 Lessons Learned About Gamification

As I was writing the post about gamification in healthcare, it got me thinking about what I’ve learned about gaming especially in today’s device centric world.  [As a side note, I certainly wouldn't take advice on gaming strategy from someone who doesn't play games.]

Whenever I go on vacation, I always pick a new game to download to my iPad and iPhone to play with.  My devices have things like:

  • Nuts
  • Tiny Wings
  • Temple Run
  • Doodle Jump
  • Jetpack
  • Tiny Tower
  • WipeOut
  • Subway Surfer
  • Sunday Lawn
  • Torpedo Run
  • Battle Nations
  • Clash of Clans
  • Candy Crush
  • Angry Birds

As I think about the games, they fall into several buckets:

  • Quick Hits – I play them a few times then delete them.
  • Interesting – I play them on and off when bored usually with a one week spike at the beginning.
  • Long-Term – I play them multiple times a week (or day) for months.

But, in the end, most games fail to keep you engaged long-term.  But, based on what gets the best engagement, here’s what I’ve learned:

  1. Games need to be relatively simple to understand and play.  There can’t be much to learn or read about them.
  2. Games have to constantly be upgrading and evolving – new levels, new upgrades, new things to earn, new challenges.
  3. Games should be able to be played online and offline.
  4. Games should offer you rewards to keep you coming back every day.
  5. Games need to be social so you can compare yourself to others, compete with people, and collaborate.
  6. Games can’t be too easy or they are boring.
  7. Games can’t be too hard or they are frustrating.
  8. Games that have you build things get you to come back and check status, but the build time can’t be too long (e.g., 6 days to wait for something to be ready).
  9. Good games will create a user community for sharing ideas and discussing success with challenges.

Healthcare Gamification

If you believe all the hype about digital health, you might think gamification was a natural solution.  Of course, if you’ve never heard of gamification, let me provide a basic definition from Wikipedia.

Gamification is the use of game thinking and game mechanics in non-game contexts to engage users in solving problems.

Here’s several articles for more information:

  1. Four Factors Driving Gamification in Healthcare
  2. From FitBit to Fitocracy
  3. The Wellness Game
  4. Gamification: Drugmakers And Health Campaigners Turn To Games To Promote Health

I think this quote from the Perficient white paper on this topic is a good one.

Gabe Zichermann, the author of Game-Based Marketing, speaks of balancing the fun and frivolity of gamification with the task of making life easier for cancer patients. He says, “I don’t presume to think that we can make having cancer into a purely fun experience. But, we have data to show that when we give cancer patients gamified experiences to help them manage their drug
prescriptions and manage chemotherapy, they improve their emotional state and also their adherence to their protocol.”

You can also look at a post by Jane Sarasohn-Kahn (one of my favorite bloggers) on this topic where she highlights several trends from a recent paper on gamification in healthcare.

Now, why should you care?

  1. Gamification should improve engagement which is critical to changing behavior.
  2. Gamification creates opportunities to make healthcare fun which can be difficult.
  3. People are different and respond to different “incentives”.  Competition and leader boards are concepts that excite lots of people to take action.

The forecasts for the gamification market are huge.  They show a nice hockey stick which gets every investor excited.

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Of course, the important question is who uses games.  Is it just teenage boys?  It’s not.  Here’s a good report which shows you breakdown by age, gender, and many other stats.

Gaming

Another quick article about gamification is from TEDMED.  The video is below, but it reminds me of some of my personal perspectives.  The sites also lists out several vendors and solutions in the obesity gamification space.

While one “easy” opportunity in my mind is to use gamification to address the rising number of kids with chronic diseases and to help address childhood obesity, there are many other opportunities like adherence.  A few examples of games out there include:

Companies like Ayogo, Mango Health, and Akili are ones that I’ve heard about, but I know there are a lot more out there.

One example I think of from watching my kids play games is from Webkinz which was a blend of real stuffed animals with online digital personas.  The animals could get sick if you didn’t nurture them and visit them.  It made me think of how an avatar could get fatter or slower based on their pedometer or eating habits.

NantHealth and Other Health Mashups

I’m always thinking about different ways to blend companies through acquisitions or partnerships.  The announcement by NantHealth the other day at HIMSS got me thinking more about it.  They are an interesting company from what I can tell although I don’t know anyone there.  

I’ve talked about Google and all their health assets although they’re not actively trying to integrate them.  I also think that there are some investment firms like Sandbox Industries that have their fingers in lots of interesting healthcare companies.  

So, what would some other interesting opportunities (M&A, partnership, JV) be (ignoring size, valuation, ownership, and likelihood):

Of course, I’ve talked about different PBM plays recently, and I think healthcare has become such a front page issue that companies like McKesson, GE, AT&T, Emdeon, Cisco, Apple, and others are waiting to figure out how and when to buy up some technology plays.  I could easily see McKesson jumping in to buy several of the adherence companies that I highlighted a few weeks ago like Proteus.  And, I’m sure there’s more from this list of fastest growing healthcare companies that will get snapped up or create some interesting partnerships.  

I also believe that health reform will drive some consolidation on the provider and payer side.  A friend on Wall Street predicted we’d get to 6 national health insurers.  I still think that’s possible – United, Aetna/Cigna, Wellpoint/BCBS, Kaiser, Humana, and ??

A Few Corporate Wellness Tips

While Al Lewis has become the industry antagonist (in a good way), he makes a lot of great points that anyone working in the industry should understand and consider.

If you haven’t read some of Al’s articles, let me point you to a few:

His writing reminds me of some of the things my former boss pointed out several years ago about the disease management industry.

In one of his posts, he makes several points that I wanted to discuss here:

  1. You should use a source like the US Preventative Services Task Force (USPSTF) as the evidence-based reference for appropriate screenings – frequency, age, gender.  Of course, I agree with this.  We need some common source that we all can use that’s based on best practices and evidence.
  2. He argues that you should stop weighing people.  I’d argue that knowing your numbers is important.  As a country and a world, we’re seeing massive growth rates in obesity which is linked to numerous diseases.  We need people to be more conscious of this risk factor especially in our sedentary work environments – see sitting disease infographic.
  3. His third point is about targeting and nudging the right population versus over-sampling everyone.  I couldn’t agree more.  This should be what the Big Data push in healthcare gets us.  How to build predictive algorithms to identify people with multiple risk factors.  How to identify people with gaps-in-care.  How to figure out what someone needs to take an action.  I always say there are 3 factors to consider:
    • Is there value in the intervention?
    • What channel / method is going to get the consumer’s attention?
    • What information is going to get the consumer to take an action?

To follow-up on my points above, here’s some information on obesity and it’s link to other diseases.

The CDC says that obesity is linked to:

  • Coronary heart disease, stroke, and high blood pressure.
  • Type 2 diabetes.
  • Cancers, such as endometrial, breast, and colon cancer.
  • High total cholesterol or high levels of triglycerides.
  • Liver and gallbladder disease.
  • Sleep apnea and respiratory problems.
  • Degeneration of cartilage and underlying bone within a joint (osteoarthritis).
  • Reproductive health complications such as infertility.
  • Mental health conditions.

And, for a fun video by Mayo Clinic on Knowing Your Numbers watch this:

Forbes “Most Promising” Companies – Healthcare

Whenever I see lists like the Forbes list of America’s Most Promising Companies, I like to look through the list and pull out the healthcare companies.  They say these are private companies that standout because of their growth and outstanding management.

#4 – Evolent

#24 – 24HR HomeCare

#28 – CareCloud

#39 – Intersect ENT

#41 – Therapearl

#95 – Boston Heart Diagnostics

If healthcare is 20% of the GDP and with all the mHealth and HIT spending, I was hoping to see a few more companies on this list.

Interview With Michael Dermer – Chief Incentive Officer at Welltok

I had a chance the other day to interview Michael Dermer (@rewardforhealth) who is the Founder of IncentOne and currently the Chief Incentive Officer at Welltok.  I’ve known Michael for a while and wanted to learn more about how he saw the market now that he’s sold IncentOne and has launched his blog – www.michaeldermer.com

As the pioneering Social Health Management™ company, Welltok is revolutionizing the way population managers optimize consumer health by aligning activities and behaviors with the right incentives and rewards. CaféWell, the company’s Health Optimization Platform™, drives engagement and incentivizes healthy behaviors though a novel combination of social, gaming and personalized activities. Welltok provides population health managers with a Platform as a Service solution that enhances revenue growth, increases administrative efficiencies and delivers health care value.

The first thing we talked about was trends in the incentive market.  He said that incentives have become an accepted part of the strategic assets that a payer can use to drive behavior change.  That was validated by Obamacare where it allows for increased use of incentives tied to outcomes.  He also pointed out that you’re seeing a jump in dollars allocated to incentives with companies spending $500-$1,000 per employee on incentives. 

Another point he made is that you’re just starting to see more sophisticated incentive program design.  He estimated that we’re at a 2 out of 10 in terms of sophistication.  We traditionally saw companies providing incentives linked to actions like taking an HRA or participating in a wellness or disease management program.  Companies are now looking for a more immediate and predictable ROI which will likely lead to a mix of actions for which consumers can earn incentives. 

He made a really interesting point about the “retailing of healthcare” which we’re seeing even with the healthcare.gov debacle.  The reality is that healthcare is moving towards more consumer responsibility with HDHPs (high deductible health plans), CDHC (consumer driven health care), transparency, and exchanges. 

The big question is whether incentive will be a differentiation point in health plan selection.  For credit cards, we’ve certainly seen the value of the incentive program be a huge focus.  There are numerous TV ads pointing to this.  Michael sees incentives creating this differentiation over time. 

I asked Michael about mHealth since I’ve seen numerous mobile solutions and web vendors showing me how they’ve integrated incentives into their program.  In his view, mobile is simply a new channel, but it’s not a disruptive force for the incentive market.  It provides a way to track and view rewards, and it will generate data to provide rewards for (e.g., steps). 

We also talked about another topic that I always struggle with which is the challenge of sustained behavior change versus a one-time boost.  I think incentives are great to open the door and get people to take an action, but after I’ve gotten my incentive, what keeps me involved.  This is where he linked back to the complexity of the program.  He suggested that incentive programs need to be dynamic.  They need to evolve both over the years of the program, and they can’t be a big bang (i.e., $500 for your HRA and nothing else).  They need to link into activities and actions throughout the plan year. 

I asked him what tips he would give to someone new to incentives.  Here was his list:

  1. Reverse the traditional order of focus.  Create a program that gets “points” on the board quickly with an immediate ROI.  Focus on the outcome-based, long-term changes second. 
  2. Weave the incentive program into the company culture.  You need to communicate about the program and link it into the company brand. 
  3. Understand the theory of relativity…which means
    • The relative dollars year over year.
    • The relative dollars per activity.  (i.e., should you get the same incentive for taking an HRA as you do for reducing your BMI by 3 points?)
    • The relative dollars compared to the average employee’s salary.
    • The relative dollars compared to the level of effort and value. 

On the flipside, I asked him what to avoid.  He had two very straightforward points:

  1. Having too many activities for too few dollars.
  2. Having a great program with no awareness. 

So, in wrapping up, I asked him why did they sell to Welltok.  He pointed out several opportunities that he saw in the combined entity:

  • The combination of engagement and incentives is foundational to healthcare success.  This is true in social, mobile, gaming, and platforms. 
  • They offer a platform as a service where different programs can be combined in different configurations. 
  • They offer a Health Optimization Hub which will optimize the efficiency of programs and maximize incentives and engagement tools. 

The Boston Physician Dilemna

I often wonder why so many healthcare companies are in the Boston area.  These two set of statistics from the Merritt Hawkins study on physician appointment wait times paint an interesting picture.

First, you have the fact that Boston has the highest ratio of physicians per 100,000 people.  Almost double the US average.

Screen Shot 2014-02-01 at 6.51.20 AM

On the other hand, it takes you the longest time to get access to a physician.

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I’m a simple person.  This doesn’t seem to make sense.  I could say that lots of them are working in academia or in companies and not actually seeing patients.  I’m sure that explains some of it, but I can’t imagine all of it.

It’s also interesting that Boston also rises to the top of the list in terms of Medicare acceptance.

Medicare acceptance rates by city

Is There Evidence To Support How Often To Go To The Doctor?

I didn’t even think this was a big question until I read an article in the AJMC (American Journal of Managed Care).  I just assumed that there were clear guidelines (evidence-based) that would say a diabetic should see a physician every X months, a hypertensive every Y months, etc.  Of course, every patient is different and their situation unique, but I thought there would be a starting point.

According to the article and the meta-analysis they did, the evidence doesn’t exist.  If that’s true (which I believe), then this could be a significant factor in overutilization.  

According to the National Health Statistics Report for 2009, there were nearly 1 billion office visits in 2009, 30% of which were  for routine follow-up of a chronic problem and an additional 26% of which were for preventive care or follow-up of an acute  condition. The remaining 42% were for the evaluation of a new problem or an exacerbation of a chronic condition.

In their example, they model that moving hypertension follow-ups from 6 months to 9 months would save $1.5B a year in healthcare costs.  

The same scientific rigor that guides therapeutic decision making should be used to optimize chronic disease management. Rational choice of follow-up intervals is a crucial step in adjusting current utilization patterns to maximize the quality of patient care while minimizing unnecessary costs.

Dossia: Not Just a Personal Health Record Anymore

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I had a chance to see a product demo of Dossia the other day.  I was really impressed which I don’t easily say.  I was expecting to hear a pitch on Personal Health Records (PHRs) and why they were different.  Instead, I got to see a robust patient engagement portal which did some really interesting things. (see image above from the Health 2.0 demo they gave)

From their website, here’s the “about” description which lists some very influential players…

Dossia is an organization dedicated to improving health and healthcare in America by empowering individuals to make good health decisions and become more discerning healthcare consumers. Backed by some of the largest, most respected brands in the world – Applied Materials, AT&T, BP, Cardinal Health, Intel, Pitney Bowes, Vanguard Health Systems, NantWorks and Walmart – Dossia’s founding member companies have united under the common vision of changing healthcare.

Having these companies involved over the past 6 years has been really important for them to accomplish what they’ve done.  As someone that’s worked on a lot of the same population health challenges, they’ve accomplished things that not even Google Health could do.

So what were the features and functions that really impressed me:

  1. They’ve built integration to health plans, PBMs, pharmacies, lab companies, and even EMR companies.  This creates a data rich longitudinal view of the patient for the patient.  (I like the expression on their website where they say “Dossia is the connective tissue that powers healthy change.”)
  2. They’ve incorporated health content which by itself isn’t impressive, but the content is tailored to the individual based on their medical data.  Not hard, but not something that many people do well.
  3. They’ve built out a series of partnerships and integrations with over 50 apps where you can navigate that turn them on as widgets within the portal.  This is very similar to some of the cool things that CarePass is doing.
  4. They’ve built the system out using open APIs (application programming interfaces) which allows other companies to easily integrate with them.
  5. And, probably one of the cooler things from my consumer engagement lens was their ability to do WYSIWYG rules creation to trigger outbound communications based on clinical data.  The idea of a rules engine isn’t difficult, but the ease of their solution with the integrated data makes it very powerful.

And, they’ve expanded their reporting.  They’ve pulled in ways to manage those family members for which you’re a caregiver.  They’re doing lots of interesting things.  They are definitely worth talking to if you haven’t seen them in a few years.

Why Healthcare Needs A “Google Health”

Most people know that Google tried to jump into the healthcare space with Google Health a few years ago.  Google Health was (from Wikipedia):

Google Health was a personal health information centralization service (sometimes known as personal health record services) by Google introduced in 2008 and cancelled in 2011.  The service allowed Google users to volunteer their health records – either manually or by logging into their accounts at partnered health services providers – into the Google Health system, thereby merging potentially separate health records into one centralized Google Health profile.

Personally, if they wanted to build that, they should just go buy Dossia, and they would be there.  Looking backwards, you can read the announcement to cancel Google Health here, and there’s lots of articles out there about why it failed.

While they haven’t had a dedicated health team officially, they continue to have several health related projects:

  1. Helpouts is a video service that is HIPAA compliant meaning it could eventually compete with Teladoc, MDLive, and American Well.
  2. Calico is a newer company focused on aging which has lots of people wondering as they add well known executives to the core team.  
  3. They just came out with their smart contact lens to help diabetics test their blood sugar.
  4. Google has an app called My Tracks and an API to tap into some of the sensors in the phone that could be used for fitness apps.  
  5. Google X staff recently met with the FDA leading to some speculation.  
  6. Of course, there is also lots of discussion about how Google Glass could be used in healthcare.  (I personally think about the Checklist Manifesto as a perfect opportunity.)
  7. And, I would also point to the intelligent home (per their acquisition of Nest) as a venture which will lead them down the path of health at some point.

You could also look at the companies that Google Ventures is investing in from the health space:

I could have easily seen them investing in something like Theranos which stands to change the biometrics space.  

So…it’s not like they’re ignoring the space which isn’t unusual for many companies outside of healthcare.  Healthcare is hard.  Healthcare has lots of regulatory constraints.  In general, many companies want to avoid having to deal with some of those issues which can constrain the rest of their businesses.

But, let’s look at the critical and hot topics in healthcare right now:

  • BigData – how to use data; how to build predictive models
  • Engagement – how to personalize communications and engage consumers to take action from mass customization to segmentation to even gamification
  • Mobile and devices – how to use technology to track your steps, monitor your health, and collect data (see post about why your underwriter wants your mobile data)
  • Social – how to use social pressures and peers to create better health
  • Connectivity – how to connect devices, caregivers, pharmacies, providers, and others into a shared platform for care
  • Security – how to securely manage data
  • Transparency – collecting and aggregating pricing data to help consumers make intelligent decisions
  • User experience – creating user journeys and user interfaces to improve the overall consumer experience (perhaps changing the model like Uber (a Google Ventures investment))

Do those things sound like the competencies of any one company?  To me, they all sound like things that Google is good maybe even great at.  Additionally, the founders of Google have the big, picture and long-term vision that’s critical in healthcare.  Driving change in healthcare isn’t about meeting specific quarterly numbers.  It’s about seeing the world in a new light where you want to drive change and improve things like childhood obesity.  It doesn’t happen overnight.  

I wish I knew more about Google.  Someday, I’d love to work with them on some of these opportunities.  If so, I could see this being a perfect fit in the Google X world.  I could see them making a change as a core focus, as investors, or simply by creating enabling tools.  But, at the end of the day, this is why I think health needs Google to have a focus here.  It’s almost 20% of our GDP and something that impacts most people on a daily basis.  

Listing of Medication Adherence Solutions

It’s been a few years since I’ve worked on medication adherence solutions.  It seems to have become a big focus again in the industry both with the Medicare Star Ratings program and with all the emphasis on waste.

As I started thinking about adherence, I thought it would be good to create a list of solutions and vendors.  I couldn’t find one anywhere on the web.  So, here’s my initial list of almost 100 companies.

I’ll make this a dynamic list so please comment or send me suggestions to add.

Here’s some old posts on adherence that I think are still relevant here:

I’ve divided the list of solutions and vendors into the following:

Devices

  • Adherence Solutions LLC – develop programs to create alliances between different players, sell Dose-Alert which is a smart pill bottle cap, and provide a mobile tool
  • AdhereTech – smart pill bottles
  • Automated Security Alert – medication dispensers to complement their medical alert system
  • Biodose – electronic tray for monitoring time and day of use
  • CleverCap – smart cap for pill bottle
  • Didit – manual tracking device that attaches to a pill bottle
  • DoseCue – smart pill bottle
  • eCap – electronic compliance monitor
  • ePill – medication reminder devices
  • eTect – biocompatible tag on the pill with connectivity and a mobile solution focused on clinical trial adherence
  • iRemember - smart pill bottle cap with voice reminder and smart phone synching
  • MedCenter – monthly organizer and reminder system
  • Med-E-Lert – automated pill dispenser
  • MedMinder – automated pill dispenser
  • MedVantx – medication sampling at the physician’s office
  • Proteus – smart pill technology
  • Quand Medical – uses Near Field Communications and mobile to do medication management and reminders
  • SMRxT – smart pill bottle
  • TalkingRx – audio device attached to pill bottle
  • uBox – smart pillbox
  • Vitality GlowCap – smart pill bottle with communication programs

Mobile / Digital

  • 2Comply – patient portal with web coaching
  • ActualMeds – online medication management for consumers, caregivers, and providers
  • AI Cure Technologies – digital health solution
  • AssistMed – web and mobile based adherence solutions
  • Ayogo – social games and apps to improve engagement and adherence
  • CareSpeak - mobile solution
  • Care4Today – two-way messaging platform, app, and website
  • CellepathicRx – mobile solution
  • CloudMetRx – cloud based solution to help caregivers with medication management
  • Dosecast – mobile medication management and pill reminder
  • GenieMD – mobile medication management and reminders as part of broader solution
  • iPharmacy – mobile pill identifier, medication guide, and reminder app
  • Mango Health – mobile medication management with gamification and incentives
  • Medacheck – mobile reminder system that incorporates caregivers
  • MedCoach – mobile medication management and pill reminder
  • MedHelper – medication compliance and tracking app
  • mHealthCoach – reminder based solution creating a digital support system
  • Mscripts – mobile solution
  • MyMeds – mobile and web medication management and pill reminder solution
  • MyMedSchedule – mobile Rx management tool with reminder service
  • Nightingale – mobile solutions for reminders, engaging your physician, and notifying your caregivers
  • PillBoxie – mobile medication management and reminder app
  • PillManager – mobile medication management and pill reminder
  • PillMonitor – mobile medication reminders and logs
  • PillPhone – mobile phone solution with biometric authentication
  • Prescribe Wellness – automated, digital interventions
  • RightScript – platform to manage prescriptions through mobile reminders that connect patients, caretakers, practitioners, and health plans
  • RxCase Minder – mobile medication management
  • RxNetwork – mobile medication management and reminders with rewards
  • Quintiles – building digitally, connected communities
  • Virtusa – multi-dimensional interventions across the patient’s journey

Platform

  • Adheris – adherence suite and advanced analytics (just acquired Catalina Health) [note: they are owned by inVentiv Health who I work for]
  • Avanter – an adherence program for pharmacies in Argentina
  • Capzule – pill reminders as part of PHR
  • Dr. First – embedded tools into EHR
  • HealthPrize – platform with gamification, incentives, education, and communications
  • LDM Group – suite of compliance products
  • McKesson – sampling, coaching, coupons, and messaging
  • MediSafe – mobile medication management app and adherence platform
  • MedPal Health Solutions – platform for medication adherence solutions
  • MedSimple – medication management, pill reminders, coupons, and PAP programs
  • mHealthCoach – care collaboration platform using machine learning to personalize communications
  • Tavie – virtual nurse for improving adherence focused on several conditions

Communications

  • Ateb – multi-channel communication programs for pharmacies
  • Atlantis Healthcare – custom adherence solutions
  • Eliza – multi-channel communication programs
  • Intelecare – multi-channel adherence communications
  • MemoText – messaging platform
  • Patient Empowerment Program – medication adherence program for pharmacies
  • Pleio – adherence solutions for the first 100-days (when most people stop taking medications)
  • Silverlink – multi-channel communication programs [note: this is the company that I used to work for and still use]
  • Varolii (now Nuance) – multi-channel communication programs
  • Voxiva – web and text messaging solution
  • West – multi-channel communication programs

Big Data

Tools / Enablers

  • 5th Finger – assessment and personalization tools
  • GNS Healthcare – using data and predictive models to identify targets and fuel intervention programs
  • Insignia (PAM) – measure of patient activation for segmentation and scoring
  • MedMonk – help pharmacists obtain funding for patients who can’t afford their out-of-pocket pharmaceutical expenses
  • MedSked – low, tech labeling solution
  • Merck Adherence Estimator – screening tool available as a widget or online at Merck Engage
  • NaviNet – communications network to enable adherence
  • NCPA – toolkit and ROI calculator for pharmacies
  • ScriptYourFuture – tools and text reminders
  • Walgreens API – an application programming interface for developers to use to connect their adherence solutions to Walgreens

Medicare focused

  • Dovetail – pharmacist led programs including MTM, in-home visits, and telephonic coaching (focused on Star Ratings)
  • Mirixa – incorporated into the MTM program
  • Outcomes – data and tools as part of their MTM solution
  • Pharm MD – Medicare STARS program

Condition specific

  • GeckoCap – adherence offering for kids with asthma
  • MyRefillRx – mobile adherence app focused on high blood pressure

Packaging

Pharma

  • 90Ten Healthcare – providing adherence programs in 23 countries
  • TrialCard – voucher and co-pay programs for consumers to stop Rx abandonment
  • Triplefin – customized programs for pharma brand managers
  • Adherence Engagement Platform – a Pfizer program of adherence materials and tools (I couldn’t find it online only in hard copy)
  • RS Associate – a company working with manufacturers in India
  • Rx.com – MTM, pre-edit messaging at the POS, and print-on-demand messaging at the pharmacy

International (recommendations send to me without English sites)

What other companies am I missing?  Send them to me directly or add them in the comments section here.  Thanks.

How Do The Big PBMs Grow?

By now, the idea of a PBM and who they are is much more of a household item than it was a decade ago.  We’ve seen massive consolidation in the industry.  We’ve seen PBMs grow in the specialty PBM space.  The question I often ponder is what’s next.  Here’s some of my thoughts.

  1. Do Nothing.  Obviously, there’s a lot to be said for ongoing momentum.  The PBMs have shown growth for many years.  While the generic opportunity and the mail opportunity has slowed down, there are still opportunities in the specialty space.  
  2. Distribution. This seems like an obvious possibility.  Why not buy Cardinal, AmerisourceBergen, or someone else?  Procurement and distribution are core competencies so I think this makes some sense.  But, will that create issues in the current client list and retail pharmacies and PBMs haven’t always had the best relationships.  (E.g., Express Scripts GPO with Kroger)
  3. Pharma.  This has been debated by a few PBMs, but getting into the R&D space is risky and doesn’t build on their core competencies.  What could be more interesting would be them getting into the services space by acquiring a company like IMS or Quintiles.  
  4. International.  Several PBMs have tried this model.  In general, it hasn’t gone anywhere.  I think the international collaboration of Walgreens and Boots is really interesting and other retailers have gone international.  I don’t see this happening anytime soon with any material impact.  
  5. Physician.  Having a greater impact in the prescribing process could make a lot of sense.  I could see some interesting targets in terms of Allscripts, Cerner, or athenahealth.  This has been a challenge for years with a few ventures into the space.  (e.g., CVS Caremark and iScribe)
  6. Technology.  At the end of the day, the PBMs are large technology companies.  Could they see their way into the mHealth space?  This space is growing like crazy, and you’re seeing established players get into the remote patient monitoring space (e.g., AT&T and Qualcomm).  I could see an acquisition in this area of a telehealth company (e.g., Teladoc) or a device company (e.g., Welldoc).  Or, they could build something more organically.  On the flipside, they could look at technology platforms to open doors to care management or ACOs (e.g., Lumeris).  Alternative, I could see SoloHealth as a really interesting asset.    
  7. Retail.  With a few exceptions, I think this strategy is off the table.  I’ve loved the CVS Caremark integration for years, and I think it’s showing dividends.  Rite-Aid is probably the only big acquisition target out there.  In this space, you probably have to look at it the other way.  Would any retailers (e.g., Walmart, Walgreens, Target) buy a PBM?  Walgreens got rid of their PBM, and Walmart has said they don’t want to be in that market so I’m not sure that would go anywhere.  
  8. Insurer.  I think this one has some interesting opportunities from a Medicare perspective and from a commercial perspective.  Could PBMs create an underwritten product and take on risk?  I think yes, BUT I think that could impact their need for reserves and the way the market sees them.  That makes me think this is less likely, but possible.  
  9. Device Benefit Management.  I think several ex-PBM executives have gone out to try to build the “benefit management” concept into the healthcare marketplace in other areas (e.g., IPG).  Could an existing PBM do it and cross-sell into their base?  Perhaps.  But, a stretch.  They’re getting big so they want to buy meaningful revenue, create synergies, and then grow it.  
  10. Navigation.  The most used benefit is pharmacy.  Today, consumers touch the healthcare system most frequently through retail and their daily prescriptions.  With the ongoing complication of the health benefits, there is a huge need for navigators (and not just in the healthcare.gov use of the term).  Think about companies like Health Advocate or Accolade.
  11. Data.  With the RxAnte acquisition, it has to make you wonder about PBMs and their data assets.  How can they use them differently?  Can they create apps?  Can they create algorithms to license?  What would this look like?  What about companies like Proteus?  Perhaps, a PBM could consolidate several unique assets along the device, smart bottle, data path.
  12. Condition specific.  I could see some PBMs going deep on particular areas like oncology to really build out an oncology practice that did everything from second opinions to case management to end-of-life counseling.  Those could all wrap around the drugs.  Or, imagine them going into the chronic kidney care space by acquiring a company like DaVita.  
  13. Providers.  While there could be some interesting synergies here with a large hospital group (e.g., HCA) or some ACO/PCMH players, I see that more of a managed care play for rolling up companies.  The ROIC (Return on Invested Capital) is too different in these physical operations that I see that being a struggle.  And, I think there’s lots of concerns about the hospital needs over time.  

Which path plays out…I don’t know, but I think it’s getting close to time that you’ll see another shift in the market as they try to secure their next 10 years of growth by expanding into something that builds on their core competencies.  

I think the other question would be if they focus on differentiation by really showing material differences in outcomes and engagement rates and look at how they show an overall health ROI not just Rx specific.  That would be where I would place my bets and look at which of these options support that.  Maybe we’ll see a PBM X (like Google X) doing some strategic long-term deals to change the overall healthcare roadmap.  

Conscious Home Mash-Up – More Likely Post Google – Nest?

In case you didn’t see it, Google acquired Nest the other day.  There’s lots of interesting articles out there about how this will fit in.

It was fascinating timing as I had just written about why Google should be in this space on Saturday.  

It got me thinking about other mash-ups to get into this space.

What about Pulte Homes working with BCBS of MI, the UAW, Ford, and the Henry Ford Health System to create a long-term retirement community built around an ACO with Medicare included?  This could be a great offset for the UAW and Ford to their healthcare liabilities.  It could create new provider models for Henry Ford.  It would create new building opportunities for Pulte, and it would provide new underwriting opportunities for BCBS.  

The other question that this brings up is who else will they acquire…or will others in this space get acquired by Cisco or AT&T or others that want to create this.  

I’ve reached out to the Nest founder and some people at Google and Google X.  (I don’t know any of them.)  This seems really exciting and similar to some of my thoughts.  I’d love to learn more.  

And, perhaps with the news that some of the Google X people met with the FDA, maybe Google is figuring out a way to get back into healthcare.  Hopefully, they don’t overlook the opportunity for patient remote monitoring in the smart home.  

Why Google Should Build The Next Seaside

In 1998, I wrote my first business plan which was about technology and architecture.  At the time, I had graduated from Architecture school and was working with Sprint on a data warehousing implementation.  It got me thinking about how to create a series of connected devices and link them to an enterprise system to manage that data for a smart home.  At the time, I think people thought I was crazy.

Jump forward 15 years and it all seems to make more sense.  For example:

Now, this type of connectivity is called the Internet of Things (#IoT) which based on Wikipedia is:

“The Internet of Things (or IoT for short) refers to uniquely identifiable objects and their virtual representations in an Internet-like structure. The term Internet of Things was proposed by Kevin Ashton in 2009.[1] The concept of the Internet of Things first became popular through the Auto-ID Center at MIT and related market analysis publications.[2] Radio-frequency identification (RFID) was seen as a prerequisite for the Internet of Things in the early days. If all objects and people in daily life were equipped with identifiers, they could be managed and inventoried by computers.[3][4] Besides using RFID, the tagging of things may be achieved through such technologies as near field communication, barcodes, QR codes and digital watermarking.[5][6]

 

Equipping all objects in the world with minuscule identifying devices or machine-readable identifiers could transform daily life.[7][8] For instance, business may no longer run out of stock or generate waste products, as involved parties would know which products are required and consumed.[8] A person’s ability to interact with objects could be altered remotely based on immediate or present needs, in accordance with existing end-user agreements.[3]

According to Gartner there will be nearly 26 billion devices on the Internet of Things by 2020.[9] According to ABI Research more than 30 billion devices will be wirelessly connected to the Internet of Things (Internet of Everything) by 2020.[10] Cisco created a dynamic “connections counter” to track the estimated number of connected things from July 2013 until July 2020 (methodology included).[11] This concept, where devices connect to the internet/web via low power radio is the most active research area in IoT.”

Or, if you prefer McKinsey to Wikipedia, here’s their article about the Internet of Things:

“More objects are becoming embedded with sensors and gaining the ability to communicate. The resulting information networks promise to create new business models, improve business processes, and reduce costs and risks.”

With all the buzz about Google’s buses and catamaran’s to ship their workers to the GooglePlex, it got me thinking about them creating a smart city.  They could have their smart cars running around.  They could even create a scalable version of smart roads that re-charge the electric cars eliminating the need for charging stations.  Or maybe, this would be something for Elan Musk who has his HyperLoop vision and Tesla Motors.  This could even play into the Green (or Sustainable) Architecture effort.  I could one day imagine a home recycling station that turned your used plastic into materials that could be used in your 3D printers. 

Of course, the key is a core infrastructure that manages all of this data and starts to create algorithms for how to use it.  Image being able to log in and get information about your house, your kids, your community, and your health.  Some things are already out there and being developed.

  • Mother is a technology that summarizes all of this data and pulls it together for people to use and monitor. 
  • Twine monitors your home and provides you with information such as your garage door is left open. 
  • Ninja Sphere is another solution for controlling your home devices.
  • Thing Worx is another solution focused on this connected house.
  • Cisco has a section dedicated to the Internet of Things.
  • Qualcomm and Verizon and others are getting into the health space, and you have companies like ADT or Time Warner that are already in the home and could expand into the health space. 

The other thing that all this data drives is the need for insights.  It’s no good to have data without the ability to turn it into knowledge.  This is again something that Google knows a lot about.  Imagine having a connected team of physicians that monitor your health based on your sleep patterns, your adherence, your exercise, and other key metrics such as blood pressure.  Imagine a dietician that monitored your food and gave you ideas about how to eat better.  There are lots of ways for the data to be used in an obviously Big Brother way, but if that could be turned on and off, then we could gain the insights without having to give up all our privacy. 

But, in general, many people are willing to trade privacy for insights.  That’s what we do every day. 

This idea of the Smart Home or Connected Home or Intelligent Home got me thinking over the holidays.  I even emailed Pulte Homes and Lennar Homes to see if they were doing anything in this space.  (They didn’t respond.)  I did stumble upon Home For Life Solutions which seems to be thinking about some of this and was talking about this back in 2009 in an article about Smart Homes and Aging in Place.    I was talking to a friend on Friday, and he shared with me some very cool things that The Villages in Florida is doing to incorporate health into their community. 

I can see so many opportunities here especially around the concept of Aging in Place.  Imagine all the Baby Boomers getting older and wanting to stay in their homes.  I’m not sure what Calico is going to do, but this could be an opportunity for them.

In a recent issue of TIME, Page discussed how Calico will treat aging and related diseases. He didn’t reveal much about the methodology, but stressed that Calico’s team will “shoot for the things that are really, really important.” The goal for Calico’s research according to Page, is to help prevent many diseases and have a greater impact on public health than drugs that target individual diseases. (from MedCity News)

Of course, this is why the concept of Seaside came to me.  A small, planned community where you live, work, and play.  There is also research by the CDC on healthy sustainable communities.  And, of course, there’s the efforts to create Blue Zones as communities

Imagine if this community existed.  You would be able to create your own insurance company.  You could offer discounts.  You could do the same with life insurance.  It could be like the Snapshot from Progressive

And, there is so much more opportunity:

  • When you drive into your driveway, why can’t your garage door recognize you.  Why do you have to press a button to open the garage?
  • Why can’t my purchases at the store be tracked online so I always know what I have and what I need?
  • Why can’t a smart cookbook recommend a recipe for tonight based on what food is at home, what food’s about to expire, and what I ate for lunch to create a balanced menu and caloric mix?
  • Why can’t my devices order my prescriptions for me when I’m low?
  • Why can’t my calendar automatically reschedule my doctor’s appointment when something else comes up?
  • Why can’t my running shoes automatically order a new pair of shoes when the cushioning gets low due to too many miles? 

One day, this will all happen where our house will be smart.  It will understand what I like in terms of lighting, shows, and music.  It will tap into my devices.  And, I’ll be able to get monitored and insights that improve my life.  And, best of all, this will be done in a sustainable way that improves the environment and our quality of life. 

So…maybe I can get Google or someone else excited about this idea!  It will take someone with a big vision to change the world, but I think it’s a huge opportunity!

Design Thinking Is Critical For The Healthcare User Experience (UX)

I was watching this video of Tim Brown (CEO of IDEO) earlier this morning, and it immediately clicked with me.  The idea of design thinking is very similar to the architecture training that I had.  Perhaps that is why I’m so fascinated by the opportunity to use technology and data driven insights to improve the consumer experience in healthcare.  

I like this definition of design thinking from an HBR article on it.

“it is a discipline that uses the designer’s sensibility and methods to match people’s needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity.”

This graphic from the Design Thinking for Educators site (from IDEO) is another good summary.

Image

But, one of the key reasons that I want to talk about this is IDEO’s frameworks are critical for healthcare.  If you look at David Kelley from IDEO, one of his key points is that “empathy” is essential to design.  That is so true in healthcare.  It reminds me of my interview with Michael Graves on this topic.  (BTW – IDEO is the group that worked with Walgreens on their new store design.)

In general, the user experience in healthcare is horrible.  People don’t understand the system.  They don’t understand their benefits.  Data is only now beginning to be transparent (but it’s still confusing).  People can’t read and understand the information.  Their providers don’t speak in plain language.  

It’s frustrating because all of us know this is a problem, but it’s so massive to change.  I always use the Triple Aim framework to make the point that the consumer experience is critical.  Think about evaluating prescription drugs or chemotherapy.  Quality of life is really important but often overlooked.  This leads to patients getting too much care as physicians try to cure them only to perhaps make their life miserable in their last few weeks of life.  

I’m going to have to continue to learn more about design thinking and reflect on how to use it more systemically in my approach to problem solving.  

 

Interview With David Tripi – Janssen Healthcare Innovation

A few weeks ago, as a follow-up to my discussion with Aetna about CarePass, I had a chance to talk with David Tripi from Janssen Healthcare Innovation about their new solution.

David is a founding partner at Janssen Healthcare Innovation where he is part of a multi-disciplinary group working toward the goal of propelling the company to become the leader in the healthcare solution business. Prior to the launch of the JHI team, David was with Johnson & Johnson for over 15 years.

“Janssen Healthcare Innovation (JHI), an entrepreneurial group within Janssen Research & Development, LLC, develops cutting-edge health solutions designed to modernize healthcare delivery, improve patient outcomes, and create a healthier world.”  This is a 3-year old effort by Johnson & Johnson focused on integrated care businesses and enabling technologies.  To support those, medication adherence and mobile are key areas.

One thing that David stressed is that they are platform agnostic and that their Care4Today Mobile Health Manager works as both an app and via SMS.  Therefore, the 50% of the US that doesn’t have a smartphone can still use it.  Additionally, it’s not a product or drug specific solution.  You can use this even if you don’t use a J&J product.

Care4Today Care4Family

Adherence is a huge challenge that everyone is aligned around, and everyone is trying to find solutions – plan design, incentives, apps, consumer engagement, framing, behavioral economics, and smart pill bottles (to name a few).  So, what’s part of the Care4Today solution?

  • It has reminders for Rx and OTC products.
  • It has a refill reminder process which they hope to automate in the future.
  • It has a two way secure messaging platform.
  • It has images of over 20,000 pills.
  • And, they also included a caregiver strategy and an incentive option.

The idea of social health is important.  We’ve talked about this for weight loss and smoking.  But, with the expanded role of caregivers, can they play a key role in improving adherence?  For example, if you respond that you didn’t take your pill and the response goes to your caregiver, will they call you?  Will that follow-up motivate you?  (Care4Family)  Some prior research says yes.

A broader question might be about how to pick a caregiver or how to define it.  Should it just be your family?  Should it include your physician?  What if you don’t have a support system?  Could the healthcare companies or advocacy companies give you a “professional caregiver”?  What about an avatar as a caregiver?

I asked about the incentive program that they included (Care4Charity).  David pointed out that using apps isn’t fun (at least for most people) so they wanted to give a slight motivation.  I questioned him on why $0.05 (which is the daily donation if you check in and take your meds).  They did lots of research which showed that the amount didn’t really matter.  So, this is an experiment to see if this extra feature of the program will nudge people to be more adherent.  Or ultimately, it would be great to segment the population to understand who it was motivating for and for whom it didn’t matter.

One of the things I wondered about was how they were going to promote the app.  Obviously, relationships with companies like Aetna and their CarePass program are one way, but with the tens of thousands of apps out there, how will people find it?  David told me that they were going to initially focus on social media – Facebook, Twitter, and mommy blogs – to drive awareness.  Next, they’re going to use pharma reps to discuss the app with physicians and pilot this strategy in HIV.

At the time, they’d had over 55,000 consumer downloads, and they’ve already gotten some initial feedback from physicians that like the fact that they’re offering solutions that aren’t branded to a specific pharmaceutical product.  Some of those physicians are already offering it to patients.  They expect this will be a big driver.  They are now starting to talk with retail pharmacies about how to encourage consumer use.  While my initial reaction was that this would be “competitive” with the Walgreens and CVS Caremark mobile solutions, they see collaboration opportunities especially with Walgreens and their open API.

Of course, I wondered about how the app was being used, but they don’t collect PII (personally identifiable information).  In the future, they plan to offer an option for patients to opt-in to share information and create a clinic dashboard for physicians to see which patients are using it and providing them with data.  And, with a new collaboration with HealthNet, consumers will be logging into the app with their HealthNet ID which will allow them to link up PII and PHI (protected health information).

So, what’s next…

  • They’ve launched in the US and France.  They’re expanding into the UK and other countries next.
  • They’re adding Spanish in Q1-2014.
  • They’ve just completed some human factor testing which will drive some UI and UX changes.
  • They’re going to do some testing and look at results with whatever data is available.
  • They’re going to try to partner with as many people as possible.

Will it move the needle around adherence?  It’s still too early to tell.  But, it’s great to see pharma testing new strategies and working in new ways with payers to try to address this challenge.

CarePass Updates – Medication Adherence and Stress

A few weeks ago, I had a chance to follow-up with Martha Wofford, the VP of CarePass about their latest press release.  This was a quick follow-up interview to our original discussion.  As a reminder, CarePass is Aetna’s consumer facing solution (not just for individuals who they insure) which integrates mHealth tools and data to help consumers improve their engagement and ultimately health outcomes.

“Many Americans have a lower quality of life and experience preventable health issues, adding billions of dollars to the health care system, because people do not take their prescribed medications. There are a myriad of reasons why medication adherence is low and we believe removing barriers and making it easier for consumers to take their medications is important,” said Martha L. Wofford, vice president and head of CarePass from Aetna. “As we continue to add new areas to CarePass around medication adherence and stress, we seek to provide people tools to manage their whole health and hopefully help people shift from thinking about health care to taking care of their health.”   (from press release)

As part of this update, we talked about one of my favorite topics – medication adherence.  Obviously, this is a global problem with lots of people trying to move the needle.  In this case, they’ve included the Care4Today app from Janssen.  This tool does include some functionality for the caregiver which is important.  It also links in charitable contributions as a form of motivation.  We talked about the reality that adherence is really complex, and people are different.  This may work for some, but adherence can vary by individual, by condition, and by medication.  But, they hope that this is a tool that may work to nudge some people.

I was also glad to see them taking on the issue of stress by adding the meQ app.  This is a key struggle, and Martha pointed out to me that 1/4 of adults are either stressed or highly stressed.

“When people are under chronic stress, they tend to smoke, drink, use drugs and overeat to help cope.  These behaviors trigger a biological cascade that helps prevent depression, but they also contribute to a host of physical problems that eventually contribute to early death…” – Rick Nauert, PhD for National Institute of Mental Health, 5/2010

She mentioned that they’ve gotten a great reception to this program, but they have a lot more to learn.  They’re still in the early period of getting insights and interconnecting all of their efforts.  We also talked about some of the upcoming opportunities with the caregivers (or the sandwhich generation).  I personally think the opportunity to improve aging in place through a smart home strategy with remote monitoring is going to be huge of the next 10 years.

I did interview the Janssen people as a follow-up which I’ll post separately, but I also thought I’d include this video interview of Martha that I found.

2014 Healthcare Predictions and Trends

Happy New Year!  2013 has been an interesting year in healthcare with 2014 promising many more exciting developments.  A few of the biggest stories from 2013 include:

  • Healthcare.gov – the politics, the drama, and the missteps
  • Healthcare transparency and costs – new companies, new revelations, and an entire Time magazine focused on it
  • Healthcare engagement – ongoing focus on how to get consumers to engage
  • mHealth and QuantifiedSelf – apps and devices proliferate
  • Investment – a huge jump in VC and angel funding for healthcare
  • ACOs – do they work or not
  • Big Data – so much data…so many opportunities

Here’s my predictions for 2014:

  1. Transparency – The race to bring cost data to the forefront of the consumer mindset will move from a radical concept to an expectation.  With increased out-of-pocket costs and HDHPs, consumers will expect access and information to cost data.  They will look for systems that can predict what they need and push data to them in a timely fashion using location based services and predictive algorithms. 
  2. Exchanges – With big companies trying the private exchanges and moving their employees to the federal exchange, we’ll see the market holding its breadth to see what happens.  If this drives success on both sides of the equation – employers and payers, you can expect a large jump in this direction later in the year.   
  3. Mobile – The traditional member website will continue to die a slow death without mobile optimization in place.  More and more consumers will access the healthcare system through a smart phone or device like an iPad.  This will drive healthcare companies to figure out how to embrace user design and member experience in new ways as they strive to provide the sustainable app that consumers use more than a few times. 
  4. Providers – Providers will continue to cautiously embrace pay-for-performance, value-based healthcare, and models like ACOs and PCMHs.  They will want them to work, but they will continue to look for the Tipping Point in which their overall panel is part of these programs.  Providers will also begin to modify their workflows using technology based on Meaningful Use and the ubiquity of technology. 
  5. Engagement – Consumer engagement in healthcare will continue to be the elusive Holy Grail.  Companies will try behavioral economics, incentives, and mass personalization to try and get consumers to understand healthcare and take actions to improve their health.  There will be more shifting to include caregivers and embrace social media (e.g., Facebook) and peer-to-peer networks.  We will start to see documented case studies and results in terms of improved outcomes. 
  6. Devices – While 2013 was the year of device proliferation, we will see the number of people (early adopters and QuantifiedSelf groupies) maxing out.  I expect some further consolidation and a dip in adoption rate as we move into the period of disillusionment.  Devices will be less about a standalone solution and look at how they integrate with the smart phone and existing systems (at work and home).  Like smart pills and smart clothes, this will lead to increased data and integration into daily life.  This will require collaboration with providers and employers to figure out how to come through this period.
  7. Value-based – CMS will continue to be a big driver in pushing new payment models around healthcare as they struggle to figure out how to slow the tidal wave of costs coming in Medicare and Medicaid.  This will meet up with some of the progress in the commercial space with ACO and PCMH models leading to an evolving path in terms of how drive value.  This won’t be the breakthrough year, but we’ll see meaningful progress. 
  8. Investments – I don’t see any slowdown in healthcare investments.  Our health issues aren’t going away in the US or abroad.  China is just emerging with a long list of health issues and technology is creating new solutions in 3rd World countries. 
  9. Pills Plus – With pharma struggling with how to reinvent itself, they are going to look at new solutions like Merck is doing with Vree Health.  This will cause them to look at many of these trends and how they wrap services, technology, and incentives around their medications.  
  10. Specialty Care – Specialty pharmacy will continue to be a big growth driver with novel innovations coming down the pipe.  But, these pharmacies will realize that they can’t work in a vacuum.  They have to do a better job at integrating care management into their services and partnering with Case Management companies to holistically treat the patient. 
  11. Metabolic Syndrome – The overall global issues of obesity and diabetes will become a huge weight around the shoulders of the healthcare system.  While the focus will continue to be on the complex cases requiring massive dollars, the majority of people will be struggling with a chronic disease.  Metabolic Syndrome will become a big focus for payers, employers, and health services companies as they try to find ways to prevent further complications. 
  12. Prevention – While I don’t expect a huge shift here, I think we’ll start to hear more voices on the perimeter yelling about why we only spend 5% of our dollars on prevention.  They’ll point out other models outside the US spending more with better outcomes.  Health Reform will begin to enable some change here, but it will be slow. 
  13. Community Based Care – With more people coming back into the healthcare system with Health Reform, there will be a greater need for location based access to healthcare.  This will involve clinics but will be much broader.  Companies will need to look at how they embrace community resources like churches to engage the disengaged and poor who don’t trust the system and have limited access to the traditional channels.  

Dung Beetles, Telomerase, Meditation, and Health

In Vic Strecher’s new book – On Purpose, he takes us through a journey inspired by the death of his 19-year old daughter.  This journey looks at a variety of research presented in a creative way, a graphic novel.  At the end of the story, I left with several interesting observations.  (For more on the book and the app he developed, go to www.dungbeetle.org.)

  1. Having meaning in your life can impact your health.  (see research and more research)
  2. Meditation can help limit stress (which impacts our health) and impact telomerase growth.  (see research)
  3. Using “fear arousal” to drive behavior change only works if people have “self-efficacy” which is really important to the carrot versus stick discussion.

 Image

The book also reinforced several things:

  1. Our decisions and behaviors influence our health.  (80% of health care costs are driven by 8 factors)
  2. Our decisions and behaviors are influenced by where we live.  (your zip code influences your health)
  3. Motivational interviewing is key to health care engagement. 

So, as you look at your New Year’s Resolutions and your priorities for 2014, it might be worth looking at On Purpose and understanding why the Dung Beetle was chosen to symbolize focus in the book.  

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