Enabling Healthy Decisions

One area where healthcare has definitely lagged other industries like consumer products and financial services has been in the area of analytics. Silverlink Communications is the first company to bring analytics to the area of healthcare communications.

We have been doing this for years and focus on the different ways to use analytics to improve results. This is not simply custom reporting which is what lots of people mean when they talk about analytics. And, it’s a lot more than simply best practices like co-branded communications (i.e., employer plus health plan) work better than communications simply from a health plan to a member (patient / consumer).

Interested in learning more…We are hosting a webinar series this month that might interest you. The first one is tomorrow.

It includes Stephen Baker who wrote The Numerati; Kinney Zalesne who wrote Microtrends; and Tom Davenport who wrote Competing on Analytics. You can register here.

If you enjoy this topic, I would also encourage you to register and read our white paper on Adaptive HealthComm Science (which is what we call our approach to healthcare analytics for communications). We also have a video on engaging consumers in their healthcare. Both can be found at the bottom of our homepage at www.silverlink.com.

I hope you all had a good Fourth of July. One thing I always think about this time of year is my perception of fireworks. I’ve never been a big fan.

Of course, like most young boys, I had my fascination with fireworks, but after two incidents, I began to view them as more dangerous.

When I was about 10, I had a pack of firecrackers go off right near my ear just as I threw them. Then, in high school, I remember watching bottle rockets hit someone’s house and worrying about it catching fire (which it didn’t).

Why should you care (this is a health care blog – right)?

I think it’s important because our frameworks about going to the doctor, going to the dentist, eating healthy, exercising, preventative care, and so many other things are set in place as we grow up. As a parent, you need to think about the example you are creating. As a communicator to the patient later in life, you need to think about what their attitudes are towards health.

According to the latest research from a Kaiser Health Tracking Poll of 634 respondents from June 1-8^th:

Since, I strongly believe responses are biased by context, I wonder how many people respond that way when they realize that they will be pushed to this plan. [The Lewin Group estimates that as many as 118.5M people (2/3rds of those who have insurance today) would be shifted to public coverage.]

We had our client event a few weeks ago (and I am finally digging out). Additionally, I had the privilege to attend one of our client’s big internal events last week. They both gave me lots to think about. I am grouping them all together here to share.

• Payors are becoming more interested in BPO (business process outsourcing) today. (Is that an economic reality or a competitive need?) Disease Mgmt is the exception here as plans are moving it back in-house.
• Even thought over 30% of payors have more than 4 backend systems, some of them are looking for new claims systems for their individual business.
• Marketing is the #1 investment area for 2009 (and hasn’t been in the top 10 for the past decade).
• One plan out there has 72 different business intelligence tools they are using.
• 67% of members haven’t been contacted by their plan in the past 18 months. (Is that good or bad?)
• 80% of members get information from general healthcare sites not the health plan website.
• Payors are starting to get into (or investigate) the social media world.
• Reducing 3 risk factors (e.g., smoking) would reduce 80% of diabetes and 40% of cancers.
• Safeway has kept their healthcare costs flat for 4 years by using incentives.
• Over 80% of Americans are on 3-tier plans.
• Only 10% of MDs aware of the cost of a drug to the patient…
  • And most think it’s the RPh’s job to address this
  • But 70% of patients don’t know the cost before it’s adjudicated
  • And 60% of patients w/o coverage don’t talk to MDs about cost
• Just following guidelines would improve care and costs dramatically (e.g., hypertension by 25%)
• Starting patients on generics increases their likelihood of reaching an MPR > 80%
• For the same location, Marriott makes 8% more revenue than competitors based on personalization and use of data
• The Royal Bank of Canada is beginning to use the value of your social network in determining things like your interest rate (e.g., John has a high net worth cousin that we want to retain).
• Your IQ score plus your credit score can explain 95% of your success as an employee
• At NetFlix, they found that people like their recommendations better than the movies people chose themselves
• High performing companies are 5x more likely to consider analytics a key part of their strategy
• One CEO is so focused on analytics that they talk about firing people for not using a control group.
• Analysis is not an ideal but a truism. You have to both have the data and the intelligence to interpret it.
• Healthcare is just realizing that consumers can be “convinced” to use specific products or services.
  • Behavorial economics (fear) versus inspiration (love).
• There are more fast food restaurants in states with higher obesity – vicious cycle.
• You have to engage consumers on their terms.
• Do consumers really know what they want? If you ask them about receiving health care communications, what would they say? Can you honor those preferences? When do you override them?
• Is communications and member insights really the only way to differentiate versus competition?
• Your brain takes in more information than it can process…this is why sleep, exercise, relaxation, etc. is necessary for your brain to process all of it. (If true, do you forget more if you don’t do those things?)
• You have to have both the Hedgehog (people that dig deep on data) and the Fox (people that connect the dots) to be successful. (Good to Great)
• Personalization and pro-active communications are key.
• 65% of healthcare products will be personalized in the next 5 years. (What are you doing to get there?)
• BWM offers a great example of customization:
  • You could name your mini-Cooper
  • Your personalized key fob would activate billboards that showed a personal message (Hi Herbie!)
• Interesting discussion on using automated member satisfaction solutions versus live agents. Do you get different outcomes? Which is more accurate?
• Do members want to be “treated like a friend”? Wouldn’t some view this as too intrusive / presumptive?
• Can you really motivate your employees if you have no personal relationship with them? I was surprised to hear some people say yes.
• The most difficult thing is to stop doing what we’ve been doing.
• Do you want to be part of a corporation or a movement?
• 65% of employees are looking for another job (even in today’s economy).
• 80% of employees don’t look forward to Monday (and heart attacks and strokes are higher on Monday mornings).
• 25% of big company CEOs would meet the clinical guidelines to be defined as a psychopath.

Hopefully, like me, these give you a few things to think about and chew on.

(Continued) Here are my highlights from Medco Health’s 2009 Drug Trend Report:

• They continue to be very aggressive about discussing David Snow’s blueprint for healthcare reform.
• They also seem to be very focused on personalized medicine with several documents out there discussing it.  They mention it here along with GINA.
• They also talk about Prevacid potentially making the Rx-to-OTC switch which we know has recently been approved.

Half of all Americans are under treatment for at least one chronic disease.  For patients initially diagnosed with chronic or complex conditions, drugs are the first choice for medical intervention 88% (131 out of 149) of the time. Care of patients with chronic and complex diseases accounts for 75% of medical costs and 96% of total drug spending in the U.S.  However, about half of all patients abandon their prescribed therapy in the first year of treatment. Indirect costs linked to absenteeism, short- and long-term disability, and presenteeism (i.e., present at work but less than fully productive) can exceed associated direct healthcare costs by two to three times—making even more critical the rigorous management of these patients and tighter adherence to ongoing care.

Major contributors to these numbers include the epidemic of obesity, the persistence of tobacco and substance abuse, and physical inactivity. As the average age of our population rises, without a paradigm shift that changes the status quo, it is expected that the number of individuals with chronic disease will similarly increase (see figure below). – for original sources go to page 85 in the document)

• I was a little surprised that it wasn’t until page 97 that they showed results from the Medco Therapeutic Resource Centers (TRCs).

Alright, after a few crashes of the blog entry, that wraps it up…one more drug trend report to go.

A colleague recently forwarded a local article on employers and plan sponsors seeking alternative avenues for cost savings – tackling dependent eligibility audits to generate plan savings.

And the trend is catching on as benefits consultant groups like Mercer, Watson Wyatt, Hewitt can attest and as Mercer recently shared that it anticipates a doubling in its private sector dependent audit business since 2008. Similarly, if one were to look at the number of state and municipal government groups looking to audit their employees this year over last, it has at least doubled.

So why are dependent audits largely considered the final frontier and why are more employers just doing audits now? Well, as all of us who read the various health care blogs and are in the business know, cost-shifting is approaching its limits– employers have only so much latitude remaining with their employees relative to increased member responsibilities with deductibles and co-insurance without cutting benefits (even though many are forced to cut regardless in this economy).

Furthermore, creative cost-saving plan design options are pretty much exhausted (though we’re seeing some innovations in pockets). So what’s left if the employer is still to offer employees the more traditional health care coverage? Some estimate that anywhere from 3 – 20% of dependents are ineligible for health coverage (most say 3-8%). Employers are taking on these audits as a means to identify dependents who clearly should not be enrolled – divorced spouses, deceased spouses (yes, they are still enrolled), older children, boyfriends – you get the idea. At anywhere from $4,700 to $12,000 total average premium PMPY (excluding any medical costs on top of premiums) there are meaningful dollars to be saved that can be the difference between continuing, trimming or altogether dropping employer-sponsored health benefits. Whether you be large or small employer group, the cost savings can be significant – well north of $1mm for many groups. So the ROI is clear and delineating who is eligible, or not, should be a relatively straightforward proposition, right?

Well, not so fast. Getting employees to comply with audits as well as send in all the necessary documentation (e.g. marriage certificates, adoption paperwork, etc.) can be tedious and cumbersome for the employer. But despite the pain of an audit for both employee and employer, there is sufficient ‘green’ in those ineligibles that employers, small and large, are launching eligibility audits.

Once an employer is determined that an audit is necessary what are the keys to a successful audit? Fundamental program design and seamless execution are critical because as a few as one irate employee can brew a firestorm in employee relations. Here are the fundamentals…

1. Education and communication
2. Data analytics to find higher-risk employees
3. Access to Information and resources during the audit
4. Ease of document submission
5. Verification and results

So where to begin? Granted each employee population is different so flexible communication and engagement tactics should reflect this, but the evidence behind dependent eligibility audits is clear so you need to think now on how to execute and execute quickly before open enrollment season is upon us. Here at Silverlink, we are offer comprehensive communication solutions that include multi-channel outreach, inbound solutions, web tools, data management, analytics and comprehensive program management so clients can optimize their outreach goals and realize substantial cost savings so that there are no surprises during open enrollment.

Lastly, in some ways the spike in dependent eligibility audits seems too little too late for plan sponsors and it is bewildering why this is only coming onto the radar now with some gusto when eligibility verification should be a fundamental part of enrollment, shouldn’t it?

This posting was written by Cassandra Price, Payor Operations Subject Matter Expert for Silverlink Communications. Cassie has held leadership positions in managed care organizations and healthcare IT solution providers in strategic product management and client services including UnitedHealth Group, McKesson Health Solutions and Concentra, Inc.. Her healthcare background also includes private equity/M&A, care management software solution design, CRM design and implementation and managed care analytics and outcomes research.

Cassie’s work at Silverlink Communications focuses on designing multi-channel communication solutions for managed care organizations and self-insured employers where driving operational efficiencies and cost-savings are critical. Solutions areas include coordination of benefits programs, enrollment & eligibility campaigns, broker communication programs, member and provider call center call obviation solutions, and various other member, provider and employer communication programs. Cassie has her MBA in finance from Babson and an A.B. in History from Hamilton College.

I must admit that I have been reading these reports by Walgreens for less time than those by Express Scripts, Medco, and CVS Caremark so there were a few more questions that jumped out in my mind here. From the beginning, one thing that I noticed was that Michael Nameth signed the introductory letter. I only pull that out to wonder how that compared to Express Scripts and CVS Caremark (which are the other two 2009 reports currently available).

• The Express Scripts report was signed by George Paz (CEO).
• The CVS Caremark report doesn’t have an opening letter.

Their trend numbers were:

• 5.6% including specialty
• 4.1% without specialty

They rolled out a new 90-day program called Walgreens90 which matches the Maintenance Choice program from CVS Caremark.

• Member pay the same at mail or Walgreens store for 90-day Rx.
• Same cost to the payor at either channel.

A semantical issue for me was that they call their program “step care therapy” versus the rest of the industry that calls it “step therapy”. Are they implying a level of care in the intervention that is different from others?

In the opening section, they talk about some general data which I found interesting:

• 1 in 7 Americans went without a prescription in 2007 because of cost related concerns
• 1 in 10 working age adults with private insurance also went without a prescription

  (Both stats from study by the Center for Studying Health System Change)

Their PMPY costs were $912 including specialty. $812 excluding specialty.

78.1% of their members take a prescription medication.

Their population had 13.6 Rxs PMPY.

Members aged 60 years and older used 2.6x as many Rxs as the younger members.

I was surprised that they claim that a 1% increase in generic fill rate produces a 2% savings for their clients. This is double what CVS Caremark claims. I always thought it was between 0.75% and 1.5%. Is their pricing different or is there something else that generates this increased savings per percentage?

The average annual member cost was $178.40 (PMPY).

They say the average ingredient cost was $146 for a brand and $26 for a generic. The brand price seems really high to me.

Their generic fill rate was 65.6%.

Members paid 16.6% of brand drug costs and 29.8% of generic drug costs (or 19.6% overall).

They say that 37.4% of all their prescriptions were filled as 90-day Rxs (retail or mail), but they lost me when they broke it down.

What surprised me (and maybe it shouldn’t) is that 7.4% of their clients drug spend is on 3 drugs that have easy savings programs associated with them:

• Lipitor – split the drug or target it for therapeutic substitution with generic Zocor (simvastatin)
• Prevacid and Nexium – step therapy for generic Prilosec (omeprazole) or move people to Prilosec OTC

Specialty drugs accounted for 0.5% of total Rxs but 10.9% of total spend.

The average specialty drug was $2,032. [for a 30-day supply I assume]

They provide a few case studies, but they point you to www.walgreenshealth.com/casestudies for more information.

One thing that jumped out for me in one of the case studies was their mention of different copays based on whether a member went to an in-network pharmacy. I wonder if (as a retailer) they have a smaller network or actually used a tiered network design. Most plans (that I’m familiar with) seem to have all (or the majority) of retail pharmacies in the network.

In their end section on the landscape, they mention new combination drugs. I would be very interested in their opinion on these…should they be covered? Are they a waste of money?

Finally, at the end, I looked at the methodology. A few things caught my eye:

• They excluded managed care clients. Why? Wouldn’t they be the most aggressive?
• They excluded Medicare Part D clients. (which is consistent with Express Scripts and CVS Caremark)
• They excluded clients with a custom formulary. Again, why?

They use a discounted AWP to calculate total cost, but they don’t tell what the discounted rate is.