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.  

8 Risks Drive 15 Conditions And 80% Of Healthcare Costs

This is one of my favorite images that I use all the time to talk about how our decisions drive our healthcare costs.  This is from the AON Hewitt 2012 Health Care Survey and based on the World Economic Forum’s data.

8 risks - 15 conditions - 80 costs - AON

Why Healthcare Needs A New “Pope”

I was reading the Time magazine article about Pope Francis who is their Person of the Year.  In reading it, I was struck by the parallels with healthcare.

  • The church is a huge institution that is hard to change…like the healthcare system.
  • There is a need for transparency…like healthcare.
  • There is a need to address the needs of the poor…just like healthcare.
  • There is a need for new changes to embrace technology and cultural change…like healthcare.

I also looked at a few of the quotes in the magazine, and they could easily be relevant for healthcare also with a subtle change in words.

“It is necessary to broaden the opportunities for a stronger presence of [consumers] in the [healthcare system]“

“Who am I to judge”  His approach to dealing with [patients] is first about compassion not condemnation.

“How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points.”

These parallels were reinforced this morning when I read an article about Amanda Levitt and obesity in USA Today.  We’re all familiar with the obesity bias that exists, and I certainly think obesity is an issue which we have to tackle.  That being said, we’re not going to address it by attacking overweight people and shaming them into behavior change.  If obesity is going to be a disease that gets treated, then we need to have patients and providers able to talk openly about it.

The article about Amanda and her efforts at http://www.fatbodypolitics.com also got me thinking about the link between purpose in life and health.  It’s certainly not just about a number like BMI.  If I go to http://www.dungbeetle.org (which is a new product from Vic Strecher), I pulled this quote:

Let’s begin by defining what we mean by purpose. A simple definition might be: the focused, active, values-driven pursuit of an identified and attainable goal within a given time frame. In our view, that time frame could last a day or a lifetime. In other words, your purpose is likely to change over the course of your life. Your purpose may also have different dimensions, including your family, your work, your community, and your own personal growth.

We all intuitively grasp, based on our own experiences, that we’re happiest when we have a strong purpose and the vitality to pursue this purpose. Recent groundbreaking science also tells us that a strong sense of purpose is associated with increased willpower, physical and mental resilience, and a revitalized sense of happiness and well-being.

The EveryMove 100 Ranks Health Insurance Companies…On Engagement and Empowerment

Engagement is such an essential part of healthcare.  I’ve talked about that many times and feel very passionate about how important engagement is to changing behavior and empowering consumers.  
 
I hadn’t had time to look at it when it first came out, but I finally got a chance to click on the press release from EveryMove which is a Sandbox and Blues sponsored company focused on health rewards and incentives.  
 
They put out the list of the top 100 health insurance companies in the US based on how well they engage and empower consumers – EveryMove 100 Health Insurance Index™ (https://everymove.org/everymove-100). In theory, if you could buy from any plan in any state in the exchange, this would be really helpful in selecting a plan.  Of course, as a researcher, I’d love to see some of the core data from a similar group of consumers to show how their engagement varied as they moved from one plan to another.  
 
They look at over 50 data points including:
  • mobile-friendly websites
  • mobile apps and app store rankings
  • self-service tools
  • incentive program offerings
  • community involvement
  • commitment to social engagement
  • consumer satisfaction
 The Top 10 include:
1.     Cigna 
2.     Kaiser Permanente of California 
3.     Premera Blue Cross 
4.     Humana 
5.     Anthem Blue Cross Blue Shield 
6.     Independence Blue Cross 
7.     Blue Cross and Blue Shield of North Carolina 
8.     Blue Cross and Blue Shield of Illinois 
9.     CareFirst 
10.   BlueCross BlueShield of Tennessee
 
The bottom 10 (of the top 100) include:
90. Fidelis Care
91. Highmark BCBS
92. BCBS of VT
93. BCBS of ND
94. Rocky Mountain Health Plans
95. Concordia Plan Services
96. Molina Healthcare
97. PacificSource Health Plans
98. AvMed Health Plans
99. Vantage Health Plan
100. Lovelace Health Plan
 
Since Cigna was the first company in the payer space (that I know of) to have a Chief Experience Officer, perhaps this shouldn’t be a big surprise that they rank so highly here.  

Top Health Issues From PWC

A few weeks ago, PWC’s Health Research Institute (HRI) published their list of 10 biggest issues for 2014.  Before I publish mine, I thought I’d share theirs.  I put my comments on each in [brackets].

1.  Picking up the pace of price transparency [this is an easy and obvious one...lots of energy here.]

Purchasers are demanding more information about the prices that providers charge and the government is giving it to them. Earlier this year, CMS released a trove of hospital pricing data for the first time showing significant variability in cost. Cost-conscious employers are making transparency a top factor in negotiations with health plans and providers. As more pricing information becomes public, how will consumers, employers, and insurers put the data to use and what does it mean for providers?

2.  Employers explore new options with private exchanges [an interesting and surprising effect of Obamacare...I don't think most people predicted this would happen quickly]

More large employers are using private exchanges as a way to provide healthcare benefits to their workers. This trend will likely grow in 2014 as employers continue to explore strategies for holding down costs, shedding the administrative burden of providing coverage, and expanding plan choice for employees. 

3.  Pharmaceutical supply chain security: Combating counterfeit drugs [a long time issue...not sure if 2014 will be the year for this]

A new federal law – the Drug Quality and Security Act – is aimed at eliminating counterfeit medications in the drug supply chain. The law imposes a tight timetable on implementing the first step toward a nationwide “track and trace” system to document the journey of prescribed medications from manufacturer to patient. Drug makers will be required to begin tracking prescribed drugs in large bundles or “lots” starting in 2015. And in 2017, the industry must begin assigning serial numbers to individual “saleable units” of every prescribed product sold in the U.S. PwC estimates that the program will cost drugmakers $10 million to $50 million per manufacturer.

4.  Medicaid’s march toward managed long-term care  [agree...Obamacare will drive more people here making this critical to long-term budget management]

States are struggling to contain rising Medicaid costs in the face of an aging baby boom population that has not saved enough for health costs in retirement. Demographic and economic trends point toward many years of rising long-term care costs. States are looking to a familiar tool – managed care – to help hold the line on long-term care spending. Ten years ago, only eight states had a Medicaid managed long-term care program; in 2014, that number is expected to climb to 26.

5.  Companies rethink their roles in the new health economy  [new models will become the norm as people stop focusing on ROI and focus on how to improve overall wellness with shift to prevention]

In the new health economy, money will move differently as consumers exercise greater control over spending and more companies compete for a piece of the healthcare dollar. Competition from new entrants, incentives to take on more risk, pressures to reduce costs, and the growing influence of consumers are all forcing healthcare organizations to rethink who they are and what they offer. Many are striking new alliances, marrying their own healthcare experience with the likes of big box retailers, technology companies, and wellness companies to diversify their brands and gain an edge over their competitors. Others are forging ahead on their own by expanding beyond their core competencies. 

6.  A new mantra for healthcare innovation: fail fast, frequently, and frugally  [not sure this is new...been the mantra for years but now more mainstream]

Converging forces in 2014, including reduced government funding, will necessitate a new and leaner innovation model. Instead of fearing failure, organizations must embrace it. A discovery process focused on failing fast and frequently can help arrive at solutions in less time and with less cost. By fostering an innovative culture that brings more rigor to the process and views failure as a means to an end, companies can achieve high-impact innovations in less time and at lower cost.

7.  Social, mobile, analytics, and cloud technologies prime health industry for new business models  [new models yes...business models and ways of making revenue - TBD]

A single ecosystem of mobile sensors, devices and apps are enabling us to track everything from steps we walk to the calories we consume. Although separately these tools are not new, they are now being used to improve the practice of medicine and coordination of care. Instead of prescribing drugs, providers are prescribing exercise regimens and using data to keep patients on track to meet health goals. In 2014, the trend has the potential to fundamentally alter how health organizations interact with patients and one another to deliver care and manage health while keeping costs down.

8.  Corporate venture capital picks up the slack  [will continue with some big fails...more likely go to fund managers like the health plans have done]

As traditional venture firms pull away from funding life sciences start-ups, corporate capital will pick up the slack in 2014. With many corporations cash rich – but R&D poor – new venture funds may be a solution for stagnating innovation. New and unusual marriages are occurring between corporate cash and traditional venture capital, injecting not only money, but fresh innovative thinking and industry insights. Start-ups can benefit from a steady stream of funding that can last throughout the development phase and draw upon corporate expertise to help commercialize products.

9.  Technology is redefining the healthcare job market  [this will continue...not sure any net new changes here]

With millions of new customers, the rise of quality-based payments, and more discerning consumers, healthcare organizations require new workforce capabilities that stretch beyond traditional clinical roles into more convenient, consumer-focused technologies.  Healthcare organizations need to use technology to extend care and build a workforce that is skilled at engaging digitally with patients.

10.  A new lens on clinical trials  [big changes coming for pharma over the next few years]

In 2014, as the pharmaceutical industry comes under increasing pressure to replenish its product pipeline faster and with fewer dollars, drugmakers must re-think their research methods. Precision medicine and the continued focus on specialty products are giving rise to new clinical trial designs, such as non-randomized studies. These changes will present new challenges for drugmakers as they work to ensure the integrity of their data, recruit appropriate patients, and determine product pricing. New technologies, such as virtual clinical trials, may offer a solution. According to HRI, nearly 70 percent of consumers surveyed agree that biomedical research is an important economic growth engine, but they are unsure of their role.

 

The list is informed by HRI research and the input of PwC’s Health Industries professionals who work with hospitals, physician groups, pharmaceutical and medical device companies and employers. In the fall of 2013 HRI also conducted a poll of 1,000 U.S. consumers on a range of healthcare topics covered in the report. The report provides further analysis of the top issues for 2014 and outlines implications for key stakeholders. For the full report, videos with industry experts and graphics illustrating each issue, visit: www.pwc.com/us/tophealthissues.

Interesting Articles, Companies, and Links From 2013 – Part I

One of the big challenges with healthcare is an explosion of new drugs, new technology, new business models, and information.  As I begin to plan for 2014, I’m trying to clean up my e-mails.  There are so many interesting articles that I never made it to this year. 

Here’s some quick summaries direct from the stories, e-mails, or newsletters that I saved, but I’ve never had time to share with you.  Enjoy!

TracFone Wireless and Voxiva, Inc. are creating a better way for Amerigroup to reach and engage millions of members and improve their health.  SafeLink Health Solutions, a service of TracFone Wireless, was created to assist partners such as Amerigroup to stay connected with their Medicaid population. Customers receive a phone, unlimited text messages, 250 minutes each month and calls to Amerigroup’s member services all at no cost.

Juniper Research’s latest report on the mHealth market forecasts cumulative cost savings from remote patient monitoring of up to 36 billion USD globally over the next five years – under Juniper’s most optimistic forecast scenario.

Sleep infographic from the NIH – http://www.nhlbi.nih.gov/news/spotlight/fact-sheet/sleep-disorders-insufficient-sleep-improving-health-through-research.html

“Designing an Effective Behavior Change Platform” unveils the findings of a comprehensive research effort into how mobile is currently used to influence behavior, and identifies best practices within a new Mobiquity framework that furthers the goal of using mobile to achieve beneficial behavior change.

Three types of managerial activities can make a capability dynamic: sensing (which means identifying and assessing opportunities outside your company), seizing (mobilizing your resources to capture value from those opportunities), and transforming (continuous renewal). This framework, which I described in my paper “Explicating Dynamic Capabilities” [Strategic Management Journal, Dec. 2007] explains how to get the future right: how to position today’s resources properly for tomorrow.  (David Teece)

Great TED-Ed video “How to sequence the human genome”. http://lnkd.in/brdYsJf 




Turn our genes on and off like dip switches? A great and far-reaching conversation between Richard Dawkins & Neil deGrasse Tyson (1hr 17mins) http://lnkd.in/b2vKf_U

“The approach of the medical establishment to health care is to cure disease, and yet the potential exists, given the appropriate focus and funding, to eliminate most diseases.” http://lnkd.in/baM5gb6

Gluten and carbohydrates may be at the root of Alzheimer’s disease, anxiety, depression, and ADHD. Dr. David Perlmutter is author of “Grain Brain: The surprising truth about wheat, carbs, and sugar; your brain’s silent killers” http://lnkd.in/buBmYmi

Top 10 Genetics Stories of 2013. http://lnkd.in/bXQKtzp

These last 5 are from Paul Sonnier’s newletter.  You can see an infographic on digital health by him here – http://storyofdigitalhealth.com/info graphic

Up is turning data into infographics if you haven’t seen any of them – http://jawbone.tumblr.com/post/69082031058/bookworms-bikers-or-bi-coastal-jet-laggers-the

One thing I think many healthcare companies miss is the customer experience perspective.  You should look at Bruce’s top 20 posts from 2013 on this topic – http://experiencematters.wordpress.com/2013/12/26/20-most-popular-cx-matters-posts-in-2013/

Keas (www.keas.com), the market leader in employee health and engagement programs, today announced the results of its 2014 Health Trends Survey. Employees have health at top of mind for 2014, with 82 percent resolving to lose weight, exercise more, or reduce stress in the New Year — and they are looking to their employers to create company cultures of health to help them make these resolutions stick. Employees report that key motivators would be cash and prize rewards for participating in corporate health programs (55 percent) and access to health programs and on-site gyms and fitness classes (38 percent).

THE NEW YORK TIMES: As Hospital Prices Soar, a Single Stitch Tops $500 - Hospital pricing is often convoluted, and hospital charges represent about a third of the total United States health care bill. In the latest installment of her health series, Paying Till It Hurts, Elizabeth Rosenthal focuses on the high price of getting stitches in an emergency room, one of the simplest procedures imaginable.  http://www.nytimes.com/2013/12/03/health/as-hospital-costs-soar-single-stitch-tops-500.html

Story about HHS and copay cards – http://aishealth.com/archive/ndbn112213-01?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=28181988

An infographic comparing US healthcare to the world based on WHO data – http://publichealthonline.gwu.edu/us-health-care-vs-the-world/

Holidays increase stress for everyone, especially caregivers. A new APA study found that more than 6 out of 10 Americans report significantly more stress during the holidays, and most of these are women. (Here’s the link.

The five semi-finalists in the Merck I Heritage Provider Network Innovation Challenge, a crowdsourcing competition that offers a total prize purse of $240,000 for breakthroughs in diabetes and heart disease research.

·         Fit4D (@Fit4D): Fit4D has developed a scalable and personalized program using an optimized mix of its Pathways technology platform and expert clinical service providers. The platform synthesizes workflow, data capture, device integration, and reporting– enabling personalized service delivery via coaches within Fit4D’s national network of nurses, dietitians, exercise physiologists, social workers & pharmacists. (http://fit4d.com )

 

·         Frame Health: Frame Health leverages the world’s largest personality characteristic database to produce comprehensive patient adherence profiles for the first time. In a 6 minute session, the platform determines the psychological triggers that will be most effective to use to attain medical adherence with each patient. (http://www.framehealth.com )

 

·         Sense Health (@SenseHealth): Sense Health crafts interactive conversations so providers can better support patients in between appointments. The Sense Health concept helps providers both create care plans and monitor care plans (and thus patient progress), while delivering SMS support to patients. (http://www.sensehealth.com )

 

·         Vital Score (@VitalScore): Vital Score is a new vital sign for the primary care visit, modeled on the APGAR score and checklist — simple interventions that radically improve care. Now, for the first time, the behavioral referral — whether for smoking cessation, medication adherence or care management — is as easy as writing a prescription. (http://vitalscorehealth.com )


·         Well Frame (@WellFrame): Wellframe reinvents the care plan using mobile devices, artificial intelligence, and human-centered process redesign. Wellframe has developed a clinically proven proprietary method of delivering care plans to patients as dynamically generated personalized multimedia daily to-do lists on mobile devices. (http://www.wellfra.me)

An article and interview with the author of The Lean Startup – http://www.strategy-business.com/article/00224?gko=82198&cid=TL20131121&utm_campaign=TL20131121

Healthcare Shifts from à la Carte to Prix Fixe article – http://www.strategy-business.com/article/00220?gko=4b689&cid=20131119enews&utm_campaign=20131119enews

Aetna (NYSE: ΑET) and Consultants in Medical Oncology and Hematology, PC (CMOH) have launched a first-of-its-kind patient-centered medical home model for oncology. Combining the proven results of evidence-based decision support in cancer care, enhanced personalized services, and realigned payment structure, Aetna and CMOH are collaborating to help increase treatment coordination, improve quality outcomes and reduce costs.

More to come as I catch up…

Verizon As A Healthcare Company? – Converged Health Management

You know that something has become mainstream when the large Fortune 500 companies (not already in healthcare) begin to jump into the space.  So while some people in healthcare are still trying to figure out what to do about remote monitoring, Verizon has jumped into the pool with their Converged Health Management solution. 

Now, don’t forget, people have been forecasting huge growth in this space while at the same time some of the start-ups in this space haven’t taken off as fast as expected.

I was hoping to talk with Verizon about this new effort, but they declined.  Since I had already prepared to interview them, I’m sharing my thoughts here.

What is Verizon doing in healthcare?

Verizon appears to be doing several things in healthcare.  While a lot of it is critical but less exciting back-office technology, they are starting to move into more of a consumer strategy (I think).

  • Networking
  • Cloud connectivity
  • Mobile
  • Security

What is Converged Health Management?

Converged Health Management is a “remote patient-monitoring medical platform designed to help clinicians and patients manage patients’ health in between doctor visits.”  This sounds really intriguing.  I was hoping to find out more about the device, the apps, the data, the platform, and how this is being integrated into the provider workflow.  But, for now, I’ll have to live with this video.

Why is this important?

This is important because about 50% of consumers have a chronic disease, and there’s no cost effective way to manage and monitor these consumers without using technology.  Remote monitoring of patients to provide a “bridge” between physician visits and nurse consultations is critical.  But, there are several key issues to be addressed:

  • How does the device get “prescribed” to the patient?
  • How does the patient learn to use the device?
  • How easy is it to set up the device?
  • What is the cost of the device?
  • What data is captured by the device?
  • How is this data transmitted and to whom?
  • How is the data used by the patient?
  • How is the data used by the clinician?
  • How does the solution change patient behavior?
  • What rules are written to monitor the data to create escalations to the physician, their care manager, or their caregivers?
  • How are outcomes demonstrated?
  • What is the ROI?

What I learned from the Press Release…And More Questions

I was able to learn some things from the latest press release on this solution, but it also drove lots of questions:

  • “The Converged Health Management solution enables patients to use biometric devices to take health information such as blood pressure, oxygen saturation levels, glucose levels and weight from home or on the go.” [Who provides the devices?  Are these additional costs?  How are they coordinated?]
  • “Patient data is then automatically transmitted through a wireless connection to a secure server that resides in Verizon’s HIPAA-ready cloud for analysis and intervention by the patient’s clinician, including a reward system that incents patients to make healthier lifestyle choices.” [Does the MD have to log-in to a portal?  Can the data be pushed to their EMR?  What is the reward system?  Who’s running that?  Are the rewards financial?]
  • “Patients can access this information and find personalized health-enhancing suggestions via the Converged Health Management smartphone app or Web portal.  [Is this free?  Can I use it or does my plan / employer have to sign up for it?  Who provides technology and member support for this?  How many people are using it?  What’s their response been?]
  • “As part of their health program, patients can take advantage of related health information, including videos and webinars.”  [Who provides the health information?  Is it URAC or NCQA accredited?  How does this integrate with the information from their health plan?  Does the nurse and physician have access to see the same information?  Can they see what information the consumer has accessed?]
  • “In addition, patients can connect anonymously with other patients in a secure “social networking” environment, where they can ask questions, and share ideas and experiences.”  [Is this like PatientsLikeMe?  Is the data sold to pharma?  Is the environment monitored?  Does Verizon provide experts to share opinions here?]

New Harris Interactive Data Supports Focus On Hospitals And Retailers

As I’ve discussed before, trust is critical in engaging consumers.  The question always is “Who does the consumer trust in healthcare?”  We certainly know that individuals like physicians, nurses, and pharmacists are trusted, but they often aren’t the ones doing the big campaigns to engage consumers.  It’s the pharma manufacturers, the hospitals, the PBMs, the payers, the retail pharmacies, and other entities.  In my presentation at the CBI conference, I hypothesized that this is why retail pharmacy should (could) take a bigger role in the future.

The new survey from Harris Interactive reinforces that.  Of course, 42% of people don’t believe any companies, but with some healthcare companies being barely trusted more than tobacco companies, consumer engagement isn’t easy.

Harris Interactive - Trusted Industries 2013

The additional bad news from the survey is that people think more regulation is necessary in healthcare.

Harris Interactive - Regulated Industries 2013

 

Interview With IMS Health About AppScript – #mHealth13

“Today, there is growing recognition of mobile health’s potential to transform healthcare – to advance doctor/patient engagement and empower consumers to better monitor and manage their own health,” said Stefan Linn, senior vice president, Strategy & Global Pharma Solutions, IMS Health. “That potential can only be realized through a systematic evaluation of the clinical benefits of healthcare apps, clear professional guidelines around their use, and effective integration of apps with other aspects of patient care. With these game-changing solutions, IMS Health is establishing an intelligent, secure infrastructure for mobile health, backed by our market-leading real-world evidence capabilities and the most advanced technology platform in healthcare.”

Most of you that read the blog on a regular basis know that I was really intrigued by the idea of “prescribing information and technology” early on.  With 90,000 different health related applications, the question is which ones should you use and how should you find out about them.  Happtique started to get into this space earlier in the year, and I spoke with them at length about integrating this into a care management platform.

I was really surprised to learn that IMS Health which I think of as a healthcare data company was jumping into this space.

IMS Health is the world’s leading information, services and technology company dedicated to making healthcare perform better.

By applying cutting-edge analytics and proprietary application suites hosted on the IMS One intelligent cloud, the company connects more than 10 petabytes of complex healthcare data on diseases, treatments, costs and outcomes to enable our clients to run their operations more efficiently.

Drawing on information from 100,000 suppliers, and on insights from more than 40 billion healthcare transactions processed annually, IMS Health’s 9,000+ expert resources drive results for over 5,000 healthcare clients globally.

Customers include pharmaceutical, medical device and consumer health manufacturers and distributors, providers, payers, government agencies, policymakers, researchers and the financial community.

I talked with Matt Tindall who’s their Director of Consumer Solutions about this a few days ago (but was waiting for their press release to be out and their presentation at the mHealth Summit – which I am very disappointed to be missing for the second year in a row.)

I also read their press release about their new solutions.

IMS Health today announced the immediate availability of AppScriptTM, an mHealth app prescribing solution designed to help healthcare providers and health plans create proprietary formularies based on an objective assessment of healthcare app functionality and value. The company also announced the launch of AppNucleusTM, its customizable, cloud-based hosting platform that will enable developers to build secure, industry-compliant healthcare apps at very low cost. Both new products will leverage IMS Health’s comprehensive data on diseases, treatments, costs and outcomes.

The AppScript Software-as-a-Service solution classifies and evaluates more than 40,000 mobile healthcare apps currently available for download on iOS and Android platforms, categorized by stage of the patient journey. Each app is assessed using the company’s proprietary IMS Health AppScore, which ranks apps based on functionality, peer and patient reviews, certifications, and their potential to improve outcomes and lower the cost of care. As part of wellness, prevention and treatment regimens, physicians can organize these apps into formularies based on their specific patient population and practice preferences. In addition, AppScript enables them to securely prescribe, reconcile and track app use by patients from any mobile interface.

AppNucleus is the company’s innovative healthcare app development and hosting platform that makes it easier for app developers to offer HIPAA- and HITECH-compliant solutions. The platform, compatible with all mobile operating systems, uniquely integrates IMS Health information and analytics at every stage of app development to support design and performance evaluation decisions. AppNucleus features a suite of plug-and-play solutions, enabling patients and physicians to exchange health information on mobile devices via a secure, encrypted channel to protect patient information. It also offers app developers a highly economical way to build security into their apps and protect patient information.

Here’s my notes and key observations:

First off, I quickly learned that I missed a very interesting report that they put out in October.  This report titled “Patient Apps for Improved Healthcare: From Novelty to Mainstream” has lots of great information which I share below.  It also is essentially the business case for these new solutions.

In talking with Matt, he shared with me how IMS Health, a 60 year old company, is using their consumer solutions group to transform how people learn and manage their health.  He talked about how they want to make mobile safer, more effective, and easier.

I really wanted to understand how they determined where to look given all the apps out there.  A lot of it is in the report, but he shared how they looked at 40,000 apps and used over 25 different criteria (such as type of information, functionality, communication process used) and peer reviews to determine a shorter list to focus on.

We discussion how the short-term success of mobile is engagement, but the long-term success will have to be tied to clinical outcomes.

He walked me through the process for getting the app prescribed:

  • The physician would be using a white labeled platform (provided by their health plan, provider group, others).
  • They would select an app based on a curated formulary.
  • The patient would get a secure e-mail or a text message with a link to the app.
  • The patient would follow the link and enter a proprietary passcode.
  • This would take them into the app store.
  • They can then download the app.

This process will allow them to track “intent to download” and then whether they did download.  The key next step will be partnering with the apps and getting the patient consent to pull data back to know not only if it was downloaded but whether it was used and how often.  And, ultimately, this will have to be integrated with the provider platform.

We talked a little bit about why IMS and he talked about their knowledge of the prescriber and ability to recommend apps for their formulary based on their patterns of prescribing.

Ultimately, I think they may be in a good position to succeed here.  I think there are several key questions:

  • How are the apps evaluated?  Do clinicians evaluate the clinical algorithms?
  • How do you determine the financial viability of the apps?  Are they one-hit wonders or shiny objects or will they be around for years.
  • How do you modify the “formulary” based on user and prescriber feedback?
  • How do you integrate the tools into the physician’s workflow?
  • How comfortable will the physicians have to be with each app?  (Won’t the users have questions for them and will that be a barrier?)

From their report on healthcare apps:

  • Only about ½ of the 40,000 apps they looked at justified a deeper dive.

IMS Consumer App Functionality

  • They categorized the apps by:
    • Inform: Provide information in a variety of formats (text, photo, video)
    • Instruct: Provide instructions to the user
    • Record: Capture user entered data
    • Display: Graphically display user entered data/output user entered data
    • Guide: Provide guidance based on user entered information, and may further offer a diagnosis, or recommend a consultation with a physician/a course of treatment
    • Remind/Alert: Provide reminders to the user
    • Communicate: Provide communication with HCP/patients and/or provide links to social networks

They also looked at apps by therapy area and by which part of the patient journey they focus on.

IMS Apps By Patient Journey

“There’s a group [of patients] who each have several medical problems and often they have several specialists, all making recommendations. It’s often overwhelming for the patient and for the caregiver. They get overwhelmed by the number of pills and the number of recommendations that they have been given, so I feel that if everybody starts prescribing apps it could quickly lead to app overload”

Leslie Kernisan – Geriatrician and caregiver educator

IMS MD Hurdles To Apps IMS App Maturity Model

 

Interview With Kent Dicks From Alere Connect – #mHealth13

While I couldn’t make it to DC for the mHealth Summit to take advantage of my press pass.  I did get the chance to set up interviews with some of the presenters. 

This morning, I met with Kent Dicks who’s the CEO of Alere Connect

From the Alere website:

Alere™ Connect develops remote health monitoring devices that deliver streamlined, cost-effective connectivity and automated transmission of secure health information across patient home, care provider, and electronic medical records. Our goal is to drive down healthcare costs by improving workflow efficiencies, patient compliance and care delivery.

Our devices provide a gateway to the Alere CloudCare™ platform, a comprehensive health information platform and suite of cloud-based tools that enables healthcare practitioners to extend their services to a broader patient population, and experience the proactive, cost-avoidance benefits and efficiencies associated with remote health monitoring. 

Kent Dicks’ bio from the Alere website:

Kent Dicks has over 25 years of successful entrepreneurial experience providing dynamic and strategic leadership in the demanding environments of Information Technology, Engineering and Aerospace/Defense. As a results-oriented leader and entrepreneur, with a strong performance record, Mr. Dicks brings his expertise in identifying niches within specific markets and his aptitude for innovation, to the field of Telehealth, specifically remote patient monitoring.

 In 2006, Mr. Dicks formed MedApps, Inc., taking his unique vision and business model for a wireless health monitoring system from concept to market innovator, at the forefront of mHealth (mobile health) today. Under Mr. Dicks’ leadership, Alere™ Connect (formerly MedApps) has developed a comprehensive remote patient monitoring system that incorporates wireless, M2M and cloud computing technologies to bring user-friendly hardware, with robust software and applications, to deliver a pioneering healthcare solution to market.

Mr. Dicks’ innovative work in this field has been acknowledged by industry and government organizations alike. As Founder and CEO of Alere™ Connect (formerly MedApps,) Mr. Dicks actively speaks on industry and government panels, discussing wireless technology’s growing role in healthcare.

As I told his PR people, I was really interesting in learning about how Alere is integrating mobile and remote monitoring into their care solutions. 

Here were my key takeaways:

  • MedApps is one of 90 companies that Alere has acquired over the years.  These include companies for Health Information Exchanges (HIEs), analytics, and informatics on top of the more traditional care management services. 
  • Kent has been working in this area for the past 6 years trying to establish the marketplace.  He pointed out some of the challenges of disparate systems and viewpoints with no common platform.  There is a definite need for some consolidation. 
  • He said that they are focused on building “the Onion” where clients can pick and choose what they want in terms of services and technology.  (i.e., a one-stop shop for customers)
  • We talked a lot about mobile and smartphones.  I’ve talked to a lot of people over the years, but he’s one of the first that wasn’t overly enamored with the promise of the ubiquitous smartphone.  He’s trying to solve the problem of mobile engagement for the 15% of people driving healthcare costs and acknowledges that they may be elderly and indigent.  If they have cell phones, they might be pre-paid ones.  They may not have WiFi at home. 
  • He talked about their efforts to develop an end-to-end solution that integrates with the cloud sending small packets of data.  We also talked a little about how Partners is giving this to people who are less technology savvy based on their initial experiences.
  • He also mentioned CardioCom and Ideal Life as two companies with similar focus on this 15% of patients and using technology to address their needs.
  • He said that Alere is already one of the largest users of remote monitoring and will deploying the solutions to tens of thousands of patients this next year. 
  • We talked about simplicity and having the user do nothing but press a button where updates can be pushed to them and their devices through the hub.  I think this is critical.  We also talked about my experiences with a hypertension remote monitoring program and the challenge of educating the consumer.  It’s one thing to make the device simple to use.  You still have to get the patient to use the device on a regular basis and use it properly.  We both agree that this is still a huge barrier. 
  • Another challenge we talked about is creating too much data.  As we put devices in the home, we have to have ways to assimilate the data in an organized manner and then run algorithms on the data to put it into context based on age, weight, gender, disease, and other factors.  Then, that has to be linked into an automated workflow to trigger a communication, a message on the device, or a call from a nurse. 
  • We talked more about clinicians and devices.  He had a good point about “making clinicians be clinicians not technicians”.  I think that gets lost sometime. 
  • He also pointed out that one of the big value propositions is that a real-time monitoring solution helps the nurses to focus on the right population that’s not being compliant.  That’s a win for both the consumer and the nurse. 
  • He said they have 40,000 people on remote monitoring today and are finding it extremely cost effective.  They’re not using it with every patient, but with the sickest of the sick.  As they’ve dropped cost, this allows them to keep the devices with patients longer as they’ve seen others only use them for 90-120 days. 
  • He talked about using the technology to reduce 30-day re-admission rates. 
  • My last topic of discussion was how to use this to help the provider (think ACO or PCMH).  He talked about the fact that providers want integrated data in one place with key information.  They’ve developed a portal for providers and are working with Virtua to integrate it into their EMR. 

It was a great discussion.  He seems to have some great experience in the space blended with a practical approach to what needs to get done and how to get it done.  There are a lot of shiny objects in this space.  Kent seems to have a good long-term approach as to how to make this into an integrated strategy that could ultimately move the needle for Alere.  

Could The Blues Build Their Own Optum?

I’ve suggested this to a few people in the Blues community, but the recent projections from United Health Group about the growth in their Optum business unit compared to the rest of their business got me thinking about it again.  

Image

If you think about Optum, they were basically composed of Ingenix (data and consulting), Prescription Solutions (PBM), and Optum which included utilization management, disease management, wellness, case management and many other services.  

So, if we look at the Blues today, they have several investments that could be used to create an Optum competitor.

If you pulled some of the services back out of the Blues that they’ve insourced over the past few years from companies like Healthways, they would have all the technology and services that Optum has.  They would need a few Centers of Excellence models which I don’t know that they have, but if this is the growth engine for the healthcare industry, there seems to be some great opportunities here.  

Are Sports Good For Kids?

This was an interesting question that I was thinking about this morning.

I could take this several directions:

  • I could look at the benefits of exercise from sports (assuming the kids actually got enough exercise in practice – see older blog post).
  • I could look at the benefits of working in a team which I see from team sports.
  • I could look at the recovery benefits of losing and coming back which is very important in business and life. (how do you handle adversity)
  • I could look at the dangers of sports.
  • I could look at concussions in football and the discussion of helmets for soccer.
  • I could look at the negative impacts of parents on their kids relative to sports.
    • Fighting at sport events.
    • Pushing their kids too far.  (below are some things I’ve heard and seen)
      • Just keep running even if you throw up.  You’ll be fine.
      • If you have to pee, just pee in your swim suit.  You can’t be distracted during the meet.
      • If you do that again, we’re going to get up at 5 in the morning and go to the gym and practice it 100x before school.
      • You need to work harder so you can be in the Olympics at 16.
      • This is our college plan.  They have to be the best at this sport.
      • I pulled them out of school so they could practice more.  (The kid was 7.)

But, I saw an article about the time that kids start school, and it got me thinking about sleep and sports and the impact on kids.

Let’s start with some established facts:

sleep guidelines

Now, let’s assume most grade schools start around 8:00.  (My kid’s school starts at 7:30.)  That means that they likely have to get up by 7:00 at the latest.  So, they should be in bed by 9:00 PM on average probably earlier for most kids and families where people are catching the bus or driving to school.

If their sports are starting practice or games after 6:00 PM, how likely is it that they’re home, calmed down, with their homework finished, and in bed by 9:00 PM?  Even if they are, how many parents are getting their kids to bed by 9:00?

“Sleep may be the most important, though overlooked, contributor to your children’s development and health. The reality is that children can survive without exercise and on little food (though I don’t recommend either), but all children need sleep. It’s often unnoticed because you don’t usually see your children sleeping and its benefits are not readily apparent (though its costs usually are).

The influence of sleep on children is profound. Quality sleep has been found to be associated with improved attention, reduced stress, greater emotional control, better mood, improved memory, greater ability to learn and return information, better grades, improved mental health, lower risk of obesity and other health problems, and longer life.” (From a good article on kid’s sleep in the Huffington Post)

So, just to be clear…I think kids should be in sports.  I just think we (as parents) need to be more concerned about making sure we don’t sacrifice our kid’s sleep on a regular basis for them to play sports and lead them into health issues and school issues.  The tradeoff isn’t worth it.  (IMHO)

Pharmacy Satisfaction – Retail Beats Mail

With the new JD Powers survey, the gap between retail pharmacy satisfaction and mail order has widened. The average mail order satisfaction score was 797 for mail versus 837 (out of 1,000) for retail.

I think one key comment from Scott Hawkins, director of the healthcare practice at JD powers was:

“One of the key things we’ve seen in the data is that if someone is feels compelled to use a mail-order [pharmacy] their satisfaction score is going to be lower than someone who chooses to use it on their own.” (From Nov 2013 Employee Benefits News article by Andrea Davis)

If I was still at a PBM, I’d push to see the results broken out both ways so I could compare apples to apples the then say the drag was from clients choosing mandatory mail.

The rankings for mail order were:

Kaiser – 868
Humana – 845
Walgreens Mail – 812
OptumRx – 798
Prime Therapeutics – 794
Express Scripts – 783
Aetna – 778
Cigna – 771
Caremark – 760

The two I find the most interesting are Prime Therapeutics and OptumRx as both of them have moved their mail order services in house in the past few years and seem to be doing well with it. Aetna has outsourced their solution to Caremark and Cigna just recently outsourced their mail order to Catamaran which wasn’t on the list (but may be in the survey).

If E-Prescribing Doesn’t Have All The Data…Is It Helpful?

This is an interesting dilemma.  At this point, I think everyone is pro e-prescribing even if it’s simply for the benefit of reducing errors.  But, I think the original intent of the solutions were to do a lot more than reduce errors.

The hope was to improve adherence (which I think may have been too lofty).  The idea was that e-prescribing would reduce the abandonment rate at the pharmacy.  I’m not sure picking up a prescription is the same as taking a prescription.  And, taking a prescription once isn’t the same as staying adherent over time.

Another hope was that the use of e-prescribing would drive formulary compliance and increase generic utilization.  The idea was that putting this information in the hands of the prescriber would allow them to make more real-time decisions that were aligned with the consumer’s interests (i.e., lower out-of-pocket spend).  The latest report doesn’t seem to support this at all.  It also echos my prior posts about whether e-prescribing was aligned with pharma at all.

Fewer than half (47.5%) of the 200 PCPs polled said they have access to formulary information when e-prescribing, and fewer than a third said they have access to prior authorization (31.0%) or co-pay (29.5%) information. Among physicians with formulary information access, that information was available 61.1% of the time and was said to be accurate 68.6% of the time.

Physicians with an EMR (54.1%) were more likely to have access to formulary information than physicians without an EMR (29.6%). And differences were seen depending on the EHR vendor: Allscripts physicians (32.2%) were less likely to have access to this information than “All Other” software suppliers (60.5%), Epic physicians (62.5%) and eClinicalWorks (68.8%). 

Another big effort that e-prescribing and integration with EMR was going to have was to push utilization management (UM) to the POP (point of prescribing) rather than having the pharmacy and the PBM dealing with it.  I never really thought this would work.  If the information isn’t there or they don’t trust the information, the prescriber isn’t going to want to deal with this.  It’s already work that they let their staff handle and isn’t something they want to deal with during the patient encounter.

While e-prescribing is definitely here to stay and becoming the norm, the question is whether it’s creating simply a typed “clean” Rx to transmit electronically or whether it’s actually an intelligent process which will enable better care.

Given multiple studies and surveys recently about transparency in healthcare billing and the general push with Health Reform to drive to outcomes, I’m not sure the “dumb” system process can be a sustainable value proposition.

Three Recent Specialty Pharmacy Reports

Last week, I noticed three recent reports that have come out about specialty pharmacy.  I haven’t had a chance to really dig in to them , but I thought I’d pull out a few of the PR highlights and share the report links here.

The first report is from the Center for Healthcare Supply Chain Research and Health Strategies Group — “Specialty Pharmacy: Implications of Alternative Distribution Models” — which looks at how providers are using buy-and-bill and white bagging.

Karen J. Ribler, Executive Vice President and COO of the Center, notes, “Distributing specialty pharmaceuticals is complex; curbing costs is just one of the many facets of providing patient-centered healthcare. Site-of-care and day-of administration dosage requirements revealed themselves as determining factors for supporting the use of one method over another. A critical look at unintended consequences leads to our conclusion that Buy and Bill is, for the time being, the preferred model for practitioners of medium to large oncology clinics, but that could change as specialty treatments evolve.”

CVS Caremark just released their report Specialty Trend Management – Where To Go Next.  In there, they say:

Infusions are increasingly being done in a hospital setting where the costs for both the drug and its administration can be the highest of all potential sites of care.  For example, costs for a standard dose of a drug for rheumatoid arthritis can vary from $3,259 for the drug and $148 for administration when infused at the patient’s home to $5,393 for the drug and $425 for the administration when infused as an outpatient procedure at a hospital. In fact, the hospital setting is typically the least cost-effective site of care for infusions. (source)

As I’ve been doing lots of work lately in identifying and segmenting the population for Population Health Management, I found this chart interesting:

Image

http://lab.express-scripts.com/prescription-drug-trends/specialty-drug-spending-to-jump-67-by-2015/

And, last month, Prime Therapeutics released a report on Specialty Pharmacy which I blogged about.

Obamacare Will Be A Great Case Study

When I think back to business school, I can only imagine in a few years that Obamacare will be a great case study for business school students to use.  It begs lots of questions that really test someone’s decision making ability.

  1. You know healthcare is a huge issue for the country.  How do you respond?
  2. You create a law that divides the country.  How do you get people to focus on the benefits of the law?
  3. You create a law that no one understands and has to go to the Supreme Court.  How do you defend it?
  4. You have to negotiate with lots of powerful groups to get everyone on board.  How do you manage that?
  5. You decide to go with a web based strategy for sales and distribution.  How do you develop and test that?
  6. You find out early that your web portal has functionality and security risks.  What do you do about it?
  7. You have a failed launch and need to fix it.  How do you do that?
  8. You made a promise to people about keeping their healthcare which everyone in the industry knew wasn’t true.  What do you do now?
  9. You make changes on the fly that affect your partners and will affect other long-term components of the plan.  Do you sacrifice for the long-term for short-term political gain?
  10. You have a chance to admit the complexities of the healthcare system and move forward.  Do you take it or stick to your guns?

I could go on, but it is fascinating.  I think these last few weeks of decisions have been crazy.  I hope there’s some group of healthcare people that really understand the current US system advising him, but it doesn’t seem like it.  Or, the administration is deliberately making choices to shift blame.

Allowing health insurers to extend individual plans that they’ve already cancelled is crazy.  It’s driving mass confusion with consumers.  It’s lighting up the call centers.  And, ultimately, if those healthy consumers go back to the plans, the underwriting for the exchanges will be garbage meaning that they health insurers will lose their shirts.  This will then mean that they underwrite with even higher prices for 2015 which will create a vicious cycle.

Like I’ve said before, this started with good intentions, but it has been a series of bad decisions.  Some things had to happen.  Nothing happens without some failures, but at some point, we need better decisions to be made.

Express Scripts Excludes 48 Drugs On 2014 Formulary

Is anyone really surprised here?  We saw CVS Caremark make some changes a few years ago that caught everyone’s attention.  (You can see a good list of 2013 and 2014 removals and options here for CVS Caremark.)  This year, it’s Express Scripts (ESRX) who’s caught the attention of the press.

Why do this?  I think Dr. Steve Miller did a great job of explaining it in a recent interview.  The most interesting thing to come out of this was the possible link to copay cards.

Pharmalot: Where to from here?

Miller: We obviously have a long-term strategy. This has sent a loud message to the marketplace that we have got to preserve the benefit for patients and plan sponsors and do things to rein in costs. As there are more products in the marketplace that are interchangeable, we’ll do more to seek the best value for our members. This is just the beginning of a multi-step process over the next several years.

Will there be more to come?  Of course.  The PBMs have to make a significant show of lowering the number of formulary drugs especially in the oral solid (traditional Rx) space to make the point to the pharmaceutical manufacturers that they control market access.  This is critical for them to create more opportunities in the specialty Rx space around rebates.  (Here’s the 2014 Express Scripts exclusion list)

Additionally, this is a low risk strategy for several reasons:

  • The disruption is minimal.  While 780,000 people sounds like a lot, it’s still just 2.6% of the population covered by these formularies.  The savings the employer will generate per disrupted member will pay for the extra customer service needed.  (Harsh reality to some people…I know)
  • As I’ve discussed before, the margins are in specialty pharmacy and mail order generics not in branded drugs which represent less than 20% of all drugs.  Therefore, this is a good place to make a stand.
    • From an old JP Morgan analysis from 2011, Lisa Gill estimated the PBM profits to be (all in 30-day equivalents):
      • $1.69 retail brand drug
      • $2.03 mail brand drug
      • $3.00 retail generic drug
      • $13.00 mail generic drug
  • This is based on a clinical review by an independent P&T committee.  Therefore, this is aligned with the health reform focus on outcomes and value.

New/Old Accusations About PBMs And Their Margins

PBMs (or Pharmacy Benefit Managers) are big business.  Just look at a few of the names and their place on the Fortune 500 list:

Not surprisingly, none of those are non-profits.  There is real money being made here.  It’s all part of the mark-up game in healthcare.  The question of course is does the money being made justify the profits.  For example, I’m happy to pay my banker lots of money as long as he’s earning me more than he’s making (and significantly more).

This is a complicated question.  (see past posts on What’s Next, Why People Don’t Save With Mail, and Growing Mail Order)  I’ve also presented on this topic several times in the past pointing out that the model needs to change, and re-iterating the fact that PBMs made a mistake by putting all their profits in the generic space.  I’ve always said that disintermediation would happen by focusing on generics at mail which is where all the money was at Express Script (8 years ago).  [People remind me that some of this has changed and is different across PBMs.]

The new Fortune article by Katherine Eban called “Painful Prescription” certains shows a dark story.  It focuses exactly on one of these scenarios which is the gap between acquisition cost and client cost.  The article talks about paying $26.91 for a drug but selling it to the client at $92.53.  I’m always reminded of the fact that at one time we used to buy fluoxetine (generic Prozac) for about $0.015 per pill.  On the flipside, we had brand drugs that we bought for more than we got reimbursed and lost money.  It was strange model.

So, here’s my questions:

  1. Do you want transparency?  If so, there are lots of “transparent PBMs” and many larger PBMs will do transparent deals.  You can also follow the Caterpillar model.  (Don’t forget that pharmacy represents less than 20% of your total healthcare spend so you can find yourself down the rabbit hole here trying to shave 2% of spend on 20% or 0.4% of your costs with a lot of effort.)
  2. Are you focused on anamolies like this one or average profits per Rx?
  3. Do you have the right plan design in place?
  4. Do you have a MAC (maximum allowable cost) list both at retail and mail order for generics?
  5. Are you getting the rebates and any admin fees from pharma for your claims passed through to you at the PBM?
  6. If you pay the PBM on a per Rx basis (i.e., no spread allowed), what are they doing to keep your drug costs down year over year (i.e., they have no more incentive to push down on suppliers)?
  7. Are you benchmarking your pricing?  Look at reports from places like PBMI.  For many smaller clients, I often wonder if the savings they find you is worth the costs.

I’m sure there’s more since I’ve been out of the industry for a few years, but while I don’t intend to be the defender of the industry, I do like to bring some balance to the conversation.

Can You Keep Your Prior Health Insurance – No

“That means that no matter how we reform health care, we will keep this promise to the American people: If you like your doctor, you will be able to keep your doctor, period. If you like your health plan, you’ll be able to keep your health plan, period. No one will take it away, no matter what.” President Obama, June 15, 2009, from a speech to the AMA

You know what…that was a great campaign soundbite. It might have even been what he wanted. But, it’s not reality. They made a mistake. Move on. Everyone in healthcare knows the industry needs reform. I think the administration would be better off to admit they were wrong and focus on the benefits of reform and stop trying to defend what they’ve said.

Instead, they continue to try to justify this statement – see whitehouse blog. Stop kidding yourself or get out of the ivory tower. It’s like trying to build a website without any experience. It makes no sense.

As I said the other day, just like healthcare.gov isn’t the same as Health Reform (PPACA).  The same goes for this statement.  Healthcare needs to change.  There are some good things here, but healthcare is complicated and the administration made some mistakes.

At the end of the day, I think we have all been surprised at the rate of change especially for big companies:

People are jumping on this opportunity to drop coverage and shift coverage to the exchanges. Someone should have been able to model out all these scenarios years ago. What if this drives lots of companies to lower hours so that people don’t get coverage and they don’t get penalized. That would be a disaster. We don’t want a society where everyone’s balancing 2-3 jobs just to get to full-time hours. (Of course, some people do it just to pay the bills.)

On the flipside, the idea of creating better healthcare coverage for individuals was a good one, but I’m not sure why anyone thought this would be price neutral. In establishing a baseline offering which everyone has to have (e.g., maternity benefits), this is going to drive up costs. By requiring pricing for 2015 before anyone has experience with 2014 is just going to require companies to underwrite a lot of risk and drive premiums up.

As a good summary read of issues, read 31 Things We Learned in HealthCare.gov’s First 31 Days.

Should Physicians Be Taught To Stop Trying?

With several recent articles about $100,000 plus cancer drugs, I was reminded of a conversation I’ve had with several oncologists. We were discussing how to use advanced illness counseling from companies like Vital Decisions to help people and their families manage through a terminal diagnosis.

On the one hand, that seems like a conversation that a physician could / should have, but I’ve highlighted some research on this before. On the other hand, in a FFS (fee for service) world, there is an incentive to keep doing everything possible regardless of costs and how long it extends life. Will this change in a value based payment model? I’d like to believe it will. There is so much money spent on care in the last few months of life with limited extension of life and questionable impact on quality of life that this may become more relevant.

But, what struck me in my discussions is that the oncologists said that no one ever taught them how to “give up” on the patient. They see success in curing the patient or getting the cancer in remission. Is that success? Is it giving up to stop pumping them full of drugs with minimal value? Is there a rationale price for each day of extended life?

We typical think of healthcare as an endless bowl of funds, but what if it was limited? What if we couldn’t just keep printing money and raising the debt ceiling? Should that $200,000 be spent to get two weeks of life for a 90-year old patient in pain or should it go to feed a family and provide them with medical care for several years?

I’m not sure who wants to make those decisions but I think there will be a day when we need to think differently about some of the healthcare choices we make.

Trajectory Modeling On Adherence By CVS

No one who works with consumers or who studies adherence should too surprised that people are different in how they fill their medications. I think companies are finally getting a better handle on longitudinal member records and ways of studying those patterns to determine how and when to intervene.

Our past behavior is always a great place to learn from about our future behavior but at the same time, people view different drugs and conditions differently. For example, I might be very likely to take my pain medication everyday since it’s a symptomatic condition versus my cholesterol medication since it’s an asymptotic condition. I also may take a different approach yo medications that have significant side effects.

At the same time, these data is well known so the quest for the “best” segmentation approach and behavior change model continues.

With that in mind, I finally got a chance to look at some research from September that researchers at CVS Caremark and Brigham and Women’s Hospital published in the journal Medical Care. They used trajectory modeling to follow statin users for 15 months and came up with six groups:

  • Brief gap in medication use or filled irregularly during the first nine months, but improved during the last six months (11.4 percent)
  • Slowly declining adherence throughout the 15 month period (11.3 percent)
  • Used statins only occasionally across the 15 month study period (15 percent)
  • Rapid decline in statin use after initiation (19.3 percent)
  • Virtually no fills after their initial fill (23.4 percent

They also identified some characteristics associated with adherence:

  • Higher adherence was seen with patients who were older, had higher incomes and held a high school diploma.
  • The highest adherence rates were associated with Medicare Part D clients and people who live in New England.
  • Those with the lowest adherence rates tended to be generally younger, male and less likely to have an initial prescription that provided them with more than a 30-day supply of medication.

Troyen A. Brennan, MD, MPH, Executive Vice President and Chief Medical Officer of CVS Caremark:


“The use of trajectory models could help us more accurately identify patients at risk for medication nonadherence so we can develop and implement targeted interventions to help them stay on their medications for chronic health conditions.”

Healthcare.gov is not the same as health reform aka Obamacare aka PPACA

It’s time to begin to focus on how to improve Healthcare.gov.

It seems like the government made all the classic rookie mistakes around implementation. They went for the Big Bang. They worked on it for years only to release it at the last second. They brought in tons of vendors and no one really coordinated them. They over paid for the project and didn’t tie anything to performance. They minimized the testing and complexity.

I think they’re going to make the same mistake again unfortunately. Fixing it may be harder then starting some of it over. Not the integration but the workflow. Bringing in the A-team and not delaying the penalties won’t be quick. And the new people should be smarter and slow things down so they don’t get thrown under the second bus.

But, this failure shouldn’t doom health reform. They are two different things. Sometimes I think the politicians living in their Disneyland of Washington forget more than they know.

The reality is that we have a huge, unsustainable healthcare issue in the US. We should be ashamed to have all the people without coverage that we do. While health reform won’t fix everything, it’s a stepping stone and a lot of the CMS work around innovation, ACOs, and Medicare STARS is critically to payment reform and the shift from FFS to value-based healthcare. There is still a ton of work to be done. We haven’t addressed health literacy. We haven’t addressed quality. The overall experience is still disconnected and generally poor.

The politicians need to focus on making our country better not playing games (on both sides).

And, while I disagree with the tactic, the Republican play to focus on the budget was important. We can’t bankrupt this country for our kids. While the government villianizes the Private Equity industry that leverages up companies and takes on debt risks that’s exactly what the government is doing now.

BTW – one of the interesting benefits of the healthcare.gov debacle is that it’s a ton of free advertising for the site. Everyone is talking about it for free and pulling consumer awareness up. (I doubt that was a strategy.)

Aetna’s Metabolic Syndrome Innovation Program

I’ve been closely following Aetna’s innovation for the past few years (see post on CarePass and Healthagen).  I had the chance last week to speak with Adam Scott who is the Managing Director of the Aetna Innovation Labs.

Here’s Adam’s bio:

Adam Scott is a Managing Director within Aetna’s Innovation Labs, a group developing novel clinical, platform, and engagement solutions for the next generation of healthcare.  Mr. Scott specializes in clinical innovation, with a focus on oncology, genetics, and metabolic syndrome, as well as “big data” analysis.  His work is aimed at conceptualizing and developing products and services that better predict illness, enable evidence-based care and lengthen healthy lives.  Prior to joining Aetna, Mr. Scott’s 15-year healthcare career has included management roles in consulting, hospital administration, and most recently health information technology.  Mr. Scott holds a bachelor’s degree from Washington University in St. Louis and a Masters in Business Administration from Northwestern University’s Kellogg School of Management.  Mr. Scott resides with his family in Needham, MA, where he actively serves as a director on community boards.

This is one of my favorite topics – Metabolic Syndrome (although yes…I still hate the term).

Definition of Metabolic Syndrome from the NIH:

Metabolic (met-ah-BOL-ik) syndrome is the name for a group of risk factors that raises your risk for heart disease and other health problems, such as diabetesand stroke.

The term “metabolic” refers to the biochemical processes involved in the body’s normal functioning. Risk factors are traits, conditions, or habits that increase your chance of developing a disease.

The Aetna Innovation Labs are focused on bringing concepts to scale and staying 2-3 years ahead of the market.  They are looking to rapidly pilot ideas with a focus on collecting evidence.  In general, Adam described their work as focused on clinical, platform, and engagement ideas.  They are trying to collaborate with cutting edge companies that they think they can help to scale quickly.  It’s pretty exciting!

As stated in their press release about this new effort:

“During the course of the last year, Aetna Innovation Labs has successfully piloted an analysis of Metabolic Syndrome and the creation of predictive models for Metabolic Syndrome. This prior work showed significantly increased risk of both diabetes and heart disease for those living with Metabolic Syndrome,” said Michael Palmer, vice president of Innovation at Aetna. “With this new pilot program with Newtopia, we are aiming to help members address Metabolic Syndrome through specific actions, before more serious chronic conditions arise, like diabetes and heart disease.”

Aetna selected Newtopia for this effort for their unique approach toward achieving a healthy weight with an integrative and personalized focus on nutrition, exercise, and behavioral well-being. Newtopia’s program begins with a “genetic reveal,” leveraging a saliva-based genetic test to stratify participants with respect to three genes associated with obesity, appetite, and behavior. Based on the results of this test and an online assessment, Newtopia matches each participant to a plan and coach trained to focus on the member’s specific genetic, personality and motivation profile. Through online coaching sessions, Newtopia will help members achieve results related to maintaining a healthy weight and Metabolic Syndrome risk-reduction, which will be measured by changes from a pre- and post-program biometric screening.

“Newtopia’s mission is to inspire individuals to make the lifestyle choices that can help them build healthy lives,” said Jeffrey Ruby, Founder and CEO of Newtopia.

If you’ve been following the story, this builds upon their project with GNS to develop a predictive algorithm to identify people at risk for Metabolic Syndrome.  As you may or may not know, there are 5 first factors for Metabolic Syndrome (text from NIH):

The five conditions described below are metabolic risk factors. You can have any one of these risk factors by itself, but they tend to occur together. You must have at least three metabolic risk factors to be diagnosed with metabolic syndrome.

  • A large waistline. This also is called abdominal obesity or “having an apple shape.” Excess fat in the stomach area is a greater risk factor for heart disease than excess fat in other parts of the body, such as on the hips.

  • A high triglyceride level (or you’re on medicine to treat high triglycerides). Triglycerides are a type of fat found in the blood.

  • A low HDL cholesterol level (or you’re on medicine to treat low HDL cholesterol). HDL sometimes is called “good” cholesterol. This is because it helps remove cholesterol from your arteries. A low HDL cholesterol level raises your risk for heart disease.

  • High blood pressure (or you’re on medicine to treat high blood pressure). Blood pressure is the force of blood pushing against the walls of your arteries as your heart pumps blood. If this pressure rises and stays high over time, it can damage your heart and lead to plaque buildup.

  • High fasting blood sugar (or you’re on medicine to treat high blood sugar). Mildly high blood sugar may be an early sign of diabetes.

So, what exactly are they doing now.  That was the focus of my discussion with Adam.

  1. They are running data through the GNS predictive model.
  2. They are inviting people to participate in the program.  (initially focusing on 500 Aetna employees for the pilot)
  3. The employees that choose to participate then get a 3 SNP (snip) test done focused on the genes that are associated with body fat, appetite, and eating behavior.  (Maybe they should get a few of us bloggers into the pilot – hint.)  This is done through Newtopia, and the program is GINA compliant since the genetic data is never received by Aetna or the employer.
  4. The genetic analysis puts the consumer into one of eight categories.
  5. Based on the category, the consumer is matched with a personal coach who is going to help them with a care plan, an exercise plan, and a nutrition plan.  The coaching also includes a lifestyle assessment to identify the best ways to engage them and is supported by mobile and web technology.
    newtopia
  6. The Newtopia coaches are then using the Pebble technology to track activity and upload that into a portal and into their system.

We then talked about several of the other activities that are important for this to be successful:

  • Use of Motivational Interviewing or other evidence-based approaches for engagement.  In this case, Newtopia is providing the coaching using a proprietary approach based on the genetic data.
  • Providing offline support.  In this case, Aetna has partnered with Duke to provide the Metabolic Health in Small Bytes program which he described as a virtual coaching program.

Metabolic Health in Small Bytes uses a virtual classroom technology, where participants can interact with each other and the instructor. All of the program instructors have completed a program outlined by lead program developer Ruth Wolever, PhD from Duke Diet and Fitness Center and Duke Integrative Medicine. Using mindfulness techniques from the program, participants learn practices they can use to combat the root causes of obesity. The program’s goal is to help participants better understand their emotional state, enhance their knowledge of how to improve exercise and nutrition, and access internal motivation to do so. (source)

We also talked about employer feedback and willingness to adopt solutions like this.  From my conversations, I think employers are hesitant to go down this path.  Metabolic Syndrome affects about 23.7% of the population.  That is a large group of consumers to engage, and pending final ROI analysis will likely scare some employers off.

Adam told me that they’ve talked with 30 of their large clients, consultants, and mid-market clients.  While we didn’t get into specifics, we talked about all the reasons they should do this:

  • People with Metabolic Syndrome are 1.6x more expensive
  • People with Metabolic Syndrome are 5x more likely to get diabetes
  • Absenteeism
  • Presenteeism

This ties well with my argument that wellness programs aren’t just about ROI.

Obviously, one of the next steps will be figuring out how this integrates into their other existing programs to address the overall consumer experience so that it’s not just another cool (but disconnected) program.  And, of course, to demonstrate the effectiveness of the program to get clients and consumers to participate.

Two quotes I’ll leave you with on why this is difficult (but yet exciting to try to solve):

“The harsh reality is that scientists know as much about curing obesity as they do about curing the common cold: not much. But at least they admit their limitations in treating the cold. Many doctors seem to think the cure for obesity exists, but obese patients just don’t comply. Doctors often have less respect for obese patients, believing if they would just diet and exercise they’d be slim and healthy.” (source)

Thirty percent of those in the “overweight” class believed they were actually normal size, while 70% of those classified as obese felt they were simply overweight. Among the heaviest group, the morbidly obese, almost 60% pegged themselves as obese, while another 39% considered themselves merely overweight. (source)

10 Healthcare Projects I’d Like To Solve

I always tend to see the glass half full so when I see a problem then I often want to rush in and try to fix it. With that said, here are 10 things that I’ve thought about that I’d like to fix or see as big opportunities:

1. The healthcare experience. While this is the third leg of the Triple Aim, it often seems like the one that is so hard for healthcare companies to get. The system is so fragmented that the patient often is forgotten.

2. Device integration. While devices are better and integration is possible, there is still a huge lift to integrate my data into the typical clinical workflow. This is only going to get much worse with ubiquitous use of sensors and will be the limiting factor in the growth of the Quantified Self movement. (See my post on FitBit)

3. Intelligent phones. This is something that people carry everywhere. They often live life through the phone sometimes missing out on reality. The phone has tons of data as I’ve described before. We have to figure out how to tap into this in a less disruptive way.

4. Consumer preferences. I’m a big believer in preference-based marketing. But the question is how do I disclose my preferences, to whom, and are my preferences really the best way to get me to engage. What would be ideal is if we could find a way to scale down fMRI technology and allow us to disclose this information to key companies so they could get us to take actions that were in our best interest. (see old post on Buyology)

5. Benefits selection. I’ve picked the wrong benefits a few times. This drives me crazy. As I mentioned the other day, the technology to help with this exists and all the data which sits in EMRs and PHRs should allow us to fix this problem.

6. The role of retail pharmacy. This is one of my favorite topics. With more retail pharmacies than McDonalds and a huge problem of access, pharmacies could be the key turning point in influencing change in this country.

7. Caregiver empowerment. Anyone who cares for an adult and/or child knows how hard it is to be a caregiver and take care of their own needs. This becomes even harder with the people being geographically apart. With all the sensors and remote technology out there, I see this being a hot space in the next decade.

8. The smart house. As an architect, I’ve always dreamed of helping create the intelligent house where it knows what food you have. It manages your heat and light. It tracks your movements and could call for help if you fall. I see this being an opportunity to empower seniors to live at home longer.

9. Helping the disenfranchised. For years, we’ve all seen data showing that income can affect health. The question is how will we fix this. Coverage for all is certainly a critical step but that won’t fix it. We have a huge health literacy issue also. Ultimately, public health needs a program like we had to get people to wear seat belts. We need yo own our fate and change it before we end up like the humans in the movie Wall-e.

10. A Hispanic healthcare company in the US. With 16% of the US that speak Spanish, I’m shocked that I haven’t seen someone come out with a health and wellness company that is Hispanic centric in terms of the approach to improving care, engaging consumers, and providing support.

So, what would you like to solve?

The Healthcare Mark-up Game – Driving Up Healthcare Costs

The idea of healthcare costs and the need for healthcare transparency has become a front page issue. With the shift to consumer driven healthcare and high deductible plans, the average consumer is increasingly aware of what things cost. And companies like Change Healthcare provide tools to help consumers navigate this maze.

But, what I don’t hear many people discuss is the issue of middlemen and how this adds cost to the system. I’ve worked for several middlemen so I think I understand the model well. Of course, these companies make good (and true) arguments which is that they lower costs due to scale based efficiencies. But, healthcare is big business so everyone has to get paid somehow. Some of the “non-profits” make the most money.

Let’s look at prescription drugs:
- This begins with the manufacturer who adds the marketing and sales costs to the actual ingredient and packaging and shipping costs.
- The drug is then shipped to a wholesaler who stocks the drugs and ships them to pharmacies.
- The drugs are then sold by the pharmacy to the consumer and the pharmacy bills the payer.
- Assuming the payer isn’t the actual employer, the payer will then bill the employer.

So who all gets paid in this process:
- The manufacturer of the drug
- The advertising companies (they name the drug, they create the packaging, they create the ads)
- The marketing companies (they set up the websites, they create the mobile apps)
- The law firms (trademarks, patents)
- The sales companies (they hire and manage the pharma reps)
- The data company (the manage the Rx data to help target the reps)
- The shipping companies (transportation)
- The wholesaler
- The pharmacy
- The marketing and communication companies (refill programs, on the bag messaging)
- The technology companies (switch company, adjudication company)
- The recruiters (hiring, staffing)
- The PBM (contracting, rebating, customer service)
- The payer (adjudication, customer service, risk management)
- The broker (commission)

Still wonder why healthcare is expensive?

I wish I had an easy answer. A lot of these services are needed and it would cost more if the employers all had to do this themselves. There would be no scale. There would be no efficiencies.

This is certainly one argument for the efficiencies of a single payer system but I don’t think that’s very efficient IMHO.

Why Wall Street Would Love An Rx Report Card By Company

I think this is true for both Wall Street along with prospective employees. I think both would love to have a report card on the prevalence of prescription drug use within a company?

- Is there an abnormally high use of anti-depressants?

- Is there an abnormally high use of sleep medications?

- Is there an abnormally high use of anti-virals associated with STDs?

All of these might indicate cultural problems which would be early indicators of turnover or other issues.

On the flipside, there might be other health data points that provide additional data.

- What is the average step count for the population?

- What percentage of the population play sports?

- How many people have metabolic syndrome?

- How many hours do people sleep?

- Are there treadmill desks and other tools to support good health?

- What percentage of people eat lunch by themselves or at their desk or in a meeting?

- What percentage of people call the EAP line?

What other health data points would you want?

The 15 Year Old Technology Missing From Healthcare.gov

I talked about my experience trying to use the site day one. I honestly hoped it was an anomaly but it doesn’t seem to be.

But, as I think about Healthcare.gov and the general benefits selection process, I see two huge gaps.

Back in 1999, I was working with a company called Firepond. The had what was called a product configurator. At the time, I was at E&Y and Empire BCBS and several other Blues hired them to build a tool for brokers. The tool sat behind a really slick web interface which allowed the broker to ask a consumer less than 10 questions. They would move a sliding bar across the screen and it would dynamically rank their plan options to tell them what was the best option for them to buy. It seems like that wold be great for Medicare.gov and Healthcare.gov.

What we were missing then which Big Data might actually help us solve now is individual claims data. This is what drives me crazy when you have to pick your benefits at work. Why can’t I upload my benefits information and have a tool actually tell me what to buy? If I had my claims history plus a predictive model, I could make smarter decisions about how to select my benefits.

7 Steps To Manage Specialty Drugs – From Prime Therapeutics

Prime Therapeutics is a PBM owned by the Blues.  Several years ago, they insourced their specialty pharmacy operations from Walgreens.  This has been part of their transformation which was a result of new leadership under Eric Elliott who used to run Cigna’s PBM.  

As a PBM that’s owned by the Blues, I’ve talked about them before as an interesting cross of a standalone PBM (ala Express Scripts) and an integrated PBM (ala Humana Rightsource).  

As everyone in the industry knows, the shift in pharmacy has moved from innovator drugs in the traditional space to innovation in the specialty or biopharmaceutical space.  This includes both branded products and biosimilars.  This is critical path for employers, payers, and PBMs.  

A traditional strategy of promoting generic drugs and mail order or preferred pharmacies just doesn’t cut it anymore.  Although specialty drugs are still only used by about 1% of the population, they are the fastest growing area in healthcare.  According to Prime Therapeutics Drug Trend Report, their clients saw a 19% increase in specialty spending last year.  And, specialty drugs now account for over 30% of all the drug spend.  

If you look at the drug pipeline, this is going to continue to explode.  I just met with a series of specialty pharmacies to discuss their offerings and strategies.  There are several drugs coming that claim to “cure” some of these specialty conditions are at least meaningfully impact the patient outcomes in ways that weren’t even envisioned years ago.  And, I think we all know that’s not going to come cheap!

So, tomorrow (10/10/13), Prime is releasing a new report – “Specialty: Today & Tomorrow” which highlights Prime’s specialty drug trend over the past year and recommends strategies that high-performing plans use to manage the steady rise in these costs.  [My comments in brackets.]

1.        Bridge the benefit divide: use combined pharmacy and medical benefit data to see the full scope of specialty spending and seek solutions.  [Critical.  IMO - No one is doing this well yet, but this is something that everyone's trying to figure out.]

2.        Focus on the biggest issues: use combined data to target the most urgent issues and focus on the areas that can provide the greatest return on investment.  [I'd expand this to be an integrated set of data - medical, pharmacy, lab, patient reported, EMR, etc.  This has to then be integrated with tools for depression screening and others to make sure the patient is supported.]

3.        Narrow the specialty network: use cost-effective distribution channels and limit the number of distributors to secure lower prices. [Fairly obvious.  I think many people are doing this.  I would expand on this to include looking at site of distribution for savings.]

4.        Embrace a management mindset: make sure the right specialty drugs are used properly by those who will benefit the most. [Agree.  I've talked about this before.  Some of these drugs still have huge adherence issues which limits their effectiveness leading to massive cost issues.  This is why some people are using only 14-day fills.]

5.        Promote preferred drug use: build plans that encourage desired behaviors. [I think we're finally at a point where we'll see specialty formularies, more rebating, and with bio-similars there may be more utilization management programs.]

6.        Protect members from high costs: limit members’ out-of-pocket costs and use available tools to reduce the burden on highly vulnerable members. [Critical.  The specialty pharmacy has to help the member limit their financial exposure.]

7.        Pick the right partner: select a trusted advisor with comprehensive capabilities and deep connections to help anticipate and address specialty drug challenges.  [Agree.  An aligned philosophy and strategy to work with these critical patients is fundamental.  This small group of patients drives most healthcare costs.] 

A copy of the specialty report is now available on Prime’s website and short videos about each of the seven steps can be found on Prime’s You Tube channel. This new report is the first specialty-focused report published by Prime. It follows Prime’s 2013 Drug Trend Insights infographic released in May. Visit the Industry Insights of Prime’s website for more drug trend information. 

Retail Pharmacies As The Distribution Point For Information

It’s always exciting to be “right” in a prediction.  When I spoke at the CBI conference a few weeks ago, one of the key points I made was that today’s healthcare consumer is overwhelmed with information.  They get conflicting data.  They don’t have enough time with their physicians.  They are increasingly responsible for decisions and even with transparency, they don’t always know what to do.  With that in mind, one of my suggestions was that retail pharmacies had a great opportunity to step in and be this information management source for consumers.  (aka – The retailers can serve as the physical resource for the retailing of healthcare.)

With that in mind, I find the announcements by Walgreens and CVS very interesting.

From the CVS press release:

“Humana’s partnership with CVS/pharmacy reflects our proven and ongoing commitment to educate individuals and their families at the places they go when they have questions about their health,” said Roy A. Beveridge, MD, Humana’s Chief Medical Officer. “We’re working to ensure people develop a better understanding of how their health coverage can help them make better, and healthier, decisions.”

“Providing information about new health insurance coverage opportunities is in keeping with our purpose of helping people on their path to better health,” said Helena Foulkes, Executive Vice President and Chief Health Care Strategy and Marketing Officer for CVS Caremark. “We are pleased to combine our innovative suite of services and our new and existing relationships with organizations such as Humana to help patients understand and have access to information about insurance options in their community.

From the Walgreen’s press release:

Walgreens store personnel are directing individual customers who inquire to the GoHealth Marketplace, a resource where they can shop and compare health insurance plans, enroll and find other important tools and information. Consumers can access the GoHealth Marketplace online from www.walgreens.com/healthcarereform or via phone at 855-487-6969. Walgreens also is providing informational brochures and other materials in stores.

“As an accessible, community health care provider serving more than 6 million people each day, Walgreens can help connect those customers who may be considering new health insurance options with resources and information,” said Brad Fluegel, Walgreens senior vice president and chief strategy officer. “Our goal is to help ensure people fully understand the marketplace, and working with GoHealth, to provide personalized consultation from experts who can help them make informed decisions.”

In both cases, they may have addressed one of my questions about this strategy from my presentation which was how would they monetize this.  I think it’s the right role, but I wasn’t sure how it would lead to revenue other than general revenue related to store traffic.  I assume both of these have some “commission” or “referral fee” for traffic generated.

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