Archive | July, 2007


I came across a new blog with a great entry on a healthcare IQ. Apparently, the physician who blogs here has used it before. It is worth a look.

As the principle for this blog, I disagree with his hypothesis about engaging patients since I think that someone other than the primary care provider needs to play this role. You can see a few of my thoughts in the comment to his entry.

Healthcare Transparency

If you don’t read The Healthcare Blog, you should.  It is certainly one of the best collections of information out there.  I constantly monitor it to see what interviews or opinions they have.

This morning I found a link to another blog which talked about Healthcare Transparency.  This is a fascinating topic especially since we talked a lot about this in the PBM world.  Brian Klepper (the blogger) presents a good discussion around a couple of key points (said in my words below):

  1. Transparency is only legitimate if everyone understands what’s in the black box whether that is a quality calculation, outcomes data, cost information or any other issue.
  2. We have to be pushing for data access so that people can make informed decisions and drive volume to the best value providers (quality/cost) that meet the standards of care.

There has always been a lot of push back from the large companies or individuals about revealing quality information or cost information.  That is what consumerism is about.  Think about mutual funds.  You know their positions, why they make decisions, their objectives, how much the fund manager is paid, etc.

Benefits and Behavior

I found another interesting thing recently when I was looking at Guardian. It is a report called “Benefits and Behavior: The Voice of American Business Owners and Benefit Decision Makers Today” (register and download here). It has some interesting facts about how companies of different sizes look at wellness and benefits.

“82% of small employers, 90% of midsize employers and 99% of large employers see value in implementing wellness programs. Yet only 57% of the small businesses that value wellness programs have implemented some type of plan. This is compared to greater adoption in larger companies: 79% of the midsize businesses and 90% of large businesses that value wellness programs have one in place.”

“68% of small employers, 78% of midsize employers and 69% of large employers want their insurance carriers to play a role in helping their company implement wellness and prevention programs to help reduce absenteeism and healthcare costs.”

“Larger companies (82%) widely believe that it is important to tailor their benefits package to meet the needs of individual employees. However, small (59%) and midsize (55%) companies are significantly less likely to agree.”

“Small (41%) and midsize (45%) employers are significantly more likely to accept the idea of a one size fits all benefits package, compared to larger companies (17%).”

“When asked to rate the seriousness of various business challenges, controlling medical costs was rated the biggest challenge by all business sizes — small businesses gave an average rating of 7.3 on a ten-point scale, mid size business averaged 7.6 and large businesses averaged an 8.2.”

New Agency Role – White Paper

“One of the great communications tragedies is to watch an organization go through a careful planning exercise, step by step, complete with charts and graphs and then turn the strategy over to the ‘creatives’ for execution. They, in turn, apply their skills and the strategy disappears in a cloud of technique, never to be recognized again.”
—from Positioning: The Battle for your Mind by Jack Trout & Al Ries, 1981

An acquaintance of mine just put out a white paper on the role of agencies. I thought it made some great points:

  1. Organizations aren’t getting the strategic support they need.
  2. There is a weak link between strategy and execution.
  3. People want a new approach that links these two and increases effectiveness.

Since this is exactly the conversations that one of my clients (Silverlink) has been having in the healthcare space with PBMs, MCOs, and providers, I found this paper a good reinforcement of their value proposition.

Health Balance Sheet

I was doing some research on Guardian the other day when I ran across one of their products called “The Living Balance Sheet”.  This is a web-based, dynamic tool to help you organize, simplify and monitor your financial life.

This made me think…why not have this for healthcare.  In one sense, the Personal Health Record is meant to do this.  (I like the example from ActiveHealth).  In another sense, that only covers the organizing and simplifying part.  I don’t think that PHRs (myPHR, ihealthrecord, Misys, etc.) are meant to mine the data and push information to you.  Their original objective was not to be a virtual coach (from my understanding).

But, this is the opportunity.  Put lots of data in one place.  Add inteligence.  Add the ability to learn.  Blend in best practices.  Begin to weigh options based on costs and quality and possibly impact on your quality of life.

Wouldn’t it be great to log in somewhere and see how you were doing?  Are you making good choices?  How do you compare to your peers?  How can you improve?  Eventually, this could even link into clothes or other objects that push data real-time to the system.

SCENARIO: John – Thanks for logging in.  It appears your blood sugar is high.  You normally have a 10% spike every day at this time, but today you spiked 20%.  We have pulled together a personalized diet plan for you.  This should give you the nutrients required while also keeping your blood sugar low.  Some other options you might evaluate are…  And, if interested, we have benchmarked your  experience with diabetes versus others within your age group.  This can be sorted by geography, income, and other metrics if interested. 

Understanding what to do and its impact on your overall health would be great.  I remember using an interactive tool years ago that told you how old you were based on exercise, smoking, etc.  It was called RealAge.  Having a “score” about your health (e.g., BMI) would be a great Health Balance Sheet.

Consumerism – My View on the Basics

So, how does one define consumerism from a pharmacy perspective?  Let’s first look at the objective.  The objective of consumerism is to put information, choice, and responsibility in the hands of the patient.  To do this successfully, several things have to be addressed – knowledge, awareness, incentives.

The benefit of pharmacy is the timeliness of the data (real-time).

I believe  consumerism is made up of several different things:

  1. Plan designs which include high deductibles and have Health Savings Accounts (HSA)s.
  2. Content and tools that helps consumers make choices.  This includes information on plan design, on disease states, on drugs, on quality, on cost, and mostly on their options.  This is for pharmacy, providers, and general healthcare services.  The options here with all the consumer-driven healthcare vendors and the Web 2.0 technologies are significant.
  3. Communications to educate and remind them.  I think of this as an event driven architecture where information is pushed to consumers around events when they need or want information.  Doing this effectively and in a timely manner is the key challenge.
  4. Incentives and rewards to align the interests of the parties.  If you stay healthy and spend less resources, you should share in the savings.  It is a simple pitch to me.
  5. A focus on prevention versus simply treatment.  This includes wellness programs and disease management.

Everyone is trying different things which is what makes this such a dynamic space right now.  Here are a few of the players:

  1. WebMD
  2. RevolutionHealth
  3. ActiveHealth
  4. DestinationRx
  5. Definity Health
  6. Metavante
  7. ConnectYourCare
  8. CareGain
  9. Healthways
  10. Lumenos
  11. Amisys
  12. PrecisionRx
  13. RxEOB
  14. Subimo
  15. iBenefit
  16. HealthEnvelope

I could go on, but there are numerous companies embracing disease management, wellness, HSAs, VBID, and many of the other concepts that are part of consumerism.  I welcome you to add other vendors to the list.  Thanks.

Libratto – Blog

Bob Nease is an executive at Express Scripts that I worked with.  Great guy.  Very smart.  Unfortunately, he hasn’t had time to keep up his blog so some of the comments are outdated, but he provides an intelligent dialogue on his blog at Libratto

Viral Marketing in Wellness?

A study in the New England Journal of Medicine by James Fowler and Nicholas Christakis found some staggering results:

  1. When people become obese, the risk of their closest friends becoming obese over the next 2-4 years increases by 171%; risk for casual friends increases by 57%; siblings by 40%; and spouse by 37%.
  2. The reverse is true about shedding weight.
  3. The weight gain/loss has a more direct affect on friends and siblings of the same gender.

This should teach us all something (or at least give us a hypothesis upon which to start) for marketing wellness and promoting change in the US.  As companies do when they want to drive change in the business community, focus on the influencers and let them drive behavior.  Now the question is whether this works for smoking cessation and other healthcare issues.  But, obesity is correlated with lots of problems – diabetes, heart disease, etc.

The power of social or viral marketing is strong.  Thinking through this as we look to how we help patients is important.

Communication Accountability

You can tell I am on the road since I am reading USToday. But, it always has some great pieces.

Yesterday (7/25/07) there is an article titled “Communication is now part of the cure” by Erin Donaghue. It has several great points:

  1. It talks about a true patient advocacy organization called Bedside Advocates. They help guide patients through the system. (much needed)
  2. It talks about the fact that many people are afraid to ask their doctor questions. I think this is much more prevalent in the 65+ age group where they were taught to respect doctors versus younger generations that are more willing to challenge those in a position of authority.
  3. It talks about the National Institute for Patient Rights and a book called 3 Secrets Hospitals Don’t Want You to Know: How to Empower Patients.
  4. The fact that CMS is linking a portion of funding to patient satisfaction scores as part of the Hospital Consumer Assessment of Health Providers and Systems which will begin to make them accountable for communications. (For example…”During this hospital stay, how often did doctors listen carefully to you?”)

This all seems like a good first step. Communications are a challenge in any industry, but healthcare has lots of people providing you with carefully reviewed information as to avoid lawsuits. Navigating that requires information and lots of questions. This is where the industry will begin to change, but it is both systemic and cultural. Neither are simple.

Graying of America – Rx Utilization

Walgreen’s 2005 Annual Report has a few great charts if you want to understand the graying of America along with its implications on prescription utilization. (see here)

Loyalty Programs in Healthcare

I know several people working on this, and I think it will be an interesting challenge.  As I have been pushing for a while, healthcare needs to embrace ideas from outside the industry.  Loyalty is an good one.  But, healthcare has an issue.  For example, how do you reward use of pharmacy without incenting inappropriate utilization.  Or, how do you give points for using an ER without encouring “emergencies”.

The right answer is to encourage wellness, but the question is who pays for this program…the employer is the best option.  Managed care could pay for this, but the question is what is the likelihood of that patient staying covered by the same insurer.  Here is an opportunity for some universal solution where wellness costs were allocated over time to the insurers which owned the patient (e.g., like a depreciating asset where you pay for the initial years even though it may continue to hold some value).

But wellness is not loyalty.  If I am a pharmacy, I want you to continue coming back.  If I am a hospital who keeps building specialty centers, I want to get all of your healthcare dollars.  Probably (if it was possible to get), a loyalty program tied to share of wallet would be right.  For example, if 80% of your pharmacy dollars are at my store, I will give you 1,000 points.  If 90%, then 1,500 points.  Etc.  You would probably need a grid system so that those with the most Rx had the base point system multiplied otherwise someone with one Rx gets the same points as someone with 10 which doesn’t make financial sense.

As mentioned in US Today (July 24, 2007 pg. B1), membership in reward programs is significant across several industries (see the snapshot of reward membership in the US based on data from Colloquy below).

  • 254.4M in airlines
  • 238.7 in financial services
  • 137.4 in specialty retail
  • 124.3 in grocery
  • 107.9 in department stores

A reward system is needed badly in healthcare.  We have plenty of sticks but very few carrots.  Both are necessary in any environment.

As companies like Maritz which have worked in the Loyalty space within other industries increase their focus on healthcare, I think we will see some evolving models.  Stay tuned.

Health Literacy Issue

Tuesday’s (7/24/07) USA Today had an article on page 8D talking about Health Literacy.  Based on a study of 3,260 Medicare beneficiaries, the authors of an article published in the Archives of Internal Medicine found that “those with inadequate health literacy were 52% more likely to have died than those with adequate health literacy”.

This gets right to the point of healthcare communications.  It is critical to understand how to deliver information and what words to use.  Unfortunately, this applies to people even with health literacy such as physicians.  I have seen healthcare communications to go to doctors talking about fluoxetine and lovastatin (for example).  Since many doctors don’t know all the chemical names of drugs, they might not know that this was talking about Prozac (fluoxetine) and Mevacor (lovastatin).  When we provided generic samples to physicians, some of them didn’t use our first batch because it only had the generic name on it, and they couldn’t be 100% sure of what it was.

So, with patients this is even more critical.  When you are wrapped up in healthcare, it is easy to think that everyone thinks like you.  For example, a patient doesn’t understand what a renewal prescription is.  This is the term for a refill when there are no open refills on your prescription.  You can’t simply refill.  You have to get your physician to write you a new Rx (i.e., a renewal).

So, literacy has a micro issue which is clarity of terminology and simplicity of messaging to deliver valuable and timely information which consumers can take action on.  It also has a macro issue which is driving literacy in general such that labels, physician’s instructions, and other information is understood.

This could certainly be an argument for voice based communications for which I am a big advocate.  This could also be an argument for multi-lingual communications so you can avoid issues like once a day being interpreted as 11 per day (since once means 11 in Spanish).

Comment and Consumerism

Yesterday, I got a comment from someone who was upset that I named the blog – The Patient Advocate. They don’t like the PBM system here in the US. And, they didn’t think this blog represented consumerism. I thought I would spend a minute responding publicly to him.

My perspective on naming the blog was simply that unless those of us within the healthcare system begin thinking about change from a patient perspective we won’t have much of a chance for change (radical or incremental). So, my hope here is to begin thinking about how patients can best receive information and be part of the process. But, yes, I am thinking about it from within the system. I am not here to take an ivory tower look at how to develop a new system.

Relative to defining consumerism, I could probably argue that all day long. My perspective is that consumerism in healthcare is largely about information and transparency. Information is easier in that there is lots of it. They question is how to get it to the patient in a timely and easily digestible manner. Transparency is harder but is happening. This requires change and helping patients to understand the rules and logic (clinical and business) behind healthcare and to get access to treatment and quality data. Both of these are necessary for people to make fact-based decisions about how and when to spend their healthcare dollars.

None of this is or will be easy. Moving responsibility for retirement funds from a defined plan to 401Ks where the responsibility is with the individual has been great for many, but not everyone has done well here. We will be in a transitionary period while this transformation happens. My hope is to be part of it and make it happen as well as possible.

Here are a few things on consumerism in healthcare:

  1. Aetna’s perspective
  2. Managed consumerism article
  3. Good blog and discussion on The Health Care Blog
  4. Forrester on healthcare consumerism
  5. Galen Institute study

Costs of Healthcare

For today, let’s stick with the consumer costs of healthcare.  Wired Magazine has a very cool graphic in their August 2007 publication (pg. 52) which shows how consumer spending breaks out.  (Note this is for an average household expenditure of $46,408 which obviously ignores the poor and working poor.)

The focus is on technology which they get down into single dollar expenditures.  But, I thought the healthcare data was interesting – $1,361 (3%) on health insurance and $405 (1%) on prescription drugs.  Both seem staggering low to me especially at a household level.  I think we spend $200-$300 per month on prescription copays in my family (and we are pretty healthy).

But, this is the type of data we need to understand and if you are targetting consumers, it is helpful to know how they prioritize their spending based on where it goes.  More to come to spending.  (And then we will have to look at the employer costs.)

Warranty on Surgery

Now here is a novel idea. I was shocked to see this little one liner in my Money magazine over the weekend. It didn’t say much else, but there is plenty of information available online.  Basically, Geisinger Health System is offering a 90-day warranty that covers all the follow-up (including re-admission) for heart surgery.

Even if some of this has been done before in healthcare, it is a key step in driving consumerism.  Translating common consumer practices (warranties) into healthcare is an easy model for us to understand.

The WSJ Blog on Healthcare

NY Times Article

The Doctor Weighs In Blog

Automated Calling Technology

I have had the chance to work with one of my previous vendors on their PBM strategy.  I find it to be a fascinating space – automated call technology.  They are at the heart of the consumerism push and work for 45 healthcare companies today.

Since a call center is often too expensive and often the turnover a killer for quality, that can be a difficult strategy for communications.  Letters are great from the fact that they can be perfectly scripted.  But, letters aren’t dynamic and aren’t real-time.  E-mail is good, but with HIPAA restrictions and other privacy issues, it can be constrained.

Everyone has a phone.  Using push technology with personalization and a dynamic engine for changing messaging has great potential.  We used this technology to drive brand to generic switching when Zocor was losing patent.  We used this to help people who got rejected at the Point-of-Sale understand their plan design (call avoidance).  And, we used this as a complement to our letters trying to move people from retail pharmacy to mail order.  It works.

I am working on the numbers now, but I suspect there is a few billion dollars worth of opportunity sitting on the table if healthcare fully embraces this technology.  By reducing inbound calls and using intelligent messaging to predict events and push information to patients, you can drive changes in behavior and make a difference.

Much more to come here…

Healthcare Bills

Have you ever had to challenge your healthcare bill?  A prescription copay.  A reject at the pharmacy.  An overcharge from your provider.  A claim that wasn’t paid for some reason.

It can be a nightmare.  Given that my wife and I are both in healthcare, I think we understand the system and the codes well enough to figure things out.  But, I often wonder how many people overpay.  This is a significant problem.  If it takes me a year to fix something, how long does it take someone who doesn’t understand the system?

Negotiating with Your MD

As you (the patient) bear more and more responsibility for your healthcare dollars, how will this play out in your relationship with your physician.  Will they negotiate with you?

I keep seeing articles in Money magazine and others encouraging you to do this.  Certainly, it can’t hurt.  Offering to pay them cash versus credit should have some immediate value to them.  A key question would be whether they truly understand the costs of their care.  I doubt they have some true cost accounting approach to help them understand.

And, do we have an established benchmark for negotiations?  I know that 10% off the MSRP for a car is a pretty good negotiation.  I know that 50% of list for furniture or jewelry is pretty good.  What is reasonable for healthcare services?  And, where do we go for quality information and the tradeoffs there?

It is an interesting question.  Without data for both sides, it is a complicated discussion.

CFO magazine had a good article about this a few years ago.  It posed the question differently.  “If all your employees have to research and negotiate their own care, what is the impact on productivity?”  Good question.

Sicko – Good Food For Thought

Have you seen Sicko? I got the management team from a healthcare client of mine to go see it with me last week in Boston. I thought it was great. If you know nothing about healthcare, you will think our system is the worse system in the world and be appalled. If you work in healthcare, you realize Michael found and did a great job of pointing out many of the weaknesses.

He also did a good job of identifying some interesting facts and showing us how healthcare works abroad. Without being a spoiler, here are some observations:

  • People without health insurance that get hurt face some very tough challenges. We need some type of care system that supports them.
  • Our processes should not interfere with care. Dropping people off in hospital gowns since they can’t pay their hospital bills is wrong.
  • Drugs are a lot cheaper outside the US.
  • The hypothesis that you wait for care outside the US seems to be a myth.
  • Running a company based on denial of care versus managing risk through wellness is a problem. This ties to bigger problems we have with the system design.

Before I go off as a liberal republican (or conservative democrat), my only recommendation is see the movie.


New Blog

I have been blogging most of this year on the topic of Business Process Management (BPM) at BPM Business.  In doing that, I continued to go back to my previous experience in healthcare and gained a fresh perspective on the healthcare consumer and their interaction with the complex heathcare processes.  (I have always been a big believer in stepping away from the day to day (or current industry) to get a new innovative perspective.)

With that in mind, I have chosen to focus my blogging on consumerism in healthcare.  To me, this is taking a consumer packaged goods framework on marketing and applying it to healthcare (think micro-segmentation, data mining, multi-channel strategy). 

Today,  most healthcare companies think about patients as claims.  The market is finally going to push them to think about patients as consumers and treat them that way.  No longer is a confusing letter with lots of legal and medical terms going to float.  Consumers are going to demand that they can understand the message and take action.

So, with that in mind, I will begin focusing my thoughts here on The Patient Advocate.  I did pull in some of my old blog postings, and I will continue to get off-topic every once and a while to talk about general business, leadership, and other topics that interest me. 

Myths of Innovation

Guy Kawasaki has another great interview on his blog.  This is an interview with Scott Berkun, author of “The Myths of Innovation”.  If you are fascinated with innovation, this is a good read.  I have tried innovation internally and externally.  These last few start-ups which I have worked on have been great.  This article addresses some of the things I have learned the hard way. 

“Innovators are born and made
Innovators face lots of challenges outside the creative process – support
Get out of the ivory tower and “tinker”

Problem definition (i.e., asking the right questions) is key  (At HOK, we used to use a book called Problem Seeking for architectural requirements which is a helpful framework here.)

There is a lot more here.  I think companies often miss the importance of “sponsoring” innovation through several actions:

  • Encouraging people to try things and having a culture that allows risk
  • Capturing ideas and having people who look across ideas for new combinations of things
  • Having funds allocated to try things…if VCs who get their pick of ideas only expect 2 of 10 to flush out, why do companies look for 10 of 10
  • Bringing in people with diversity (background, culture, education, industry)

Innovation is a critical process for companies.  Thinking about how you create it, capture ideas, and manage your portfolio is important.  In this blog, I have talked about P-TRIZ and Return on Time (ROT) which are both relevant here. 

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