Archive | December, 2007

Academic Detailing

Their is a concept is the pharmacy world called academic detailing which essentially means educating physicians about the cost / benefits of prescription drugs.  It can be done via letter, phone, and face-to-face.  Many managed care companies and PBMs have tried it over the years.  Does it work?…sometimes.

“It’s estimated the pharmaceutical industry spends about 90% of its $21 billion marketing budget on physicians each year.”  (Journal of the American Medical Association article from January 2006)

Logically, it seems like a great idea.  Get out and provide physicians with unbiased information about the drugs they prescribe.  Provide them with published research.  Show them how they behave versus their peers through benchmark data based on their prescribing habits.

Since I briefly owned academic detailing as a product line, I remember the challenge that our lead pharmacist had on proving the business case of why we should invest there.  There were too many challenges:

  •  Why does the physician care about cost?  They care about what works.  If you can clearly prove the compliance is tied to out-of-pocket costs, they might get interested, but the cost to the patient (at least if they have insurance) has historically not been significantly different between different options.  [I do believe consumerism and consumer-driven healthcare might change this.]  I always compare this to the expression “no one ever got fired for hiring IBM”.
  • To compete with the brand manufacturers who have 10’s of thousands of representatives out meeting with physicians, it would take billions of dollars.  Who is going to fund this?  You see change happen in small pockets where there is large marketshare by one dominant payor that can influence the physicians.  With the government as the largest payor in healthcare, they could do this, but where is the money going to come from?
  • Do the physicians have the time?  There are 10,000+ drugs out there.  Physicians are busy and under lots of pressure.  Some physicians have stopped seeing detail representatives.  Others charge for their time.  This is not a 2 minute discussion.  (I believe that is the average for a manufacturer’s representative with a physician.)  This is a 30+ minute discussion of clinical and cost information.

Perhaps P4P (pay-for-performance) may change this.  I know that when physician’s were capitated for both medical and pharmacy costs that it could impact their prescribing habits.  I always here about different groups trying academic detailing for all the right reasons…BUT, I never see any great proof.

Another CEO Interview – ABC

I think a lot of times when I quick say ABC company people think I just mean any “generic” type company (i.e., typical MBA case study speak), but in healthcare, we have AmerisourceBergen Corporation which some people (probably no one in their corporate marketing) refer to as ABC.  It competes with Cardinal Health and McKesson and is in many areas of healthcare especially in prescription drug distribution.  (They are a $57B company in a market where the 3 of these companies control 90% marketshare.)

SmartMoney had an interview with their CEO (David Yost) in February 2007 (which I am just reading over the holidays).  Since their margins are in the single-digits, the logical question was how do they grow.  He pointed out that generics and specialty drugs represent the big opportunities.  Interestingly on specialty drugs he talked how they can “tell the manufacturers where the patients are and how much insurance companies will probably reimburse on certain drugs.”  This doesn’t strike me as the role I would typically look to them for.

It was also an interesting discussion around Wal-Mart’s $4 generics.  I have been skeptical of the promotion, but he would have some visibility to data to understand the results.  Regardless, the effort of the pharmacies to lower the cash costs for prescriptions (for those without insurance) is an important effort.

“The pricing difference Wal-Mart is offering isn’t enough to cause them [patients] to change pharmacies.  Plus, a lot of people are going to Wal-Mart looking for $4 prescriptions and can’t find them.”

BCBSA President Interview on

If you are interested in what the president of the Blue Cross Blue Shield Association is talking about, you can see a quick 5 minute video interview on  He talks about his original vision when he joined of wrapping a strong national support organization around a group of companies that are embedded in the local areas and serve 100M people nationally.  He talks about working with the government to figure out the “superhighway” needed to drive interoperability across plans to allow Electronic Health Records, Personal Health Records, and e-prescribing to be successful.  He also touches on the issue of how to better use and share the data across plans to improve healthcare quality.

Polypharmacy Programs

I am sure that some people are focused on this, but I rarely hear about it.  Although most people go to more than one pharmacy, today’s claims adjudication systems are programed to identify serious issues across pharmacies.  But, since you can’t reject every claim, the edits in the system are focused on the serious issues which might leave some opportunity for improvement.  If you add in OTCs and supplements that people take, there may be opportunities that aren’t captured by the system.

I found some results from a 2003 Premera BC program which I thought were quite impressive.  They built a program that offered a medication review with your physician if you took 5 or more prescriptions.  Their results included:

  • 50 percent of the targeted members brought in their medications for the physicians to review.
  • One out of every three members received prescription changes.
  • Sixty four percent had a medication added.
  • Forty seven percent had one or more medication stopped.
  • Sixty five percent had the dosage of a medication changed.

Given results like this, it would seem like a program everyone should be doing.

Parents on DNA Testing and Mandatory Vaccines

In the Early Fall 2007 Michigan Alumnus magazine (Go Blue!), they had a few health stories.  The CS Mott Children’s Hospital asked 2,000 adults if they would endorse genetic testing to determine if their children were at risk for developing a disease when no treatment exists.

  • 54% (of those with an opinion) said yes.
  • 39% agreed but only if an effective treatment existed.
  • Only just over a third said they were willing to have the DNA stored in a biobank (a collection of DNA to help researchers identify treatments and preventative strategies).

The authors believe the reluctance is related to fears of how that information could be used to affect employment or insurance coverage.  Apparently, Congress is evaluating a Genetic Information Nondiscrimination Act to address that concern.

With many states considering making it mandatory that girls 11-12 get the HPV vaccine that provides protection against human papillomavirus (the virus linked to cervical cancer and genital warts), the hospital polled US parents to get their opinion.  44% were in favor of making it mandatory for school entry.  23 states and Washington DC have introduced bills regarding this and Virginia has passed a law requiring it.

On the vaccine issue, I really don’t know enough to have an educated opinion right now.  On DNA testing, I think of it like participating in the national bone marrow donor program.  I would want mine on file so that if I had a disease and they found a cure that they would reach out to me and help me.  People might try to abuse the information, but I believe that in the long-term the benefits outweigh the risks and society will be protected.

Patient Comments About PBM Reimbursement

I understand the logic if I am the pharmacies of reaching out to the patients to motivate them and use that to compel the legislators to act but doesn’t it seem strange to have an end customer comment about the supply chain relationship of two entities. What am I talking about?

The Coalition for Community Pharmacy Action which is made up of the National Community Pharmacists Association (NCPA) and the National Association of Chain Drug Stores (NACDS) conducted a survey of 1,000 pharmacy patients about the slow reimbursement of Medicare Part D drugs by the PBMs and upcoming cuts in Medicaid reimbursement. Not that I don’t think it’s an issue, but I find it hard to believe consumers knew about the issue and weren’t “coached” into answers based simply on the way the questions were asked. Regardless, the results were:

  • 83% said that it was unfair that “PBMs and prescription drug plans keep money as long as possible, allowing them to earn interest on it, while pharmacies must continue to provide their services and prescription drugs upfront to patient even though they haven’t been paid.” [Do you think the average patient would say that if you simply asked them what they thought about reimbursement policies for pharmacies?]

The survey is obviously to drive support for two bills – H.R.1474, the Fair and Speedy Treatment of Medicare Prescription Drug Act of 2007, and S.1954, the Pharmacy Access Improvement Act (PhAIM) of 2007 which require complete and accurate Part D claims submitted electronically be paid within 14 days by electronic funds transfer, and paper claims within 30 days.

  • 78% thought it was unfair that “under the new rule, pharmacies that participate in the Medicaid program would have to sell generic drugs at a loss.” [I believe it’s possible, but I would like to see the math here. Is it net of their costs? Are their costs direct labor or is it a volume issue?]

“We have reached critical mass in our efforts to rectify the debilitating consequences of the Medicare Part D and Medicaid reimbursement systems,” said Bruce Roberts, RPh, NCPA executive vice president and CEO. “The sentiments expressed by community pharmacies, members of Congress, and organizations such as NCPA and the National Rural Health Association are well known. The missing voice has been the patients who are adversely affected by the consequence of community pharmacies being squeezed to the breaking point. Now we have a comprehensive scientific survey indicating patients find the reimbursement policies objectionable and are supportive of the pending legislative solutions that should spur action in the halls of Congress.”

I am a big believer in the independent pharmacy. They have and continue to play a vital role in many communities and serving patients in a very hands-on way. As the market has changed, it has been difficult. Seniors, who I believe are disproportionately represented at the independent pharmacies, were cash paying customers for a long time. Medicare Part D changed that and took away a great source of cash flow and margin.

Population Change – Good Graphic

Doing some cleaning and came across this image which does a great job of showing the transition across age groups over the next 12 years.  This tells you a lot about how we will have to adapt the system to support, care for, and communicate with a very different population.


A Few Other Facts From CSC’s Survey

While I was flipping through CSC’s 2004 Customer Intelligence Diagnostic Survey, I found a few other interesting facts:

  • Only 20.7% of the 58 Fortune 1000 companies have a 360 degree view of the customer (i.e., consolidated data across the enterprise)
  • Only 41% of them had used external data to augment their internal customer data
  • Only 10% of the companies had a high degree of confidence that their customer data was clean, accurate, and timely
  • 20% of the companies never capture responses to marketing campaigns for evaluation and another 40% only collect the data occasionally
  • Only 25% were capturing and using customer preferences
  • Only 28% were using an external source (e.g., National Change of Address) to update and verify addresses
  • 62% of them were segmenting customers based on demographic or behavioral criteria
  • 59% of them segment customers based on preferences and needs
  • Almost 80% believe they are missing revenue opportunities due to poor data quality or lack of integrated information
  • Only 22% make customer insights readily available to all their personnel in sales, marketing, and service
  • Only 19% have business rules and triggers to launch targets treatments across customer touch points

There were no healthcare companies included in the survey, but I am sure they would have lagged even more.  Now, some of this has likely changed over the past few years, but there is a lot to be done to address the opportunities.

Proactively Addressing Customer “Defection”

Where your customer (or patient) has the ability to defect (i.e., chose another health plan, go to another PCP or hospital, chose another drug or pharmacy), what are you doing to predict this and act in advance.  As the old saying goes, it is cheaper to keep a customer than to attract a new one.

In wondering what other industries do, I was a little discouraged to find the following in CSC’s 2004 Customer Intelligence Diagnostic Survey:

“half of the respondent firms never, or almost never, perform defection analysis to identify customers who are on the verge of defection.  Nevertheless, over half of the respondents claim that they have developed targeted programs to prevent defection.”

Even companies that ask about your experience or satisfaction often don’t act on it.  For example, I have stayed at the Detroit Ritz several times for personal travel.  Each time, check-in has been bad.  Every time I check out, they ask how my experience was.  I say it was okay.  They say great and move on.  [Which shouldn’t be acceptable at a place like the Ritz that prides themselves on customer service.]  Never have they asked me for feedback.  So, instead, I complain to the national office and get a gift certificate which costs them money…simply for not acting on my lack of satisfaction.

In healthcare, it may be a little harder to predict, but not filling a maintenance drug or not scheduling a follow-up appointment are definitely bad signs.  A quick follow-up survey to any experience will tell you a lot.   And, as I think I have mentioned before, for healthy people that never experience their healthplan, it makes a lot of sense to reach out to them prior to open enrollment when all they will see is another rate hike.

A few recent entries on other blogs

It is always important to see what others are writing about on their blogs. There are now almost 700 healthcare blogs tracked by eDrugSearch. (Just 6 months ago, I think it was only 400.) Here are a few recent posts worth reading.

The main value of transparency is not necessarily to enable easier consumer choice or to give a hospital a competitive edge. It is to provide creative tension within hospitals so that they hold themselves accountable. This accountability is what will drive doctors, nurses, and administrators to seek constant improvements in the quality and safety of patient care. So, even if we can’t compare hospital to hospital on several types of surgical procedures, we can still commend hospitals that publish their results as a sign that they are serious about self-improvement.

    • On DiabetesMine, there is a great summary of all the things that have happened around this disease in 2007.
    • It’s not healthcare specific, but Seth Godin’s entries are always interesting.  Read this one about what you did in the past and grabbing opportunity.  It should help you set a positive outlook for 2008.
    • A new blog that I recently started following is called Enterprise Decision Management.  Here is one entry on Business Intelligence 2.0.  He has lots of great entries that I will elaborate on later.  This approach is core to creating an intelligent healthcare communications strategy.
    • The Hospital Impact blog has a nice entry on 2007: A Year in Review.
    • On the Health Business Blog, David talks about “shopdropping” which is a retail activity where people leave things at stores (i.e., reverse shoplifting).  Interesting.
    • John quotes a study on the eHealth blog that says that 39% of physicians are e-mailing patients.  I find that amazing.  I have never heard of a physician doing this.
    • On Hospital Marketing, there is an entry on Hospitals in Facebook which makes the point about healthcare being behind and not thinking creatively about how to use new media.  I would like to see some discussion there on the topic, but there hasn’t been any yet.

    Just a few other blogs to check out.

      Setting Healthcare Goals

      I have always been a big believer in using New Years as an excuse to think about my goals – what did I accomplish last year, what do I hope to accomplish in 2008, and what are my 5 and 10-year goals. With the exception of a few years, I have done this for most of the past decade. It is a an interesting tale of how my priorities have evolved from very career oriented in the early years after business school to much more balanced now. My goals will now typically include a few career objectives, some family objectives, a financial planning objective, and a few personal objectives (e.g., run a 1:40 half-marathon).

      When I got ready to write this entry, I decided to try and find a story / study that I had heard referenced numerous times about an ivy league class where they tracked the success of people that wrote down their goals versus those that didn’t. Unfortunately, all I found was that it was a myth. I still believe it is a helpful process, and I think telling some of them to others so that they encourage you is also important.

      A good term to use in setting goals (work or personal) is S.M.A.R.T. which stands for Specific, Measurable, Attainable, Realistic, and Timely. Just Google “SMART goals” and you will find numerous links. It is often a good idea to have a specific objective or event and/or to reward yourself. (e.g., I want to lower my BMI by X points prior to my annual visit to the doctor and will upgrade the cabin on my next cruise if I achieve this.) And, don’t forget to set a baseline metric for where you are today so you know how much you have improved.

      So what goals should you have a health consumer…here are a few ideas:

      • Know your metrics (BMI, HDL/LDL)
      • Understand your family history and probability of diseases
      • Lose weight or improve your physical fitness
      • Take any preventative measures needed based on age or gender or other attributes
      • Take advantage of any wellness programs offered (wellness goal article)
      • Learn about the food you take into my body
      • Eliminate any unhealthy activities (e.g., smoking)

      And, what goals would we want our healthcare companies to have for the new year:

      • Understand me as an individual and how I want to be communicated with
      • Improve your customer service so it is proactive and I only have to tell you once who I am
      • Make your communications understandable to me not only to a medical professional
      • Help me manage my data
      • Give me tools to make decisions don’t just shift risk and responsibility to me
      • Help me with prevention and wellness and other long-term activities

      With that in mind, it should be interesting to see if Revolution Health gets some traction with their new offering – Resolutions 2.0. From what I have read and seen, it looks like they have created an online tool for setting and tracking goals and combined that with two things – social interaction to build encouragement and expert insight to provide hints and advice. It will be interesting to see the adoption and use. It would be great if they could track it versus a control group to see the improvement in achievement of goals.

      “The beginning of a new year always brings with it a fresh start and the best of intentions to change one’s life for the better,” said Steve Case, chairman and CEO of Revolution Health. “We all make New Year’s resolutions but going it alone can often make those good intentions a grind. By adding the power of friend-to-friend support along with expert information, is offering a simple, fun and free way for people to achieve goals they never have before.”

      The expert “groups” they have created include the following which although broader in scope than I expected seem to have something for all of us:

      1. Improve My Relationship/Marriage
      2. Keep My Family Active
      3. Take Charge of Your Life
      4. Become A Complaint Free Person
      5. Eat Right and Stay Slim
      6. Walk More to Lose Weight
      7. Sleep At Least 7 Hours A Night
      8. Have a Smoke Free Day
      9. Lose Up to 20 lbs By Spring
      10. De-stress

      Merry Christmas and Happy New Year

      I hope you all are enjoying the holidays whether it is Hanukkah, Kwanzaa, Christmas or another holiday. As we move into a New Year, I find it is always a time to sit back and reflect. What did I accomplish this year? Am I on track for my personal or professional goals going forward? Have I made a difference this year?

      In that spirit, I share a few things both serious and lighthearted:

      1. Regardless of how you feel about the war in Iraq and Afghanistan, the reality is that we have real people working on behalf of us to defend our country. These soldiers are away from their families and loved ones sacrificing to do what they believe will keep us safe. In that spirit, I recently adopted a soldier so that I could hopefully let them know that we are thinking about them. Here is a good local site for that –
      2. And, here is a great story about a bank that gave their employees $1,000 to “pay-it-forward” and do something good for someone else. They received video cameras to record the event and to share with their colleagues. What a great, creative idea for the holidays. One company and 500+ people making a difference.
      3. My uncle recently e-mailed this to me (so I can’t validate its legitimacy, but it makes a good story) and in the spirit of the holidays, I share it. It is the translation of the famous song about the 12 days of Christmas. (If it’s not true, it’s very creative.)

      From 1558 until 1829, Roman Catholics in England were not permitted to practice their faith openly. Someone during that era wrote this carol as a catechism song for young Catholics. It has two levels of meaning: The surface meaning plus a hidden meaning known only to members of their church. Each element in the carol has a code word for a religious reality which the children could remember.

      • The partridge in a pear tree was Jesus Christ.
      • Two turtle doves were the Old and New Testaments.
      • Three French hens stood for faith, hope and love.
      • The four calling birds were the four gospels of Matthew, Mark, Luke & John.
      • The five golden rings recalled the Torah or Law, the first five books of the Old Testament.
      • The six geese a-laying stood for the six days of creation.
      • Seven swans a-swimming represented the sevenfold gifts of the Holy Spirit-Prophesy, Serving, Teaching, Exhortation, Contribution, Leadership, and Mercy.
      • The eight maids a-milking were the eight beatitudes.
      • Nine ladies dancing were the nine fruits of the Holy Spirit – Love, Joy, Peace, Patience, Kindness, Goodness, Faithfulness, Gentleness, and Self Control.
      • The ten lords a-leaping were the Ten Commandments.
      • The eleven pipers piping stood for the eleven faithful disciples.
      • The twelve drummers drumming symbolized the twelve points of belief in the Apostles’ Creed.
      • To stay lighthearted for a minute (and as a parent), I also got a smile out of this letter to Santa that someone sent me.

      Dear Santa,

      I’ve been a good mom all year. I’ve fed, cleaned and cuddled my children on demand, visited the doctor’s office more than my doctor and sold sixty-two cases of candy bars to raise money to plant a shade tree on the school playground. I was hoping you could spread my list out over several Christmases, since I had to write this letter with my son’s red crayon, on the back of a receipt in the laundry room between cycles, and who knows when I’ll find anymore free time in the next 18 years.

      Here are my Christmas wishes:

      I’d like a pair of legs that don’t ache (in any color, except purple, which I already have) and arms that don’t hurt, but are strong enough to pull my screaming child out of the candy aisle in the grocery store.

      If you’re hauling big ticket items this year I’d like fingerprint resistant windows and a radio that only plays adult music, a television that doesn’t broadcast any programs containing talking animals, and a refrigerator with a secret compartment behind the crisper where I can hide to talk on the phone.

      On the practical side, I could use a talking doll that says, “Yes, Mommy” to boost my parental confidence, along with two kids who don’t fight and three pairs of jeans that will zip all the way up without the use of power tools.

      I could also use a recording of Tibetan monks chanting “Don’t eat in the living room” and “Take your hands off your brother,” because my voice seems to be just out of my children’s hearing range and can only be heard by the dog.

      If it’s too late to find any of these products, I’d settle for enough time to brush my teeth and comb my hair in the same morning, or the luxury of eating food warmer than room temperature without it being served in a Styrofoam container.

      If you don’t mind, I could also use a few Christmas miracles to brighten the holiday season. Would it be too much trouble to declare ketchup a vegetable? It will clear my conscience immensely. It would be helpful if you could coerce my children to help around the house without demanding payment as if they were the bosses of an organized crime family.

      Well, Santa, the buzzer on the dryer is calling and my son saw my feet under the laundry room door. I think he wants his crayon back.

      Have a safe trip and remember to leave your wet boots by the door and come in and dry off so you don’t catch cold.

      Help yourself to cookies on the table but don’t eat too many or leave crumbs on the carpet.

      Yours Always,

      US News and World Report Health Links

      If you haven’t been there, US News and World Report has a good site for healthcare rankings and other information. Here are a few of the things you will find there:

      1. A link to Healthline where you can get help with Medicare Part D
      2. A list of the top plans according to rankings by NCQA (National Committee for Quality Assurance)
      3. Risk assessment tools on things like heart disease
      4. Links to health centers on topics like Asthma

      Of course, the ranking are the most unique feature since the other health information is probably available on lots of other sites.  You can see some of the things that NCQA looked at in the rankings on the site also.


      Passing on the costs of unhealthy behavior

      I mentioned it in a blog post a few days ago, but apparently, companies can now screen employees for something like smoking if they have a published policy.  [I don’t know all the details.]

      The Cleveland Clinic won’t hire anyone who smokes anymore and Scott’s gives you six months to quit smoking or you get fired.  (Based on the fact that it costs about $3,400 more per year to employ someone who smokes.)

      I asked a friend of mine at a large insurer this week who verified that they are getting lots of requests from employers around smoking.  Most companies are trying to figure out whether they discourage smoking or simply pass on the costs to the smoker.  This begs the obvious carrot or stick discussion in terms of motivation.

      It made me wonder what would be next.  Obesity would seem like the condition that companies would want to address since it is tied to so many diseases and drives so much cost.  Maybe a BMI sliding scale for healthcare costs.  Of course, you would need to have some type of test to exclude people who were genetically pre-disposed or medically not able to control their weight. 

      Whatever approach was taken, there is a lot to driving positive behavior.  A blog entry on Consumer Focused Care does a great job of talking about this.  He talks about how a group of maids became healthier simply by being told that their work (e.g., scrubbing floors) was equal to the recommended daily exercise.  There is a power in being positive and helping people realize what they can do to make a difference. 

      PHR as a Chip

      I am sure some people think of this as a crazy notion.  Would this ever happen?  What are the implications?  What is the value?

      People getting “chipped” seems scary to a lot of people.  But, an intelligent chip that could collect body information – weight, blood pressure, etc – and feed it to a PHR (personal health record) seems pretty interesting to me.  Even simply having a chip that could be read and used to identify you if you were unconscious or dead or unable to identify yourself seems valuable.

      I have seen John Halamka talk briefly about his chip live, but I was glad to see that he has a whole entry about it on his blog “Life as a Healthcare CIO“.  It is a good read of the pros and cons. 

      The Cost of Stress

      I think it is always interesting to quantify something that many of us may deal with abstractly.  Money Magazine (Dec 2007, pg. 44) has an article called “Hidden Costs of Stress” which does just that.

      “Chronic stress, the kind you experience when the demands of life exceed your ability to cope, boosts the risk of developing ailments ranging from the common cold and gum disease to obesity and heart disease.”

      The author working with several other groups puts the costs per year of stress at:

      1. $300 for over-the-counter drugs (e.g., pain relievers and decongestants)
      2. $5,600 for physician visits and other out-of-pocket healthcare costs
      3. $375 for high life insurance premiums
      4. $500 or more for dental costs

      The other big issue is lost productivity which the article mentions saying that workers with severe stress miss 23 days of work a year.  That’s an economic hit to the employer along with a source of additional stress since your performance will be lower and you will use all your vacation days to cover your stress days.

      The article throws out a few simple methods to reduce stress – exercise, stretching and breathing deeply, and reducing caffeine.  Personally, I believe we have to learn to say “no” to control stress.  No – I am too busy to do that.  No – I don’t need to buy that until I have the money.  A lot of stress is often self-induced trying to do or have too much.

      So, given some obvious costs, I wonder if we will ever see a “disease management” type program to reduce and manage stress.

      If Trust is Important…What Do I Do With This?

      I don’t think anyone would argue that trust is one of the most important components of corporate branding especially if you are communicating with consumers.  How do you compel them to act (even if its in their self-interest) if they don’t trust you?

      That being said, what does it tell us that the healthcare industry ranks so low in the annual Harris Interactive survey which asks “Do you think <industry> generally do a good or bad job of serving their customers?”  Hospitals do okay with 74% of those surveyed saying yes.  Even drug companies rank okay at 61%.  [Cable is also at 61% and the phone company at 67%.]  Health insurance comes in at 46% with managed care at 41%.  The only lower companies are oil and tobacco companies.  We have to figure out how to fix this if we are going to successfully drive wellness and change healthcare in this country.


      My Poker Analogy for Healthcare

      I have a group of guys who I play poker with at least once a month. We play Texas Hold’Em which is all the rage and even on ESPN. One of the guys who follows my blog asked me why I didn’t compare poker to healthcare since I use every other analogy from my life. So, here goes…

      There are a couple of key skills in poker:

      • Understanding the math behind the cards.
        • If I have a pocket pair (e.g., two jacks in my hand), what is my probability of winning? Well this is tied first to how many people are playing and therefore how many other cards have been dealt.
        • Understand “pot odds” which basically means knowing what return I am getting on my chips if I bet (e.g., if there are 200 chips in the pot and another player bets 5,000, you are barely getting a $1 for each of your chips).
      • Understanding the people.
        • Some people play “tight” and only bet when they have good hands.
        • Some people like to bluff and are willing to take risk.
        • At the same time, you have to know both the person and their chip stack. Do they have a big chip stack (relative to the table) and therefore can take a chance?
      • Understand the game.
        • Depending on the order of betting and the number of cards played, you should act differently. It is critical to understand the order of betting.
        • It is also important to understand how people are playing the game. In big dollar games, amateurs typically won’t bluff. If you allow people to buy back in to the table versus an elimination process, people will be much more “loose” with their betting.
        • Understanding what their pattern of betting “should” mean. They checked…therefore they are weak and I can push them around.

      So…what does this have to do with healthcare or more specifically HealthComm.

      1. You should be developing your communications based on science. What works? What doesn’t work? [the math]
      2. You should be personalizing your communications and actions based on the individual and their disease. [the people]
      3. You should be learning from history and trying different approaches to improve your success rate. [the people]
      4. You should know what others are doing and really understand correlations. [the game]
      5. You need to know as much as possible about the individual and what other things influence them (e.g., income, age, geography) to know how they interpret information and their condition. [all of the above]
      6. What type of message will get action – reward, penalty, passive, aggressive. [all of the above]

      I may try another one, but I think this gets to the heart of it. Keep it simple…right.

      Sticky Messaging

      We used to talk a lot about stickiness of websites and eyeballs back in the late 1990s. The word still has some attraction and is a key point in the recent McKinsey interview with Chip Heath. Chip is a professor of Organizational Behavior at Stanford University’s Graduate School of Business.

      “The key to effective communication: make it simple, make it concrete, and make it surprising.”

      Although the article is primarily around what executives need to do to make their messaging and ideas stick with diverse audiences, it has a lot of relevance for healthcare.

      “A sticky idea is one that people understand when they hear it, that they remember later on, and that changes something about the way they think or act.”

      Think about all the things you want to tell your patients or members or employees (or vice-versa all the things you patients want your healthcare companies to tell you):

      • There has been a change to your X (copay, formulary, network).
      • You have an opportunity to save money by doing X.
      • We are missing X data that will delay your coverage.
      • We see that X happened and wanted to gather data on your experience or proactively address your question.
      • Welcome to our plan. Have you registered on the website? Have you received your ID card?
      • Please take this Health Risk Assessment.
      • Your credit card has expired. Would you like to update it?
      • Your order is delayed. If this is an emergency, please do X?
      • We see you were on the website. Did you find what you needed?
      • Do you need a copy of your X (formulary, provider directory)?
      • You have not yet picked a Primary Care Physician. Would you like to do that now?
      • Did you receive the information that we sent you?
      • Are you following your physicians orders? Did you do X? Why or why not?
      • Our records show us that you are due for a X. (Flu shot, screening)
      • Are you using any over-the-counter products that we should have in our database to identify drug-drug interactions?
      • Please remember to refill your medication?
      • Are you having any side effects or complications associated with your recent medication or procedure?
      • Have you enrolled yet in our disease management (or incentive) program? Would you like more information?
      • Welcome to the plan.
      • We know it is time for open enrollment. We hope you will renew with us. We are offering a local meeting to help you learn more about your benefits. Would you like to attend?
      • X has changed with your drug, condition, etc. There is new information available at Y.

        Getting back to the article…He offers several good examples of sticky messages which are primarily what I would call rallying calls for organizations. In healthcare, the key is to find these simple messages that compel people to act. So, bottom lining it, he gives six basic traits:

      1. Simplicity – short and deep
      2. Unexpectedness – uncommon sense messages generate interest and curiosity
      3. Concreteness – his example is don’t say “seize leadership in the space race” but say “get an American on the moon in this decade”
      4. Credibility – this should be so easy in healthcare if you leverage all the people and stories out there
      5. Emotions
      6. Stories

      He has a few great stories such as:

      • A Nordstrom’s person wrapping something bought at Macy’s just to make the customer happy. [And probably without point it out.]
      • A FedEx driver who forgot the key to a box simply unbolting the box from the ground and throwing it in the truck so they weren’t late.

      These things reinforce the message while becoming a type of urban legend that stay with people. They evoke emotion in a simple way.

      One good example I have from Express Scripts was around trying to motivate people to change from one drug to another. When Zocor was going generic, we decided to launch a huge multi-modal campaign to drive down Lipitor marketshare and move people to Zocor so that when it went generic everyone would win. [Clients would save; patients would save; and we would make more money.] It worked. But, prior to the program, we worked with linguists and others to design and test a set of messages. The one that resided best was “we have a secret that can save you money”. People were intrigued and listened. They felt like they were being let in on something that was important. We ended up positioning it similar to a Consumer Reports Best Buy. It worked.

      Looking for an Acquisition – Speculation

      With the stock market handsomely rewarding the PBMs especially Medco and Express Scripts, they have cash and stock value to go on the acquisition path. Express Scripts has grown through acquisition over the years leading up to its acquisition of several specialty pharmacy companies a few years ago. In the St. Louis Business Journal, David Myers (VP, Investor Relations) is quoted as saying “Acquisitions are Express Scripts ‘No. 1 priority for our strong cash flow'”.

      [By the way, as I have previously disclosed, I own no ESRX stock or other stocks individually. I only invest in mutual funds…and do very well with it.]

      Although it’s been out for a week, I just read it this morning so before I run into anyone there I want to have fun guessing what Express Scripts might acquire. Usually, all I hear about is speculation of who might buy them. It typically is either a retailer like Walgreens or Wal-Mart or occasionally a managed care company. I don’t see them getting bought with the valuation so high. And, there are very few payor other than United Healthcare (which is tied to Medco) or WellPoint that could swallow such an acquisition. And, I am sure Walgreen’s won’t do anything until they see what the CVS/Caremark deal looks like, but if it works, they would have to make a bid for Medco or Express Scripts to compete.

      1. Buy one of the many regional PBMs that exist. This would be the easy play. It could be integrated. There is lots of synergy. But, people still go to the regional players for a reason, and you may lose a lot of the lives. Now, buying Walgreen’s PBM might be an interesting play and create a sticky relationship with them to align against CVS/Caremark.
      2. Buy a niche PBM in an area such as Worker’s Compensation. Not a bad strategy. They used to have about 20% marketshare in this space. They could also go after the Third Party Billers here although I think that market space may collapse.
      3. Buy another specialty PBM. I hope not. They have the assets already to be successful here. All you would be doing here is buying lives for people committed to one particular pharmacy. I think the premium would be too high.
      4. Go into a related space like dental or vision, but they tried vision before and it never really took off.
      5. Go into the data (e.g., IMS) or IT space (e.g., Ingenix), but they have also tried this and it never took off.
      6. Continue to acquire in the consumerism space. They recently bought ConnectYourCare. There are lots of companies out there doing interesting things in this space and with the projected growth here there are lots of opportunities. The problem is valuation of these companies, maturity of the business model, their risk in going into this business, and their focus on the traditional PBM model.
      7. Buy a technology company like an e-prescribing company (e.g., Prematics where Barrett Toan (founder of ESI) is an advisor) or a Physician Practice Management company (e.g., Pat McNamee the Chief Administrative Officer came from Misys which I believe was for sale) or healthcare IT company like Cerner or a pharmacy automation vendor like ScriptPro or a Personal Health Record company (like Aetna bought ActiveHealth).
      8. Buy a disease management company. Medco has a 10-year (I think) deal with Healthways which I would assume is a “try and buy” type relationship (i.e., let’s try this out and if it works we will buy you at a pre-determined price). ESI has worked with LifeMasters in the past, but I assume there are lots of players out there with interesting models.
      9. Follow Medco and buy in the disease space and DME (durable medical equipment) space. Medco bought PolyMedica earlier this year as part of their strategy to develop disease specific pharmacies called Therapeutic Resource Centers. This would probably be the most logical extension. It seems to be working for Medco.
      10. Buy into the international health
        . This would probably be the most adventuresome with the biggest upside (if it could work). There is a lot of opportunity outside the US, but with limited investment, no managed care companies or PBMs have ventured too far. Express Scripts has a company in Canada. I know a few others have explored and/or tried small ventures.
      11. Buy into the generic manufacturer or distribution space. This would probably be the most lucrative. They have a huge distribution channel. Why not buy a portion of an existing generic manufacturer, open a distribution company (like McKesson, Cardinal, or AmerisourceBergen), and create a single source relationship with the Express Scripts pharmacy and give the retail pharmacies a different reimbursement rate if they used them.
      12. They could always try to become a retailer or go into the clinic business. There is something here, but it is a very different model and given the “training” they have done with the street over the past decade to focus on ROIC (return on invested capital), I don’t think they could do this.

      Now, the two things I would suggest if I were still there would be:

      1. Invest in IT. Look at how to automate more workflow activities. Look at technologies that drive patient self-service. Look at things that drive patient behavior (online tools, educational programs, incentive systems). Build out mass customization and personalization based on integrated data – medical and lab – so that no one can catch them. (But, if you are waiting to sell, don’t spend the money to overhaul the system.)
      2. Create some mad money in a Venture Capital type relationship with someone like Google or Microsoft that are trying so hard to get into the healthcare space and would welcome the relationship to jumpstart.

      Who knows? I certainly don’t know what they will do, but it is a fun position to be in. You have money. The market is at an inflection point. You want to be a catalyst. You have driven incredible results for a decade. What next?

      Forrester on Individual Health Market

      It is a few months old, but Forrester put out a report called “The $115 Billion Individual Health Insurance Opportunity” back in October of this year that is packed with facts and a few interesting concepts. The key point is that established companies need to maintain success in the B2B world that we live in today while aggressively migrating processes, collateral, skills, and products to work in the B2C market.

      I was definitely surprised by their statistic that 9% of today’s market is made up of individuals purchasing their own insurance and that 20% of the population is either in a high deductible or CDHC plan. Their data also says that 31% of the uninsured are actively investigating insurance. Obviously, this means a lot of people looking for health information and taking more responsibility for their care.

      They offer 3 recommendations:

      1. Get ahead of the legislative curve. I would agree. Companies should be out testing models right now with the early adopters. [One of my favorite quotes from one of the founders of IDEO goes something like ‘fail early to succeed sooner’.]
      2. Develop and launch innovative plan designs. They talk about Prudential’s “pay-as-you-go” model in Europe and American Community Mutual Insurance in Michigan that has a buy-up plan that you can buy after you get sick. WOW!! I am not sure how you underwrite this, but it sounds very interesting.
      3. Invest in low cost distribution channels. They talk about Tonik which I mentioned before and the building of online presence. They also talk about outsourcing.

      One of the big things that this will all require is some rebuilding of infrastructure to support different sales processes, personalization, claims set-up, and customer support. Companies should also be looking at data and how they can better use and mine data to learn and improve.

      Phone Still Dominant Channel With Today’s Teens

      I woke up this morning and was reading the USA Today and was surprised by an article on communication channels by today’s teenagers.  I was sure text messaging or instant messaging would top the list, but instead, it was the good old POTS (Plain Old Telephone Service).  Not cell phones, but land lines.  Surprising to me.

      From the article and survey, the percentage of teens who communicate with friends every day via these methods:

      • Landline  39%
      • Cellphone  35%
      • In person  31%
      • Instant message  28%
      • Text message  27%
      • Social networking site  21%
      • E-mail  14%  [probably the biggest surprise to me]

      The article goes on to provide more details, but the key point was that they just communicate more.  They don’t drop old media as the core technology, but they augment it.  Something to learn perhaps.

      My most interesting learning with the younger generation(s) has been their lack of interest in using voicemail.  I remember reading about it on Brazen Careerist (an interesting blog on work/life and generational issues) and have validated it with several people.  They all say that they just look at caller ID and call you back versus actually listening to voicemail.

      Applying Technology Trends to Healthcare

      McKinsey recently put out their 8 technology trends article (access available with free registration). I thought I would translate those to the topic of healthcare communications. Hopefully, we don’t have to be hit by a bolt of lightning to change, but we realize and can document the ROI of acting now and improving our system by involving and reacting out to patients.

      1. Distributing Cocreation – This is the trend which is happening in many industries where consumers (patients) and suppliers (providers) are taking more involvement in product design and even advertising. New media and technology have enabled this to happen. This is a big opportunity for healthcare. In general, I see companies doing focus groups, but not letting product design be driven by the consumer. I don’t see competitions to design the next advertisement for a managed care company happening today.

      “By distributing innovation through the value chain, companies may reduce their costs and usher new products to market faster by eliminating the bottlenecks that come with total control.”

      1. Using Consumers as Innovators – This conceptually seems similar to the first trend although there are likely more differences than semantics, but the value remains in letting consumers push healthcare. How do we capture what they want and the value associated with it? How do we create business models that allow companies to exist to provide that offering? It’s not easy for individuals to drive innovation since we are often tied to what we know.
      2. Tapping Into A World Of Talent – For the past few decades, many other industries have focused on getting their executives to gain multi-cultural experiences by working globally. There have also been studies that link innovation to diversity. With the exception of pharma, most healthcare companies aren’t global. Sure, all the big companies look outside the US for models and occasionally to sell to the government entities, but not much has taken off. The primary expansion in leadership that I have seen over the past five years is a lot more healthcare companies recruiting in executives from non-healthcare companies which will create some diversity and bring a new perspective to the table. Interestingly, I think this also is an issue in the patient outreach process. Are your communications taking into account the diversity of your patient population – e.g., language, messaging, channel, speed of voice?
      3. Extracting More Value From Interactions – This is very true for healthcare. I would bet that the majority of communications in healthcare are either reactive (you call them) or required by regulatory issues (e.g., explanation of benefits or annual notification of change). These programs were originally designed to cost as little as possible so that someone could check the box. Well, guess what. Over the past few years, companies are realizing that these communications are their best ability to influence patients. So, what are the “golden moments” that exist where an interaction can drive loyalty, satisfaction, wellness, etc. Companies need to figure out what the potential value is and how to capture it.
      4. Expanding The Frontiers Of Automation – Automation has been a focus for years. Healthcare is not an exception expect people struggle with how to provide care and a personalized experience while leveraging automation and technology. And, now with technologies such as web services, companies can be interlinked and automated which (when done right) can improve the consumer’s experience. Of course, the second challenge is that automation is best when it enables a process and people don’t often think, manage, or operate from a process perspective.
      5. Unbundling Production From Delivery – I think the whole concept of unbundling could be very interesting given consumerism. Unbundling has already happened for the corporate buyer…they can buy health insurance separate from pharmacy. So, could I (the consumer) one day buy long term insurance separate from prescription coverage separate from my provider network separate from customer support. Could I choose my disease management company? What would that mean for group discounts, bulk purchasing, underwriting models, etc.?
      6. Putting More Science Into Management – We are a lucky generation in that we have access to reams of data and information. Of course, the challenge is how to turn this into intelligence and use it. It is easy to get overwhelmed and frozen. But as managers, using information applying algorithms, linguistics, and neurosciences to it to create personalized communications that apply to each micro-segment of your population is a great opportunity. It translates success from luck to predictable outcomes.

      “From “ideagoras” (eBay-like marketplaces for ideas) to predictive markets to performance-management approaches, ubiquitous standards-based technologies promote aggregation, processing, and decision making based on the use of growing pools of rich data.”

      1. Making Businesses From Information – Healthcare has long embraced this trend. There are numerous companies (e.g., IMS) which are built around information. There are clinical companies that produce drug monographs for use by clinicians. There are aggregators of information (e.g., ePocrates). The point is that companies not only create data exhaust, but as they apply decision sciences, they become consumers of more and more data.

      “Creative leaders can use a broad spectrum of new, technology-enabled options to craft their strategies. These trends are best seen as emerging patterns that can be applied in a wide variety of businesses. Executives should reflect on which patterns may start to reshape their markets and industries next—and on whether they have opportunities to catalyze change and shape the outcome rather than merely react to it.”

      These seem like reasonable trend predictions that are applicable generally and make a lot of sense form a healthcare perspective.

      Is Healthcare Missing a Generational Opportunity?

      I think a lot about some of the new marketing tactics being used by consumer product companies – sponsorship (e.g., McDonalds Holiday Lights at the Beach Presented by Verizon Wireless), advertisements or product placement in video games, corporate tattoos, YouTube videos, MySpace personas, and Second Life avatars. Logically, who cares about most of these for healthcare. The primary users of healthcare are the senior population…and they aren’t being influenced by these channels. The corporate buyers are the HR or benefit professionals…many of whom have professional consultants (e.g., Hewitt, Mercer). Branding is often an afterthought within healthcare.  [Can you image a company working with the reality show Survivor to make sure that one of their competitions earned the winner a personal healthcare coach sponsored by Cigna (for example) for a year?]

      BUT, we all know that health insurance (or any insurance) company is not typically viewed as a trusted entity looking out for your best interest. (As one of my old bosses used to say…how many times are you going out to dinner with your health care broker each year?) I guess my point is why are some of the key players thinking out 20 years and trying to figure out how to influence the younger generation and show healthcare as an entity that works to make their life better (e.g., have a video game where buying health insurance makes your character recover faster from injuries).

      For example, I believe most people have a great impression of architects as humane people based on The Brady Bunch’s depiction of the father figure who was an architect. The lead character in Spike Lee‘s movie, Jungle Fever, was an architect. Have you ever seen a movie where the lead character was the VP of claims at a managed care company or the CEO of a PBM? There needs to be someone out there thinking big picture and looking at what it will take over time to change the perception of healthcare because perception is ultimately reality so we have to address both. Fix the problem and get people to believe that we fixed the problem.

      Do We Eat Our Own Dog Food?

      I don’t know the answer here, but I am sure someone out there does. The question is whether healthcare professionals are bigger utilizers of healthcare services (e.g., MRIs, prescriptions, well visits, etc.). I always want to know that from service providers. If you are selling me a CRM (customer relationship management) application, do you use it? If you selling me financial advice, have you used your own advice to get rich?

      I think back to a prior job where I remember our lawyer telling me that they used anti-depressants, and my boss telling me that she had sleep problems and used drugs to help her sleep. But, in other cases, I know health professionals that will try many other options (e.g., diet, exercise, nutraceuticals) before using prescriptions.

      The reality is that whatever we do it isn’t something that can be extrapolated. We know too much and therefore aren’t a relevant predictor of behavior. Those of us that work in the industry are just too close. The problem is how many products, offerings, services, solutions, etc. are based on what we would want.

      We need that outside-in perspective to tell us what the average person (if such a person existed) or simply a normal person within a micro-niche might do. How would they react? How do they interpret information? What makes sense to them? If I say you have to “renew” your prescription every 12 months, do you know what that means? Does the term GPI or NDC or therapy class mean anything to you? I remember looking at our formulary documents one year which were organized by therapy class (e.g., Non-Sedating Antihistamines, Proton Pump Inhibitors) and all of a sudden realizing that no patient could understand that. We would mail it to them and expect them to know what the alternative drugs were in the class. They didn’t even know how to read the document.

      Medco on CDHC – Support Programs Are Important

      In Managed Healthcare Executive (12/1/07), there is a CDHC (Consumer Driven Healthcare) article by Medco which I found very interesting.

      • A survey by the Employee Benefit Research Institute found that 70% of those in consumer driven healthcare plans consider costs when deciding to see a doctor or fill a prescription (versus 40% in a comprehensive plan). [This seems like the premise of consumer driven healthcare…you will be more careful with the costs of healthcare when they come out of your pocket.]
      • The study also found that people were twice as likely (35% vs. 17%) to avoid, skip, or delay healthcare services. [I’m feeling better so I don’t need to finish taking that prescription or no reason to go for my screening until my cash flow is better…here is the problem.]
      • The problem is compounded as an employer. Not only can your costs go up but you could lose productivity of an employee.
      • The author talks about a 2005 Medco study which showed the medication adherence is associated with significant medical savings (e.g., $1 spent on Rxs for diabetes leads to $7 in medical savings)
      • The article says that the average number of Rxs per household was just more than 21 in 2003. [I have never seen it presented this way. I always use the number of 13.1 Rxs PMPY which is from 2005.]
      • The article talks about RationalMed which is Medco’s patient safety system that looks at integrated data (pharmacy, medical, lab, and patient self-reported). [I think that this type of data integration is critical to healthcare. The challenge is integration of the data and taking action on it. I would also like to know the predictive value of the system compared to other tools such as ActiveHealth.]
      • It points to some data on generic drugs that is great and which was new to me.

      “Generic drugs not only cost substantially less, but they also promote drug compliance. A recent study in The Archives of Internal Medicine found that patients who took a generic drug had close to a 13% increase in drug therapy adherence, compared with patients who took brand name third-tier drugs covered by their plan.”

      • The author goes on to talk about the need to provide patients with information and use tools to drive change. Here were a couple of the points being made:
        • People who used Savings Advisor (an online tool that compares costs) were 60% more likely to switch to a generic.
        • ¾ of people who discussed generics with their MD or pharmacist got a suggestion to use a generic. [I would like to see it for the percentage of people for which a generic was clinically appropriate. Was this 100% of the opportunities or 75% of the opportunities as implied?]
        • Direct mail about generics increased generic conversion by 22% at a savings of $88 per switch per year. [This seems low.]

      CDHC will only be successful when companies have figured out how to empower patients with information rather than simply shifting the burden of financial management to them.

      Bat Phones, Blue Phones, and On-Star

      I was listening to a GM commercial for their OnStar service earlier today, and it made me wonder.  If GM can design a service, staff a call center, and make money in the highly competitive car market, why can’t healthcare?

      Conceptually, it seems like such a great service.  No interactive voice response (IVR)…you actually get to a live agent right away.  You press a button and you are connected…no remembering numbers or having to find the right time to call.  They help you with any issue…rather than route you to some other person for follow-up.

      bat-phone.jpgMany of you will remember the “Bat Phone” from Batman where (if memory serves me) the Commissioner could pick up the phone and be instantly connected with Batman to ask for his help.  We tried a few programs to get at this at Express Scripts.  We worked with BCBS of Massachusetts to pilot the “Blue Phone” which was placed at certain high volume pharmacies and allowed patients to pick up the phone and talk directly to an agent that could address questions about their claim (i.e., why has my copay changed?  why isn’t this drug covered?  the claim got rejected, why?).

      “Customers seem to be willing to use the Blue Phone more each day,” said Jon Hersey, pharmacist at Stop & Shop. “The response from BCBSMA is routinely quick and customers don’t spend a lot of time waiting on the phone. This saves time for us and keeps the customers happy, because we can spend more time filling prescriptions and less time answering questions.”

      The other thing we tried was setting up a tiered customer service model where high utilizers of prescriptions were given a direct dial that took them directly to a group of skilled agents.  Patients loved both the Blue Phone and the tier service model.  The challenge of course is staffing appropriately and managing costs.  BUT, if companies were more proactive in call obviation, they could employ solutions like this.  If companies mined their data to identify when patients would call and reached out to them before they called to address their questions, then inbound call volume would drop dramatically and would be more the exception than the rule.

      DTC Marketing Blog

      I just discovered a blog this morning on DTC (Direct to Consumer) marketing around pharma. I read a few of the posts which seem to provide a good perspective on some of the recent things going on in the industry.

      One that stuck out at me talked about the effectiveness of sales reps.

      75 percent of pharma rep sales calls don’t involve a face-to-face meeting with a doctor, according to research by Leerink Swann & Co.

      I never worked for big pharma doing detailing, but I had a brief chance to try it when I managed a small sales force detailing physicians on generic drugs, mail order, and electronic prescribing.  The reps seemed to have decent access to physicians especially once they built a relationship with the office staff and understood his/her busy times.  Of course, we were bringing a new topic to the table and in some cases were partnering with the local healthplan.

      One of my biggest takeaways from that was that it takes at least 7 times (with the same message) to make an impression.  The physician is so busy and has so much information coming at them that this is a long-term strategy.  I am honestly surprised the industry hasn’t moved to online detailing or even “books-on-tape” type of detailing where the physician can get the information they need at the time they need it.

      It was also interesting that some places were beginning to charge pharma or the reps for  access to the physician.  It would be interesting to really sit back and understand how reps can help physicians improve the safety, adherence, and wellness of their patients.  That is in everyone’s interest assuming the market will bear the correct price for value-added therapies [which I think specialty drugs prove out given their ability to price the drugs at a 10x+ multiple of normal oral solids].

      Missouri Healthcare Discussion

      Last month, there was an article in the St. Louis Business Journal where several industry leaders commented on the future of healthcare for Missourians.  I thought several of the comments were universally relevant.

      The participants were:

      Facts / Comments from the article:

      • If you are living under 300% of the FPL (federal poverty level) and don’t have insurance, you are twice as likely to be admitted to the hospital for an avoidable condition
      • Government is the biggest payor – 10M lives covered as an employer, 40M Medicare lives, 51M Medicaid lives, and 47M uninsured.

      “The tragedy in St. Louis right now is that within the city and parts of the county, we still have third world outcomes.”  [Ron Levy]

      •  70-80% of everything the doctor says isn’t understood by the patient
      • Dr. Lipstein mentioned a few of the BJC websites for the public – and  I scanned the helpforyourhealth site which has some nice features like a ask the pharmacist button where the Q&A is posted for everyone to see.  On the other hand, the myhealthfolders appears to be their own PHR but mostly self-reported information.
      • Dr. Lipstein also talks about the fact that they have evidence that investing in health literacy and promotion, screenings for blood sugar, cholesterol, blood pressure, and BMI, and getting people into programs to manage diseases or risks can lower the costs of healthcare.
      • Dr. Lipstein also says that the Cleveland Clinic won’t hire anyone who smokes anymore and Scott’s gives you six months to quit smoking or you get fired.  (Based on the fact that it costs about $3,400 more per year to employ someone who smokes.)
      • They talk a little about the Danish model of healthcare where primary care physicians are actually paid more than specialists.
      • Dr. Peck talks about the fact that 75% of healthcare costs are from people with chronic disease and many of those could be identified early through risk factors.
      • Ron Levy talks about how 1/3 of the Medicare costs are spent in the last 3-6 months of life.

      It was a good piece.  Healthcare as always is complicated with lots of factors.  The only way to fix things is to understand the correlations, isolate a few factors, and improve them.  I think a lot of solutions get discounted because their is always some reason why they can fail.

      My big takeaway from the discussion was prevention.  We need more education, more screenings, and more wellness activities.  The question is aligning incentives at the patient and payor level to invest in these.

      Generic Biologics

      injection.jpgI mentioned this yesterday in a blog entry about The Right Prescription.  But I found a few things in an AHIP article today:

      •  Biologics are expensive, cutting-edge medical treatments made from living cells
      • $52.7B industry today; projected to grow to $90B by 2009

      “We must focus our efforts on properly managing the costs of biotech drugs to ensure the pharmacy benefit is protected and preserved for the future.”  (Steve Miller, MD, Chief Medical Officer at Express Scripts)

      •  The  say that the top two anemia drugs accounted for 17% of all Medicare Part B carrier spending in 2005.  Two other biologics for cancer and rheumatoid arthritis made up another 3% of Medicare spending.
      • There is lots of discussion going on here at the legislative level to create a pathway for generic biologics to come to market.
      • PCMA estimated $14B in savings over the next 10 years if a pathway is created and Express Scripts estimated $71B in savings.
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