Archive | April, 2009

Shoddy Reporting – “10 Things Your Pharmacist Won’t Tell You”

While I am usually a big Smart Money fan, I think this article is over the top. It’s sensationalist. It pulls random criminal examples and makes them sound normal. I’m not a pharmacist but I was offended for my friends that are.

Here are their points with my comments in brackets.

  1. I’m overworked and stressed out [Who isn’t these days? Maybe part of health reform should look at the right staffing levels for health professionals and put an hour maximum on them like airline pilots or truck drivers.]…note that there were 3.8B Rxs filled in 2007.
  2. …which means I’m more error-prone [more than what…I would bet technology has improved the error rate compared to the past. But, a 1% error rate would mean 38M errors per year. The question of course is errors that leave the pharmacy. The bigger issue is finding time for them to counsel patients where there would be a final safety check and discussion around the medication to minimize patient errors.]
  3. I don’t understand all my merchandise [Isn’t this what technology is for? With 10,000+ drugs today plus all the over-the-counter drugs, this is an impossible task. And, the article complains about their ability to catch OTC interactions…well that’s pretty hard when they aren’t tracked. A great opportunity for PHRs.]
  4. My drug-swapping could make you sick [While the article says it’s fine “most of the time”, it sounds like they are talking about NTI (narrow therapeutic index) drugs which aren’t switched by many pharmacists that I know. It’s a short list of drugs and probably less than 1% of the prescribed medications in the US. Talking about causing unnecessary worry…someone must have gotten their information from a brand pharma rep.]
  5. Frankly, your private records aren’t all that private [Come on. First they talk about drug companies sponsoring programs. So what…they don’t get patient data. The only way they know who uses their drug is when consumers sign up on their websites for coupons or to receive information. Then, the article goes on to talk about electronic records and electronic prescribing. That’s a very safe process with lots of protection. Don’t make people afraid of the future.
  6. I can be pretty sneaky sometimes [I am sure this is true in every profession, but they talk about some old issues like charging more than the copay or having a higher cash price than a NEGOTIATED price from your insurer. And, buying and selling samples…that would be illegal so I’m pretty sure that’s not a “common” practice.]
  7. Paying out-of-pocket? The price of your prescription just went up. [Yes. Nothing new here. It’s the same issue in medical costs. So, go somewhere else. I’m not saying it’s right to gouge someone, but costs vary and stores have a right to charge a different price.]
  8. The medication is stale [Here they quote a case from 1991. Nothing more recent than a criminal from the early 90s.]
  9. I don’t just sell drugs. I make them. [Here they talk about compounding which I think is a really small percentage of the time. I have never heard of a pharmacist compounding a drug that they could take off the shelf and give to a patient.]
  10. You can get any prescription you like online. [I don’t get their point here. If you have a prescription, you can use the Internet to order refills from your pharmacy (in many cases). There are lots of legitimate online stores for OTC products.]
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New Terms – ShyPod, Tweetup

There is always new “slang” popping up, but it seems to happen more lately (or I’m just getting old). Here are a few things from an article in Delta Sky Magazine (April 09) and today’s USA Today.

  1. Blackberry Jam – delay caused by a person walking slowly, nose glued to PDA.
  2. Defaced – deleted from someone’s list of Facebook “friends”.
  3. Designated Texter – someone who receives and responds to the driver’s text messages to ensure passenger safety.
  4. Kthxbi (OK – Thanks – Bye) – Fast end to an online conversation that going nowhere.
  5. ShyPod – Someone who won’t share his or her iPod for fear of being exposed as a disco/country/Neil Diamon lover.
  6. Hashtag – users can disclose the topic of their tweet by prefixing a word with a hash symbol (#health).
  7. Tweet – a short update of 140 characters or more.
  8. Tweetup – when Twitter users meet face-to-face.
  9. Following – when you receive someone tweets, you are considered their follower.

Who’s Killing Independent Pharmacy?

This is a great question.

  1. Has it been the big mail order pharmacies?
  2. Has it been the PBM’s and their negotiating leverage?
  3. Was the final straw Medicare Part D and the loss of the cash patient?
  4. Is it other retail chains and their operating efficiencies?
  5. Was it just a natural evolution?
  6. Is it the fact that money isn’t made on the Rx anymore but on the candy bars and soda?
  7. Is it technology and the capital investments required?

Here is a quote from Jennifer Luddy, spokeswoman for Medco Health Solutions, (from AIS Drug Benefit News):

“The facts show that it is not mail-order [pharmacy], but rather chain pharmacies that are presenting a threat to independent pharmacies. According to national data from the pharmacy industry itself, for every independent pharmacy that closes, 25 chain and big-box retail pharmacies open.”

Healthcare Entities in the Fortune 500

I always find it interesting to see who the largest healthcare companies are in the annual Fortune 500 list. Here they are:

  • McKesson #15
  • Cardinal #18
  • CVS Caremark #19
  • UnitedHealth Group #21
  • AmerisourceBergen #26
  • Johnson & Johnson #29
  • Wellpoint #32
  • Walgreens #36
  • Medco Health Solutions #45
  • Pfizer #46
  • Aetna #77
  • Abbott Laboratories #80
  • Humana #85
  • HCA #88
  • Merck #103
  • Wyeth #110
  • Express Scripts #115
  • Bristol-Myers Squibb #120
  • Eli Lilly #122
  • Cigna #132
  • Schering-Plough #138
  • HealthNet #165
  • Amgen #168
  • Medtronic #196
  • Baxter International #219
  • Coventry Healthcare #226
  • Community Health Systems #243
  • Tenet Healthcare #283
  • Boston Scientific #320
  • Owens & Minor #339
  • Quest Diagnostics #341
  • Becton Dickinson #347
  • Stryker #375
  • Wellcare Health Plans #381
  • Henry Schein #389
  • Omnicare #392
  • Davita #433
  • Gilead Sciences #444
  • Mylan #462
  • Universal Health Services #467
  • Universal American #494

If you look at the lists of best investments or most bank for the buck, the company that appears the most is Express Scripts (ESRX).

Communication Evolution

I was thinking this morning about how communications evolve. Here are a few examples from the past few years:

1. Caller-ID replacing voicemail.
2. E-mails replacing memos (and getting much longer).
3. SMS and Twitter replacing e-mail.
4. Scanning replacing faxing.
5. Facebook replacing online photo albums.
6. Evite replacing invitations (with mixed success).
7. Twitter beginning to replace news clipping services.
8. Craigslist replacing newpaper listings.
9. Websites replacing brochures.
10. Virtual conferences eroding attendance at physical conferences.

To “Tweet” Or Not To Tweet – Wrong Question

I have been a skeptic (and am changing my tune), but for all of you out there that think “what can I share in 140 characters”, I suggest you frame the question differently.

Ask – Should I have a Twitter account?

Even if you don’t want to tweet about yourself, you should have a Twitter account to serve as a news feed. As I saw from the WHCC 2009 and the Health 2.0/Ix Therapy conference, you can learn a lot by using Twitter simply to follow people. And, with more and more companies jumping on board, it’s a great way to keep up with information.

If you find the right reporters, news sources, companies, and bloggers, you can use this as a news summary of relevant events.

(Obviously, I am not the only one struggling with this as another media as evidenced by Josh Seidman’s post the other day.)

Mayo Clinic On Using Twitter

This is a good presentation on using Twitter, etiquette, etc. For more on Twitter in Healthcare from Mayo Clinic, you can go here.

7 Points in 7 Minutes

In looking at the Ix Therapy blog about the conference they just had with Health 2.0, I found this note which I found very interesting…

  • James Hereford made 7 fabulous points in 7 minutes about building Ix into the delivery system:
    • You have to deliver what patients want (doesn’t matter how cool the technology is).
    • It has to make sense for clinicians from a clinical perspective.
    • It has to make sense for from a clinical workflow perspective.
    • Focus processes on the value proposition for the patient (I may have mangled this one a bit).
    • Information needs to be common, ubiquitous, and well-designed.
    • Health care is all about trust; whatever we do needs to enhance trust in the patient-provider relationship.
    • Incentives are critical.

    Gov Leavitt On Gov’t Trojan Horse For Healthcare

    In a piece that was posted on the AmericaSpeakOn.org website this morning and which I heard Governor Leavitt talk through last night, he lays out some of the illusions that we have around government run healthcare and reminds us that Medicare isn’t a model to emulate (in case you didn’t know that).  A few of the quotes from the piece:

    • Advocates of government-run health care suffer under the illusion that Medicare operates more efficiently than the private sector.
    • The efficiency of a health-care system isn’t measured by the volume of checks it issues, but the value it generates.  Medicare’s uncoordinated, quality-indifferent, more-more-more structure is moving it rapidly toward bankruptcy, and taking our nation with it.
    • Since 1970, the cost of these flagship government-run health-care programs has risen more than two-and-a-half times as much as the cost of all other health care in the United States, the vast majority of which is run by the private sector.
    • Medicare’s budget is projected to double within ten years, topping $1 trillion annually.  The number of workers per beneficiary will soon drop from almost four to just over two and a half.
    • This is like treating chronic obesity with a perpetual regimen of double calories.
    • Inevitably, government-run systems cut costs by cutting access to services.

    There is another answer.  The government needs to promote value — to empower consumers to pursue the highest-quality care at the lowest-possible prices.  Strong government action is needed to organize an efficient market where consumers can choose insurance plans and medical practitioners who offer the best value.  What is not needed is to replace the private market with a government-run system in which only the truly rich have a choice.

    One Universal Mail Facility

    Given the market trends and the over-capacity of mail, could we ever see one facility that served everyone?  It would be an interesting play.  I think the evolution would be to allow all the existing mail facilities into the network (i.e., Express Scripts mail could serve Medco members and vice-versa).  That would force consolidation and really put everyone in a competition around cost-to-fill and customer service.

    Economically, it seems very logical to come down to a few high-volume facilities that filled all the automated scripts.

    I guess the other play would be that mail just became a central fill for retail and every Rx was picked up locally but the majority were filled centrally and shipped for pick-up.

    Neither are likely in the near future, but interesting models to debate.

    postman

    Pharma Rx Costs Tied To Outcomes

    Given our opinion that the PBM industry would be moving to more outcome based pricing, the articles today about Merck and Cigna‘s deal on pricing based on outcomes is very timely.  I “tweeted” about it early in the AM, but I have got the article sent to me by a lot of people.  So, here are a few of the things being said:

    WSJ Blog

    Now Merck and Cigna have announced what they’re calling a “performance-based contract” for Merck’s diabetes drug Januvia. But the deal is actually the reverse the pay-for-performance ideal: Merck will get paid less per pill, not more, if the drug works well.

    Under the deal, Cigna will get a discount on the drug if patients’ blood sugar falls. Cigna will get additional discounts if patients faithfully take the drug when they’re supposed to. (These two variables often go together — taking the drug faithfully helps keep blood sugar down.)

    Cigna PR

    “Merck should be recognized as the first major pharmaceutical company to offer increased discounts on its oral anti-diabetic products, supporting CIGNA’s efforts to reduce A1C levels for individuals with diabetes, regardless of what medication they may be taking,” said Eric Elliott, president of CIGNA Pharmacy Management. “Improving people’s health comes first for both CIGNA and Merck. We hope this agreement will become a model in the industry.”

    So…it seems like an aligned deal.  Merck and Cigna want adherence.  Employers want lower costs and better outcomes.

    Want To Stay Up To Date

    If you’re interested in staying up to date, but you don’t go out to the blog every day, you can sign up to receive e-mails with any updates.  I am also continuing to find some use for short information updates via Twitter.

    Consumers Don’t Care About Wellness

    Here’s a good provacative quote from Forrester…are all the wellness efforts doomed or are incentives the minimum requirement to play?

    “Health plans keep saying that they have to improve consumer engagement and that one of the best ways to do this is by engaging them in wellness initiatives. The data tell me that consumers don’t care about wellness. Employers do. But while most employees may hear the [wellness] message, they also ignore it….”

    — Carl Doty, VP and research director at Forrester Research, told AIS’s INSIDE CONSUMER-DIRECTED CARE.

    Whitepaper: The Future of the PBM (Pharmacy)

    As we have been working with a lot of PBMs over the past year, the question has come up many times – “where do you see the industry going?” After bouncing some ideas off a few of you, we have pulled together a whitepaper with the Silverlink Communications perspective. Certainly, each area of the whitepaper could have been its own chapter, but rather than turn this into a thesis, we are publishing it.

    As I have said in a few recent articles including the one in HCPro, I think the Express Scripts acquisition of NextRx will likely accelerate a few of our predictions here.

    The executive summary of the whitepaper is below. The final whitepaper is available here.

    I would welcome any comments you have…

    Executive Summary

    In the next several years, we believe that three changes will drive the pharmacy marketplace and ultimately change the business model for PBMs. These changes will be accelerated by the current financial crisis which may drive further consolidation in the short-term. Consolidation which we believe will accelerate the “race to the bottom” where the traditional model of scale has been maxed out with parity achieved among the large PBMs.

    1. The need to better engage the consumer in understanding their benefits and ultimately responsibility for their care;
    2. The effort to automate and integrate data across a fragmented system and across siloed organizations; and
    3. The shift from trend management to being responsible for outcomes.

    Consumer Engagement
    The industry-wide movement to consumerism will continue to affect plan design, but it will also thrust PBMs and pharmacies into the critical path of member engagement. With pharmacy being the most used benefit as well as the volume and accessibility of retail pharmacies, they will play a critical role in driving adherence and helping consumers understand healthcare. This will renew the focus on cognitive skills, medication therapy management and ultimately drive the desire for a more traditional “corner store” approach that can be scaled using technology.

    Combining this with the macro-economic forces that are driving ubiquity of technology through mobile media and the evolution of the Internet from a pull media to a push media will also challenge the PBMs and pharmacies to innovate. They will be required to look outside of healthcare models to identify the right communications to drive behavior. PBM’s and pharmacies will have to leverage behavioral economics and personalization technology to get the right message to the right consumer at the right time through the right medium.
    Automation and Integration
    The consumer engagement challenges will only exasperate some ongoing challenges within the PBM and pharmacy community. This will include the lack of staff to provide more cognitive services and the general fragmentation of data across organizations and functional silos. Figuring out an overall “single view of the patient” which shows all the touch points and offers a coordinated multi-channel strategy for inbound and outbound communications will become a major focus.

    In addition, in order to make these solutions efficient, the development of predictive models, much like the clinical and underwriting solutions being used today, will become the norm across the industry. As these models are fine tuned and the promise of e-prescribing becomes more of a reality, the channel for engaging physicians in the member’s care will finally exist. PBMs and pharmacies will be able to use data to allow physicians to understand when patients aren’t being compliant and when there is an opportunity to drive change.

    From Trend Management to Outcomes
    The traditional business model for the PBMs has been based on large scale negotiations to drive rebates and efficiencies within mail service – cost to fill and acquisition costs. At the same time as those efficiencies reach a maximum discount, the traditional tools for managing trend will have run their course. Although plan design won’t “die”, comparative effectiveness may reduce (or eliminate) the need for formularies, and in general, the ability to shift cost to the consumer above the 25-30% level will be difficult.

    Both of these challenges will push the PBMs and pharmacies into a role where they are focused on driving health outcomes and being part of the bigger solution across the industry. They have a strong footprint to drive this change and as theranostics (or personalized medicine) evolves there will be an opportunity to find cost effective solutions to change the prescription landscape.

    Promotion vs. Nudging vs. Mandatory Mail

    Although there is always a dialogue about the lifecycle of mail order, I think some of the work out of the Consumerology group at Express Scripts is interesting.  The frameworks that they apply internally are very similar to the technology and approach that Silverlink uses with the rest of the market.  [Kudos to Sean Donnelly and Bob Nease for their work on this new approach.]

    The traditional ways of driving mail order have been:

    • Over a copay incentive (and hope)
    • Letter and calls encouraging member to convert
    • Providing a call center to facilitate the conversion to mail (from an inbound call or from a transfer on an automated outbound call)
    • Mandatory mail – requiring the member to use mail or pay the full cash price for the drug
    • Retail buy-up – allowing the member to keep getting the maintenance drug at retail (after 2 fills typically) but requiring them to pay a penalty for choosing a higher cost channel

    Now, “Select Home Delivery” uses the 401K approach of opt-out vs. opt-in to drive participation.  As behavioral economics would suggest, inertia will carry the momentum and by getting the member signed up in mail and moving them to mail will drive success versus requiring them to take an action. The idea here is to “nudge” the member versus force them or leave it up to them to take action.

    Select Home Delivery optimizes the use of cost-saving Home Delivery, requiring members to opt out of the program rather than the traditional approach of requiring members to opt in.  The program is based on the psychological principle of hyperbolic discounting, which says immediate events (for example, the hassles of signing up for Home Delivery) loom large compared to downstream benefits (such as a lower overall copayment and receiving a 90-day supply).  Dr. David Laibson, an economics professor at Harvard and member of the Center’s advisory board, conducted research showing that applying this principle to 401(k) programs dramatically improved participation rates.

    “Opt-out and active decision programs for 401(k) enrollment dramatically improved low employee participation rates. We wanted to explore whether these tools could also solve healthcare challenges,” Laibson said. “This is one of the first marketplace adaptations that successfully applies behavioral economics to improve healthcare.”  [quotes from Consumerology blog]

    I think the new results from their blog (below) are impressive.  [BTW – If you’re a member at Lowe’s or another client which has used this, I would love to hear your reactions.]

    select-home-delivery

    Express Scripts Outcomes Conference Begins

    As with each annual Outcomes conference, Express Scripts (ESRX) has released their annual trend numbers. Here are a few of the highlights from the press release:

    • Overall pharmacy trend = 3.0% (down from 5.5% in 2007)
    • Estimate consumers and employers are paying $42B too much in 13 therapy classes by not optimizing generics.
    • On average, a generic drug is over $90 cheaper than a brand name drug.
    • Generic drug usage increased by 7.5 percent, while utilization of brand name medications decreased 11 percent.
    • 67.3 percent of all prescriptions that Express Scripts filled were for generic drugs by the end of 2008. [I didn’t like the comparison which was an average across the 12 months ending in Sept 2008 from IMS of 63.7%…not apples to apples.]
    • In 2009, at least 20 branded drugs are expected to become available generically.
    • Over the next five years, more than $66 billion worth of branded drugs are expected to lose patent exclusivity.

    “Using generic drugs that are safe and effective can help lower costs while still driving value for patients and employers,” said Steven Miller, MD, senior vice president and chief medical officer at Express Scripts. “Our results indicate that cost control is achievable through careful management of appropriate use of drugs and delivery channels, without shifting costs to consumers. Although the trend is the lowest it has been in over a decade, significant opportunity to lower spending still exists.”

    “Finding ways to reduce spending without compromising health outcomes is the top priority for healthcare reform, as the Obama administration recognizes,” said Alan Garber, MD, PhD, Henry J. Kaiser Professor and director of the Center for Health Policy at Stanford University. “We have long used financial incentives to try to eliminate waste. Now we’re finding that tools that build upon the insights of behavioral economics and psychology can have powerful, positive effects.”

    “In today’s economy, we are not only tracking wasteful spending across the country but developing strategies to reduce it,” said George Paz, chief executive officer at Express Scripts. “By applying the principles of behavioral economics we are helping consumers make better and more cost-effective healthcare decisions. We understand we cannot eliminate waste alone and we are committed to working alongside likeminded organizations, such as the Federal Coordinating Council for Comparative Effectiveness Research, to continue to identify strategies to improve our healthcare system.”

    “Studies have repeatedly shown that people work much harder to avoid losses than to pursue gains,” said Bob Nease, PhD, the company’s chief scientist. “This suggests that a ‘stop wasting money’ message is more effective than a message focused on potential savings. In addition, by applying evidence-based segmentation, we have practical insight into which members are likely to be most sensitive to loss aversion. One size does not fit all.”

    The Innovator’s Prescription – Christensen Book

    I haven’t had the chance to read the book yet, but for those of you interested, I thought I would point you to the review from a few months ago on The Health Care Blog.

    The book is mistitled. It should have been titled “The Innovator’s Diagnosis”. The book does a fantastic job at diagnosis (Dx) of problems in the U.S. health care system. It presents many new, innovative analytical frameworks and lenses through which to view the U.S. health system.

    However, it’s weak on prescription (Rx): many of the proposed solutions are speculative, ungrounded, and/or defy political reality.

    Waxman at the AMA

    I am finally catching up on some notes from Rep. Henry Waxman (D-CA) when he spoke to the AMA in March 2009.  (From “The Pink Sheet”, March 16, 2009, pg. 27)

    “We all know we have to get costs under control, but the way to do that is not to tell physicians what they can and cannot do or put them in a position where they cannot put the needs of their patient first.”

    “I am not interested in trying to put a public plan in place that would drive out competition.  I believe we must have a significant role for private insurers.  We must allow them a fair opportunity to compete.”

    “We have to reward quality and outcomes, not just reward volume.”

    The $40B HealthCare Opportunity Around Retention

    It’s obvious to anyone close to it, but harder to align the goals to take advantage of it.  With people “aging-out” from group plans to Medicare and people leaving their employer coverage to go to the individual market, managed care has a huge opportunity to retain that business by providing them a transition path.  According to McKinsey (and from what we see), that’s generally not happening.

    A few facts from their report:

    • 68 percent of all members aged 60 to 64 have never been approached by their current insurers to discuss retirement options.
    • more than 80 percent of respondents aged 60 to 64 said they would consider purchasing an individual product from their current carrier if they left their jobs or retired.
    • Only 33 percent of 60- to 64-year-olds thought that their insurers offered Medicare products, for example, when in fact almost all major carriers do.

    It’s also a simple economic problem.  They are less expensive to retain and convert while their a member than once they are on the open market.  You may even save on broker fees.  Developing a data driven approach to create timely and personalized communications along with a service to transition them should be a priority.

    mckinsey-conversion-opp

    Tipping Point for eRx

    David Snow said that Medco had achieved over 10% of Rxs being electronic a few months ago.  Now Walgreens put out a press release that in March they had 15% of all their Rxs sent in electronically.  Perhaps we are reaching the “tipping point”.

    Walgreens pharmacies filled 3.1 million electronic prescriptions in March, a 211% increase over the same period a year ago. Still, that represents only about 15% of all eligible prescriptions.

    Walgreens estimates it will fill more than 40 million electronic prescriptions in 2009, compared with 15 million last year.

    Upcoming Book By George Halvorson From Kaiser

    I had the privledge of previewing George Halvorson‘s new book “Health Care Will Not Reform Itself” this week.  My book cover quote would go something like this:

    “Opinions supported by facts all wrapped up in a narrative.  It’s like a fireside chat with one of the greatest leaders in healthcare.”

    I won’t pull things from the book yet, but I found it a logical follow-up to his other book “Health Care Reform Now! A Prescription For Change“.  He talks about the need for bold goals and a clear set of metrics to drive change.  He talks about why healthcare costs go up and the fact that we need universal coverage.  And, he also hits on what seems to be the key theme of the day – reducing costs while improving outcomes.

    While I was at the WHCC09, I got to sit down with George Halvorson and talk about healthcare for an hour.  It was a great privledge that I enjoyed a lot, and I could have talked for hours.  We hit on a bunch of topics so let me share some of them.

    • We talked about him writing books.  I was commenting on how much I like his writing style and was intrigued to learn that he said some professors don’t like using his books because they’re “too easy to read”.
    • We had a fascinating discussion around leadership and diversity and how he has created a very diverse leadership team at Kaiser.  I was also impressed to hear that one member of team does an international fellowship each year where they spend time abroad learning about how healthcare is delivered and managed in other countries.  [very progressive]
    • We talked about how healthcare was going to change.  He spent a lot of time on the need to create aggressive goals especially around the 10-20% of things that drive 80% of the costs.  For example, he asked why we don’t try to reduce asthma attacks or congestive heart failure by 90%.  And, he pointed out the fact that we don’t have a common set of goals that allows enterprises to reverse engineer the process and identify points of variance.  Without that process analysis and a specific goal, it is hard to drive improvements.

    “We need to change our expectations of what is possible.”

    • We talked a little bit about where innovation will come from.  He talked about how Deming, a statistician, revolutionized manufacturing as a lead into the point that innovation will likely come from outside the industry.  [I think this is interesting as I have seen more and more executives at healthcare companies that are coming from outside of healthcare.  I also think things like the X-Prize may attract others to try their ideas.]
    • He gave some great examples of how Kaiser has deployed their 30 black belts.  The one I quickly jotted down had to do with how nurses change shifts.  This shift change is where all the information was exchanged about different patients and when accidents sometimes happened.  By changing the process, they dropped the accident rate and reduced the communication time from 40 minutes per shift to 12 minutes per shift.
    • We also talked about HIT (Healthcare Information Technology) and the need not only to drive utilization but to mandate system integration.  This tied in with an earlier conversation where we spoke about coordinated care versus uncoordinated care and the need to create a “virtual Kaiser”.  I think there is a lot to learn from the Kaiser model and some of the things they are doing with technology to drive care.  [I was pleasantly surprised that he believes physicians will embrace technology as a tool to help them standardize care.  I think that is critical path to successfully reducing costs while improving outcomes.]
    • I couldn’t jot down all the statistics fast enough, but he talked about how they were testing different “panel systems” in different geographies to see what the best process and technology solution would be.  They had had some great results.  [One fact he shared that jumped out at me was that 25% of people over 65 that break a bone die within a year.]
    • The last thing we talked about was probably the most insightful to me.  Given the amount of money spent in the last months of people’s lives, I was interested in his global perspective on whether that was a cultural issue.  He said that he thinks it is mostly that the care system in the US lacks honesty or the ability to be brutally honest.  We talked about one scenario where people who do nothing live an average of 140 days and those that get invasive surgery live an average of 100 days…but they are hoping to be that 1 in a 1,000 that live an extra year.  [Is it worth all that pain, surgery, and medicine for the last few months?]  We also talked about the new $100,000 breast surgery drug which extends the patient’s life on average for 1 month.  [Again, is that an appropriate use of money?  Would we spend it if it came out of our pockets?]

    When the book comes out, I will try to pull out some of the key points, but I would recommend you pick it up and read it for yourself.  I think you will really enjoy it.

    WHCC 09 Interview with Ed Batchelor (Humana)

    I had an opportunity to sit down with Ed Batchelor from Humana yesterday.  He has an interesting role driving the Stay Smart / Stay Healthy program for them as part of his Corporate Web Strategy role.  From what I could tell, it’s a program done for the greater good of educating consumers about key healthcare topics.  To accomplish that, Ed has a direct reporting relationship to the operating committee at Humana and was brought in from outside the industry.

    Here is an example of one of the videos that they are pushing out on YouTube.  I really like the whiteboard communication approach.

    Some of the big takeaways from my discussion were:

    1. You have to meet the consumers where they are – Facebook, YouTube, Blogs.
    2. If you create a neutral educational message, consumers will trust information (even from health plans).
    3. You can only deliver information in “bits”.  Don’t overwhelm them.
    4. Fun is good.
    5. Regardless of what many (including myself) might think, seniors don’t all shy away from these social media.  [20% of the 1.1M views on YouTube have been from people over 55 years old]
    6. Success on YouTube doesn’t translate to blogs.

    One question that I had was how to get away from the “healthcare speak” so that consumers could actually understand it.  He talked about 3 things:

    1. Bringing in an external person
    2. Using focus groups
    3. Using an outside agency

    The other thing we talked about is that pull through that they are getting around employers and brokers.  They are pulling the videos in (like here) and re-using them.

    This was a program they were highlighting in their booth and one of the public areas here so I appreciated the opportunity to sit down and learn more.

    So…Google Was Indicative

    I talked earlier about Google searches relative to the NextRx sale.  In the 3 days before the acquisition was announced, the majority of the searches (by far) that I could see and brought people to my site were about Express Scripts (or ESRX) and Wellpoint (or NextRx).  So, I am not sure if that was PR people looking for things to respond to or insiders doing some analysis, but it seems like Google searches could tell us something.

    Again…the power of data.  Now, if I was a stock trader and had access to all of the Google search data, perhaps I would have a way to beat the market.

    Keynote Sessions at the 6th Annual WHCC

     

     

    Well, it’s hard to do any “real-time” blogging with no plug for my laptop and no Internet access. I’m glad I actually began to try Twitter the other day. Here were the quick Twitter updates that I threw out there. To see all the “tweets” about the conference, you can go here (#whcc09).

    1. Information transparency is a waste of time if you don’t have choices. #whcc0927 minutes ago from txt
    2. Audience smiled less, gets less sleep, and less happy via gallup well-being survey done before event. #whcc0931 minutes ago from txt
    3. India $14 pmpy hc costs. #whcc09about 1 hour ago from txt
    4. Consumer reports rolling out safety and effectiveness comparisons to site tonight. Could be big deal and big first step. #whcc09 about 1 hour ago from txt
    5. #whcc09 highest selection on data to disclose is providing information on comparing mds (via audience poll). about 1 hour ago from txt
    6. Are consumers really willing to trade convenience for savings and broader coverage? Not real til it affects me. about 1 hour ago from txt
    7. #whcc09 healthcare is either engine for growth or anchor about 2 hours ago from txt
    8. #whcc09 ceo of kelly svcs says surveys show that greatest issue to starting company is access to hc about 2 hours ago from txt
    9. #whcc09 – ceo of wpt just said they sold nextrx to esrx as a way to lower costs. True in economy of scale perspective. What about coor about 2 hours ago from txt
    10. #whcc09 only 10% of audience believe costs will be managed with legislation in 10 years. About 50% skeptical. about 2 hours ago from txt
    11. #whcc09 – reform w/o public plan an option if meet admin’s 8 objectives. about 3 hours ago from txt
    12. #whcc09 – MA connector has 80% of purchases online in under 25 minutes. Will broker model die? about 3 hours ago from txt
    13. #whcc09 person from MA connector – waste is someone else’s income – one challenge. Their trend is only 5%. Not bad. about 3 hours ago from txt
    14. #whcc09 bs of ca ceo – hc is a right. Can’t achieve coverage w/o controlling costs. Involve constituents more often. about 3 hours ago from txt
    15. #whcc09 good speaker from administration…laid out principles…no secret sauce…costs, quality, coverage about 3 hours ago from txt

     

    These are my notes from the sessions. As time allows, I will work on some “stories”, but I thought I would share this.

    Dr. Hughes from the Obama administration:

    • HC costs are “crushing the budgets” of families and government
    • Businesses finding it difficult to maintain coverage and be competitive internationally
    • HC reform not just a moral imperative but an economic imperative (Obama says)
    • Not whether every American deserves coverage but how we get there
    • How we get there
      • Expand coverage
      • Prevention and expansion of public health
    • Hosting of localized healthcare session – 9,000 volunteers; 30,000 participants; 4,000 reports
      • Very similar findings
      • Affordable, high-quality coverage
    • CHIP plan
    • American Recovery and XXX Act
      • Billions for research and other health priorities
        • $19B to modernize system w/ HIT
        • $1.1B comparative effectiveness
        • $1B Prevention
        • $2B Community Health Centers
        • $500M for health workforce training and education
      • $87B to states for Medicaid and CHIP
        • Protect 20M Americans
      • HC tax cut of 65% for COBRA
        • 7M Americans
    • $630B healthcare reserve fund for next 10 years
      • 50/50 by increasing revenue and cutting costs
        • Tax the rich
      • Reduce overpayments to MA
      • Reduce drug prices
        • Expanding access to generics
        • Follow-on biologics
      • Medicare / Medicaid payment accuracy
      • Improving care for those that have been hospitalized
        • 1/5 Medicaid rehospitalized w/I 30 days
      • Align incentives for quality not just quantity of services
      • LT investment
    • No written plan…approaching with open mind to collaboration
    • President has endorsed 8 principles
      • Protect family health
      • Affordable
      • Prevention
      • Quality and safety
      • Portability
      • Choice of MDs
      • No pre-existing conditions
      • End LT health cost growth for business

    Bruce Bodaken – CEO of BS California

    • Lessons learned from failed CA experiment
    • Principles:
      • Healthcare is a right (can’t turn a blind eye)
      • Can’t achieve coverage w/o controlling costs
    • Been working on CA legislation since 2002
    • Need to touch base w/ constituents more often
    • Need unions and business in lock-step
    • May not want to take this all on at once [big bang vs. incrementalism]
    • Can’t be globally competitive w/o addressing cost issue
    • The right time to see this happen…”capture the moment”
    • Change happens when things are up in the air

    John Kingsdale – MA Health Connector

    • Moral challenge that the country has to win
    • Passed 198-2 in MA (across both houses)
    • Bit of genius to how they did it
      • Bit off what they could chew
      • Almost universal (2.6% uninsured)
      • Universal insurance in Europe is closer to 1% uninsured
    • Costs no more worse than CA and other places
    • Didn’t worsen costs (5% annual trend)
    • Didn’t do radical attack on costs…health care reform 2
    • Pay ~600% more than industrialized countries for administration of health
    • Pay ~300% more per day in hospital than other countries
    • “Waste is someone else’s income”
    • Moving away from fee for service model
    • How does the federal government do it in depth of recession?
      • Premium increases still going up 10% while in recession / depression…how is that possible.
    • Connector
      • Educate and inform buyer
      • Put forth high value option
      • Facilitate comparison for “shopping”
    • Connector can create a modern way to distribute health insurance…but this will threaten some of the existing players [i.e., brokers]
      • Should be all online
    • 80% of their purchases are online in 20-25 minutes

     

    Q&A:

    • Need for bi-partisan support. What’s president’s perspective – important or will he ram it through?
      • Wants bi-partisan support.
      • President will do what he has to do to get it passed.
    • One of the big elements of discussion is having a big public plan. Does it drive private plans out of business? Don’t take away from what people have. How does administration think it will play out?
      • There are lots of good plans out there. Administration open to change / discussion. Plan doesn’t have to have public plan if it meets his 8 objectives.
      • Having regulation w/ teeth important. Risk pool vs. head-to-head competition.
      • Proposals for single payor in CA has failed multiple times.
      • Need to do something other than putting ½ T business out of business

     

    Audience Polls:

    • Believe legislation will be passed
    • 50% believe we will make marginal progress in next 10 years
    • ~ 50% feel that cost mgmt unlikely
    • 40/40/20 audience split btwn republican/democrat/independent

     

     

    Second Session – Facilitated by Vanessa Fuhrmans (WSJ)

    Health and Money

    Angela Braly (WPT), Carl Camden (CEO of Kelly Services), and Mark McClellan (Brookings Institute)

     

    Audience Poll: 42% believe individuals should pay the most for HC

     

    Angela:

    • Jeopardy question ” what does WPT provide to 1 in 9 americans?” answer was life insurance which was wrong
    • Needs to be a game-changer.
      • Need solution for uninsured
      • Don’t think gov’t plan is the right answer
      • Think need to make changes in individual market
      • Enforceable
      • Reward healthy behavior
      • Guaranteed issue
      • Focus on cost and quality
    • Sold PBM since it’s a way to drive to lower cost

     

    Poll – what % of 17M adults going to MD will receive recommended course of care – 55%

     

    CEO of Kelly Svcs

    • 26% of workforce is “free agent”
    • Expected to grow dramatically
    • The group that produces the most new business start-ups
    • US falling behind others in start-ups per 1,000
    • Greatest impediment to starting business in US survey is access to HC
    • Total costs of employment in US is driving move to offshore
    • Question should we where jobs are growing vs. whether companies moving offshore

     

    Mark McClellan:

    • HC can be engine for growth or anchor
      • Is spending getting more or due to inefficiencies?
        • Life expectancy goes up 1 year per decade
    • Have to change the system not just buy more people into the current system
    • Lots of examples of getting much more with less
      • Cleveland Clinic
      • Geisinger
    • Key steps:
      • Major emphasis on measuring quality and cost
        • Consistent, meaningful, patient level, outcome based
      • Create accountability in payment systems and benefit systems

     

    Audience Poll – Do you support reforms to the current payment system – 82% support major reform.

     

    Audience Poll – Do you support reforms to the current delivery system – 84% support major reform.

     

    Audience Poll – Would you still support if it affected access to your md, policies and cost – 67% yes. [this is a major variance from public response]

     

    Angela – Private insurers will take proactive role in driving healthcare payment reform. Aligning reimbursement w/ outcomes may be the result. Compensating for prevention is important.

     

    Mark – Lots of worry about comparative effectiveness being over simplified and mis-applied.

    Mark – Need to focus on value in HC.

    Angela was asked the “tough” question on why hasn’t healthcare reformed itself. I thought she had a great answer…”because people want convenience”. Members don’t want to have smaller networks or restricted access. They want everything, but at a lower cost. [Not a likely scenario.]

    Selling NextRx to Express Scripts

    I was hoping I might get a chance to sit down with Angela Braly (CEO at Wellpoint) at the WHCC 2009 in DC to talk about the sale they announced yesterday NextRx to Express Scripts).  I think it’s a very logical decision, and I think they got a good price.  For my old team at ESI, there is a huge opportunity for them to drive mail volume.

    In her keynote discussion this morning, she briefly mentioned the sale saying that they sold it to help lower healthcare costs.  While I completely agree in the short-term (i.e., rebate contracting, network negotiations), I remain mixed in my long-term view.

    I talked briefly with Les Masterson about this yesterday for the article he just published – “PBM Sale Highlights Dilemna for Health Plans“.  I do expect this will push for the development of a new business model which will highlight automation, member engagement, and a greater role in driving outcomes.

    George Van Antwerp, vice president, solutions strategy, at Silverlink Communications, Inc., in Burlington, MA, says health plans can benefit from having their own PBMs if they use them properly.

    “I think that it’s beneficial to plans to own their own PBM if they can integrate data and create a better member experience; make the tradeoff between increased pharmacy spend and lower medical loss ratio; and manage to get most of the economies of scale in terms of operations and negotiation. That has proven hard to do within health plans, and therefore, there will be short-term interest in capitalizing on the valuation of the PBM business,” says Van Antwerp.

    With three large PBMs left after the pending purchase, Van Antwerp says the trio will “race to the bottom in terms of negotiating scale leverage.” Van Antwerp predicts the remaining PBMs will ultimately try to differentiate themselves by offering healthcare management through member engagement, greater transparency, and a renewed focus on health outcomes.

    Podcast on Saving Money in Pharmacy

    Les Masterson from HealthLeaders Media posted an audio recording of a conversation we had a few weeks ago about how plans should save money by driving mail, generics, and programs like pill splitting.

    Express Scripts (ESRX) buys NextRx from Wellpoint

    Express Scripts is buying NextRx from Wellpoint (press release).  Key points:

    • $4.675 B
    • 10 year deal w/ Wellpoint
    • 25M lives
    • 265M adjusted Rxs managed annually

    This makes them bigger than CVS Caremark and almost as big as Medco in terms of Rx volume.  The challenge will be whether these lives stay with Express Scripts when they come up for renewal or not.  Just having a deal with Wellpoint doesn’t require them to stay.  (I hope they have an earn out tied to retained lives.)

    BTW – This is almost at the top of the $1-$5B range which will bring anyone else contemplating selling their PBM to the table.

    Here is the mention with script counts from the WSJ Blog.

    Giving Twitter One More Try

    I have not been a big fan of Twitter from the perspective of using it to provide a reality show on my life.  And, I have struggled a little to find the productive use of it as a business tool.  Blogging has fit much better.  That being said, I see it being used so much more by people so I am going to give it one more try.  I have a few ideas on how to use it.  I have added my feed to the blog page on the right, and I am going to give it a month to see if it is interesting or not.

    Medicaid Communications

    Interested in hearing more about this topic.  You can hear Margot Walthall from my team talking about this on an upcoming webinar.

    The Medicaid Communications Lifecycle:  From Onboarding through Redetermination
    April 28, 2009 | 1:00 PM ET | 10:00 AM PT

    Introducing your Medicaid members to your plan’s benefits as well as their responsibilities is critical to developing a successful member / health plan relationship. Sustaining positive impressions over the course of the member’s eligibility is equally important to retaining Medicaid members.

    Silverlink has developed a broad set of communications outreach programs that have yielded strong results for Medicaid and CHIP populations. Join us for this complimentary webinar where we will explore how Silverlink can help you cost-efficiently support:

    • The Medicaid onboarding process with welcome/HRA outreach
    • Targeted messages about health screenings to drive HEDIS results
    • Communications approaches that can reduce health disparities
    • Effective methods for educating members about the redetermination process that can inspire loyalty

    Register Here

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