Archive | May, 2009

Medco 2009 Drug Trend Report Part 2

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

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

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


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

Medco Chronic Disease Growth

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

Medco TRC Outcomes

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

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Medco 2009 Drug Trend Report

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

  • Overall trend was 3.3%.  (1.3% excluding specialty drugs.)
  • Specialty trend was 15.8%.
  • Their generic fill rate was 64.1%.
  • Interestingly, they broke out trend to show that clients with over 40% mail use had a trend of -0.7% while those with less than 40% had a trend of 5.8%.
  • I do like the generic distribution chart below although it is for 2008 Q4 while their 64.1% number is for the average of 2008.

Medco GFR Distribution

  • They point out that utilization growth was negative 1.1% last year which was the first time in a decade.  What I was surprised at is that they didn’t “blame” the economy for this.  Most surveys I have seen say or imply that people are taking less medications because of the increasing cost burden while their overall wealth is decreasing.
  • Medicare costs increased 6.8% for their PDP (prescription drug plans).

Medco Medicare Spending 2009 Rpt

  • I think it’s interesting in helping companies focus their management efforts when they project that “in the next 3 years more than 85% of drug trend will be driven by drugs in six categories: cardiovascular, endocrine/
    diabetes, central nervous system, musculoskeletal/rheumatology, respiratory, and oncology”.
  • In a brief section about the unwired state of healthcare, they share some scary statistics:
    • A review involving the medical records of 41 million Medicare patients identified $8.8 billion in error-associated costs and 238,837 preventable deaths. Moreover, a large subset of these errors are medication errors.
    • An estimated 1.5 million preventable serious medication errors occur each year, with $217 billion (2006 dollars) in associated costs.
  • Since people are always asking for quantifiable value around adherence, I liked the chart below which showed the survival rates over years based on adherence vs. non-adherence.

Medco Statin Survival Rates by Adherence

  • They introduce a new metric – Generic Opportunity Score (GOS).  It takes into account both chemical and therapeutic opportunities for generics to be used.
  • They also provide some details on a brand-to-generic $0 copay waiver program which had a 14% success rate.  That’s pretty good from what I have seen.
  • Here is a breakout of the specialty pharmacy categories:

Medco Specialty 2009

  • Now, where they do credit the economy is with improving generic fill rate, mail order utilization, and client’s use of trend management programs.
  • They show trend by age group with the lower age groups growing faster.  They also showed a nice graph of utilization by state.

Medco Geo Distribution 2009

  • Below is their chart on where trend growth in the future is projected to occur (which should tell you where to focus preventative action).

Medco Top Therapy Classes Trend 2009

A Few Medco Updates

First, Medco published their Drug Trend Report for 2009 a few days ago.  I am just starting to read it and will post my comments in the next few days.  [BTW – I am the #1 Google hit if you query “drug trend report”.]

Second, they recently posted a video of Mark Spitz talking about Medco’s website and savings money on prescriptions.

Then, they also presented a few new studies at ISPOR this past week which showed:

  • Asthma patients taking a statin were less likely to have a asthma related hospital or ER visit.
  • Patients with MS (multiple sclerosis) were more adherent when using specialty.

I think I’m going to try to learn more about the MS study.  Did it vary by age, gender, plan design, pharmacy type, stage of disease, etc.

Do Consumers Understand Cost of Individual Insurance?

In a study done by Kelton Research on behalf of eHealthinsurance.com, I found a few interesting data points:

  • 65% of people don’t think they could afford health insurance for more than 6 months if they lost their job.  (Since most Americans live paycheck-to-paycheck, that shouldn’t be surprising.)
  • Only 26% knew that individual health insurance is cheaper than COBRA although COBRA can be a lot less expensive with the Obama subsidiary.
  • 31% think that they would be denied coverage by another plan versus the actual denial rate which is closer to 11%.
  • To stay covered, only about 50% would be willing to spend less on cell phones or cable TV.
  • Only 40% would be willing to pay more than $200/ month.

CareScientific: MythBusters

A few former co-workers and friends of mine (Brenda Motheral and Steve Melnick) have formed a new company called CareScientific.  This is a follow-up to Brenda’s paper a few months ago on Disease Management.  You can now go to their site and see more about what they are doing:

  • Custom program evaluation
  • Provide a proprietary algorithm for selecting cost-effective patients for intervention

They also offer a Disease Management (DM) plausability and VBID plausability calculator to help you assess whether the saving you need are rational expectations.

I had a chance to see them officially launch this a few months ago at a conference.  Here were a few of my notes and some of their slides from the event:

  • To reduce healthcare costs, you can look at pricing, disease management, and utilization management.  If you’re looking at DM, you need to focus on outcomes from both a quality and an ROI perspective.
  • The early models for DM were much more multi-disciplinary.
  • In a recent care coordination project, only 1 in 15 people showed a reduction in hospitalization…none showed an ROI.
  • Hewitt says that less than 40% of plan sponsors are satisfied with DM.
  • In 20 CMS studies, not one has shown an improvement in Rx adherence.
  • Most DM savings are simply regression to the mean.
  • Key things to focus on:
    • Behaviors that save money
    • Improving collaboration – where it matters
    • Rigorous evaluation
    • Determine savings plausability
  • There are 3 concentric circles of focus.  At the middle is cost savings then cost-effective and then clinically appropriate.  Most programs are clinically appropriate, but only 20% show cost savings.

Dependent Eligibility Audits – a final frontier?

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

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

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

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

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

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

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

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

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

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

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


 

Why Does WSJ Villanize CVS Caremark?

I was so annoyed when I read the WSJ this morning about CVS Caremark charging more for members that go outside the CVS store or mail order.  Come on guys.  This is a basic tiered network design.  It’s not unlike tiered formularies or preferred drug lists.

First, it’s a plan design that was created and offered to clients.  Some clients choose it.  That’s not CVS Caremark’s issue.  Anyone could do this and offer it.

Second, what’s different between this an mandatory mail or retail buy-up.  If you choose a higher cost location, you have to pay more.  You’re getting the same drug at a higher cost facility.

What frustrates me the most here is that we will never reform healthcare and drive out costs if people want to have their cake and eat it too.  You think you can have total flexibility and manage costs.  We have to make some hard decisions and push people to drugs, locations, treatments, etc. that offer similar quality at a lower cost.  That’s not going to be easy.

cake

Walgreens 2009 Trend Report

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

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

Their trend numbers were:

  • 5.6% including specialty
  • 4.1% without specialty

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

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

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

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

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

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

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

78.1% of their members take a prescription medication.

Their population had 13.6 Rxs PMPY.

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

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

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

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

Their generic fill rate was 65.6%.

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

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

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

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

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

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

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

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

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

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

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

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

Express Scripts 2009 Drug Trend Report

I always enjoyed being part of the team that put the Drug Trend Report out when I was at Express Scripts from 2001-2006. With that in mind, I do await anxiously to see what new information they will share each year. I will say that the core fundamentals (as always) were very strong in the 2009 report, but I missed not having any client case studies in the document.

They reported drug trend of 1.5% (without specialty) and 3% with specialty.

Specialty drug trend was 15.4%.

Patients paid an average of $12.82 per Rx.

They say that more patients converted to Home Delivery (aka mail order). [I have to check this. My recollection is that mail volume was relatively flat and this would be hard to achieve unless they had more people filling less drugs on average at mail.]

They reported PMPY utilization of 14.32 Rxs.

Their members paid 29% of the generic drug costs; 19.6% of the brand costs; and 22.3% overall for traditional drugs. For specialty drugs, they paid 2.3% (or 20.2% for all drugs including specialty).

They have a section on compliance (which is rapidly becoming a key discussion point in the PBM world). I was a little surprised they didn’t call it adherence which is more common these days. But, they revealed some surprisingly high MPR (medication possession ratio) numbers for antidiabetics, antihypertensives, and lipid-lowering drugs. Considering adherence is where a member has an MPR of greater than 80%, they showed 77%, 83%, and 83% respectively. Since we know that 50% of people (on average) drop therapy within 12-months, this seems improbable on a book-of-business basis. (Maybe I’m just becoming a cynic in my old age.) The only reason I could find to explain this example was that this was not based on new starts (i.e., NRxs) unless they came in the first quarter. Therefore, there might be some selection bias in that they are taking MPR on people that started the year on the medication and may therefore have been people who were more likely to be adherent. I would rather see this done on a rolling 12-month basis.

As I often use, they define waste in the system and give you a potential GFR (generic fill rate) goal for the top therapy classes.

ESI Estimated Savings GFR 2009

Their analysis shows that 55% of the costs for specialty drugs were billed through the medical benefit rather than the pharmacy benefit.

55% of their members are in plans with at least one step therapy module.

They talk about a few studies they have published showing that targeted and framed messages are more effective than general messages. And, that those messages are more effective with mail order users than people at retail.

Again, there might be some selection bias here as people at Home Delivery may simply be more active in managing their healthcare. The other question I have had for a few of my friends there has been whether we are comparing apples-to-apples. Since I ran a few of the programs before I left, I know we did a lot more interventions (web, inbound IVR, outbound calls, messaging on the invoice, letters, POS rejects) than we did for retail (letters and outbound IVR). If they’ve adjusted for that, than this is clear. If not, I would want to see that adjustment made.

As anyone who reads the blog knows, I am a big supporter of the theory behind their Consumerology story. I think Larry Zarin and Bob Nease have done a great job putting together their advisory board, creating case studies, and using behavioral economics. I always talk with our clients about these theories, and our analytics team is constantly helping clients define test plans that use these.

  • Social comparison
  • Hyperbolic discounting
  • Loss aversion

In comparing adherence at retail and mail, one thing that came into my mind was whether a driver of better adherence was a longer time window to refill. Typically, you have a refill-too-soon (RTS) edit in place until 2/3rds of the medication has been used (based on days supply dispensed from dispense date). At retail, that means you have about 10 days. At mail, that means you have about 30 days (less the 7 days for shipping). Does that make a difference?

I was also surprised under the methodology section that they now include rebates in calculating costs. It’s a quick one-line comment but how did that effect trend or other metrics here…and if so, how significantly?

As always, I love the therapy class reviews in the back that give you great numbers like:

  • Cost PMPY
  • # Rxs PMPY
  • Prevalence of Use
  • Average Cost / Rx
  • # Rxs / User / Year

Have a Swine Flu Party?

dancing-pig

I must admit that it never even crossed my mind, and I don’t plan on running out to get infected.  But, I find the debate and discussion very interesting.

In case you have missed it, the NYTimes had an article today about this.  The key concept in question is whether getting the disease today with a potentially milder strain will prevent you from a more dangerous strain which could come later.

“I think it’s totally nuts,” Dr. Moscona said. “I can’t believe people are really thinking of doing it. I understand the thinking, but I just fear we don’t know enough about how this virus would react in every individual. This is like the Middle Ages, when people deliberately infected themselves with smallpox. It’s vigilante vaccination — you know, taking immunity into your own hands.”

The Personalization of Health Care

With genomics and other tools, it seems possible that we could one day see completely personalized health care.  Of course, the immediate reaction will be won’t this mess up risk pools.  [I am sure there is someone smarter than me that will figure out how to make that piece work.]

What I see is the following:

  • Understanding personality types would allow patients to be matched to providers.
  • Genetic testing would allow for better predictive models on what individuals with need in terms of coverage.
  • Genetic testing will allow for the creation of personalized medicine.
  • Better predictive models will allow for better care plans and preventative medicine.
  • More transparency will allow people to make better decisions (e.g., calories displayed at restaurants).
  • Ubiquitous technology will integrate health decision making into everyday processes and tools.
  • Technology will allow companies to develop personalized, targeted communications that are based on patient preferences, historical responses, personality type, and experience to drive healthy behaviors.

Could we eventually get to the point where each of us had an adaptive plan that covered different things as we grew older and constantly optimized our care team or medical neighborhood based on our needs?

Of course, the risk comes when the models are wrong, but if you applied some of the chaos theory logic to a traditional modeling strategy and the current underwriting programs, who knows?

Not something for the next few years, but something I was noodling on the other day.

CVS Caremark TrendsRx Report 2009

This is one of my favorite times of year. After working on the Drug Trend Report at Express Scripts for several years, I love to get all the trend reports from the PBMs and read them. The first one that I have had a chance to review is the one from CVS Caremark. I found it an easy to read document with good case studies and a mix of strategy and tactics.

Here are some of my highlights and observations:

  • 3 out of 4 clients cited “reducing health care costs” as their primary measure of PBM success…AND 2 out of 3 prioritized “plan participant behavior change” as the way to reach that goal. [Maybe the plan design bigot is finally dead.]
  • With pharmacy spend approaching $1,000 PMPY, I found their chart on potential cost reduction a simple way of pointing people to things they should think about.
    cvs_caremark_savings-opportunities-09
  • A 10% improvement in diabetes adherence can save $2,000 in annual health care costs. [I assume this is based on improving MPR and would definitely like to learn more on how the health care costs are quantified.]
  • They layout three objectives – improve use of lower cost drugs, improve adherence, and get people to take better care of their health. [Similar to the concept I laid out in my white paper of needing to be broader than just Rx benefit management.]
  • They talk about two of their solutions:
    • Consumer Engagement Engine (CEE) which is very similar to what Silverlink does and provides business logic for targeting the right member at the right time with the right message.

      consumer-engagement-engine

    • Proactive Pharmacy Care is their “medical neighborhood” concept to stitch together their entities – Mail Order, CVS retail, Specialty, MinuteClinic, and their disease management company.
  • Their trend was 3.9% PMPM in 2008 (or 2.8% excluding specialty drugs).
  • Medicare Part D utilization was up 4.1% compared to 0.8% for the rest of their BOB (book of business).
  • Their GDR (generic dispensing rate) averaged 65.1% for 2008 and was 66.3% in December 2008.
    • Best in class employers = 68.2%
    • Best in class health plans = 73.4%
  • As they remind you, a 1% increase in GDR is roughly equal to a 1% reduction in pharmacy spend.
    • [What I would like to see is improvements in GDR from new drugs coming to market in 2008 versus improvements that came from clients implementing plan design.]
  • They say [which I preach all the time} – “proactive consumer engagement improves results and lowers the risk of disruption. For best results, provide personalized actionable information at a range of touchpoints.”
  • I saw a few interesting things in one of the case studies they share about their “Generous Generics” program. [Does that name get used with consumers? What’s their reaction to it?]
    • $0 generic copay at mail [that should drive volume]
    • 10% coinsurance penalty for not shifting to mail after the second fill [similar in concept (I believe) to the Medco “retail buy-up” concept]
  • Top Ten Therapeutic categories (53% of spend):
    • Antihyperlipidemics
    • Ulcer drugs
    • Antidiabetics
    • Antidepressants
    • Antiasthmatics
    • Antihypertensives
    • Analgesics, Anti-inflamatory
    • Anticonvulsants
    • Analgesics, Opioid
    • Endocrine and Metabolic Agents
  • They state that the population of diagnosed diabetics is growing by roughly 1M a year.
  • They state that a generic for Lipitor is now expected in Q4 2011 [which I think is about a year later than originally expected]
  • They show some data from their Maintenance Choice program which I think has a lot of opportunity.
    • This is where you can get a 90-day Rx from either mail or a CVS store for the same copay. [The key here is for them to understand member profitability and for CVS Caremark to understand how to drive consumers to the preferred channel.]
    • [I would really need to understand their profitability by channel because if I read the chart in here right, it would appear that given the choice 45% of those at mail would choose 90-day at retail…a scary concept for mail order pharmacy.]
      maintenance-choice
  • They give a case on Maintenance Choice which leaves me looking for a key fact. They state that a recent implementation has a goal of 70% of the client’s day’s supply will go through the preferred network (CVS) or mail and that 20% of it goes through mail today. [What percentage goes through CVS today? If it’s a client in Boston, that one scenario. If it’s a client in Chicago, that would be another feat.]
  • Specialty pharmacy trend was 13.5%.
  • They say that pharmacogenomic testing is being used more frequently for specialty drugs. [I would love to know more…how often? For what drugs? Has it improved outcomes? Are their clients covering it? How are they playing in this space?]
  • They talk about adherence which continues to be one of the hottest areas in the Rx arena today. They give stats showing 15-48% improvement across different metrics and up to $142 in cost avoidance in one case. [Are these again control groups? What was the cost / benefit analysis or ROI? Is this improvement in average MPR (Medication Possession Ratio) or improvement in the % of people with an MPR of >80%?]
  • They talk about 88% of heart failure patients maintaining optimal prescription adherence compared to a norm of less than 50%. [My questions here (which isn’t apparent) is whether this was an opt-in program so the 88% is for engaged and active participants or whether it was across all targeted members.]
  • They provide a quick list of factors that will impact drug trend:
    • Driving costs:
      • Aging
      • Obesity
      • Diabetes
      • Specialty pipeline
      • More aggressive treatment guidelines and earlier diagnosis [which hopefully would lower total healthcare costs]
      • DTC advertising
    • Reducing costs:
      • Economy – reduced utilization and improved GDR
      • Increased availability of generics
      • FDA safety reform
      • Lackluster non-specialty drug pipeline
      • Utilization and formulary management
      • Consumer price transparency

Replacing the “Plan Design Bigot”

In my whitepaper, I talked about the fact that plan design as a tool for managing trend is “dying”. There isn’t room to shift more cost to the consumer. PBMs and plans have to actually activate consumers and get them to take preventative action and cost saving actions.

There are still plenty of people out there that I will call “plan design bigots”. They believe that the only way to drive behavior is to implement plan design – limit the formulary, change copays, put in utilization management programs, implement POS edits. Those things work…don’t get me wrong. But, if that was all there was to it, this would be easy. It isn’t.

You have to find ways to engage the consumer, get them to care, and get them to take action.

I would layout 3 challenges:

  1. Cutting through the “noise” or “communication clutter” that people have in their lives.
  2. Delivering personalized information (right message, right time, right channel).
  3. Getting them to act (AND sustaining that action over time).

Just look at adherence. Reducing copays to $0 improves adherence, but only about 5-10%.

Life In A Six Word World

A friend of mine just formed a new group in LinkedIn which I found interesting…”Life in a Six Word World“.

From the group description: A friend recently asked if I could describe myself in 6 words. I couldn’t… Could you? Could you describe your business value in 6 words? Well in our new Twitter society you just may have too. This group is about sharing your Six Word “whatever” as well as asking for help and discussing how communication is changing.

I am not sure I can come up with one, but here are some:

  • Overall: Enjoying Life.  Love Family.  Work’s Great.
  • Work: Learning.  Doing.  Planning.  Innovating.  Challenging.  Enjoying.
  • Personal: Love Kids & Spouse.  Crazy Relaxing.

Teachable Moments

In the world of communications, there is a lot of information out there.  And, it continues to grow.  Consumers are overwhelmed today…and that’s not going to stop.

I have been talking a lot lately with people on how to find the “teachable moments”.  If you are communicating with someone and want them to take action around their healthcare – continue to fill a medication, use the 24/7 nurse line, move to a generic drug, you have to catch them when they are willing to take action.

This is completely different from the parallel conversation around behavioral economics and how to figure out what information will motivate them to act.

Here, the question is when are they willing to be “taught” or “influenced”.  For example, if I tell you that Lipitor is not on formulary but you don’t take Lipitor, you probably don’t care.  Six months later when you get diagnosed with high cholesterol and your MD writes a prescription for Lipitor, you won’t remember.  

We have to identify when people are open to new information and time things to communicate with them at that point.  

Do you understand how your patients / members receive information?  Do you understand their lifecycle of interactions with you?  Do you understand how and when they take action?  I always like to use the “outside-in” framework for analyzing and problem solving things from the patient point-of-view.  

HINT: Stop thinking like a person who works in healthcare.  You will not solve this problem using yourself as an example of “normal”.

Hint On Avoiding H1N1 (Swine) Flu

WASH YOUR HANDS!!!

purell_hand_sanitizer

(Note: This is not meant to be a product endorsement for Purell.)

Communication Strategy Regarding H1N1 (Swine) Flu

“There is a lot of media, a lot of news, a lot of rumor – the sooner you can get correct and accurate information to consumers, the better – otherwise people will look to other sources that may not always be accurate.”  (Jan Berger, President of Health Intelligence Partners on podcast)

We have been hearing a few things from our clients and have put some information up on the Silverlink website.  Some of the comments have been:

  1. I have seen a spike in call center volume about this topic.
  2. Clients want to change plan design to make sure Relenza and Tamiflu are covered and don’t require a prior authorization or have a quantity level limit on them.
  3. We want to proactively reach out to at risk populations – children, seniors, or people with a compromised immune system.
  4. We want to be able to flexibly target certain geographies.
  5. We want to remind people not to panic, drive them to quality information sources, and make sure they know the basics – wash your hands.

At a minimum, everyone is adding information to their websites.  Many consumers are Googling the topic or following updates from @CDCEmergency (on Twitter).

Healthplans, PBMs, and population health companies are at the heart of this.  They need a coordinated strategy to inform people appropriately as this issue continues to be top of mind.

We recorded a podcast last night with the Medical Director from Healthwise and Jan Berger who is the former Chief Medical Officer from CVS Caremark and is now president of Health Intelligence Partners.  In here, they answer some general questions about the situation and what companies should be doing to educate members.

The two standard solutions Silverlink is offering clients are:

  1. Offer an inbound FAQ (Frequently Asked Questions) line with CDC content and specifics about their plans.  This can help with overflow from their call center and/or be used as a direct line from their website or outbound communications.
  2. Selectively target populations (age, zip code, disease state) with a brief message reminding them to wash their hands and telling them where to get qualified information.

As with all our communications offerings, these can be customized (messaging, channel, targeting, etc.) to meet client requirements.  Additionally, since one of our technology advantages over others in the space is our flexibility, we can work with clients to keep these messages up-to-date as the situation changes and as new information has to be added.

Swine Flu (H1N1) Continues To Top News

(picture from http://www.myfox8.com/lifestyle/health/la-sciw-swine-masks28-2009apr28,0,4461177.story)

It’s amazing how this has dominated traditional media and blown away the online media.

I few things that stick out for me:

One of my favorite pictures that goes right to the health literacy issue is the following.

NOTE: This is not what H1N1 flu is about…hence the dropping of the “swine flu” term.

(picture from http://cuteoverload.com/)


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