Archive | September, 2009

“Insights” Gone Wrong

There is a great “cartoon” at the end of the recent Fast Company magazine that gives an example of how using information can lead you to a wrong decision.  It’s one of the reasons that I always point out the difference between someone who has provided services to an industry and someone who has worked in an industry.  It’s not the same.  Sometimes, you need to truly understand the nuances and how decisions are made.

It also made me think of a great Facebook example of how using social connections can lead to bad business decisions.  Given all the talk about making peer-to-peer recommendations based on your social network, this is a slippery slope to watch.  We are still new to this area and mistakes will happen.  One of the bigger ones that I have heard occurred in Facebook where they allowed advertisers to use member’s pictures.  Well, how do you think people felt when they saw the advertisements that say “Meet Singles In Your Neighborhood” with a picture of their spouse.  It didn’t go over well.

Great idea.  Interesting technology.  Bad application.

This will happen in healthcare.  The question is who will be first to stub their toe in the new world.

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Mail Order Pharmacy – Good or Bad (Two Surveys)

I love when two parties (both with their own agenda) publish data that clearly shows that they are right.  Now, in this case, one quotes a 3rd party so I do give them more credibility.  And, the other (as I will show below) seems to not take the patient’s responsibility in mind.

First, PCMA (Pharmaceutical Care Management Association) publishes research from JD Power on pharmacy satisfaction.  It shows that insured and non-insured patients are generally satisfied with their pharmacy experience.  Mail order clearly came out on top of all types of pharmacies.  (Given that only 12% of people know the name of their pharmacist, I would expect them to be more closely clustered together.)

The J.D. Power and Associates study measured customer satisfaction with the pharmacy experience across major national retail drug store chains, mass merchandisers and supermarket stores, and mail-order channels. The study examines seven factors that contribute to consumer satisfaction with brick-and-mortar pharmacies and five factors that determine satisfaction with mail-order pharmacies. The average overall satisfaction index for each of the pharmacy distribution channels were:

  • Mail-order pharmacies: 834
  • Supermarket pharmacies: 820
  • Mass merchandiser pharmacies: 801
  • Retail chain pharmacies: 798

Then (no big surprise here) NCPA (National Community Pharmacy Association) puts out a survey of 400 patients showing how dissatisfied they are with mail order.

  • They are unhappy being forced to use a lower cost pharmacy.  (GVA – get used to it as part of healthcare reform)
  • They complain that their prescriptions don’t arrive on time (which could impact adherence).  (GVA – did they call in time or wait for the last minute…were they adherent to begin with)
  • They complain about their medications changing (i.e., titrating to a different strength).  (GVA – they shouldn’t move to mail until they’ve stabilized and any mandatory plan I’ve ever seen required at least 2 months as the same strength before requiring movement to mail)
  • They complain about getting different medications than what they ordered.  (GVA – I bet most of that was people getting the chemically equivalent generic.)

This isn’t something that will easily get solved.  The FUD (fear, uncertainty, and doubt) out there rules in many cases and statistical anomolies are what get discussed.  I would love to compare complaint rates, error rates, and satisfaction for patients that use both channels (retail and mail).

Mail Order Retention (or Churn)

It is fascinating how life comes full circle.  I remember when I worked on the Sprint Data Warehousing project back in the 90’s.  At the time, it was the first 1 terrabyte warehouse being built, and we were using some very cool technology from Microstrategy which offered the first web-based DSS (decision support system).  One of the key components of the reporting solution and business driver model we created was churn (or retention).  You can look at it either way.

But, this is a classic example of focusing on the right metric and that you have to measure what matters (to throw out a few oldies but goodies).  Retention is a pretty new concept within the pharmacy world especially within mail order pharmacy.  Growth has been pretty constant for the past decade until the past 18 months.  Now, everyone is trying to figure out what’s happening and why.

  • Are people going to Wal-Mart and paying cash?  (Or other similar card programs at Walgreen’s and CVS?)
  • Are people simply filling less prescriptions?
  • Are people skipping doses and doing other things to stretch out their prescriptions?
  • Are people trying over-the-counter medications or using samples?

There are lots of questions that matter here.  And, you have to think through the mail order process.  How do patients experience it?  Why do they leave?  There’s lot of research that’s been done by the different PBMs here.

I had a chance to talk with Drug Benefit News about this the other day.  You can read the story here.  Here’s a piece of what we discussed:

Depending on the payer, mail-order customer retention rates vary from 75% to 95%, according to Van Antwerp. “Very few people left because of service issues,” he explains. “The majority left because of refill issues. They got to the point where they forgot to refill an important medication and couldn’t get it within a 24-hour time period…or it was up for renewal and they needed to get the next prescription written.”

To address that, some PBMs are working to develop better refill-reminder programs, including moving some customers to auto-refill, Van Antwerp says. “When you look at refill patterns, some people chronically refill too early so they hit that ‘refill too soon’ reject ,” he explains. “Others chronically refill too late.”

“Secondarily, we look at the channel that they’re using to fill,” he adds. “Some people still mail in their refill via ‘snail mail.’ Others use IVR [i.e., an interactive voice-response system].” His firm is working with some PBMs to help them understand each enrollee’s historical behavior, and then customize a response that helps improve mail-order retention while moving the member to the lowest-cost channel for ordering refills — either IVR or the member portal, Van Antwerp says.

Why Wellness Matters

I’ve had an intense month so I’m hoping to catch up on my big pile of blogging ideas this week.  We’ll see.

Here’s one I pulled the other day.  I liked this graphic from MVP Healthcare in their corporate profile.

MVP Wellness Stats

It hammers home all the key points – regression to the mean, focus on the high cost individuals, and cost is avoidable if you focus on preventation and education and successfully engage the consumer.

Where’s the Mail Pharmacy Price Matching?

Given that people are leaving mail order pharmacy to go to places like Wal-Mart for $4 generics (which only applies to 300 of 10,000 drugs), I would think that mail pharmacy would employ a consumer pricing tactic like price matching.  Of course this is really hard due to plan designs and runs counter to everything the industry has done before, but it is a simple message.

Why is Wal-Mart (and others) getting people to leave their pharmacies (retail and mail)?  KISS (Keep It Simple Stupid)  They have an easy message “Get a 30-day supply for $4 or a 90-day supply for $10”.  It’s not this complicated message about formulary, copay, deductibles, percentage of costs, etc. 

So, why not respond in kind with a simple message like “We’ll meet any price you find at any other pharmacy for a similar quantity of drugs”.  Just a thought.

New Inc. 500/5000 Healthcare List

I always find the Inc. 500 (or 5,000) list interesting.  It shows you up and coming companies.  It can also show you some trends.  Well, if you sort the latest list by health care, you come up with 328 results. 

Here’s a screenshot of the top companies listed.  I’ll be the first to admit that I haven’t heard of many companies on this first page other than MedVantx at the top of the list.

Inc 500 2009 Healthcare


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