Archive | October, 2009

Health Plans vs. Drugmakers: The Battle Over Copay Subsidies

Register today for …

Health Plans vs. Drugmakers:
The Battle Over Copay Subsidies

An Audioconference

Thursday, November 5, 2009

1:00 – 2:30 Eastern time

As more generic drugs eat into drugmaker profits from blockbuster medications, pharmaceutical manufacturers are using copayment subsidy programs to target patients with commercial insurance. Their strategy of paying the copays for members who take top-tier brand-name drugs, instead of less expensive generics, is drawing drugmakers into conflicts with health plans, and putting some patients in harm’s way as well.

  • How do these programs interfere with efforts by payers and PBMs to move patients to generics?
  • How much are they costing health plans?
  • How much risk are they creating for patients who may now have incentives to take less healthy medications?
  • What strategies are payers now using to fight back?

Dial in on Nov. 5 to hear Michael Cartier, chief clinical officer at Twinsburg, Ohio-based PBM Envision Pharmaceutical Services, Inc., and George Van Antwerp, general manager of pharmacy solutions at Silverlink Communications, Inc., provide valuable insights and practical advice on how health plans can track and counteract copay subsidy programs. You’ll get all the details on strategies you can design and implement immediately, including:

  • What types of drugs do copay subsidy programs target, and how do they work?
  • What is the impact on drug dispensing rates?
  • What are the differences between copay subsidy programs targeting specialty drugs versus those for other medications — and how should health plans respond?
  • How can health plans ensure that copay subsidy programs don’t compromise patient safety?
  • How can payers use step therapy, generic promotion and other programs to target classes that subsidies are focused on?
  • How can adjustments to tier structures make copay subsidies less attractive?
  • What operational issues must be considered when implementing such a tiered structure adjustment?

To register at a special discounted price or for more information, please visit or call 800-521-4323.

Telling The World Your Status

Will the habit of “status updates” be a good thing for healthcare?  We are encouraged to keep food journals, to track medication, to track facts about our conditions, and to report on many other aspects of our life.  Those things can be very helpful for patients in their discussions with their physicians.

So, as people increasingly become used to track and reporting what their doing, will that make it more normal to track these healthcare statistics?

Here’s some recent facts from a Pew report on Twitter and Status Updating:

  • 19% of Internet users now do some type of status reporting
  • The more devices you own (laptop, Internet enabled phone, Kindle) the more likely you are to update your status…39% of those with four devices.
  • The average age of people using the following (and trend versus last year):

Waiting In Line For Flu Shots



Over the weekend, we went to get flu shots.  I was amazed at how many people showed up.  The flu shot clinic was supposed to open at 9am.  We got there at 8:30 to a line of at least 100 people.  Fortunately, they opened early and we got out by 9:00, but as we left there was a line of several hundred people out the door and down the sidewalk.  Amazing!

I saw a story on the news earlier showing a 3-hour line to get H1N1 shots in Michigan.  This is out of control.

Generational Differences On Health Reform

I heard it today from CNN and then separately from an analyst who covers Medicare.  They both were talking about the differences in support for health reform based on age.

The CNN reporter and interviewee were talking about how seniors see health reform as taking away from Medicare and are therefore not supportive.  Seniors are generally happy with what they have.  On the flipside, they were saying that younger people are skeptical that there will be a system there to support them so they want health reform.

It’s interesting since that was different than the research that the analyst shared with me.  She said that they found that seniors were from the generation that was saved by the government during the depression, and they trust the government.  On the flipside, she said that they found that those about to be seniors were from the generation that felt the government let them down in Vietnam and have little trust in a government solution. 

I think it just points to the need to understand the consumer and drive messaging that appeals to their different backgrounds.  Politics has done this for years.  Consumer products have done this for years.  Healthcare is now focused on it.  This is just another example of why it’s important.

What Does Your State Say About Your Health

Forbes recently had an article about the most medicated states.  There has always been wide variation which is the key point here.  Some of this is attibuted to health and some of it to physician behavior. 

  • First, let me point out a flaw.  The author assumes that 7% of claims are mail and aren’t meaningful.  Well, you have to adjust that by days supply which means its more like 18-20% of volume which is meaningful.
  • Second, I think it’d be interesting to include OTC (over-the-counter) information here especially with things like Claritin and Prilosec going OTC in the past 5 years.
  • Third, I think the following quote from the article is very scary.

“Heightened awareness of certain drugs and conditions may be another explanation. In 2005, pharmaceutical companies spent $122 million on direct-to-consumer antidepressant advertising–almost four times what they spent in 1999. A 2005 study in JAMA found that 55% of participants who requested a brand-name drug received an antidepressant; only 10% of patients who had similar symptoms but made no request received an antidepressant.”

There is also another study out that ranks states – Commonwealth Fund State Scorecard on Health System Performance.

“Where you live matters for how long you live and how healthy you live”  (Cathy Schoen, VP, Commonwealth Fund)

State Health Rankings

Average Employee Healthcare Out-of-Pocket $1,938 (2010e)

In an article “It’s Health Enrollment Time” (10/6/09, USAToday), Hewitt is quoted as projecting that employee’s healthcare costs will increase by 10% in 2010 moving their costs up to $1,938.  The article also takes about 3 things you should expect:

  1. Continued movement to co-insurance versus co-payments. 
  2. More high-deductible plans.
  3. More dependent audits. (i.e., looking for kids that have graduated or others than can no longer be called dependents)

Consumer Preferences

The concept of preference-based marketing has been around for a long-time and continues to become a hotter issue especially in healthcare.  The challenge, of course, is balancing what consumers know they want versus what they actually use.  Ask anyone if they want an automated call, and the immediate answer is no.  People think about those annoying “robo-calls” that use text-to-speech (TTS), have a pause when you pick up the phone, and are not personalized at.

On the flipside, look at the data and outcomes which intelligence, voice-based call systems produce…it’s amazing.  People pick up the phone.  People interact with the technology.  And, the calls are highly personalized.

But, we are at an interesting crossroads about companies beginning to think thru and capture information about you.  Do you want to be called at home or on your mobile phone?  When is it okay to text you?  What communications should come in print versus e-mail?

“Just 32% of marketing decision-makers surveyed in July 2009 said they knew how their customers behaved across channels, and only 37% were aware of consumers’ channel preferences.”  (ExactTarget 2009 Channel Preferences Survey)

The survey also showed changes in channel choice.

Change in preferences

Written format used

Top Drivers of Health Care Costs 2010

A recent Managed Healthcare Executive article (Oct 2009) provides survey data from 650 people at health plans, PBMs, disease management companies, and hospitals.  [As a side note, I was really surprised at how far off this group’s estimates were relative to the impact of prescription costs…which are generally in the 10-12% of total healthcare costs.]

Top Drivers of Cost 2010

Another survey I found interesting in the article was why health plans are perceived as dishonest.

Why Healthplans Perceived DishonestAnother part of the survey had 7.8% of people saying that patients (consumers) are less interested in health and that the primary reasons for lack of engagement were:

Barriers to mbr engagement

Americans Don’t Expect Healthcare Changes To Be Positive

In the latest poll by USA Today and Gallup, the majority of people expect health care legislation to either have no change or make things worse.  (A $1T for neutral would be a problem.)

Here are the results from four questions:

  1. Quality of health care you and your family receive.  [19% get better; 40% no change; 39% get worse]
  2. Health care coverage you and your family receive.  [20% get better; 40% no change; 37% get worse]
  3. Insurance company requirements you have to meet to get certain treatments covered.  [25% get better; 25% no change; 46% get worse]
  4. Cost you and your family pay for health care.  [22% get better; 27% no change; 49% get worse]

Get Ready To Pay More For Healthcare

As expected, employers are going to push more cost to employees (those lucky to still have coverage) in 2010.  Everyone should have been expecting this.  In an article on, a consultant from Watson Wyatt predicts 10-20% increased cost.  A consultant from Mercer says the catch phrase will be “taking responsibility”.

If anything, this should help Obama and health reform.  Having a huge cost burden pushed to you in one of the worse economies will force people to make tougher decisions and could have a negative impact on overall health.  Additionally, it will push more people into high-deductible plans which require more transparency around cost and quality which while better these days still isn’t there for the masses.

broken piggy bank

Oncology Specialty Spend Hits 5% (Medco)

A few weeks ago, Medco Health Solutions released some compelling (or scary) statistics on oncology spend:

  • Equals 5% of overall prescription costs
  • Grew at rate of 15.1% last year (trailing only autoimmune and multiple sclerosis within specialty drug spend)
  • Expected sales to be $80B by 2012
  • More than 800 drugs in the pipeline
  • 1.48M new diagnoses expected in 2009
  • Costs are typically more than $20,000 for a 12-week therapy and sometimes $10,000 per month

The good news is that people are living longer with the American Cancer Society saying that the 5-year survival rate is up to 66% for all cancers (1996-2004) versus 50% (1975-1977).

BUT, the treatments have lots of side effects which is creating an ancillary market around “supportive care therapies” to manage the side effects.  (Drugs to treat drugs…I understand it but it still seems wrong.)

Will Paying You To Be Adherent Matter

It’s an interesting question.  If I pay you $30 to take your medications every month, will you be more likely to actually take them or will you be more likely to tell me that you took them?  I was talking to someone about their program yesterday, and a lot of it comes down to measurement.  If, for example, I get paid if I open the pill bottle every day and that data is stored somewhere, I’m surely going to open it regardless of whether I take the drug.  (At least I think that’s what human nature would do.)

13 of Top 50 Jobs in Healthcare

guy kicking

CNNMoney published a survey on the Top 50 Jobs.  It looks at median pay, top pay, 10-year growth rate, total current employment, flexibility, benefit to society, personal satisfaction, and stress.

Of those 50 jobs, 13 of them are health related:

2 – Physician Assistant

4 – Nurse Practitioner

7 – Physical Therapist

11 – Anesthesiologist

13 – Pharmacist

14 – Occupational Therapist

15 – Nurse Anesthetist

19 – Physician / General Practice

22 – Physician / Ob-Gyn

23 – Clinical Psychologist

24 – Psychiatrist

25 – Veternarian

44 – Pharmaceutical Sales Rep (I thought this job was disappearing)

80% From Mandatory Mail – No Way

A PBM executive called me last week to ask about some information they got from one of the big strategy firms.  The PBM is trying to improve their mail order utilization.  They strategy firm said that 80% of mail order utilization is from mandatory mail…PLEASE.  I almost choked since I know the cost of that bad advice was more than they paid us last year to do some of these programs.  I was happy to help them understand the basic dynamics of how to encourage consumers to chose mail order and what factors contribute to utilization.

Wrong Way

Blog Link – Who’s Paying To Kill Health Reform

As those of you that read this blog know, I certainly support reform, but I disagree with the approach the administration is taking.  That being said, I liked this graphic that I found on the Campaign For America’s Future blog.  Whether it’s true or not, I have no idea.  [But, it gives me a good list of companies to whom I might want to send donations!]

Who Paying To Kill Health Reform

Where Does Your Health Insurance Dollar Go?

I like this nice simple image for this.


1, 2, 3 of picking benefits

In the November 2009 Time magazine, they suggest three things you should do when picking benefits:

  1. Don’t just default to your current plan.  Spend the time to compare copays, premiums, deductibles, and estimate out-of-pocket costs.  [too bad most plans don’t give us an easy to use model of what you would have spent last year under the different plan options]  They also suggest opening a HSA (Health Savings Account) if you go with a high deductible plan.
  2. Fund your FSA (Flexible Spending Account).  They estimate that you save $350 for every $1,000 you deposit (and use).
  3. Test your wellness.  Many employers (and health plans) offer different forms or tools to test your wellness and health.  You should know the results and you may even get paid to do it.

Do You Have An Ethical Responsibility To Your Benefits?

In a recent Time magazine article around donating money, the author makes an interesting point.  He says that if you donate a small amount to a charity, but remain on their mailing list, you may actually cost them money.  They will call you and send you letters asking for money for years.  It poses (indirectly) an interesting question – “do you have an ethical responsibility to remove yourself from their mailing list?”

I think most of us would argue that they shouldn’t keep mailing us unless we opt-in.

But, it made me think about how people use their benefits.  If you’re offered $100 to take a Health Risk Assessment (HRA), but you know that you won’t change anything, is that ok?  If you buy an expensive medicine and know you won’t be adherent to the medication, you’re wasting money…is that ok?

Assuming there is some shared pool of resources that your employer funds for healthcare, what is your ethical responsibility for how that money is allocated?  Generally, they are going to want to spend as much money on prevention that they can…to improve your health.  BUT, everyone hates to spend money which they know is wasted.

Twitter Experiments

I’ve been playing with this medium now for a while.  While I was originally a skeptic, I’m becoming a convert.  Here’s a few things I’ve tried recently:

  1. Following a conference virtually.  Today, I’m flying into SFO for the Health 2.0 conferenceAmerican Airlines offers WiFi on the plane so I can use the hashtag #health2con to follow postings from other Twitterers and stay up-to-date before I get there (late).
  2. Reporting a service issue.  I tried doing this with my satellite TV provider (DirectTV) who has a twitter account, but I didn’t get a reply.  Probably not surprising.
  3. Finding info.  I’ve done this a few times with mixed results.  I think it depends a lot upon your number of followers and the time of day you post.

Patient Choice in Health IT

If you don’t follow Susannah Fox‘s research and presentations, you should.  She works for the Pew Internet and American Life Project.  Here is a recent post about a recent presentation on Patient Choice in Health Information Technology (HIT).  Just pulling a few facts from it…

Our surveys find that the internet is increasingly helpful to American adults seeking health information.

  • 60% of e-patients (or 42% of all adults) say they or someone they know has been helped by following medical advice or health information found on the internet. That’s an increase from 2006 when 31% of e-patients (25% of all adults) said that.
  • 3% of e-patients say they or someone they know has been harmed by following medical advice or health information found on the internet, a number that has remained stable since 2006.

BUT, she also points out…

“There is no evidence that the internet is replacing health professionals, or Dr. Mom, but rather it is enabling a new way to connect to information and resources.”

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