Archive | January, 2010

Evolution Of How The Big 3 PBMs Describe Themselves

A few years ago, I think it was a lot harder to differentiate the positioning of the big 3 PBMs – Medco, Caremark, and Express Scripts. Over the past few years, I think they’ve taken different positioning paths.

Look at how their corporate descriptions how evolved over the past few years. They all used to focus on the PBM core services. Now, Medco talks about making medicine smarter; CVS Caremark talks about health services; and Express Scripts talks about Consumerology.

Medco 2010

Medco Health Solutions, Inc. (NYSE: MHS) is pioneering the world’s most advanced pharmacy(R) and its clinical research and innovations are part of Medco making medicine smarter(TM) for more than 60 million members.

With more than 20,000 employees dedicated to improving patient health and reducing costs for a wide range of public and private sector clients, and 2008 revenue exceeding $51 billion, Medco ranks 45th on the Fortune 500 list and is named among the world’s most innovative, most admired and most trustworthy companies.

For more information, go to

Medco 2006

Medco Health Solutions, Inc. (NYSE: MHS) is a leader in managing prescription drug benefit programs that are designed to drive down the cost of pharmacy healthcare for private and public employers, health plans, labor unions and government agencies of all sizes. With its technologically advanced mail-order pharmacies and its award-winning Internet pharmacy, Medco has been recognized for setting new industry benchmarks for pharmacy dispensing quality. Medco serves the needs of patients with complex conditions requiring sophisticated treatment through its specialty pharmacy operation, which became the nation’s largest with the 2005 acquisition of Accredo Health. Medco, the highest-ranked prescription drug benefit manager on Fortune magazine’s list of “America’s Most Admired Companies,” is a Fortune 50 company with 2004 revenues of $35 billion. On the Net:

CVS Caremark 2010

CVS Caremark is the largest provider of prescriptions in the nation. The Company fills or manages more than 1 billion prescriptions annually. Through its unmatched breadth of service offerings, CVS Caremark is transforming the delivery of health care services in the U.S. The Company is uniquely positioned to effectively manage costs and improve health care outcomes through its more than 7,000 CVS/pharmacy and Longs Drugs stores; its Caremark Pharmacy Services division (pharmacy benefit management, mail order and specialty pharmacy); its retail-based health clinic subsidiary, MinuteClinic; and its online pharmacy, General information about CVS Caremark is available through the Investor Relations section of the Company’s Web site, at, as well as through the press room section of the Company’s Web site, at

Caremark 2005 (pre-acquisition by CVS)

Caremark Rx, Inc. is a leading pharmaceutical services company, providing through its affiliates comprehensive drug benefit services to over 2,000 health plan sponsors and their plan participants throughout the U.S. Caremark’s clients include corporate health plans, managed care organizations, insurance companies, unions, government agencies and other funded benefit plans. The Company operates a national retail pharmacy network with over 60,000 participating pharmacies, seven mail service pharmacies, the industry’s only FDA-regulated repackaging plant and 21 licensed specialty pharmacies for delivery of advanced medications to individuals with chronic or genetic diseases and disorders.

Additional information about Caremark Rx is available on the World Wide Web at

Express Scripts 2010

Express Scripts, Inc., one of the largest pharmacy benefit management companies in North America, is leading the way toward creating better health and value for patients through Consumerology(SM), the advanced application of the behavioral sciences to healthcare. This approach is helping millions of members realize greater healthcare outcomes and lowering cost by assisting in influencing their behavior. Headquartered in St. Louis, Express Scripts provides integrated PBM services including network-pharmacy claims processing, home delivery services, specialty benefit management, benefit-design consultation, drug-utilization review, formulary management, and medical and drug data analysis services. The company also distributes a full range of biopharmaceutical products and provides extensive cost-management and patient-care services. More information can be found at and

Express Scripts 2005

Express Scripts, Inc. (Nasdaq: ESRX) is one of the largest pharmacy benefit management (PBM) companies in North America, providing PBM services to over 55 million patients through facilities in 13 states and Canada. Express Scripts serves thousands of client groups, including managed-care organizations, insurance carriers, third-party administrators, employers and union-sponsored benefit plans.

Express Scripts provides integrated PBM services, including network pharmacy claims processing, mail pharmacy services, benefit design consultation, drug utilization review, formulary management, disease management, medical and drug data analysis services, and medical information management services. The Company also provides distribution services for specialty pharmaceuticals through its CuraScript specialty pharmacy. Express Scripts is headquartered in St. Louis, Missouri. More information can be found at

A Few Adherence Examples of Communications

Express Scripts has been using Consumerology as their framework for member communications.  I hadn’t heard much about what they were doing in the adherence area so I turned to the web.  I found a few things that I thought people might be interested in.  [Google is a wonderful tool.]

Last year, they had talked about the study in California with the power company and the influence that social norms had on power utilization.  They were testing this.  I found a presentation online that shows a cool graphic with some of the messaging.  I’m not really sure if patients will get the concept of medication possession ratio (MPR) so I’m anxiously awaiting the results.

I also found a screenshot of sample adherence report which they’re using in a pilot with Vitality.  [I’ll assume the data is mocked up and not real PHI.]  I really like the report.  I’m still torn on the GlowCaps concept in terms of whether consumers will use them, but they seem to have some good results.  [And, I always try to remember that I’m not the average consumer so my opinion is just my opinion.]

The last thing that I found which was interesting was some FAQs on their auto-refill program.  I remember pushing for this back when I was there, and I could never get the operations people and clinical people to approve it.  This type of program is becoming the norm now for many mail order and retail pharmacies so I’m glad to see they have it in place.

Military Families and Healthcare

There is an article in today’s USA Today about wounded veterans that got me thinking about where this falls on the healthcare reform priorities. As I’ve stated before, I completely agree that the US system needs reform. The question is whether to go “big bang” or focus on change in key areas. I continue to argue that focus on fixing one problem at a time is best. I would initially focus on the uninsured. This article made me realize that another area of focus should be on providing comprehensive coverage for those that serve our country.

While most of us enjoy our freedom, there are a select few which are willing to sacrifice their lives to protect us. We should never forget that. They should be cared for.

The State of Social Media Marketing

In a study by the MarketingProfs, they look at use of social media by industry which is interesting. The full report is something you have to pay for, but they give you a presentation you can download for free and allow us bloggers to use some of the charts.

  1. The first one shows users of videos for viral marketing. I was surprised to see healthcare at 18.5%, but this makes sense. There are lots of videos which can be educational.

  1. The next one shows social media use by company type. I certainly have seen a lot of companies putting LinkedIn and Facebook pages up. Additionally, a lot of companies are using Twitter for PR and other information. Since I don’t use MySpace that doesn’t surprise me that it’s so low.

  1. The last one isn’t shown by industry, but I think it’s interesting. I’d love to know if healthcare is more conservative than other industries. I would imagine they would be. [The other thing to know here is the mix by size.]

Book: The Checklist Manifesto

Reading a brief summary of this book caught my attention. The Checklist Manifesto hits on one of those sensitive areas in healthcare…can technology make physicians better? YES.

“Medicine today is so complex that even the sharpest doctors can no longer keep everything they need to know in their heads.” (Atul Gawande)

  • Only about ½ of heart attack patients get the best care within the recommended window.
  • It takes an average of 17 years for a new treatment to reach even ½ of the patients who would benefit.
  • Using a “safe-surgery checklist” reduced the number of complications and deaths by 1/3. (The New England Journal of Medicine)

Rock ‘n Roll Impact on Hearing Not As Significant As Expected

(Or at least that’s a good sensationalist title)

In a study in the American Journal of Epidemiology, it suggests that people who grew up in the Rock ‘n Roll generation are holding on to their hearing longer than their parents. (Will this continue for the iPod generation?)

The odds of having hearing impairments were 13% lower in men (and 6% in women) for every five-year increase in year of birth. (Based on study of 5,300 people born between 1902 and 1962.)

As the blurb in the USA Today mentions, there are other factors – ear protection, less noisy jobs, better treatment for conditions that led to hearing loss.

Pharmacists To Diagnose – Not The Right Answer For Pseudophedrine

In a letter to the editor, a consumer was suggesting that one answer for BTC (behind-the-counter) medications such as cold medications would be to require the pharmacist to determine who should get them. Certainly, we need to figure out a way for these medications not to be used to create methamphetamine (meth), but this won’t work (IMHO). On the flip side, requiring a prescription for patients to get these doesn’t make a lot of sense either. It would drive up physician visits and overall healthcare costs.


  • Pharmacists are already very busy (at most pharmacies).
  • The margin on these medications probably doesn’t justify applying high cost labor to them. Today, a pharmacy technician that makes significantly less does and can handle “filling” these. [Of course, if this argument worked, pharmacies would stop filling $4 generics and free antibiotics.]
  • What’s the proper diagnosis for a cold and how would you screen people?
  • If criminals wanted the drugs, wouldn’t they just get sick and come in to get them?

Splitting Up CVS Caremark – Stupid – Just Learn How To Compete

The fact that the NCPA [see their press release on this] and others in the pharmacy community have chosen to push for the FTC to investigate the CVS Caremark merger and continue to encourage this is ridiculous.  CVS has owned a PBM (Pharmacare) for years.  Walgreens has its own PBMLongs had a PBM (RxAmerica).  Kroger’s has a PBM.  Unless I’ve missed it, I don’t remember hearing about them not being able to own a PBM or seen complaints about their ownership.  [And, like Adam Fein – I didn’t know this retrospective breakup was even an option.]

So, I perceive this whole FTC issue as a backhanded strategy to gain a competitive advantage over a competitor that’s beating them in the market.  [Just imagine the distraction of having to split the companies up or the hassle of having to put in a bunch of additional limitations.]  We know that independent pharmacies have continued to lose marketshare for years to retail chains and mail order.  It’s no different than any other market where scale matters (e.g., hardware stores).  If small pharmacies can compete, they should figure out how to make money and demonstrate value that people will pay for and stop focusing on crying wolf about a successful competitor.  [More on what I would do another time.]

I’ve been a big believer of retail and PBM integration for years.  At Express Scripts, we only thought there were a few companies that could buy us – Walgreens, Wal-Mart, or United.  At this point, I don’t see that happening, but I see lots of efficiency in leveraging plan design, retail face-to-face counseling, pharmacy automation at mail, and other coordinated solutions.

Another issue that is raised [in complaining about the CVS Caremark integration] are patient complaints.  These are certainly possible, but isn’t that a BBB issue or someone else’s issue.  Unfortunately, I bet you can’t find a pharmacy or a PBM without some patient complaints.  People take their healthcare personally and hate change.  BUT, I can’t imagine that I would go to the government and point out that some clients of my competitor aren’t happy.  [And the fact that politicians believe the hype and try to push stupid legislation like HR 4489 makes a mockery of our government.]  I’ve talked about transparency before so I won’t harp on this here, but how many companies (in our capitalist society) are required to provide data about margins and forced into a certain business model. 

Another issue you hear is about CVS Caremark “steering” people to preferred pharmacies (CVS, mail, specialty).  First off, this is not a PBM decision.  Limited retail networks have been an option for ever.  Clients chose what plan designs to implement.  The PBM’s job is to implement these plans and manage them effectively.  PBMs and consultants (e.g., Hewitt, Mercer) often model out the options for the clients so they learn how to save money.  And, in many cases given the pace of cost increases, if these options didn’t exist, then employers would drop benefits quicker.

Finally, the data doesn’t lie.  Members are generally very happy with the PBMs and mail order (or as much as they are with any “managed care” type company).  PBMs save clients money (and make money doing it).  PBMs provide clients with data.  Clients have lots of options for “transparent” companies and there’s been no big movement of marketshare to them.  PBMs drive adherence.  Mail order patients are more adherent.  Specialty mail order pharmacies drive successful outcomes.  The point is that the model works…stop trying to fight the model and come up with a better mousetrap. 

[Enough ranting for the evening.]

Pharmacy Counseling – Mail vs. Retail Privacy

One of the other things that caught my eye in the USA Today article about the changing role of pharmacists were the comments about counseling.  I’m not sure if I see that as any change.  Isn’t that what most pharmacists go to school for?  They want to help patients.  They don’t go to school to count pills. 

A few years ago when I worked on my idea of a kiosk to dispense medications that was the big discussion I had with several pharmacy leaders.  I wanted to free up the counter time for counseling and let the kiosk hold the refills and acute medications which didn’t require as much pharmacist time. 

Today, when you go to most pharmacies, you talk with the pharmacy technicians which in some states don’t even have to be certified and can essentially be someone with only a high school education.  Not that there is anything wrong with not going to college, but I bet that most of us have high expectations for the person standing on the other side of the counter.

So, I think everyone would love the pharmacist role to evolve.  BUT, I think the other question this begs is whether this is a private setting to have that discussion.  Now, there are a few pharmacies that have created a quiet area for counseling, but let’s face it, the majority of the time, you’re standing at the counter with another patient right over your shoulder (or back at the yellow line 24″ behind you).  How many of us really want to talk about the rash that developed as a side effect or the new diagnosis that we got from our physician or the fact that we can’t afford the medication in front of our neighbor or some miscellaneous person that might be judging us?

So, I’m always amazed when people talk about mail order as this anonymous 800# for counseling.  Isn’t it more convenient to be able to call your pharmacy from your own home (or another private setting) at anytime of day or night and ask questions?  Isn’t it more private?

Since less than 20% of people can even tell you the name of their pharmacist (and probably an equally low percentage of patients are known by name by the pharmacist), does this face-to-face relationship really matter?

I won’t deny that the Ashville Project worked and that the cases where the pharmacist is engaged with the patient in a long-term, trusted care relationship that it makes a difference.  I only question whether that model exists, is scalable, is cost-effective, and can be staffed.  (Don’t forget that just a few years ago they were forecasting massive staffing shortages around pharmacists…I don’t think that’s been solved.)

Where Do Prescriptions Get Filled?

I was reading the article in the USA Today about the changing role of pharmacists which had the following chart about where medications get filled. 

How Many Top Companies To Work For Are In Healthcare?

I always find the list of the top 100 companies to work for interesting.  It’s interesting to see who makes the list and what they do for their employees.  And, it always make me think back to 2004/2005 when Express Scripts set a goal of being on the list.  We took our initial internal survey and identified what we needed to do to improve.  And, part of our incentive compensation the next year became an improvement in our scores.

Now as I look at the 2010 list that just came out, I’m always interested to see what healthcare companies make the list.  This year there are 17.

# 17 – Methodist Hospital System

#19 – Genentech

#25 – Novo Nordisk

#26 – CHG Healthcare Services

#32 – Baptist Health South Florida

#40 – Scripps Health

#46 – Ohio Health

#50 – King’s Daughters Medical Center

#55 – Mayo Clinic

#60 – Indiana Regional Medical Center

#63 – Southern Ohio Medical Center

#74 – Children’s Healthcare of Atlanta

#79 – Meridian Health

#81 – Atlantic Health

#85 – Arkansas Children’s Hospital

#96 – LifeBridge Health

#99 – Winchester Hospital

Interview with Cyndy Nayer from the Center for Health Value Innovation

I had a chance yesterday to sit down and talk with Cyndy Nayer (President, CEO, and co-founder) from the Center For Health Value Innovation. For some of you, this is a new buzzword for others it has been around a while. I remember back in the early 2000s when stories of Pitney Bowes kept popping up and then working with a few of our clients (like Marriott) when I was at Express Scripts on what were being called “value-based designs”. [I even had an offer to go to ActiveHealth (now part of Aetna) and work on their Value Based offerings several years ago.]

And, it’s a small world. Several people from my past are involved: (1) Peter Hayes was a client at Express Scripts and (2) Roy Lamphier played soccer with me in high school.

What is the Center For Health Value Innovation?

The center is an “information exchange” for value based design which as she points out is much more than just a prescription benefit and not simply giving people free drugs to make them more compliant. [If only it were that easy!]

What do you mean by Information Exchange?

A place where people can share stories, trends, info, and research. They see their job as getting information out there and providing support around modeling, analysis, and identifying gaps. [And, I know they do a lot of education as you can see Cyndy at many conferences.] She talked about educating the marketplace on an “actionable format” for implementing value-based design.

Can you describe Value Based Design?

Value Based Design is a suite of insurance design, incentives, and disincentives that support prevention and wellness, chronic care management, and care delivery. It is focused on linking stakeholders across the care continuum and developing structures like outcomes-based contracting where all stakeholders benefit from better health outcomes.

She mentioned that in an upcoming edition of the Journal of Benefits and Compensation that there will be a paper that builds on some adherence concepts to discuss the 5 Cs of Value Based Design: [Noting that the first 3 come from some work from Merck.]

  • Commitment
  • Concern
  • Cost
  • Communication
  • Community

We talked about the need for communications to be multi-directional and include the patient, the physician, the pharmacy, and other caregivers. We talked about community needing to expand on that to include family, the employer, and other entities. [As we all know, health care is local and value based design is no different.]

We spent a little time here talking about community, and the need for this to happen at a community level. [Much like e-prescribing and other things have found out that localized momentum is important.] One question in my mind is who is the catalyst – the hospitals, the physicians, the local managed care companies, employers, grocery stores, wellness companies, pharmacies.

We talked about the fact that this isn’t the same as Accountable Care Organizations, but like that concept, this has to be developed as part of the fabric of the community not imposed on the community.

Being from Detroit, I asked if this was a model for them to help develop around. That is an area of focus and there has been some work done in the Battle Creek, Michigan area.

Why are employers so interested in Value Based Design?

Originally, employers were interested since it was something new, but the recession forced them to look at this more seriously. But, this is a long-term process and something which they benefit from. Better health lowers absenteeism, and businesses need health communities and healthy workers for growth.

Why don’t companies implement Value Based Design programs?

Companies don’t implement them because they’re not prepared for the amount of work needed to get started and it’s not a cheap fix. [If you want to save money, just drop the benefits…not that anyone really advocates that.] We talked about that lots of people react to the urban legends of just giving out free drugs [which isn’t Value Based Design] which would be easy. Companies need to realize there is work to be done to communicate this, design it, and manage the implementation across the community. BUT, once it’s installed, it’s completely sustainable.

Is there a certification (i.e., URAC) for value-based design?

She told me that nothing exists today and that it would be hard to do. Today, there isn’t alignment in the marketplace around incentives and a standard model. They spend a lot of time working with different groups to drive education and training to link health and productivity measurement with value and functional performance.

What’s next for 2010?

In 2010, they will be bringing much more information forward on how to support and extend the work done in the 1st book (Leveraging Health…which Dr. Jan Berger, Silverlink’s Chief Medical Officer co-authored with the Center) and the decision matrix that they recently published. They will continue to serve more as a guide helping interested parties in private, invitation only events to design solutions and then bring those solutions to market.

How does someone learn more about Value Based Design?

The simple answer is to go to the Center For Health Value Innovation website. They have a whole library of information there.

Scott Brown Quote

From the Corporate Research Group blog:

One thing is clear, voters do not want the trillion-dollar health care bill that is being forced on the American people.  This bill is not being debated openly and fairly. It will raise taxes, hurt Medicare, destroy jobs, and run our nation deeper into debt….I will work in the Senate with Democrats and Republicans to reform health care in an open and honest way. No more closed-door meetings or back room deals by an out of touch party leadership. No more hiding costs, concealing taxes, collaborating with special interests, and leaving more trillions in debt for our children to pay.

[BTW – On a personal note…It’s always fun to be onsite for big elections.  I was in Boston for this although I’d put it as my 3rd most interesting election.  I was in Brazil in 1989 for their 1st election in 30 years and I was in Prague for the vote to split Czechoslovakia into two countries.  Those were both a little more exciting…although not as relevant to my day-to-day life.]

Latest Data Shows Low % Of Seniors Online

Everyone always wants to move to electronic communications (e-mail, portal) in healthcare (along with other industries) based on cost and data availability.  Unfortunately, seniors aren’t online as much as we think.  Yes, there are exceptions.  We all have stories about our grandparents being online or some blogger whose 80 years old.

But, the latest data from Pew shows that they aren’t online.  Their not using high speed connections.  And, when they do go online, they’re dipping their toes in the water not jumping in the deep end to use all the cool tools. 

This is certainly reinforcing of the data we observe at Silverlink when we interact with Seniors.  They are used to the phone.  They like to talk on the phone.  They know how to navigate and interact with automated telephony (especially intelligent telephony not annoying IVR trees).  And, since we can provide similar data to the web and e-mail about how Seniors interact with the communications, it has been a growing area for healthcare companies.

10 Events That Changed Marketing This Century

We all find lists and good graphics interesting.  This one caught my attention.  The article is in Advertising Age.  Their timeline is pictured below:

How Do Physicians Want To Hear From Their Pharmacy/PBM?

In the pharmacy and PBM business, there are lots of reasons to reach out to a physician:

  • Drug-drug interactions
  • A chemically equivalent version of the drug prescribed is available
  • A therapeutically equivalent version of the drug prescribed is available
  • The prescribed drug is not covered
  • A prior authorization is required
  • The patient is required to try an alternative drug first (step therapy)
  • The prescribed drug costs too much and the patient would like a new drug
  • The prescribed drug had unplanned side effects
  • The patient’s prescription has to be renewed
  • The patient is required to move to mail

The question is always how to best do this. Here are some options:

  1. Call the physician’s office.
    1. Using call center agents would be expensive, and after navigating an IVR tree and talking to the front office staff, they would simply leave a message. This would just lead to an ineffective back-and-forth in many cases.
    2. Automated technology won’t effectively navigate the IVR tree, sit on hold, and deliver a message.
  2. Send a letter to the physician.
    1. This allows for the proper level of information to be provided so the physician has time to look up the patient record and respond.
    2. For most of the cases above, the time lag on this would be unacceptable.
  3. Fax the physician.
    1. This is the default solution since you can deliver mail type content in a timely fashion.
    2. But, there is no great physician fax database.
    3. And, do physician’s read the faxes?
  4. E-mail the physician.
    1. This isn’t really an option since there’s no physician e-mail database (that I know of) and you can’t send PHI via e-mail.
    2. Your only option here would be to send e-mails that alerted the physician to log into a portal where all these messages were waiting for them.
  5. Use the EMR or eRx application.
    1. As physician’s get more automated and technology becomes the default workflow solution, everyone sees this as the holy grail. A pop-up can tell the physician about inbound messages for them to respond to.
    2. Some solutions hope to push this messaging to the time the prescription is written which I think is fascinating, but I don’t imagine a physician wants to deal with all that during the patient encounter. (Maybe I’m wrong.)

So, what I’m interested in hearing from physicians on is what works. I’m sure you want to say that most of these messages aren’t things you want to deal with, but plan design is here to stay and works to control costs. I’m sure some of you feel this is the “managed care system” telling you how to prescribe, but we know that the amount of information needed to keep current on everything is overwhelming. And, cost matters to patients which means getting them on the right drug that they can afford will impact adherence and ultimately outcomes.

So…How should PBMs and pharmacies communicate with physicians?

CxPi Scores For Healthcare Companies

CxPi is the Customer Experience Index from Forrester. 

The CxPi is based on consumer evaluations during November 2009 across three areas: 1) meeting needs; 2) being easy to work with; and 3) enjoyability.

As expected, pure healthcare companies fall towards the bottom here, but some of the retail pharmacies are much higher up.

There weren’t a lot of excellent scores in the survey, and I’m sure we can all debate where the companies fall.  But, I think the point that healthcare clusters at the bottom (and has since the beginning) is a problem.  How do we improve that consumer experience?

Sleep Deprivation No Longer A “Badge of Honor”

I would argue that for years many people bragged about how little sleep they got (as a proxy to show how hard they work).  Has that changed or will that change?  I’m not sure.  The whole concept of face time is often more normal than the work smarter not harder concept.

The question of course is whether research on the impact of sleep deprivation will change anyone’s mind.  In an article I just read, it has several key points from a recent study [by Daniel Cohen, Harvard Medical School, Science Translational Medicine journal]:

  • Studies estimate that almost 30% of Americans get less than 6 hours of sleep per night.
  • The circadian rhythm hides the effects of chronic sleep loss and gives people a second wind btwn 3-7 pm (before they fall off a cliff in terms of attention).
  • If you stay up all-night on top of sleeping less than 6 hours a night for the past 2-3 weeks, your reaction times are 10x worse than they would have been if you just pulled an all-nighter. 

“A large segment of the population may be at a high risk of committing catastrophic errors” (Eve Van Cauter, sleep researcher at the University of Chicago)

Given the risks of error, the impact on health, and other issues, it would seem like companies would want to discourage this “badge of honor” and encourage people to get appropriate sleep.

Medco: 6% of Seniors Take 20+ Rxs Per Day

From a Medco Health Solutions survey of seniors 65 and older who take medications.  [Note that 20% of insured seniors did not take any medication on a regular basis.]

(Note: Chart re-created by me based on appearance in USA Today Snapshots.)

Wal-Mart Home Delivery – Will It Make A Difference

Now that Wal-Mart is pushing their home delivery direct-to-consumers via TV commercials and the web, will that have an impact on the market?

I could see a few possible reactions.  The simple one would be that their investment simply proves to validate the mail pharmacy option (if that’s needed) and build more awareness of this as an option.

Another response could be that one of the big PBMs (Medco, CVS Caremark, Express Scripts) decides to compete in this “cash” or DTC market and tries to sell directly to consumers.  That has lots of implications. 

Like the $4 generics, it’s still limited to a small set of generic drugs that you get for $10 thru mail.  But, will that drive volume?  Are consumers “fooled” by the simplicity of the message or are they frustrated when they realize that their drugs aren’t $10?

Will safety groups or payors get involved to minimize to issues of having these scripts process outside the benefit and therefore not be in the member record for DUR (drug utilization review) – aka looking for drug-drug interactions?

Will PBMs change their contracts with retailers to strictly prohibit them from providing mail order DTC?

Will other retailers follow suit?

Transparency…Transparency – Enough

I was reading the NCPA blog this morning on PBM Transparency and the CVS Caremark Conundrum (more on that another time) and had to comment.  [Certainly not an unbiased blog.]

They talk about government intervention and transparency as:

“Small step toward reining in egregious and costly PBM practices like spread pricing (paying the pharmacy one price then quietly billing health plans much more) and rebate abuse (pocketing huge sums from drug makers before giving plan sponsors what’s left).”

Come on.  How many PBM clients don’t know that they have spread pricing?  Plus, don’t the retailers have spread pricing.  I’m pretty sure that consumers don’t know the acquisition cost of their drug compared to what they pay for it.  (There have been plenty of stories about the gouging at retail to cash patients using generics.)  There are plenty of PBM contracts today that are pass-through pricing meaning that the payor pays the PBM what they reimburse the retail pharmacy.  (I get so tired of people using arguements from the 1990’s and early 2000’s as fact.)

Then, let’s talk about rebates.  How many clients of PBMs today don’t know that rebates exist and don’t get most of the rebates passed on to them?  A lot of this data is available in general reports about the industry, from consultants, and thru surveys.  There aren’t a whole lot of mysteries in the PBM world.

The reality is that people get bitter because the PBMs continue to make money in a bad economy.  I don’t see what’s wrong with that.  They make money as they save clients money. 

  • More generics = more client savings and more PBM profit. 
  • More mail order = more client savings and more PBM profit. 
  • Lower trend (i.e., cost increases year-over-year) = more client savings and more PBM profit.

Some PBMs even take risk to put their money where their mouth is.  There have been numerous government and independent studies showing the value of PBMs.  There have also been enough “transparency” contracts out there from traditional PBMs and PBAs (Pharmacy Benefit Administrators) that there is proof that transparency doesn’t save money. 

I’ll talk more about why I think the CVS Caremark deal is good later.

Double Whammy: Lose Job and Become Sicker

A study released earlier this year suggests that losing your job can increase your odds of developing a new stress-related health problem by about 80%.  (read more)

The study also suggests that just the threat of losing your job can do this and that those that keep their job are also at risk.  Oh well…If you’re a fatalist (like Michelle Obama), then you’re pretty much doomed in this economy.  But the reality is that life is stacked against you.  You need to take the bull by the horns and be responsible for your healthcare otherwise you enter that death spiral (literally).  And, being unhealthy will cost you more – medicine, physician visits, life insurance premiums, individual health insurance costs, absenteeism, salary (see below).

“Economists Susan Averett and Sanders Korenman studied the effects of obesity on wages, using a sample consisting of individuals aged 16-24 in 1981 who were 23-31 in 1988. They showed that women who were obese according to their Body Mass Index (BMI) in both 1981 and 1988 earned 17 percent lower wages on average than women within their recommended BMI range.

Women are not the only ones to suffer discrimination based on appearance. While obesity had a slightly negative effect on a man’s earning power, height seems to play a much more significant role in determining a man’s salary, with shorter men getting the “short end of the stick.”

So, one of the important things to do is understand the impact of stress and focus on stress management (see tips).  Regular exercise is a good way to help with this (and helps with your overall health and weight management).

 “Stress can increase blood pressure and heart rate, which can tax the heart.  We’re seeing more people who are putting on weight because they aren’t eating well under stress.”  (Marc Eisenberg, MD, Columbia University)

[P.S., Don’t forget that if you like these blog postings that you can get them sent to you an e-mail every time I post.  To get that, simply sign up here.)

MOST People Happier On Days They Don’t Work – Really?

In one of the most stunning studies ever, the researchers show that people (not all just most) are happier on days that they don’t work. But, let’s drill in since I actually found the study interesting and began to wonder about implications that might have on when healthcare companies should communicate with people.

The study in the Journal of Social and Clinical Psychology showed that people are happier on weekends (when most aren’t working) due to “more connection with other people and more self-direction” (co-author Richard Ryan). (see article in USA Today)

One other aspect of the research was that people were happier when they were competent even if the task was difficult.

So, this brings up lots of questions:

  • Since we know that happy call center agents can influence customers, how do you increase their feelings of competency, autonomy, and connectedness?
  • Are you better off communicating with members/patients on the weekends when they are happier?
  • Who are the people that are happier at work than home?
  • Since the general stereotype is that men are less competent with household chores and raising kids, did gender matter? (The article said that age, education, salary, marital status, and # of hours didn’t matter.)

Anxiety and Depression Up In Students

In my opinion, your high school and college years are time to prepare for the future and enjoy life. After that, you start saving for retirement, taking care of a family, and many people end up in that sandwich generation having parents and children to care for. But, we know that kids also feel massive pressures (self-induced, peer pressure, or based on their parents) to perform well in sports, school, standardized tests, and other things that will help them succeed. There are also lots of social pressures at a time when the “right” answer isn’t clear.

Today, young people are also having a very hard time finding a job. A problem that is certain to create long-term issues as these people enter the workforce with less experience. [I know at E&Y the only variable that seemed to correlate with Partnership was whether the person had worked during college.]

A new survey [mentioned in USA Today , 1/12/10, pg. 4D) shows that five times as many high school and college students in the US are dealing with anxiety and other mental health problems than people of the same age in the Great Depression. That’s amazing to me. The Great Depression seems like such a hardship time.

Now, the other view of this is that more people are getting diagnosed with these diseases these days, but this survey was based on diagnosis codes or even Rxs filled. It was based on people taking the Minnesota Multiphasic Personality Inventory, a psychological questionnaire.

Calories on Menus – WOW!

This past week was the first time I was in NY since they were required to show calories on menus everywhere. WOW! It really makes you think differently. I went to Cosi to get a sandwich with a client and was stunned. I know I’m not the best, but sitting there seeing my options was both startling and a little bothersome. I hope this gets passed across the country. I would definitely think differently about my food choices.

Now, on the flipside, it definitely makes it much harder to just “cut loose” and grab a hot dog at the baseball game. You now are conscious about the impact that has on your waist (and potentially your health).

SPAM Blocker as Modern Day Censor

One of our clients told me this morning that my blog is blocked within the company. I was surprised. It got me thinking about the power of the SPAM Blocker (or whatever the right name is for the software that keeps people from visiting certain websites). Usually, I thought this was set up for pornography and gambling, but I know these have expanded to social sites like Facebook, LinkedIn, Twitter, and others.

Some, I can agree with others I can debate. Facebook seems unnecessary for work, but I could argue that LinkedIn could provide some work value. Twitter can be used as a distraction or with all the companies using it, it would seem like it could be a work tool.

That puts a lot of power in the hands of the software or IT person who selects which sites or parameters trigger “the big red hand”. [At least that’s what I’ve seen at several companies.]

Or, maybe I am simply too politically incorrect on my blog [doubtful].

New Respect For Swimmers

I’ve never been a swimmer and hence, whenever anyone asks me about doing a triathlon, I just laugh.  But, now my 8-year old has gotten into swimming. They run a mile then swim for 90-minutes 3x per week.  I figured if she could do it than I could.  Big mistake.

I tried to swim for 30-minutes that other day and felt like I was going to pass out.  I’m sure it was a good workout, but I realized that like running I need to manage my expectations and start small.  This may be a good new years resolution…make it one hour swimming.

4 of top 5 Fastest Growing Salaries are for Healthcare Jobs

A recent article highlights jobs with the fastest growing salaries.  Four of the top five are from healthcare:

  1. Oral pathologists
  2. Social medical researchers
  3. Pharmacologists
  4. Toxicologists

2010 Banned Words?

I think of Lake Superior State University as a place I expect to see list for NCAA hockey championship, but not the literary location that would be producing the 35th annual List of Words Banished from the Queen’s English for Mis-use, Over-use, and General Uselessness.

But, it seems to get lots of media play, and in the spirit of helping you trim your communication choices in the new year…

  1. Shovel-ready [I’ve never heard anyone use this.]
  2. Transparent / transparency [about time]
  3. Czar [doesn’t seem like a democratic term]
  4. Tweet [seems too early to kill this]
  5. App [might also be a little early]
  6. Sexting [n/c]
  7. Friend, as a verb [I think social media will keep this around for a while]
  8. Teachable moment [I actually like this one and didn’t realize it was a commonly used term]
  9. In these economic times…
  10. Stimulus
  11. Toxic assets
  12. Too big to fail
  13. Bromance
  14. Chillaxin’ [Never heard this one…maybe just not that cool]
  15. Obama, as a prefix [Agree…I was never a fan of Obamanomics, etc.]
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