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New Healthcare Blog Carnival – The Benefits Package

There is a new blog carnival which starts today called The Benefits Package.  It’s the first blog carnival dedicated to employee benefits. 

Click here to check it out

Another example of a blog carnival is Grand Rounds which has been around for years.  Here’s the last Grand Rounds.

Pharmacy 2011 – 11 Things To Consider

I pulled together (in Prezentation Zen style) 11 Things to Consider in the Pharmacy industry.  It’s certainly a matter of opinion, but it’s a point of view meant to cause you to think.  I spend a lot time with clients thinking about the industry, and I thought this was a fun way to put some of those thoughts out there. 

I divided these up into two areas:

The Consumer:

  1. Patient Centric approach is critical path. (i.e., create an experience)
  2. Be proactive not reactive. (think Obesity)
  3. Literacy and health disparities need to be addressed. (simple and direct)
  4. People are different…act appropriately. (mass customization)
  5. Genomics are fascinating…but can be confusing. (and healthcare in general is already very confusing)

Business Strategy:

  1. The pharmacist role has to change from refills to outcomes. (see prior post)
  2. Blend high touch and automation in specialty. (they have the same needs about information)
  3. Integrate your physician and consumer strategies. (the HIT focus will make this more pressing)
  4. You need a STAR strategy for your PDP. (hottest topic in Medicare right now)
  5. Mobile is here to stay. (but may not be a business model unto itself)
  6. Social media will change the conversation. (so what are you doing)

Wal-Mart and Humana for Medicare Part D

Again, I’m a little late on this story (too much work), but I was thinking about it after the CMS news recently that they were going allow plans with a 5-star rating to have an open enrollment season all year round.  That’s a huge deal. 

(If you’re don’t know what the Star Ratings are about,  see the Kaiser Family Foundation piece on What’s In The Stars or if you’re working on improving your Star Ratings, you can see Silverlink’s Star Power solution.)

Humana Walmart-Preferred Rx Plan

If you missed it earlier this year, Humana announced that they were partnering with Wal-Mart to offer the lowest national plan premium for 2011 for standalone PDP plans (see details).  Consumers who select the plan will get a lower copayment when they use Wal-Mart pharmacies.  (I’ve talked about limited networks before so it will be interesting to see if this gets more to be offered in the marketplace.)

“The basics of the preferred network – tight formulary and a low premium – offer an affordable value proposition for patients.”  William Fleming, Vice President of Humana Pharmacy Solutions (from Drug Benefit News on 10/8/10)

This creates a network with 4,200 preferred pharmacies and 58,000 non-preferred pharmacies.  Personally, I’m still surprised more people haven’t gone to the $0 copay for prescriptions at mail which Humana offers in this plan (for tier-one and tier-two).  United Healthcare has recently rolled out a program called Pharmacy Saver which has some similar attributes to the Humana plan. 

So, has it made a difference?  We won’t know yet.  I would expect it would.  The economy is still tight.  Seniors are budget conscious.  Humana has good brand equity.  Wal-Mart, especially in certain geographies, is frequented heavily by this population.

Medicare open enrollment is from November 15th thru December 31st.  This certainly caught everyone’s attention when it launched.  (You can see some of Adam Fein’s comments when it first was announced and here’s a more recent AP article on the topic.)  In a few months, we will know a lot more.

Blog Reader Survey

I’m always interested to know more about my readers.  The only things that I can do to judge success are (1) look at number of visits; (2) look at number of subscribers; (3) look at number of comments; or (4) look at number of links.

Here’s a few questions.  I appreciate you commenting:

Get New Posts E-mailed To You

If you’re like me, you don’t regularly go out to the blogs that you like.  I’ve found that having new content e-mailed to me is very convenient.  I can read it on the plane or easily forward it.

On top of the people that read the blog in Google Reader, Plaxo, LinkedIn, and Facebook, about 300 people across healthcare have already signed up to get updates e-mailed to them.  To do the same, just click here

Thanks for reading.

Mobile / Social Media Stats c/o HubSpot

I’ve never met the people over at HubSpot, but I like the information that they’re making available.  (Thanks SF for the suggestion.)

Here’s a few graphics from a recent post on their blog about mobile infographics.  (BTW – I love infographics)

In another area of their site, they have some interesting data on how blogging and social media drives leads.  Here are three of them that I found interesting.

Blog Content Via E-mail

Just a friendly reminder that if you’re like me and you don’t get out to check blogs you follow regularly, you can have new posts e-mailed directly to you.  A few hundred of your peers have signed up for this service for Enabling Healthy Decisions.  The list is not used for anything else.  If interested, simply go to

Every morning, Feedburner looks for any new posts in the past 24 hours, aggregates them, and e-mails them to you.  Thanks for following.

Doctor – Patient: Relationship or Transaction…and Therefore

Don’t jump the gun too quick here. I assume most of you are going to say that there is an implicit (or explicit) relationship between the physician and the patient. They have some interest in your outcome and your care.

But, before you go there, I want to put forth a hypothesis. If this is true, is it okay for the physician to monitor your activities on your social network? (original question posted by The Side Note blog) Can they follow your tweets? Can they review your activities on Facebook or MySpace or some future site? Can they reach out to you to ask why you tell them you’re on a diet while you tweet about eating a Big Mac? Can they ask you about side effects that you’re having to a medication?

I’m positive that they don’t have the time to monitor these sites (but someone could do that for them). The question is whether it’s ethically okay for them to do that and use that information to provide you with care.

It seems like everyone else is using that information (which is public domain). Lawyers are using it. Tax collectors are using it. HR managers are using it. I would assume insurance adjusters might be using it.

Obesity Rates Vs. Population Growth

The research correlating weight with your social network is out.  So, it makes me wonder as I look at the states with the highest rates of obesity whether they will build on themselves.  Will they continue to get more and more obese?  The logical next question is whether that will at some point affect things like the healthcare costs in these states, employment growth in these states, and population growth.

Given two options, would you move to a healthier state or do you believe that you’re above this social pressure which will lead to less exercise and higher weight? 

The states with the highest rates of obesity were:

  1. Mississippi (33.8%)
  2. Alabama
  3. Tennessee (tied for 2nd)
  4. West Virginia
  5. Louisiana
  6. Oklahoma
  7. Kentucky
  8. Arkansas
  9. South Carolina
  10. Michigan
  11. North Carolina (tied for 10th at 29.4%)

The fastest growing states (2008-2009) were:

  1. Wyoming
  2. Utah
  3. Texas
  4. Colorado
  5. Alaska
  6. Arizona
  7. Washington
  8. North Carolina
  9. Georgia
  10. South Carolina

Should Restaurants Use Characters To Promote Unhealthy Foods?

I find this to be an interesting debate similar to should companies be able to promote smoking.  On the one hand, kids are obviously motivated to go to a fast food restaurant to get the latest toy that comes with the kids meal.  On the other hand, they can’t do it unless their parents take them there.

Additionally, you have to think about what the consumption of these fast foods are by the general population to understand if kids are eating the food at a higher rate than their parents.  I’m not sure you could look at families versus couples because by the nature of families being busier and more scheduled they are less likely to eat prepared meals at home.

These high level issues are important because if kids are likely to eat the meals anyways than why not give them a free toy because you are essentially using marketing to get them to choose one restaurant over another based on the toy.  If it is the toy that is changing their eating habits then we have a different issue – commercials, over-scheduling, parental control, access to healthy meals and snacks, and general eating habits of the population.  I struggle with the argument that the companies themselves shouldn’t be allowed to advertise.

But, I do think there is comparative research which has been done on tobacco and alcohol advertising (i.e., the Marlboro Man).

A factoid I saw in Time this morning was that

“Celebrity sells…kids think food tastes better when a popular carton character appears on the packaging…But, the flavor boost occurs only with junk food, not healthy snacks like vegetables.”

Even with that data, 47% of the child-marketing budgets for fruits and vegetables are on licensed characters compared to 29% of the dairy budgets, 15% of the junk food budgets, and 7% of the candy and ice cream budgets.

Lottery For Taking Your Medicine

Adherence is the big focus these days.  It’s an issue where everyone is aligned – payer, pharmacy, PBM, pharma, patient, MD.  And, there are certainly lots of savings to be gained both hard dollars (less ER visits) and soft dollars (less absenteeism). 


There are lots of issues around adherence.  Getting people to fill the script after they leave the doctor’s office.  Making the script affordable.  Getting them to take the medication.  Remembering to take it over time.  Dealing with side effects.  Dealing with differences in cultures, conditions, health literacy, etc. 

Now, people are paying you or giving you a chance to “win” money every day just for taking your medication (see NYT article).  So, in my mind, this eliminates the issues of affordability (i.e., you already have the drug) and side effects (i.e., you’re not going to take something that has a meaningful side effect just for money).  So, why do I have to pay you.  Does the dentist pay you to brush your teeth?  Of course not.  Does your auto insurance company pay you not to speed?  Does your life insurance company pay you to not drive drunk?  NO…In all these cases you either pay more money if you do this or your service gets discounted if you don’t. 

If you have a chronic illness, can afford the medication, and have no meaningful reason to not take it, you should be doing your best to take the medication.  Otherwise, you’re driving up the costs of healthcare for you and your friends and your kids.  You do have some social responsibility to try and get better OR you should pay more for your healthcare.  We all have a choice (see the 1,000 pound woman).

Won’t paying people just create a long-term “dependency” where I only want to take my pills when I’m getting paid?  Probably…we certainly used to see that incentives at the call center drove up success rates, but once they went away the success fell below the baseline. 

Will this create an incentive simply to open the pillbox to get paid even without taking the medication?  No one is there making sure it goes down my throat so I’m sure some people will game the system.  (A sentiment shared by John Mack at the Pharma Marketing Blog.)

For the people that are adherent, will you just be wasting money?  Yes…and why should my neighbor get paid for forgetting…I’m going to want the same thing.

Don’t get me wrong.  I’m a fan of incentives, but reward me for the right things otherwise we end up with situations like Enron.  Incent me for managing my BMI, my A1c value, my blood pressure.  I can take medication, work out, or diet to achieve those. 

Give me tools and information.  Help me to understand my drug.  Help me to afford my drug (e.g., value based insurance design or patient assistance programs).  Educate me on my condition.  Have a talking pillbox or medication bottle.  Call me to remind me to refill.  Sign me up for auto-refill. 

I just can’t get on board with this latest twist.  I guess the proof is in the pudding so we’ll see if it makes a difference.  I’d love to be proven wrong here and see us throw money at people and change the healthcare cost curve.

Walgreens vs. CVS More Thoughts

This was definitely the hot topic yesterday. I talked to lots of people about it.

I had a chance to give it some more thought last night. A few things dawned on me.

1. Timing. This was timed well from a Walgreens perspective. Managed Care RFPs are mostly over and employers are making their decisions now on PBM services. Managed Care would have been more likely to focus on the cost and understand how to mitigate the disruption. Employers will be much more sensitive to the disruption. That will be something that CVS Caremark will have to manage.

2. Who wins. Since one analyst told me that Walgreens represents only a single-digit of CVS Caremark’s revenue, the impact may not be huge. On the flip side, it’s likely some downside for Walgreens since they’ll stop serving some portion of CVS Caremark’s business. Consumers aren’t helped here. So, my only conclusion is that the other PBMs (i.e., Medco and Express Scripts) are best positioned to win from this if it causes any CVS Caremark PBM decisions to go their way. At a minimum, it creates FUD (fear, uncertainty, and doubt) which no sales person likes to have to deal with.

3. Validation. If I’m the product manager for Maintenance Choice at CVS Caremark, this seems like pretty strong validation that the offering works. As Adam Fein showed before, it does drive volume to their stores. Obviously, Walgreens was afraid of this taking off and having a larger impact on them.

So…what would I do?

This is interesting since one of my last tasks at Express Scripts was to come up with a strategy in late 2005 around CVS and Walgreens backing out of our mandatory mail network. My strategy (which I ultimately left to pursue) was to respond by opening onsite clinics and building out a pharmacy kiosk system that could be put in grocery stores (only 50% have pharmacies), large employer campuses, and high density sites in big cities. While Express Scripts didn’t choose that path, I still believe there is opportunity there and CVS Caremark could easily implement such a strategy. [It’s starting to get momentum in Canada.] CVS Caremark (or Walgreens for that matter) have the technology and business model to implement on-site pharmacies and to create a central fill using kiosks. If those could mitigate the effect of the Walgreens decision, it could be an interesting response. [BTW – If you’re interested in my pharmacy kiosk business model that I ultimately wrote up and pursued with some angel investors, let me know. I may try to post some of it here later.]

On the other hand, another response would be to look at the top 5 MSA (market service areas) where Walgreens is stronger than CVS. I’m guessing those are NY (post-Duane Reade acquisition), Delaware (post-Happy Harry’s acquisition), St. Louis (CVS just started operating here), and a few others. They could go into those markets and buy up independents or some smaller chains to immediately mitigate this.

There are several responses short of just folding and putting Walgreens in the network. Ultimately, I think it’s about whether CVS and Walgreens see each other as “enemies” or just competitors. Do they want to grow the pie or do they want to put the other out of business (if such a thing were possible)?

More to come I’m sure…

CVS Caremark Split Up?

I guess I have to comment on this hot topic.  Since I’ve been an advocate since the beginning, I think my opinions are different than the masses.  Looking at Adam Fein’s blog this morning, he asks three questions:

How does patient care improve when a PBM owns a brick-and-mortar pharmacy chain? Where can a combined PBM-pharmacy chain improve performance on traditional PBM metrics? How exactly does a payer benefit when CVS increases its pharmacy market share?

1. How does patient care improve?  CVS Caremark just announced this week the rollout of their Pharmacy Advisor program (think response to Medco TRCs).  This leverages their 7,000 retail stores and their face-to-face interactions with patients to manage chronic conditions (beginning with diabetes).  Assuming this scales, it has the great opportunity to improve patient care.  AND, when they eventually roll-in Minute Clinics to this solution (which I don’t think has happened yet) there may be more opportunity.  The retail side of the company also added to their ExtraCare strategy a diabetes focus earlier this week which makes a lot of sense. It remains to be seen the effect this could have on super beta prostate.

2. Where can a combined entity improve on traditional PBM metrics?  This is a softball.  Traditional PBM metrics are GFR (generic fill rate), rebates, mail order penetration, and trend (see comments on trend).  Generic fill rate involves talking with patients about therapeutic alternatives and intervening with MDs to change the script.  A retail chain can do that and can make changes before the first fill and before the patient starts a routine.  They also have a relationship often with the MD.  Driving rebates (as a proxy for lower net cost) can happen the same way.  Mail order is a more difficult metric, but Maintenance Choice createst that option and a store with the right POS (point-of-sale) system could make a difference.  I would argue that the goal for a combined entity is to optimize the right channel for the patient.  And, since all of these lead to lower trend…a combined entity has power.

3. How does the payor benefit?  Again…a softball.  Just like a limited network (less stores), pharmacies have always offered lower rates to payors (or PBMs) in return for marketshare.  CVSCaremark could offer tiers based on marketshare to their clients (i.e., you get a 17% discount for all Rxs processed if your marketshare is 30% and you get 19% discount if your marketshare is 40%).  There are obviously fixed costs (real estate, transportation, technology, staffing) so there are incentives for store operations to optimize volume (without getting too much such that they have to hire additional staff).

The Facebook and iPod Generation

When I think of the current generation that is coming into the workforce, I think of people who:

  • Grew up with social media all around and are less concerned about privacy
  • Grew up with the ubiquity of technology having an iPod always on and being in constant communication with their mobile phone
  • Grew up with the US in a constant state of war – 9/11, Iraq, Afghanistan
  • Grew up with the idea of constant stimulus – portable video games, TVs in the car
  • Grew up with periods of market instability – technology bubble, 9/11, housing bubble
  • Grew up with a likelihood of living at home after college [and think that’s ok]
  • Grew up with more global awareness via CNN and the Internet
  • Grew up with allergies and general paranoia – no more leaving home as a kid and coming back when the sun set or eating peanut butter at school

I think the more typical perception of many of them is an overly privileged generation who can’t focus on one thing, expect everything (money, position, title, responsibility) regardless of whether they deserve it, don’t follow basic protocols (like a thank you after an interview), have been coddled their whole life, and have no respect for what others have done.  But I think every generation thinks that of the next generation.

I guess the official definitions are: (see good presentation)

  • Traditionalists – born before 1946
  • Baby Boomers – born btwn 1946 and 1964
  • Generation X – born between 1965 and 1981
  • Millennials – born 1982 to 2000

The Millennials are also called Generation Y, GenNext, the Google Generation, the Echo Boom, or the Tech Generation and are 76M strong. With immigration they are likely to surpass the Baby Boom generation in the 2010 census. [Note – Comments derived from reading an exerpt of The M Factor by Lynne Lancaster and David Stillman in the May 2010 Delta Sky Magazine.]

Their book – The M Factor – is focused on this generation. They talk about the fact that this generation is talking about and searching for “meaning” in their work. They’ve been raised by working parents that struggled with life balance and want more out of work for their kids. They see how work has become so engrained in our lives with Blackberries and other tools.

More than 90% of US Millenials said having opportunities to give back thru their company was somewhat to very important when considering joining an organization.

51% of young workers surveyed as part of the Kelly Global Workforce Index were prepared to accept a lower wage or lesser role if their work contributes to something “more important or meaningful”.

The question that a lot of this drives at is how do you leverage the passion and tech savvy Millenials as part of your workforce. They are going to drive changes. They are going to be innovators. And, they’re not going anywhere. Here’s a good blog on Generation Y.

It reminds me of some mock interviews I did a few years ago at my business school. I was stunned by some of the accomplishments of these people. They had founded companies and businesses. They had volunteered in the community. They were well read and had passion for things that I didn’t care about at their age. I was glad to have made it thru school with my peers. But, on the flipside, I talked with my friends who are the Dean of the School and run the Career Center to point out that not one of those people wrote me a thank you or sent me an e-mail. None of them ever asked me to help them find a job leveraging my network.

The article talks about this Millenial generation growing up at a time when the divorce rate had dropped and parents spent more time with their kids and transformed from authority figures to mentors and friends of their kids. This whole concept of “helicopter parents” has been explored in other areas and still amazes me. [Are you a helicopter parent test.] For example, 11% of US Millenials said they would feel comfortable involving their parents in salary negotiations. [If I had the option legally and a parent showed up with their kid for a salary negotiation, I would rescind the offer. If they can’t do that by themselves, how can I trust them to drive my business in pressure situations?]

In healthcare, the best example I always use for a company focusing on this generation or the “Young Invincibles” is Tonik Health which is a Wellpoint brand. I’m always surprised how few people know them. Take a look at their website (below) – the colors, the words, and the positioning is all so different than how most of us think about our health insurer. Here’s a good blog entry on the “millennial patient“.

Why is this relevant to my healthcare communications blog – because segmentation is so key to effective messaging. You have to understand this generation and how to engage them and drive them to take care of their health. Traditional language, modes, techniques, and messages may not work. The article (from the book) talks about their focus on feedback and scoring. They are used to constant [positive] stroking and having a score to evaluate success. They grew up being rewarded for everything. How does that manifest itself in a wellness system that tracks their good deeds (exercise, diet, preventative actions), provides them with rewards, frames their effort as contributing to the greater good, and integrates technology (e.g., connect devices)?

Only 3% of the people they surveyed said that Millenials handled negative feedback well. They haven’t been allowed to fail. This makes me think about one of my favorite quotes from IDEOFail Often To Succeed Sooner. You have to understand how to try, fail, learn, and try again to make improvements.

Here’s some recent research we’d done at Silverlink on the “young invincibles” and “Why I Have Health Insurance”:

A Few Recent Posts Worth Reading

Trying to keep up with newspapers, magazines, blogs, and everything else can be a fulltime job.  So, I took a quick skim of some of the blogs I follow.  Here are a few entries worth reading:

  1. Genetic Test Reduces Hospitalization For Users Of Warfarin
  2. Copays – When 95% Savings Isn’t Enough
  3. Chilmark on WebMD’s Social Media Launch
  4. Health Reform To Squeeze MCO Profits
  5. Micro-Obstacles to Health and Wellness
  6. DiabetesMine (always great)
  7. Pharmacy’s MTM Challenge (one of my favorite bloggers)
  8. Rating MDs on Cost
  9. The Power of FREE
  10. Medicine is Human

There are lots more, but that’s all I have time to share right now.

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.]

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.

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?

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.

Cosmetic Neurology

Not surprising…students using ADD/ADHD drugs to help them perform better.  Probably not a good thing.  This shows how badly overwhelmed or overstimulated our population is.  We can’t focus on one thing at a time to get it done w/o some drugs.  Could it really be 20% of college students using these drugs?  There is certainly some dependency risks.

From a blog posting on this:

I got most of my Adderall information from a great article in the New Yorker by Margot Talbot titled Brain Gain: The underground world of neuroenhancing drugs. In it, Sean Esteban McCabe, from the University of Michigan’s Substance Abuse Research Center says that at some universities, up to 20% of the population is using these drugs: “White male undergraduates at highly competitive schools—especially in the Northeast—are the most frequent collegiate users of neuro-enhancers.”

Anjan Chatterjee, a neurologist at the University of Pennsylvania , coined the term “cosmetic neurology” to describe the trend of taking drugs to enhance ordinary cognition. He says, “Many sectors of society have winner-take-all conditions in which small advantages produce disproportionate rewards.”

Good cartoon to sum this up.

Gov’t Reduce HC Costs: Rx Decisions Say No

I have nothing against the pharmaceutical companies.  We need medications.  Development of medications costs money.  There are lots of failures to find one that works.  They deserve to make money.

That being said…they are smart and apparently the administration is inappropriately (IMHO) paying attention to what they suggest is right.

  • For Medicare PDP, the plans can no longer require the member to pay more when they choose a brand drug which is available as a generic.  WHY NOT?  It’s the same drug.  There may be a few exceptions called Narrow Therapeutic Index (NTI) drugs, but just make them exceptions.  This was a bad decision which will cost us taxpayers money.  (See prior posts – Potentially Ridiculous Decision and Uproar Over “Reference-Based”…)
  • Now, they jump on the savings that are offered for members who hit the “donut hole” and stay on the brand medication.  Why not just require MDs to give out samples?  Of course this will effect behavior and drive brand utilization.  Pharma is not stupid.  This is another decision which will cost us taxpayers money.

On the one decision where they go against pharma – drug reimportation, they make a bad decision.  Why import drugs?  Why not implement a therapeutic MAC (maximum allowable cost)?  This will definitely impact drug costs AND generic drugs (which make up almost 70% of the claims filled) are cheaper in the US.

This is the government that we want to manage the costs of our healthcare system when they can’t even make the logical decisions that anyone close the business could make.  Come on!

[IMHO = In My Humble Opinion]

Sold to Pharma

Finding A New Name

I have received notice that I can no longer use the “Patient Centric” term.  Apparently, it’s a Trademarked name.

As I am looking at new names, I have come across a new series of blogs and sites.

1. I first looked at “The Engaged Consumer”

2. I looked at “Healthcare Communications”

3. I looked at “Health Engagement”

4. I looked at “Member Engagement” which is open, but I’m not sure it’s the right terminology.

I welcome any thoughts.  I am working on a few more right now.

Should MDs Make Less Since Work Is Fulfilling?

It’s an interesting question, and one I had never thought about.  But, this is how I would summarize Penelope Trunk’s post.

Why do doctors need to make so much money? The non-financial rewards for being a doctor are larger than almost any other profession. Except teaching.

Can’t I have a good job that I like; make a difference in society; AND make a lot of money.  Is that too much to ask?

I guess it’s like saying why can’t I balance work and family AND make a lot of money.  It can happen, but it’s rare and hard. 

I’m not sure I buy her hypothesis about lowering standards to create more MDs which would drive down costs, but it’s an interesting perspective.

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.


7 Points in 7 Minutes

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

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

    Gov Leavitt On Gov’t Trojan Horse For Healthcare

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

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

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

    Pharma Rx Costs Tied To Outcomes

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

    WSJ Blog

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

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

    Cigna PR

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

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

    Want To Stay Up To Date

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

    Promotion vs. Nudging vs. Mandatory Mail

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

    The traditional ways of driving mail order have been:

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

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

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

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

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


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