Archive | Books / Articles RSS feed for this section

Our First Think Different Event

May 29, 2008 by George Van Antwerp 2 Comments

Today was our first Think Different event in Boston. This is a road show we are doing around our new positioning and how health care companies need to get outside the box to improve the effectiveness of their communications. It has four external speakers plus our CEO.

[Spoiler Alert: If you are attending an upcoming session, I may reveal some of the content here.]

I missed ½ the session today due to a client call, but I will be at 3 of the other 5 events. In listening to the first two speakers, I jotted down a few thoughts.

From Kinney Zalesne:

  • She spoke about moving to the Starbucks economy and how we have much more choice today in what we do, who we love, religion, and our gender. Everyone immediately thinks of gender meaning sex change operations, but the point here is that there is a group of people who don’t want to be forced to select a gender identity. Before you discount it, you should know that 100 corporations, 75 colleges, and 8 states now ban discrimination based on gender identity. This was a bit of a surprise to me, but when I was talking with a large health plan about this, they informed me that their new EMR (electronic medical record) allowed for 5 possible gender options.
  • She talked about people basically starving themselves to focus on the theory that has been demonstrated in animals, but not yet in humans which says that by eating 30% less calories you can extend your life by 40%. (Not something I will be doing.)
  • She talked about the Do-It-Yourself (DIY) Doctors which are the people who use the Internet to self-diagnose and treat the MD as an ATM for drugs (i.e., I need a prescription for simvastatin can you please write it for me). I have heard a lot of talk recently about the changing perception of physicians. I haven’t seen the statistics, but one person said that they have lost the most respect over the past 20 years than any other profession. I think Kinney’s point is more about them moving from being a supervisor role (i.e., you should do this) to an advisor role (i.e., thanks for your opinion…I will take it into consideration).
  • Her statistics about 5M working retired (i.e., >65 years old) and 2M working teens (i.e., using the Internet to make money before they leave high school) says a lot about how benefit design will need to change. The implications on needs and flexibility (e.g., imagine two primary addresses for snowbirds) could be significant.
  • In her talk about micro-targeting, my mind drifted to a few thoughts:
    • How has gas prices changed our opinion of other costs? A $15 copay used to be equal to 7 gallons of gas. When it only equals 3 gallons of gas, do we view the $15 differently? [Have you caught yourself saying gas is only $3.75 at this one station near my house?]
    • Just like your segmentation can change in healthcare, it is important to consider the macro-economic and political environment when communicating. Have you listened to all the car advertisements lately…they all talk about gas mileage?
    • If you need a simple example of why personalization matters, think about buying a car. I am not a mechanical person so if I came in and someone talked to me about horsepower and cylinders then I would be turned off. I care about comfort and low maintenance.
    • Finally, getting back to health, I thought about how difficult it is to be successful. Let’s assume there were 10 primary reasons for non-adherence and 3 primary channels for delivering information (live, letter, automated call). In this case, you have 10% chance of hitting the right message and a 33% chance of using the right channel (i.e., a 3% chance to be successful).

From Liz Boehm:

  • She shared a lot of great facts about patient awareness of technology and how adherent they are.
  • She points out a scary fact that while our health care needs are going up with the boomers we simultaneously have an issue with health care workers retiring which will only make things worse in the short term.
  • She showed that 47% of people had visited their health plan’s website. [I will have to push her on this data since I believe they visited, but I think the percentage that log-in and use the site has to be very small. I would estimate 10-15%.]
  • She talked about use of social media and gave an example of a MySpace group on diabetes.
  • I found the discussion on wellness very interesting where she pointed out that things like chocolate, riding an elevator, or for some smoking gives you an immediate positive feeling while dropping your cholesterol by 10 points or even trying to lose 1 pound per week is pretty abstract.
  • I have talked about loss aversion several times, and she talks a lot about it. Using it to make a link to why incentives matter in health care.
  • Talking about motivation, I like her point that it isn’t a reasonable suggestion if you can’t achieve it. It may make good clinical sense to have a BMI of <25, but for someone with a BMI of 31, perhaps setting a goal of 28 is more reasonable and not as discouraging.
  • In her talk about trust, it made me wonder how many people that work for managed care companies and pharmacy benefit management companies reveal that fact at cocktail parties. I am not talking about professional networking events, but your neighborhood events. Do you say who you work for and address their comments about service and/or coverage issues?

I finished my client meeting in time to hear Stan Nowak, our CEO and co-founder, speak and tie together the different points of view with some potential actions that people could take. As he often does, he talked a lot about the power of data and the fact that what’s new to health care is often old in other industries. We are an industry with the most data about people, but the least ability to use it effectively.

It’s also interesting to hear him talk about some of the “data exhaust” that is created by the analysis that the team does. These are facts that get revealed which may be surprising and may be things you never even thought to look for. For example:

  • Patients with emphysema are 40% more likely to engage in a communications program related to additional coverage than patients with migraines.
  • Patients with uncommon names are 18% more likely to complete a healthcare survey than those with common names.
  • Males with depression are 83% less likely to do pill splitting than females with depression.
Books / Articles, Consumerism, Events, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Research, Silverlink, Technology, Value Propositions

Groups And Microsegments

May 28, 2008 by George Van Antwerp 0 Comments

When I was listening to Kinney Zalesne (Microtrends author) present this morning at our Think Different event, there were several things that crossed my mind:

  1. Which micro-trends am I part of?
  2. How much micro-targeting is too much?
  3. Will consumers self-identify into groups?

Without going back to the whole book, I can think of several micro-trends with which I associate:

  • Marathoning
  • Stay-at-home worker and extreme commuter
  • 30-winker (don’t sleep a lot)
  • DIY Doctor (research my own care)
  • Pet Parent (pamper my dog)
  • Video Game Grown-ups (enjoy playing Wii w/ and w/o my kids)
  • Blogger

It has come up in the past two sessions where I have seen Kinney present. The question is how much is too much. Just because I know that you like cats, subscribe to Popular Mechanics and GQ, and have 3 siblings, should I use that information?

  • I certainly think that more targeting is better although I might not always want you to tell me how much you know about me.
  • You have to be flexible enough to allow for mistakes in interpretation and/or not too presumptuous. (For example, one of our co-founders is from Brazil but has been here for years. He recently started getting all of his communications from a few companies in Spanish. He didn’t opt-in, but they assumed his last name meant he spoke Spanish (which is not what they speak in Brazil BTW).)
  • You have some issues of parity which must be either addressed or are legally required (i.e., you may have to treat everyone in a similar way). I am sure we might all like to drive high satisfaction for healthy members to increase their retention, but this deliberate adverse selection would be an issue and abuse of information.

Finally, there is a lot of discussion about capturing preferences (i.e., I prefer calls over letters) and how to segment populations. I think there is an interesting trend in social media for people to self-identify into groups. For example, I pulled up my LinkedIn profile to look for a second at all the groups to which I belong. The same thing is happening in Facebook. Until recently, this was not a huge driver of activity, but over the past 6 months, I have noticed people forming and joining groups. We want to be associated with certain things. I think if I knew how the information was being used that I would spend a few minutes during enrollment filling out information about how and when to communicate and interact with me. I think I would even reveal my Myers-Briggs category (INTJ) if it helped someone better deliver information to me that would make me healthier.

The younger generation is rapidly becoming used to revealing lots of information about themselves. I don’t think that things are considered as private as they once were.

Books / Articles, Consumerism, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Research, Value Propositions

Book Review: Health Care Reform Now!

May 27, 2008 by George Van Antwerp 3 Comments

Health Care Reform Now! A Prescription For Change is the latest book by George Halvorson (CEO of Kaiser Permanente). I have been talking about it and using quotes from it for a few months. I finished the book a few weeks ago and figured that I better carve out the time to capture my thoughts now.

First, if you are looking for a great book on why healthcare is a big issue in this election, you don’t have to look any further. As someone running one of the biggest healthcare entities in the US, George clearly knows what he is talking about and speaks from a position of authority. I know that he has talked with all of the candidates about their policies.

If you are in healthcare and trying to be a catalyst for change, you have to read the book. It is pointed, opinionated, and supported with lots of facts and examples. If it doesn’t make you want to change what we have, I would be shocked. Some of the examples of mis-alignment are scary.

Some of the facts he shares:

  • Family health insurance rates in CA already exceed the per capita income of 147 countries.
  • General Motors now spends more money on healthcare then on steel.
  • Nearly 50% of the time, patients in the US are receiving less than adequate, inconsistent, and too often, unsafe care.
  • Healthcare costs are unevenly distributed in America.
    • 1% of the population uses 35% of the healthcare dollars
    • 5% uses 60%
  • Care linkage deficiencies abound – and can impair or cripple care delivery.
  • Economic incentives significantly influence healthcare.
  • Systems thinking isn’t usually on the healthcare radar screen.
  • Most of our costs are for chronic diseases – primarily diabetes, congestive heart failure, coronary artery disease, asthma, and depression.
  • Prevention is a lot less expensive than addressing these chronic diseases at their late stages.
  • The US ranks 35th in the world in infant mortality.
  • We could cut the complications of diabetes by 90% with best care and involved patients.
    • We could cut second heart attacks by 40%.
    • We could cut school and work days lost because of asthma by 90%.
  • Incentives work…yet while we have 9,000 billing codes for procedures and services not one of them is for curing someone or improving someone’s health.
  • There is up to a 60% difference in the 5-year mortality rate for breast cancer patients, depending on which hospital’s surgery team did the surgery.
  • 1 in 10 doctors use electronic medical records (EMR) and only 5% of hospitals use computerized physician order entry (CPOE). This means our history exists mostly in paper files with no standards.
  • Almost 50 developing nations have higher immunization rates for preventable childhood diseases than the US.
  • The Institute of Medicine showed that it takes “seventeen years before a proven new technique becomes the standard of care in a given medical specialty.”
  • There were 2,000 published clinical trials in 1985 and 30,000 published in 2005. (Can your provider really keep up without an electronic system?)
  • Diabetes is the number one cause of new blindness (90% preventable) and foot and leg amputations (85% preventable). It is the number one co-morbidity associated with death from heart failure.
  • Asthma causes – 2M emergency room visits, 500,000 hospital stays, 5,000 deaths, and 14M lost school and work days per year.
  • The vast majority of asthma attacks can be prevented.
  • If Americans were 5-10% thinner and walked just 30 minutes per day, the incidence of Type 2 diabetes could be cut by more than half. (Culture and incentives matter)
  • We spend $250,000 every minute on heart disease.
  • More than 15M Americans have depression…and on average, people with depression have 3 other chronic diseases.
  • A 10% reduction in spending for the top 0.5% of patients would create enough savings to fund universal coverage for the uninsured.
  • The most expensive acute conditions are cancer, maternity, and trauma care. (Acute conditions account for 30% of the health care spend.)
  • The median life expectancy across the 117 cystic fibrosis centers is 33, but it is 47 at the highest performing center. (This seems embarrassing that there could be such a difference here.)
  • US employers pay an average of $6,600 Per Employee Per Year compared to $600 in Canada.
  • 4% of people believe they have insurance…but they don’t. (Who are these people?)
  • Government pays 44% of the healthcare bill today; employers 26%; and individuals 30%.

Key Point – I think everyone wishes that we could address the uninsured and underinsured issue here in the US. It is ridiculous. But, I think most people feel it would further complicate the economy and be a downward drag. George presents a good case that today’s model simply cost shifts so that we are paying for care but paying at the high cost of emergency care not preventative care for those people. In the book, they say that this cost represents $922 per employee today in what is paid. Someone has to pay the providers for these real costs that they incur and can’t recoup. We could cover the costs of the uninsured without any real increases in costs.

Some of my favorite quotes:

  • “We don’t really have a health care delivery system in this country. We have an expensive plethora of uncoordinated, unlinked, economically segregated, operationally limited Microsystems, each performing in ways that too often create suboptimal performance both for the overall health care infrastructure and for individual patients.” (introduction)
  • “Performance reporting that actually exists about either processes or outcomes is almost always regarded in the current culture of American health care as an onerous, externally imposed burden, extraneous and irrelevant to the actual business and profession of care delivery.” (pg. 23)
  • “I do not want ‘rules-based’ medicine. I do want accountable care.” (pg. 29)
  • “Process reengineering will not happen on any scale in health care until there is a financial reward for doing just that.” (pg. 33)
  • From the book Escape Fire: Designs for the Future of Health Care by Don Berwick – “A patient with anything but the simplest needs is traversing a very complicated system across many handoffs and locations and players. And as the machine gets more complicated, there are more ways it can break.” (pg 86)
  • “We need highly credible doctors, nurses, and health educators talking to patients in targeted and effective ways to help people make the lifestyle changes necessary to avoid diabetes.” (pg 117)
  • “Health care can be improved. The challenge is to do it consistently and systematically, not incidentally and haphazardly.” (pg 122)
  • “Improving care by 50 percent for diabetics is wonderful, but not as wonderful as reducing the number of diabetics by 50 percent by preventing the disease.” (pg 206)

Comments:

  • He talks about studying the international models and that none of them are the same. They have all been individually developed to fit the culture and needs of the country.
  • He talks about creating a “patient-centered American health care marketplace”.
  • He is careful about not just pushing the Kaiser model of vertical integration. He focuses on virtual integration which is more achievable.
  • More care is not better care.
  • He gives several examples of how following best practices for evidence based medicine improved outcomes but reduced revenues for the providers which is a hard model to sell.
  • He compares HEDIS scores (which measure how often health plans offer care that complies with best practices) with Six Sigma:
    • Average performance for screening for colorectal cancer is 49% (or 1.5 sigma).
    • Recommended treatment of acute depression is 61.6% (average) and 70.8% (90th percentile) which are 1.8 and 2.1 sigma performance.
    • Note: 2-sigma performance means 308,000 cases of non-compliance per million patients…6-sigma means only 3.4 cases per million.
  • He talks about the fact that 5% of patients experience an adverse drug event. I think the PBM industry has consolidated a lot of data to minimize this, but I am surprised more people don’t talk about samples here. Although they are supposed to track samples, I bet most physicians don’t record them in the chart and they certainly aren’t electronically managed to look for potential drug-drug interactions. (In my opinion, there is still opportunity for improvement, but it is at the pharmacy level not the provider level.)
  • He proactively addresses one major excuse about controlling patient behavior. Yes…we can’t control the patients, but we can make sure that the right events happen to align them for success.
  • I like his suggestion that a personal health record could be a more logical first-step than a full blown EMR solution due to costs and ability to execute.
    • “That personal health record data set for each patient should show all care received by that patient, all prescriptions paid for, all tests given, all diagnosis made, and all providers who delivered care to each person as a patient. The information should be in an easy-to-use format and available to each patient on demand, either electronically or on paper.”
  • He provides a good, quick comparison of PHR and EMR:
    • EMR has the exact Rx dosage and level. PHR may just have the name of the drug.
    • EMR will have the x-rays and scans. PHR will just say the date the test was done.
    • EMR will have notes from physician visit. PHR will just know the patient visited.
  • Preventing a CHF (congestive heart failure) crisis might only generate $200 in billable revenue while treating a crisis creates $10,000 – $20,000 in revenue. (And, we really wonder why people aren’t acting preventatively.)
  • Preventative care makes me think of two examples:
    • People have to want to be healthy and manage their risk. I know numerous people who are told to be on bed rest when they’re pregnant that don’t listen to their physicians.
    • People have to know there is not a risk of discrimination. I know a friend with MS who didn’t go see a doctor for several years until she had found a job with good health insurance.
  • He talks a little about it, but I think the issue of helping patients evaluate trade-offs is a big one. Enabling them with information is important, but how do we help them compare two treatments based on both outcomes and the experience (i.e., pain, functionality). Is it always better to simply live longer even if you have limited functionality and are always in pain?
  • He talks about plan design with some very good insight:
    • Deductibles only work if the unit of care being purchased is less than the deductible.
    • Deductibles tend to discourage chronic patients from getting preventative and maintenance care.
    • Percentage copays only work on big dollar differences. Otherwise, paying 10% more of a drug or office visit that costs $20 more is only $2.
  • In talking about plan design, he talks about something that in pharmacy is referred to as Therapeutic MAC. (MAC = maximum allowable cost) This allows patients access to any drug, but the plan only pays for the lowest cost drug which produces equal outcomes. Therefore, a patient might get the first $70 of any office visit covered, and they pay the difference. Then they care about where and when they go to the doctor.
  • For all the talk about price transparency and driving decisions, he makes a great point that this is thrown out the window at times. For example, when you are having a heart attack, you don’t have time to research your options and make tradeoffs.
  • Kaiser saw first-hand what happens after seniors pass a cap on prescription coverage (pg 137):
    • 18% started skipping doses of medication
    • 9% increase in ER visits
    • 13% increase in hospital admissions
    • 22% increase in mortality
  • He talks about 8 developments that have made health care reform possible:
    • Common provider number
    • Computerized databases
    • Electronic claims data portability
    • Government transparency about payment data
    • Universal awareness of the quality issues
    • Buyers are ready for change
    • Internet functionality used for care
    • Lawmakers are ready for reform
  • He talks about blending virtual care and live care with a technology infrastructure which I think makes a lot of sense. I wonder how we change physicians to be more comfortable with the “DIY” (Do It Yourself) patient that comes in with lots of information and suggestions from other caregivers or even getting “second-guessed” by the rules engine of the EMR.
  • He talks about health care needing a Target, Best Buy, or Wal-mart to manages the buy and sell side of health care.
  • (I am going to massively over-simplify this) He talks a lot about having the buyers issue an RFP requiring certain things and creating a new type of entity – the Infrastructure Vendor (IV). “The IV should facilitate and operate electronic connectivity support tools for the patients and caregivers and should demonstrate their effectiveness to the buyers.”
    • He doesn’t see the government playing this role which limits who could do this nationwide.
    • Conceptually, I agree that a technology backbone that connects everyone would be key.
    • It sounds a little too build it, and they will come to me. This is a radically and risky change that would need everyone on board.
    • Some mandated change at a government level has to be required.
    • Could you do this at a state level first?? For example, I know a coalition that got all the employers to agree to a RFP and moved all their business to Humana for one area after they won the RFP.
  • At many points in the book, I kept thinking about the need for SLAs (service level agreements) on outcomes. (I haven’t studied the capitation modes tried in the US years ago, but there seems to be something there about paying a provider a fixed amount per year. Their job is then to act preventatively.)
  • I am a fan of using incentives and penalties in the system with one caveat. I think you need to tie this to genomics. So, someone who has high cholesterol based on their family history and tries to treat it shouldn’t be treated the same way as someone who eats junk food all the time with no family history.
  • I think making people buy-up to different providers or drugs works great for events that can be planned, but not for emergency. It would be possible to tell which one was which with a fully integrated system. Of course, you have to manage people not gaming the system, but that is where there should be incentives for being preventative. Trading off metrics in your design to balance behavior will be key.
  • Another sad fact that he relays toward the end of the book is some of the data pointing to the racial and ethnic disparities in coverage and care in the US.
    • The death rate from asthma for African American children is 4x the death rate for white children.
    • Minority Americans make up ~ 1/3rd of our population but over ½ of the uninsured.
  • One thing I didn’t see or get was whether any of the international models that he studied had a focus on outcomes.
    • I thought one interesting point he made that in a government system where votes are at stake there is a strong focus on primary care which is used by the masses (i.e., more votes) versus specialists which are used by the minority of patients. Another example of how incentives skew solution design.
  • I am always shocked when I see the Federal Poverty Guidelines. How does someone survive on $9,800 or $20,000 for a family of 4? If you ever wonder how all the tasks get done around you and still feel like addressing the uninsured and underinsured is an issue, you should try to live on that income.

My summary after reading the book was:

  • Wow! We have a lot of work to do.
  • We can make a difference pretty easily.
  • There are three things that matter – infrastructure, incentives, and culture.
  • Employers have to be willing to push incentives or penalties to their employees. The strategy of lowering costs without “disrupting” people doesn’t work.

Go read the book. Help make a change.

Books / Articles, Consumerism, Healthcare, Innovation, Managed Care, PBM / Pharmacy, Research, Technology, Value Propositions, Weblogs
, , ,

Medco’s Trend Report

May 22, 2008 by George Van Antwerp 0 Comments

Medco‘s Trend Report recently came out for 2008 (which looks back at 2007). Here are some of the graphs and information from it.

“Generic drugs have been a tremendous asset in controlling runaway health care costs,” Medco Chairman and CEO David B. Snow Jr. said. “Generic cholesterol medications have helped contain our drug trend to a new all-time low of 2.0 percent. Patients and our clients are reaping the benefits of generics as we enable them to hold down costs and make prescription drugs one of the few areas where spending trails overall health care inflation.” (Source)

  • Drug trend was 2.0%.
  • They talk a lot about what drives trend by class.
  • It shares a lot of tables and charts. (I pulled out those below that most interested me.)
  • They talk about legislative and technology issues / opportunities such as e-prescribing.
  • They talk about consumer driven health plans (CDH):
    • Lot of plans offering them; low adoption (2.6M members)
    • Mail order use is only 1.2% higher and generic use is only 1.0% higher (so much for easy ways of saving money)
  • They talk about the rapid growth of people using social networking tools to learn about diseases and medications.
    • Which presents risks and opportunities

  • They introduce a new metric…the Generic Opportunity Score.
  • They introduce a new topic to me which is “adjunct therapies”. The key to this topic here is whether plans should consider coverage of over-the-counter (OTC) drugs that are prescribed for use with prescriptions to treat a condition.
  • They talk about Medicare driving a focus on quality.
  • They talk about coverage for the uninsured.
  • They talk about biosimilar drugs (aka – biogenerics).
  • The talk about genomics (i.e., personalized medicine).
  • They talk about BTC (behind-the-counter) and OTC (over-the-counter) trends.
  • They talk about nanotechnology.

I didn’t read it word for word, but it seems to cover the landscape well and give good easy to read metrics with lots of charts.

Books / Articles, Consumerism, Healthcare, Innovation, PBM / Pharmacy, Research, Technology, Value Propositions

Silverlink HealthComm Behavioral Index

May 20, 2008 by George Van Antwerp 1 Comment

Although this new index was released in a story a few weeks ago, the official press release should be out this morning. It has been interesting to watch this transform from a concept to an initial survey with some data.

What is it? The Healthcomm Behavior Index is a quarterly survey of 1,000+ commercially insured adults in the US that measures the effectiveness of healthcare communications. It focuses on three areas – personalization, satisfaction, and action.

What are some of the key findings?

  • Effective healthcare communications (i.e., targeted and personalized) have the potential to build member affinity, loyalty and trust, and significantly drive behavior change.
  • There is a direct relationship between healthcare behavior change (the willingness to take action) and how personalized and satisfied members are with their healthcare communications.
  • Respondents are generally lukewarm on healthcare communications and there is significant opportunity for health plans to improve the effectiveness of their communications programs.
  • Unlike other consumer industries, demographics are not as predictive
    of healthcare behaviors.
  • The single most consistent
    determinant of healthcare behaviors is health status.
  • Unhealthy members (those who arguably use health benefits more actively) are the least satisfied and the least likely to take action. These are the members who are the most costly to the health plans so if the plans improve the effectiveness of their communications, they will be able to drive behaviors within this segment and thus have the opportunity to significantly reduce healthcare costs.
  • Seniors are more satisfied and take more action relative to other age groups. This was a counter-intuitive finding as it was assumed that seniors as a whole would have a higher percentage of ‘unhealthy’ members. However, we found that people tend to rate their health status relative to their age.

What are the conclusions? Personalized healthcare communications leads to better satisfaction which leads to a higher likelihood that a healthcare consumer will take action relative to their healthcare behaviors. To most effectively drive member behavior, health plans should micro-segment their populations and deliver extremely targeted and personalized communications programs.

I found the most interesting fact to be that those who took action were the most satisfied with their healthcare communications and felt that they were personalized to them. Digging in a little on the research process, those terms were based on questions that addressed the following:

  • Took action = acted on information + adopted a healthier lifestyle + improved my health
  • Satisfaction = got the right amount of communications + easy to understand + timely + useful
  • Personalization = trust the communications + specific to my needs + treat me like an individual

It will be interesting to see how we can use these results with clients to create a benchmark, compare them to a national average, and then look at how self-reported data correlates to claims data. Ultimately, this could prove to be a defining moment in creating the business case for why healthcare communications are so important beyond the obvious – patient satisfaction, lowering inbound call volume, driving behavior, improved profits, etc.

Books / Articles, Consumerism, Healthcare, Marketing / Communications, Research, Value Propositions

Pharmacy Satisfaction Did You Knows

May 15, 2008 by George Van Antwerp 0 Comments

PharmacySatisfaction.com puts out a weekly factoid. They are very interesting and make some great points. I have talked about it before, but here is an updated list with the new factoids from 2008.

  • Independent drug stores continue to score highest in customer satisfaction, followed by food stores, clinics, and chain and mass merchandise pharmacies, in that order.
  • The number one concern across all pharmacy users is that their prescriptions are filled accurately.
  • Independent pharmacy customers are the most satisfied with the services their stores provide.
  • The most useful feature those Web sites offer to them, the survey found, is the ability to order refills online.
  • Nearly three in 10 order their refills online.
  • An average of 69.4% of customers own or use a computer.
  • Customers average three visits each month to their pharmacy.
  • Only about 1-in-5 pharmacy customers, overall, say that they use a loyalty card that provides points, discounts or other savings.
  • While the majority of loyalty card users are satisfied with the expected cost savings by using their card and with the ease of enrolling and understanding the benefits of their card, fewer than 1-in-4 card users are highly satisfied.
  • The drug store industry remains largely up for grabs, with nearly half of pharmacy customers saying they use more than one pharmacy to fill prescriptions.
  • Pharmacy use varies considerably by population. Chain pharmacies are most commonly used among residents of areas with more than 100,000 people. Independent pharmacies are most commonly used among rural respondents (areas with less than 100,000 people). Use of independent and mass merchant pharmacies decreases as population increases. Chain, food store, mail/online, and clinic pharmacy use tend to increase with population.
  • However, as pharmacy customers age, they are much less likely to use chains and considerably more likely to use mail/online and clinic pharmacies.
  • Seven-out-of-ten pharmacy customers indicate that they “definitely would” or “probably would” use their local pharmacy if they could receive the same amount of medication at the same price as their mail-order pharmacy.
  • The heaviest users of prescriptions are survey respondents in their 60s, averaging 5.4 new scripts and 29.2 refills per year.
  • The most preferred method for filling those prescriptions among respondents is to take them to the pharmacy and wait for them to be filled.
  • Indeed, physically handing a paper script to the pharmacist or tech in the store—or picking up a script phoned in by the doctor—remains the overwhelming choice among consumers. Most shun the use of drive-through windows.
  • How long patients have to wait for their scripts to be filled is a key component of customer satisfaction.
  • Fully 93 percent of those surveyed expressed satisfaction with the ability of pharmacies to dispense their new prescriptions in the time promised.
  • Pharmacy customers’ most commonly preferred method of refilling prescriptions (assuming prices and amounts of medication are the same) is calling an automated telephone system and picking up prescriptions at the store.
  • Independent customers are the most likely to receive prescription refills in less than 15 minutes, followed by food store, chain and mass merchant customers.
  • The average survey respondent is spending a considerable sum each month on drugs at their pharmacy—$82 on average (versus $57 a month on food and groceries at their pharmacy).
  • Customers who paid full retail price for their medications, paid an average of $81 for their most recent prescription.
  • Customers who paid the store discounted amount for their medications, paid an average of $75 for their most recent prescription.
  • Customers who paid a fixed-percent co-pay for their medications, paid an average of $56 for their most recent prescription.
  • Customers who paid a fixed-dollar co-pay for their medications, paid an average of $36 for their most recent prescription.
  • On average, respondents spend $82 a month at their pharmacy on prescription drugs, $57 on food/groceries, $18 on non-prescription (OTC) drugs and $14 on personal care/cosmetics.
  • An average of 85.9% of computer owners/users use the computer to improve their health by looking for information about diseases.
  • Much has been written about the value of closer pharmacist-patient relationships, but Americans seem to feel far more connected to their physicians, dentists and nurses than to their pharmacists. That’s clearly not all pharmacy’s fault; the same survey respondents agreed that they were usually given the opportunity to speak with their pharmacist when filling their last prescription. What’s more, pharmacists ranked a close second to doctors as sources of information about medications.
  • Only 16 percent of respondents describe their relationship with their pharmacist as “We are on a first-name basis and have known each other for a very long time.”
  • Walgreens’ “Dial-a-Pharmacist” initiative, launched in February 2006, allows non-English speaking patients to connect with pharmacists speaking 14 different languages.
  • Doctors (94%) are the most commonly referenced source of information on medications, followed by pharmacists (83%), nurses (57%), pharmacy brochures (50%) and the Internet (42%).
  • Doctors (77%) are the most trusted source of information on medications, followed by pharmacists (64%), nurses (43%) and pharmacy brochures (20%).
  • Independent pharmacy customers have the most trust in pharmacists, while mail/online customers have the least. Compared to last year, customers of all types of pharmacies place more trust in their pharmacist as a source of information.
  • More than one-third of pharmacy customers failed to fill all their prescriptions last year, and only 35 percent of all respondents said they were fully compliant on the medications they did take. Nevertheless, refill reminders from the pharmacy remain relatively rare, most patients profess.

2008 Factoids

  • In general, older patients tend to be more compliant than their younger counterparts.
  • The biggest reason for not taking all medications as directed was simply, “I forgot.”
  • Nearly 2-out-of-3 (65%) indicate that they missed a dose or took less medication than prescribed in the past year.
  • The most commonly cited reason for not filling all prescriptions is not needing (42%), followed by too costly (27%), changed by doctor (20%), side effects (17%) and insurance did not cover (16%).
  • Among the medical conditions displayed, those treated for HIV/AIDS and high blood pressure are the most likely to have filled all of their prescriptions in the past year. Those treated for RLS are the least likely to have filled all their prescriptions in the past year.
  • For competing pharmacy providers, satisfaction is a key measurement. Customers who say they are “highly satisfied” with their pharmacy are much more likely to return than those who are simply “satisfied.”
  • Pharmacy customers who are “highly satisfied” with their pharmacy overall are considerably more likely to have positive return intentions, compared to customers who are simply “satisfied” (97% definitely intending to return versus 65%). Survey results have also shown significant revenue differences between highly and poorly rated pharmacies, health plans, and PBMs.
  • Compared to last year, pharmacy customers place more importance on four of the six overall areas of pharmacy services—most notably professional services — followed by pricing and insurance, and overall convenience.
  • 31% of customers consider it “very important” that Pharmacists give advice on OTC/herbal products.
  • 38% of customers consider it “very important” that Pharmacists give advice on health conditions.
  • 57% of customers consider it “very important” that Pharmacists are friendly and courteous.
  • 65% of customers consider it “very important” that they are able to speak to a Pharmacists give clear instructions about Rxs.
  • 65% of customers consider it “very important” that they are able to speak to a Pharmacists about their concerns/questions.
  • 66% of customers consider it “very important” that their pharmacy protects the privacy of their health info.
  • The most common ailment that drives customers into your stores is high blood pressure, which afflicts nearly 50 percent of the respondents surveyed by WilsonRx. High cholesterol, allergies, ailments of the esophagus, arthritis and diabetes also are extremely common among patients.
  • When asked about their satisfaction levels, respondents who received birth control prescriptions were happiest with the medical treatment they’re getting, followed by those thyroid disorders, epilepsy/seizures and type I diabetes.
  • Among the pharmacy services customers say are most important to them is: Help untangling complicated insurance issues, and money-saving alternatives like generic drugs.
  • Consumers are generally satisfied with many of the services, medicines and health-oriented advice they find at their local pharmacy, but they’re also keenly aware of the high costs of pharmaceuticals and quick to shift outlets if they feel their needs aren’t being met.
  • Those who are covered by prescription plans—including nearly 39 million Medicare patients enrolled in some kind of coverage—often feel overwhelmed by the complexities and co-pay issues they encounter at the pharmacy counter.
  • Know your customer — whomever, wherever they are. Being able to identify different customer types is an important first step in anticipating customer needs and managing the expectations of each person.
Books / Articles, Consumerism, Healthcare, Marketing / Communications, PBM / Pharmacy, Research

Are You Doing Enough To Drive Generics?

May 13, 2008 by George Van Antwerp 0 Comments

From the Express Scripts Outcomes event a few weeks ago, here is an estimate of all the money left on the table by not increasing your generic fill rate in certain key categories.  Are you doing enough?

  • Utilization management programs – step therapy, prior authorization, quantity level limits?
  • Formulary coverage?
  • Plan design incentives?
  • Pharmacy incentives?
  • eRx messaging?
  • Web tools?
  • Patient communications?
  • Patient incentives?
  • Driving people to mail?

Here is a graph from CVS/Caremark‘s trend report from last year that shows correlation between certain programs and generic fill rate.

Books / Articles, Consumerism, Healthcare, Marketing / Communications, PBM / Pharmacy, Research, Value Propositions

Poor Health Plan Satisfaction Due To Poor Communications

May 8, 2008 by George Van Antwerp 1 Comment

JD Power just finished their second annual National Health Insurance Plan Study which looks at member satisfaction.

“The study finds that the majority of health plan members rate their insurer lowest for the communications and information that are provided to help them understand their plan. Only 45 percent of members reported they fully understand how to use their health insurance coverage and member services. Enhancing member understanding with critical plan details—such as prescription coverage, co-pays, how to locate physicians and how to appeal coverage denials—can lead to higher satisfaction ratings for insurers.”

They evaluated 17 regions and publish reports like the following:

Information and communications is the third largest driver of health plan satisfaction at 17%. The only two things above it are coverage and benefits (#1) and choice of physicians, hospitals, and pharmacies (#2). So, it makes a great case for why communications is something to invest in and focus on. It drives satisfaction which drives retention. Additionally, it is something through which you can create sustainable differentiation. Benefit design and network size are pretty easy to copy.

Books / Articles, Healthcare, Managed Care, Marketing / Communications, Research, Value Propositions

College Grads On Work Hours

May 6, 2008 by George Van Antwerp 1 Comment

As you can tell, I have been slow on the posts lately…too much work. Today (for example), I have a breakfast meeting in Boston, an afternoon meeting in Minneapolis, and then fly to Phoenix for a morning meeting on Wednesday. Crazy day.

But, all this made the USA Today Snapshot in Section B catch my eye. It was an Accenture College Senior survey about how many hours they expect to work in their first job (post graduation). What would you guess? I would have said 50-60 hours especially when you’re in your initial job and proving yourself.

I at least find this surprising. What are the 5% doing that work less than 30 hours per week? And the 41% that think they are working between 31-40 hours per week. These are college graduates most of which I would think are taking salaried jobs.

Books / Articles, General Thoughts

Robot Animals

May 6, 2008 by George Van Antwerp 0 Comments

In the spirit of research, I found this an interesting article. It talks about using robotic squirrels to infiltrate the squirrel population and learn about their communication techniques, social queues, and survival instincts.

“Animals and humans are all affected by behaviors, body postures and signals from each other that we may not be aware of.” Sarah Partan, Asst. Professor in Animal Behavior at Hampshire College

Obviously, I don’t think we are going to build robots that mimic humans and get responses, but it is often hard to fully understand the situation response that you get especially since so much of an individual response if framed by past experiences. But, that being said, my one takeaway (other than general interest) was the need for thinking holistically about multiple channels (e.g., web and chat) or sonic branding (i.e., the voice delivering the message).

Books / Articles, Research, Technology

Surgery To Make You Taller

May 4, 2008 by George Van Antwerp 0 Comments

I read about this years ago, but I am still amazed by it.  Did you realize that there is limb lengthening surgery that you can undergo to grow taller?  And, that you can do it cosmetically?  It basically involves cutting your legs, breaking the bones, and then over months slowly stretching them by turning screws in braces in your legs.

A friend of mine told me that his cousin who is a surgeon in the US has even done it to make someone shorter so that they could do some undercover work.  That is dedication to your job.

Imagine, if you will, a surgeon breaking your leg bones in four places, then attaching a steel scaffold frame to the outside of your limbs with metal pins jutting into your bones.

Every day for months you rotate screws attached to the pins in your legs. There are many moments of excruciating pain and the constant worry of infection. After that there is a grueling regimen of physical therapy. (ABC News)

Here are a few articles:

Books / Articles, Healthcare

Drugs Down. Gas Up. Food Up.

May 3, 2008 by George Van Antwerp 0 Comments

With most of our good going up.  According to CNN, I heard them say this morning that gas is up $0.60 per gallon in the past year and earlier this week, they said that food is up 35% in the past year.  (Neither of these are scientific, but they make the point.)

That makes me wonder how our impression of price changes.  Will we become less price sensitive as we get used to higher prices on everything.  A friend of mine told me that when they had a global meeting the people from Europe were commenting about how great it is to come to the US where taxes are low and gas is cheap.  It’s all a matter of perspective.

So, with most things going up, I found this press release from Express Scripts interesting:

Last year marked the first time in at least five years that consumers paid less, on average, in their prescription drug copay, according to the 2007 Drug Trend Report released by pharmacy benefit manager Express Scripts. The average copay dropped 25 cents to $13.20 even as the average total cost of a prescription rose from $55.01 to $55.93.

Express Scripts attributed the average copay decrease to greater use of generic drugs, saying in the report that consumers saved an average of $15 per prescription each time they moved from a brand to a generic.

Where $15 was once a big deal, will that need to be increased over time to have the same effect as the price of goods increases?  My dad still talks about seeing movies for $0.10, but we know those days are gone and a dime doesn’t buy much any more (if anything).

Books / Articles, Consumerism, Healthcare, Marketing / Communications, PBM / Pharmacy, Research

Drug Testing At 12…At Home

May 2, 2008 by George Van Antwerp 4 Comments

My local area paper – West NewsMagazine – has an article in the April 30th edition about Teens and Drugs.  I will save my comments for the end here, but I found it an interesting read.

  • The company they talk about is TestMyTeen.com.  They distribute one free kit to the parents through school and they charge $18.99 for additional kits that test for the 10 most commonly used drugs.
  • It says that drug testing gives teens a socially acceptable excuse to say no.
  • The article has several people talking about testing before you have a problem as a source of prevention.
  • According to the Drug Test Resource of St. Louis which also offers a home drug test kit for $49:
    • 54% of all high school students will use an illegal drug by the time they are a senior
    • 82% of those that use a drug try cocaine
    • 2 of those that use a drug try heroine
  • They say that the average age for first drug use is 12.
  • The article talks about making it routine and providing rewards for a positive test.

“We should be telling our children that we love them and trust them, but we don’t trust the environment they’re going to be in.  In the end, I’d rather they think we don’t trust them than to bury them.”  Shelley Kinker, co-founder of Drug Test Resource of St. Louis

“The problem is, you’re not dealing with the issues that caused them to use in the first place and drug testing them might just drive them to use something else, like more alcohol or a substance you’re not testing for.”  Tish Fontana, a professional counselor

WOW!!  I am not sure where to start.  I certainly worry about my kids and peer pressure.  Some days, I feel like I want to have software to record their every keystroke on the computer; give them a GPS tracking watch so I know where they are; and eventually have a way of recording the speed and location of the car at all times.

BUT, I ultimately think it’s our duty as parents to teach our kids how to make decisions and enable them to become productive adults.  Let me go point by point here:

  • Testing for the most common drugs.  Great, but doesn’t that just encourage creativity to get around the system…look at steroid use?  Isn’t drinking a bigger issue with teenagers?  Isn’t abuse of prescription drugs a real issue?
  • I can’t see kids (that wouldn’t already say no) using the excuse of being tested to stop peer pressure.  And if they do, what are they going to do when they go to college?
  • I really can’t see testing my kids at 12 without any reason to suspect they were using.  I agree that trust is earned, but don’t we start with the assumption of innocence in this country.
  • The age and prevalence of use statistics are scary.  I wonder what the frequency of use is.
  • Rewarding your kid for not using drugs.  How about punishing them for using drugs?  Or rewarding them for stopping using drugs.

I care, but I think this is pretty extreme.

Books / Articles, Healthcare, Technology

Deloitte On Healthcare Consumers

May 2, 2008 by George Van Antwerp 1 Comment

Deloitte recently published their results from a survey of more than 3,000 Americans on healthcare.  Here were some of their high level findings:

  • 93 percent of consumers say they’re not adequately prepared for future health care costs
  • 79 percent say candidates’ positions on health care are likely to influence their presidential vote
  • 46 percent place health care among their top three voting concerns
  • 26 percent would pay more for online access to medical records and results
  • 84 percent prefer generic drugs to name brands
  • 39 percent say they’d go abroad for treatment if quality was comparable and the cost was cut in half
  • 66 percent either strongly support (36 percent) or might support (30 percent) state-mandated health insurance
  • 63 percent either strongly support a tax increase to provide coverage for the uninsured (29 percent), or are inclined to support one (34 percent)
  • 52 percent understand their health insurance plans
  • Only 8 percent understand their health insurance completely
  • 18 might turn down a job to retain current health care coverage
  • 34 percent would use a retail/walk-in clinic; 16 percent have already have
  • 78 percent want to customize their insurance to include the features they value, with the cost changed accordingly

“The U.S. health care system is in the midst of a transformational change that many believe is centered on consumerism — the process of enabling and engaging consumers more directly in selection and purchase decisions regarding health care services. A traditionally one-way conversation is becoming a dialogue as the health care system transitions from patient-oriented to consumer-oriented. Industry stakeholders need to prepare to address the challenges and opportunities that consumerism presents.”

They have a lot more on their website about this:

Books / Articles, Consumerism, Healthcare, Managed Care, Research

What A Difference A Few Years Makes

April 29, 2008 by George Van Antwerp 0 Comments

Before a whole week passes, I need to capture my interview with Gene Drabinski from Trizetto. Gene is the President of Cost and Quality of Care. This was a fun interview where we just kicked back at the end of day two at the World Healthcare Congress and talked.

I haven’t spent much time around the Trizetto people recently and still thought of them as Facets which was the software that I remember from my payor days at Ernst & Young LLP.

Of course, I had done some homework prior to the meeting and began by asking some questions about being acquired by Apax who is taking them private. We talked about the advantages of being private versus public. The big one being the ability to plan long-term and make investments rather than try to make each quarter’s number.

He was then kind enough to walk me through some of the history of Trizetto. If you go to their news page off their website, I had realized before I talked to them that I was outdated in my frame of reference. They are talking about social networking and consumerism and decisioning not about claims processing and efficiencies.

We talked a lot about the CareKey application which they acquired. CareKey (now CareAdvance) is a PHR (personal health record) which sits on top of a member database. He described several key features of the application:

  • Good metadata (i.e., data about data)
  • Ability to reach out and capture new data systemically
  • Custom rules environment
  • Able to be integrated with workflow and used in disease management, case management, and utilization management

CareAdvance Enterprise – Enterprise software that allows health plans to automate utilization, case, disease and population management, and to extend a personal health record and personal health management tools to their members. The system includes two modules: Personal CareAdvance and Clinical CareAdvance, which integrate with the health plan’s core information systems, aggregating the member’s personal claims and diagnosis history, current prescriptions, and laboratory data into a single data repository.

We talked about transfering the information from one PHR to another. He clarified that the transaction data was transferable but not the context. We then spoke about their vision for Integrated Healthcare Management as an out-of-the-box solution to make the patient “be the best I can be”. From what he said, the physician is the final constituent that they need to get integrated.

“Integrated Healthcare Management is the systematic application of processes and shared information to optimize the coordination of benefits and care for the healthcare consumer,” said TriZetto Chairman and CEO, Jeff Margolis.

From Gene’s session at the conference, he facilitated a panel that included Vicky Gregg who is the President and CEO of BlueCross BlueShield of TN. One of her slides which captures the Trizetto IHM vision is here:

My takeaways were (a) Gene’s would be an enjoyable person to work with and (b) Trizetto is doing a bunch of interesting stuff and focused on how to use technology to transform the industry.

It’s also worth reading through Jeff Margolis’ document called The Health Plan of Tomorrow.

Books / Articles, Consumerism, Healthcare, Managed Care, Marketing / Communications, Technology

Silverlink Coming To A City Near You

April 28, 2008 by George Van Antwerp 0 Comments

I am really excited about a new initiative at work.  We have pulled together a great set of speakers and are doing a road show around the country.

The speakers include:

The topic of the event is Healthcare Communications: Think Differently and is about how to engage the new healthcare consumer and drive behaviors in scale.  Very much like what a lot of the talks were about at the World Healthcare Congress.  It’s not simply getting data and information, but it is about making that information actionable.  That is exactly what this 1/2 day session will be about.

The meetings will be in Boston, NY, Hartford, Minneapolis, Oakland, and Westlake (CA).  Click here to find out more information and to get registered.  We hope to see you there.

Books / Articles, Consumerism, Events, Healthcare, Innovation, Managed Care, Marketing / Communications, PBM / Pharmacy, Research, Technology, Value Propositions, Weblogs

Commit. Don’t Just Try.

April 19, 2008 by George Van Antwerp 0 Comments

These were the words from Liz Murray (Homeless to Harvard) at the SMG Summit.  I am not sure of the context since I saw it in a summary in Chain Store Age this morning, but I think it is relevant in healthcare in so many ways.

  • Commit…don’t just try to build a focus on the patient.
  • Commit…don’t just try to understand how your processes impact the patient.
  • Commit…don’t just try to focus on outcomes over ROI.
  • Commit…don’t just try to create a positive, personalized experience for each member.
  • Commit…don’t just try to be responsive, timely, and meet the service needs of your patients.
  • Commit…don’t just try to improve.
Books / Articles, Consumerism, Healthcare, Marketing / Communications

The Implication Of Choices

April 18, 2008 by George Van Antwerp 0 Comments

I have heard this theory many times, but I was glad to run across an article on it.  The basic point is that too many choices have negative implications on people.  In this article from Health Day News, it discusses a study published in the Journal of Personality and Social Psychology about the effect of multiple choices.

“If people have a day or period of time in which they are making many choices, they will be vulnerable to low self-control,” said study lead author Kathleen Vohs, assistant professor of marketing at the University of Minnesota. This could lead “to overeating, overdrinking, overspending, losing one’s temper, and procrastination.”

This has a significant implication within healthcare.  How do you empower a patient in a consumer driven world and make information transparent without overwhelming them with options and data?  How do you communicate to a patient about their options without giving them every possible scenario? 

We generally want a simple solution and to be guided to a good decision without being manipulated.  How do we accomplish that?  It reminds me of a JD Power study on the auto insurance industry that I often quote that showed that the most satisfied consumers were not those whose rates went down, but those who rates went up BUT were proactively informed and offered options. 

Books / Articles, Consumerism, Healthcare, Marketing / Communications, Research

Health and Wealth

April 18, 2008 by George Van Antwerp 0 Comments

There have been several articles about the potential convergence of healthcare and financial services.  Can a Fidelity become a one-stop shop where you invest your money and also get your insurance (health, auto, home)?  If consumerism really transfers the healthcare spend to the individual, are they in the best position to manage that money and help you plan for the future?

It is both a scary and interesting question.  Do they understand healthcare?  Would they focus on outcomes or just return?  [Is that different from most payors today?]  Would we make different decisions if we were evaluating our out-of-pocket costs for healthcare versus buying a few more shares of a stock?  I think it would certainly drive a different view of the patient as the consumer and push all their lessons learned around behavior and customer service into healthcare which would be good.

You have the Blue Healthcare Bank and OptumHealth Financial Services (previously Exante) as two examples of historical healthcare companies (BCBS and United) who have expanded into this converged area.

Going back to a McKinsey article on this topic from June 2005 called “The coming convergence of US health care and financial services”, they laid out several opportunities:

  1. Savings oriented health care products (e.g., HSAs).  They estimated there could be 25M HSAs by 2013 generating $55-$75B in revenues.  (Big market)  They quoted a statistic that as many as 80% of consumers don’t reach their plan deductibles which creates an opportunity for financial services companies to make money managing their deductible dollars.
  2. Consumer health care payments and financing.  They estimate that there is $375B in out-of-pocket expenses that could be managed and $60B in consumer bad debt related to healthcare.  These create opportunities around debit cards or credit cards.
  3. Supplemental risk products.  I think this is a clear opportunity to provide the safety net for consumers around long-term care and major accidents.  They estimated this to be a $3-$5B in net profit opportunity.
  4. Benefits administration.  They estimated this to be a $50B space growing at 15% but with lots of established players (Accenture, Hewitt).
  5. Payment assurance and transaction processing.  They estimated that streamlined operations here could save as much as $4B in operating costs.

Obviously, this forecast and many of these opportunities have led to dozens of acquisitions and investments since the report came out.  But, we still haven’t seen any major sea change.  I predict that once the election is over and the future direction from the government is set that we will see some additional energy here.

Books / Articles, Consumerism, Healthcare, Managed Care, Value Propositions

2008 Outcomes Conference

April 15, 2008 by George Van Antwerp 0 Comments

As a follow-up to my last post, I thought I would share some of the agenda items and the new Drug Trend Report from Express Scripts‘ Outcomes conference 2008 which is happening right now.  Unfortunately, they don’t let many external people in (even on my own dime) to hear the presentations.  I have to get it off the website and talk about it 3rd hand.

I will have to read the report and will have more to share.  Here are a few things that caught my eye:

As you can see from the agenda, several topics around consumerism which is a hot topic there.

Books / Articles, Consumerism, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Research, Technology

Medicare Part D Market Penetration

April 12, 2008 by George Van Antwerp 1 Comment

Mark Farrah Associates recently published a study through AHIP around Medicare Part D.  Here were a few of the takeaways:

  • 80 companies offer stand-alone prescription drug plans (PDP).
  • 17,409,974 people in PDP plans in 2008 (2.8% year-over-year increase).
  • Medicare Advantage (MA) plans with drug coverage had a 15% year-over-year gain.
  • Total Medicare population is 44.2M.

One of the key questions they were trying to answer is what is the untapped market size.  Their estimates put the market at 1M-4.6M.  But, I also found it interesting that they estimate that 3-11% of the eligible Medicare patients have Medicare as a secondary payor – a coordination of benefits (COB) opportunity?

Books / Articles, Consumerism, Healthcare, PBM / Pharmacy, Research, Value Propositions

Transient Insurance

April 12, 2008 by George Van Antwerp 0 Comments

According to an article in the Detroit News, 1 in 6 Americans lack insurance for some part of the year. They could be chronically uninsured or simply in transition between jobs. Today, the individual health care market is certainly one of the fastest growing (if not the fastest growing) market for managed care companies.

Forrester estimates that this is a $115B market today.

With an average annual premium of $5,520 per family (or $2,400 per person assuming 2.3 people per family), that means the average premium per day is $6.58. Will we ever get to a point where you can buy short-term (i.e., less than 30-day) health insurance? And, if we did, can you set it up so that people don’t go on and off just as they feel ill?

The Forrester article talks about a Prudential model in Europe that is pay-as-you-go around health insurance.

Books / Articles, Consumerism, Healthcare, Managed Care, Marketing / Communications, Research

Medco on Future of Pharmacy

April 8, 2008 by George Van Antwerp 2 Comments

Medco has introduced a new publication called Perspectives. The one I just read was by Dr. Robert Epstein who is their Chief Medical Officer and is about how pharmacy will become personalized, specialized, and consumer driven. It is a well written piece with some good and interesting facts. Here are a facts and takeaways:

  • “Over the past five years we’ve seen a 60 percent increase in adult ailments diagnosed in children and treated with adult medicines.”
  • “The use of proton pump inhibitors (PPIs), drugs for heartburn and acid-reflux disease, increased by 60 percent in children between the ages of 1 and 4. This is despite studies revealing that as many as 95 percent of young children who present with symptoms of reflux self-correct for the condition in 12 to 16 months. Furthermore, some recent research suggests the long-term use of these products – particularly in the early years of life – can lead to infections, pneumonia or gastroenteritis.”
  • “Blockbuster medicines in three new major therapeutic categories – Fosamax® for osteoporosis, Risperdal®, an antipsychotic, and Imitrex® for migraines – soon lose patent protection.” [He then suggests that payors begin to look at strategies for driving Fosamax and Imitrex marketshare now, especially for new patients, so that when they go generic they are positioned to take advantage of the savings.]
  • He talks about the changing guidelines for hypertension, asthma, and cholesterol and points out that “It’s estimated that 25 percent of Americans have hypertension, and another 25 percent have “pre-hypertension” – which means half of the U.S. population will become candidates for treatment.”
  • He talks about nano-technology and gives the following example:

“One company, based in Houston, has taken nano-sized particles of gold, which are injected into the bloodstream and leach from the leaky blood vessels associated with rapidly growing tumors. When exposed to infrared light – these gold particles literally absorb the heat and destroy the tumor. Called AuroLaseTM Therapy, within 10 days of a single treatment this therapy caused, laboratory rats with prostate cancer to attain a 90-percent survival rate.”

  • “More than one in five people placed on Coumadin® are hospitalized by side effects, many of which could be averted by genetic tests to more accurately guide proper dosing”
Books / Articles, General Thoughts, Healthcare, Innovation, Managed Care, PBM / Pharmacy, Research, Technology, Value Propositions

Stop Sweating With Botox

April 8, 2008 by George Van Antwerp 0 Comments

I was just listening to the local news out here in Phoenix and was surprised to hear them talk about the increased use of Botox by people to stop sweating in their armpits. Apparently, stars have used this for a while but now average people are doing it. The report said that one set of injections lasts 6-9 months which for the people with overactive armpit sweating.

I am not sure I believe it, but the news reporter said that these are usually covered by insurance.

CBS News Story

Books / Articles, Healthcare, PBM / Pharmacy, Value Propositions

Going to WHCC

April 8, 2008 by George Van Antwerp 0 Comments

I am excited that I get the opportunity to go to the World Healthcare Congress in DC later this month. This looks to be a great conference, and I am going to blog from the event. If you’re there, look me up. I will be sitting at the bloggers table at the front of the event.

Books / Articles, Healthcare, Innovation, PBM / Pharmacy, Research

Maternal-Fetal Surgery: Trade-off Examples

April 7, 2008 by George Van Antwerp 0 Comments

One of the key parts of healthcare is the need to make tradeoffs especially when it comes to treatment plans. Exercise requires a commitment and can make you sore. Some drugs have side effects that may impact other parts of the patient’s life. Surgeries carry risk.

With that in mind, I found an article in the American Way magazine interesting in its discussion of maternal-fetal surgery. This is a technique where a doctor uses a fetoscope (telescope with a small camera at the end) to go into the uterus through a tiny incision (0.15 inches wide) to stabilize life-threatening blood-supply imbalances (e.g., twin-twin transfusion syndrome) and through larger incisions to remove rapidly growing and life threatening tumor masses. As you can imagine, this is controversial. There are risks for the mother and no guarantees that it will be successful.

There were less than 1,000 surgeries between 2005 and 2006, and it sounds like it is used for extreme cases today (i.e., less than 10-20% chance of the fetus living). A clear example of why transparent information is necessary and clear communications make a difference. Patients need to understand their options, the risks, the tradeoffs, and the implications.

Books / Articles, Healthcare, Innovation, Technology

Example of Misalignment

April 4, 2008 by George Van Antwerp 0 Comments

One of the points in George Halvorson’s book Health Care Reform Now! is about misalignment of incentives.  Providers are not paid for better outcomes.  They are paid per activity (i.e., to keep people coming back).  It’s a key point which deserves a much longer discussion.  That being said, I couldn’t help but think of this when reading yesterday’s WSJ article “Flu Economy Takes Unexpected Turn“.  A few quotes that it mentions include:

  • CEO of Walgreens at shareholder meeting – “If attendees of the meeting needed to cough, he joked, they should leave the room and ‘go to a movie theater or on a bus’ to spread their germs. ‘We’re really hoping for a very strong flu season’.”
  • “Unfortunately, people have not been getting sick at a rate that we would all like yet.” P&G CEO
  • “On the pediatric side, young kids coming into the hospital, that’s a nice margin for us, as well.” CFO of LifePoint Hospitals

Now, the easy discussion here would be to criticize these executives for being insensitive, but that’s not the problem.  The problem is that we have incented our healthcare system so that people make money when people are sick.  To my earlier post, this doesn’t mean people shouldn’t make money, but it means we should find a way to incent them to make people better.  We have decades of benchmark data (somewhere).

Books / Articles, Healthcare, Leadership, Managed Care, PBM / Pharmacy

Convergence: The White Space Between Ford and Starbucks

April 2, 2008 by George Van Antwerp 1 Comment

I recently read a great book called Microtrends. If you haven’t seen it, I highly recommend it for its interesting analysis of trends and the way it makes you think. For example, it talks about how people are drinking more water and more caffeine drinks. It talks about how people have much shorter attention spans yet there is a rise in knitting and books are getting longer. It talks about obesity and young vegans. It plays on the power to see small trends (i.e., 1% of the population) and how they can impact the overall framework. (You can read my detailed notes here.)

One of the frameworks that the authors use is to compare the world as moving from a Ford economy (one choice) to a Starbucks economy (personalization). As healthcare typically lags other industries, I think we this analogy works to show where healthcare was and where we are going over time. Historically (at least in the modern era), we had one choice for healthcare coverage which was offered through our employer. Over time, that has changed to where most people have more than one option for healthcare coverage from their employer. And now, more and more people are losing coverage and the fastest growing segment is individual health insurance.

We have evolved to personal healthcare, but we aren’t yet to personalized healthcare which I think will be largely driven by genomics and some radical change to our healthcare system. Unfortunately, I think we are stuck somewhere in between right now where to personalize your healthcare you need to go to a series of providers or tools which aren’t integrated. There are a few scenarios out there where there is some integration of medical, pharmacy, lab, and other data (Kaiser jumps to mind). But, even in an integrated environment, they haven’t yet fully digitized the offering and created a seamless patient experience (to the best of my knowledge).

As George Halvorson says in his latest book, Health Care Reform Now!, “We have an expensive plethora of uncoordinated, unlinked, economically segregated, operationally limited Microsystems, each performing in ways that too often create suboptimal performance both for the overall health care infrastructure and for individual patients.”

In a likely scenario, you have the following for a sick patient who is actively managing their health:

  • A primary care physician and their staff to interact with
  • A specialist and their staff to interact with
  • A pharmacist (or likely multiple pharmacists)
  • A specialty pharmacy and their nurse
  • A managed care company (and possibly Medicare) which offers a member portal and tools
  • A PBM which offers a member portal and tools
  • A disease management company and their health coach
  • Health portals or information sites (e.g., WebMD, RevolutionHealth)
  • A gym and potentially a trainer
  • A series of vitamins and OTCs that no one has visibility to (other than maybe their grocery frequent buyer card program)
  • One or more disease specific communities that they participate in (i.e., some of the Health 2.0 companies)
  • Blogs and news feeds they subscribe to for information on their disease

The reality is that they have to go out and build a series of interactions to create this semi-personalized offering with no hope of the data being integrated, getting consistent messages, or any true learnings being generated. Each party has a 1:1 relationship with them (best case) and knows a piece of the puzzle. Without an integrated infrastructure, aligned incentives, and a mechanism to engage each patient according to their preferences, we have a very difficult challenge (as an industry) and each patient bears the brunt of this.

Until we can create physical or virtual convergence (i.e., integration of data and tools into one framework), we won’t be able to move from buying coffee at one store and skim milk at another store and our muffin at another store to a Starbucks world where we have one interface to select and personalize our healthcare experience. I wish I had the answer. Unfortunately, as more and more people are talking about, it seems like we have to make a radical change to be successful. Evolution from the status quo will likely not work. Much like GE had a program in the dotcom days called DestroyYourBusiness.com where they encouraged their leadership to figure out how to develop a new model, that is what healthcare needs with the support to initiate the skunkworks organization which might eventually become the norm.

Books / Articles, Consumerism, Healthcare, Leadership, Managed Care, Marketing / Communications, Research, Technology, Value Propositions, Weblogs

Compliance / Persistency / MPR

April 1, 2008 by George Van Antwerp 1 Comment

Non-compliance is a significant issue in healthcare.  You have the issue of whether people fill the prescriptions that their physician writes; whether they use them once they pick them up; and whether they continue to refill them and stay compliance over time.

You will hear several terms used:

  • Compliance is “the extent to which a patient acts in accordance with the prescribed interval and dose of a dosing regimen”. (source)
  • Medication Possession Ratio is the days supply of medication divided by the days between refills.
  • Persistence or length of therapy (LOT) is the number of days elapsed between the date of the first claim and the date when the days supply of the last claim is depleted.
  • Medication Possession Ratio (MPR) is the days supply of all fills minus days supply of last fill / days elapsed between first and last fill.
  • Adherence to therapy can be defined as being both compliant and persistant.
  • The medication ownership ratio (MOR) is calculated as the proportion
    of patients on each initial prescription on a given day. It was
    used to describe the percentage of patients within a treatment cohort
    who had the medication in their possession on any given day.

Here are a few good sources for information:

I found the following chart in PWC’s publication Pharma 2020: The Vision a good graphic.

noncompliance-pwc2020.jpg

Books / Articles, Healthcare, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Research

Where Is “The Best Care”?

March 31, 2008 by George Van Antwerp 0 Comments

In a great post on the HealthBeat Blog, Maggie Mahar talks about research from The Commonwealth Fund called “Aiming Higher: Results from a State Scorecard on Health System Performance.” It provides a comparative state-by-state study of care in the U.S. (States in white are in the top quartile…ND, SD, NE, MN, IA, WI, ME, VT, RI, MA, HI.)

statehealthcarerankings.jpg

As she points out, the researchers used 32 indicators which look at “Access”, “Quality”, “Potentially Avoidable Use of Hospitals and Cost of Care”, and “Healthy Lives”.

She also goes on to talk about the lack of connection between quality and cost of care. She talks about research from Dartmouth Medical School that supports the data from this study.

“If insurance rates nationwide reached that of the top states, the nation’s uninsured population would be halved,” the Commonwealth report observes. “If all states could approach the low levels of mortality from conditions amenable to care achieved by the top state, nearly 90,000 fewer deaths before the age of 75 would occur annually. Matching the performance of the best states on chronic care would enable close to four million more diabetics across the nation to receive basic recommended care and avoid preventable complications, such as renal failure or limb amputation. By matching levels achieved in the best-performing states, the nation could save billions of dollars a year by reducing potentially preventable hospitalizations or readmissions, and by improving care for frail nursing home residents. If annual per-person costs for Medicare in higher-cost states came down to median rates or those achieved in the lowest quartile of states, the nation would save $22 billion to $38 billion per year. While some savings would be offset by the costs of interventions and insurance coverage expansions, there would be a net gain in value from a higher-performing health care system.”

As the economy continues to be challenged and with the election coming, this will certainly be an issue that those planning the future of our healthcare system need to analyze. There are lots of opportunities for improvement to the system, but we have to realize the challenge of aligned incentives within the system and external to the system. I predict it would take three election cycles (12 years) for us to make fundamental change. How we get politicians aligned and committed to something that outlasts them may be as difficult as changing the system itself.

Books / Articles, Healthcare, Managed Care, Research, Weblogs
Newer Entries
Older Entries