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My Top 11 Healthcare Predictions For 2013

It’s always fun to predict what will happen in the next year. No one is ever right, but you can hope to be directionally correct. With that in mind, here’s a few of my thoughts for what will happen in 2013…

  1. Reform (PPACA aka ObamaCare) will happen. While the Republicans will fight it, with Obama’s re-election and the Supreme Court decision. Reform will continue to happen. The states will mess up the Exchanges which will create many issues, but private exchanges will come to the “rescue”.
  2. Big Data” will be a focus at every healthcare company. What data to store? How to mine the data? What data to integrate? How to bring in unstructured data such as physician’s notes? What to do with consumer reported and consumer tracked data from all the different devices?
  3. Physicians will emerge back in the power seat. With Accountable Care Organizations and Patient Centered Medical Homes, consumers are finally becoming more aware of all the shortcomings in our sick care system. They trust their physicians although somewhat blindly given ongoing challenges with evidence-based care and quality which are often the result of our Fee For Service system (too little time) combined with an abundance of new research happening concurrently.
  4. mHealth will be the buzz word and exciting space as entrepreneurs from outside healthcare and people with personal healthcare experiences will attempt to capitalize on the technology gap and chaos within the health system. This will create lots of innovation, but adoption will lag as consumers struggle with 15,000+ apps and the sickest patients (often older patients) are the slowest to adopt.
  5. Device proliferation will go hand in hand with mHealth and with the Quantified Self movement. This will create general health devices, fitness devices, diabetes solutions, hypertension solutions, and many other devices for wellness and home monitoring for elderly patients. Like mHealth, this will foster lots of innovation but be overwhelming for consumers and lead to opportunities for device agnostic solutions for capturing data and integrating that data for payors and providers to use.
  6. The focus on incentives will shift in two ways. Technology vendors will begin to look more and more at the gamification of healthcare and how to use gaming theory and technology to drive initial and sustained engagement. At the same time, the recent ruling will allow employers to shift from rewards to “penalties” in the form of premium differentials where patients who don’t do certain things such as take biometric screenings or engage with a case manager will pay more. In 2014 and 2015, this shift will be from penalties with activity to penalties tied to outcomes.
  7. Consumer based testing will drive greater regulation. With the focus on home based testing (e.g., HIV or High Cholesterol) and the increased interest in genetic testing especially when tied to a medication, the FDA and other government agencies will have to address this market with new regulations to close gaps such as life insurance companies being able to force disclosure of genetic testing in order to get coverage (even though the testing isn’t necessarily deterministic).
  8. Clinics will prepare for 2014. With the increase number of consumers being covered in 2014, there will be an access challenge for patients to see a provider. This will drive buildout and utilization of health clinics such as TakeCare or MinuteClinic. Clinics will have to look at how to adapt their workflow to create a patient relationship which will create potential integration points with TeleHealth and bring back up the issue of whether they should or could replace the traditional Primary Care Provider (PCP) relationship or not.
  9. Telemedicine will hit a tipping point and begin to Cross the Chasm. They now have better technology and adoption within major employers. This will start to create more and more business cases and social awareness of the solution. With utilization, we will see great adoption and the increasing use of smart phones for healthcare will drive telemedicine into an accelerated growth stage.
  10. Transparency solutions will continue to be a hot area with CastLight and Change Healthcare leading the way. Their independence and consumer engagement approaches based on critical moments (i.e., pointing out how to save money on Rxs just before a refill) and using multiple channels will show high ROI which will also increase broader healthcare awareness making them part of the population health solution.
  11. Generics will no longer be a talked about issue. With generic fill rates running so high across different groups and being front page news, PBMs, pharmacies, and pharma will truly begin to move forward to embrace the specialty market with a clear vengeance (at least in the US).

There are still a few longer term trends that I’m watching, but I don’t think that 2013 is the primary year for them.

  1. The evolving role of pharmacists within the Medical Home and with vaccines.
  2. A significant shift from mail order to 90-day at retail fulfilled by massive central fill facilities.
  3. Pharma co-opetition where they begin to collaborate at the disease state level realizing the a rising tide is good for all boats.
  4. Integration of data from all types of solutions and actions into workflow triggers that automatically create new events within the care management infrastructure using Service Oriented Architecture and Business Process Management.

Kroger Expansion – Digital, Physical, Strategic, and Specialty Pharma … Oh My!

Since one of my first jobs was at Kroger, I’ve always been intrigued to see what happens with them. (I can even still go back almost 30 years later and still have some of the General Managers at my old store come out and remember me.) So, I was initially intrigued a few weeks ago when the story came out in Drug Store News about their expansion plans.

“Over the course of a day-long investor conference Tuesday, Kroger outlined its future growth strategy. Across its physical store base, Kroger plans to enter one or two as-yet-to-be-named new markets along with boosting presence in existing markets. But Kroger also has significant designs on the multichannel consumer, and outlined for analysts the grocer’s plan to grow its marketshare across the digital landscape as well.”

Kroger has several interesting assets to leverage:

Now, with today’s announcement, they’ve made a jump into the Specialty Pharmacy Space with their acquisition of Axium. It begs the question of what they want to be – a grocer with a pharmacy, a pharmacy with groceries, a health destination, or something new.

Looking at some JD Powers data from 2010, they are positioned in the middle of the pack from a pharmacy satisfaction perspective.

On the other hand, if I look at their positioning from Bruce Tempkin’s analysis, they score well.

I have to believe there’s some great opportunity here. I’m a big believer that the retail assets create large opportunities for them to play in the broader healthcare market.

  • They have broad hours (in some cases 24/7).
  • They are natural destinations for people.
  • They can host clinics.
  • They already have pharmacies.
  • They have food which is a critical part of addressing obesity and for certain conditions like hypertension and diabetes.
  • They have patient specific data around things like home monitoring tests, food products, OTCs, and other products.
  • They are generally located in easy access locations.
  • They have good brand equity.

For example, just look at this press release from Target from a few years ago. This is a broad vision (that I’ve never heard or seen in the market). On the flipside, we know that CVS, Walgreens, and WalMart are spending considerable efforts trying to really “own” this space with their teams. We also know that specialty pharmacy (and even pharma in general) is trying to see how it gets out of its box and become broader players in the health continuum looking beyond just drugs to actual outcomes. (This is why healthcare is so exciting right now!)

1/3rd Of Diabetes Develop Chronic Kidney Disease #WorldDiabetesDay

With 347M diabetics worldwide and another 79M in the US alone with pre-diabetes, we hear a lot about this condition, and its cost impact. But, I’m always surprised that there’s not more focus on the fact that 1/3rd of diabetics will develop Chronic Kidney Disease (CKD). CKD is a progressive condition for most patients where they eventually end up on dialysis which is very expensive and has a significant impact on patient’s quality of life.

So what can diabetics do to avoid developing CKD:

  • Control your blood sugar level
  • Keep blood pressure under control
  • Check your blood pressure as often as your doctor recommends
  • Ask your doctor to test you for kidney disease at least once each year
  • Take medicines to help control your blood glucose, cholesterol, and blood pressure if your doctor orders them for you
  • Follow your diet for diabetes
  • Get regular exercise
  • Avoid alcohol
  • Do not smoke
  • See your doctor as often as you are told

Are You Part Of The Quantified Self “Movement”?

I’m not sure whether to call it a movement or a trend or some other term, but I think it’s very interesting.  This idea of capturing and tracking data manually and through devices fits very well with the idea of “Know Your Numbers” in healthcare.

Here’s the descriptionof Quantified Self from Wikipedia:

The Quantified Self is a movement to incorporate technology into data acquisition on aspects of a person’s daily life in terms of inputs (e.g. food consumed, quality of surrounding air), states (e.g. mood, arousal, blood oxygen levels), and performance (mental and physical).

The movement was started by Wired Magazine editors Gary Wolf and Kevin Kelly in 2007as “a collaboration of users and tool makers who share[d] an interest in self knowledge through self-tracking”. In 2010, Wolf spoke about the movement at TED, and in May 2011 the first international conference was held in Mountain View, California.

Quantified Self is also known as self-tracking, body data and life-hacking. It is described in articles such as this one in the Economist and this in Forbes.

With an increasing amount of devices on the market that can be integrated (e.g, FitBit), we will see a huge rise in remote patient monitoring where the patient takes a greater role in this effort.  Even know you are seeing more efforts to integrate devices into the “smart home” with a focus on older patients, but I think this smart home concept will continue to grow. 

This Slideshare presentation is a nice summary…

 

 

Will You Be Charged More For Not Participating In Wellness Programs?

Thus, the major factors that insurance companies traditionally use to charge higher premiums – such as health status, the use of health services, and gender – will no longer be allowed under the ACA. However, the ACA does permit employment-based health plans to charge employees up to 30 percent more on their premiums (and potentially up to 50 percent more) if they fail to participate in a wellness program or meet specified health goals.  [From Kaiser document]

Traditionally, health plans and employers have rewarded consumers for taking some basic action (e.g., $100 for completing an HRA)…although some companies prefer penalties versus incentives.

At that same time, there is some evolution happening here with companies moving from simply paying for an action to requiring participation in a program (e.g., disease management).  The next step that a few companies are engaging in is actually incenting or penalizing consumers based on health outcomes.  This will certainly open some doors for legal challenges where people will argue that they are genetically pre-disposed to some factor that limits their ability to lose weight or lower their cholesterol or some other measure of health.

But, in one of the first legal challenges in FL, the court recently upheld the idea of rewarding (or penalizing) consumers based on taking a specific action (like completing a biometric screening).  With that, I expect companies will be more empowered to take advantage of the fact that under health reform they can charge consumers up to 30% more for their healthcare for either not participating or not achieving a specific health outcome.

With an average monthly premium of $468 per month of single person coverage and consumers paying an average of 21% of their healthcare costs (or $97 per month), this means that a consumer could pay an additional $29 per month (or $349 per year).  [If I interpret all of this correctly…if it’s 30% of the total health premium (not just the consumer’s share), then this jumps up dramatically.]

Not surprisingly, employees aren’t real excited about this.  In a survey by the National Business Group on Health, 62% oppose charging employees more for health coverage if they do not participate in wellness programs.  And, 68% oppose requiring employees to participate in a wellness program in order to qualify for health insurance.

And, according to the survey, the most effective cost control tactic was believed to be Consumer Driven Health Plans by 43% and wellness programs by 19% while 60% of employers plan to increase the premium paid by employees (i.e., cost shifting).

But, if companies throw out a life preserver (i.e., wellness program) to a drowing individual (i.e., unhealthy individual), why isn’t it a reasonable expectation that the individual has to grab it (i.e., participate in the program)?

The Transtheoretical Model And Setting Goals

There’s a good article in Time (9/17/12) called “Goal Power” by Dr. Oz.  I found it interesting on a few fronts.

“Getting people to make meaningful changes in their lives is much more complicated than explaining to them what to eat for dinner, how often to exercise and which kinds of tests they should get from their doctors.  The psychology of health is every bit as complex as the biology, and to create seismic shifts in behavior, we have to probe the subconscious.”

1. The topic of goals and objectives and their importance relative to healthcare behavior change is a repeating theme.

  • A month ago, I was at a presentation by Dr. Victor Strecher who founded HealthMedia.  He was talking about the importance of getting people to articulate their goals or objectives for changing.  (E.g., I want to become healthy to see my daughter get married.)
  • I had a pharmacy client who was looking into this as part of an adherence program a few years ago.

2. The topic of behavior change and behavioral economics has been a very popular theme with Nudge and many other publications and programs over the past few years.

3. Obesity, which is part of the focus of his article, is widely becoming recognized as the greatest public healthcare challenge of the 21st century.  And, it is a very complex issue tied to sleep, stress, social network, and many other factors.

4. He introduces the transtheoretical model (also known as the Prochastka model or the Stages of Change), which is widely known in the academic and health areas, into the public domain which surprised me.

(Here’s the abstract from what one widely quoted paper on this.)

The transtheoretical model posits that health behavior change involves progress through six stages of change: precontemplation, contemplation, preparation, action, maintenance, and termination. Ten processes of change have been identified for producing progress along with decisional balance, self-efficacy, and temptations. Basic research has generated a rule of thumb for at-risk populations: 40% in precontemplation, 40% in contemplation, and 20% in preparation. Across 12 health behaviors, consistent patterns have been found between the pros and cons of changing and the stages of change. Applied research has demonstrated dramatic improvements in recruitment, retention, and progress using stage-matched interventions and proactive recruitment procedures. The most promising outcomes to data have been found with computer-based individualized and interactive interventions. The most promising enhancement to the computer-based programs are personalized counselors. One of the most striking results to date for stage-matched programs is the similarity between participants reactively recruited who reached us for help and those proactively recruited who we reached out to help. If results with stage-matched interventions continue to be replicated, health promotion programs will be able to produce unprecedented impacts on entire at-risk populations.

5. He references two of the big studies that looked at social pressure an its influence on health.  Something that peer-to-peer healthcare and social network tools can create for us by developing support communities and “buddies” to support our change.

  • 2012 study in the journal Obesity about weight loss.
  • 2008 study in the NEJM about smoking

6. He references Dr. Nicholas Chrisakis who co-authored the book Connected which is being manifest in the company called Activate Networks.

Overall, for those of us that work in the healthcare field, these are all critical topics that we constantly talk about.  It’s nice to see it brought to the “popular press”.

How And Why I Use Twitter

I often get stopped by people I know who say things like:

  • I see a lot of your tweets in LinkedIn.
  • You use Twitter. Why? I don’t really want to tell people that I’m going to eat dinner or some other miscellaneous fact.
  • Can you really get anything out of 140 characters?

So…let me share my perspective on how my use of Twitter has evolved and what I get out of it.

It took me a few tries before I found out how to use Twitter effectively.

  1. First, I tried just using it to share thoughts or opinions across a variety of topics. I didn’t find that valuable and wondered why anyone would follow me to know that.
  2. Second, I tried using it to pose questions about healthcare topics that I was interested in. That worked ok because it synched with LinkedIn, but I didn’t have enough Twitter followers for that to make a difference.
  3. Finally, I decided to just use it as a “notebook” to capture facts while I read or to bookmark articles that I found interesting. (Of course, some of this became possible as every web article now offers a “share” feature.) This works especially great when you’re at a conference and is even a good way to follow a conference that you miss.

The next thing that I had to figure out was just understanding the technology.

  1. Reading things in Twitter is ok, but a lot of people post links. Often times, it’s not that effective to be constantly going out to the links to see what they say. In comes Flipboard to save the day. (see older post here)
  2. To make things more searchable, you have to use hashtags where you put a “#” in front of a key expression or search term.
  3. Most people don’t get a lot of followers although you hear about all the celebrities with millions of followers. (see HubSpot presentation below for general Twitter statistics)

I figure it must be working for me now. I have over 1,000 followers which according to this site is true for less than 1% of people on Twitter. But, I don’t think followers is the best indication (especially since almost ½ of followers might be bots and you can buy followers). I know that it’s working for now since I can post a question and sometimes get an answer. I can connect with companies and meet people. I’ve even heard from people at conferences that they follow my feed. Probably my best experience was when I read an article early in the morning, posted a quick summary, and then had a national reporter call me to ask me for the source so he could write an AP article…all before 8 am.

Just to check, I went out to the StatusPeople application which tells you how many of your followers are bots versus simply inactive. I was pleased with the results.

Comparing Obese States With Less Obese States

You can’t really call any state “non-obese” these days with every state having at least 20% of their population considered obese and 12 states having over 30% of their population obese.

 

 

But, in a separate study, I found it interesting to compare some metrics from the most obese to least obese states.  Not surprising.

 

 

One of the things that I do always find interesting is whether people consider themselves to be obese.  People generally don’t.  I’ve spoken about it before, but I sometimes think healthcare providers need to be more direct with people to let them know that they are obese and this in going to increase their chances of dying sooner (2x more likely to die prematurely) and having other health problems.

Digital Dimension Of Healthcare Paper – Global, mHealth, Halvorson

I was just skimming the Digital Dimension of Healthcare whitepaper which has as one of its authors – George Halvorson from Kaiser.  There’s not a lot of new information in here if you’re well read on the space, but I like their framing of a fourth space for health delivery along with their two dimension matrix of opportunities.

The other piece that I’ll pull out here is the Six Principles that they identify:

  1. Set the direction, and commit to it
  2. Balance patient confidentiality and information sharing
  3. Empower patients
  4. Adapt payment systems
  5. Reduce barriers to regulatory approval and licensing
  6. Accelerate the healthcare evidence base

Would You Pay $100 A Month For A Diabetes Application?

An article in MobiHealthNews caught my attention this morning when it talked about 2 payers agreeing to pay $100 a month for Welldoc’s diabetes application. This is fascinating to me since (a) I’m always interested in how people price and value services and (b) I’d love to bundle something like this into our diabetes offering. 

This of course begs the key question which is what is the value of the application.  We’re all familiar with the fact that diabetes drives significant costs within our healthcare system.  Here’s a quick summary from the ADA.

The national cost of diabetes in the U.S. in 2007 exceeds $174 billion. This estimate includes $116 billion in excess medical expenditures attributed to diabetes, as well as $58 billion in reduced national productivity. People with diagnosed diabetes, on average, have medical expenditures that are approximately 2.3 times higher than the expenditures would be in the absence of diabetes. Approximately $1 in $10 health care dollars is attributed to diabetes. Indirect costs include increased factors such as absenteeism, reduced productivity, and lost productive capacity due to early mortality.

Of course, diabetics also spend a lot of money on out-of-pocket costs themselves.  $6,000 from one study mentioned here.

But, I think the key question here is what assumptions make this a good investment.  Let’s me walk through my thought process.

  • At $100 per month, you pay $1,200 per year per member.
  • BUT, members won’t actively stay engaged with the application all year long so you have to assume some percentage of engaged members.  (A key question is whether you pay only for actively engaged members or all members enrolled in the program.)  And, how long does a patient have to use the application to achieve the results?
    • If 20% are engaged, the cost per engaged member would actually be $6,000 ($1,200 divided by 20%). 
    • If 60% are engaged, the cost per engaged member would be $2,000.
  • The next question is how you estimate the value of the application.  Based on their study, they saw a 1.9 point drop in A1c which is a good one-year drop and a good outcome metric to focus on (see article).  So the question becomes…what is the value of a 1.9 point drop in A1c?  This is a question I was looking for earlier.
    • This pharmacist based study talks about a 0.8% reduction in A1c leading to $1,200 in total savings.
    • This CVS study showed a $3,756 annual savings for an adherent diabetic versus non-adherent.  (But, adherence wasn’t shown in the Welldoc study.)
    • The President from Welldoc quotes a savings of $3,500-$4,000 per point drop in A1c, but I couldn’t find the study to support that.  (I e-mailed their PR people about this.)
    • And, a few weeks ago at a mHealth conference, I heard someone say the value was $7,000 per point reduction in A1c.

As you can see from this tweet, I was looking for this study yesterday and mentioned DiabetesMine to see if Amy might know, but she didn’t.

 

So, my conclusion is that this is worth it if:

  1. The value is closer to the $3,500 point.
  2. You pay based on actual engagement or utilization…or you only give it to people who actually use it versus the overall population. 
  3. The application improves adherence.

I hope to figure this out since this was the first FDA approved device and looks very promising.

Vaccine Excemptions By State

This is an interesting map from Every Child By Two which is a pro-immunization advocacy group.  And, per the article in USA Today, this discussion around vaccines is heating up with kids coming back to school and the biggest epidemic of whooping cough in 50 years.

I’ll also pull up this video that I posted last year which I thought to be a fun presentation of this topic.

Health Companies On The Inc. 500 List

I always find lists interesting.  The Inc 500 gives you a view into some of the quicker growing companies althougth there certainly is a mathematical bias towards having a small base to grow off.  But, it can help you see some trends and areas of market activity.  Here’s this year’s list from the September 2012 edition of Inc Magazine.

Chronic Kidney Disease (CKD) Action Plan Poster

I was at my physician’s office yesterday and noticed this great poster on the wall from the Renal Physicians Association (RPA).  I reached out to them and got a PDF of the poster – RPA Toolkit Action Poster FINAL.  (Note: It’s meant to be a poster on the wall not a graphic in a blog post so it’s here for you to go look at, but it’s not easy to read and digest here.  Use the link to get to the PDF.)

The key points are that it shows you stages of CKD based on GFR along with the action you should take.  It also highlights the risk factors for CKD and the possible complications.



What Would You Pay For A Week Of Life?

I was at an Oncology meeting earlier today, and there was a brief discussion about pharmaceutical costs which is certainly one factor in overall healthcare costs.  (See article on the 11 most expensive drugs ranging from $200-$410K / year)  Ultimately, this always brings you back (at some point) to the topic of Quality Adjusted Life Year (QALY) or (a new term to me) “futile care” meaning care done essentially with a very low probability of working. 

Of course, like the lottery, we all like to believe that we’ll be the 1% for which this effort pays off.  (see Prospect Theory or a broader article on use of incentives in healthcare).  This can often be a very cost effective way to get people excited.  This is especially true for poorer people who spend as much as 3% of their income on lotteries which have a very low return

But, the question at the center of this is what you would pay for a week of life?

  • $100
  • $1,000
  • $10,000
  • $50,000

And, would that answer change based on timing?  I believe so.  If asked today, when you were healthy, would you agree to spend $50,000 to gain one week of life?  Perhaps not.  When you’re on your death bed and realize that you still want to see a few more people, your answer may change.  And, your family’s answer might change.  If you had to make that decision for your parent, it might be tough to make at the hospital, but if you sat down with them when they were healthy and asked them whether they would like you to spend your kid’s college savings account on gaining them a week of life, the answer might change.

But, what about when the money’s not yours.  We all know the infamous diner’s dilemna where we’re likely to spend more money when your splitting the bill with everyone.  When you’re covered by insurance or by the government, it’s not always your money being spent.  So, what if it was positioned differently?  If you knew that spending $50,000 for that one week of life meant that there wouldn’t be money to fund a shelter for 3-months that provided 20 homeless families with a place to sleep.  Would that change your answer?

It’s a tough question.  No one like to put a financial value on life.  I don’t have an easy answer other than having the discussions earlier with the patient and framing them the right way. 

Never mind the question about quality of life…Would you rather die in 2 days at home or would you rather live 8 days in the hospital where your throwing up all the time?

I don’t know the economic tradeoff of these treatments or drugs so this isn’t specific to any scenario, but is a situation which come up and everyone runs away from.  I understand why.

Shifting Spend In Pharmaceutical Spending

Pharmaceutical manufacturers are dealing with massive shifts in their industry – less blockbuster drugs, more generics, emergence of different global markets, a greater payor emphasis on outcomes and adherence, less interaction with sales reps, more use of biologics, and the emerging biosimilar opportunity.

All of that is causing a massive shift in where they invest.  In some cases, you’re seeing manufacturers invest in devices (e.g., Sanofi diabetes device) or into education and content at a disease (not drug) level or even in mHealth (e.g., Boehringer and Healthrageous). 

With that in mind, I found this Booz & Company survey interesting in highlighting how their shift in spending is changing.

The Core Of The ACO – The Provider

While my other post talked about the IT priorities of the ACO, I believe that a large part of the ACO (Accountable Care Organization) effort driven by CMS is about creating a provider-centric approach to care management. While medicine certainly began as a provider to patient relationship, that has changed over the years to a managed care driven relationship. This peaked years ago with the HMO backlash that led to the revised system that most of us have grown accustomed to operating within.

Then, with the discussions around exchanges, Medicare, and the individual market, we’ve seen a shift to a more patient-centric approach to healthcare focused on the patient experience and understanding their behavior. Is anyone necessarily wrong – no. But, there needs to be a balance. I personally think that the ACO approach is trying to build some of that with a Kaiser type of framework. Physicians would be at the heart of the solution with technology, process, and financial support from managed care companies and medical management companies. And, they would have to partner with the patient to really affect behavior and ultimately health outcomes.

Will it work? Who knows. There have been a lot of smart people who have spent a lot of time and energy trying to figure out health outcomes and cost with limited effect in any scalable way.

There have been a few initial articles about ACO success:

There have also been a few people talking about ACO 3.0 and the future of how ACOs will evolve from what we know today.

Of course, most of this is focused on the CMS ACO model while others are using the “ACO” moniker as a framework for pay-for-performance (P4P) within the physician world.

[To see more about our physician directed Accountable Care Solutions at inVentiv Medical Management, click here. Or contact me if you’re interested in how we’re applying these to support ACO and “ACO-like” organizations in their efforts to engage consumers and drive health outcomes.]

Building Accountable Care Solutions

Right now, it’s a little bit of the Wild West in terms of building Accountable Care Solutions (ACS’s)…which is not necessarily bad.

You have physicians building ACOs. You have hospitals building ACOs. You have managed care companies buying physician groups to have ACOs. You have managed care companies providing technology to providers to have ACOs. You have consultants helping design ACOs. You have technology companies building components of ACOs. Eventually, my prediction is that you’ll end up with some type of franchise model on ACOs that providers can leverage. Perhaps it’ll be like the Medicine Shoppe model for pharmacies.

But, as I read through all the literature and try to have opinions on this space, there are a few core things I keep coming back to:

  • Leveraging Evidence-Based Medicine (EBM) guidelines
  • Consumer engagement and behavior change
  • Quality tracking and reporting
  • Technology enablement
    • Patient registries to collectively manage similar patients
    • Gaps-in-care identification
    • Risk modeling
  • Coordination of data and care across PCP, specialists, hospitals, pharmacy, clinics, and labs
  • “Care coordinator” role (probably a blend of human and automation)
  • Sharing value and risk

While traditional providers have been focused on actual diagnosis and care, they haven’t focused on most of this. This is a fundamentally different business (at least at the individual physician level). Even the one that most naturally fits with the practice of medicine – Evidence Based Medicine – is a challenge given the pace of change and information. Plenty of studies have documented this challenge.

So, while everyone is now using this term that our team started using last year, the reality is that ACS’s are complex solutions that take a holistic view of the patient and their care and manage using EBM with an integrated solution that blends technology and face-to-face care with a focus on specific health outcomes.

To borrow from Ernst & Young, here’s a framework they propose on their website about Accountable Care:

[To see more about our physician directed Accountable Care Solutions at inVentiv Medical Management, click here. Or contact me if you’re interested in how we’re applying these to support ACO and “ACO-like” organizations in their efforts to engage consumers and drive health outcomes.]

Five Critical Components Of An ACO

The Advisory Board out of Washington DC has jumped headfirst into the pool around ACOs. They have some great information on their website and like any other consultants, provide some great frameworks to leverage.

One that I found helpful lays out the 5 critical IT components for developing an ACO (see image below):

  1. Network Interconnectivity (Practice Management System and Electronic Medical Record integrations in my words)
  2. Clinical Knowledge Management (Evidence-Based Medicine in my words)
  3. Patient Activation (or Engagement)
  4. Financial Operations
  5. Population Risk Management (or Medical Management or Population Health Management)

I think this is a good starting point for understanding what technology you need to provide an ACO (and theoretically make money doing it).

[To see more about our physician directed Accountable Care Solutions at inVentiv Medical Management, click here. Or contact me if you’re interested in how we’re applying these to support ACO and “ACO-like” organizations in their efforts to engage consumers and drive health outcomes.]

$WAG and $ESRX Reach New Pharmacy Deal!

Wow!  Finally! 

Those are my immediate reactions.  I just saw the news that Walgreens and Express Scripts have reached a new pharmacy deal effective 9/1/12.  I’m sure there are lots of consumers that will be happy about that and a few competitive PBMs that will be disappointed. 

A few things that this makes me think about:

  • The Walgreen’s shareholders will be happy.
  • Both parties can claim some victory by holding out so long.
  • I imagine that the limited network was working ok, but there wasn’t huge adoption.  It was probably also an issue in RFPs and with consultants.
  • Other PBMs were likely using this in selling against Express Scripts so they’ll be disappointed.
  • Obviously, the Medco contract with Walgreens was the big catalyst here.  Letting that transition to a point where they didn’t get any Medco or Express Scripts patients would be a disaster.
  • Will this change Walgreens collaboration with the NCPA against the PBMs and mail order or is that just the natural conflict here?

The biggest battle now will be around customer retention and winback.  Can Walgreens get their old Express Scripts patients to come back?  Can CVS and others hold on to the patients?  This will really test the theory about customer loyalty in the pharmacy space. 

The other interesting thing here is that this pushed Walgreens to really re-evaluate their strategy and market positioning.  Will they emerge as as stronger and different company because of this 9 month period.  I would think so, but that is still TBD.

The Express Scripts 2011 Drug Trend Report – Full of Infographics

Those of you that have been readers for a few years know that I love to read and summarize these reports. They provide a huge set of aggregated data and summarized information that is useful in creating business cases and identifying trends.

This year is no different although the graphics within the Express Scripts Drug Trend Report continue to get better … ala infographics (as they even posted one recently on their blog).

So, what caught my eye this year…

  • There was one ex-Medco person who signed off on the intro letter…and interestingly (compared to other DTRs), no George Paz signature.
  • They have a big picture of their Research & New Solutions Lab upfront (see below). It reminds me of the NOCs (Network Operations Centers) that I had at my past 3 employers. [Maybe one day before I move out of St. Louis they’ll take me on a tour.]

  • I was definitely interested to hear what they would say about Walgreens. They tackled it early on in the document.

Our 2011 retail-network negotiations marked another milestone in our heritage of independence from pharmacies and alignment with our plan sponsors. One retail pharmacy chain, Walgreens, was unwilling to offer rates and terms consistent with those of the market, and instead opted to leave our pharmacy network at the beginning of 2012. Although we remain open to Walgreens being part of our pharmacy network in the future, the positive reaction we received from plan sponsors and members during the process of transitioning patients to other pharmacies confirmed what our prior analyses had shown: the vast majority of the U.S. has an oversupply of pharmacies, suggesting that networks can be tightened significantly while maintaining sufficient patient access.

  • 17.6% of the total Rx spend was for specialty
  • 47% of specialty medications are processed under the medical benefit
    • 78% for oncology
  • They talk a little about evaluating genetic tests and when to recommend a test. It’s definitely an evolving space, and it will be interesting to see the Medco influence here in terms of what they recommend.
  • They talk about $408B in waste from adherence, generics and mail order. All consumer behaviors. (see last year’s report focused on waste)
  • They show the breakdown of waste by state where the South is the biggest problem. It looks a lot like the Diabetes Belt although it also includes the SouthWest.

  • Not surprisingly, diabetes, cholesterol, and hypertension represent 3 big opportunities.

 

 

  • FINALLY…For years, I’ve been comparing two older studies to make the point that people think their adherent when there’s no way that perceived adherence can match reality. The most exciting thing to me was that they actually looked at perceived and actual adherence on the same patients.

For example, patients in the least-adherent group in the survey of Express Scripts members had an average actual MPR of 24.3%. The average perceived MPR reported by patients in this group, however, was 90.6%. We therefore found a staggering 66% gap between perceived MPR and actual MPR.

  • They talk about how this data is being used to predict non-adherence with some crazy high reliability. (Meaning only that it sounds too good to be true.) Regardless, they’re right in using data to identify behavior gaps (current and future) and developing personalized interventions to address barriers.

  • The overall drug trend was 2.7%
    • 17.1% specialty trend
    • 0.1% traditional drug trend
  • Here’s the breakout by class of specialty spend

  • Actual member out-of-pocket and percentage of cost actually went down $0.14.  Surprised?

  • Perhaps most interesting (and new) is a huge section on Medicare and Medicaid trends. Obviously this shows their focus here in an area that CVS Caremark has also been focusing on.

I’d also point you to Adam Fein’s breakdown of this report (in a more timely manner).

Highlights From The Prime Therapeutics Drug Trend Report

It’s been a busy year, and I’m getting a late start on reviewing the drug trend reports as I’ve done in the past. I’ll try to get to the CVS Caremark and Express Scripts reports next week.

As I mentioned last year, the Prime Therapeutics Drug Trend Report takes a more aggressive stand and how they compare to the competition. I’ll give a lot of that credit to Eric Elliot’s presence there as the CEO.

“Smart car buyers know that the actual cost of a car does not always align with the price on the window; the same is true for pharmacy benefits. Yet plan sponsors continually focus on “sticker price” measures such as brand-name discounts or manufacturer rebates — metrics that can be manipulated to make a deal look more attractive.”

The one thing which is noticeably different this year is that the document has more of a care management sound to some of the programs they talk about with an emphasis on total healthcare cost savings. Again, I attribute that to both being owned by the Blues and having several people in the management team that came from payers. Buried towards the back, they call themselves “total health focused” versus their competitors.

As always, here’s a few things that caught my attention:

  • A $4.73:$1 ROI for using the local pharmacist to address gaps-in-care.
  • 1.3% trend increase.
  • 74.7% generic fill rate.
  • 20.1% specialty trend increase.
  • 15.4% of client’s pharmacy spend is for specialty drugs which cost on average $2,654.
  • 0.4% of Rx claims processed are for specialty drugs.
  • Their Rxs PMPY have gone up to 12.4 which I think is closer to industry.
    • This is an interesting one. I pointed out a few years ago that they were below average which I wasn’t sure if this was due to plan design, member mix, or client mix.
    • They seem to be going up even though some industry data suggests a downturn in Rxs filled which again is something I can’t explain.
    • It could simply be more people >50 years old are staying in the insured mix…and they use more drugs.
  • Their average net costs per Rx were:
    • $165.33 brand
    • $17.95 generic
    • $57.53 combined
  • They breakdown specialty spend by category and also show how it’s growing and is projected to grow as a percentage of total drug spend.
  • Of course, another big piece of the specialty picture is how the spend breaks out between medical and pharmacy benefits. This is why blending data to understand the complete picture is important.
  • I thought the list of specialty drug management tools was a good starting point although I expected to see more here about how to integrate with the payers especially around categories like oncology and what BCBS of Florida is doing around an oncology ACO solution.

 

Some ACO Facts From Modern Healthcare and CMS

In a Modern Healthcare article about ACOs, there was the following graphic which is a quick snapshot.  The key here is that companies are rapidly moving forward with ACOs (commercial and Medicare).  The initial data is positive, and it seems like everyone is jumping on board.

Scary Infographic On the Effects Of Soda

The scariest stat in here is that kids ages 1 and 2 are drinking soda on a daily basis.

Now, the fact that we’re fat and drink too much soda isn’t the soda’s company’s fault.  We drink soda of our own free will, but this is a contributor to our obesity and this is why the NY soda law makes sense.  (And, IMHO, this is why the soda companies supported removing their drinks from schools and went into the business of selling non-soda beverages…they know there are issues regardless of what they say.)

Soda Infographic

Drug Trend Reports: Quick Summary Of Big Three PBMs

“Comparative” is a very loose word to use here since each PBM has a slightly different approach to their analysis.

But, while it’s truly impossible to compare apples to apples and I will continue to argue that trend may be an irrelevant metric, I know may consultants and others are focused on these metrics.

With that in mind, I pulled the trend numbers (overall and specialty) along with the generic fill rate from the Express Scripts, CVS Caremark, and Prime Therapeutics trend reports.

 

Overall Rx Trend

Specialty Trend

GFR

CVS Caremark

2.2%

19.1%

74.1%

Express Scripts

2.7%

17.1%

75.0%

Prime Therapeutics

1.3%

20.1%

74.7%

Notes:

  • I used the CVS Caremark health plan overall and specialty trend data which I thought would be most comparable to Prime’s data.
  • Express Scripts reports their overall trend (without specialty) being 0.1%.
  • CVS Caremark provides a break out of trend along with best practices by sector (see below).

     

Interview With Michael Graves On Healthcare Design

When I was in architecture school, Michael Graves was one of those architects that we studied.  Everyone wanted to be like him designing cool building like this one below.  Since then, he’s gone on to be even more famous both from an architecture perspective and a design perspective (even having his own Target line).

But, since he was left paralyzed from the chest down in 2003, he’s had an incredible focus on redesigning healthcare from the perspective of the patient.  [I would put him in a similar e-patient category as e-Patient Dave, but while Dave is focused on technology and data, Michael is focused on furniture and spatial experience.)

I was thrilled to get the chance to talk with him yesterday to see how this effort was taking off, and on a personal note, to see if this idea of architecture influencing outcomes would be generally accepted.  My general takeaway after talking with him was that he’s getting a very positive response as he talks to people about it, but you’re not seeing a sea-change in terms of clients focusing on this or his fellow architects embracing this.  But, as someone in healthcare, this isn’t surprising.  We know it takes physicians 17 years to adopt new standards…why should it take the administrators of those physicians any less.

At the same time, there is a huge focus on the patient experience and on outcomes these days.  Both of those can be improved through a focus on the physical experience.  I asked him whether he was seeing interest from both inpatient and outpatient facilities.  He indicated that the dialogue is all happening around hospitals which isn’t surprising given their investments in new facilities and the industry shift around ACOs and PCMHs.  But, any of us that have sat in a physician’s office looking at posters from the drug companies, outdated magazines, or just an overly sterile room, know that these things don’t relax you or make you comfortable.

Michael tells a story that I’d seen in other articles about how he first came to understand all the problems with the physical space in the hospital.  He wanted to shave one day and realized that he couldn’t see himself in the mirror and he couldn’t reach the water to turn it on.  It was all designed by someone that hadn’t put themselves in the patient’s shoes (or wheelchair) to understand their perspective on the space.

Since “evidence-based medicine” is all the buzz in the healthcare area, I asked him about the term “evidence-based design” which is used in several articles and on his website.  As he pointed out, it’s basically about just using common sense, but I do think there’s more there (to eventually sell this).  To me, this implies a level of rigor linking more practical furniture and spatial redesign to clinical outcomes and patient satisfaction.  These are the things that are going to motivate the CFO to open the purse strings to make a change.  Unfortunately in our healthcare system, there aren’t a lot of changes made just because the patient wants them or they make sense.  Otherwise, we’d have a healthcare system not a sick care system.

The final topic we discussed was moving beyond furniture to look at art and color and other things that could effect the patient’s experience.  He told me that he’s also a painter (which I didn’t know) and mentioned that one of his clients had bought some of his art and furniture for their facility.  He also reinforced a study that I’d seen before about not using abstract art but focusing more on natural scenes within the patient setting (also mentioned below).

Here’s a few articles from other interviews and a link to the work he’s doing with Stryker on medical equipment / furniture.  You can also see a press release on his upcoming presentation at the end of this post.

And, while Michael is focused on the furniture and spatial experience, there are others focused on the art, colors, and other aspects of the hospital experience.  I found this text from The Atlantic from a few years back that even talks about some of the studies that have been done.  [Maybe case managers should be asking for specific rooms in facilities!]

Such “evidence-based design,” which draws its principles from controlled studies, is the great hope of professionals who want to upgrade the look and feel of medical centers. Much of this research follows a seminal 1984 Science article by Roger S. Ulrich, now at the Center for Health Systems and Design at Texas A&M. He looked at patients recovering from gallbladder surgery in a hospital that had some rooms overlooking a grove of trees and identical rooms facing a brick wall. The patients were matched to control for characteristics, such as age or obesity, that might influence their recovery. The results were striking. Patients with a view of the trees had shorter hospital stays (7.96 days versus 8.70 days) and required significantly less high-powered, expensive pain medication.

Along similar lines, a 2005 study compared patients recovering from elective spinal surgery whose rooms were on the sunny side of a ward with those on the dimmer side. Those in the sunnier rooms rated their stress and pain lower and took 22 percent less pain medication each hour, incurring only 80 percent of the pain-medication costs of the patients in gloomier rooms. Other studies, with subjects ranging from the severely burned to cancer patients to those receiving painful bronchoscopies, have found that looking at nature images significantly reduces anxiety and increases pain tolerance. Not all distractions are good, however. Ulrich and others have found that inescapable TV broadcasts and “chaotic abstract art” can increase patients’ stress.

Press release about his upcoming presentation:

World-Renown Architect Becomes Healthcare Advocate After Rare Illness Leaves Him Paralyzed

Michael Graves to speak at medical conference about his passion for healthcare design


Michael Graves, the award-winning architect and product designer famous for his collection of home products sold at Target, will address the country’s top healthcare professionals during a special reception at the 2012 Health Forum and the American Hospital Association Leadership Summit next month.  He will give a personal account about how paralysis fueled his desire to improve healthcare design.

Graves, who was recently named the 2012 recipient of the Richard H. Driehaus Prize and applies his design philosophy to designing better hospitals and home care environments, will be the featured speaker immediately following the welcome reception of the 2012 AHA Summit, at the San Francisco Marriott Marquis, at 7 p.m., Thursday, July 19.

In his lecture, “People First: Redesigning the Hospital Room,” Graves will discuss his own experience with a sinus infection that left him paralyzed from the chest down and how undergoing hospitalization and rehabilitation in inadequately designed hospital rooms has inspired his healthcare designs.

Graves talk will focus on design solutions for Stryker Medical, including a collection of hospital patient room furniture that addresses common hospital problems such as infection control, patient falls and clinician back.

“We are thrilled to have such a highly-acclaimed and gifted architect speaking before the healthcare community about ways of improving the hospital setting,” said Harold Michels, senior vice president of the Copper Development Association (CDA), the organization hosting the dinner event with Graves.  “This is a can’t-miss event that will certainly have hospital CEO’s and healthcare advocates talking about way after it’s over.”

Graves has said that spending months in hospitals during his recovery in 2003 opened his eyes to poorly designed patient rooms, and made him realize the patient experience could be improved by design.  He immediately began to sketch ideas for improving hospital buildings, room and furniture.

The event is being presented by CDA’s Antimicrobial Copper team, which is working to advance the message that copper surfaces intrinsically kill disease-causing bacteria.  On display will be a variety of antimicrobial copper products, which can play a pivotal role in healthcare facilities by killing bacteria that cause hospital-acquired infections and by reducing costs.

Laboratory testing has demonstrated that antimicrobial copper surfaces kill more than 99.9% of the following HAI causing bacteria within 2 hours of exposure:  MRSA, VRE, Staphylococcus aureus, Enterobacter aerogenes, Pseudomonas aeruginosa, and E. coli O157:H7.

Graves is internationally recognized as a healthcare design advocate, and in 2010, the Center for Health Design named Michael Graves one of the Top 25 Most Influential People in Healthcare Design.  Graves regularly gives lectures to major healthcare advocacy groups, including AARP, the Healthcare Design Conference, Medicine X and TED MED.

About Michael Graves & Associates

Michael Graves & Associates has been in the forefront of architecture and design since AIA Gold Medalist Michael Graves founded his practice in 1964. Today, the practice comprises two firms run by eight principals. Michael Graves & Associates (MGA) provides planning, architecture and interior design services, and Michael Graves Design Group (MGDG) specializes in product design, graphics and branding. MGA has designed many master plans and the architecture and interiors of over 350 buildings worldwide, including hotels and resorts, restaurants, retail stores, civic and cultural projects, office buildings, healthcare, residences and a wide variety of academic facilities. MGDG has designed and brought to market over 2,000 products for clients such as JC Penney, Target, Alessi, Stryker and Disney. Graves and the firms have received over 200 awards for design excellence. With a unique, highly integrated multidisciplinary practice, the Michael Graves Companies offer strategic advantages to clients worldwide. For more information, visit www.michaelgraves.com.

About the Copper Development Association

The Copper Development Association Inc. is the market development, engineering and information services arm of the copper industry, chartered to enhance and expand markets for copper and its alloys in North America. Learn more on ourblog. Follow us on Twitter.

Sports As Training For Real Life

A former sales executive once pointed out to me the fact that he liked to hire people that had competed at the highest level in sports.  I didn’t understand why, but his explanation made a lot of sense to me. 

  1. They learned how to set goals and train and prepare for those goals.
  2. They knew how to win.
  3. They knew how to lose, reflect on the loss, move on, and prepare to win again. 

I think number three is what gets lost in the “trophy generation” that we see out there today.  Kids that only know how to win and throw their rackets or get upset if they lose.  They don’t understand the value of competition, of being pushed, and of learning how to lose with grace.

Do You Push Your 10 Year Old To Be An Olympian?

When I was watching the movie The Tooth Fairy last week, it really got me thinking about how some people push their kids so hard into sports at such an early age.  I heard one 10 year old parents talk about their kid being in the next Olympics (when their not even the best at their sport that I know). 

Here’s some examples of what I’ve seen which seem wrong:

  • A 6-year old that is home schooled so he has more time for private lessons in his sport
  • A kid who is only rewarded if she sets 3 records this summer
  • A kid who is paid to beat certain people at her sport
  • A kid who is punished by extra practice if she doesn’t perform perfectly
  • Multiple kids playing on 2 or 3 different teams simulateously in the same sport
  • Kids training 4-5 hours per day / 6 days a week at age 9

I see more and more parents (of kids under 11) video tapping their performances and then breaking down their play after they perform with them.  The focus is always on the negative.  As I heard one kid say, “be my parent not my coach”.  I think that’s important.  Parents can’t project their expectations of paying for college and fame on their kids at such an early age. 

This leads to self-esteem issues.  It leads to burnout.  It leads to over training.  And, it can lead to false expectations that manifest themselves in poor sportsmanship. 

For example, I know one kid that my kid has to compete with came up to her and said “why are competing on this team…I can’t win if you compete”.  Never mind the team spirit.  This kid wants the personal recognition even in a category that she doesn’t compete in year-round, but she thinks she should be a star in whatever she does.  This is what leads kids to cheat and be bullies. 

Here’s a few other articles on this topic:

Here’s a quote from an interview with David Ellis a sports nutritionist about specializing too early:

Early bloomers typically have an advantage on these AAA teams, and while they dominate the domestic stage with their early maturity and specialization, they are not as competitive on the international stage once other competitors have matured. In fact there is evidence that the athlete who didn’t specialize early and was a little later in maturation might end up being the better athlete! Why you ask?

That multi-sport athlete kept on developing motor skills and competitive vision that might have been more challenging in totality than the narrowed focus of the specialized athlete. These multi-sport athletes are hungry to compete as they approach their prime, and because many were late bloomers, they had to be smarter players to make up for their lack of size and strength. So when their bodies do catch up maturation-wise, they often times have a sharper set of skills, and the net result is an athlete who has the tools and the motivation to compete at an elite level versus the burn out early specialized athlete who often seems to have peaked too early and below their net potential.

Healthcare Transparency, Out-Of-Network Claims, and Technology Solutions

Another big focus area these days is around the creation of transparency solutions to enable consumers to make better cost decisions about their healthcare.  While several companies have sprung up to work directly with consumers, the large payers have begun to rollout their own solutions.   And, as you can see from the Towers Watson and National Business Group on Health 2012 Survey, this issue of transparency was the 3rd biggest focus area for 2013. 

If you havent’ heard much about the topic, here’s several articles about the challenge of price discrepancies and surprise bills to consumers:

Here’s what UHG and Aetna are doing:

A few of the companies to look at are:

Companies like GoodRx are creating solutions in this area. 

You also might enjoy this infographic from Change Healthcare.

 

If you don’t believe this is a big issue in terms of price differentials, take a look at this data from the Healthcare Blue Book.  This shows a huge swing in prices which depending on your plan design can directly impact your out-of-pocket spend. 

Test or treatment Low Fair High
Brain MRI $ 504 $ 560 $ 2,520
Chest X-ray 40 44 255
Colonoscopy 800 1,110 3,160
Complete blood count 15 23 105
Hip replacement 19,500 21,148 43,875
Hysterectomy 8,000 8,546 16,480
Knee replacement 17,800 19,791 42,750
Knee arthroscopy 3,000 3,675 7,350
Laminectomy (spine surgery) 8,150 11,744 25,760
Laparoscopic gallbladder removal 5,000 6,459 12,480
Tubal ligation 2,865 3,183 5,729
Transurethral prostate removal 4,000 4,409 8,875
Ultrasound, fetal 120 169 480
Vasectomy 700 1,003 2,100