I was reading my AIS Health Business Daily e-mail this morning. Today’s quote of the day is below. It made me wonder. Think about any healthcare organization. We have a long way to go to get here.
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AIS Quote Of The Day – Will Healthcare Ever Be Like Nordstrom’s?
June 25, 2014 
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Getting To Zero Trend In Specialty Pharmacy – CVS Caremark – AHIP
June 24, 2014 6 Comments
When I was at AHIP last week in Seattle, I had a chance to see Alan Lotvin from CVS Caremark present on specialty pharmacy. It was one of the best presentations that I’ve seen in a while.
It was good because I actually heard things that I’d never heard discussed around specialty pharmacy before. And, as he pointed out, specialty will represent 50% of the pharmacy spend and about $235B in total spend by 2018. This is where everyone is focused and the opportunity for differentiation exists.
- He talked about how to get to zero trend in specialty.
- He talked about the consumer experience in specialty.
- He talked about care coordination and its value in specialty.
- He talked about the need for a beyond the pill approach by the specialty pharmacy.
So, what does all this mean? Let me share some highlights:
- Specialty pricing is starting higher based on government pricing constraints. You can’t raise price. It’s easier to start high, discount, and/or come down over time.
- Pharma is beginning to price based on Quality Adjusted Life Year (QALY).
- 3.6% of patients drive 25% of costs (not a surprise)…but 43% of their total costs are not from the specialty condition but from their co-morbidities. (Why treating the patient not the condition is critical.)
- Site of care (which is the hot buzz today) can save you 17% or more.
- Developing an exclusion formulary is important to counteract copay cards and help reduce costs.
o This article says that CVS Caremark is working on a formulary with 200 brand drugs excluded.
- They are moving from 12-month contracting with pharma to 2-3 month contracts to really keep on top of market conditions.
- Coordinated care can drive lower costs in terms of readmissions and other total medical costs.
- You can use generics to replace biologics. For example, he showed switching out an HIV biologic costing almost $3,000 / month with 3 generics costing $101 per month. (I’ve never heard anyone else talk about this.)
- He also reinforced the fact that today’s specialty benefits are not coordinated across medical and pharmacy. For example, he used the RA example where there are 9 drugs with 4 of them commonly used under the medical benefit and 5 under the pharmacy benefit.
But, the most important thing was their strategy to get clients to ZERO TREND for specialty pharmacy. (It reminded me of the program I developed at Express Scripts where we actually guaranteed a 3-year zero trend…if you followed our very aggressive recommendations.) He outlined the following:
- 1.5% savings from their formulary
- 0.5% savings from an exclusive specialty network
- 1.9% savings from an aggressive generic policy
- 1.0% savings from innovative pricing
- 3.6% savings from optimizing site of care
- 2.5% savings from medical claims editing and repricing
- 6.0% savings from enhanced prior authorization
He also went on to talk about the consumer experience. I think a lot of specialty pharmacies are thinking about the same things, but there were several things he shared that were new to me. It was exciting.
As I’ve said before, as specialty pharmacies really start to think about the patient and focus on the experience over time, we will start to see more coordination with pharma about going beyond the pill and driving lower total costs.
Prime Therapeutics Drug Trend Report 2014 Report
June 19, 2014 0 Comments
The Prime Therapeutics Drug Trend Report was released yesterday. Interestingly, they start out the report by making the point that what really should matter is net ingredient cost not trend. I’ve made the point before that trend isn’t a great number to focus on for many reasons. And, if you’re comparing trend numbers (which we all do), then you need to understand different methodologies. I think Adam Fein does a good job of summarizing that in his post. (BTW – This is a tough discussion to have especially when you’re getting spreadsheeted by consultants as part of an RFP.)
As comparisons, you can see my reviews of the other drug trend reports here:
Their report was short and to the point. Here’s some of the key data points:
- 25M members
- 80.6% generic fill rate
- 12.7 Rxs PMPY
- Overall drug trend = 3.3%
- Specialty drug trend = 19.5%
- Net ingredient cost trend = 2.2%
- The net ingredient cost per Rx = $58.99 (this is net of rebates and takes into account acquisition costs and network discounts)
- They state that this beats the competition by $6.00 per Rx
Of course, anything anyone really cares about these days is specialty. Specialty represents only 0.4% of the scripts they fill but 20.5% of the spend for a commercial account. (They point out that this is much less as a percentage of scripts than other PBMs which have closer to 1% of their scripts classified as specialty…which could influence trend numbers.) The chart below shows how some of the things we all did around traditional drugs apply to specialty drugs.
And, they make a few predictions going forward:
Mail Order Prescriptions Dropped 9.2% – WOW!
June 17, 2014 0 Comments
For some people running mail order pharmacies, this analysis is no big surprise. They’re running off to their boss to show them that it’s not just their mail order facility, but it’s an industry issue. To others, they’re left scratching their head trying to figure out why this is. If mail order is where all the money is, what does this mean to them? (The historical PBM model put most profit in generics filled at mail order.)
Per a statistic mentioned in Drug Benefit News from Pembroke Consulting (and discussed here by Adam Fein), mail order prescriptions from 2012 to 2013 (excluding Medicare) dropped 9.2% while retail prescriptions jumped 2.7%. (This is not new news, but this is a big drop.)
I’ve talked about the issues and challenges of mail order many times:
- Retail satisfaction seems to beat mail order satisfaction based on different studies, but at the same time, there are studies showing the exact opposite.
- Presentation on the challenges with improving mail order rates
- Why clients don’t always save using mail order
- Why consumers choose mail
At the end of the day, I simplify the mail order issue down to four major challenges:
- Savings are disappearing. Savings were primarily on brand drugs filled for 90-days. When you fill a generic at mail and your getting 15-30 days supply for “free” (i.e., no copay), that’s great, but the copay savings is $4-10 every 90-days. With generic utilization in or around 80%, this is a real issue.
- Transparency, coupons, and cash pay. With apps like GoodRx, it’s easy for consumers to find the lowest cost option for them to fill a prescription. That might be in a discount program. It might be to pay cash. It might be with a coupon. And, it might be mail order. They now can figure it out and optimize their spend easier. Mail isn’t the only option.
- High expectations. As a society, we continue to be more and more of a society that wants an instant response. Sending prescriptions off to a black box with a multiple day turnaround and difficulty tracking the prescription doesn’t meet our modern expectations. (A connected model of electronic prescribing may one day change this.)
- Cash flow. As I always point out to people, we (those working in the industry) don’t represent the average American. While it seems so logical to pay for a 90-day script in order to save money, that means you have to have the cash to pay for 3 months upfront. Not everyone can do that especially when they have multiple prescriptions…And, no mail order pharmacy that I know of wants to be in the credit business.
Will mail order disappear? Of course not, but PBMs need to continue to either find ways to improve the consumer experience and make it better or they need to recognize the issues that exist and continue to diversify. And, with more 90-day prescriptions at retail for the same copay (i.e., CVS Caremark), this will continue to shift expectations.
Chinese Herbal-Therapy Ward At Cleveland Clinic
June 10, 2014 0 Comments
I think this is really interesting. Cleveland Clinic has opened a Chinese herbal-therapy ward. In the US, we’re very much a medicated society. There’s a pill for almost every ailment you have and some you didn’t even know you had. Even admitting that Western medicine might not have all the answers is a big step forward especially for such as prestigious hospital such as Cleveland Clinic.
So, what are they doing? According to what I’ve read, they see patients with chronic pain, fatigue, poor digestion, infertility, and sleep disorders. The clinic is run by a certified herbalist under the supervision of several classically trained physicians. Access to the clinic is only on a referral basis, and according to Ohio law, the physician has to continue to oversee the patient’s treatment for a year after their referral.
The clinic is a single room with bright pillows, a tapestry, candles, and a cot.
Compared to China, the herbal formulas here are all encapsulated versus sent home with them to brew.
Of course, one of the worries is drug-herb interactions which requires them to coordinate care using an EMR and have people that have the right training and work with a clinic that can provide them with the right herbs and still meet their safety standards.
A consultation costs $100 which is typically not covered by insurance. Additionally, follow-ups are $60 and a one-month supply of herbs will cost $100 (on average).
Here’s more on their clinic:
- Time article (which is what I first read)
- WSJ article
- Advisory Board
12 Innovation Lessons from 2014 (Fast Company)
June 10, 2014 0 Comments
Back in March 2014 (yes I’m behind), Fast Company put out a report on the World’s Most Innovative Companies. I thought the list of 12 trends or lessons from their research was worth sharing.
- Exceptional is the Expected…Google is the case study here, but they make a point that for most companies, the best businesses focus on less not more.
- Innovation is Episodic…Innovation ebbs and flows so people don’t stay on the list every year. This is also known as regression to the mean or the Sports Illustrated curse (of being on the cover).
- Making Money Matters…This is very true for mHealth. I’ve seen so many really cool ideas, but if they’re not self-sustaining, that’s a problem.
- Sustainability Has Found A New Gear…”Green” is no longer a gimmick. Companies are innovating and using alternative fuels and recycling as part of that.
- Unlocking Global Talent Unlocks Possibility…I can’t believe companies still don’t get this. To innovate, you need diversity and a culture which allows those different opinions and perspectives to hash it solutions. (Just look at the graphic at the bottom of this post for Silicon Valley which makes that point.)
- Passion is Underrated…While crowdsourcing sounds like old news to many industries. I think there’s still a huge patient empowerment push that will happen in healthcare. (Just look at this article in the WSJ.)
- Conflict Isn’t Required…This is the perfect Blue Ocean example. You don’t always have to try to change the establishment but sometimes you have to figure out a whole new way.
- Happy Customers Make You Happy…Not much to say here. Healthcare is about to learn this lesson with exchanges, but we have a long way to go.
- Software Beats Hardware…YES! A great computer with a horrible data entry process which messes up the physician workflow and consumer experience is bad. We need outside-in design to develop user-friendly software that takes into account workflow and regulation but improves the overall experience and outcomes.
- “Made In China” Is A Compliment…I’d expand this point to say that while we’ve outsourced for years for cost that’s building up knowledge and a middle class abroad. As their expectations and experience rise, we’re going to see more innovation and quality from abroad.
- The Biggest Winner In The App Economy Remains Apple…And, now, Apple is taking it’s “moral obligation” and bringing it to healthcare.
- Dreaming Big Isn’t Folly; It’s Required…Eliminating cancer. Changing payment paradigms in healthcare. Getting patients to take action. Changing food at schools. We have to have some BHAGs in healthcare and make them happen. (Perhaps some of the HealthPeople 2020 initiatives will get us thinking.)
Above: Tech Immigrants: A Map of Silicon Valley’s Imported Talent (from VentureBeat article)
Curing Camden: Book Review
June 10, 2014 0 Comments
Curing Camden is a quick read on how different groups collaborated to change the healthcare cost curve in Camden, NJ. Here’s the official language from the Amazon site, but after reading it, I thought I’d highlight a few things that caught my attention.
As the federal health reform debate played out in the national media spotlight, author Christina Hernandez Sherwood was reporting on the American medical system from the street level. From 2010 to 2012, she wrote a half-dozen stories for thePhiladelphia Inquirer that focused on an innovative healthcare nonprofit: the Camden Coalition of Healthcare Providers. These stories centered on the nonprofit’s role in combating falls, violence, diabetes, and other issues in Camden, New Jersey, a city known nationally as one of the country’s poorest and most violent, but that is now making a name for itself as an innovation leader in the public health sector.
In Curing Camden, all of Sherwood’s articles have been collected into a single book, including the unpublished final installment profiling the nonprofit’s founder. This book takes readers from the living rooms of Camden residents to the halls of the New Jersey State House in Trenton and beyond. Sherwood highlights how Camden could be the first US city to bend the cost curve by lowering healthcare costs while improving care. The ideas revealed in this book could be translated into practice across the country, and Camden could become a national model of 21st century medicine and public health.
The book goes through several core chapters. The first one is on creating a citywide health record by working with the 3 primary health systems in the city. The core part of the success here is that they used the framework of opt-out not opt-in which would drive more participation at the consumer level. This behavioral economics framework called “active choice” has been used by several companies that I’ve worked with in the healthcare space to shift behavior patterns. This obviously has the opportunity to reduce duplicate testing and improve care coordination.
The second chapter is about create an ACO for Camden with a 3-year Medicare demonstration project. It’s an interesting discussion about how Dr. Jeffrey Brenner began using data to learn things about the Camden population. For example he found out that most of the population will vista a hospital at least once in a 2-year period (which is 2x the national rate). He also found that most of the top reasons for going to the emergency room were all primary care issues. He makes a great point in the book that while people think that complicated patients simply like going to emergency rooms the reality is that they don’t have better choices.
The third chapter was about protecting against the risk of falling. From 2002-2009, Camden residents made more than 17,000 trips to the hospital (the number one cause of hospital visits in Camden). This isn’t a localized issue either. Falls affect 1 in 3 seniors every year and drive $19B in costs according to the CDC. In the book, they make an interesting point about the “vicious cycle” of falling which leads to less activity which leads to weaker patients increasing the likelihood of another fall.
The fourth and fifth chapters are about diabetes. In Camden, almost 13% of adults have diabetes. These patients can be high utilizers which is something they talk about along with their focus on the 13% of patients that drive more than 80% of the costs in Camden with one patient having over $5M in charges over 5 years. Of course, people in dangerous communities are at higher risk of obesity due to lack of access to food and safe places to exercise which contributes to the diabetes issues.
The sixth chapter is about violence and helping victims. Camden’s 77,000 residents experience more than 13 aggravated assaults per 1,000 residents (which is 5x the national rate). This lead to 9,361 trips to the hospital from 2002-2009.
It’s an interesting read. They had a lot of grant money, but at the end of the day, it was about several things:
- Coordination and collaboration across the different systems
- Localized care – being in the apartment building with a clinic or going into people’s homes
- Using data to target the areas where they could make a difference
- Caring to make a change
$83,000 In Savings On 3 Procedures – The Driver Of Transparency & Reference-Based Pricing
June 9, 2014 0 Comments
At the front of the HealthLeaders Magazine, they have a FactFile every month with data from Truven Health. The one from March 2014 focused on price variation and transparency. I thought I’d share a few of the charts.
This first chart shows their projections about the impact of a price transparency tool on cost savings over three years. (BTW – If you’re looking for information on price transparency tools, I would go to Jane Sarasohn-Kahn‘s blog HealthPopuli and look at her posts on transparency – Part I, Part II, Part III, Part IV, and Part V). Their projection was $6,786,000 in year 3 for an employer with 20,000 employees (or about 46,000 total covered lives if you assume a ratio of 2.3).
The other topic in the FactFile is about price variation and potential savings. They looked at three procedures and the variation in pricing for them. They then estimated the savings from those three procedures for an Chicago based employers.
As you can see, the variation is dramatic. What this will eventually lead to is called “reference-based pricing” where payers will agree to pay a fixed amount (or reference price) for a procedure and consumers will have to use transparency tools to figure out which providers will meet that price or pay out of pocket to go elsewhere. The hope is that this will drive down prices, make consumers aware of differences, and finally help people understand that price and quality are NOT correlated in healthcare.
Here’s a few articles to read on price transparency:
Will Smart Sports Equipment Lead To Better Athletes?
June 7, 2014 0 Comments
For those that are part of the Quantified Self movement, this is just a natural extension. You can now measure your different sports.
- Swingbyte – a sensor that clips to your golf club to monitor speed, acceleration, arc, and other stats.
- 94Fifty Smart Sensor Basketball – a sensor embedded in a basketball to track shot speed, arc, and backspin along with dribble speed and force.
- FWD Powershot – a sensor that fits into the handle end of a hockey stick and measures speed, angle, and acceleration.
- Zepp Baseball Sensor – a sensor stuck to the knob of a baseball bat that tracks the speed and plane of the swing and the angle of impact.
- There’s also the Babolat Play which is a smart tennis racket.
On the one hand, this stuff is fascinating and amazingly cool. On the other hand, who even knew that dribble force was something for me to be coached on. It will be interesting to see how athletes and coaches adopt these technologies and how they help improve sports over time. Will they increase the stress for the average athlete who was never going to be great and was just playing for fun? Will they improve everyone and help players and coaches really focus where they can make a difference?
19% Higher Risk Of Medication Non-Adherence If The Physician Communicates Poorly
June 6, 2014 0 Comments
This was just one of the really great data points I got from the Medication Adherence Clinical Reference page from the American College of Preventative Medicine. It’s worth a read.
But, let me highlight a few other points:
- Non-adherence is thought to account for 30-50% of treatment failures.
- Trust and communication are critical factors in adherence.
I think this is important because a lot of the industry solutions focus on the pharmacy and the consumer. They don’t (IMHO) go back to the initial discussion with the provider. How are we helping to enable those conversations to last longer than 99 seconds in the average encounter in which time they have to explain the medication, the side effects, and help the patient feel like the medication is going to make a difference? (Of course, this always make me think of my favorite placebo effect video.)
Additionally, this chart from the Adult Meducation publication was a great list of factors reported to impact adherence. (Sources: Miller et al., 1997; Nichols-English and Poirier, 2000; Vermiere et al., 2001; World Health Organization, 2003; Krueger et al., 2005; Osterberg and Blaschke, 2005)
They also share this chart (which I’ve seen a version of many times):
[Source: National Association of Chain Drug Stores, Pharmacies: Improving Health, Reducing Costs, July 2010. Based on IMS Health data]
Should Providers Have Private Conversations With Your 12-Year Old?
June 6, 2014 0 Comments
There was an interesting story which came out of Michigan this past week from Christy Duffy about how her physician’s office was requiring all minors between the age of 12-17 to have a 5 minute private conversation with them (according to the law). Of course, it appears that they made a mistake per her later post, but I think it serves to make several interesting points.
1. Don’t always assume that someone’s interpretation of the law is right if it doesn’t make sense. Sometimes, you have to apply common sense and push back or ask questions.
2. There is a gray area between protecting the rights of our kids and protecting our rights. While the intent of allowing our kids to have honest and open conversations is appropriate, there needs to be some involvement of the parents.
It’s an interesting topic for discussion. Should our teenagers have access to providers on their own? Yes. If a teenager has a health issue, I think we’d all prefer that they talk to a professional rather than Dr. Google or their friends to find the answer.
Should a provider be able to force a private conversation with a minor? Yes…if they have a legitimate concern about abuse, but I don’t see any other reason.
Should a teenager who’s covered by my insurance and lives in my house be able to block me from having access to their medical records? Yes. This is the law, but should providers be having private conversations to offer them this option? I don’t think so. I would like them to have those discussions with me and my child to say that here are their options.
Should a teenager have a private conversation with their provider about STDs, HIV, and birth control? Yes, BUT I’d like to have the conversation at the right age with me in the room initially and then offer the private option. I don’t think forcing that conversation on a 12-year old would make sense in a private setting.
Ultimately, this comes down to the issue of access to the medical records online. What I heard was that this would also require the provider to get a cell phone and e-mail address for my kids. Obviously, if they’re doing something confidentially with the doctor, that’s one thing, but as a matter of record, I disagree. (I don’t even give out my kid’s Social Security numbers.) I don’t want my kids to start getting e-mails, phone calls, and letters sent directly to them as early as 12-years old. And, yes…I do try to shelter them a little. We talk about all the issues, but in a way that my wife and I want them to learn, not according to some formula driven approach that’s mandated. But, ultimately, I don’t think a 12-year old is mature enough to make all their own health decisions or to feel like they should.
Obviously, some part of this falls on the parent regardless to create an environment of open dialogue with their kids. The kids have to feel comfortable talking with their parents which is important for health and many other challenges that our kids have to deal with. And, unfortunately there’s always bad people in any profession so while sexual abuse by a physician or nurse is rare it’s not unheard of. Ideally, I think you should have the choice of when to encourage a private conversation and never have it mandated (unless of course the provider suspects abuse). Unfortunately, with a report of abuse being made every 10 seconds, we have a huge problem in our country.
Our Unreasonable Expectation For Devices And Apps
June 2, 2014 0 Comments
I was reading an article the other day about devices like FitBit and their use within corporate wellness programs. One of the questions it was asking was why use them when people abandon them after a while. I found this great chart from Endeavour Partners in their whitepaper which looks a lot like an adherence curve. They say that 1/3 of people abandon their devices within 6 months which makes it a hard investment for anyone. 
It’s the same question you might ask around mobile apps. While this chart shows that Americans install almost 33 apps, the questions is how long they use them.
(Source: http://www.statista.com/chart/1435/top-10-countries-by-app-usage/)
According to Flurry, most apps peak within 3 months, and they show that health and fitness app retention is only 30% after 90-days. Again, that doesn’t make you want to invest a lot of money in a mobile app. But, there are lots of reports out there telling us that people want to use mobile to communicate with their providers, track calories, and do lots of other health related tasks. (see RuderFinn report, see IMS report, see Pew report)
So, what gives? Do we have unreasonable expectations? I would say yes.
We live in a ADD culture where people are constantly multi-tasking. People want things that evolve and constantly change. It’s the same reason we don’t want the same experience every single day. It’s the reason that you’ve seen people from gaming coming into healthcare. They understand how to keep people engaged over time.
Whether you want to picture it as a customer journey or different phases, the reality is that messaging needs to evolve with the consumer. If you got the same letter every month, at some point, you don’t even pay any attention to it. At some point, you wouldn’t even open it.
When I worked in healthcare communications, it was the same challenge from a strategy perspective. How would we coordinate communications across channels? What would the first message say versus the fifth message? How do you avoid message or channel fatigue?
It’s the same thing in the digital or device world. So, I ask the question…do we have unreasonable expectations about these tools by thinking that we can put them out there and sustain use of them? I think so. We need an evolving, constantly changing strategy about content, community, functionality, etc. to keep engagement sustained.
New CVS Caremark Offering – Specialty Connect
May 31, 2014 0 Comments
First CVS Caremark began offering mail order (90-day Rxs at lower cost) at retail stores (aka Maintenance Choice), and now with Specialty Connect, they are doing the same thing in specialty pharmacy.
Specialty Connect was a pilot program that won the PBMI Innovation Award this year. What it does is to allow consumers the choice of getting their specialty medications at either the CVS Caremark specialty pharmacy or picking them up at a local store. This is a change since: (1) many pharmacies don’t typically stock specialty medications; (2) many PBMs require use of a specialty pharmacy (i.e., mail); and (3) specialty medications typically require some addition handling and counseling which may be difficult to do at a local store level.
But, this is a very consumer friendly solution, and it has had some positive initial success. Here’s a quote and some data from their press release: (some additional data in the original PBMI document)
“Specialty Connect helps specialty patients with these critical therapies by helping to eliminate common challenges they had often faced and by offering them flexibility and choice,” said Alan Lotvin, M.D., Executive Vice President of Specialty Pharmacy for CVS Caremark. “The program makes it easier and more convenient for patients to submit and receive their specialty prescriptions either through CVS/pharmacy or by mail. What’s more, it increases medication adherence, improves outcomes and lowers overall health care costs for specialty patients and payors.”
Specialty Connect has demonstrated high levels of patient satisfaction as well as improved adherence for specialty pharmacy patients. In fact, pilot program results demonstrated a 13 percentage point increase (from 66 to 79 percent) in patients who were optimally adherent to their medication. Early program results also show that the program is improving upon the patient experience and reducing traditional barriers to getting started on medication, with 97 percent of patients successfully starting on therapy after only their first interaction at a CVS/pharmacy store. In addition, more than half of patients, many of whom were existing mail service pharmacy customers, chose to pick up their specialty medications at CVS/pharmacy.
Hopefully, this and many of the other CVS Caremark successes will make people wonder why they ever wanted to break the company up into different business units. As I’ve said for years on the blog, in the press, and to many Wall Street analysts, the integration of the business units can offer huge value once the synergies are realized and the consumer experience is integrated.
The other interesting things that I thought about when reading about Specialty Connect were:
- It’s great to offer a centralized call center to support specialty but will that be enough at the local store level? Will patients want some type of higher touch local presence? Can that be achieved through a telemedicine or kiosk type solution?
- I remember about 5 years ago when most specialty people thought they had to treat patients with specialty diseases differently. I kept trying to argue that they are just like other consumers. You should think about the experience across channels and at the patient not just condition level. This seems to signal a movement towards this. They are using SMS (text messages) and other channels to communicate with them which was a foreign concept a few years ago.
Top 25 Wikipedia Health Topics
May 28, 2014 0 Comments
The IMS Institute for Healthcare Informatics published a report in January called “Engaging Patients Through Social Media“.
One of the things it highlighted is the incredible use of Wikipedia for healthcare information. People are typically going to Google and looking for a disease. Based on Wikipedia’s page rankings, this often leads them there.
Now, what makes this more interesting is the article in the BBC News which says that 90% of wikipedia articles on health contain errors.
Of course, the trick in reading the article closely is that it says they found that “90% of the entries made statements that contradicted latest medical research”. What’s the difference? Well, we know that it takes years for evidence-based medicine to become adopted within healthcare. So, how long does it take the latest medical research to get updated on all the sites? What I would love to see is a comparison of Wikipedia to WebMD, Ebix, and Healthwise. That would be telling.
Great #BigData JAMA Image Missing Some Data Sources
May 27, 2014 1 Comment
When I saw this article and image in JAMA, I was really excited. It’s a good collection of structured and unstructured data sources. It reminded me of Dr. Harry Greenspun’s tweet from earlier today which points out why this new thinking is important.
People share more accurate #health & #lifestyle info through social media than with docs, what does that mean for…
— Harry Greenspun, MD (@harrygreenspun) May 27, 2014
But, it also made me think about this image and what was missing. The chart shows all the obvious data sources:
- Pharmacy
- Medical
- Lab
- Demographic
- EMR / PHR
It even points out some of the newer sources of data:
- Online communities
- Genetics
But, I think they missed several that I think are important and relevant:
- Structured assessments like the PHQ-9 for depression screening or the Patient Activation Measure.
- Communications data like:
- How often do they call the call center?
- What types of questions do they have?
- Do they respond to calls, e-mails, SMS, letters, etc?
- Have they identified any barriers to adherence or other actions (e.g., vaccines)? Is that stored at the pharmacy, call center, MD notes?
- Browser / Internet data:
- This could be mobile data from my phone.
- What searches I’ve done to find health information. What have I read? Was it a reliable source?
- Device data (e.g., FitBit):
- What’s my sleep pattern?
- What am I eating?
- How many steps do I walk a day?
- Income information or even credit score type data
These things seem more relevant to me than fitness club memberships (which doesn’t actually mean you go to the fitness club) or ancestry.com data which isn’t very personalized (to the best of my knowledge).
In some cases, just simply understanding how consumers are using the healthcare system might be revealing and provide a perspective on their health literacy.
- Do they call the Nurseline?
- Do they go to the ER?
- Do they have a PCP?
- Do they use the EAP?
We’d like to think this was all coordinated (and sometimes scared into believing that it is), but the reality is that these data silos exist with limited ability to track a patient longitudinally and be sure that the patient is the same across data sources without a common, unique identifier.
Novartis And Curing Cancer
May 25, 2014 0 Comments
The 5/26/14 edition of Forbes has a great article on Novartis called “Will This Man Cure Cancer?”. It’s an interesting article and Novartis has really ramped up their focus on Oncology with their purchase of Glaxo’s Cancer drugs. And, they recently got FDA approval for a lung cancer drug of theirs.
The article talks about Joseph Jimenez’s leadership at Novartis and highlights several interesting things:
- A focus on speed to stop having to turn patients away from a possible cure.
- Cancer drugs already represent $11.2B of Novartis’ $58B in sales.
- Novartis has a 33% stake in Roche which has $31B in oncology sales.
- Gleevec was it’s big breakthrough oncology drug that Jimenez’s predecessor believed in and has been so successful that it’s a $4.6B drug where they’ve been able to quadruple the price.
- It talks about transforming the campus working with architects like Frank Gehry and moving research to Cambridge, MA.
There is some discussion on a new therapy that they’re working on based on some initial trials which uses CARTs (Chimeric Antigen Receptor T-Cells) to attach cancer. At the same time, Juno Therapeutics is on the same trail and raised $175M in their first round to research it.
I really liked one quote from Jimenez in the article that seems to imply a focus on the end goal not necessarily whether they win.
“You look at a company like Celgene, and you know they’re going to figure it out. And they should figure it out. It will be good for patients. We want to beat the competition, but we’re really using the competition to trigger us to get to the patient.”
He goes on to talk about the issue of pricing especially around oncology drugs (but also applicable to specialty drugs in general). He calls it “a new brutal world” because costs will go up with the aging population and new medicines which will cause more backlash against price. He talks about looking at how to be innovative about pricing which could be interesting.
EMD Serono Specialty Digest 10th Edition – A Few Highlights
May 22, 2014 0 Comments
This is definitely worth a read. They have it nicely packaged up with a slide deck also once you register. Here’s a few highlights.
Look at the gap between perceived value and satisfaction with clinical programs offered by specialty pharmacies.
Look at the huge jump in plans to educate physicians.
Look at the different adherence management strategies. I’m amazed at the low percentage using an outside vendor but the huge perceived effectiveness.
Look at some of the benefit strategies that companies are planning to use.
This is an interesting one that shows that companies are really going to focus on controlling specialty benefits in the exchange world in the future.
This shows the variation in terms of coverage (medical versus pharmacy) for different categories of drugs.
There’s more in the deck and report, but these should be enough to tease you to read more.
Continued Discussion On Specialty Care Coordination
May 22, 2014 1 Comment
I like this quote from Debbie. It reminds me of my post from the other day “Care Is Coming To Your PBM” and is very much in line with the article I tweeted yesterday – Pharmacy Chains Continue To Blur The Line. The point is that complex conditions like oncology are a lot more than simply filling the drug. To be truly patient-centric, you need to be able to answer all these questions:
Cancer is a great example of where everything comes together from a care coordination, testing, diagnosis, delivery, and pharmacy perspective. At the same time, we know that patients still see multiple doctors who don’t coordinate their care. We know they get mis-diagnosed. We know that don’t stay adherent with their medications. We know they don’t always articulate their wishes. And, we know the amount of care spent in the last months of life is disproportionate (IMHO) to the minor life extension which they get (often in less than optimal conditions). Here’s a good summary of some key data from the EMD Serono report:
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Humana – Most Improved In Customer Service Report
May 22, 2014 0 Comments
I always enjoy Bruce Temkin’s reports and analysis. He just came out with his latest report on customer service.
It’s not a healthcare focused report so you have to gleam a few things from his summaries although you can buy the report to see the details by company. Without doing that, I thought I’d point out a few things from his charts.
1. Humana was the most improved (of all companies) in terms of customer service. Great job. Coventry (which was bought by Aetna) had the biggest drop (of all companies) in terms of customer service. [Perhaps not a big surprise as integrations can always be tough.]
2. As it has in past years, healthcare continues to be at low end of the spectrum in terms of customer service. While you can divide up the market into pharmacies, physicians, hospitals, PBMs, and insurance companies (with many other players out there), one of the biggest groups which is covered in the survey is health insurance companies. They fall below airlines and way below other types of insurance companies – i.e., auto / home.
3. Five of the bottom 20 companies he highlights on his blog are all health insurance companies. [But, you’ll have to click through to see who!]
Seems like a great opportunity for someone to help those and the entire industry to think differently about customer service and consumer engagement.
Who Is Hubbub Health?
May 20, 2014 4 Comments
“Hubbub is a technology-driven online playground and mobile wellness solution that uses social circles and gamification to motivate and engage people in healthy behaviors.”
Several people have suggested I take a look at what Hubbub Health is doing so I did. At first glance, there were several things that caught my attention (beyond the interesting teaser description of the company):
- Lots of unconventional language in how they talk (reminds me of the Wellpoint Tonik Healthcare business from years ago)
- A direct to consumer model where you can download the app and use their tool AND a $3 PMPM (per member per month) model for employers which includes additional services like health coaching (most people aren’t in both markets)
Of course the question is whether this is just another one of many mobile companies making a play in healthcare or whether they’ll actually survive for a few years and get traction.
But, Hubbub isn’t just another one of the many wellness vendors out there. They’re part of Cambia Health. You’ve probably still never heard of them, but Cambia is Regence which is a BCBS plan operating in Oregon, Idaho, Utah, and some counties in Washington. Additionally, they own and/or invest in lots of companies – e.g., HealthSparq, GNS Healthcare, OmedaRx, and Wellero (plus Hubbub).
So, this gives them some instant credibility. And, it’s an interesting time in the market. The Population Health Alliance (which used to be the Care Continuum Alliance) recently put out a post looking for contributions around “Return on Value” or VOI (Value on Investment) which is the focus these days in Population Health Management.
This sounds a lot like what you see in the presentation and white paper by Hubbub.
What was more interesting was some of the foundational elements upon which Hubbub was built like:
Cognitive Evaluation Theory (CET) concerns intrinsic motivation, motivation that is based on the satisfactions of behaving “for its own sake.” Prototypes of intrinsic motivation are children’s exploration and play, but intrinsic motivation is a lifelong creative wellspring. CET specifically addresses the effects of social contexts on intrinsic motivation, or how factors such as rewards, interpersonal controls, and ego-involvements impact intrinsic motivation and interest. CET highlights the critical roles played by competence and autonomy supports in fostering intrinsic motivation, which is critical in education, arts, sport, and many other domains. (source)
Self-Determination Theory (SDT) represents a broad framework for the study of human motivation and personality. SDT articulates a meta-theory for framing motivational studies, a formal theory that defines intrinsic and varied extrinsic sources of motivation, and a description of the respective roles of intrinsic and types of extrinsic motivation in cognitive and social development and in individual differences. Perhaps more importantly SDT propositions also focus on how social and cultural factors facilitate or undermine people’s sense of volition and initiative, in addition to their well-being and the quality of their performance. Conditions supporting the individual’s experience of autonomy, competence, and relatedness are argued to foster the most volitional and high quality forms of motivation and engagement for activities, including enhanced performance, persistence, and creativity. In addition SDT proposes that the degree to which any of these three psychological needs is unsupported or thwarted within a social context will have a robust detrimental impact on wellness in that setting. (source)
Those are foundational for a lot of the work in healthcare, and I liked this graphic about motivation.
Whether the app works and captures my attention is still TBD. I did download it and register, but I didn’t really get engaged upon registration. And, the website seemed better than the mobile app, but it still had a few issues in terms of how the large top image dominated most of my screen on my laptop.
At the end of the day, their key role like anyone in this space is to figure out how to engage the consumer (or patient or member or individual) as validated in a study they use.
A Great Health Add-on To Your HVAC System
May 15, 2014 0 Comments
In the spirit of the Internet of Things and the Smart Home, I was intrigued by a short article I read about Menssana Research which can identify 2,000 chemical compounds from our breadth…including signs of cancer and radiation exposure. Pretty cool!
I guess this explains how dogs can detect diseases in humans.
Of course, my mind jumped to the idea of how you could use existing devices (like Nest) which would be tied into our HVAC system and could monitor the overall air in an entire house and look for risks based on the air. (like my idea of the smart toilet) Maybe that’s a little too scary like why an underwriter wants your cell phone data or too much like the Snapshot from Progressive. And, while on the one hand it’s cool, I’m not always sure we’re ready to know things too much in advance so the question would really be how early is the device identifying people and how accurate is it.
Innovative Ideas For A Weight Loss Company
May 15, 2014 0 Comments
As I’m enjoying my time thinking about what’s next, one of the things that I’ve thought a lot about key problem areas in our healthcare system. Obviously obesity is one of them. And, you have lots of companies trying to figure out what to do here.
So, I was thinking about what I would do if I were at a Weight Watchers or Jenny Craig or Vree Health…
- Build an assessment tool (like Milliman or InterQual) which could be used for assessing patients and creating an evidence-based care plan.
- Work with KitchenAid or others to create a branded line of smart devices which used the Internet of Things to do things like re-order healthy foods and suggest menus.
- Work with Jiff’s assessment tool or with Newtopia to study the ability to take data and create personalized diet plans.
- Work with FitBit or other device company and a gamification company to create a kid’s device linked to a game where the key player got fat tied to their activity level and where they opened up new levels tied to their behavior (e.g., eating healthy).
- Create online communities for people to share stories and experiences (like PatientsLikeMe but moderated).
- Move from physical locations to a virtual site using American Well technology blended with Withings scales.
- Incorporate stress management and sleep management into the overall program.
- Work with Healthways and the Blue Zones effort to create a family centric option tied into the schools and focused on getting everyone healthy across generations.
- Create a mobile coach using embodied conversational agents (similar to avatars) to drive behavior change and create a location-based prompts (i.e., as I pull into McDonalds).
- Work with manufacturers to create a “beyond the pill” approach to obesity drugs that incorporates coaching and behavior change with the pill being the final mile which should drive greater formulary coverage.
- Create a detailed patient journey map based on ethnographic research for weight loss with different triggers and create a “Coach certification” that can be used with coaches to certify that they are following best practices.
- Work with biometrics companies (e.g., LabCorp, Quest) or clinics (e.g., MinuteClinic) to create an early identification process for obesity and/or metabolic syndrome with a process for them to “prescribe” a specific program.
- Research and design ethnic specific obesity related programs for sub-populations within the US. For example, partner with the large Hispanic groups to create a Spanish (language, experience, culturally relevant) programs.
- Partner with the ADA and NKF to jointly address metabolic syndrome together.
- Work with the AMA and medical schools to teach MDs how to treat and talk with obese patients (something they don’t do well today).
- Work with a grocery store or food company to create an augmented reality process for smart phones or Google Glass that would highlight healthy foods on the shelf and help people shop better.
- Work with Medicaid to create a process by which people earned cell phone minutes or lower copays based on activity and participation.
Just some ideas that I thought I’d share.
Reconciling Legal Marijuana With Drug Prevention
May 14, 2014 0 Comments
As the parent of kids, I’m obviously concerned about what they do as they grow up. On the one hand you want them to learn to make decisions. On the other hand, you don’t want to endanger them. That requires helping them to understand right from wrong. That requires helping them to make smart decisions and understand the long-term implications of them.
This is where I struggle with the modern attitude towards the legalization of marijuana. While it may not be a “gateway drug” according to science, it is certainly highly correlated with future drug use, and it has a negative impact on health. Additionally, it’s addictive for about 10% of people and more addictive when you’re younger.
As someone who has watched people throw away their life on drugs and the son of someone who worked in drug and gang rehabilitation centers, I personally see it as a slippery path. I agree that alcohol may be the gateway “drug” when not used appropriately and can be very dangerous for kids and for many adults who can’t control themselves. You can find lots of research on alcohol related deaths due to increased disease burden or simply drunk driving.
So, like many health related topics, the information out there is very confusing for our kids. On the one hand, we point out what your brain looks like on drugs (if you remember the PSA from the 80s and 90s).
On the other hand, we talk about medical marijuana, and we have states where it’s now legal to buy marijuana like Colorado. But, the idea of walking down the street and seeing cannabis stores is crazy to me.
Perhaps a sad sign of this issue is the spike in travel to Colorado especially around Spring Break. They’ve also seen an enormous jump in applications to go to college in Colorado. (I think I’ll bet on causality not just correlation here.)
At the end of the day, I think we want to keep our kids safe and help them avoid anything addictive – tobacco, drugs, and alcohol. (And, yes…you could take this further to look at caffeine or sugars or other things that impact their health.) At a minimum, we want to help them understand the facts and make sure they know the risks and determine if they fit the addictive profile or not. They already have a hard time navigating childhood and adolescence…let’s be careful not to make it too easy for them to fall off track. Unfortunately, decisions like this have broader implications on our next generation even if they don’t actually use marijuana.
Of course years ago, we used opium, cocaine, and herion as medicine also…but we outgrew that phase of “modern healthcare” so maybe this too will pass.
As Demand For Healthcare Services Goes Up, Satisfaction Goes Down
May 14, 2014 0 Comments
This statement alone should scare anyone as you think about all the new consumers coming into the healthcare system. That will only stress the system more leading me to believe we’ll see bigger drops in satisfaction in the years to come.
This data is from the latest American Customer Satisfaction Index (ACSI). You can see a blurb on them below along with the full ranking of different industries. Not surprising, healthcare isn’t at the top, but let me highlight a few of the categories:
- Ambulatory Care = 79
- Health and Personal Care Stores = 79
- Hospitals = 76
- Health Insurance = 73
In general, I found the industries to be very tightly clustered. I’m going to reach out to them to see how to interpret that.
About ACSI
The American Customer Satisfaction Index (ACSI) is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. The ACSI uses data from interviews with roughly 70,000 customers annually as inputs to an econometric model for analyzing customer satisfaction with more than 230 companies in 43 industries and 10 economic sectors, as well as over 100 services, programs, and websites of federal government agencies.
ACSI results are released throughout the year, with all measures reported on a scale of 0 to 100. ACSI data have proven to be strongly related to a number of essential indicators of micro and macroeconomic performance. For example, firms with higher levels of customer satisfaction tend to have higher earnings and stock returns relative to competitors. Stock portfolios based on companies that show strong performance in ACSI deliver excess returns in up markets as well as down markets. And, at the macro level, customer satisfaction has been shown to be predictive of both consumer spending and GDP growth.
The Similarities Between Consultants And Entrepreneurs
May 7, 2014 1 Comment
I’ve been thinking a lot about the excitement of being an entrepreneur or an innovator and how that compares with being a consultant. While I could find a few articles out there comparing these two career paths, I thought I would share my observations.
I think the two have some of the same fundamentals:
- Self-motivator – In both cases, you have to able to drive yourself. You’re responsible for your career and your success. You’re always under pressure to perform, and you’re typically part of a small, core team. It’s important that you can motivate yourself to push past the finish line. I think of both like running a marathon.
- Quick learner – Your role in both types of organizations is constantly changing. You’re adapting with the business and the market. This requires the ability to understand and see trends. It requires the ability to connect with clients and monitor the market. It requires the ability to learn new things and to have a desire to learn new things.
- Able to pivot quickly – Change is a constant in almost any role in business today, but the pace of change in the start-up world is amazing. You need to understand this pace of change and how to be a change agent in both these roles. How do you help people with the organizational change that’s required to make your project a success.
- PPTS – No…this isn’t being an expert at PowerPoint although that may be an important skills. PPTS stands for People, Process, Technology, and Strategy. You need to understand all four of these areas of the business. You don’t have to code to be a great consultant or entrepreneur, but you need to understand technology and its impact on business.
- Think and do – While there are a few opportunities to just develop strategy and move on or to simply operate an outsourced project, I think you need to understand how to take ideas from concept through implementation. This means that you understand how to work with the CEO and how to work with the call center agent.
- Motivational – Most entrepreneurs and consultants are somewhat evangelistic and they’re always involved in the selling process (in any role). They are selling and building ahead of the curve which means they have to compel people to act. They are also working with multiple vendors and cross-functional teams that don’t report to them. Success is dependent on their people skills and the ability to motivate these different groups.
Agree? Disagree? Thoughts?
Getting Back Into The Pharmacy Industry
May 5, 2014 2 Comments
After working at Express Scripts for almost 5 years and then selling into the PBM industry for almost 5 years, I’ve had the chance to lead and work on a ton of very interesting projects:
- Electronic prescribing
- Generic sampling
- Generic promotion – DTC, plan design, utilization management
- Formulary support programs
- Mail order promotion – mandatory mail, retail-to-mail, 90-day
- Prilosec and Claritin going from Rx to OTC
- Adherence
- Pill splitting
- $0 copay / VBID
I’ve found that I love business development (working with clients and vendors). I enjoy bringing ideas from concept through pilots and then determining how to scale them. I love doing research and presenting. I enjoy working cross functionally. I enjoy leading teams and pushing the envelope to get people to think different. Ultimately, I enjoy solving problems. I like being the person who’s brought in with a business challenge and can then figure out the solution – do the research, evaluate the options, create a plan, implement the plan, and create a process of continuous improvement.
So, after spending 2 years working in the care management side of healthcare and learning about case management, disease management, claims code editing, and other solutions to manage complex patients with cancer or chronic kidney disease, I’m ready to jump back into the pharmacy industry (specialty, PBM, retail, pharma, payers or related companies). (And, I’ll be bringing a lot of lessons learned with me.)
I think the industry is going through another inflection point which is what Mark Merritt from PCMA pointed out a few years ago is the core skill – adaptability. If you think about the trends, I think there are several key things that make this an interesting time to be in the industry. And, everyone is fighting commoditization by trying to differentiate themselves.
- The focus on specialty will make integration between care management and traditional PBM services critical.
- The complexity of care is driving a huge focus on evidence based medicine (e.g., Best Doctors or Eviti) which will eventually lead to companion diagnostics and personalized medicine.
- Pharma is trying to figure out their role in this new world and will start looking at creative ways to blend product and services (e.g., Merck’s investments in Vree Health).
- The market is full of change with new technologies and new start-ups that will lead to more unique mash-ups, and I still think you could see Google Health come back in some form.
- Medication adherence continues to be such a huge opportunity that no one’s cracked with over 100 vendors that I identified, and no one has figured out how to fully integrate medical and pharmacy benefits to address specialty medications.
And, the fundamentals are good for the industry.
- The PBMs are big and need to grow so they’ll have to do some creative things.
- People continue to get older and take more medications.
- Health reform is forecasted to grow the market by over $200B in the next 10 years. (from recent CatamaranRx presentation on their investor website)
Of course the question is what to do…
All of these things sound interesting, but here’s what I’m going to focus on:
- A company with an entrepreneurial (or intrapreneurial culture).
- A role working directly with clients (no Ivory Tower role).
- A mission driven organization which wants to change the world and improve outcomes.
- A passionate leader and team that I can learn from.
- A leadership role where I can help a PBM or payer (or a group of them as a consultant) help make this transformation. Some of the roles that would interest me would be:
- MD strategy
- Adherence
- ACOs
- Shared risk
- Evidence-based care
- Consumer experience
- Journey mapping
- Consumer advocate
- Incentives
- Gamification
- Plain language
- Patient Activation
- Consumer engagement
- Multi-channel coordination (print, web, IVR, mobile, SMS, F2F, telehealth)
- Big data
- Segmentation
- A-B testing
- Social media
- mHealth / Care coordination
- Risk and segmentation algorithms
- Coordination with caregivers and providers
- Remote monitoring
- Working with clinics and telehealth
- Beyond The Pill
- Obesity
- Chronic Kidney Disease
- Oncology
- Diabetes
- Innovation and business development
- MD strategy
(If you know of something interesting, let me know.)
Care Is Coming To Your PBM
May 5, 2014 2 Comments
The creation of the “softer, gentler” PBM is one of my predictions driven by the rise in specialty pharmacy. While generic fill rates and mail order penetration still matter to earnings, the focus across the industry is on specialty.
- What can we expect in terms of pipeline?
- How and when will genetic tests be required? (i.e., companion diagnostics)
- How can we treat the patient not just fill the drug?
This will bring back a focus on how pharma and the PBMs work together which has had a bumpy past. Initially the two were very close. Then, with the rise of generics and more trend programs like prior authorization and step therapy, the PBMs and pharma butted heads frequently.
Of course, the situation for pharma has changed also. They are trying to figure out how to go “beyond the pill” and create new consumer relationship and make money. (Here’s a good article about pharma and digital from the other day.)
In case you missed them, here’s a few other things that are relevant:
- Envision just hired the former head of Accredo as their CEO.
- CVS Caremark bought Coram.
- All of the trend reports focus on specialty – Express Scripts, CVS Caremark, CatamaranRx, and Prime Therapeutics.
And, I think this screenshot from the Barclays Global Healthcare Conference Presentation given by Express Scripts shows that they are focused on this care and delivery intersection by continuing to show the success from the Therapeutic Resource Centers.
So, what do you think? Will the PBMs become more care management focused? Will they integrate with the other care providers? Will this be the beginning of their focus on working with ACOs and PCMHs? Will this change their approach? Will we see PBMs differentiating around key, chronic diseases like the specialty pharmacies have done? Will this create an opportunity for integrated PBMs (i.e., Humana, Cigna, Aetna) to differentiate?
CVS Caremark 2013 Drug Trend Report (Insights 2014)
April 24, 2014 2 Comments
The CVS Caremark publication Insights 2014: Advancing The Science Of Pharmacy Care came out the other day. They took a different approach than the detailed trend report which Express Scripts put out. Their document is more of a white paper about “7 Sure Things”.
The 7 Sure Things are to help you know what to do with your pharmacy benefit and cover:
- Prescription trend is on the rise.
- Generics have peaked…and you’re going to feel the difference.
- Specialty drives trend. But do you know how much?
- Price is King…Not much of a surprise there.
- Money matters to members. Cost share does influence behavior.
- Adherence is the answer. No one said it was going to be easy.
- Past performance is no guarantee of future results.
If you’re managing a pharmacy program and you’re surprised by any of these, I would suggest you look for another job.
So, let’s drill down into the report to see what it shows us:
- Their trend numbers were:
o 0.8% for traditional (non-specialty) drugs
o 15.6% for specialty drugs (down from 18.3% in 2012)
o 3.8% overall
- While utilization was up 2.1%, the primary driver was price which increased 8.2%. These factors were mitigated by a 6.0% change in mix.
o They hint at an interesting question of whether utilization is growing due to an improving economy. (correlation or causality?)
- Their GDR (generic dispensing rate) was 81.4% in 2013. (I’d love their perspective on a maximum GDR since they say it’s peaked.)
- I like the chart below which shows trend with and without generics coming to market.
- Of course, specialty continues to be the real story in all the PBM reports.
- They claim that 53% of total specialty medication costs were paid under the medical benefit in 2012 which is in-line with most projections. (While they give some perspective on what to do here, this would be one thing I would have liked to see broken out in more detail as this is a critical area for PBMs which hasn’t been cracked yet.)
- They share the AWP trend broken out below and give some crazy examples of AWP price inflation (e.g., 573% for clomipramine) with some explanation for why this happens.
- Here were their top 10 specialty drug categories. The top 5 are the same as the CatamaranRx list, but the bottom 5 are in a different order.
- A scary statistic (in isolation) is that over the past 5 years patient out-of-pocket costs for prescriptions have climbed 250%. (But, I think their percentage of cost share has stayed the same. It would be interesting to show this in real dollars and compare this to both price and wage inflation just to hammer home the point.)
- They talk about CDHPs (consumer driven health plans) and how that is impacting utilization and cost. (These are often high deductible plans where consumers pay out of pocket until they reach a certain amount…which often really makes the point in early January to consumers. And, can lead to dissatisfaction when that prescription that was $30 in December is now $350 in January.)
- They talk about adherence, and they certainly have continued to publish a lot of studies in this space. (They also know have Dr. Will Shrank on their staff full-time after working with him for years. I think very highly of Will as one of the best adherence researchers in the country.)
- They give a real high level mention of some of their new efforts around adherence:
o Simpler labels
o Synchronizing refill dates
o Reminder devices
o Digital / mobile tools
- They also provide this nice summary of how costs go up and where the savings come from. (Of course, the challenge is in drug classes other than these three and getting clients to give you any credit for the productivity savings and also netting out the program costs.)
- On a scary note, they predict that Rx trends may jump back into the double digits for the next 4 years.
At the end, they give 5 sure strategies that clients should do.
- Double down on generics. (To me, this means – step therapies, formularies, setting copays right, mandatory generic programs, and generic substitution programs.)
- Look across benefits at specialty. (This is a key one as I mentioned above. You need to think through how specialty drugs are filled and billed under medical.)
- Tackle price. (They are focused on distribution channel here, but I’d also think about copay levels, plan design, and value-based programs.)
- Be strategic about cost share. (They are focused on how cost share affects adherence which is important, but only one component of an adherence strategy.)
- Keep the big picture in mind. (They allude to it here, but I think this is a key point that ultimately it’s about outcomes and prevention.)
Overall, this was certainly the easiest “trend report” to read. It tells a clear story which is probably great for the average client and would drive more discussion with your account manager.
Is Your PBM Really Different?
April 23, 2014 2 Comments
Every time I talk to a PBM, they want to convince me that they are unique. And, that is important to me (and should be to you). If they are simply driving generics, getting network discounts, and filling mail and specialty scripts, they’re clearly in a commodity space. It’s a race to the bottom, and they’re fighting very large companies – Express Scripts, CVS Caremark, and CatamaranRx. And, none of those companies are standing still. Of course, the other PBMs that are part of United Healthcare, Humana, and Kaiser are all looking at how they leverage the care assets and broader solution which they can bring to the client. (And, I’d put Prime Therapeutics somewhere in the middle based on their ownership by the Blues.)
But, as I’ve seen, value isn’t just about cost. That maybe one leg of the stool, but you need to improve outcomes and the consumer experience (i.e., The Triple Aim). With that in mind, I created a checklist of what I want to know to see if a PBM is really different.
- Engagement – What channels do you use to engage the consumer? How do you integrate those channels? What percentage of members engage with you when you outreach to them? What is your A-B testing strategy? What consumer insights can you share with me? How do you measure engagement (e.g., PAM score)? What is your segmentation approach? Do you have someone in charge of the consumer experience? Can you show me your customer journey maps?
- Digital – What is your digital strategy? What percentage of your members have downloaded your app? How often do they use it? Why do they use it? How long do they keep it on their phone? What value do they get from it? How are you using other channels? Are you using social media with a purpose or just trying everything (see new whitepaper on digital transformation)? Where do you members congregate online? How does this vary by age, gender, condition, number of Rxs, etc.? Does your involvement make a difference in engagement, outcomes, adherence?
- Innovation – What’s your biggest innovation? Are you making money off it? How does it help you sell? How does it help your customers to differentiate themselves? Do you have a budget? Resources? Is it just an ivory tower exercise? How do you sustain it? How are you using crowdsourcing? Are you working with any VC firms or incubators to develop new ideas? What percentage of ideas come from your clients? From your employees? What’s your innovation funnel look like? How many ideas die after a pilot? Are you able to scale pilots that are successful?
- Big Data – What types of data do you get – medical, lab, EMR, patient reported, device? Do you buy data? How do you integrate this data? Do you have predictive models? How are they used? Do you have published studies on the results? What insights have you gained from the data? How have you integrated the data into your solutions? How do you move things from data to insights to action?
- Integration – What type of integration do you have – with POS systems and retailers, with physicians and practice management systems, with providers and EMRs, with mobile solutions, with remote monitoring companies? How do you create a simplified consumer experience across the care continuum? Are you working with wellness and disease management companies? Are you coordinating care for complex patients? Do you provide support for cancer survivors? How do you work with pallative care companies? How do you support the family or the caregivers?
- Partnerships – Who are your partners? How does 1+1=3? What’s unique about the relationship? How do customers benefit by your relationship? How do consumers benefit? How do providers and pharmacies benefit?
- Physician Strategy – How do you work with physicians? What data do you give them about their patients? What insights do you give them? Do they just see you as a block or have you found a positive way to collaborate? What do you do to influence physician’s prescribing habits? How are you working with physicians to address adherence? How are you using your data and predictive models to integrate them into providers evidence-based medicine algorithms?
- Outcomes – What programs do you offer to clients and consumers that are focused on an outcome that may reduce Rx utilization? How do you work with dieticians or social workers? What percentage of your members have a PDC of greater than 80%? How do you track lab values and clinical values versus just an Rx count? What are you doing to reduce readmissions? How are you impacting all of the STARS measures (not just the pharmacy ones)?
- Pharma – How are you working with pharma? Are you helping them to extend “beyond the pill”? How early do you get involved in their pipeline? For complex conditions, are you helping them to demonstrate outcomes? Are you looking at how to collaborate with key medications – e.g., oncology? Have you looked at how to blend care with prior auth with Rx for conditions like obesity?
- Payment – What’s your approach to transparency? Is it just pass-through pricing? Do you do risk based pricing? How? How do you contract with pharma? Have you worked directly with any ACOs? Have you taken risk?
This isn’t new…I’ve been talking about this for years. Here’s my whitepaper on this from 3 years ago.
And, here’s a presentation that I’ve given on this topic at several conferences.
2013 CatamaranRx Drug Trend Report
April 23, 2014 3 Comments
I just finished reading the 2013 CatamaranRx Drug Trend Report (2014 Informed Trends: Moments of Opportunity) and wanted to share some of the things that caught my eye. (BTW – CatamaranRx was formed by the merger of SXC and CatalystRx.)
One of the early comments in the document caught my eye. While simple, it is still so true in healthcare.
“Bringing consistency through a national perspective on best practices, a “local” understanding of how health care is practiced and deep insights at the individual level, to promote the very best outcomes.”
- Their trend numbers were lower than Express Scripts and CVS Caremark.
- They did a good job of tackling the impact of healthcare reform on the PBM marketplace and why this creates more opportunities.
“The looming pharmacy demand is also driving the healthcare market toward expanded cost containment and coordinated care measures. Industry estimates are projecting more than 30 million new PBM customers as a result of the ACA. This influx of new customers will stimulate creative cost management paradigms and entice new entrants into the PBM sector.”
- 50% of the new drugs approved by the FDA in 2013 were specialty drugs. (reiterating the fact that specialty is really the focus of the PBM today in terms of opportunity to influence trend)
- 30% of the new drugs approved were oncology drugs. (similar to years past)
- Orphan drugs without competition were 2.6x more expensive than orphan drugs with competition. (not too surprising)
- They point out that no true biosimilar has been approved in the US (which I didn’t realize). They also point out that international experience is that biosimilars will save 10-15% not the 40% projected by the CBO.
- They have nice clean charts around price inflation (deflation) for brand and generic drugs.
- The average cost of a specialty drug rose to $2,860 in their book-of-business.
- The top 10 specialty drug classes represent 86% of specialty drug spend.
- The report talks about medication adherence using PDC (proportion of days covered). They show some good adherence rates in key classes (which always brings up questions about methodology).
o Over what time period?
o Is this all members prescribed an Rx?
o Is this all members with one Rx?
o What is the percentage of members with over 80% PDC (versus the average PDC)?
o (Note: These are the same questions for every PBM that shows you adherence numbers.)
- Here’s their forecast for the next few years in terms of trend.
- They are projecting a generic fill rate of as high as 90% by the end of 2016!
- I like that they break out their highly managed clients to show they got an overall trend of -0.1% even though they had higher specialty trend driven by oncology. They shared a list of key things that those clients were doing:
o Member risk scoring and personalized interventions.
o Tailored clinical programs, including step therapy, quantity limits and prior authorization.
o Aggressive management of controlled drugs to reduce misuse and abuse.
o Formulary management tailored to address client-specific, high-cost medication classes.
o Exclusive specialty through BriovaRx, a high-touch, patient-centric model.
o Plan designs with copay differentials that promote cost-effective choices.
o Multi-channel communications that engage members in their healthcare.
- I was excited to see them dedicate a whole section talking about engagement.
o The need for the right message.
o The need for targeting algorithms.
o The need to vary channel based on preference.
- They share some details on their hospital discharge program which sounds right from a PBM perspective – focused on medication reconciliation and adherence. My key question would be understanding if they address the other risks of re-admission while they have the patient on the phone (i.e., treating the patient not the Rx and not the disease).
- I haven’t heard as much about MTM lately so it was nice to see them talk about it and see some results which seem really good.
Two miscellaneous comments here:
- This seems to be a much improved document than the one I reviewed years ago from SXC.
- My only challenge with the format was that it prints the two pages on one page in the PDF (but that could be user error).
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