Enabling Healthy Decisions

These are from Cliff Cramer, Director, Healthcare and Pharmaceutical Management Program at Columbia Business School
[with my comments in brackets].  

Have you seen the show Hoarders?  Very scary.  It’s amazing that people can live like this.  Logically, it would appear that there is some type of additive or compulsive behavior issue here.  Go to the website and look at some of the pictures.

I can only imagine the social and health consequences of this on the entire family.

Over the past few years, marketing has rapidly evolved with technology, social media, and neurosciences. As consumers are taking a more active role in their healthcare (both willingly and unwillingly), healthcare entities are scrambling to understand how they think, how they make decisions, and how to develop programs that effectively communicate with consumers to drive appropriate and cost-effective behaviors.

“The task of neural science is to explain behavior in terms of the activities of the brain. How does the brain marshal its millions of individual nerve cells to produce behavior, and how are these cells influenced by the environment…?”

To accomplish this, companies are integrating different data sources, leveraging behavior science methodologies like champion / challenger tests, and stepping outside of healthcare for best practices. Financial services (e.g. credit card companies) have been deploying these marketing sciences for years to improve yield, but healthcare companies are just beginning to realize that in order to influence the 50-70% of healthcare costs that are lifestyle related they will need to think differently. This new approach to marketing and healthcare communications blends the qualitative and quantitative aspects of marketing and looks to areas like linguistics and behavioral economics for insights.

“Genetics influence how a person makes a decision based on whether their options are presented to them in a positive or negative way (framing effect) — such as being told there is an 80 percent chance of surviving or a 20 percent chance of dying during an operation.”

One of the leading researchers in this area of neuromarketing is Martin Lindstrom who recently authored a book called “Buy-ology“. In the book, he walks through research where he uses fMRI (functional Magnetic Resonance Imaging) and SST (Steady-State Typography) to study the brain activity during multiple marketing experiments. This analysis reveals a series of insights including things like:

1. Cigarette warning labels have the opposite effect on smokers.
2. Logos have lost their importance, but branding matters immensely.
3. The reason why people chose Coke over Pepsi is because of their branding not because of taste.

   “Our irrational minds, flooded with cultural biases rooted in our tradition, upbringing, and a whole lot of other subconscious factors, assert a powerful but hidden influence over the choices we make.”
   

Given the challenges that we all face in terms of branding and allocation of marketing dollars, these are important things to understand. We want to make sure that as consumers increasingly control their healthcare decisions that they choose our facilities, buy their health insurance from us, and/or view us as a trusted source of information. To achieve this, we have to get into their heads and understand how they make decisions and what will compel them to act. Since, as Martin Lindstrom points out, almost 90% of our buying behavior is subconscious, we have to better understand our consumers and provide them with value-added content that is tailored to their needs.

Eric Kandel, Principles of Neural Science, fourth edition

Wellcome Trust, news release, May 5, 2009

Martin Lindstrom, Buy-ology: Truth and Lies About Why We Buy (New York: Doubleday, 2008), p. 18

In these difficult economic times, saving money has become a way of life. Unfortunately, Americans have been trimming costs on items vital to their health. A Kaiser Family Foundation study found that 53% of Americans have cut back on healthcare over the past year because of cost concerns, with 21% cutting back by not filling a prescription.

There are ways to save money on prescription drugs without skimping on your health. It’s time to debunk the following prescription drug cost myths.

Myth #1:    “My physician would have told me if there was a lower-cost option.”

Physicians are focused on their patients’ health and often don’t have time to study the costs of the more than 10,000 prescription drugs currently on the market, let alone the ins and outs of each patient’s health plan. In one study, over 80% of physicians felt it was the pharmacist’s job to discuss costs with the patients.

What can you do? Talk to your pharmacist about therapeutic alternatives to your prescription drugs.

Myth #2:    “My pharmacist would have told me if there was a lower-cost option.”

There is currently a shortage of pharmacists in the U.S. and while they would like to consult with patients, many don’t have the time to help each person optimize their prescriptions. Also, at retail pharmacies, pharmacists are unlikely to encourage savings opportunities like mail order and may even be hesitant to encourage 90-day retail.

What can you do? Ask your pharmacist about lower-cost options for your drug plan design.

Myth #3:    “Prescription prices are the same everywhere.”

Prices can vary dramatically between pharmacies, especially for generics. In one study, prices varied as much as 1,000% for cash paying customers. Also, getting 90-day prescriptions through the mail or sometimes at your local pharmacy can save you money.

What can you do? Ask your health plan for an online comparison tool and research prescription drug costs in your area.

Myth #4:    “Generics aren’t as effective as brand name drugs.”

Generic drugs have the exact same active ingredients and side effects as brand drugs. They are less expensive than brand drugs because the manufacturers aren’t starting from scratch when it comes to the costs associated with developing and marketing a new drug. In addition, brand drug manufacturers make approximately 50% of the generic drugs themselves under other names.

What can you do? Go to the FDA website and read their educational materials about generic drugs and ask your doctor to prescribe.

Myth #5:    “My adherence to my medication doesn’t affect overall healthcare costs.”

In one study, the annual healthcare costs of a person with diabetes who didn’t take medications were twice that of a diabetic person who adhered to a medication plan. Non-adherence to medication is estimated to cost the healthcare system $290 billion a year. As many as 30% of people never fill their first prescription and more that 50% of people stop taking their long-term medications within 12 months.

What can you do? Research the medications that you are on and understand how other patients have used them and the time it takes for them to work. Never stop taking a medication without discussing it with your physician first.

I always have a good laugh when I see how people use data in a way that frames something to be more than it really is. The title here is a made up scenario, but I can clearly see a retailer that sends out satisfaction surveys to people that shop at their store two or more times in a 60-day period. They then put out a report that shows that their customer satisfaction scores are 90%.

Of course, without understanding the selection bias, it sounds great. [This is not dramatically different than claiming outcomes that are simply regression to the mean which has been an issue for years across a lot of companies.]

In another example, a vendor talks about consumer reactions to their communications. They point out some great quotes that people say about their interactions. But, there’s a HUGE selection bias here. The people that make those comments are:

• People who are willing to interact with the technology (i.e., pick up the phone and listen to the message);
• People who spend time on the entire call and make it to the end of the call where there’s a survey; and
• People who are willing to participate in an optional survey about the communication.

Should we be surprised that these people really like the technology? NO!

It’s like asking people in a web survey whether they frequently go online.

But, that’s the beauty of sharing pieces of data. And, it’s proof that words do matter.

Register today for …

Health Plans vs. Drugmakers:
The Battle Over Copay Subsidies

An Audioconference

Thursday, November 5, 2009

1:00 – 2:30 Eastern time

As more generic drugs eat into drugmaker profits from blockbuster medications, pharmaceutical manufacturers are using copayment subsidy programs to target patients with commercial insurance. Their strategy of paying the copays for members who take top-tier brand-name drugs, instead of less expensive generics, is drawing drugmakers into conflicts with health plans, and putting some patients in harm’s way as well.

• How do these programs interfere with efforts by payers and PBMs to move patients to generics?
• How much are they costing health plans?
• How much risk are they creating for patients who may now have incentives to take less healthy medications?
• What strategies are payers now using to fight back?

Dial in on Nov. 5 to hear Michael Cartier, chief clinical officer at Twinsburg, Ohio-based PBM Envision Pharmaceutical Services, Inc., and George Van Antwerp, general manager of pharmacy solutions at Silverlink Communications, Inc., provide valuable insights and practical advice on how health plans can track and counteract copay subsidy programs. You’ll get all the details on strategies you can design and implement immediately, including:

• What types of drugs do copay subsidy programs target, and how do they work?
• What is the impact on drug dispensing rates?
• What are the differences between copay subsidy programs targeting specialty drugs versus those for other medications — and how should health plans respond?
• How can health plans ensure that copay subsidy programs don’t compromise patient safety?
• How can payers use step therapy, generic promotion and other programs to target classes that subsidies are focused on?
• How can adjustments to tier structures make copay subsidies less attractive?
• What operational issues must be considered when implementing such a tiered structure adjustment?

To register at a special discounted price or for more information, please visit http://www.aishealth.com/Products/C9P27_110509E740.html or call 800-521-4323.