Archive | Healthcare RSS feed for this section

The Young Invincibles

February 19, 2009 by George Van Antwerp 0 Comments

“I could have gone to a major university for a year. Instead, I went to the hospital for two days.”

The New York Times had a good article about young people without insurance.  According to the article, there are 13.2M within this group or 29% of the age bracket (which I believe is limited to people in their 20’s).  The article talks about borrowing medications, setting their own bones, and using the Internet to self-diagnose.

“We see people with urinary tract infections taking meds better suited for ear infections or pneumoniaDr. Barbie Gatton explained (ER doctor in NY) “Or they take pain medicine that masks the symptoms. And this allows the underlying problem to get worse and worse.” — the problem is, they haven’t really treated their illness, and they’re breeding resistance.”

My impression is that most people in this age group only act as “invincible” since they can’t afford coverage.  The article does talk about legislation that would allow people to be covered under their parents insurance until they are 29.  That certainly helps some, but it puts a burden on employers that may not be fair.

Consumerism, Healthcare, Managed Care, Value Propositions

Seeing Significant Improvements With BPO

February 18, 2009 by George Van Antwerp 0 Comments

Business Process Outsourcing (BPO) or as I will sometimes call it CPO (Communications Process Outsourcing) is something we are definitely seeing a growing demand for in the market.  It blends technology, services, process management, consulting, and analytics.

Both IDC and Gartner have now talked about this in recent reports.

According to Janice Young, IDC program director, Payer IT Strategies, “we expect to see an increasing interest and likely investment in BPO in 2009 and 2010 for healthcare payers. Our recent results from our January 2009 healthcare payer survey of IT spending indicate that 45% of healthcare payers expect BPO investments to increase this year.” These trends are highlighted in IDC‘s U.S. Healthcare Payer 2009 Top 10 Predictions (January 2009).

Gartner research vice president, Joanne Galimi, reported on BPO services within health plans in a recent report entitled Healthcare Insurer Business Process Outsourcing Trends (January 2009). “Although things look gloomy for the larger economy, the potential for BPO to address immediate business pressures and long-term recovery goals for the health plans will be unprecedented,” says Galimi.

When I first came to Silverlink as a consultant in early 2007, this was exactly my vision.  I always talked about the “one throat to choke” model.  When you are in an operations role, it is always so difficult to coordinate modes, vendors, discrete data sources, and ultimately to get a holistic view of the member (or patient).  This is what I wanted to help build and is exactly what we have done.

Fortunately, we are now in a position where we can talk about how this service model has grown and how offering turnkey services for clients has driven results.  I love to focus on outcomes so this is exciting.  Here are a few from the press release we put out this morning:

  • Over a 300% improvement in retail-to-mail conversions for a large pharmacy benefit manager (PBM),
  • 54% increase in participation for a pharmacy program, representing between $150 and $175 per year per prescription in consumer savings,
  • 400% improvement in yield in a COB program, translating to over $20 million in cost savings to a major U.S. health plan, and
  • Up to an 82% increase in transfer rates for population health engagement for disease management, lifestyle management and treatment decision support programs.
Books / Articles, Healthcare, Innovation, Leadership, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Silverlink, Technology, Value Propositions

Pharmacy Principles for Healthcare Reform

February 18, 2009 by George Van Antwerp 0 Comments

Several pharmacy groups have put out their principles for healthcare reform:

“Proper use of prescription medications helps improve quality of life and health outcomes. How ever, the health care system incurs more than $ 177 billion annually in mostly avoidable health care costs to treat adverse events from inappropriate medication use. T he proper use of medication becomes even more important as treatment of chronic disease costs the health care system $ 1.3 trillion annually, or about 7 5 cents of every health care dollar.”

The document goes on to talk about the importance of pharmacists in managing chronic diseases and helping patients.  A role that I completely support although I question the bandwidth of the pharmacists to do this given the massive shortage in the US.

The Principles are:

  1. Improve Quality and Safety of Medication Use
  2. Assure Patient Access to Needed Medications and Pharmacy Services
  3. Promote Pharmacy and Health Information Technology Interoperability

They are kind of like “No Child Left Behind” in that you can’t argue with the concepts.  At first read, the only thing that raised an eyebrow for me was some of the language around Principle 2.  I could interpret it to be a subtle play against some of the trend management tools that the PBMs use to help control prescription costs – e.g., mail order pharmacies.

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

Process…The Key to Success

February 16, 2009 by George Van Antwerp 0 Comments

“We get brilliant results from average people managing brilliant processes. We observe that our competitors often get average (or worse) results from brilliant people managing broken processes.”

Sources: “Decoding the DNA of the Toyota Production System,” Steven Spear and Kent Bowen, Harvard Business Review, September-October 1999

I think this is so important especially in times like this when we are all focused on doing more with less. It is critical to understand how your process works; how to apply automation; and how to learn and improve it over time.

I came across a presentation from a webinar I gave back in 2007 on Business Process Management (BPM) which made me think about this. (Some of the vendors in this space include Pega Systems, Lombardi, and Appian.)  It’s also very relevant given Gartner‘s recent report on Business Process Outsourcing (BPO) in the payor space.

“Healthcare insurers should view business process outsourcing as a means to achieve business transformation while minimizing risk. Therefore, using BPO for nondifferentiating business processes is an essential step toward achieving competitive success and business growth.” Joanne Galimi in Healthcare Insurers Business Process Outsourcing Trends (January 23, 2009).

Finding a business partner that can work with you to understand your processes, understand what measures matter, help you improve your approach, and that is willing to take risk based on your success is important.   I always encourage people to not think of companies as vendors but as partners that bring them innovative ideas and help them iterate to improve.  I don’t believe in the big bang theory that I can do it right the first time and never need to change.  That flies in the face of everything that has been observed in different industries.


BPM / Process, Business Tools, General Business, Healthcare, Managed Care, Silverlink, Technology, Value Propositions

Cigna And Social Media

February 9, 2009 by George Van Antwerp 0 Comments

I usually hold Humana out as an innovator in the area of established health care companies using social media and other tools to drive awareness.  I was pleasantly surprised to find out more about Cigna’s activities on Facebook, MySpace, and Twitter along with their deployment of games (like Humana) from the World Healthcare Blog.

its_time_image_5

Business Tools, Consumerism, Healthcare, Innovation, Managed Care, Marketing / Communications, Technology, Weblogs

Focus On Chronic Diseases

February 8, 2009 by George Van Antwerp 0 Comments

People are always talking about where to focus to reduce costs in the US health care system…Here’s a hint from the January 2009 Health Affairs Health Policy Update:

“Now three-quarters of the $2 trillion-plus that we spend on U.S. health care each year goes to paying the bills for chronic illness:  cardiovascular and pulmonary disease, cancers, diabetes, arthritis, high blood pressure, depression.  Globally, the World Health Organization estimates, three out of every five deaths – four out of five in low- and middle-income countries – stem from chronic disease.”

Healthcare, Research, Value Propositions

Are You A Registered Organ Donor?

February 7, 2009 by George Van Antwerp 0 Comments

According to one article, there are about 70M registered organ donors which is a number that has increased as 31 states now allow people to register online.  Considering the wait list for donations – just over 100,000 today according to The Organ Procurement and Transplantation Network – this is an important thing to consider.

Here is some of their data:

Healthcare, Research, Value Propositions

Marketing In A Recession

February 7, 2009 by George Van Antwerp 0 Comments

Most healthcare people hate the word marketing.  Well, you know what…that is a big piece of what healthcare is about especially with the rise of consumerism.  Individual marketing.  Medicare.  Getting people to make better choices.  It’s all about marketing.

One of the things I liked in the attached presentation is that it talks about tightening up your funnel.  One of the things I notice with lots of companies is that they don’t always take a rigorous process framework for thinking about members and communications.  Process matters.  You have to think about an integrated approach and how you optimize that process.

Books / Articles, Healthcare, Marketing / Communications

The Easiest $400+ You Can Save In Healthcare

February 6, 2009 by George Van Antwerp 0 Comments

In today’s economy, we are all looking for ways to save. And, it should be no surprise that pharmacy is the most frequently used benefit since, on average, people get fourteen 30-day prescriptions per year.

That being said, there are still hundreds of dollars that millions of us can save. Let’s take an easy example – Lipitor. Lipitor still has about $8B in sales here in the US. If you assume the monthly cost is $125 per 30-day supply and everyone on the drug filled it 12 times per year (which doesn’t happen but is a topic for another day), that means that each consumer on Lipitor represents $1,500 in revenue to Pfizer per year. Dividing the $8B by $1,500 tells me that there are about 5.3M consumers using Lipitor in the US.

On most formularies (or preferred drug lists), Lipitor is a 3rd tier drug meaning that consumers are paying $40-$50 per month for this drug. Considering the fact that Lipitor has a generic alternative which is called simvastatin (aka generic Zocor), consumers can often talk to their physician and use this drug as a lower cost alternative. Additionally, both of these drugs are maintenance drugs that can be filled at mail order which often represents a 30% savings to a consumer (based on average plan designs). And, finally, simvastatin is a drug which can be split according to many different companies.

Here is the math, but a consumer on Lipitor could talk to their physician to get started on simvastatin, split the pills, and after a few months move to mail. That would save them $400+ in many cases.

  • Assuming Lipitor is a 3rd tier drug with a $40-$50 monthly copay and the consumer fills the drug every month for a year, they would spend $480-$600 out-of-pocket.
  • Assuming they moved to simvastatin (with their MD’s approval) with a $10 copay, they would immediately drop their costs to $120.
  • Assuming they split their pills (i.e., got a higher dose of the medication and used a pill splitter to use ½ the pill each day), they would typically reduce their copays by 50% or drop their costs to $60 a year.
  • And, if they then moved the prescription to mail where they reduced a 90-day supply for the same price as a 60-day supply at retail, they would drop their out-of-pocket costs to $40 a year.

I don’t know about you, but that seems pretty easy. It’s clinically appropriate for most patients. The PBMs will typically help you with these programs by reaching out to your physician to get the new prescription.

Hopefully, you’ll be hearing from your PBM or managed care company about these savings. At Silverlink Communications, we are working with lots of them to design and execute these types of programs. It is always very rewarding to get in touch with consumers and bring them a message about how to save money.

If you are a health plan whose premiums are going up, this is a great way to reach out to your membership and provide them with a positive message about how you care and are responding to them in these tough economic times.

Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Silverlink, Value Propositions

Government Takeover Of Healthcare

February 6, 2009 by George Van Antwerp 1 Comment

Since I very much believe in our capitalist society (even with all the mistakes that have taken us down this recession / depression path), I was a more than a little surprised that in a survey in yesterday’s USA Today 59% of the people surveyed thought government would do the same or better job than private health insurance companies.

Healthcare, Research

Coupoing Back in Vogue

February 6, 2009 by George Van Antwerp 0 Comments

I don’t know what the statistics were before, but these statistics published this morning in the USA Today seem high.

    65% of people 18-39 examined mail more carefully for coupons versus six months earlier

    73% of people 40-49

    And, 57% of people 50+.

coupon

With unemployment expected to come out today at 7.5% (the highest in 17 years), we shouldn’t be expected, but it certainly puts new focus on using incentives to drive healthy behaviors.

Consumerism, General Business, Healthcare, Research

Cooking With Google

February 3, 2009 by George Van Antwerp 1 Comment

This is an interesting thing that someone told me about a few weeks ago. They said that they come up with recipes by simply typing some ingredients into Google and then seeing what it produces. I tried it with a few random lists of items and came up with long lists of ideas.

Now, if we could just blend a personal coach, a personal chef, and an automated kitchen that tracked all my products by barcode, I would have a very cool “smart house” type of feature for helping me eat healthy.

cooking

General Thoughts, Healthcare, Technology

Healthcare…The Growth Area In The Economy?

February 3, 2009 by George Van Antwerp 1 Comment

I keep reading that the growth in employment in the US is coming in healthcare. Since I have heard that Aetna, Cigna, and BCBSMI have all let go 1,000+ people, that seems hard to believe. Combine that with multiple large healthcare companies that have said they won’t pay bonuses this year and the fact that pharma has let go about 30,000 people.

My take is that we are seeing a shift from large companies to smaller companies in the healthcare industry much like I could argue has happened in manufacturing and other services. This plays to the concept of the Starbuck’s Economy and driving to subsegments of the population.

I also think you are going to get all these people with big company experience that go on to become entrepreneurial (as long as capital frees up).

General Thoughts, Healthcare, Managed Care

Excess Healthcare Spending

February 2, 2009 by George Van Antwerp 0 Comments

According to McKinsey…

McKinsey research shows that the United States spends about $650 billion more than might be expected given its level of wealth and the experience of similar countries.

Here is a chart that breaks this down in a typically McKinsey framework (which I love BTW):

mckinsey-on-excess-hc-spending1

Books / Articles, Healthcare, Research, Value Propositions

Will Plans Cover Genetic Testing?

February 2, 2009 by George Van Antwerp 1 Comment

I came across this fact the other day from Systemed Group, a division of Medco. According to the 300 health plans they surveyed, 38% of them said they will definitely (3%) or probably (35%) cover genetic testing within five years.

Interesting. What will this mean? What will these test consist of? What will they cost? How will they be used? Will they cover the drugs that are personalized based on genetic makeup?

Consumerism, Healthcare, Managed Care, PBM / Pharmacy, Research

Do $4 Generics Impact Mail Order and the PBM?

January 29, 2009 by George Van Antwerp 1 Comment

Some of you will remember that I wrote about this topic several months ago – The Brand Only PBM. As a follow-up to that article, I got interviewed by Neal Learner from Drug Benefit News about $4 generics. The interview got published today and is available here on page 6.

He asked about a few topics:
* How are PBMs and health plans reacting to the $4 generics programs?
* Are the programs used by people with insurance?
* How many generics could be offered at this price?
* Do they present a threat to the PBM?
* Will they impact the Rx Benefit?

BUT, what I find to be an interesting topic related to this is what happens if the USPS goes to 5-day a week mail service either closing on Saturdays or for some day during the week? How would this impact mail order and the PBM? I would think this would impact mail order by either delaying the distribution cycle or by forcing them to use FedEx or UPS which would be more costly. Another challenge to the primary profit driver?

Healthcare

7 e-Patient Conclusions

January 29, 2009 by George Van Antwerp 2 Comments

Thanks to e-patient Dave’s reminder on the e-Patient blog…

Here are 7 conclusions from the white paper that came out last year on this topic. Very important in diffusing some of the myths around the role of social networking in healthcare and the use of the Internet for information.

1. e-patients have become valuable contributors, and providers should recognize them as such.
“When clinicians acknowledge and support their patients’ role in self-management … they exhibit fewer symptoms, demonstrate better outcomes, and require less professional care.”

2. The art of empowering patients is trickier than we thought.
“We now know that empowering patients requires a change in their level of engagement, and in the absence of such changes, clinician-provided [information] has few, if any, positive effects.”

3. We have underestimated patients’ ability to provide useful online resources.
Fabulous story of the “best of the best” web sites for mental health, as determined by a doctor in that field, without knowing who runs them. Of the sixteen sites, it turned out that 10 were produced by patients, 5 by professionals, and 1 by a bunch of artists and researchers at Xerox PARC!

4. We have overestimated the hazards of imperfect online health information.
This one’s an eye-opener: in four years of looking for “death by googling,” even with a fifty-euro bounty for each reported death(!), researchers found only one possible case.

* “[But] the Institute of Medicine estimates the number of hospital deaths due to medical errors at 44,000 to 98,000 annually” … [and other researchers suggest more than twice as many]
* We can only conclude, tentatively, that adopting the traditional passive patient role … may be considerably more dangerous than attempting to learn about one’s medical condition on the Internet.” (emphasis added)

5. Whenever possible, healthcare should take place on the patient’s turf. (Don’t create a new platform they have to visit – take yourself wherever they’re already meeting online.)

6. Clinicians can no longer go it alone.

* Another eye-popper: “Over the past century, medical information has increased exponentially … but the capacity of the human brain has not. As Donald Lindberge, director of the National Library of Medicine, explains ‘If I read and memorized two medical journal articles every night, by the end of a year I’d be 400 years behind.”
* In contrast, when you or I have a desperate medical condition, we have all the time in the world to go deep and do every bit of research we can get our hands on. Think about that. What you expect of your doctor may shift – same for your interest in “participatory medicine.”

7. The most effective way to improve healthcare is to make it more collaborative.
“We cannot simply replace the old physician-centered model with a new patient-centered model… We must develop a new collaborative model that draws on the strengths of both systems. In the chapters that follow, we offer more suggestions on how we might accomplish this.”

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

Improving Your Healthcare Communications

January 28, 2009 by George Van Antwerp 1 Comment

I put up a new page off the site that talks about HealthComm that many of you might find interesting.

Healthcare communications is a strategic opportunity for most healthcare entities. This framework should help you think about how to design solutions to drive behaviors within your membership.

Consumerism, Healthcare, Marketing / Communications, Methodology, Silverlink, Technology

Did You “Catch” Your Obesity?

January 28, 2009 by George Van Antwerp 1 Comment

What if obesity were a virus that once you caught it you couldn’t manage it with simply diet and exercise?  That would be a very discouraging fact.

sneezeWell, some recent research is finding a link between a virus and obesity and claiming just that.  Of course, the primary issue is overeating especially with limited exercise, but this presents a new wrinkle in solving the obesity crisis.

So, to manage obesity, you need to sleep more and eat better.  Exercise has an impact, but it may not be the best way to try to lose weight (see article).

Books / Articles, exercise, Healthcare, Research

Where Are My Land Legs

January 27, 2009 by George Van Antwerp 2 Comments

I just got back from our “annual” Disney Cruise realizing that this vacation of 8 nights was the longest vacation I have ever taken.  Anyways, less that 24 hours later, I was back on a plane and jumping into meetings.  I still haven’t quite got my land legs  back.

But, I am anxious to share lots of things with you so hopefully, I will find some time this week to catch up on blogging.

A few things from vacation:

  1. It is amazing the redundancy and rigor that a company like Disney has.  We love the cruises.  I was amazed to learn that for the stage productions they put on on the boat that they have 2 microphones and 2 batteries for each actor.  And, if that’s not enough, they have their voices recorded for each part so they could lip synch if everything failed.  Why don’t we have that type of redundancy (without adding cost) in the healthcare system?
  2. I always lose faith in the healthcare system when I see the advertisement at the airport showing a physician signing the foot on which surgery is going to be performed.  Is that the best way we have of ensuring no mistakes are made?
  3. On the boat, you have to wash your hands before you enter any restaurant.  It would certainly take away from the ambiance, but should that be a more regular practice on land?
  4. They have a nice gym on board that I used 3 times.  They even run a 5K now at their island (on some not all cruises).  It made me wonder what percentage of the people on board worked out and whether that was a similar ratio to typical life and society.  If so, it reinforces one of our major challenges.
  5. How about some healthy food at airports?  I am surprised I haven’t ranted about this before.  It is getting better at a few airports where you can find a few things, but it is genuinely difficult to travel and eat healthy.
Events, exercise, General Thoughts, Healthcare

Walgreens Complete Care and Well-Being

January 15, 2009 by George Van Antwerp 0 Comments

Walgreens has just announced their offering to push into the on-site clinic market.  It is not completely new for them, but this is certainly a broader offering leveraging several assets they have acquired.

The program’s foundation is the pharmacy and health centers located on employer campuses or manufacturing facilities, along with Take Care’s in-store retail clinics and Walgreens nationwide pharmacies. Take Care’s employer health centers can offer complete pharmacy and health care services ranging from acute (e.g. strep throat) to primary care, occupational health, infusion services, specialty pharmacy, prescription mail services and disease management and are staffed by a combination of Walgreens clinicians including physicians, nurse practitioners, physician assistants, nurses, pharmacists and other health care professionals. Take Care Clinics, walk-in health care clinics open seven days a week and located at neighborhood Walgreens drugstores nationwide, are staffed by nurse practitioners and physician assistants who offer health care services built around a family’s needs.

I have always found this model to make a lot of sense, but it is hard to scale beyond massive employer sites.  In general, I think you have to have at least 1,000 people at one site to even begin to see this as a profitable investment (if I remember my analysis from years ago).

I am not really sure what the “all prices transparent to the employer” means in their press release.  Are they really going to reveal the acquisition cost of drugs?  The cost of their private label medications?  The cost of a clinic visit?  I am not sure that’s necessary.

Providing convenience without increasing costs should be enough.  Employees will love it.  Of course, I have heard that once you put it in that it is impossible to pull these out without very negative employee reaction.  And, I do believe that convenience (as it does with 90-day Rxs) can help improve adherence with mixed with the right education and counseling.

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

Regence Quote On Pharma Studies

January 13, 2009 by George Van Antwerp 1 Comment

I always find some great nuggets in the AIS daily news.  I thought I would pass on this one from the head of pharmacy at RegenceRx.

“Unfortunately, we find that only 15% to 20% of pharmaceutical studies are reliable. Our findings are not unusual. For example, Pitkin, R. et al (JAMA. 1999; 281:1110-11) found that 18% to 68% of abstracts in six top-tier medical journals contained information not verifiable in the body of the article. To assure Regence doesn’t disregard valid studies, we request full study information from pharmaceutical manufacturers in addition to reviewed published information. Unfortunately, it’s rare for manufacturers to provide information beyond what’s in the published study.”

— Helen Sherman, Pharm.D., senior director of pharmacy services and chief pharmacy officer at The Regence Group, which operates BCBS plans in the Northwest, told AIS’s DRUG BENEFIT NEWS.

Books / Articles, Healthcare, PBM / Pharmacy, Research

Potentially Ridiculous Decision

January 11, 2009 by George Van Antwerp 3 Comments

I’m trapped in Boston waiting to get home due to the snow storm last night.  While I am waiting, the guy sitting a few chairs away from me was talking on the phone to a reporter.  If what he said is true, it’s a massive step backwards.

He said that CMS is no longer going to allow Medicare Part D plans to charge more for multi-source brands (MSBs).  These are brand drugs that have a generic equivalent (i.e., they are the same drugs based on active ingredients).  This would be a massive win for pharma since the manufacturers typically drive the price up after patent expiration so that they can make as much money as possible on the people that continue to use these drugs.

In most cases, these drugs are immediately moved to the 3rd tier of the formulary while the generic version is placed on the first tier.  This allows people to get them, but they have to pay more.  If CMS doesn’t allow this anymore, it will create lots of potential waste and be a big step backwards for all the progress we have made around generics.

sold-to-pharma

Healthcare, PBM / Pharmacy, Politics

Physician as Coach: Patient as Player

January 9, 2009 by George Van Antwerp 0 Comments

I really like this analogy.  Dr. Field talks about it in his blog.

It is easy for me to understand the role of my physician as providing me with the details about my disease.  They can tell me what to do.  They can motivate me to do it.  BUT, ultimately, it depends upon me as the patient to actually deal with the condition and improve it.

Consumerism, Healthcare, Weblogs

Walgreen’s President On Recession Impact

January 8, 2009 by George Van Antwerp 0 Comments

In case you didn’t see it, Gregory Wasson (President and COO) from Walgreens did an interview with The New York Times on how the economy is impacting them and answered a few other questions about their strategy.

Q. How is the slowdown affecting purchases of prescription drugs and health and beauty aids?

A. We certainly are seeing a slowdown in prescription drugs. In this economy, patients are not seeing their doctors as frequently. There may be some cases they are skipping doses of medications to control costs. As far as over-the-counter items, we see consumers definitely looking for value. We’re also seeing a big increase in private label product. The consumer is willing to buy down.

To read the rest of the interview…click here.

Books / Articles, Healthcare, Leadership, PBM / Pharmacy

Follow-up On Physician’s Comments On PBMs

January 8, 2009 by George Van Antwerp 0 Comments

I talked about it in a few previous blog entries – Physicians versus PBMs and Physicians as Victims of System – and I am finally getting around to the source interview in AIS’s Drug Benefit News from October 31, 2008.

Here are a couple of additional thoughts after reading the entire interview with Toni Brayer:

  • She questions the value of PBMs (pharmacy benefit managers).
    • [It’s been well documented that PBMs can drive lower trend and have lowered prices.  This was well documented by third parties before PBMs were made central to the Medicare Part D benefit.  Additionally, reading any of the PBM trend reports will show you the money that can be saved by leveraging the trend programs that they offer.]
  • She talks about confusion between mail order pharmacies and PBMs.
    • [This is a good example of one thing that PBMs have driven which is mail order utilization which has driven down costs and allowed members to move from 30-day to 90-day prescriptions.  But, mail order is often a key component of the PBM offering.  People should think of them as two different entities – the PBM is focused on claims processing and the rules for benefit administration…the mail order is simply a pharmacy that uses automation to deliver medications to members from a centralized location.]
  • She says that PBMs contribute to the double digit increases in pharmacy costs that have occurred. 

    • [I think this has been disproven by many of the independent studies.  Additionally, the increases are driven by increased utilization, brand price increases, and new product introductions in most cases.  PBMs drive down reimbursement rates year-over-year, drive generic fill rates, and move members to lower cost channels such as mail order or specialty pharmacies.]
  • She talks about the hassle of PAs (prior authorizations).
    • [I completely understand the hassle here and am a little mixed in my opinion.  On the one hand, this is an effective trend management technique using evidence-based standards to manage inappropriate use of medications.  On the other hand, since in most cases, 95%+ of all PAs are approved (if the MD calls in), it does seem like an unnecessary burden.]
  • She also talks about confusion between brands and generics.
    • [This has become a bit of a challenge over the past few years as some branded products end up being cheaper than generics.  This has led to formulary tiers at a few companies reflecting more about drug price than brand versus generic.  And, I completely agree that physicians can’t be expected to understand formulary status…without electronic prescribing tools.]
  • She talks about pharmacies not automatically refilling prescriptions.
    • [I agree with her here with a few caveats.  Pharmacies should be reaching out to patients to remind them about refilling their medications.  They should be using a barrier survey to understand why they aren’t refilling and help them address these barriers or pushing them back to their physician when appropriate.  In my day job, this is definitely something that I talk with a lot of pharmacies (mail, retail, and specialty) about how to do this.]
  • She even talks about tamper-proof prescriptions being a hassle.
    • [In most cases, I think pharmacies offer patients either tamper-proof or standard prescription bottles as a choice.  Obviously the tamper-proof is to reduce the risk of children getting into medications and overdosing.  I don’t know the statistics, but I think it’s a legitimate concern.]
  • She compares pharmacies to the Department of Motor Vehicles.
    • [WOW!  I have certainly heard that some of the pharmacies in high density urban areas have ridiculous wait times, but I think this is a pretty bad slam.  The pharmacies that I go to take time to talk with the patients.  They are fairly quick on filling medications.  They use computer technology and automation to drive efficiencies.  We have a huge shortage of pharmacists in the US so there are some challenges.  That was one of the reasons I tried to go to market with a pharmacy kiosk solution.]
  • She says that she always considers cost when writing a prescription.
    • [This is great.  I know physicians generally do this for the medications they understand cost on…which are usually the outliers.  But, with over 10,000 medications on the market, I can’t imagine they can keep up with some of the idiocyncracies in the market.  Again, although I am not the biggest believer in electronic prescribing, this is one of the clear advantages here that it can show drug cost and member cost.]
  • She thinks that pharmacies are gouging patients by only dispensing 30-day supplies for chronic medications.
    • [This one I can talk about from several perspectives.  First, for new prescriptions, it is usually appropriate to only dispense 30-day prescriptions until the patient stabilizes on an Rx and strength.  Second, most patients have access to mail order where they can get a 90-day prescription…and some retailers offer this also.  Third, pharmacies generally make their money on the things people pick up while in the store…on many Rxs, pharmacy is a loss leader.  Fourth, to fix this issue, we would have to stabilize care so that only one insurer / employer paid since today people move around too much creating a disincentive to have one payor pay for a longer Rx only to have the patient leave before they use up their supply.  Fifth, since most people are non-compliant / non-adherent, there would be a lot of waste.]
  • She talks about hardly any medications costing under $40.
    • [Since most people have prescription drug coverage, this would only apply to 3rd tier drugs or specialty medications.  With all the $4 generics, patient assistance programs, and drug discount programs out there, patients don’t pay over $40 in many cases.  If she is talking about drug costs to the payor, then most brands certainly cost over $40 but that now represents just over 30% of all drugs dispensed.  I will let pharma make the arguement, but clearly the research required to bring a new drug to market justifies much of the cost.]
  • She suggests pricing brand drugs with no generic alternative lower.
    • [I am all for lowering healthcare costs and don’t think manufacturers should gouge patients, but in a capitalist society, why would I lower the cost of something that people need and have no alternative for?]

Sorry for the long rant, but there was soo much fun stuff to respond to in this interview…I never thought I would be a “defender” of the PBM model, but I really disagree with a lot of her comments.  PBMs do a lot of good things for clients and members even though they are in the “middle man” position.

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

A Single View of the Member

January 7, 2009 by George Van Antwerp 0 Comments

Do you dream of being treated as one consistent individual across a company?  Wouldn’t it be nice if they knew every communication they sent to you – letters, calls, e-mails – and knew every communication touch you had with them – webpages visited, faxes, inbound calls, e-mails?  Unless someone can tell me different, this is still a dream world at most companies and maybe more than a dream at most healthcare companies.  (It’s even more complicated if you start thinking about all the touches by the health players – hospitals, clinics, MDs, disease management companies – and integrating them.)

All that data could help paint a much better picture of each individual if blended with outcomes data.  Who responded to what?  When did they respond?  What did they do?  How did it vary by condition?  How did it vary by gender?  By age?  What can you use to predict response rates? (I.e., the key here is having data transparency, easy to access data, and the ability to mine and analyze the information.)

There are so many variables that it can be overwhelming.  That’s why I found the discussion around Campaign Management 2020 by Elana Anderson and then commentary by James Taylor interesting.

“we can dream of technology that supports fully automated marketing processes and black box decisioning, tools that simplify marketing complexity and support collaborative, viral, and community marketing” (Elana’s blog entry)

This really gets at the heart of some of the fun projects we are working on these days at Silverlink Communications with our clients where we are bringing Decision Sciences to healthcare and helping clients optimize their engagement programs, retail-to-mail, brand-to-generic, HEDIS, and coordination-of-benefits (among dozens of other solutions).  Helping clients layout a strategy, define a process, develop a test plan, execute a program, and then partner with them to improve results is what makes my job so exciting.

As we go into the new year, I hope all of you are having fun at your jobs or quickly find a new job if your unemployed.

Business Tools, Healthcare, Innovation, Marketing / Communications, Silverlink, Software, Technology, Weblogs

Using Your FSA For Your Gym Membership

January 6, 2009 by George Van Antwerp 0 Comments

Maryland is working on a bill that will allow you to use your flexible spending account (i.e., pre-tax dollars) for things like gym memberships and sports equipment.  I am not sure I agree with the sports equipment since I could see a whole arbitrage opportunity of buying equipment with pre-tax dollars and then selling it on eBay.  But, I can see things like gym membership or even fees for a race qualifying.

I don’t have an opinion on the bill, but the concept sounds intriguing and sends the right message.

Books / Articles, Consumerism, exercise, Healthcare, Innovation, Value Propositions

Rx Spending Slows

January 6, 2009 by George Van Antwerp 0 Comments

In the USA Today, there was an article this morning about the slowing growth in the prescription drug market.  Growth was only 4.9% (in dollars) which is the lowest since 1963.  A lot of this is due to the increasing use of generics along with the trend toward $4 generics or even free generics.  They attribute some of it to safety warning which may have decreased utilization and certainly there have been multiple surveys talking about the dampening effect of the economy.

The article states that health care services overall rose 6.1% to $2.2 trillion in 2007 (or $7,421 per person) according to CMS’s Office of the Actuary.

They also state that generics now make up 67% of all prescriptions filled and that drug prices grew only 1.4% which was down from the 3.5% in 2006.

I was surprised by the statistic that the FDA issued at least 68 safety warnings in 2007.

In general, I didn’t agree with their observation that lower prescription drug cost increases contributed to holding overall health care spending increases down since prescriptions only make up about 10% of total healthcare costs.

Books / Articles, Healthcare, PBM / Pharmacy

Breaking Down The 2008 PBM Customer Satisfaction Report

January 6, 2009 by George Van Antwerp 1 Comment

PBMI (Pharmacy Benefit Management Institute) put out its 14th report on employer satisfaction with their PBMs. Here are some of the highlights from the report:

  • 275 employers representing 11.3M members responded.
  • The overall rating was an 8.0 out of 10.0. (up from 7.9 in 2007)
  • 6.7% of respondents perceived that their benefit costs were increasing more than others and ranked their PBMs lower. (perhaps a validation that trend management matters…hence the “battle” to show the lowest year-over-year trend to the street in the individual trend reports)
  • PBMs were ranked on three factors – overall service and performance, delivering promised savings, and delivering promised services.
  • For the overall score:
  • Aetna (6.6), Argus (4.8), Innoviant (8.7), MedImpact (8.0), NMHC (7.5), and Prime Therapeutics (9.0) also were part of the report but had limited profiles due to a lower number of surveys being received.
    • As far as I know, Prime doesn’t contract directly with employers but just through their BCBS owners. That would seem to disadvantage them in this survey.
  • Employers can contract directly with PBMs or thru a managed care entity or buying group. Those that contracted directly ranked their PBMs higher (8.2 versus 7.6) which makes sense since they are more involved and more likely to be actively managing trend and having lower costs.
  • This is validated by the fact that those with very aggressive intervention in benefit management rated their PBMs much higher (8.6 versus 7.1). About 33% considered themselves to be very aggressive.
  • PBMs were rated the worst (7.2) for their disease management programs.
  • When looking at factors that were correlated with satisfaction there were a few surprises and a few no-kidding variables:
    • I was surprised the member website, specialty pharmacy, and mail service pharmacy ranked low on the list of variables (i.e., less correlation).
    • I was not surprised that account management ranked high and retail pharmacy network was low. In many cases, the networks are pretty similar. I would be interested to see how large employers ranked PBMs versus smaller employers since they probably get different levels of service.
  • Looking at the overall scores from 2004-2008:
    • Caremark, Catalyst, Cigna, Express Scripts, and Medco all went up.
    • Walgreens and Wellpoint went down.

Looking at the ranking of key factors:

Highest Ranked Function(s)

Lowest Ranked Function(s)
Aetna Retail pharmacy network

ID card production

 Mail service pharmacy

Disease mgmt programs
Argus Retail pharmacy network

ID card production

 Formulary mgmt and rebates

Account mgmt
Catalyst Retail pharmacy network

Claims processing

 Disease mgmt programs

Mail service pharmacy
Cigna Account mgmt

Member services

 Delivering promised savings

Disease mgmt programs
CVS Caremark Retail pharmacy network

Claims processing

 Formulary mgmt and rebates

Disease mgmt programs
Envision Overall service and performance

Account mgmt

 Disease mgmt programs
Express Scripts Retail pharmacy network

ID card production

 Member services

Formulary mgmt and rebates

Disease mgmt programs
Innoviant Formulary mgmt and rebates

Delivering promised savings

 Utilization and benefit mgmt consulting

Member website
Medco Retail pharmacy network

ID card production

 Utilization and benefit mgmt consulting

Mgmt reports

Disease mgmt programs
MedImpact ID card production

Claims processing

Retail network

 Formulary mgmt and rebates

Drug utilization mgmt

Specialty pharmacy

Delivery promised services
NMHC Retail network

Plan implementation and changes

Specialty pharmacy

 Mail service pharmacy

Disease Mgmt programs
Prime Therapeutics ID card production

Retail network

 Disease Mgmt programs

Specialty pharmacy

Formulary mgmt and rebates
Walgreens Retail pharmacy network

Mail service pharmacy

 Mgmt reports

ID card production

Member website
Wellpoint Retail pharmacy network

Claims processing

 Acct mgmt

Disease mgmt programs

Mgmt reports

Utilization and benefit mgmt consulting

So…my overall assessment is that it is a good report. It is limited by response and limited by the fact that there aren’t major differences between PBM scores (with a few exceptions). But, it certainly would give me some clues on what to expect, where to push, and how I should evaluate my PBM.

Books / Articles, Healthcare, PBM / Pharmacy, Research
Newer Entries
Older Entries