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Incentives in Healthcare

December 10, 2007 by George Van Antwerp 2 Comments

Will incentives be a focus in healthcare? Certainly in lots of other industries, they are a minimum requirement to play at the table – hotels, airlines, banking, consumer products, and casinos. Consumers expect them in many cases. One of the big challenges that any presidential candidate hoping to change healthcare will have to solve is alignment of incentives.

There is lots of data out there validating this as a focus. In The Road Ahead: Emerging Trends in 2007
by Hewitt Associates, they say that 48% of employers offer or plan to offer incentives to employees who participate in wellness or health related initiatives. Health plans have started to tier payments based on patient activities around wellness. Companies are paying patients to take HRAs (Health Risk Assessments) and results have shown that the more they pay the better the participation in taking HRAs.

Wellpoint offers employers credits to offset deductibles when members engage in certain activities. Highmark has an outcomes program where members get points for taking classes and participating in other programs. And, IBM offers employees as much as $300 a year for exercising regularly and logging into the companies preventative-care website.

On the other hand, companies like Target have used gift cards as an incentive to get patients to fill their prescriptions at the Target pharmacy for several years. Many companies have used copay waivers or $0 copay programs to encourage patients to try generic drugs. Earlier this year, Democrats in MN recommended giving publicly insured patients $20 gift cards for following their physician’s orders.

Several traditional companies that have worked in other industries are focusing on healthcare. IncentOne is the one that appears to be the market leader with Hallmark Insights and Maritz quickly ramping up.

So, when could you use an incentive:

  • If you’re an MCO, you could use incentives for:
    • Health Risk Assessments
    • Disease Management Program Engagement
    • Health Education Class Enrollment
    • Brand to Generic Programs
    • HEDIS Reminders
    • Multi-step Milestone-Oriented Wellness Programs (many employer-group driven)
    • Member Portal Registration or Utilization
    • Personal Health Record Registration
    • Product Design Surveys
    • Satisfaction Surveys
    • Refer a Friend Programs
  • And, if you’re a PBM, you could use incentives for:
    • Retail to Mail (or Specialty)
    • Retail to Retail (Limited Retail Network)
    • Brand to Generic
    • Brand to Preferred Brand
    • Rx to OTC
    • Dose Consolidation Programs
    • Pill Splitting
    • Cross Sell opportunities with supplies companies—transportation services, DME, etc
    • Refer a Friend
Consumerism, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Value Propositions

Worker’s Compensation: Focus Moving to Prescription Optimization

December 7, 2007 by George Van Antwerp 0 Comments

As a pharmacy (retail or mail and to a lesser degree specialty) or as a PBM or pharmacy administrator, one of the best ways for you to save clients money (lower average ingredient costs), save patients money (lower copays), and drive margins is typically to manage the distribution channel, drug utilization, and drug selection. There are traditional ways of doing this – formulary / preferred drug list, copays, and coverage rules (e.g., step therapy). But, more and more, companies are looking for softer solutions that focus on patient education.

How do you get patients to understand the value of generics and request that from their physician? How do you get patients to understand when mail order or specialty pharmacy is appropriate? How do you recruit them and work with their prescribing physicians? [hint: aligned incentives, proactive education and messaging, data management, patient segmentation models, online tools, and multi-modal coordination]

Worker’s compensation is typically its own animal. Patients pay no copays. Patients don’t really have eligibility cards. In some states, you can direct care (i.e., you have to go to these pharmacies). And, you have a whole industry of companies called third party billers (TPB) that buy the prescriptions from the retailers based on a factor for the receivables and then try to find the carrier or employer who covers that claimant and charge them more then the TPB paid. It solves the problem for the retail pharmacy of knowing who to bill for the claim (since there is no eligibility card…at least on the first fill).

Typically, this business is separate from the traditional MCOs and PBMs and done by companies like PMSI, Cypress Care, and MSC while some companies have a small group focused on it (e.g., Express Scripts). On the 3rd, there was an article titled “Workers comp PBMs can help employers control drug costs”. The article talks about the need to get an identification card to the patient (aka injured worker…aka claimant) as soon as possible so that their future claims process under the negotiated discount rate.

“If you have discounts, and your plan members aren’t going to network pharmacies, it doesn’t do any good.” (Vicki Wheeler, Express Scripts)

Several industry experts chime in to point out that it’s not about the billed rate per claim but about the utilization management. (Joe Paduda, a blogger on the topic, was also quoted in the article.)

“PBMs that intervene early in the prescription drug management process also can encourage the use of generics or less-expensive brand medications whenever they are available.” (Nick Page, PMSI)

Obviously, the holy grain is getting the patient better and back to work so understanding compliance and the link between appropriate drug utilization and overall medical spend for the patient is critical path. But, it appears from the story that the WC business will follow the route of the commercial PBMs and begin looking more aggressively at how to change behavior when you have no plan design (i.e., no copays). Couponing may be the option, but who pays?

(Another blog on WC that I just discovered is called Workers Comp Insider.)

Healthcare, PBM / Pharmacy, Value Propositions
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Access, Price, Service…The Next Phase for MCOs

December 7, 2007 by George Van Antwerp 0 Comments

It seems a logical evolution of the marketplace. Have we moved to a point where MCOs can really differentiate themselves based on their service? (The indicator for me on this would be whether consumers are willing to pay more out-of-pocket to have one plan versus another simply because of service.) It will certainly happen. Web tools. Pro-active communications. Personalized messaging. Educational programs. Friendly call center reps. Consumers care about these things.

Coverage, the AHIP magazine, had a recent article called “Creating a Culture of Service” which is about this topic. It talks about a health plan where the average call is picked up in 12 seconds, the call abandonment rate is 2%, and 88% of questions are resolved on the first call. I am not sure this is a sustainable model of differentiation since there is a floor to improvement. It is similar to the Kano Model which is used in Six Sigma. This model points out that there are different curves of expectations. Initially, you can delight a customer with something new, but it quickly becomes a standard expectation in the marketplace.

The article does point out a key point which is that patients expectations of service are not based on healthcare companies. They look at Starbucks, Nordstrom’s, Amazon, Dell, Disney, and other companies for what they expect in terms of online presence, response time, and service culture. In many companies, the call center agent is the first (and potentially only) point of contact for a patient (or member). They are not highly paid and often take the brunt of complaints all day long. Finding a way to make them happy and patient centric is essential.

Another challenge which exists in any human centric function like customer service is consistency. As benefits get more complex and companies have huge turnover issues at their call center, getting the same answer every time is difficult. Which is massively frustrating as a consumer. We used to have to do “secret shopper” calls constantly to determine what parts needed more training. This is of course one area where automated voice solutions are being used both inbound (reactively) and outbound (proactively) to address consistency and timeliness. In many cases, you can predict events that will drive a call and see a patient’s history to understand their probability of calling (versus using the web). Why not launch a call to them before the call which is less expensive?

One hiring model we saw work very well in specialty pharmacy was hiring people who had a family member with a chronic condition. They were empathetic. They understood the patient’s frustrations. And, they could project their family member’s experience. They were great.

BTW – The article has a great sub-story about what Connecticare has done in their call center to address recruiting and turnover.

Other things I have seen work are empowering the end agent to resolve an issue up to a certain level. If a person is complaining about a $5 copay change, it may be worth waiving it one time and sending them some information rather than taking 3 calls from them at $5 per call. Or, it may be worth providing a one-time override rather than spending 8 hours trying to resolve it.

Incentives along with metrics are also another obvious tactic. Definitely don’t incent them to get off the phone quickly. That always creates issues. Look at ways of turning them into “sales agents” for the company and reward them for getting patients to change behavior or based on satisfaction scores.

And, one thing to avoid that drives patients crazy is having different information on the web than at the call center. And, even worse is not letting the call center agents have Internet access so they can’t see what the patient sees.

There are a few words on technology such as CRM (customer relationship management) and voice recognition software (e.g., routing to a different agent based on an angry voice). This surprises me a little since I think using data to segment and address different patients differently. Are they a frequent caller that we should route to a live agent without IVR (interactive voice response)? Do we know why they might be calling and have an answer?

As I have talked about before, I believe MCOs and other healthcare companies will be differentiated based on communications. How do they use their data and a permission based marketing approach to understand the patient, push information to them at the right time using the right medium, and support their needs? That is what I am focused on building with clients.

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

One Experience With Motivating Pharmacists

December 5, 2007 by George Van Antwerp 0 Comments

Yesterday, a client was asking me about using incentives to motivate pharmacists to take action on behalf of the patient. I had done a pilot with a government client that had a concentration of lives in a small geography and had the majority of their prescriptions filled at one regional pharmacy chain. It seemed like the right scenario to try a program.

I wrote up a mini-case study last night which I thought I might share.

Summary:

The client decided to implement five new step therapy (i.e., the patient is required to use a lower cost generic drug prior to being able to get a higher cost brand drug) programs to go live simultaneously. We were asked to look at innovative solutions to manage the member “disruption”.

We approached the regional chain about a pilot program to reimburse pharmacists for helping patients resolve step therapy rejects at the point-of-sale. We designed a fax form for each of the five therapy classes which outlined the first-line alternatives. The objective was for each pharmacist to fax the prescribing physician using one of the five fax forms upon receiving a reject.

We agreed to pay the pharmacy/pharmacist $10 per fax sent. [Legally, we did not believe we could pay for results but simply for taking action.] We ran the pilot for 6 months and subsequently compared the amount of claims filled within the therapy class (aka GPI) after the rejects at the participating chain versus the amount of claims filled within the class at other chains for the client. We also looked at the number of prior authorizations and percentage of first line agents filled for patients that hit a step therapy reject.

Results:

At the conclusion of the pilot, we found no statistical difference between results from the participating chain versus other chains that did not participate in the pilot. In this time period, I believe we paid out approximately $20,000 for the program and concluded that this was not a solution for influencing physician behavior around plan design.

Lessons Learned:

Because of other priorities, we did not do a thorough analysis of the reasons for this not being successful (e.g., interviews with participating pharmacists), but we had numerous hypotheses about the pilot program.

  1. The incentive did not actually get to the retail pharmacist from corporate and therefore the incentive was null.
  2. $10 per fax was not enough, given the volume of rejects, to make a financial difference to a pharmacist making over $100K per year.
  3. Pharmacists were already doing everything possible to help the patients and the incentive was simply additional cost for a task already being done.
  4. Sending faxes to the physician needed to be followed up by the patient and/or pharmacist to make sure the physician acted on the request.
  5. There needed to be more education from the corporate office of the retailer.
  6. Patients were concerned about the follow-up. Our research had already shown that 50% of people who hit a step therapy reject don’t fill a claim, but that 90% of those that don’t fill a claim either get a sample, purchase an OTC, or pay cash for the rejected drug. (i.e., only 5% of those that hit the reject get nothing)

If I were to do it again, there were several things I would do differently. Trying to drive behavior at the pharmacy is a question of aligning incentives and pushing information to them through channels like the Point-of-Sale (POS) system and reject messaging. But, changing behavior has to involve physicians, consumers, and the pharmacist.

Healthcare, PBM / Pharmacy

A New Pharmacy Model

December 5, 2007 by George Van Antwerp 0 Comments

I had a chance to ride on a plane today with a man who sits on the board of a pharma company. He has worked in pharma for 30 years, and we had a good discussion. One of the things we talked about was the “arms race” in pharma to build up their number of detail representatives. Obviously this changed over the past few years especially with some of the limitations which have been placed on how pharma reps can incent physicians. We went on to talk about the challenge of physicians keeping up with all the drugs on the market and even understanding all the basic pharmacology. With over 10,000 different drugs, this is a challenge for pharmacists much more so for physicians who have other information to manage.

In discussing the topic, it reminded me of a law which exists in a few states that allows physicians and pharmacists to have a legally binding agreement around therapeutic substitution (i.e., allowing the pharmacist to change drugs or chemical entities for the patient without getting a new prescription). I can’t remember what these are called, but I threw out a new model to him that would seem very logical.

Could physicians simply write a prescription for a lipid lowering drug (aka cholesterol medication) and put the relevant diagnosis code and lab values on the prescription? The pharmacist would then be responsible for determining the right drug for the patient based on their prescription history and their benefit plan. It seems like a simple model which focuses every constituent on their primary role – the physician owns the diagnosis and care plan while the pharmacist owns the prescription selection.

It would eliminate the need for pharma reps in many ways because the conversation would be with pharmacies who use online information and have a corporate infrastructure that could have models for selection of drugs based on DUR (Drug Utilization Review – e.g., drug-drug interactions), copayments, UM (Utilization Management – e.g., step therapy, prior authorization, quantity level limits), and perhaps profit.

Healthcare, PBM / Pharmacy

IBM on HC 2015 – Part I

December 2, 2007 by George Van Antwerp 0 Comments

I had a chance to catch up on a bunch of reading on the plane including an IBM brochure I picked up the other day on “Healthcare 2015 and US Health Plans“. I found it to be a good piece with several good frameworks although it doesn’t take any radical views on the future (which I would have liked to see).

Here were a few of the facts / takeaways from the brochure:

  • US healthcare expenditures per capita are 2.3 times higher than other developed countries and projected to increase 83% over the next 10 years
  • Medical errors cause between 48,000 and 98,000 patient deaths per year
  • Medication errors cost the US over $3.5B per year
  • On top of the 47M uninsured, there are 15.6M underinsured
  • There are five issues that will make change difficult for healthcare:
    • Funding constraints
    • Societal expectations and norms
    • Lack of aligned incentives
    • Inability to balance ST and LT perspectives
    • Inability to access and share information

    “We believe that the U.S. healthcare system will not achieve a comprehensive “win-win” transformation by 2015 because of political gridlock and inability of key stakeholders to work collaboratively to reach solutions for the ‘greater good’.”

  • They do predict that some form of universal coverage will be enacted by 2015 and will be focused on the individual not the employer to address the “job lock” challenge.
  • They see a key role for health plans and call upon them to lead the transformation to a “more patient-centric, value-based, accountable, affordable and sustainable U.S. healthcare system”.
  • They predict that employer-sponsored health benefits for family coverage will increase from $8,167 in 2005 to $17,362 in 2015.
  • In 2006, PPOs (preferred provider organizations) accounted for 60% of private insurance enrollees (up from 41% in 2000).
  • Employers offering coverage has dropped from 69% in 2000 to 61% in 2006 and is predicted to go below 50% by 2015.
  • They talked about employers putting a lifetime cap on retiree benefits which was a new concept to me, but they said that 49% of employers polled in 2005 had a cap (of which 59% of those on the plan had already hit the cap).
  • They talk about lifestyle choices impacting premiums which would lead to increased wellness and preventative programs.
  • There is some scary data about money needed post retirement. They say that half of all bankruptcies are in part due to medical expense. They also say that “a couple retiring in 2016 at 65 years of age would need US$560,000 if they lived an average lifespan. They would need US$1.05 million if they lived to 95 years.” This is specific savings for healthcare costs in addition to Medicare. WOW!! And, they say that 40% of people over 55 have $50,000 or less saved.

ibm-retirement-health-savings.png

 

“The health–wealth intersection is already taking shape. Players from each sector are experimenting with offerings that cross the boundary between the two, such as reverse mortgages to finance nursing-home costs and arrangements that let individuals tap into their life insurance policies to cover medical costs. But the new health–wealth business will evolve and change shape for at least the next couple of decades, as the retail health-care market coalesces and consumers take on more responsibility for their medical needs.”

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

HBR Health Consumer Segmentation

December 1, 2007 by George Van Antwerp 0 Comments

Harvard Business Review has an article “What Health Consumers Want” by Caroline Calkins and John Sviokla (both from Diamond Consultants) in the December 2007 issue.  I think they sum up one of the problems that I talk about with a couple of quick comments in the beginning:

“Yet the idea that companies might profit by segmenting customers to address their varied needs seems almost foreign to the health industry.”

“Companies can uncover areas of untapped value by analyzing patterns in demand for health products and services.”

They point out that looking at people from a health and wealth perspective at the same time is very revealing.  Which certainly makes sense as many people are predicting that these two markets will come together at some future stage.  Their research pulled out four consumer groups [with my summary of their text]:

  1. Healthy Worriers – receptive to new things, willing to change, look at dynamic between wage inflation and healthcare costs, look to employers for information, overwhelmed by choices
  2. Healthy, Wealthy, and Wise – fit, health conscious, financially confident, want choices, not scared of complexity, self-service tools important, service focused
  3. Unfit and Happy – manage own money but overconfident on health issues, don’t trust MDs, need tools and incentives to drive action
  4. Hapless Heavyweights – not particularly health or financially oriented, typically overweight, need support groups and penalties

Personally, I find it nice that they point out the fact that some groups want incentives and some need penalties.  I have blogged about this a couple times as one of the simplest examples of why segmentation and message flexibility is so key.  I think the first two have a nice opposite with simplicity versus choice.

Books / Articles, Business Tools, Consumerism, Healthcare, Innovation, Managed Care, Marketing / Communications, PBM / Pharmacy, Research, Value Propositions
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Zyrtec Pricing and Space on the Shelf

November 30, 2007 by George Van Antwerp 0 Comments

I talked about it last week.  Zytrec is going OTC at the end of January.  I was surprised to see that they already have shelf space (at least at Walgreens) and pricing posted.

I can’t find it posted on the web anywhere, but I believe it had a 45-day supply for $26!  For those of us that use it, that would be a great deal considering in many cases it is a non-formulary drug which a high 3rd-tier copay.

Healthcare, PBM / Pharmacy

Shot Across the Bow or First Blow – Walgreens

November 30, 2007 by George Van Antwerp 0 Comments

arrow.jpgI expected to see a lot more buzz yesterday after Walgreens announced that they were going to pull out of several contracts with CVS/Caremark over reimbursement.  Obviously, the two are huge competitors so I don’t find it surprising at all.

I assumed CVS would push on Walgreens through their PBM contracts.  What I wonder is whether this is a shot across the bow by Walgreens in a very public manner or whether this is the beginning of multiple blows back and forth between the two companies.  It should be very interesting.

The announcement: “After many months of talks over unreasonably low and below-market payment rates by CVS Caremark Corp. for four prescription plans, Walgreens today withdrew as a pharmacy provider from the plans.”

Affected Plans: ArcelorMittal, Johnson Controls, Inc., Progressive Casualty Insurance Co. and Wisconsin Education Association Trust.

A few quotes from Trent Taylor (president of Walgreens Health Services):

“This is not where we wanted negotiations to lead”

“We’re sorry that our pharmacy patients and CVS Caremark’s clients are caught in the middle, and we’ll do all we can to ensure a smooth transition for our patients to another pharmacy.”

“Leaving a benefits plan is an extraordinary step for us, but it demonstrates how extraordinarily low our payments were from CVS Caremark. We can’t continue accepting reimbursement rates that are drastically below market, while offering patients needed special services such as 24-hour pharmacy access and drive-thru pharmacies.”
“In an effort to be as open and transparent as possible in negotiations, we even offered to open our books directly to the employer groups and show them how much our pharmacies are paid by CVS Caremark,” said Taylor. “Unfortunately, CVS Caremark wouldn’t allow us to do that.”

A few editorial comments…

  • Why does this play out in the press?  This is the same thing that both of them did when they opted out of the mandatory mail networks for several clients.

  • I can’t imagine that the individual pharmacist who actually has the patient relationship at Walgreens is going to be really happy about this.  It is one thing at a corporate level, but very different in the trenches.

  • I don’t buy the argument of “special services” such as 24-hour and drive-through pharmacies being a reason to justify higher cost.   Nice features.  I am surprised he wouldn’t have talked about value delivered – generic substitution, formulary compliance, medication therapy management, etc.

  • I love the last comment about opening the books.  Would he do the reverse and open up the books for how much their PBM pays CVS, how many lives they have on mandatory mail, their costs, etc.?  It’s always great to offer something that you know can’t happen.

Events, Healthcare, PBM / Pharmacy

PHR – Key for Improving Senior Care???

November 30, 2007 by George Van Antwerp 3 Comments

In the AHIP (America’s Health Insurance Plans) magazine Coverage (Sept+Oct 2007), there is an article on using Personal Health Records to improve healthcare for seniors. I am reading it as I type my commentary here, but I start with some skepticism.

  • Apparently CMS (Centers for Medicare & Medicaid Services) commissioned a 18-month pilot to help design a user-friendly PHR for Medicare beneficiaries.
  • The article gives a good, simple definition of PHR as being “designed for use by individual consumers and contain a core set of medical information that includes physician office visits, medications, lab results, and general health information.”
  • It talks about advance PHRs having a care alert which is a signal to consumers that they are due for a treatment of test. [I have talked with a few PHR vendors about this. I can’t agree more. It is great to have the data, but the systems need a proactive communication mechanism to push timely content to consumers so that they take action. (shameless plug…what a great opportunity for someone like Silverlink to offer an automated call program that takes automated triggers from the PHR and launches a pre-defined, personalized call to the consumer)]
  • It offers an interesting statistic that I haven’t seen before – 100M people (of the 249M insured) have at least one chronic disease.
  • CMS previously rolled out a bare-bones PHR at www.MyMedicare.gov which had 2M of the 42M Medicare beneficiaries register. [Of course, registration means nothing. How many actively log-in, update information, and use the information?]
  • Plans participating in the pilot include HIP of NY, Arkansas BCBS, BCBSLA, Humana, Kaiser Permanente, UPMC Health Plan, Aetna, and Medcore Health Plan.

“Health information technology will improve health outcomes and contain costs and help provide meaningful dialogue between members and providers so tests are not conducted unnecessarily.” (Laura Landry, Director of IT, BCBS Louisiana)

  • It talks about AHIP and the BCBSA (Blue Cross Blue Shield Association) collaborating to make PHRs transferable across plans which is vital for success.
  • Apparently, the groups have also collaborated to define a model PHR which would include physician encounters, names of clinicians and facilities, medications, lab results, family history, immunizations, health risk factors, advance directives, allergies, alerts, and physician directed plans of care.
  • The article also highlights another issue which is true for many solutions which is density of utilization by provider. For example, if the physician is expected to use a tool but only 5% of their patient base uses it, it will be hard to get them to change their workflow. If 90% of their patients use the same tool or a tool that provides a common interface to the physician, then they will be more likely to interact using the technology.
  • A representative from Humana says that seniors are using the data to enhance their dialogue with physicians. [I think this is a key point. I spearheaded the rollout of a “physician kit” at Express Scripts which was a set of forms that the patient could download to take to the physician’s office to discuss generics, mail order, and their condition. The key was that us communicating with either party was only so effective. We had to drive the two parties most involved in care to talk together with the facts in front of them.]
    • The article later talks about several of the demonstration projects that offer printouts for discussion or putting in the patient’s chart.
  • Humana members can also give access to family members and providers through their user names and eventually direct access.
  • Kaiser’s PHR allows the member to see when a lab was done, the results, and send questions to the physician directly through the tool.
  • It talks about one of the PHRs which automatically hides certain information from the provider but can be unhidden by the patient.
  • I thought the article was going to skip the subject of whether this population would adopt this technology, but towards the end it points out that according the US Census Bureau only 35% of people over age 65 have computers and only 29% have access to the Internet. [Of course, this will change as the Baby Boomers move into this phase of their life.]

senior-w-computer.jpgThe other critical component in my mind is that these things have to be automatically populated. The patient can contribute family history, allergies, and OTC utilization, but why should I have to type in my physician visits or prescriptions. That should all come directly into a system. There is a lot to prove here. The concepts are sound and rationale, but it’s a complex system with limited historical adoption of consistent technologies. People won’t stand for having to rebuild a new PHR every year as vendors and companies cycle through trying to settle on a few core products.

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

Pharmacy Satisfaction Is Declining

November 30, 2007 by George Van Antwerp 0 Comments

According to a WilsonRx survey that was published in the same Retail Clinician magazine (Winter 2007), “customers express a decline in overall satisfaction with their pharmacy in 2006, probably due to difficulties with Medicare Part D and rising copays.” The highly satisfied percentage dropped from 58% to 53%. I still think many industries would be happy with a 3% dissatisfied population. (see www.pharmacysatisfaction.com for more information)

I find it difficult to believe that people would blame the pharmacy for rising copayments or the complexities of Medicare Part D. But, everyone looks for a scapegoat for their problems. I think a more interesting question or survey would be how people judge satisfaction with their pharmacy. Is it wait time? Is it friendliness of the staff? Is it access to the pharmacist? Is it price when they pay cash? Is it willingness to call their physician or insurance company to resolve issues?

I was pleasantly surprised recently when I was at a Walgreens and saw the pharmacist come out from behind the counter to great an older patient, ask them about their wife, and spend time trying to see what she could do to help the couple. Usually, you think of the bigger chains as being so focused on production that you interface with the pharmacy technicians.

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

Retail Clinician Survey

November 30, 2007 by George Van Antwerp 0 Comments

Back when I visited a retail clinic (i.e., MinuteClinic, RediClinic, TakeCare), I grabbed a copy of the Retail Clinician magazine that they had. Finally, I am getting to the bottom of that reading pile to browse through it. It had a survey of 150 nurse practitioners that work in the clinics which revealed the following:

  • 57.2% of them work in clinics that are in chain drug stores
  • 63.7% of them came from a physician’s office or hospital / ER
  • 58.1% of them see more than 10 patients per day
  • Their busiest days are Mondays and Saturdays
  • 57.2% said that they write prescriptions for more than 70% of the patients they see
  • 53% said that they give OTC recommendations to less than 40% of their patients
  • 56.2% said that more than 40% of the patients they see don’t have a medical home (i.e., a primary care physician)
  • 21.2% of them saw their challenge as health care claims adjudication and 24.6% of them saw their challenge as public awareness
  • 79% said they would be receptive to handing out patient education materials
  • 67% said they would be willing to hand out product samples
  • 50% of them said that they consult the pharmacist 1-5 times per day for questions

I don’t have the data right now to compare this to physician’s practices, but it would be an interesting comparison in terms of percentage of times Rxs are written, etc. As I mentioned the first time I went to a clinic (I have been back since), I agree that this is a great avenue for information distribution. It is much less rushed than the physician’s office.

 

 

 

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

Employee Satisfaction – Drug Utilization

November 30, 2007 by George Van Antwerp 0 Comments

Over the past decade, colleges have had to reveal more information about crime statistics on campuses which creates a new way of comparing colleges. For some random reason, I was thinking earlier about how interesting it would be to see drug utilization by employer as a proxy metric for job satisfaction and culture. Imagine if you get see the utilization of anti-depressants or sleeping pills by employer. That might help you understand how people feel about the company and the amount of on-the-job stress.

I know that clinically someone is going to beat me up about depression being a serious disease, but this is not meant to make light of the disease. It is simply an acknowledgement that abstracted medical data could reveal interesting things about companies – number of worker’s compensation claims, use of diet drugs. Just like I would argue that knowing the BMI of company employees would tell you a lot about the role of diet and exercise in a company.

I can remember preparing for annual reviews with clients and looking at their top 10 therapy classes based on utilization. You could quickly tell things like average age and other attributes of the company.

General Thoughts, Healthcare, PBM / Pharmacy

The Express Scripts Outcomes Conference

November 28, 2007 by George Van Antwerp 1 Comment

In my time at Express Scripts, one of the most interesting events was our Outcomes conference. We invited about 700 clients to come to beautiful St. Louis for 3 days to hear from our research group on trends and new programs to manage pharmacy benefits. All the large PBMs (Medco, Caremark, Express Scripts) put out annual publications on their research.

Express Scripts puts the publication along with the slides and audio out on the Internet. Here is a quick summary from 2007 which I took from the website.

  • Brand prices rose 6.9% in 2006, while generic prices fell 5.7%, which shows how generics continue to play a major role in managing prescription-drug trend.
  • 2006 drug trend of 5.9% – lowest in a decade.
  • More than $50 billion worth of brand drugs are scheduled to lose patent during the next five years. Important examples include Prevacid® in 2009 and Lipitor® in 2010.
  • Twenty percent of drug spend comes from specialty medications, but relatively few people use these types of drugs. This portion is projected to grow to 26% by 2010.
  • There are over 600 biopharmaceuticals products in the pipeline. This trend is being driven by the Human Genome Project, breakthroughs in the field of biopharmaceuticals, and a philosophical change in the pharmacy industry.
  • A growing number of members are becoming engaged in their decisions about prescription drugs, seeking information on drug-therapy alternatives and the prices of these alternatives. For example, 21% of the users on Express Scripts’ website used the Price Check feature during Q4 2006.
  • What Patients Don’t Know About Their Prescription-Drug Benefit
    • 64% could not correctly identify the type of pharmacy benefit plan they enrolled in.
    • 60% could not correctly identify the amount of their generic copayment.
    • 50% indicated their physician or pharmacist never or seldom talked to them about generics.
  • Several active ingredients work to influence the effectiveness of the information that plan sponsors provide to members:
    • Opportunity – Making sure you provide the information at the time in which the member is most engaged in the decision-making process.
    • Incentive – Members sometimes need an additional short-time incentive to choose the lower-cost option.
    • Assistance – Changing medications requires considerable assistance, which provides a barrier in making this adjustment.
  • The hypothesis was that Part D beneficiaries would take advantage of lower-cost generics to avoid hitting the donut hole. However, the reality is that many beneficiaries are hitting the donut hole unnecessarily and could take advantage of lower-cost generics.
  • Express Scripts’ research has shown that there is a direct correlation between a higher generic fill rate and the lower percentage of members reaching the donut hole.
  • The hypothesis from Wal-Mart was that low prices on selected generics would result in more volume of other generics and brands as well as increased nonpharmacy store sales. However, their market share increased by just 1% overall, which lead to a minimal market impact on prescription-drug use. Three reasons for this minor effect:
    • Members didn’t always save as much as advertised, and the payment was closer to $6 due to program limitations.
    • Members did not want to unbundle their prescriptions and use multiple pharmacies.
    • Many patients do not consider Wal-Mart a convenient choice.
Books / Articles, Consumerism, Events, Healthcare, PBM / Pharmacy, Research

Patient (Customer) Value – Social Dimension?

November 28, 2007 by George Van Antwerp 0 Comments

I was reading an interesting entry on Forrester’s Marketing Blog about redefining the value of your customer away from ROI to something that reflects their social value.  The author defines social value as:

1) A customer’s knowledge and involvement – in short, his level of expertise and interest in the category and brand. 

2)  How he participates, and the value of his connections – what social activities is he involved with (both on and offline) and where (on what networks is he active).  The value refers to the value of the connections themselves:  are the communities more tightly-knit or diffused, are they public or more intimite.

3) The number of contacts the customer has in each network. 

It made me think about two things: (1) how would we value a patient in healthcare and (2) how do we drive and evaluate social value.

Different constituents would value patients differently [these represent logical hypotheses but not fact]:

  • To a pharmacy, it is the high utilizer that they want.  And, they make the most money off a cash paying customer who buys generic drugs at something close to their AWP (Average Wholesale Price) which is about 70-90% too high.
  • To a PBM, it is the chronically sick patient who fills lots of drugs but is very active in their healthcare so they use the website, use mail, use generics, and don’t call customer service very often.
  • To a managed care company, their highest value customer (or patient) is the healthy individual who is insured so that they collect the premium but don’t actually pay anything out.
  • To the physician, their highest value patient is the sick consumer who needs specialized care which they have to provide (e.g., injections done by the physician).  In a capitated model, this is different because they want to create healthy patients and are incented to promote wellness.
  • To the hospital, their highest value patient is the insured patient who has a complex illness that requires lots of tests or who has an elongated hospital stay.

Driving and evaluating social value is a different animal.  I do believe that providers and insurers should be promoting communities of care where people with diseases can share experiences and information.  That will be a powerful tool in promoting consumerism.  A managed care company (e.g., United, Humana, Wellpoint, BCBS) has enough scale that they could create an anonymous discussion area for their covered lives which was moderated by an expert.  (Not too dissimilar to the disease specific pharmacies that Medco is creating with their Therapeutic Resource Centers.)

Assigning value is more difficult, but it could be a composite score of activity on the web, registration in certain groups, etc. It won’t be perfect, but it is clear that some people are outspoken advocates which can promote or hurt your brand.

Consumerism, Healthcare, Innovation, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Value Propositions, Weblogs
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It Seems So Simple…

November 27, 2007 by George Van Antwerp 0 Comments

In the CVS/Caremark 2007 TrendsRx report, they present a compelling yet simple story about people with chronic diseases.

“Increasing the effectiveness of adherence interventions may have a far greater impact on the health of the population than any improvement in specific medical treatments.” World Health Organization 2003 Special Report “Adherence to Long-Term Therapies: Evidence for Action“

If every four people at risk for a chronic condition such as diabetes, hypertension or stroke:

  • One is unaware that he/she is sick
  • Of those who are diagnosed, one in three doesn’t get the prescription filled
  • Of the two who begin therapy, one stops taking medications within six months.
  • One is compliant with prescribed treatment

This clearly points to issues – the need for wellness programs and preventative medicine, the need to link compliance across MDs/Pharmacies/Patients, the need to drive adherence, and finally helping consumers understand why this important. It seems like simple problems to address, but if you’ve tried, you will realize it is a challenge and would be even if incentives were aligned.

[Sources: Caremark data combined with third-party references including the US Census, Centers for Medicare and Medicaid Services (CMS), the World Health Organization (WHO) among others.  Compiled by Jan Berger, MD, Chief Clinical Officer at Caremark.]

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

CVS / Caremark / MinuteClinic Article and Comments

November 24, 2007 by George Van Antwerp 0 Comments

I will stick with Drug Store News (Nov. 12, 2007) for now.  They had a good long story on the CVS Caremark acquisition building momentum.  They also talk about MinuteClinic which was a separate acquisition by CVS.  As I have said for a while, I think this was a good move.  It creates a lot of opportunity.  The combined entity now has touch points at several stops along the care continuum.  The question (of course) is how to capitalize on this without compromising the core businesses and without making people feel to “controlled” along the path.

From a top down view, the biggest things that jump out at me are:

  • How to expand the care model at the retail pharmacy using MinuteClinic.
  • How to get patient’s to grant access to share data across business units (PBM, retail pharmacy, MinuteClinic).
  • How to provide Medicare Part D type services like MTM (medication therapy management) through MinuteClinic facilities (even if the pharmacist were coming over to use them).
  • How to “value” each patient and determine the optimal mix of services and facilities for them.  For example, if they don’t impulse buy, you might as well get them to use mail.  Or, if they have a lot of maintenance medications that are generic, but they tend to buy a lot of other goods at retail, you might want to pre-fill their prescriptions at mail and ship them to the retail store for pick-up.  Or, if they have kids, you may want to encourage them to use the CVS that is an extra 2 miles away because it has a clinic.

Here are a few things from the article:

  • “So far, the moves are paying off as the company already has realized $660 million of cost savings and continues to anticipate about $1 billion of revenue synergies to be achieved by the end of 2008, with the later coming primarily as it rolls out new PBM offerings” (from Lehman Brothers analyst Meredith Adler in a research note)
  • Chris Bodine was named president of CVS Health Services earlier this year which is where the PBM and MinuteClinic business report up through [by the name of the group it would imply that there are more things to come once they digest these deals].
  • There hasn’t been much about what these new PBM offerings will be, but Tom Ryan (President and CEO) talked about them actively working and trying things that are “integrating our PBM capabilities with our strong consumer connections through our retail business”.  A few opportunities mentioned in the article are:
    • Therapeutic Interchange – [If the retail POS (point-of-sale) system can deliver formulary alternatives to the pharmacists, CVS should be able to help their PBM customers make different decisions to drive formulary compliance (rebated brands and generics) while lowering patient’s copayments.  This would be a big deal to plan sponsors and patients.]
    • Flexible Fulfillment – They talk about allowing traveling patients that use mail to get short fills at retail.  [I think some retail-at-mail solution here will be more creative.  They could do central fill which is a concept where scripts are filled at a mail order facility and delivered to the retail pharmacy for pick-up.  They could split scripts to fill a 7-day at retail and the remaining 83-days at mail (depending on their cost structure).  There are lots of trade-offs here around whether they want foot traffic (for cross-sell) or not.]
    • Specialty at Pharmacy – CVS retail stores fill about $3B worth of specialty prescriptions (think about injectible drugs and drugs that are very expensive).  But, most people want more support and move to a dedicated specialty pharmacy.  [I am not sure of the economics and logistics of storing specialty medications across a broad retail base versus simply using retail as a referal source for their specialty pharmacy.  Now, some specialty drugs are still shipped directly to MDs and billed under a different fee schedule on the medical side.  If they could use MinuteClinic as a dispensing location for specialty drugs, they could offer a convenient service to patients, lower costs for their clients, and gain visibility into drugs being coded as medical services.]
    • MinuteClinic is in the process of creating a pilot program to monitor health assessments and screen for illness just for PBM clients.  [If they could figure out a way to offer preventative care, they might be able to figure out how to take risk.  It would be a powerful story to offer clients a service that bore risk around spending, trend management, and overall care / outcomes.  With a few other acquisitions or partnerships, they could begin to look very different.]
    • Corporate Clinics are briefly mentioned.  [This is another interesting pitch for me.  If you put a MinuteClinic on-site at many of their large corporate clients and/or in areas where they have a dense population, they could provide health services and use the clinic to “steer” (as legally allowed) patients to CVS, mail-order, or their specialty pharmacy.  For companies, this increases their stickiness to CVS on the PBM side while reducing time away from work for their patients.]
    • One-third of their PBM business is up for renewal in 2009 [so they have about 6-months to demonstrate the uniqueness of this story to those clients to easily renew them without major price concession.  As I sure their competitors will be focused on conflicts of interest, too much turmoil, and other FUD (fear, uncertainty, and doubt).]
    • On a fairly different note, another article about CVS talks about their new advertising campaign focused on women as caregivers including a new website for people to share personal stories.  (www.ForAllTheWaysYouCare.com)   The initiative seems to have an impressive group of panelists.

 forallthewaysyoucare.png

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

Highest Spending at Independents

November 24, 2007 by George Van Antwerp 0 Comments

In the November 12, 2007 issue of Drug Store News, they have a Pharmacy Facts section.  This month’s fact is about how much pharmacy customers spend on prescription medicines per month at the different types of pharmacies.  This is based on a survey done by WilsonRx.

  1. Independent – $87
  2. Mass Merchant – $82 (e.g., Target)
  3. Food – $78
  4. Chain Drug Store – $75 (e.g., CVS or Walgreens)
  5. Mail / Online – $69
  6. Clinic – $40

Even being close to the data, I am not sure what this tells me:

  • Older patients (who have more Rxs and therefore higher spend) go to the independents?
  • People without insurance and who pay full-price go to the independents?
  • The independents aren’t as able to drive formulary compliance and/or generic utilization to help lower out-of-pocket costs for their patients?
  • That people that go to independents are less likely to divide their spending between multiple pharmacies (i.e., use retail and mail order)?

It is an interesting data point, but without context, I am not sure how anyone can do anything with it.  But, that is how data gets manipulated.  I could use it to support any theory above.

Books / Articles, Healthcare, PBM / Pharmacy, Research

Insider’s View is Too Close

November 23, 2007 by George Van Antwerp 0 Comments

As I think it can be in any industry, a big challenge is immersing yourself in your field while at the same time maintaining and outside-in perspective.  The challenge of losing that perspective is (A) using language that people don’t understand or (B) creating elequoent solutions that aren’t practical.

(A) From a communication perspective, the issue of language is one where I am sure most of you could come up with examples.  There are numerous times when I have gotten something and had to read it a few times to understand whether it was an EOB (explanation of benefits) or a bill.  I remember trying to write letters to patients and having to re-write them numerous times to get them ready to be sent out.

For example, in the PBM world, we would talk about refills versus renewals.  (e.g. glossary) I don’t think many consumers know what a “renewal script” is…but that wasn’t intuitive to us.  [BTW – It means your prescription has no more refills left.]  We would talk about DAW prescriptions [aka Dispense As Written].  Even worlds like formulary caused people problems when we used it on the website or in a letter [preferred drug list sometimes worked better].  Another one that threw everyone off was saying “this drug is not covered”.  Did that mean the patient couldn’t get the drug?  Did that mean the patient had to pay cash for the drug, and if they did, did they receive the client’s negotiated discount at the pharmacy?  Did that mean it required a Prior Authorization? 

I think the point where this really threw people off was when we communicated to physicians.  In my job driving generics, I remember reviewing the physician letters and seeing that we always called the drugs by their generic name – omeprazole (Prilosec), fluoxetine (Prozac).  When I pointed out that physicians don’t always know the drug by its chemical name, people were shocked.  Sending a letter to a physician saying you should switch from Nexium to omeprazole was pretty ineffective if they didn’t know what drug we were recommending.  I always tried to get us to say “the generic version of Prilosec (omeprazole)”.

hmo_blue_card.gif

(B) On the side of an overly eloquent solution, I have been stymied by my insurance card.  It is a national coverage card from BCBSMA.  It may work great in Massachusetts, but in Missouri, the providers can’t find the group ID on the card.  This has happened everytime we use it.  If they hadn’t been a client at Express Scripts and I knew their group IDs by heart, then each provider would have to call them. 

The other challenge with the card is that they give you one for each person in the family.  So, if you have 5 kids, you would have 7 cards (which you are expected to carry).  At the doctor for our kids the day, we simply tried to give them the patient IDs for the kids.  They were upset since apparently they have a swipe card system for the BCBS cards and don’t know how to manually enter the patient ID. 

To me, this is a great example of something that has been totally reengineered and become less effective.  I am sure they were putting more information on the card and pushing the group number to a corner wasn’t a big deal.  I am sure individual cards is great for older kids that carry their own.  I am sure smart cards is a great thing.  Unfortunately, all it has done is make it harder not easier. 

On the positive, I like BCBSMA’s general approach, service model, and many other things so the card is a hassle but not likely to impact my overall satisfaction.

Consumerism, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy

Literacy Adds Additional Challenges

November 21, 2007 by George Van Antwerp 1 Comment

I have some other seniors statistics that I will add later, but this morning I was researching seniors and healthcare communications.  I was surprised to see some of the data around how literacy presents a big challenge for them.  Here are a few facts and some links for more information:

  • “People aged 70 years and older with limited literacy skills are one and one half [1.5x] to two [2x] times as likely to have poor health and poor health care access as people with adequate or higher reading ability, according to a study led by researchers at the San Francisco VA Medical Center and the University of California, San Francisco.” (source)
  • “One in four [seniors] had limited literacy. In practical terms, these elders ‘may have trouble reading basic health information or pill bottle instructions'” (source)

  • “Although only 12 percent of the U.S. population was age 65 and older in 2003, they accounted for one-third of all patients admitted to the nation’s community hospitals in that year – over 13 million hospital stays, according to the Agency for Healthcare Research…The elderly also accounted for 44 percent of all hospital charges  nearly $329 billion.” (source)

  • “Senior citizens (65+) scored far lower than younger people in a 2003 literacy test. The test had a maximum score of 500.” (source)

literacyhlth-6-09-12.gif

  • “Less than one out of six U.S. adults have “proficient” health literacy, according to the report released this week, but for seniors it is only about three out of a hundred.  A staggering 29% of senior citizens do not even have “basic” health literacy.” (source)

I think this is an interesting angle that you don’t hear much about.  We spend all this time trying to think about what to say and other creative aspects, but sometimes we have to simplify the story to get to the point of being usable.  Here are a few other links if interested in the topic:

Consumerism, General Thoughts, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Research

Zyrtec to Go OTC

November 21, 2007 by George Van Antwerp 1 Comment

By now, everyone should be familiar with Claritin (loratadine) and Prilosec going OTC.  They were really the first two blockbuster drugs to go OTC (over-the-counter).  Motrin / Advil is available both as a prescription strength and OTC.  Zantac (ranitidine) is also available OTC.

From a personal perspective, I am happy.  I have two kids with allergies that are on Zyrtec (which is off formulary) and where I pay $50 / month per kid.  I also find this an interesting DTC (direct-to-consumer) challenge for managed care plans and PBMs.  I had the opportunity to run both of our programs (Claritin and Prilosec OTC) at Express Scripts for this which included coordinating with modeling and clinical teams, designing the communication strategy, talking with clients, and helping drive OTC utilization where clinically appropriate.

From some initial research, I found the following:

  • Zyrtec (5 and 10mg tablets and 5 and 10mg chewables) and Zyrtec-D (1mg syrup and extended release) were approved by the FDA to go OTC. (article)
  • McNeil Consumer Healthcare (subsidiary of J&J) will be responsible for the OTC products.
  • McNeil has said the products will be available in late January 2008 and will be less than 1/3 the price of the prescription.
  • Non-Sedating Antihistamines (NSAs) represent 7.8% of the commercial Rx market and Zyrtec had about 37% marketshare in 2006 (generics had greater than 50%) with a typical member using 3.65 Rxs per year (or 0.29 Rxs PMPY).  (per Express Scripts Drug Trend Report)

Taking common Rxs to OTC status makes a lot of sense, but also creates a lot of questions:

  • If there are interactions with the drug but it no longer shows up as a claim, does this create a DUR (drug utilization review) problem?
  • Do pharmacies make more money on the generic Allegra or on the OTC?
  • For PBMs that make spread on claims and/or get a claims administration fee, how do they align their incentives with their clients (employers, managed care) that would prefer to see the patient use the OTC?
  • Which costs less out-of-pocket…the generic Rx or the OTC?

So, what should you do?   If you’re a consumer, you will likely hear something from your employer, managed care company, PBM, or pharmacy.  If your a company, you need a creative plan to execute against.  Contact me to learn more about how we (Silverlink) are going to help our clients.  [I can’t give away all the secret sauce here.]

But, if you are generally interested in this topic, here are a few links for you:

Consumerism, Events, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Research
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WSJ on Texting in Healthcare

November 20, 2007 by George Van Antwerp 3 Comments

Obviously my entries about texting in healthcare are timely. Today’s WSJ includes an article (pg D1) by Rachel Zimmerman called “don’t 4get ur pills: Text messaging for Health”.

She points out several compliance type programs where this is being used (outside the US)…birth control pills (England), AIDS (Australia), psychological support for bulimics (Germany), and smoking cessation (New Zealand).

Apparently, the American Telemedicine Association is developing guidelines for the appropriate use of text messaging in healthcare (along with other new media). The executive director, Jonathan Linkous, was quoted as saying “There are obviously times when telemedicine is inappropriate. Texting someone to tell them they have cancer is one of them.” [I think we can all agree.]

Of course, with health costs being concentrated in a small percentage of the population which is typically older, can texting make a difference? It isn’t easy to type on those small mobile phones with arthritis. Lots of seniors don’t even carry mobile phones. Plus texting is a whole different message as the article points out. My kids will probably get it much better than me.

Plus, using condense information can be risky. We had this problem in sending messages to pharmacies where we had a finite amount of characters to say “Drug A is not covered but the following drugs are covered but if medically required then the physician has to call 800-xxx-xxxx to request a prior authorization”. Other than reminders or pushing them to a very specific action it may be a challenge.

I think sending links or phone numbers via text message could be helpful. For example, using co-browsing, a company could trigger a message a message suggesting the patient call-in for more information or also go to another site. [What is co-browsing…this is when a company (typically a call center agent) can see where an individual is on the web and what they are looking at to help them.]

She mentions a few companies:

There certainly is a need for something that is quick and ubiquitous around healthcare. For someone under 40, I think texting could work great. For people over 40 (an arbitrary line), I think automated voice is better. It is just as quick. It is ubiquitous. And, it can be personalized and change during the call versus going back and forth via text messages.

Books / Articles, Business Tools, Consumerism, Healthcare, Innovation, Managed Care, Marketing / Communications, PBM / Pharmacy, Technology

Reverse Auction for MDs / Hospitals

November 20, 2007 by George Van Antwerp 1 Comment

auction.jpgIn healthcare, you sometimes hear people talk about waiting (at the pharmacy, for an appointment) while other people seem to get right in.  A lot of this has to do with geography (remember ‘healthcare is local’) but it also has to do with cycles.  For example, Mondays are always busier after the weekends.  [I have heard ERs are often busier during a full moon, but I don’t have research on that (and didn’t look).]

Certainly, another driver of healthcare costs are some of the large capital purchases at hospitals for imaging or other diagnostics.  If every hospital has to have the latest and greatest but they are only use 20% of the time, that isn’t an efficient use of capital across the healthcare system.  If you have to spread that cost for the equipment across 1/5th of the potential patients, it means you are overcharging by 5x.

Reverse auctions wouldn’t be easy, but BidRx pulled it off in pharmacy.  [I am not sure how successfully.]  The reverse auction model would be consumerism at its best.  The consumer would post their needs – a CAT scan, a PCP, a neurosurgeon, open heart surgery.  Physicians or hospitals would bid on their business based on the parameters – timing, price, etc.

In a theoretical sense, it would be interesting to test and see if it would work.  But, my objective was not to sit in the ivory tower, but to look at a model that would improve healthcare capital efficiency by better utilizing fixed costs.  If hospitals and MDs could bid for patients to fill their slow times, wouldn’t the following be possible:

  • Less need for capital redundancy (i.e., every hospital would not need to have the same equipment)
  • Less wait times for patients since they would be slotted in to open times
  • Less peaks and valleys at doctor’s office and hospitals since they would be offering a “discount” for you to come on Wednesday versus everyone wanting to come on Monday

Participation wouldn’t be easy, but ultimately, changing our healthcare model won’t be easy.  Just an idea.  There is something here to make the system more efficient.

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

Mashing Two of My Posts

November 19, 2007 by George Van Antwerp 1 Comment

I was thinking about Google’s SMS service earlier today (see post on this).  Separately, I was thinking about my post on remembering health information (e.g., drugs, strength, previous lab values).

So I went to one of the Google Health Blogs to suggest the idea.  Unfortunately, the e-mail they list bounces back and you can’t leave comments…strange.  Why not combine the two comments from my earlier blogs was my suggestion?  Obviously, it only appeals to a piece of the population, but I would love to be able to text message my PHR (Personal Health Record) with “Rx name, strength” or “PCP name, phone” or “HCL scores and dates”.  [Look at myPHR, iHealthRecord, ActiveHealth, Microsoft, or Google for PHR solutions.]

It is always so difficult to remember that information, but if I could get it texted to me in a few seconds, it would be great.  I have to believe there is some unique code in my Blackberry that could serve as a unique identifier for security purposes.  Just a thought…

BTW – If you try to find Google blogs on health, you find out there are dozens of Google blogs:

“There’s all this hubub about what Google and Microsoft are doing,” Aetna CEO Ron Williams (pictured) said this afternoon on a visit to Health Blog HQ. “We’re perplexed by the fact that their vaporware gets all this attention and we get very little.” (comment on the WSJ Health Blog)

Don’t forget to add this blog to your reader or sign up for e-mail updates whenever a new entry is posted. 

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

What Have You Failed At Today?

November 17, 2007 by George Van Antwerp 0 Comments

I caught this story on ABC last night about entrepreuners.  It made an interesting point about the need to fail and learn from your failure.  In summary, it was basically saying that people who took risks, failed, and spent the time to learn from their failures ended up more successful.

I think that is very relevant to the world of healthcare communications.  Any program should have a test plan of ideas that are constantly being varied to see what works best.  Each micro-niche of the population is going to respond differently.  If you aren’t out there trying different things, you won’t optimize the success of your programs.

Of course, this is easier said than done. You need a culture that believes in failure.  You need a way to learn from your mistakes.  You need people that are willing to admit they were wrong.  You need a measurement tool to document the success of one attempt versus the other.  And, you need to understand what can be varied to drive change.

Let’s take a simple example here.  In the world of automated voice communications, you can vary dozens of things:

  • Which voice should you use – gender, age, accent?
  • How should the voice speak – casually, formally, authoritarian, consultative?
  • What speed should the voice be at – normal pace, fast, slow?
  • What time of day should you call?
  • What day of the week should you call?
  • Should you leave a message or call back?
  • How many times should you attempt to reach the patient?  Within what window?
  • How long should the call be?
  • Should the call be complemented by letters or other outreach?
  • Should the call offer to connect them to a live agent?

I could go on, but I think you see the point.  Experimentation is key and makes a difference.  I am not even getting into the thousands of variables in the messages. 

So, go out and fail at some new program to communicate and engage with your patients.  Learning faster is your best way to succeed. 

Consumerism, General Business, Healthcare, Innovation, Leadership, Managed Care, Marketing / Communications, PBM / Pharmacy

Would You Use a Pharmacy Kiosk?

November 17, 2007 by George Van Antwerp 2 Comments

Another question from a few years ago that I thought I would throw out here [while I wait for my connecting flight in Charlotte]. Would you use a pharmacy kiosk to drop off your prescription and pick up your prescription as long as you had access to a pharmacist via video conference?

This was an idea that I worked on for about a year. The concept was the following:

  1. Develop a kiosk that had the following functionality:
    • A scanner for you to scan in your paper prescription, insurance card, and identification;
    • A video conference connection for you to talk to a pharmacist who was located remotely using a phone receiver for privacy;
    • A credit card swipe for payment; and
    • Stock the top 200 drugs which could be picked and labeled via robotics and dispensed real-time after your claim was adjudicated and copay collected.
  2. The technology was going to be a blend of what Duane Reade had piloted in NY and what RedBox had created in the DVD space.

redbox_kiosk_1_300.jpg + dr-kiosk.jpg

These kiosks could then be used by the different constituents in the following way:

  • Retail pharmacies to serve as an afterhours pharmacist for certain drugs
  • PBMs as a way to serve employers by putting a kiosk on-site for employees to get acute drugs or short-fills for movement to mail order
  • FDA as a secure way of managing behind-the-counter drugs such as Sudafed where dispensing could be tracked electronically across pharmacies
  • Grocery stores or other retailers as a low-cost customer service play of offering their customers access to drugs without having to invest in inventory and physical assets

I had lots of debate with pharmacists about this.  The pushback of course was whether I was trying to replace or dis-intermediate them.  That was not the objective but rather trying to find a way to allow them to focus on truly providing counseling to patients who needed it while allowing patients filling maintenance drugs or simple acute drugs to get them delivered at the lowest cost.

Given the pharmacist shortage, this seemed like a logical solution to me.  Who knows.  There might be an adoption of this.  It is probably like automated grocery store lines.  I remember seeing them about 10 years ago at a few places and just within the past 2 years they have taken off everywhere.

instymeds.jpg 

The one company that had a similar concept, raised funding, and seems to be getting a little progress is Instymeds.  They have focused on using the technology for rural hospitals where pharmacist staffing and afterhours pharmacy access is difficult.  When I spoke with their CEO, they had raised over $10M, had very patient VCs that were willing to wait out the changes needed in the regulatory environment, and had millions from previous successes in the entrepreneurial space.  I wish them luck.

Here is my older entry on some basics around kiosks in healthcare.

Healthcare, Innovation, PBM / Pharmacy, Software, Technology

Some Pharmacy Statistics

November 16, 2007 by George Van Antwerp 0 Comments

statistics.jpgWhen I worked on my start-up, I collected a bunch of data that I used in my business plan and pitch documents.  I thought they would make an interesting read for many of you.

  1. Size – The prescription drug market is enormous and growing every year. Current estimates put the market size at $221B, and it is projected to grow to $520B by 2014 .
  2. Marketshare – In 2004, according to the National Association of Chain Drug Stores (NACDS), the pharmacy market share was divided as follows traditional chains (41%), mass merchants (9.7%), supermarkets (12.2%), independents (18.3%) and mail order (18.7%). Walgreens had 14% market share.
  3. Cost Pressures – The economic situation for pharmacies is complicated by several forces putting pressure on them:
    • The growth of the Pharmacy Benefit Management (PBM) company has increased the concentration of insured lives within a few Fortune 100 companies forcing the pharmacies to accept lower reimbursement rates;
    • There are now more than 55,000 retail pharmacies in the US and an overcapacity of mail order pharmacies which is more than can be profitably supported;
    • The largest companies such as Walgreens are rapidly leveraging innovative technologies to allow them to fill drugs at a much lower cost while others are clinging to a high touch, convenience model that is not sustainable; and
    • A shortage of thousands of pharmacists in the US has driven starting salaries for pharmacists above $100,000 in some markets.
  4. Growth – The cost pressures facing pharmacies are mitigated by two things – inflation and utilization. Both continue to go up year over year and have dulled the effect of economic pressure. According to Express Scripts 2004 Drug Trend Report, Per Member Per Year (PMPY) utilization is 13.1 prescriptions for insured patients. Assuming a 6% annual growth in prescription utilization, that means that the average insured consumer would use 18.6 prescriptions PMPY by 2010.
  5. Pharmacist Staffing – A recent article estimated that the current pharmacist shortage in the US of 4,000 to 8,000 open positions will increase to 157,000 by 2020. This staffing crunch combined with the payor’s move to consumer driven healthcare where the patient has greater responsibility for their healthcare dollars will put incredible stress on the system. Just as patients need the trusted pharmacist to play counselor or coach, the workload will have increased to the point where they do not have the time to spend with them. In 2005, these issues led Walgreens pharmacists to briefly strike noting the risk to patient safety.
  6. New Models – An increasing number of employers are building on-site pharmacies, and several companies are piloting “vending machine” type solutions for pick-up of dispensed medications. In late 2005, the Department of Defense issued an RFI to explore a telepharmacy solution to replace their Military Treatment Facilities (MTFs) . Some states such as North Dakota are piloting a telepharmacy solution which is a model allowed in several states where a pharmacy technician can dispense while being monitored remotely by a pharmacist.
  7. Patient Satisfaction – Although studies show that pharmacy patients are generally satisfied, 56% of household consumers report that they use more than one pharmacy to fill prescriptions according to the WilsonRx Report 2005. And, according to NACDS, 68% of people choose a pharmacy based on location.
  8. Loyalty – Even though location is a huge influencer, a Morgan Stanley report showed that the willingness to switch to mail was highest at big chains – Walgreens (44%), Wal-Mart (41%), and CVS (35%). Given the concentration of marketshare in these stores and their growth forecasts, it seems logical that the marketshare could be re-distributed to locations that are already visited like grocery stores. According to the Food Marketing Institute (FMI) shoppers make and average of 2.2 visits to the grocery store each week.
  9. Consumer Driven Healthcare (CDHC) – CDHC is used to refer to a lot of different scenarios in which the burden for managing cost is pushed to the patient. This includes high deductible plans, Health Reimbursement Arrangements (HRAs), Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). One of the biggest issues is that this is similar to the movement to 401K plans, but in healthcare, there is no decision support infrastructure. Initial estimates are that 40% of employers will offer this type of plan design over the next few years. This will put pressure on the pharmacist to act as this decision support resource.
  10. Aging of the Population – With the ongoing aging of the population and forecasted growth in people age 65+, this growth in prescription drug use will continue. Based on the Medical</a Expenditure Survey from 2002, the differences in utilization of prescriptions increases dramatically as people age. For example, people 35 to 44 use 7 prescriptions per year while those 45 to 54 use 12 prescriptions per year and those 65 to 74 use 24 prescriptions per year.
Consumerism, Healthcare, Innovation, Marketing / Communications, PBM / Pharmacy, Research
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Where are the generic only pharmacies?

November 16, 2007 by George Van Antwerp 1 Comment

A few years ago when there was all the debate around Canadian reimportation of drugs, I had the opportunity to write the position paper for Express Scripts on this topic and work with our internal and external counsel to summarize our position with our clients.  At the time, payors and patients were very interested in getting branded drugs filled outside the US and shipped back to them.  [Or, in some cases, driving across the border to get the prescriptions filled.]

In working on that project, I learned that the government control that worked to keep brand prices low – at a simple level think one buyer – had the opposite effect on generics.  Generic drugs actually cost more outside the US where there is massive competition for the drugs.

As I have talked about before, consumers who pay cash pay a ridiculous mark-up on generic drugs even in the US.  Given those two facts, I remember talking with a friend of mine about opening generic only pharmacies just inside the US border to attract Canadian citizens.  Problematic legally I am sure, but the concept seemed like a genius move pre-Medicare Part D.  You could save the uninsured and seniors massive amounts of money.

I haven’t had the time to do the research, but I still have to believe there is an opportunity for a highly efficient pharmacy which offers generics closer to cost.  I would see it more like a membership.  You pay $100 per year to belong and you get your prescriptions for the pennies that they cost rather than your copay or the cash price.  Everyone wins.

But, here we are four or five years later and to the best of my knowledge no one has done it.

General Thoughts, Healthcare, Innovation, PBM / Pharmacy
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Most Prescribed Drugs for Kids

November 15, 2007 by George Van Antwerp 0 Comments

Another factoid from USA Today…Healthcare (due to costs) has been a front page issue in business for most of the past decade. Just over the past 3-5 years has it become a front page consumer issue. It is rare that I can pick up USA Today, go to MSN, or open up my iGoogle news page and not see one or more article about healthcare. This is certainly a positive step in the consumerism path.

None of us would be ready to take on more responsibility for our healthcare until it becomes ingrained in our head about the basic market dynamics and sources of information.

This list of drugs is pretty telling about children. As I have heard asked many times “Are these conditions really more prevalent today or are we better at diagnosing them or are we simply a culture that is more willing to medicate marginally impacted people to stop any problem?”

Here is a chart from the 2004 Medical Expenditure Panel Survey which shows the top 5 drugs based on spending (in millions). (shown in USA Today Snapshots on Nov. 13th on the frontpage of Section D)

Healthcare, PBM / Pharmacy, Research

P4P – Pharmacists vs. MDs

November 15, 2007 by George Van Antwerp 0 Comments

p4p.jpgI only heard a piece of the presentation yesterday at AHIP (America’s Health Insurance Plans), but I was a little surprised. They were talking about the topic of P4P (pay for performance). The survey population clearly supported P4P for MDs with the primary objective being preventative care and compliance. This focus did surprise me since I imagined it would have been more focused on cost management.

The survey population wasn’t interested in all at P4P for pharmacists. This surprised me a little bit especially given the access differences. Certainly, physicians can impact bigger dollar decisions (e.g., drugs vs wellness or surgery vs other options), but if the focus is on preventative care and compliance, they pharmacists have easy access to the patients.

Pharmacists are a walk-up option. No appointment is needed. Some pharmacists really know their patients. Both parties are really busy so rewarding them for the additional responsibility is appropriate.

I think it was about 20% that thought about rewarding pharmacists and clearly the focus (not surprisingly) was on driving formulary compliance and generics. In many cases, they have rewards to do this today.

If you’re interested in seeing one of the studies out there, here is one on Medicaid. The conclusion was:

“Medicaid directors and their staffs generally report positive feedback on their pay-for-performance programs and believe that the overall quality of care being provided is improving, although they have mixed opinions about cost savings resulting from the programs. Directors are considering changing some of the measures, incentives, and even the data collection strategies to improve their existing programs and to shape planned programs. Overall, they believe that pay-for-performance is adding to their repertoire of tools to improve the care provided to their Medicaid populations.” [K. Kuhmerker and T. Hartman, Pay-for-Performance in State Medicaid Programs: A Survey of State Medicaid Directors and Programs, The Commonwealth Fund, April 2007]

Business Tools, Healthcare, Managed Care, PBM / Pharmacy, Research
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