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Predictors of Non-Adherence

December 29, 2010 by George Van Antwerp 0 Comments

From the literature…(NEJM 353:5 August 4, 2005, page 491) with my comments about how to address them.

  • Predictor: Presence of psychological problems, particularly depression
    • Study: vanServelien et al., Ammassari et al., Stilley et al.
  • Predictor: Presence of cognitive impairment
    • Study: Stilley et al., Kino et al.
  • Predictor: Treatment of asymptomatic disease  [Need aggressive reminder system to initial create habit]
    • Study: Sewitch et al.
  • Predictor: Inadequate follow-up or discharge planning.  [Educational follow-up]
    • Study: Sewitch et al., Lacro et al.
  • Predictor: Side effects of medication  [MD or RPh education of patient]
    • Study: van Servellen et al.
  • Predictor: Patient’s lack of belief in benefit of treatment
    • Study: Okuno et al., Lacro et al.
  • Predictor: Patient’s lack of insight into the illness  [New to therapy educational content]
    • Study: Lacro et al., Perkins
  • Predictor: Poor provider-patient relationship  [Tips to patients on how to interact with MD]
    • Study: Okuno et al., Lacro et al.
  • Predictor: Presence of barriers to care or medications  [Barrier survey and personalized info to address barriers]
    • Study: van Servellen et al., Perkins
  • Predictor: Missed appointments  [Appointment reminders]
    • Study: Servellen et al., Farley et al.
  • Predictor: Complexity of treatment  [MTM type services]
    • Study: Ammassari et al
  • Predictor: Cost of medication, copayment, or both  [Value based plan design]
    • Study: Balkrishnan, Ellis et al.
Books / Articles, Consumerism, Healthcare, Marketing / Communications, PBM / Pharmacy, Research, Silverlink, Value Propositions

Save $30B in Medicaid (over next decade)

December 28, 2010 by George Van Antwerp 1 Comment

The big assumption around savings is always that you’ll have to cut benefits. What if that wasn’t true? Why wouldn’t the government be making those changes?

A new report by The Lewin Group explores this. 73% of Medicaid spending is based on fee-for-service plans that are administered by state officials. Not a big surprise to those of us that believe in the private market over big government, but they leave a lot of money on the table compared to Medicare and managed Medicaid.

The savings come from four areas:

  1. Generic Drug Dispensing: Medicaid FFS is less effective at encouraging the dispensing of generic drugs in place of brands. The generic dispensing rate in Medicaid FFS averages 68%, compared to an average 80% generic dispensing rate in Medicaid MCOs. While some of this difference is attributable to demographic differences between the Medicaid FFS and MCO populations, much of the generic dispensing difference persists when looking within each demographic subgroup.
  2. Dispensing Fees: At $4.81 per prescription, the national average dispensing fee that Medicaid FFS programs pay to retail pharmacies is more than double the average dispensing fees paid by Medicare Part D payers, Medicaid managed care organizations (MCOs), or health plans in the commercial sector.
  3. Ingredient Costs: The rate at which retail pharmacies are reimbursed for the actual medication ingredients (pills, capsules, etc) is also higher, on average, in Medicaid FFS programs than in Medicare Part D or the commercial sector.
  4. Drug Utilization: The number of prescriptions dispensed per person is typically higher for similar demographic subgroups in Medicaid FFS programs than in Medicaid MCOs for similar demographic subgroups due to less effective controls on polypharmacy, fraud, waste, abuse, and other factors in the FFS setting.

Their study estimates that converting all the FFS Medicaid to a Managed Medicaid model that relies on the typical PBM process would save almost 15% (or about $30B over the next decade).

The report also includes lots of comparative data (state by state) which shows the discrepancies across the US in terms of cost of FFS Medicaid.

Books / Articles, Healthcare, Leadership, Politics, Research, Value Propositions

Is the Male “Customer” a Red Herring (in Healthcare)?

December 26, 2010 by George Van Antwerp 0 Comments

If you haven’t paid attention, the gender inequity in salaries in some areas seems to be broken.  For city-dwelling single people in their 20s, females median full-time income is 108% of their male counterparts (Reach Advisors research of 2008 Census Bureau data).

And, if you look at the statistics from “The Rise of the Sheconomy” in Time (11/22/10), the statistics paid a clear picture of change:

  • 35% of women (vs. 27% of men) ages 25-29 hold a bachelor degree or higher
  • Women hold 49.6% of non-farm jobs in the US
  • Women own 29% of companies
  • 64% of women with children under age 6 also work outside the home
  • Women make up 58% of online retail dollars spent
  • Women make 80% of healthcare decisions
  • Women purchased 45% of electronics
  • Women make up 44% of NFL fans
  • Women control 51.3% of the private wealth in the US
  • 35% of wives earn more than their husbands
  • 9 out of the 10 occupations predicted to add jobs in the next 8 years are dominated by women

You shouldn’t be surprised by this.  I personally have several friends that are the stay-at-home dads.  I worked for a women who had “never” been to a grocery store.  And, I know a lot of women who could tell you more about professional football than I could.  (Here’s an older list of facts.)

“Get the guy right and you’ve made a sale; get the woman right and you have a customer.”  (From Marti Barletta in the Time article)

So, will that play out in healthcare or has that ship sailed a long-time ago?  If females make 80% of the decisions, do you really need a male strategy?

Females accounted for 57 percent of all personal healthcare spending in 2004, although they made up just 50 percent of the U.S. population. Across all payers and services, females spent about $1,448 more per capita on healthcare than males in 2004. The greatest disparity was in nursing home care, where females spent nearly twice what males spent.

The gender divide in share of total spending should not come as a complete surprise, because women have a longer life expectancy (80.4 years compared to 75.2 years for men).

The estimates were based on administrative data from Medicare’s National Claims History Files, the Medicaid Statistical Information System and the Medicaid Analytic Extract System. (Source)

At the same time, we know that…

Men Frequently Ignore Symptoms and Are Reluctant to Seek Care Until There Is a Crisis

“Health, United States, 2009,” reports that men from ages 18-44 years were 70 percent less likely to visit a physician in 2007. The report also indicates that men were 80 percent less likely to have a usual source of health care, as compared to women. (source)

So, what does this all mean?  It means that males still represent about 1/2 the healthcare costs although it appears their use of the system is either prompted by a female in their live (wife, mother, sister, friend, caregiver) or by the fact that there is a crisis.  This plays well into the quote about targeted “shopping” versus looking for a relationship.

One could assume that means that males are more likely to use urgent cares and/or clinics…but I couldn’t find that data.

Getting males to be more preventative is one challenge.

Getting them to view a health plan or pharmacy as more tailored to their needs is another.

Is it worth the money and effort or should you (as a healthcare company) appeal only to the females?  I’m not sure I know the answer, but the data certainly points you in a direction.  It would be interesting to look at conditions that are primarily male or drugs that are tailored to male conditions and understand how females drive those decisions and utilization (knowing that a lot probably has to do with whether it’s asymptomatic or not.

Books / Articles, General Thoughts, Healthcare, Marketing / Communications, Research, Value Propositions

Does Playing Sports Mean Your Kids Get Enough Exercise?

December 22, 2010 by George Van Antwerp 0 Comments

I would have thought so.  If my kids were signed up for soccer or baseball, I would imagine that when they practiced that they met the daily expectations for kids.  (I’m pretty sure that the 1 mile run plus 75 minute swim practice for my daughter meets the requirements, but…)

The government’s guidelines for physical activity are that children get 60 minutes a day of moderate to vigorous activity.

What do you think?  In a 90-minute practice, would your kid get 60 minutes of activity? 

Unfortunately, the answer is no.  In a study published in the Archives of Pediatrics and Adolescent Medicine:

  • Kids were only getting 45 minutes of moderate to vigorous activity (which was 46% of their practice time).
  • Only 24% of those monitored met the goal.
  • Soccer was more active than baseball which is more active than softball.

In another study in Medicine & Science in Sports & Exercise, it showed the there are only 16 minutes of exercise seperates fit and unfit kids and that boys get more exercise than girls. 

Should you plan differently?

Should coaches train differently?

I’m not sure, but it puts an interesting spotlight on something that I for one would have taken for granted.

Books / Articles, Healthcare, Research, Value Propositions

State Spending Per Medicaid Enrollee

December 21, 2010 by George Van Antwerp 0 Comments

I don’t post a lot of the information that I get from various press releases, but this one seems interesting.  It ranks the top 10 and bottom 10 states based on Medicaid spending…which is obviously very relevant as we move to more people being covered by Medicaid and also has relevance on physician participation with Medicaid.

This is from CoverageForAll.org and is based on the Kaiser data from statehealthfacts.org:

The 10 states with the highest Medicaid enrollee funding are as follows:

State

 Medicaid Enrollees* Medicaid Payment Per Enrollee*

Total Federal

Medicaid Payment**
1. Rhode Island 195,400 $8,796 $  1,834,227,212
2. New York 4,954,600 $8,450 $47,618,463,035
3. District of Columbia 164,900 $7,932 $  1,445,734,028
4. Alaska 120,800 $7,815 $     890,169,313
5. New Jersey 954,000 $7,814 $  9,425,126,545
6. Minnesota 785,600 $7,700 $  6,977,657,315
7. Massachusetts 1,402,500 $7,490 $10,821,588,261
8. Connecticut 530,300 $7,357 $  4,543,549,844
9. North Dakota 69,400 $7,288 $     534,431,274
10. Pennsylvania 2,090,200 $7,159 $16,299,966,377

The 10 states with the least Medicaid enrollee funding are as follows:

State Medicaid

Enrollees*

 Medicaid Payment Per Enrollee *

 Total Federal

Medicaid Payment**
1. California 10,511,100 $2,701 $38,747,885,430
2. Arizona 1,455,800 $3,066 $  7,506,329,319
3. Georgia 1,685,000 $3,560 $  7,337,801,478
4. Oklahoma 719,200 $3,571 $  3,538,913,312
5. Texas 4,170,100 $3,598 $21,461,296,293
6. Arkansas 692,300 $3,617 $  3,287,326,144
7. Louisiana 1,096,500 $3,823 $  6,067,665,948
8. Hawaii 216,600 $4,051 $  1,206,716,133
9. South Carolina 891,600 $4,260 $  4,436,586,247
10. Michigan 1,855,500 $4,348 $  9,846,978,779

*Kaiser State Health Facts Medicaid Payment Per Enrollee 2007

**Kaiser State Health Facts Total Federal Medicaid Payment 2008

Books / Articles, Politics, Research

Adherence More Important Than Technology

December 20, 2010 by George Van Antwerp 0 Comments

This is a great quote:

“Increasing the effectiveness of adherence  interventions is likely to have a far greater impact on population health… 

  than any improvement in medical treatments, including highly promising advances in biomedical technology”.

–World Health Organization (WHO) report, Adherence to Long-Term Therapies: Evidence for Action. 2003
Books / Articles, Healthcare, Marketing / Communications, PBM / Pharmacy, Research

Alternative Pharmacy Network Whitepaper

December 16, 2010 by George Van Antwerp 2 Comments

Milliman recently put out a whitepaper commissioned by ReStat on “Alternative Pharmacy Network” savings. My general opinion is that they use a lot of data and analysis mixed with some sensationalist statements to make the very obvious point that creating a limited or closed pharmacy network will save you money. (I hope they didn’t charge much for this.)

Net-Net: Limited or tier pharmacy networks are a great idea.  ReStat is building on their experience with Caterpillar which is a great program.  But, the whitepaper was flawed. 

Their conclusions were:

  • Potential Savings – The analysis shown in this report suggests that APN programs can offer a significant savings to employers relative to traditional networks. For an assumed range of consumer use of participating pharmacies, an employer with 10,000 lives could save $200,000 to $620,000 per year, depending on benefit design, without changing cost-sharing structures (see Table 3). Benefit design changes could increase or decrease the savings. A closed APN network (no coverage for non-APN pharmacies) would increase savings for a given benefit design.
  • Sources of Savings – In our analysis, the APN model can achieve lower cost because the PBM and retail pharmacy retain less revenue.
  • The Value of Limited Networks for Pharmacies -For medical benefits, health plans use network providers as part of overall quality and efficiency programs and are promoting network programs such as medical homes and pay-for-performance. Sponsors and PBMs can extend the advantages of networks to the pharmacy benefit. However, the ability to obtain value in a locale depends on the willingness of some pharmacies to participate as network members.
  • Plan Design Changes – Plan sponsors may need to change their plan designs to encourage use of the limited network. For example, the copays for limited network pharmacies may need to be decreased (from current levels) and/or the copays for non-network pharmacies may need to be increased to create a benefit differential between the network and non-network pharmacies. These plan design changes could reduce or increase the projected savings of a limited network, depending on the specific change.

 

My comments about their analysis:

  • They assumed that retail pharmacies would reduce their spread on generics by 44% (and brands by 78%) to be part of a limited network. That might be true for a large client with geographic concentration and for a retailer with low market share, but I think that’s a leap. (see chart below on brand pricing assumptions)

 

  • They say that spread for retail claims for PBMs can be 10-15% of AWP. I’ve seen plenty of deals that were negative (at least on brand drugs). In many cases, spread pricing doesn’t even exist.
  • They claim that PBM’s make money “(as part of a typically Drug Utilization Review program) actively encourages patients to switch to different medications as a core part of its business.” Really. That went out with the AG settlements back around 2004. Chemical substitution to generic equivalents certainly happens, but using DUR to push therapeutic conversion. I don’t think so.
  • They claim that PBM’s will buy drugs and repackage them to get a higher reimbursement rate at mail. I’ve never seen it (but that doesn’t mean it’s not done).
  • MAC pricing at mail. Yes. PBMs do make most of their money on generics at mail, and I’ve talked about the need to align your MAC lists at retail and mail before.
  • They also say “While mail order presents the opportunity to save sponsors money, attempts to encourage mail order by reducing copays could increase sponsor cost if the benefit plan is poorly designed (e.g., copays are reduced too much), utilization increases, or generic dispensing decreases.” I’ve talked about why clients lose money at mail before, but I’m pretty sure that there have been plenty of studies that show adherence improves (not unnecessary utilization). Studies have also shown that if you adjust for acute medications at retail then the generic dispensing rates are very comparable at retail and mail (or explained thru population differences).
  • They claim that the PBM’s make 10-15% on specialty drugs that they dispense (which seems high to me) and then use $5,000 per month as a number when the average 30-day supply of a specialty drug is more like $1,500.
  • They claim “Different manufacturers offer different rebates, which may factor into a PBMs decision making.” I think if you read the P&T process documents you would see that decisions about in or out are made based on clinical decisions and then a formulary can be broad or narrow based on the net price to the plan sponsor which does (and should) evaluate rebate impact.
  • They quote a source saying that 35% of rebates are kept by PBMs. Again, that seems really high. In my experience, there was an administrative fee equal to several percent of the AWP of the drug that was kept but the rebate dollars were passed to the plan sponsor.

 

While I like the simplicity of the flat fee payment model (i.e., I pay my PBM $3.00 per claim), it certainly creates no incentive for them to do better year over year in improving their negotiating with pharma and retailers or to worry much about trend management.

They talk briefly and seem to encourage ReStat’s Align product which seems like a very logical approach (used by other PBMs also).

Restat configures custom retail networks and benefit designs that create incentives to encourage member use of alternative in-network pharmacies and allows consumers the ability to shop based on price as well as service. Non-network pharmacies are also available but at a higher copay or costs.

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

My AHIP Podcast On Adherence

December 14, 2010 by George Van Antwerp 0 Comments

I did a podcast with AHIP on adherence.  I was hoping to embed it here, but I couldn’t so here’s the link.

http://www.ahiphiwire.org/Innovations/Feature.aspx?doc_id=722249

Consumerism, Healthcare, Innovation, Leadership, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Silverlink, Social Media, Value Propositions

The 11 Dimensions Of Non-Adherence

December 10, 2010 by George Van Antwerp 0 Comments

I found this nice summary document on MAPS (Medication Adherence Profiling System) which was part of the Boehringer Ingelheim Pharmacy Satisfaction 2009 Medication Adherence Study.  Here are the dimensions and key issues:

  1. Reminder tools to address memory and confusion
  2. Enhance communications to address perceived ineffective communications
  3. Financial assistance to address monetary concerns
  4. Heighten transparency to address distrust of healthcare providers
  5. Promote regimen to address not taking medication as prescribed
  6. Practice discretion to address interpersonal discomfort and social barriers
  7. Empower the patient to address perceived negative consequences
  8. Confront avoidance to address denial and fear
  9. Demonstrate efficacy to address the perception that medication doesn’t work
  10. Allay concerns to address negative attributes of medication
  11. Continue touchpoints to address the lack of belief in the importance of ongoing therapy

The document goes on to give sample strategies and tactics for each dimension.

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

The Not-So-Secret Handbook Of Pharmacy Facts

December 8, 2010 by George Van Antwerp 0 Comments

Adam Fein from Drug Channels just published his newest report – 2010-11 Economic Report On Retail And Specialty Pharmacies. If you’re going to spend money on a report, I would suggest you consider this one. You couldn’t Google the information and format it for the price.

He does a great job of aggregating data, looking at trends, creating great charts, and providing an informed perspective on the industry. Let me just pick out a few things to highlight from the report:

  1. He predicts four trends:
    1. Market growth and shift to specialty
    2. Boom-to-bust for generic drugs
    3. Cost-plus pharmacy reimbursement
    4. Preferred pharmacy networks
  2. He talks about the concentration of specialty pharmacies and the fact that 81% of health plans require their members to use 1-2 specialty pharmacies.
  3. He talks about the shifting market share among retail pharmacies and the fact that while only 31% of urban and suburban pharmacies are independents that number jumps to 65% in rural areas.
  4. He talks about the AWP discount that plan sponsors realize at retail compared to mail and how that gap has 58 basis points in 2010. (A key fact in understanding why you have to have the right plan design to save at mail.)
  5. And, one point that I often make (without the exact data) is that people paying cash for prescriptions pay too much. He shows that the gross margin for cash patients at independent pharmacies is a whopping 54% compared to 20% of less for other 3rd party and government reimbursed scripts.

Here’s an example of one of his charts (exhibit 34).

My final commentary on the report is that this should be a read for people trying to work in the industry or new hires in the PBM or retail management. I’m pretty sure all the analysts on Wall Street already read it.

Enjoy!

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

Guest Post: Sports Drinks for Kids: A Do or a Don’t?

December 6, 2010 by George Van Antwerp 0 Comments

Joy Paley is a guest blogger for An Apple a Day and a writer on online nursing classes for the Guide to Health Education.

Sports drinks have been getting a ton of bad press lately. Google the subject, and you’ll find a myriad of newspaper articles and blog posts “exposing” sports drinks for what they are—water with sugar and a little artificial coloring. But it’s no surprise that sports drinks have sugar in them; that’s something that’s never been hidden. The real question is, will that extra sugar be bad for your kid? Well, as most things, it depends.

Dental Health: One mark against sports drinks like Gatorade is that they can be bad for your teeth, if you drink them often enough. They all are relatively acidic, which can lead to enamel degradation. Juice and soda are acidic too, though, so it’s not like sports drinks are special in that regard.

Performance: The literature review of the effectiveness of sports drinks on preventing dehydration and increasing performance is mixed. In most respects, water and sports drinks perform equally well. After working out however, kids who have had the sports drink have been shown to have a higher body weight—meaning they lost less fluids during their workout. This is one potential benefit of choosing a sports drink over water.

Calories: Sports drinks are generally full of high-fructose corn syrup, providing many sugary calories to whoever drinks them. For example, 20 ounces of Gatorade Performance has 122 calories! That’s less than 20 ounces of soda, but it’s still nothing to sneeze at.

And, many studies have correlated a higher intake of sugary beverages, like soda and sports drinks, to higher body mass index and worse diet in children. It makes sense right? If a kid is drinking soda all the time, they’re consuming more calories, and drinking less of the beverages that are actually beneficial, like milk or 100% juice; greater intake of those beverages correlated to an adequate intake of calcium, vitamin C, vitamin A, and magnesium.  

In Moderation: If you look at all the scientific studies I mentioned above, you might want to make a knee jerk reaction and pull that sports drink right out of your kid’s hands. Those studies aren’t about your specific child or family, however, and it’s important to realize how your particular situation could come into play here.

If you live in a house where kids rarely have soda or other sugary drinks, letting them have a Gatorade at sports practice isn’t going to make them obese. If your kid is already guzzling soda at home, then adding a sports drink isn’t going to help—but sports drinks are only one thing that should be on your list of dietary worries.

What you do want to avoid is having your kid think that sports drinks are somehow “healthy,” when the truth is that they’re not. And, you don’t want a situation where your kid drinks sports drinks in place of water, because they think the sports drink will somehow make them feel better. However, as long as the drinks are had in moderation, like being consumed only at a specific activity like sports practice, they aren’t going to make your kid unhealthy.

Other Possible Beverages: I would caution parents to avoid replacing regularly sugared sports drinks with lower-calorie artificially sweetened ones. The trouble with these? In studies, greater intake of diet soda has been linked to higher BMI. Why? People rationalize that they are consuming less calories, so they “make up” for it by eating more.

Instead, try creating your own fruit-infused water. Cut up strawberries, cucumbers, and apple slices, and let them sit overnight in a pitcher of water. The result is delicious and low-calorie. Or, pick up a low-sugar 100% fruit juice from the store.

The Bottom Line: If your kid eats a healthy diet and avoids most sugary beverages, letting them have a Gatorade at their practice or game isn’t going to hurt. Just don’t let sugary sports-drinks replace water in regular day to day activities.

exercise, General Thoughts, Guest Post, Healthcare, Research

Managed Care Digest – HMO PPO Rx Digest

December 2, 2010 by George Van Antwerp 0 Comments

A friend sent me a link to this earlier today (HMO PPO Rx Digest).  I haven’t read thru the whole report yet, but they have some slides you can download and see the graphs.  I downloaded them and posted them on Slideshare for others to easily view.  Here you go. 

Books / Articles, Managed Care, PBM / Pharmacy, Research

Leading Trends in Rx Plan Management (Medco)

November 30, 2010 by George Van Antwerp 0 Comments

It’s always nice when you get on the marketing distribution list from companies. I love to get the PR and marketing materials to review. Medco recently sent me this document called “9 Leading Trends in Rx Plan Management: Findings from a National Peer Study“.

The survey was across 380 organizations plus 100 consultants and brokers. And, the survey was conducted prior to health reform passing so that’s an important timeline to keep in mind. It’s a nice quick read with lots of stats and charts from the survey with comparisons to last year’s numbers.

Executive Summary:

  • Less than 40% said they were extremely or very concerned about economic conditions affecting their ability to offer the same level of prescription benefits over the next 2-3 years. (down from 60%)
  • Plan sponsors are increasingly eager to find cost control solutions:
    • 90% – promoting the use of formulary products (brand and generic)
    • 80% – encouraging the use of mail order
    • 83% – helping members make more effective healthcare choices
  • 76% of plan sponsors state that balancing costs with care is the key philosophy (which is a reversal from 5 years ago where it was providing broad coverage)
  • Respondents see pharmacy as representing 22% of their overall costs (a higher number than I’ve seen before so I’d like to see actual data here)
  • Surprisingly, plan sponsors were more concerned over DTC advertising and minimal attention to personal health than aging and use of specialty drugs
  • 72% EXPECT their PBM to help reduce overall healthcare costs (what I’ve been saying for a few years)
  • 79% say that specialty pharmacy is better managed by the PBM than the health plan

The 9 leading trends:

  1. A transformative shift in benefit philosophy continues
  2. Rising costs replace economic woes as key affordability issue
  3. Plan sponsors prefer targeted but limited government employment
  4. Use of integrated data is becoming standard practice
  5. CDH plans are struggling to gain momentum
  6. Specialty medication management programs are increasing sharply
  7. Generics and preferred drug programs moving from incentives to mandates
  8. Decisive move towards stronger mail incentive programs
  9. Plan sponsors look to PBMs to reduce overall healthcare costs

(The ones that surprised me here were #4 which I just haven’t seen significant movement on and #7 where I haven’t seen much in the way of mandates, but I’m on the outside looking in these days.)

#1: Transformative Shift in Benefit Philosophy

  • Only 6% are focused on limiting coverage
  • Honoring retiree commitments is still the #1 factor in guiding retiree benefits
  • 95% of benefit advisors agree

#2: Rising Costs as Key Affordability Issue

  • 72% blame physicians for complying with patient requests for more expensive branded medications
  • 52% believe that engaging members to make better health and cost related decisions is their number one priority (which is exactly what Silverlink does for clients!)
  • 95% of benefit advisors agree

#3: Targeted but Limited Government Involvement

  • 60% say the government should have minimal or no role in providing prescription benefits (only 15% preferred a private plan)
  • 71% want the government to help bring generic biologics to market faster
  • 42% believe the government should mandate e-prescribing initiatives
  • 75% of benefit advisors agree that government proposals will help lower Medicare Part D costs

#4: Use of Integrated Data

  • 64% use integrated data to improve health and financial outcomes (I would guess much of that is outsourced to 3rd parties. This also still doesn’t include lab values.)
    • 74% do it to improve case management
    • 70% do it for disease management
    • 68% do it to identify members at risk
  • 95% of benefit advisors agree on the likelihood of recommending data integration over the next 2 years to control drug costs

#5: CDH Plans are Struggling

  • 27% of respondents offer a consumer-directed health plan but 73% say their members are reluctant to join
  • It was virtual tie between those that thought CDH plans helped reduce Rx costs and those that didn’t…but the majority of people agreed that they help employees better understand the real costs of healthcare
  • 67% of benefit advisors agree on the likelihood of recommending a CDH plan over the next 2 years to help control costs (which seems out of line with the employer perspective)

#6: Specialty Medication Management Programs are Increasing

  • 83% of respondents plan to install clinical and cost-management programs to help contain the cost of specialty medications
  • 40% cite specialty as the key cost driver
  • Respondents believe that billing under the pharmacy benefit:
    • Provides more consistent pricing (79%)
    • Provides a better understanding of therapy management savings opportunities (77%)
    • Provides a more complete and accurate picture of specialty spending (80%)
  • The programs being used are:
    • Utilization management (64%)
    • Limit days supply (63%)
    • Preferred pharmacies (58%)
    • Step therapy (55%)
    • Move coverage from medical to pharmacy (41%)
    • Waive copayments to increase use of a preferred pharmacy (9%)
  • 76% of benefit advisors agree on the impact of UM programs controlling specialty drug costs

#7: Mandates Over Incentives For Formulary Agents

  • 58% are requiring the use of generics and preferred drugs (does this mean going back to closed formularies?)
  • 90% use programs that incent (i.e., lower copays I assume)
  • 94% are likely to increase member communications to encourage the use of generics
  • 63% of benefit advisors agree on mandating the use of generics to control costs

#8: Stronger Mail Incentive Programs

  • 58% have installed programs where the member pays more at retail after a set number of refills (I think this is a Medco anomaly…they’ve always had the highest mail utilization)
  • 85% have a cost-share strategy that favors mail
  • 38% waive one or more copays as an incentive to move to mail
  • 5% auto-enroll members in mail
  • 54% believe dispensing errors are less likely at mail (while 7% believe retail is better)
  • Mail order is seen as having a better chance to maximize generic use (by a 5:1 margin over retail)
  • 69% of benefit advisors agree that dispensing errors are less likely at mail than retail

#9: PBMs and Overall Healthcare Costs

  • Why use a PBM:
    • More focused and experienced at controlling drug costs (88%)
    • Most competitive drug prices (88%)
    • Provide detailed analysis and reporting to help explain cost drivers and identify savings opportunities (87%)
    • More innovative approaches to controlling costs (83%)
  • After cost control of Rx, what do they look for in a PBM:
    • More effective in promoting adherence (69%)
    • Helps control overall healthcare costs (72%)
    • Better medication counseling (70%)
  • Benefit advisors believe the following are the most critical priorities for plan sponsors:
    • Engaging members (39%)
    • Controlling specialty costs (24%)
  • Ensure the pharmacy benefit supports a broader health strategy (20%)
Books / Articles, Healthcare, Marketing / Communications, PBM / Pharmacy, Research, Silverlink

Interesting Data Points From Specialty Pharmaceuticals Report

November 29, 2010 by George Van Antwerp 0 Comments

One my flights over the holiday, I had a chance to read the 2010 Specialty Pharmaceuticals Facts, Figures and Trends. This is a publication put out by the Center For Healthcare Supply Chain Research. The data represents survey data from manufacturers and distributors from surveys sent out in March 2010. I pulled a handful of things that caught my eye into this post, but there is a lot more in the report that manufacturers and distributors would be interested in.

Overall Market:

  • Global market for specialty pharmaceuticals is $144B (7.5% growth).
  • US specialty pharmaceuticals market is $64B (4.9% growth).

Survey Data:

  • Anticipated 2010 growth rate is 8.4%.
  • Half of distributors specialize in specific disease states.
  • All distributors claim to specialize in oncology and 2/3rds in RA. The next big focus areas are Autoimmune (including HIV/AIDS) / Immune, CNS (including MS), and Hematology.
  • The biotech drugs in development by disease area (from PhRMA 2008 Report):
    • Cancer                     254
    • Infectious Disease            162
    • Respiratory                27
    • Cardiovascular                25
    • Blood Disorders            20
    • Diabetes and metabolic        19
  • Nearly 60% of distributor’s product sales are distributed to independent clinics owned or operated by physicians. Only just over 20% are distributed to specialty pharmacies. (This was a shocker to me.)
  • From a storage perspective (based on SKUs not volume):
    • 41% require refrigeration
    • 2% require a freezer
    • 6% have to be stored in a cage
    • 4% have to be stored in a vault
  • From the distributors:
    • Avg # of orders per day = 2,153
    • Avg dollar amount per order = $10,503
  • ¾ of distributors with revenue streams below $1B use refrigerated boxes while none of those with revenues > $1B do…but all of them regularly use ice packs and insulated boxes.
    • A temperature monitor is used on 47% of the shipments
    • A humidity monitor is used on 17% of shipments
  • Manufacturers buy insurance always in 38% of the responses and 13% of the distributor responses. 50% of the time, in both cases, insurance is never bought.
  • One question which I found very interesting was what services they provide (by % of manufacturers):
    • 38% offer disease management programs
    • 75% offer drug and disease education programs
    • 25% offer compliance management programs
    • 75% offer patient assistance / copay subsidy programs
    • 25% offer an Internet community
  • Now, from a distributor perspective, what services they offer:
    • 75% offer call centers (I thought this would be 100%)
    • 14% offer disease management
    • 50% offer loyalty / incentive programs (this seems high to me)
    • 38% offer MTM
    • 38% offer refill reminders (why wouldn’t this be 100%)
  • Distributors reported an average of 1.4% of specialty units returned.
  • Manufacturers reported an average of 1.6% of specialty unites returned.
    • 73% outdated
    • 22% short dated
    • 4% damaged
  • 38% of distributors collect HIPAA information and share it in a de-identified and aggregated manner with manufacturers (with 60% of that information being at the dispensing location level).
    • Adherence
    • Disease
    • Filling location
    • Dosing
    • Physician information
    • Treatment plan
    • Treatment facility
  • Oncology makes up 60% of the sales volume for the distributors.
    • 1.5M new cancer diagnoses will be made in 2010 (American Cancer Society)
    • New cancer incidence rates are higher in men than women
    • 1/3rd of women and ½ of men will be diagnosed with cancer (National Cancer Institute)
    • Nearly 8% of cancer survivors admit to putting off medical care and 11% skip taking their medications due to cost
  • One very interesting insight was that some physicians prescribe an IV-administered agent rather than an oral medication to allow the patient to be monitored. (I wonder what the cost / value tradeoff is here.)
Books / Articles, Healthcare, Marketing / Communications, PBM / Pharmacy, Research

2010 Rx Benefits Survey (KFF)

November 23, 2010 by George Van Antwerp 0 Comments

This came out a few months ago, and I’ve been carrying it around for a while. (Here’s the summary.)

I read section 9 which is about the prescription drug benefits. A few facts from the report:

  • Almost 3/4 of people have copays (i.e., flat dollar amount) versus co-insurance (i.e., percentage of cost).
  • The average copayments were:
    • $11 first-tier
    • $28 second-tier
    • $49 third-tier
  • For co-insurance, the payments were:
    • 17% first-tier
    • 25% second-tier
    • 38% third-tier
  • 13% of workers had a plan with four or more tiers
  • 5% of workers have plans were the cost sharing is the same regardless of drug chosen

One of the more interesting things I saw is that average copays on first and second tier drugs are going up while the average coinsurance is going down.  Not much but directionally interesting.

Books / Articles, Healthcare, Methodology, PBM / Pharmacy, Research

Highly Stressed…Eat A Small Piece Of Dark Chocolate

November 22, 2010 by George Van Antwerp 0 Comments

A new site I heard about is called VideoMD.  Here’s one of the videos I found on it.

(But, I couldn’t use the embed code from their website so I used the embed code from YouTube.)

Healthcare, Marketing / Communications, Research, Social Media, Technology

Why Do Consumers Not Pay Their Healthcare Bills (McKinsey)

November 22, 2010 by George Van Antwerp 0 Comments

Why don’t healthcare bills get paid?  Here’s a study from McKinsey.  Not surprising is that it’s a mix of lack of understanding and lack of resources.  It would be interesting to map that to type of costs – preventative versus emergency. 

Healthcare, Research

MD or RPh for info on prescriptions

November 18, 2010 by George Van Antwerp 0 Comments

If you have detailed questions on prescriptions, would you talk to your physician or your pharmacist?  I’d certainly talk to my pharmacist.  That’s their job while the physician is there to diagnose and treat.  I don’t think they can keep up with all the 10,000+ prescriptions in the market. 

But, apparently, I’m not the norm (not a big surprise on most things).

Healthcare, PBM / Pharmacy, Research

How Generic Prices Drop With Number of Manufacturers

November 18, 2010 by George Van Antwerp 2 Comments

Here’s another great analysis by my friends at Barclays Capital (contact Meredith Adler).  It’s amazing to see the correlation of these two variables:

  1. Generic price as a percentage of the brand price and
  2. Number of generic manufacturers in the market.

It begs the question of why those last few manufacturers get into the market.

Healthcare, PBM / Pharmacy, Research

Brand Prices vs. Generics Over Time

November 18, 2010 by George Van Antwerp 0 Comments

It’s amazing to look at the increasing gap over time between the price of a brand drug and the price of a generic drug.  There are a few things going on:

  • More specialty drugs
  • Less blockbuster drugs and therefore more research costs per new brand drug
  • More generic competition

But, regardless of the logic behind it, it is dramatic.

(Note: Research from Meredith Adler and team at Barclays.)

Healthcare, PBM / Pharmacy, Research

Smaller Homes – Better Health?

November 18, 2010 by George Van Antwerp 0 Comments

Apparently, there is a trend toward smaller homes (although I don’t see it out in the burbs).  The median home size has dropped from 2,300 square feet in 2007 to 2,100 square feet with more than 1/3 of Americans saying their ideal size is below 2,000 square feet.  (stats from article)

This makes me wonder if having less room will encourage people to get out of the house more.  Go out in the yard and play.  Go out to the gym.  Be more social. 

Will this encourage more neighborhood interaction?  Since we know that social pressures affect our decisions around smoking, eating, and exercise, this would seem like a good thing. 

It would be an interesting thing to study at a macro level.

Books / Articles, exercise, General Thoughts, Healthcare, Research

CVS Caremark Insights 2010

November 17, 2010 by George Van Antwerp 0 Comments

I’m catching up on a few things this week. One of those is sharing my notes from the CVS Caremark Insights 2010 publication (their drug trend report). While this year’s report outlines all of the traditional things you would expect – trend, spend by condition, market conditions, generic pipeline, I really thought the exciting information was at the end where they really begin to stitch together the retail / PBM model. I’ve talked about why I believe in this model so strongly in the past (you can also see some of their executive’s comments here). And, I think my perceptions about the future of pharmacists create lots of opportunity for a combined entity. I also think they hint at some of the insights they gained from research around non-adherence and around abandonment which is important and creates a foundation for them around predictive modeling and focused interventions.

  • I like that this year’s publication starts with a letter from Per Lofberg (the new President). He has brought them a renewed perspective on the PBM within the overall CVS Caremark enterprise which I think has been very helpful for them in this year’s sales cycle. [I personally haven’t met him yet, but I’ve heard a lot of good things about him.]
  • This introduction talks about:
    • Generics, specialty, and genetic testing as key trends
    • Controlling costs thru – plan design, clinical strategies, and negotiations with the manufacturers and retailers
    • Executing flawlessly
    • Improving outcomes
  • I like the fact that they introduce the outcomes focus early on. I think that linking themselves to outcomes given their unique footprint (retail, PBM, clinic) is critical for long-term differentiation.
  • Much like I see at Prime, CVS Caremark is a company that is blending its long-term team with some new leadership from outside the company and from the retail side of the business to drive innovation and change. I believe the clients and market has seen some of those changes already.
  • A quarter of their clients maintained a gross trend of less than 3%.
  • I found it interesting at the beginning of the document where they talk about the recession and macro-economy where they mention the effect that the COBRA subsidy had on health consumption.
  • They say that their member contribution is 15.7% which seems really low to me, but that is pulled down by the Medicare average.
  • As everyone has talked about, one of the big drivers of cost this past year was significant price inflation (9.7%) for brand drugs.
  • Their generic dispensing rate (GDR) in Q1-2010 was 70.4%.
  • Their average specialty trend was 11% with a best-in-class trend of 7.3% which seems really low.
  • Not a big surprise, the top classes are similar to other PBMs with large commercial populations. Here’s the list of the top 10 categories:
  • They mention later on their managed Medicaid lives (which I didn’t even know that they had). I think this should be a good growth area along with their Medicare Part D (PDP) lives.
  • They introduce a new methodology which I like which looks at trend by group – employers, health plans, TPA, and Medicare. There are differences in each so being able to compare to a relevant peer group is valuable.
  • They also talk about another change which is looking at book-of-business (BOB) which represent their top clients which represent 65% of total drug spend.
  • Their average gross trend was 3.4% (or 2.4% if you exclude specialty).
  • Digging into the best-in-class numbers is interesting. For example, for employers, 78.6% of their days supply was filled at preferred channel pricing (mail order or 90-day retail). I assume this is essentially for just maintenance drugs, but it seems really high (which is good) and is a new metric for me to think about.
  • They talk about 77.7% of hypertensives (in employers) being optimally adherent (which I assumes means having and MPR > 80%). This seems pretty good, but I don’t have an industry number to compare to.

“With overall goals of reducing health care cost and improving member outcomes, health plan respondents in our 2010 benefit planning survey placed high value on proactive member outreach (93 percent), multi-channel access for members (87 percent) and opportunities for face-to-face consultation (73 percent)—all factors that can help keep members on prescribed therapies and satisfied.” (page 14)

  • For each segment, they give the distribution of trend numbers. Here’s the one for health plans:
  • The best-in-class Medicare and Medicaid number for Generic Dispensing Rate are high and set a high goal:
    • 78.2% Medicare Part D
    • 86.8% Medicaid

Member retention is critical and involves a balance of copay levels, premiums and drug coverage as well as less tangible factors. Member satisfaction plays a significant role in loyalty and re-enrollment. High-performing plans focus on effective member communication and outreach as well as added-value services such as the CVS ExtraCare Health card.

  • They talk about using a split generic tier design for Medicare to allow for different member copays for higher priced generics. I think this makes a lot of sense, but I don’t know all the details or member data and feedback to really understand how it plays out.
  • I’ve never spent much time on Managed Medicaid, but they give a few numbers here:
    • Their average age is 17.6.
    • The average PMPY spend is $288.
  • Several times they use the term “evidence-based” which I really like. I recently was using that term to refer to communications and talking about how to leverage data to create “evidence-based” communications to consumers.
  • They provide a nice 2-page summary of reform.
  • They put out a short list of recommendations:
    • Prepare to take advantage of pending new generics; evaluate plan design and communication strategies for quick mobilization when new launches are pending. (This will be a big year for this with Lipitor.)
    • Many specialty pipeline products are for orphan diseases and will have narrow indications; have plans in place to ensure appropriate utilization. (This will continue to be a bigger and bigger issue.)
    • If you haven’t already done so, investigate the use of genetic testing to help guide treatment decisions. (Given their relationship with Generation Health this is an area that I expect to hear a lot more about in future Insights publications.)
    • Newer, more expensive pharmaceuticals may offer little advantage over existing products in the class; consider step therapy or preferred product strategies. (I think Utilization Management (UM) activities like Step Therapy (ST) will be a continued focus for the next few years especially as biologics allow these “traditional” techniques to be applied to specialty.)
    • Use wellness and preventive programs to identify people at high risk for chronic disease and help them lower their risk profile. (This is an area that I would have liked them to talk more about. As I’ve said many times, this is an opportunity for them to shine and differentiate.)
    • Members with chronic disease who are non-adherent tend to have higher health care costs; evaluate your population’s adherence levels and the support you provide to help people stay adherent. (Differentiation in this area is a huge opportunity. I think they are doing some interesting work in this area as they’ve talked about in some recent press releases – Rx abandonment, barriers to diabetes care, US Airways program, and behavioral research.)
  • They provide a forecast on trend for overall, non-specialty, and specialty. Here’s their forecast for the overall trend.

  • They give a clear chart on the generic opportunity and likely impact on overall generic fill rates for 2010-2012.

  • They go on to talk about specialty drugs which could be as much as 50% of the total spend by 2013…a scary prospect.
  • They have a good “state of the union” for specialty in the deck:
    • As of January 2010, 57 percent of all late-stage pipeline drugs fell into the specialty area.
    • 71 percent of applications for supplemental indications are for specialty products.
    • The number of new specialty drugs approved in 2009 was more than double the number of 2008.
    • Provenge, the first therapeutic vaccine—which utilizes the patient’s own DNA and stimulates the immune system to fight prostate cancer—was approved early in 2010.
    • Potential approvals 2010-2012 include four new products for multiple sclerosis (all oral), three for hepatitis C, and three for cystic fibrosis.
    • 18 of the products pending approval in 2010 target orphan diseases, which currently have few or no treatments.
    • While health care reform legislation provides for a pathway for approval of biosimilars, it also mandates a 12-year minimum exclusivity period for brand innovators with the possibility of additional exclusivity in 12-year increments for the development of new uses.
  • They then talk a little about pharmacogenomics (PGx). Again, I expect this to be a much bigger area in the future. It’s interesting. It’s changing rapidly. BUT, there is a huge education mountain for patients and MDs.

For a 1M member population, ~$12M is spent each year on 18 drugs that are administered to patients who do not respond and/or who are more likely to experience drug-induced medical complications.

  • I think some of the hidden gems begin on page 27 where they talk about their study on electronic prescribing:
    • 22.1% never filled their first claim. (why – samples?)
    • They found that those who had an eRx were most likely to fill than those with a paper Rx. (I personally would have bet on the other…i.e., that I have something physical in my hand that it would serve to remind me to go to the pharmacy.)
  • Another study towards the end was on abandonment (which they recently released more information on). It showed that copay, income, and whether it was an NRx (new start on Rx) were predictors of abandonment.
  • They also share work done around adherence focused on complexity of therapy – number of Rxs, number of MDs, number of pharmacies, and synchronization of refills. They talk about using this to score patients and predict risk of non-adherence. (I look forward to seeing more here since this seems very interesting especially in terms of focusing resources and developing a triage model.)
  • They shared the results of a deep dive on reasons for abandonment of prescriptions. Being able to respond and position messaging around these reasons is important.
  • They share some of the work from their Pharmacy Advisor program:
    • IVR messaging improved the odds of refills by up to 70.6% when members answered the phone.
    • Early IVR refill reminders were 2x as effective for first fill persistency rates at mail as compared to reminders after refill due dates.
    • Physician directed fax alerts about gaps in care nearly doubled gap closure rates.
    • Pharmacist interventions were most effective at improving adherence.
    • Members in VBID (value based insurance design) in which copays were lowered or eliminated were more likely to initiate therapy, less likely to discontinue therapy, and had better adherence.

“Diabetes is one of the most prevalent and expensive chronic diseases in the nation, costing the U.S. an estimated $174 billion a year,” said Troyen Brennan, MD, MPH, EVP and Chief Medical Officer of CVS Caremark. “The Pharmacy Advisor program improves clinical care because we are able to identify and address pharmacy-related care issues that if left unattended could result in disease progression and increased health care costs. We are also better able to engage the member in their care through multiple contact points, providing counsel that can improve adherence and help members optimize their pharmacy benefit and find the most cost effective options.” (quote from press release)

  • They talk about a pilot program they did in Polk County were patients signed a contract for care and was focused on diabetes care. It had some great results:
    • Reduction in blood glucose levels from 52% under or equal 7% at the beginning to 72% after one year.
    • 30% reduction in hospitalizations.
    • 24% reduction in ER visits.
    • Only 3.4% of enrolled members had poorly controlled diabetes (compared to national average of 29.4%).
    • Improved patient care – identification of potential adverse events, streamlined medication regimens, and formulary support.
    • (I personally would think this would get other plans (or PBMs) to partner with them on regional strategies where they have a strong retail presence.)
  • This also coincided with their announcements about their Pharmacy Advisor program which officially launches in January 2011. I’m very interested to see the uptake here which I would imagine will parallel the success of Maintenance Choice. This is a program which leverages their Consumer Engagement Engine (see image from last year’s report) and their retail presence to engage consumers.

Overall, it was an easy read without a lot of fluff. It cuts to the chase and gives you a good perspective on how they think. You begin to get a feel for what they are doing differently, but I imagine that you’ll continue to see a lot more research and case studies come out in the next year about some of the work they are doing.

(Note: In the sense of disclosure, CVS Caremark is a stock that I own.)

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

Prime Therapeutics 2010 Drug Trend Insights Report

November 12, 2010 by George Van Antwerp 1 Comment

I am way behind this year in getting thru the Drug Trend Reports and posting my comments.  I think I still have to do both the CVS Caremark report and the Walgreens report…and if I can get it, the SXC report also.  (You can see my thoughts from the Medco and Express Scripts Drug Trend Reports earlier.)

A few things I’ve found interesting this year were that Medco reached out via their PR group to engage me and several other bloggers in the space.  And, Prime Therapeutics has always been very active in engaging me around my thoughts on their report (see comment from last year) and continued to be proactive in discussing it with me and sending me a hard copy to read on the plane.

Overall, I think their Drug Trend Report continues to improve year after year.  It’s interesting in that this year I found the tone slightly more aggressive in talking about them versus their competition.  Certainly, Prime is going thru some changes (if you haven’t noticed).  They brought Eric Elliott on board who I think very highly of after hearing him speak and engaging him on a few topics.  Eric has brought in a set of core people from Aetna, Cigna, Express Scripts, and other places to complement an existing management team that really understands the market and how to work with the Blues owners.  [I personally think of them (and MedImpact or SXC) as a dark horse would could consider bidding on the Walgreen’s PBM lives while everyone is pretty focused on it being either Express Scripts or Medco.]

  • If you don’t know, Prime works with 17 BCBS plans who are either owners or clients.  They managed $9.1B of drug spend in 2009 and had 15M members.
  • Their overall trend was 3.4% which is good.  Everyone’s trend was generally low this year although I continue to question if this is the right metric for the industry.  I also wonder if they will embrace the outcomes based rebating that Eric did with Merck at Cigna.
  • Early on they talk about one of the ways they manage trend being through adherence and not manufacturer programs.  I might be out on a limb here, but I believe manufacturer funding on adherence programs (especially in specialty) is a good thing. 
  • They are always quick to point out that they report drug trend across their entire book of business not a random set or using any other cut of the data. 
  • They share some early analysis looking at medical claims where they identified that 1/3 of people with diabetic complications had no recent diabetes prescriptions.  A gap-in-care intervention opportunity. 
  • They also shared a study that I hadn’t seen published that members using a 90-day supply of medication (retail or mail) were 40% less likely to stop taking their drugs than those using a 30-day supply.  That’s a big difference. 
  • Interestingly they source a study saying that their members get Rx refills a day faster than competitors.  Again, that’s a big difference.
  • Generics were 67%.  (in 2009)
  • They talk about their MAC list (Maximum Allowable Cost) which is used to manage the cost of generics in the payment terms with the retailers.  They are the only PBM that I’ve ever seen do this. 
  • Their average costs per Rx were:
    • $145.51 Brand
    • $18.21 Generic
    • $62.40 Overall
  • They talk about the need to establish out-of-pocket (OOP) maximums for higher cost drugs.  I AGREE!
    • 1 in 6 cancer patients with high OOP costs abandon treatment
    • Capping OOP at $100 reduces abandonment to 4.9%
  • They (like others) discuss the impact of rising drug prices primarly around brand products. 
    • I had an interesting discussion with a reporter at the NY Times yesterday on this where he talked about manufacturers essentially paying the entire copay (20% of a $100,000 drug) to keep it getting filled. 
  • They projected that the GFR (generic fill rate) would exceed 70% by the end of 2010 which I suspect will happen (if it hasn’t already). 
  • It was interesting that they layout their pharmacy benefit for their employees.  That would be an interesting one to come across PBMs.  How do they treat their employees?  What do they recommend?  Do they take their own advice?
    • Generics were 10% with a $4 min and $10 max
    • Mandatory generic policy
    • Step therapy
  • Specialty medications had a 13% trend while representing less than 1/2 percentage of the overall prescriptions processed…but they did account for 12% of the cost.
  • Prime’s members filled 11.8 prescriptions per year (2.5% increase in utilization).
  • Prime’s Medicare trend was -5.6% with utilization of 48.2 Rxs PMPY.  The average age for their Medicare lives is 73 (compared to 33 in the commercial lives).
  • As I’ve talked about before, I like the way they break out their “Focus” drugs which are drugs used to cover diabetes, high blood pressure, high cholesterol, respiratory disorders, and depression.  These are categories with clear value propositions around adherence and are often co-morbidities. 
  • The average specialty drug cost $2,117.07.
  • Here’s some of their top drugs based on spend:

  • A few facts…
    • 7 in 10 Americans die from chronic illness.
    • As many as half of all patients don’t adhere to their prescription regimens.
    • More that $100B is spent each year on avoidable hospital admissions due to non-adherence.
    • Adherence to high blood pressure treatment alone could prevent 89,000 premature deaths in the US annually.
  • They shared that 70.5% of their 683,000 members using a statin in the second half of 2009 had an MPR (medication possession ratio) of 80% or higher (which is considered clinically adherent).  They talked about using copay waivers, value-based benefit design, and member education to drive up MPR.  [I’d love to see how the 3 compared in terms of results and ROI.]
  • They talked about an MD intervention program around respiratory illness that got 10% of members to return to therapy.  [I’m a big believer that PBMs need to integrate their MD and consumer intervention strategies since 1+1 can equal 3 in some cases.]
  • They then go thru different therapy class (drug categories) to discuss each one.  In the gastrointestinal disorders (think Prevacid, Protonix, Prilosec), I was surprised they didn’t talk about a strategy to drive OTC (over-the-counter) use.  [Although with some of the new rulings about what can be considered part of your flexible spending accounts, it may change how people compare the costs of OTCs to copays.]
    • I’m still a big fan of step therapy in this category using OTCs then H2s then generic PPIs then brand PPIs, but I know step therapy with OTCs can be a pain. 
  • Specialty drugs accounted for 21% of the $300B in 2009 drug spend (National)…by 2030, it’s estimated that specialty will account for almost 50% of drug expenditures.
  • They talk about Ampyra (a new MS drug) but don’t talk about how they are managing that.  [From my NCPDP meeting last week, RegenceRx was talking about more aggressively managing this.]
  • They share the research from PhRMA that there are 861 drugs in the pipeline for oncology.
  • Here’s a nice graphic on designing the right benefit…

  • They provide some best practices around plan design which did prompt some questions for me:
    • They talk about value-based benefits when MPR is less than 80% for diabetes, high blood pressure, and high cholesterol.  I’m good with this as long as it’s not selectively offered to just those with low MPR (i.e., rewarding those who aren’t taking their medications).
    • They talk about requiring prior auth (PA) before a non-preferred drug is dispensed.  Does this mean the formulary is essentially closed?
    • They talk about using co-insurance to deter the use of brand-name and non-formulary drugs.  I’ve always been a skeptic here since the patient doesn’t know the cost of the medication so I believe that flat copays are much easier to understand the difference, but there might be research that I’ve missed on this one.
    • They talk about reaching out to MDs on generic utilization.  This should work but is tough.  I had an academic detailing team at Express Scripts and a generic sampling team.  I’d love to know what the success rate was and if MDs impressions of generics have changed over the past 5 years. 
  • For tiers, they share data that suggests that the copay savings needs to be $25.50 per month for a patient to choose a generic over a brand (and I might assume one brand over another).  As they point out, that’s much larger than the $13 difference which exists today.
Books / Articles, Healthcare, Leadership, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Value Propositions

Todd Park (HHS CTO) On Unlocking Innovation Mojo (#mhs10)

November 8, 2010 by George Van Antwerp 0 Comments

I came out to the Mobile Health Summit (Twitter hashtag #mhs10) in DC today, and I had the opportunity to interview Todd Park who is the Chief Technology Officer (CTO) for the US Department of Health & Human Services (HHS). Todd is a great resource for the country and perhaps a surprising bureaucrat (in the nicest sense of the word) given his background as a consultant and then co-founder of athenahealth.

It was an interesting discussion starting around what his role is. The CTO role is a new role in the US government which he describes as an internal change agent who is responsible for working with HHS leadership. He described his objective as forming virtual start-ups to advance new solutions. [A radical departure for those of us that view government as a monolithic organization which is slow to change and full of red tape.]

He said that one of the first questions people ask when they see the new initiatives such as HealthCare.gov is who were the consultants he brought in from Silicon Valley to do the work. He says that it was all internal people. We talked about that being a cultural change which he described as “creating the right vision” and a “work pathway”. That sounds exactly like what one might see a change agent being responsible for – better leveraging internal assets by changing the framework for service delivery.

We talked about several of the initiatives that HHS has worked on lately:

  1. HealthCare.gov which is a focused on helping consumers find public and private options for healthcare. He said this was a 90-day implementation. I think if you go to the site you’ll see a few things:
    1. Easy navigation
    2. Content for multiple personas
    3. Links to social media
    4. Videos, widgets, blog postings, iPhone app, etc.

    This is much like what you would expect from a direct-to-consumer company or your health plan.

  2. The Open Health Data Initiative which is focused on taking data which HHS has and making it available for use by companies for FREE. The idea is to stimulate an eco-system around the data and enable better health thru better decisions. He uses the NOAA framework as an example for how they share data to sites like weather.com. He then mentioned that they had done a brainstorming session earlier this year to think about what could be done with this data (some of which was new to everyone). You can learn more and see the 2-hour YouTube video here, but a talk by Todd Park at another event is below.

     

  3. The Blue Button Initiative which was launched in October and focuses on getting Medicare members and veterans to get a copy of their own data to print, download, share, upload, etc. Already more than 100,000 have downloaded their data. This should certainly be an enabler for PHR adoption.

We then went on to talk about HHS as a “reservoir of innovation mojo” which needs to collaborate with the public sector. In Todd’s words, he sees government as needing to be a catalyst and enabler. When he joined, his idea was not to fly in like aliens and change HHS, but to come in and find ways to unlock the mojo which already existed.

I asked him if he sees this as being a model for the private sector. Obviously, one of the challenges we have everywhere is figuring out the right way to balance co-opetition and competition. If we’re going to “solve” our obesity epidemic, we need to have some collective knowledge and insights rather than constantly re-creating learnings in a microcosm. On the flipside, companies want to create intellectual property and sustainable differentiation. It’s not easy to balance.

But, Todd mentions that several companies are already following in the “blue button” model such as Gallup / Healthways which is making their Well Being Survey data available publicly (for FREE) for the top 200 cities.

Of course, there is a lot of work to do here. I asked him about what the government was doing to address some things at a national level (e.g., obesity) where in my mind we almost need a reframing such as that which happened with littering, smoking, or wearing our seat belts. He brought up three things that were happening:

  1. National Quality Initiatives
  2. HealthyPeople 2020
  3. Community Level Dialogues

One of the other things that we talked about was the challenge of making changes to health outcomes with the health literacy levels in the US. I suggested that we need to address this systemically as I believe we need to address financial literacy…beginning in the schools and the home. He talked about needing to making learning fun through educational games. He mentioned that the First Lady had been promoting the creation of apps to accomplish this as part of a competition. (This made me think of the iTots article in today’s USA Today.)

We closed with a quick discussion on other things that he’s monitoring that will drive healthcare innovation. He talked a lot about improvements in the provider payment system – think Accountable Care Organizations (ACOs) and Patient Centered Medical Homes (PCMH). The goal with these is the change from “pay for volume to pay for value”.

Talking to Todd gives you a positive view on what government can do. I can see him motivating his team and his prior teams to follow his vision and embrace change.  I’d have to agree with Matthew Holt’s article on Todd Park from earlier this year.

Books / Articles, Consumerism, Events, Healthcare, Innovation, Leadership, Politics, Research, Technology, Value Propositions

Express Scripts Model – DBN Article

October 29, 2010 by George Van Antwerp 0 Comments

I was quoted in yesterday’s Drug Benefit News with one of my favorite people – Dr. Steve Miller from Express Scripts.  This was a follow-up to talk about their predictive model for adherence.  Steve confirmed what had previously been reported that it is 85% accurate in predicting the 10% of people least likely to be adherent.  He says that the model takes into account past behavior, demographics, condition, and the drug.  Those sound like a lot of the right variables.

The article teases us with information that CVS Caremark is planning to publish a study in the upcoming months on their model.  Medco Health Solutions comes across as more of a skeptic in the article talking about efforts from 20 years ago that were difficult and expensive to execute. 

My quotes were very consistent with what I’ve shared on the blog – fascinating, somewhat skeptical, more concerned about the group that is somewhat adherent than those that are the bottom 10%, implementation of behavior change is more important that the model. 

“Everybody’s trying similar efforts in terms of how to predict adherence…but there hasn’t been a model that has proven itself as being a good predictor.  Maybe Express Scripts has cracked the code…I would assume that if you can accurately predict who is going to be adherent that will be a good tool.”

However, attempting to change behavior in the top 10% of patients likely to be nonadherent will be tough, Van Antwerp contends. “The industry is still waiting for that proof,” he maintains. “If we can predict that patients are adherent but can’t change behavior, then the model doesn’t do us much good.”
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Predictive Model + Segmentation + Intervention

October 21, 2010 by George Van Antwerp 0 Comments

I was fielding a few questions today about the predictive model from Express Scripts.  The concept of predictive modeling is one that everyone is working on and holds great allure.  BUT, it is only a piece of the puzzle.  In the dialogue, I identified three key tenets for success.

  1. Predictive Model – Can you predict who is likely to act in certain ways – be adherent, log-in to the member portal, use mail order, switch to generics, pick up the phone?
  2. Segmentation Model – Once you can predict people, can you develop a segmentation model about how to get them to take action based on different attributes – gender, age, past behavior, preferences, income, other?
  3. Intervention Strategy – If you can predict who is most likely to act and know what type of segment they fall into, do you have a cost-effective intervention strategy to get them to take action…right message at the right time using the right channel?  For adherence, this could be reminders, coaching, devices, or other tools.  (As many people say, a less sophisticated strategy executed perfectly is better than a complex strategy executed less than perfectly.)

And, then you need to study and refine these on an ongoing basis especially since topics like adherence may be affected by macro-economic trends (e.g., economy), patient beliefs (e.g., fatalism), and other attributes (e.g., plan design) on top of the attributes in your models. 

I do believe we’re early in the days of modeling and that the access to data and greater availability of informatics resources will increase the development and focus on these models.

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

Total Medical Costs Lower For Diabetics At Mail

October 15, 2010 by George Van Antwerp 0 Comments

I can’t believe I missed this one earlier this year especially since a friend of mine is one of the authors…BUT this is an important one for the industry showing that not only did adherence improve moving from retail to mail order pharmacy but as pharmacy costs when up the corresponding medical costs went down MORE!

I’m just going to paste the abstract from the Journal of Medical Economics below:

Objective: To compare long-term diabetes medication adherence and healthcare costs in patients using mail order pharmacy versus retail pharmacy.

Methods: The MarketScan database was used to identify patients who filled prescriptions for oral anti-diabetes medications in a retail pharmacy for at least 6 months before switching to mail order pharmacy for at least 12 months. These patients were matched to others who used retail pharmacy continuously for at least 18 months. A propensity score was used to create matched groups of patients comparable on probability of switching to mail order, weighted Poisson regression was used to analyze differences in medication adherence, and Tobit regression was used to compare costs.

Results: A total of 14,600 patients who switched to mail order were matched to 43,800 patients who used retail pharmacy continuously. The average adjusted adherence in retail pharmacy was 63.4% compared to 84.8% after switching to mail order. Per-member-per-month total healthcare and total medical costs were on average $34.32 and $37.54 lower in the mail order group, respectively. Diabetes-related medical costs were on average $19.14 lower in the mail order group, while pharmacy costs were $14.13 higher.

Limitations: Limitations include a patient population under the age of 65, no information on pharmacy benefit design, and limited follow-up time relative to that necessary to identify long-term diabetes complications.

Conclusions: After adjusting for measured confounders of medication adherence and disease severity, individuals who switched to mail order pharmacy had higher medication possession ratios and trended toward lower total and diabetes-related medical costs over time.

Press release about it here.

Here’s a slide showing the values:

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Why Mail Order Is Better (ESRX)

October 15, 2010 by George Van Antwerp 0 Comments

I was looking at the latest investor decks from Express Scripts on their site and found this slide in the presentation from the William Blair Growth Stock Conference.  It does a nice job of comparing the two channels although I’m sure that my retail friends would hotly debate this topic.

Healthcare, Marketing / Communications, PBM / Pharmacy, Research, Value Propositions

Changing Rxs (or Doses) Without Asking Basic Question

October 14, 2010 by George Van Antwerp 0 Comments

I’ve talked about this with many clients.  Since physicians don’t always engage patients in the basic dialogue around adherence, how can they decide to increase doses or change prescriptions simply if the patient’s condition isn’t becoming better?  This has to drive waste in the system. 

The reality is that a physician may get a lab value that shows that their patient’s cholesterol (or A1c or…) is higher than it was last time.  They know the patient is on a certain dose of the medication.  They instinctively think to increase the dose or change the medication.  BUT…they don’t always ask the patient about their adherence to the medication.  This is attributed to multiple reasons:

  • They don’t see adherence as their issue.
  • They assume the patient is adherent.
  • They assume the patient would tell them if they weren’t adherent.
  • They assume if they ask that the patient would lie to them and say they were adherent.

I’d heard about a study done about a decade ago that had looked at this, but it had never been published.  I was excited to see that Medco had published some research on this topic today. 

There were some interesting things in the research also.  It was another validation on the fact that men are more adherent than women.  And, it showed that people with multiple conditions were more adherent.  I would expect that there is a curve around this that people with a few medications and those with lots of medications are least likely to be adherent, and those somewhere in the middle are most adherent.  (But, I’ve never looked at the data with this question in mind.)

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Some Medicare Survey Data

October 13, 2010 by George Van Antwerp 1 Comment

The Medicare Part D prescription drug coverage has been a great validation for the PBM industry. It has shown the ability of the traditional tools to manage spend and provide an affordable benefit.

With that said, a new survey conducted on behalf of the Medicare Today coalition shows more reinforcing data:

  • 84% of beneficiaries are satisfied with their coverage.
  • 80% said their Part D premiums and co-pays are affordable
  • 94% said that they understand how their plan works and know how to use it
  • 65% said that they don’t feel a need to shop for a new plan during open enrollment
  • Only 20% were aware of the new discounts on brand-name medications that are available when they hit the donut hole next year [If I was pharma, I would make the PDP plans educate consumers on this.]

“The Medicare Part D program continues to defy its doubters,” said Mary R. Grealy, president of the Healthcare Leadership Council and co-chair of Medicare Today. “At its outset, critics said health plans wouldn’t participate in Part D, but today seniors have ample choices of affordable plans. They said the program would cost too much, but the last Medicare trustees report reported costs are 41 percent below initial expectations. And they said seniors would find the program too confusing, but it remains enormously popular.”

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