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Will eRx Reach The Tipping Point

February 15, 2008 by George Van Antwerp 0 Comments

The concept of the tipping point made famous by Malcolm Gladwell’s book is (in my words) the inflection point at which the market begins to adopt something and everyone jumps on the bandwagon.

So, with CMS saying that eRx (electronic prescribing) could eliminate as many as 2M prescribing errors per year, and Congress considering a bill to link Medicare payments to use of technology, will it make a difference.  (I am pulling a few of these facts from Medco’s recent announcement about launching a Medicare Part D eRx initiative.)  Only 3% of physicians use the technology today, and from my experience working with the vendors and physicians, there are still several big issues.  Maybe this will address some of them.

  1. Standards – Will all the payors and PBMs share some standard such that a physician can move from system to system or from office to hospital without having to relearn a new application?  Can they write prescriptions for the majority of their patients from one system or have to keep using different applications?
  2. Stability – Is there a vendor that they can trust?  There have been several great concepts that were either before their time or had a flawed model.  Time and money wasted on a system that isn’t supported leaves a bad taste in their mouth.
  3. Workflow – Does the system fit into their current office workflow?  If not, why should they change behavior?  Is it less expensive and disruptive for them to have the pharmacy or PBM contact their staff to address the issues after the fact?  What percentage of the 2M errors wouldn’t be caught further upstream?
  4. Incentives – What’s in it for the physician?  You are asking them to do more.
  5. Division of Labor  – Who has what responsibility?  For the PBMs, MCOs, and pharmacies, it is great to resolve issues at the point-of-care (POC) with the physician.  Drug-drug interactions.  Formulary issues.  Brand to generic opportunities.  Retail to mail opportunities.  The physician could easily get overwhelmed with all the requests and go from a quick process to a difficult process.
  6. Support – What IT responsibilities come with the system?  Who is supporting it?  Does it impact the rest of their practice?  Does it integrate with their practice management system?  If they come to depend on the solution, what happens when it goes down?
  7. Cost – Who pays – physician, MCO, PBM, pharma (not likely these days)?

I know many of these are addressed in different ways today.  I think we may be able to systemically force some of this into the office, but in general, until there is a generational transition in the physicians office (i.e., those in their 30s today are the high prescribers), I don’t think wide spread adoption will happen.

The value is clearly there.  Even looking at the pilot statistics from the Medco pilot in Michigan, you see that there are issues and opportunities which can be addressed.  These don’t even take into account the handwriting issues and other safety issues which occur.

  • A severe or moderate drug-to-drug alert was sent to physicians for more than 1 million prescriptions (33 percent), resulting in nearly 423,000 (41 percent) of those prescriptions being changed or canceled by the prescribing doctor;

  • More than 100,000 medication allergy alerts were presented, of which more than 41,000 (41 percent) were acted upon; and

  • When a formulary alert was presented, 39 percent of the time the physician changed the prescription to comply with formulary requirements.

I personally think one of the most interesting opportunities will be to see who received a prescription and didn’t fill it and subsequently determining which of those estimated 30% of people should be filling the claim.  The value of driving that initial compliance should be significant in avoiding more costly issues down the line.

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

Peeling The Healthcare Onion

February 14, 2008 by George Van Antwerp 1 Comment

I think an onion is the right analogy for healthcare for three reasons: (1) it can make you cry; (2) every time you pull off a layer you learn more; and (3) what you see from the outside is a lot different than what you see from the inside.

    • It can make you cry.

      onion1.jpgWhen you have the Congressional Budgeting Office projecting the healthcare costs will be 49% of GDP by 2082, you know things have to change. This is a front page topic almost everyday across the country. But, like an onion, if we don’t handle this right, it will make you cry out of frustration and pain. Change is not easy especially in a complex system that we have today. Finding the right mix of push and pull is going to be important.

      Quality is still an issue across the system. Biting a bad onion or having a quality issue with your care can make you cry. Look at the USA Today article from the other day about Too Many Prescriptions, Too Few Pharmacies or an entry on my blog about the Institute for Healthcare Improvement.

      • Every time you pull off a layer you learn more.

      This applies so many ways to healthcare given our system, but I think of this from two perspectives – data / information and process. We have so much data in healthcare, but without the right model to make it into information, it just sits there. And, as we layer data (e.g., medical plus pharmacy plus lab) or integrate healthcare data with demographic data, we can learn so much more about our patients and how to care for them. This ranges from simple questions such as how to motivate behavior (e.g., cost savings versus loss avoidance) to how to deliver information based on their learning style.

      Every question you ask (or layer you pull off) reveals a new set of data that can be transformed into information while at the same time creating new questions. Does the relationship you found in the data simply indicate correlation or is there actual causality there? I look at the data that CVS/Caremark presented around saving 30% of healthcare costs by driving compliance and adherence and wonder why people aren’t jumping up and down trying to capture this savings.

      • What you see from the outside is very different than what you see from the inside.

      There is a concept in Six Sigma about designing the process from the outside-in. Imagine sitting in the middle of the onion…all you see is onion all around you. That is a common pitfall when solving problems in the industry that we work in. We are too close to the problem and the historical solution. If all we see is the onion, those on the outside (our patients / members / employees) see the onion in relation to other food options. Their expectations for healthcare are produced by other companies that they interact with. They expect web solutions that work. They expect excellent service. They expect to be valued as a customer and of course need the power to walk away and chose another option.

      onion2.jpgThis is a common problem in healthcomm (healthcare communications). We present information in a channel that we believe is effective based on our experience and paradigm (i.e., written, verbal, kinetic). We use language that we think is helpful. A few of my favorite examples from my PBM days are:

      (1) Telling patients that they need a renewal (prescription). They don’t know what that means. It means they need a new refill since their original prescription refills have run out.

      (2) Telling a physician to consider prescribing lisinopril and giving them sample bottles that say lisinopril. [Because, of course, they would know the chemical name for Zestril.]

      But, this happens all the time. Telling a person that wants all the facts a lot of qualitative information will fall on deaf ears. Providing a person with lots of options when their looking for an expert opinion will frustrate them. One way to frame this is based on personality type. (Of course, that information isn’t sitting in a database somewhere for us to tap into.)

      The reality is that people are different. As you think about your healthcare process, try to be the patient. As one of my bosses used to say, give it to your grandmother and see what she thinks. Can she understand it? Can she make sense of the process?

      It’s not easy finding the right amount of onion to use in your recipe, but it is important to continue trying to improve.

      Consumerism, Healthcare, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Technology, Value Propositions

      10 Ways To Fix Healthcare (From LiveSmarter)

      February 11, 2008 by George Van Antwerp 1 Comment

      I am not sure whether this is a new blog or some content off a business site, but I think it is a good entry.  This lays out comments from a bunch of people in and outside the industry about how to fix the situation that we are in.

      It includes comments like:

      • “encourage healthcare professionals to cooperate and develop a shared mission.” [Health 2.0]
      • “market forces bear no consequence on rising healthcare costs” [individualized health insurance]
      • “individuals rely on random health events like hospital stays and office visits for care.” [preventative care]
      • “Though preventive programs incorporating diet, exercise and stress management might cost more money upfront, overall costs will drop by 30 percent and may save the patient from going for tests and getting treatment with expensive machinery.” [low-hanging fruit exists]
      Consumerism, Healthcare, Managed Care, Value Propositions, Weblogs

      Data Access Issue

      February 11, 2008 by George Van Antwerp 0 Comments

      For those of you that ever wonder how easy it is for big technology companies to get to internal data, the WSJ blog highlights an issue that Vioxx litigants are having with Express Scripts.  They want to charge for the data access since it will take 420 hours (or one person for over 10 weeks fulltime) to pull the data at a cost of $150/hr for a total cost of $63,000.  [Not a bad job for someone…$300K per year to run a bunch of queries.]

      Healthcare, PBM / Pharmacy, Value Propositions, Weblogs

      COB Predictive Values

      February 8, 2008 by George Van Antwerp 0 Comments

      COB (or Coordination of Benefits) is a core managed care function that is often ignored (and varies by state to make things more complicated). It is a required process by which managed care companies need to identify if people have other coverage (i.e., should I send someone else the bill). Given the high dollars here, you would think companies would be focused on driving this as a cost management or profit initiative.

      Good companies find 2.5% or more of their population have secondary insurance. I have seen analysis saying that if you include claims that should be billed to worker’s compensation, auto insurance companies, etc. that the number could be as high as 15%, but that seems really high.

      An interesting fact that one of our experts shared with me was that claims data could explain over 65% of the variance in COB responses for a working age population while it could only explain just over 40% for seniors. They have found some incredible correlations to create ROIs for clients in the 2,000% range. [Not bad. If I could get my boss a 20:1 return, I think he would pay attention.]

      Of course, as a patient, all I care about is that my claim gets paid, and I don’t get a bill from my provider.

      Again…I may be preaching to the choir, but this is why data matters. This is why you need metrics. This is why you need to know your baseline and track how you improve this.

      And, always make sure you understand the definition, the data sources, and the data quality. I remember doing data standardization processes for Sprint back in the mid 1990s. It took a while just to get agreement on what a customer was from a business and systemic perspective. Another example I previously had when looking at two vendors was defining success. They attempted to create a standard metric of abandonment for people that came to a website to take a survey (i.e., how many abandoned the process before completion). One seemed dramatically better than the other.

      Upon research, we found that one broke the survey into sections and offered them an out on each page. As long as the consumer exited at a planned opt-out point, they were a “success” and had not abandon the survey (even though they hadn’t completed it). The other only counted those that finished the survey. Not surprising who had a better score.

      Healthcare, Managed Care, Marketing / Communications, Technology, Value Propositions

      Why Consumerism Matters For Pharmacy

      February 7, 2008 by George Van Antwerp 0 Comments

      I found this Hewitt data in a presentation by UHPS (United Healthcare Pharmaceutical Services) which is the subsidiary of United Healthcare that manages the Medco relationship (they still outsource their pieces including mail and claims adjudication) and the RxSolutions (former Pacificare PBM). It was from a slide deck given by their National Sales Director at an AeA Seminar on 9/20/07.

      [On an interesting side note, UHPS recently won a 1M life competitive contract for PBM services which I believe is one of their biggest wins as a PBM selling outside their existing base.]

      I think the key point from this image is that patients have the most influence over the drugs they utilize. With multiple drugs for any therapy and lots of information out there, patients can have an intelligent dialogue with their physician about their choices. This becomes much harder for certain medical situations.

      If you get fascinated by the space, they talk about a few of their differences:

      1. A different formulary strategy – evidence based, real-time changes, place drugs on any tier (e.g., generic on 3rd tier if appropriate)
      2. They recommend a $35 differential between Tier 2 and Tier 3 (which probably means that their clients are price neutral if the patient chooses Tier 3…they may even be better off as the rebates to be at Tier 2 are probably much less than $35)
      3. They recommend a 2.5x to 3x multiplier for mail order (i.e., take your 30-day copay and multiply it by2.5 or 3 to determine your 90-day copay). This probably means very little mail adoption, but that patients that use mail will save the payor money on brands. They probably save on generics no matter what.

      It is interesting to see the different models emerging in the PBM space. For a while the companies were highly clustered and faced with a price path. Now, you have a few key differences:

      • CVS / Caremark has the play of integrating retail and mail
      • Medco is going down the path of disease state differentiation
      • Express Scripts latest presentations have focused on consumers and engaging them
      • United is talking about their different approach along with the benefit of an integrated data set and captive PBM working with the managed care entity. If they figure out the evidence-based strategy and convince their clients of the value of this, they may be able to get a jump start on the market from a clinical perspective.

      The one constant for all of them is communications and engaging the consumer. Interesting. A friend of mine who works with benefit consultants told me that that is the hot topic he hears everywhere today. They want to know how to engage them, what the value is, and how to prove it.

      hewitt.png

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

      Information Latency: Why Don’t We Change?

      February 4, 2008 by George Van Antwerp 2 Comments

      I have had this note to self for a while so I am finally going to put a quick entry out here on the topic.

      The issue is data latency or more appropriately information latency.  The data often exists right away, but the challenge is how to you get the data into a usable form, with context, and with enough data to make decisions.

      In communications, this manifests itself in healthcare in two ways that immediately jump to mind:

      1. In a traditional letter program:
        • You send a letter to a patient (7-10 days from data targeting to mailbox)
        • Patient opens the letter and has to contact their physician (if they choose to do anything)
        • Patient trades messages with physician and/or has to schedule an appointment
        • Patient meets with physician who (for example) writes them a new prescription
        • Patient waits for medication to run out then refills with new drug (e.g., generic, on-formulary drug)
        • Claims get aggregated and reports run
        • Best case – 30+ days to see if program had any effect (most likely 6 months)
      2. In a traditional survey:
        • Company prints a survey and mails it to 10,000 people hoping for a 10% response rate to get a statistically valid sample size of 1,000
        • Patients fill out the survey over the next month and mail them to a data entry company
        • Data entry company manually enters them, aggregates the data, and creates a report
        • 45-60 days later the company has information from the survey

      Of course, the issue with both of these is that you have lost a huge window of time especially if you need to make changes to your program or the survey tells you that you need to gather more information.

      Why don’t more companies talk about on-the-fly program changes and how to use modern technology to get real-time feedback for programs where they can pause the program, make change (e.g., change the message, add a new question), and then continue the program?

      Business Tools, Healthcare, Innovation, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Technology, Value Propositions

      Another AIS Gem

      February 4, 2008 by George Van Antwerp 0 Comments

      AIS has a daily newsletter that comes out which starts with a quote.  I have found a lot of these good teasers.  Here is one from last week.

      “Providing education and information [about Health Savings Accounts] is very important. Too many companies talk too much about the money. That’s not the key. The tax benefits are nice, but people want to know what happens if they get sick. They want to know how the HSA works and whether they’re going to be stuck with a medical bill.”

      — Roger Abramson, director of legal, compliance, education and human resources at Fontis Healthcare Services, Inc., told AIS’s Inside Consumer-Directed Care.

      It is a good point about how often we communicate one thing which seems relevant to us without thinking about the receiver of information’s framework and hierarchy of information needs.

      Consumerism, Healthcare, Managed Care, Marketing / Communications, Value Propositions

      Generic Changes: Patient’s Confused

      February 3, 2008 by George Van Antwerp 0 Comments

      Typically these things play out behind closed doors or in court and don’t always impact the patient, but I think the latest Protonix saga will have a brief impact on patients.  Primarily causing some confusion.

      The basic scenario:

      • Teva decided to challenge Wyeth’s patent and launches generic Protonix early (this means that they are going at risk and if they lose the patent fight that they owe Wyeth 3x the revenue collected from the product)
      • Teva ships about $300-$400M worth of generic Protonix in December and January
      • Wyeth fights them in court and decides to bring its own generic version of Protonix to market
      • Now, Teva has decided to stop shipping generic Protonix (see WSJ blog on this)

      If you’re a United patient, you likely just got a letter telling you that they have moved the generic to the third tier (i.e., highest copay) and moved the brand to the first tier which is typically for generics.  They obviously worked a deal directly with Wyeth.  But, the consumer has to deal with issues such as state mandatory generic laws that require the pharmacy to fill a brand drug that has a chemically equivalent generic available with the generic unless the physician has checked DAW (dispense as written) for the brand drug.

      Good business logic saving everyone money, but this may burden the consumer and the pharmacy and the physician.  Hopefully, they have an effective communication strategy to drive patient behavior.

      So, your prescription history might look something like this (while staying on the same drug):

      • November – brand Protonix (2nd tier)
      • December – generic Protonix from Teva (1st tier)
      • January – generic Protonix from Teva (1st tier)
      • February – brand Protonix (1st tier)
      • March – generic Protonix from Wyeth (1st tier)
      Consumerism, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Value Propositions, Weblogs

      Single Answer or Multiple Answers

      January 31, 2008 by George Van Antwerp 3 Comments

      I was having an interesting discussion yesterday about how to solve a problem.  The two opinions were whether there is a best answer or whether there are multiple best answers.  It’s a great question.

      Let’s frame it this way.  Is there a message that is most likely to drive compliance for a group?  I gave them the benefit of the doubt that they aren’t crazy enough to suggest that one message works generally with no segmentation.  (McKinsey‘s article “Getting Patients To Take Their Medication” has some good research around creating segments and showing how some of the segments vary in what they want.)

      The other person was presenting a case that they could do lots of research on linguistics and other topics and suggest one optimal message that would work across broad segments of the population.  I was of the opposite opinion that a personalized message that had certain core research but varied by geography, condition, age, income, benefit type, prior interactions, etc. was better.  And, that what is good today may change both generally and individually over time.

      I would rather get all the micro-niches of people to their highest compliance and adherence level versus getting a better average across all group. 

      Basically, my position is that there are multiple optimal solutions to the problem not just one.  It triggered a memory for me of when I first went to business school.  In architecture school, design is somewhat subjective.  (There are some logical rules such as the Fibonacci Sequence which serve as guiding principles of scale…for example.)   We were taught to always bring three solutions to our initial presentations to let the judges decide which one we should push to finalize.  We had to pick one for a deliverable, but it was always a tradeoff.  In business school and the hard sciences, there is often only one answer that is valid.  (1+1 always equals 2.)

      But, for communications, marketing, and other things, it seems obvious to me that companies are best served by dynamic flexibility that allows them to bring multiple solutions to the market in parallel that adapt to different patients and change over time to respond to the market and the patient.

      Here is a quick snapshot of the segmentation from the McKinsey report…

      mckinsey-hypertension-segmentation.png

      Books / Articles, Consumerism, General Thoughts, Healthcare, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Value Propositions

      Excellent Versus Very Good Service

      January 29, 2008 by George Van Antwerp 0 Comments

      On my vacation, we took the kids on a Disney Cruise.  We also went last January.

      For the first time, I think I can actually differentiate between very good and excellent on the survey.  I always struggle with that and tend to grade down.  In general, we love the Disney experience and the cruise is very well run.  We are already booked for next year and will be going with several other families.

      Anyways, on the boat, you go to a different restaurant each night and your wait staff follow you.  This year, they were attentive.  No food was messed up.  They were polite.  They did magic for the kids each night at the table.  They engaged us in conversation.  It was very good service.  Better than almost any restaurant.

      BUT, since we were there last year, we had a very high expectation.  Last year, the wait staff learned each day.  After day one, they knew what drinks my kids liked and had them waiting for them when we arrived for dinner.  By day three, they knew my son was a picky eater and had one of his favorite foods on the table.  And, they knew that my daughter wanted some snack other than the typical appetizers and they had that waiting.  Basically, they learned, adapted, personalized, and acted proactively.  The difference was amazingly clear within very tight parameters.

      Of course, it took someone else to point out to me that this was an example to share since this is the key point for my healthcare companies.  You need to learn from your communications.  You need to adapt to today’s technology and your patient’s expectations.  The patient experience has to be personalized (in scale) to be in a message they respond to, in a channel they like, at a time that is convenient to them, and based on previous interactions.  And, you have to act proactively.  The patient doesn’t always know when to act.

      Since traditional differentiators are basically null (i.e., network size, plan design), it becomes all about communications and service.  How do you drive the patient experience?   It is worth looking at the Forrester data on customer experience index.  Healthplans score incredibly low in terms of usefulness, ease of use, and being enjoyable.  The highest (that they looked at) was Kaiser at 63% with the lowest being Aetna at 49%.   [60-69% meant that the customer had an “okay” experience with the company.]

      General Thoughts, Healthcare, Managed Care, Marketing / Communications, PBM / Pharmacy, Value Propositions

      Diagnosis Code Plus Rx

      January 29, 2008 by George Van Antwerp 2 Comments

      In a WSJ Blog article about sound alike drugs, they have a potential solution about having the physician add information about why the drug is being used.  Obviously, the low hanging fruit here is to move to electronic prescribing where the clinical information (i.e., diagnosis code) is in the same file as the drug and technology can be utilized to look for potential issues.

      In the short-term, adding the diagnosis code (aka ICD-9 code) to the prescription would have lots of benefits.

      • Avoid getting some point-of-sale rejects when a drug is used off label.  Or vice-versa, avoid off-label use by rejecting claims.
      • Avoid getting suggestions you change prescriptions only to find out that you should not do it given your diagnosis.
      • Development of proactive algorithms (e.g., macros) in the technology where whenever a doctor diagnosed diabetes then it would pull up their typical regiment of drugs based on formulary status and other inputs.
      • Better tailor / personalize information based on disease and drug to help the patient and their care team drive successful outcomes.

      The issue of sound alike drug names is a real issue.  Obviously, any time you have multiple human handoffs in a process then you increase the likelihood of error.  As I think I have talked about before, I remember my MD prescribing an eye drop.  I picked up a prescription and the pharmacist clearly told me to put one drop in each eye twice a day.  At the end of the second day, I read the label in detail and realized that it said to put the drops in the ear only.  When I called them back, they talked to the MD and realized that they had heard the wrong name when they listened to his voicemail.

      Healthcare, Methodology, PBM / Pharmacy, Technology, Value Propositions, Weblogs

      Where Are The Evidologists?

      January 29, 2008 by George Van Antwerp 0 Comments

      After one of their team posted a comment on my site, I went to Bazian‘s website.  Very interesting.  They are a UK based company that focuses on providing evidence-based healthcare information to publishers, governments and insurers.  Sounds promising.  This is an important issue across the world as companies and practitioners look at how to embed intelligence into process and technology to deliver the best outcomes.  Here is a presentation that they have for download on their website.  In it, they propose a new healthcare role of the evidologist and draw a nice parallel to the radiologist.

      “In late 2005, Bazian gave a presentation about putting evidence into practice – a much discussed topic in the world of evidology.  It summarised 10 years of experience in evidence-based medicine, and draws conclusions about who should be putting evidence into practice, when, and what has to really happen for evidence to become a routine part of medical practice.”

      Ev·i·do·l·o·gy n.

      A new medical specialty that enables medical research to be incorporated systematically into clinical practice [Latin videre to discern, comprehend; evideri to appear plainly]  

      Books / Articles, Healthcare, Leadership, Managed Care, Methodology, Research, Technology, Value Propositions

      Concise Summary of Compliance Reality

      January 28, 2008 by George Van Antwerp 3 Comments

      I have shared other facts with you on compliance. This is a hot topic in healthcare right now. I thought pulling this one graphic out of my entry on Caremark’s trend report made sense. This really gets to the point. Take this in light of the following quote from WHO (World Health Organization) and you can understand why.

      “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.”

      caremark-compliance.png

      They have a good chart in the document about speciatly medications and the impact of medication management services.

      caremark-specialty-adhearence.png

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

      Increasing GDR

      January 28, 2008 by George Van Antwerp 0 Comments

      I love reading healthcare articles which have acronyms that not everyone knows. (Maybe it was defined earlier, but I didn’t see it.)

      Another nugget from the Caremark trend report is on programs and plan design components to drive generic dispensing rate (GDR) which is the number of prescriptions filled as generics divided by the total number of prescriptions filled. (Versus generic substitution rate which is the number of prescriptions filled as generics divided by the total number of prescriptions filled for which a chemically equivalent generic is available. I can’t remember whether we used only A-B rated generics or all generics, but that is a technical discussion for another time.)

      caremark-driving-gdr.png

      This is great. It tells you the impact (on average) of implementing a plan design or some of their clinical programs on your GDR. (BTW…a good rule of thumb is that an increase of 1% in GDR is worth about 0.75-1.5% savings in your overall prescription spend.)

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

      Caremark’s TrendsRx Report 2007

      January 28, 2008 by George Van Antwerp 1 Comment

      Well…I better get this posted before all the 2008 reports start coming out. I have started it a few times, but there is so much good content in here that I haven’t finished. I am determined to get this done tonight. As you may know, all of the PBMs publish very well done annual research reports on the trends in the industry and what they have learned from their data. I have talked about Express Scripts research and reports (here, here, and here) and Medco’s report (here). [Note: For simplicity sake, I am not going to put all the sources here. They are in the Caremark
      document.]

      “Consumers experience the [healthcare] system as complex, impersonal, disconnected, reactive, and increasingly unaffordable.”

      • In 2006, the average number of retail Rxs per capita was 12.4.
      • 59% of those <65 had an Rx in 2004 and 92% of those >65.
      • With consistent use of effective prevention, early intervention, and adherence strategies, they estimate that 30% of current healthcare spending could be eliminated. Image the impact of that on MLR (medical loss ratio) which is a key metric for managed care companies on how much of each premium dollar they actually spend on healthcare costs.
      • They layout a very logical vision that would take advantage of their unique set of assets with CVS, Caremark, and MinuteClinic.
        • Preference based consumer access.
        • Patient focused view within their systems and communications.
        • POC (point-of-care) connectivity. (i.e., pushing relevant information real-time to physicians and pharmacists to optimize care)
        • Personalized health advocacy (“make the healthcare experience less disconnected and impersonal”)
      • The price of brand drugs (on average) increased by a rate of 3x the CPI (consumer price index) in 2006…the highest since 2002. [In my opinion, this will continue as they face more price pressures with the government being the largest buyer now with Medicare Part D and with the majority of claims now being filled with generics.]
      • At the same time, the price of generic drugs decreased by 1.2%.
      • With Medicare, Medicaid, and other public payer, the government now pays 40% of the total drug spend in the US.
      • They are working with the Coalition for a Competitive Pharmaceutical Marketplace (CCPM) to reduce patent expiration “loopholes” (aka ways that brand manufacturers extend their patent lifecycles which are often perceived to not add any additional value).

      Some of the graphs and charts that I found interesting and helpful are below. (I pulled one of my favorites out in its own posting.)

      caremark-national-health-expenditures.png

      caremark-30-reduction.png

      caremark-balanced-scorecard.png

      caremark-awp-inflation.png

      (BTW – If you don’t know who BOB is, it stands for Book of Business which means the payors whose data was included in the analysis.)

      (They make the point that 5 of the 10 drugs face patent expiration by 2010 so as expected prices are increased in the years prior to maximize return.)

      I haven’t talked a lot about specialty drugs here on the blog. Here is a good list of the top classes. Typically these drugs are either high cost and/or require special care (mostly meaning injection). The average specialty drug would typically cost $1,500 per 30-day supply versus more like $80 for a non-specialty drug.

      caremark-specialty.png

      caremark-specialty-balanced-scorecard.png

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

      Medical Mistakes

      January 28, 2008 by George Van Antwerp 0 Comments

      •  Wash hands with soap.  Check.
      • Clean patient’s skin with antiseptic.  Check.
      • Wear sterile mask, gown, and gloves.  Check.
      • Put sterile drapes over  entire patient.  Check.

      And that’s all it takes to reduce common infections from medical tubing by 2/3rds.  (12/28/06 study in the New England Journal of Medicine looking at 108 ICUs in Michigan hospitals)  Seems pretty simple.checkup.jpg

      Do you remember when the Institute of Medicine put out their study in 1999 that said that 100,000 people died annually from preventable hospital errors?  People were shocked.  The medical profession thought the numbers were too high.  So, I find it more that a little interesting that the Institute for Healthcare Improvement (which includes 3,000 of the 5,000 hospitals in the US) put out a report in 2006 on saying that they had saved over 120,000 lives.  [If that was for 3/5th of the hospitals, I guess that means that about 200,000 people were dying per year in the US due to preventable hospital errors.]

      So, it is with mixed emotion that I look at their latest campaign which is the 5M lives campaign to reduce deaths, injuries, and near misses in US hospitals.  Now, I am being a little sensationalistic.  The fact that hospitals are collaborating, sharing information, being transparent, looking for best practices, and trying to improve is great.  Sometimes, it is just shocking what has been going on.  [Imagine the error rates in some 3rd world countries.]

      Here is an article from today in the LA Times about this.

      Books / Articles, Healthcare, Leadership, Research, Technology, Value Propositions
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      Another Quickie – DM Megatrends

      January 25, 2008 by George Van Antwerp 0 Comments

      Here is another blog entry and linked presentation to look at on Disease Mgmt and some of the trends.

      Healthcare, Managed Care, Technology, Value Propositions, Weblogs

      Prevalence of Chronic Illnesses

      January 16, 2008 by George Van Antwerp 0 Comments

      I found this concise slide showing the number of patients with certain chronic diseases along with the financial impact to our economy.

      chronic-illness.jpg

      Healthcare, Managed Care, Research, Value Propositions

      Coordinated Communications

      January 15, 2008 by George Van Antwerp 0 Comments

      A few days ago, I talked about a press release from Express Scripts around formulary change programs to encourage patients to move to a different drug (same therapeutic category different chemical entity). I mentioned in there a single frame that I created to organize the program. Happily, I found it publicly so I can share it. Here it is. The key points here were – identifying the different constituents, determining the best mode of communication, coordinating across channels, and determining how to sequence communications based on events (aka triggers) which might be a date or a percentage of their prior prescription being used.

      zocor-control-room.jpg

      While I was searching, I also found the presentation we gave on how multi-modal coordinations using a letter and an automated call impacted success for my retail-to-mail program. The key to remember here is that we targeted people who had already received one or more letters and had not responded. The results were great.

      esi-rtm-results.jpg

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

      The $1,400 Physical

      January 7, 2008 by George Van Antwerp 6 Comments

      If you’ve never heard of it, concierge medicine is an interesting extreme of consumerism.  I met a physician in St. Louis about 7 years ago who had such a model.  He didn’t take insurance.  Each patient had their own voicemail box for exchanging messages with the physician.  Everyone paid him an annual fee for unlimited access.  Most of his revenue was for a private company’s executive team and their families.  He spent lots of time with the patients, focused on preventative care, and kept trying to find ways to keep them healthy.

      Newsweek had an article about this in their 11/26/07 publication called “The Blue Chip Checkup“.  It talks about the Concierge Medicine clinic in LA where you can go get a $1,400 Vehicle Loans physical just like the President gets.  It is so comprehensive that it even includes a skin consultation.  Apparently, over the past year, they have had 600 people come in to get this physical.

      I know lots of people are pretty skeptical about this.  I am not sure I have an opinion yet.  It’s interesting.  Obviously, you don’t want to create unneeded costs and certainly we don’t want to make care a luxury good.  But, having people take responsibility for their health and wanting to learn as much as possible about how to manage their care seems like a positive.

      Ideally, there should be lots that we can learn about patient-MD interactions, value of testing, preventative care, and what would happen in an ideal setting where insurance and money was not an issue.

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

      Pharmacy Satisfaction: Communication is Key

      January 6, 2008 by George Van Antwerp 0 Comments

      It’s always great when you find research that clearly reinforces one of the things you always talk about – communications. At PharmacySatisfaction.com which is a website sponsored by WilsonRx and Boehringer Ingelheim, it lists the 10 steps to customer satisfaction for a pharmacy. A few key items that I think are relevant to a lot of what I talk about and do with customers in pharmacy and healthcare in general:

      1. Know your customer (database marketing / management)
      2. Speak up (you’re the expert…help them)
      3. Educate the customer (reach out to them proactively and help them with information)
      4. People skills (understand that different people respond to different messages, mediums, voices, times of day, etc)
      5. Address compliance (refill reminders)

      It also made me think about two topics which I think are relevant to communications success – Linguistics and Nuerosciences. As you might expect, there are lots of blogs on both. Here is a list of blogs and some definitions:

      Linguistics is the study of the nature, structure, and variation of language, including phonetics, phonology, morphology, syntax, semantics, sociolinguistics, and pragmatics (per The American Heritage Dictionary of the English Language).


      Neuroscience is a branch (as neurophysiology) of the life sciences that deals with the anatomy, physiology, biochemistry, or molecular biology of nerves and nervous tissue and especially their relation to behavior and learning (per Merriam-Webster’s Medical Dictionary).

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

      Enhanced Communications Have An Impact

      January 6, 2008 by George Van Antwerp 1 Comment

      On January 4th, Express Scripts put out a press release about consumers using a home delivery pharmacy being more likely to choose lower-cost therapies. It is an interesting study as published in the December 2007 issue of the Annals of Pharmacotherapy. I had the fun job of designing the program as one of my projects before I left Express Scripts. I will never forget my boss coming to me and asking me to think about how we could drive market share movement of several large drugs if we took them off formulary (i.e., Lipitor). He handed me a white paper written the year before on what to do. Since he was new, I didn’t give him too much grief since I was the author of the white paper from the year earlier about what we should have been doing for the past 12-months to prepare for this.

      Anyways, I pulled a lot of input and created a great single-frame image which showed the major constituents and the tools/tactics we would use to drive market share both pre-formulary change and post-formulary change. I went back to my day job, but the image became the roadmap for a multi-modal communications strategy. As was my intention (since I was responsible for mail order), it looks like it worked both to move share and to show how mail could be better than retail.

      Here are a few of the highlights from the press release:

      • Express Scripts evaluated consumer behavior after they made a change to the formulary positioning of cholesterol lowering drugs to prepare for Zocor going generic in mid-2006.
      • They looked at more than 200,000 retail and mail patients.
      • All patients got a formulary notification letter informing them of their therapeutic options, materials for their physician, a website for more information, and toll-free number to call. [2 years earlier I had created the business case for mass mailings of formulary notification letters.]
      • The IVR refill line included messaging about switching to a formulary agent, and we placed automated outbound calls to mail order patients [using Silverlink Communications].
      • Patients that were interested were queued up for a change at mail after 1/1/06 (so as not to lose rebates for our clients in 2005).
      • Obviously, other plan factors (i.e., copay differentials, step therapy) impacted choice. [I.e., if I only have to pay $5 more per month for a drug that I am used to, I probably won’t switch]
      • The results were great. 52% of the mail order patients and 33% of the retail patients chose to switch therapies.
      • Some of the retail patients were part of a rapid response program in which they received a letter telling them about their options in the therapy class right after they received their first fill of the non-formulary drug in the new year. [another program which I developed and launched for step therapy] Receiving this letter increased their likelihood of switching by 28%. [BTW – we tested this with letters vs. automated calls from Silverlink back in 2005 and the results were very similar.]

      “Creating a dialogue with consumers is a crucial factor in successfully changing behavior and delivering value at the consumer level,” explains Emily Cox, Ph.D., senior director of research at Express Scripts. “Home delivery consumers received additional information and were more likely to seek further assistance through the Web and by calling Express Scripts. Enhanced communication clearly has an impact. The effectiveness of the rapid response program for retail consumers also supports the value of enhanced communications.”

      As I have mentioned before on the blog, this was a great program. It proved that PBMs can influence market share. I was more than a little disappointed to see that after we moved all these patients to Zocor to take advantage of the generic then company than moves Lipitor back on formulary only to have to ask the patients to switch drugs again. [Fortunately, I was not there for these discussions.]

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

      Did You Know Factoids

      January 4, 2008 by George Van Antwerp 0 Comments

      I found this great list of factoids or Did You Know statements at PharmacySatisfaction.com. Here were some of my favorites or more interesting ones.

      • The biggest reason for not taking all medications as directed was simply, “I forgot.”
      • The number one concern across all pharmacy users is that their prescriptions are filled accurately.
      • The most useful feature those Web sites offer to them, the survey found, is the ability to order refills online.
      • Nearly three in 10 order their refills online.
      • Customers average three visits each month to their pharmacy.
      • Only about 1-in-5 pharmacy customers, overall, say that they use a loyalty card that provides points, discounts or other savings.
      • While the majority of loyalty card users are satisfied with the expected cost savings by using their card and with the ease of enrolling and understanding the benefits of their card, fewer than 1-in-4 card users are highly satisfied.
      • The drug store industry remains largely up for grabs, with nearly half of pharmacy customers saying they use more than one pharmacy to fill prescriptions.
      • Pharmacy use varies considerably by population. Chain pharmacies are most commonly used among residents of areas with more than 100,000 people. Independent pharmacies are most commonly used among rural respondents (areas with less than 100,000 people). Use of independent and mass merchant pharmacies decreases as population increases. Chain, food store, mail/online, and clinic pharmacy use tend to increase with population.
      • However, as pharmacy customers age, they are much less likely to use chains and considerably more likely to use mail/online and clinic pharmacies.
      • Seven-out-of-ten pharmacy customers indicate that they “definitely would” or “probably would” use their local pharmacy if they could receive the same amount of medication at the same price as their mail-order pharmacy.
      • The heaviest users of prescriptions are survey respondents in their 60s, averaging 5.4 new scripts and 29.2 refills per year.
      • How long patients have to wait for their scripts to be filled is a key component of customer satisfaction.
      • The average survey respondent is spending a considerable sum each month on drugs at their pharmacy—$82 on average (versus $57 a month on food and groceries at their pharmacy).
      • An average of 85.9% of computer owners/users use the computer to improve their health by looking for information about diseases.
      • Much has been written about the value of closer pharmacist-patient relationships, but Americans seem to feel far more connected to their physicians, dentists and nurses than to their pharmacists. That’s clearly not all pharmacy’s fault; the same survey respondents agreed that they were usually given the opportunity to speak with their pharmacist when filling their last prescription. What’s more, pharmacists ranked a close second to doctors as sources of information about medications.
      • Walgreens’ “Dial-a-Pharmacist” initiative, launched in February 2006, allows non-English speaking patients to connect with pharmacists speaking 14 different languages.
      • Independent pharmacy customers have the most trust in pharmacists, while mail/online customers have the least. Compared to last year, customers of all types of pharmacies place more trust in their pharmacist as a source of information.
      • More than one-third of pharmacy customers failed to fill all their prescriptions last year, and only 35 percent of all respondents said they were fully compliant on the medications they did take. Nevertheless, refill reminders from the pharmacy remain relatively rare, most patients profess.
      • In general, older patients tend to be more compliant than their younger counterparts.

      I mentioned poly-pharmacy a few days ago, but here is some data about how many pharmacies patients use.

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

      Loyalty…Retention

      January 3, 2008 by George Van Antwerp 0 Comments

      I had a good lunch meeting today discussing loyalty in healthcare.  The loyalty expert asked me what I meant when I use the word “loyalty”.  Good question.  I immediately jumped to points programs which is what I usually think about when I say loyalty.  He asked about points versus information versus experience.  I usually think of those as some of the key components of retention.  Retention to me is a lifecycle program that address the patient experience from getting them to select you, welcoming them to the program, educating them, and exiting them at the right time.  It involves information, tools, incentives and rewards, and has to be relevant to them.

      Healthcare is unique in that you can’t simply incent on volume.  I don’t want you to get an prescription if an OTC will work.  I don’t want to you to go the physician unnecessarily.  I want to incent you to do the right thing – go to your physician versus the ER; exercise; get appropriate tests done; participate in disease management programs; or use a generic drug.  Some of these are easy to capture, but some of them become self-reported data which is hard to automate and collect.

      So, we talked about the different constituents and what they might do:

      • Providers (MDs, clinics, hospitals): pretty difficult to see the right model here…obviously they want your business if/when your sick so a share of wallet concept could work, but there isn’t a clear alignment of incentives without a pay-for-performance (P4P) or capitated relationship.
      • Pharmacies or Durable Medical Equipment (DME) Providers: this is the easiest model to understand, but you still have to make sure you don’t incent inappropriate behavior
      • Managed Care or Other Insurers: this is where the biggest opportunity exists, but the question is how to you get companies to invest in rewarding preventative actions rather than running the odds of having a major cost factor for the patient prior to the patient churning (i.e., going to another payor)
      • Disease Mgmt Companies: this is a clear model since they are being paid to manage a disease and lower the costs.  offering incentives or rewards that make a patient compliant (i.e., loyal) or drive behavior to a care plan would be in their interest.
      • Pharmacy Benefit Managers (PBMs): there is something here especially around mail order pharmacy, but I think the big opportunity here is reward for behaviors such as using self-service (web, IVR) or choosing the lowest cost option – OTC, generic, mail order, etc.
      • Pharmaceutical Manufacturers:  here there is clear alignment.  We used to do programs such as the 5-7-9 card which was for some drug (that I can’t remember).  The patient got the 5th, 7th, and 9th fill free if they stayed compliant and enrolled in the program.

      In researching this, I found this good loyalty presentation by Carlson Marketing.  With healthcare being so behind other industries and struggling to figure this model out, the only place we are going to find a lot of research and information is going to be in other industries.

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

      Academic Detailing

      December 31, 2007 by George Van Antwerp 2 Comments

      Their is a concept is the pharmacy world called academic detailing which essentially means educating physicians about the cost / benefits of prescription drugs.  It can be done via letter, phone, and face-to-face.  Many managed care companies and PBMs have tried it over the years.  Does it work?…sometimes.

      “It’s estimated the pharmaceutical industry spends about 90% of its $21 billion marketing budget on physicians each year.”  (Journal of the American Medical Association article from January 2006)

      Logically, it seems like a great idea.  Get out and provide physicians with unbiased information about the drugs they prescribe.  Provide them with published research.  Show them how they behave versus their peers through benchmark data based on their prescribing habits.

      Since I briefly owned academic detailing as a product line, I remember the challenge that our lead pharmacist had on proving the business case of why we should invest there.  There were too many challenges:

      •  Why does the physician care about cost?  They care about what works.  If you can clearly prove the compliance is tied to out-of-pocket costs, they might get interested, but the cost to the patient (at least if they have insurance) has historically not been significantly different between different options.  [I do believe consumerism and consumer-driven healthcare might change this.]  I always compare this to the expression “no one ever got fired for hiring IBM”.
      • To compete with the brand manufacturers who have 10’s of thousands of representatives out meeting with physicians, it would take billions of dollars.  Who is going to fund this?  You see change happen in small pockets where there is large marketshare by one dominant payor that can influence the physicians.  With the government as the largest payor in healthcare, they could do this, but where is the money going to come from?
      • Do the physicians have the time?  There are 10,000+ drugs out there.  Physicians are busy and under lots of pressure.  Some physicians have stopped seeing detail representatives.  Others charge for their time.  This is not a 2 minute discussion.  (I believe that is the average for a manufacturer’s representative with a physician.)  This is a 30+ minute discussion of clinical and cost information.

      Perhaps P4P (pay-for-performance) may change this.  I know that when physician’s were capitated for both medical and pharmacy costs that it could impact their prescribing habits.  I always here about different groups trying academic detailing for all the right reasons…BUT, I never see any great proof.

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

      Polypharmacy Programs

      December 29, 2007 by George Van Antwerp 2 Comments

      I am sure that some people are focused on this, but I rarely hear about it.  Although most people go to more than one pharmacy, today’s claims adjudication systems are programed to identify serious issues across pharmacies.  But, since you can’t reject every claim, the edits in the system are focused on the serious issues which might leave some opportunity for improvement.  If you add in OTCs and supplements that people take, there may be opportunities that aren’t captured by the system.

      I found some results from a 2003 Premera BC program which I thought were quite impressive.  They built a program that offered a medication review with your physician if you took 5 or more prescriptions.  Their results included:

      • 50 percent of the targeted members brought in their medications for the physicians to review.
      • One out of every three members received prescription changes.
      • Sixty four percent had a medication added.
      • Forty seven percent had one or more medication stopped.
      • Sixty five percent had the dosage of a medication changed.

      Given results like this, it would seem like a program everyone should be doing.

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

      Proactively Addressing Customer “Defection”

      December 27, 2007 by George Van Antwerp 0 Comments

      Where your customer (or patient) has the ability to defect (i.e., chose another health plan, go to another PCP or hospital, chose another drug or pharmacy), what are you doing to predict this and act in advance.  As the old saying goes, it is cheaper to keep a customer than to attract a new one.

      In wondering what other industries do, I was a little discouraged to find the following in CSC’s 2004 Customer Intelligence Diagnostic Survey:

      “half of the respondent firms never, or almost never, perform defection analysis to identify customers who are on the verge of defection.  Nevertheless, over half of the respondents claim that they have developed targeted programs to prevent defection.”

      Even companies that ask about your experience or satisfaction often don’t act on it.  For example, I have stayed at the Detroit Ritz several times for personal travel.  Each time, check-in has been bad.  Every time I check out, they ask how my experience was.  I say it was okay.  They say great and move on.  [Which shouldn’t be acceptable at a place like the Ritz that prides themselves on customer service.]  Never have they asked me for feedback.  So, instead, I complain to the national office and get a gift certificate which costs them money…simply for not acting on my lack of satisfaction.

      In healthcare, it may be a little harder to predict, but not filling a maintenance drug or not scheduling a follow-up appointment are definitely bad signs.  A quick follow-up survey to any experience will tell you a lot.   And, as I think I have mentioned before, for healthy people that never experience their healthplan, it makes a lot of sense to reach out to them prior to open enrollment when all they will see is another rate hike.

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

      PHR as a Chip

      December 22, 2007 by George Van Antwerp 1 Comment

      I am sure some people think of this as a crazy notion.  Would this ever happen?  What are the implications?  What is the value?

      People getting “chipped” seems scary to a lot of people.  But, an intelligent chip that could collect body information – weight, blood pressure, etc – and feed it to a PHR (personal health record) seems pretty interesting to me.  Even simply having a chip that could be read and used to identify you if you were unconscious or dead or unable to identify yourself seems valuable.

      I have seen John Halamka talk briefly about his chip live, but I was glad to see that he has a whole entry about it on his blog “Life as a Healthcare CIO“.  It is a good read of the pros and cons. 

      Healthcare, Innovation, Technology, Value Propositions, Weblogs

      The Cost of Stress

      December 22, 2007 by George Van Antwerp 1 Comment

      I think it is always interesting to quantify something that many of us may deal with abstractly.  Money Magazine (Dec 2007, pg. 44) has an article called “Hidden Costs of Stress” which does just that.

      “Chronic stress, the kind you experience when the demands of life exceed your ability to cope, boosts the risk of developing ailments ranging from the common cold and gum disease to obesity and heart disease.”

      The author working with several other groups puts the costs per year of stress at:

      1. $300 for over-the-counter drugs (e.g., pain relievers and decongestants)
      2. $5,600 for physician visits and other out-of-pocket healthcare costs
      3. $375 for high life insurance premiums
      4. $500 or more for dental costs

      The other big issue is lost productivity which the article mentions saying that workers with severe stress miss 23 days of work a year.  That’s an economic hit to the employer along with a source of additional stress since your performance will be lower and you will use all your vacation days to cover your stress days.

      The article throws out a few simple methods to reduce stress – exercise, stretching and breathing deeply, and reducing caffeine.  Personally, I believe we have to learn to say “no” to control stress.  No – I am too busy to do that.  No – I don’t need to buy that until I have the money.  A lot of stress is often self-induced trying to do or have too much.

      So, given some obvious costs, I wonder if we will ever see a “disease management” type program to reduce and manage stress.

      Books / Articles, Healthcare, Research, Value Propositions
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