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Sticky Messaging

December 20, 2007 by George Van Antwerp 0 Comments

We used to talk a lot about stickiness of websites and eyeballs back in the late 1990s. The word still has some attraction and is a key point in the recent McKinsey interview with Chip Heath. Chip is a professor of Organizational Behavior at Stanford University’s Graduate School of Business.

“The key to effective communication: make it simple, make it concrete, and make it surprising.”

Although the article is primarily around what executives need to do to make their messaging and ideas stick with diverse audiences, it has a lot of relevance for healthcare.

“A sticky idea is one that people understand when they hear it, that they remember later on, and that changes something about the way they think or act.”

Think about all the things you want to tell your patients or members or employees (or vice-versa all the things you patients want your healthcare companies to tell you):

  • There has been a change to your X (copay, formulary, network).
  • You have an opportunity to save money by doing X.
  • We are missing X data that will delay your coverage.
  • We see that X happened and wanted to gather data on your experience or proactively address your question.
  • Welcome to our plan. Have you registered on the website? Have you received your ID card?
  • Please take this Health Risk Assessment.
  • Your credit card has expired. Would you like to update it?
  • Your order is delayed. If this is an emergency, please do X?
  • We see you were on the website. Did you find what you needed?
  • Do you need a copy of your X (formulary, provider directory)?
  • You have not yet picked a Primary Care Physician. Would you like to do that now?
  • Did you receive the information that we sent you?
  • Are you following your physicians orders? Did you do X? Why or why not?
  • Our records show us that you are due for a X. (Flu shot, screening)
  • Are you using any over-the-counter products that we should have in our database to identify drug-drug interactions?
  • Please remember to refill your medication?
  • Are you having any side effects or complications associated with your recent medication or procedure?
  • Have you enrolled yet in our disease management (or incentive) program? Would you like more information?
  • Welcome to the plan.
  • We know it is time for open enrollment. We hope you will renew with us. We are offering a local meeting to help you learn more about your benefits. Would you like to attend?
  • X has changed with your drug, condition, etc. There is new information available at Y.
     

    Getting back to the article…He offers several good examples of sticky messages which are primarily what I would call rallying calls for organizations. In healthcare, the key is to find these simple messages that compel people to act. So, bottom lining it, he gives six basic traits:

  1. Simplicity – short and deep
  2. Unexpectedness – uncommon sense messages generate interest and curiosity
  3. Concreteness – his example is don’t say “seize leadership in the space race” but say “get an American on the moon in this decade”
  4. Credibility – this should be so easy in healthcare if you leverage all the people and stories out there
  5. Emotions
  6. Stories

He has a few great stories such as:

  • A Nordstrom’s person wrapping something bought at Macy’s just to make the customer happy. [And probably without point it out.]
  • A FedEx driver who forgot the key to a box simply unbolting the box from the ground and throwing it in the truck so they weren’t late.

These things reinforce the message while becoming a type of urban legend that stay with people. They evoke emotion in a simple way.

One good example I have from Express Scripts was around trying to motivate people to change from one drug to another. When Zocor was going generic, we decided to launch a huge multi-modal campaign to drive down Lipitor marketshare and move people to Zocor so that when it went generic everyone would win. [Clients would save; patients would save; and we would make more money.] It worked. But, prior to the program, we worked with linguists and others to design and test a set of messages. The one that resided best was “we have a secret that can save you money”. People were intrigued and listened. They felt like they were being let in on something that was important. We ended up positioning it similar to a Consumer Reports Best Buy. It worked.

Books / Articles, Business Tools, Healthcare, Leadership, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Value Propositions

Forrester on Individual Health Market

December 20, 2007 by George Van Antwerp 0 Comments

It is a few months old, but Forrester put out a report called “The $115 Billion Individual Health Insurance Opportunity” back in October of this year that is packed with facts and a few interesting concepts. The key point is that established companies need to maintain success in the B2B world that we live in today while aggressively migrating processes, collateral, skills, and products to work in the B2C market.

I was definitely surprised by their statistic that 9% of today’s market is made up of individuals purchasing their own insurance and that 20% of the population is either in a high deductible or CDHC plan. Their data also says that 31% of the uninsured are actively investigating insurance. Obviously, this means a lot of people looking for health information and taking more responsibility for their care.

They offer 3 recommendations:

  1. Get ahead of the legislative curve. I would agree. Companies should be out testing models right now with the early adopters. [One of my favorite quotes from one of the founders of IDEO goes something like ‘fail early to succeed sooner’.]
  2. Develop and launch innovative plan designs. They talk about Prudential’s “pay-as-you-go” model in Europe and American Community Mutual Insurance in Michigan that has a buy-up plan that you can buy after you get sick. WOW!! I am not sure how you underwrite this, but it sounds very interesting.
  3. Invest in low cost distribution channels. They talk about Tonik which I mentioned before and the building of online presence. They also talk about outsourcing.

One of the big things that this will all require is some rebuilding of infrastructure to support different sales processes, personalization, claims set-up, and customer support. Companies should also be looking at data and how they can better use and mine data to learn and improve.

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

Is Healthcare Missing a Generational Opportunity?

December 19, 2007 by George Van Antwerp 0 Comments

I think a lot about some of the new marketing tactics being used by consumer product companies – sponsorship (e.g., McDonalds Holiday Lights at the Beach Presented by Verizon Wireless), advertisements or product placement in video games, corporate tattoos, YouTube videos, MySpace personas, and Second Life avatars. Logically, who cares about most of these for healthcare. The primary users of healthcare are the senior population…and they aren’t being influenced by these channels. The corporate buyers are the HR or benefit professionals…many of whom have professional consultants (e.g., Hewitt, Mercer). Branding is often an afterthought within healthcare.  [Can you image a company working with the reality show Survivor to make sure that one of their competitions earned the winner a personal healthcare coach sponsored by Cigna (for example) for a year?]

BUT, we all know that health insurance (or any insurance) company is not typically viewed as a trusted entity looking out for your best interest. (As one of my old bosses used to say…how many times are you going out to dinner with your health care broker each year?) I guess my point is why are some of the key players thinking out 20 years and trying to figure out how to influence the younger generation and show healthcare as an entity that works to make their life better (e.g., have a video game where buying health insurance makes your character recover faster from injuries).

For example, I believe most people have a great impression of architects as humane people based on The Brady Bunch’s depiction of the father figure who was an architect. The lead character in Spike Lee‘s movie, Jungle Fever, was an architect. Have you ever seen a movie where the lead character was the VP of claims at a managed care company or the CEO of a PBM? There needs to be someone out there thinking big picture and looking at what it will take over time to change the perception of healthcare because perception is ultimately reality so we have to address both. Fix the problem and get people to believe that we fixed the problem.

Consumerism, General Thoughts, Healthcare, Leadership, Managed Care, Marketing / Communications, Value Propositions

Medco on CDHC – Support Programs Are Important

December 17, 2007 by George Van Antwerp 0 Comments

In Managed Healthcare Executive (12/1/07), there is a CDHC (Consumer Driven Healthcare) article by Medco which I found very interesting.

  • A survey by the Employee Benefit Research Institute found that 70% of those in consumer driven healthcare plans consider costs when deciding to see a doctor or fill a prescription (versus 40% in a comprehensive plan). [This seems like the premise of consumer driven healthcare…you will be more careful with the costs of healthcare when they come out of your pocket.]
  • The study also found that people were twice as likely (35% vs. 17%) to avoid, skip, or delay healthcare services. [I’m feeling better so I don’t need to finish taking that prescription or no reason to go for my screening until my cash flow is better…here is the problem.]
  • The problem is compounded as an employer. Not only can your costs go up but you could lose productivity of an employee.
  • The author talks about a 2005 Medco study which showed the medication adherence is associated with significant medical savings (e.g., $1 spent on Rxs for diabetes leads to $7 in medical savings)
  • The article says that the average number of Rxs per household was just more than 21 in 2003. [I have never seen it presented this way. I always use the number of 13.1 Rxs PMPY which is from 2005.]
  • The article talks about RationalMed which is Medco’s patient safety system that looks at integrated data (pharmacy, medical, lab, and patient self-reported). [I think that this type of data integration is critical to healthcare. The challenge is integration of the data and taking action on it. I would also like to know the predictive value of the system compared to other tools such as ActiveHealth.]
  • It points to some data on generic drugs that is great and which was new to me.

“Generic drugs not only cost substantially less, but they also promote drug compliance. A recent study in The Archives of Internal Medicine found that patients who took a generic drug had close to a 13% increase in drug therapy adherence, compared with patients who took brand name third-tier drugs covered by their plan.”

  • The author goes on to talk about the need to provide patients with information and use tools to drive change. Here were a couple of the points being made:
    • People who used Savings Advisor (an online tool that compares costs) were 60% more likely to switch to a generic.
    • ¾ of people who discussed generics with their MD or pharmacist got a suggestion to use a generic. [I would like to see it for the percentage of people for which a generic was clinically appropriate. Was this 100% of the opportunities or 75% of the opportunities as implied?]
    • Direct mail about generics increased generic conversion by 22% at a savings of $88 per switch per year. [This seems low.]

CDHC will only be successful when companies have figured out how to empower patients with information rather than simply shifting the burden of financial management to them.

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

Generic Biologics

December 14, 2007 by George Van Antwerp 1 Comment

injection.jpgI mentioned this yesterday in a blog entry about The Right Prescription.  But I found a few things in an AHIP article today:

  •  Biologics are expensive, cutting-edge medical treatments made from living cells
  • $52.7B industry today; projected to grow to $90B by 2009

“We must focus our efforts on properly managing the costs of biotech drugs to ensure the pharmacy benefit is protected and preserved for the future.”  (Steve Miller, MD, Chief Medical Officer at Express Scripts)

  •  The  say that the top two anemia drugs accounted for 17% of all Medicare Part B carrier spending in 2005.  Two other biologics for cancer and rheumatoid arthritis made up another 3% of Medicare spending.
  • There is lots of discussion going on here at the legislative level to create a pathway for generic biologics to come to market.
  • PCMA estimated $14B in savings over the next 10 years if a pathway is created and Express Scripts estimated $71B in savings.
Books / Articles, Healthcare, PBM / Pharmacy, Research, Value Propositions

More From ESI Outcomes

December 13, 2007 by George Van Antwerp 0 Comments

Continuing to pull some facts from the prior Outcomes conferences…

When we first began using what we called AEC (Automated Educational Calls), we did a couple of quick pilots with control groups to see how they worked and if they increased lift in our existing programs. For one of my programs (retail-to-mail), we saw a boost on top of our direct mail program not only from those people that received a generic message but especially from those people who listened to the call. Here was a quick snapshot since over the course of multiple attempts we had a 5% success rate with direct mail and in certain programs had gotten our success rate as high as 16% in direct mail while still seeing additional “lift” in the success rate by coupling calls and letters together.

Another question answered was whether DTC (direct-to-consumer) advertising worked. Here you see that the most heavily advertised space had significant trend. In other studies, we showed that although DTC may not grow the specific drug in a 1:1 correlation it did grow the total pie for that therapy class.

As I mentioned yesterday in the entry about big pharma, the discovery of new products has dropped dramatically as shown here.

If you are focused on what’s happening from a generic drug perspective, this chart is a good picture of what’s expected over the next few years.

This is a little old (2004), but based on order of magnitude, it is relevant. The question is what is a theoretical maximum generic fill rate for some of the high cost therapy classes and what is this worth to a plan sponsor in terms of savings.

Another set of data that I always found interesting was the variation in use of generics by state.

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

The ESI Outcomes Conference

December 13, 2007 by George Van Antwerp 1 Comment

It was always fun to prepare for our annual Outcomes conference at Express Scripts. What research did we have? Who would it surprise? How would it impact us or clients? Anyways, all of these presentations and even some audio are on the website (2004, 2005, 2006, 2007). I pulled a few slides / graphs with some key points below.

Is there compliance elasticity with prescription drugs? Of course. The research team replicated a published study and found results that were much less dramatic and echoed prior research supporting the following. (elasticity in this case meant that for each 100% increase in the cost of the drug what was the decrease in utilization of the drug)
elasticity-esi.png

The differential between your brand and generic copays makes a difference in your generic fill rate (GFR). The data supports the null hypothesis that would say that the greater the difference (i.e., the more the patient saves) the higher the use of generic drugs.

Why are people non-compliant (actually from the WSJ)?

A question I often hear is what percentage of people call into the call center. Obviously this varies by population, but as shown below, it also greatly matters by how aggressive the plan design is and how many changes they are making.

The next question should be whether disruption (measured by the proxy of inbound call volume) is worth it. So, the slides show the trend versus the call volume.

Sticking with the theme, the question is how long does the disruption last. Not too long.

It is never easy to get information out to patients in a timely and effective manner, but the question that also had to be asked is whether they wanted the information. From a 2002 Express Scripts survey:

  • 74% “feel more valued” when they understand the rationale behind their benefit design.
  • 85% “want information” about how to save money on their prescription drugs.
  • 80% feel “more in charge” when they understand choices
Books / Articles, Events, Healthcare, PBM / Pharmacy, Research, Value Propositions

IBM HC 2015 – Win-Win or Lose-Lose

December 13, 2007 by George Van Antwerp 0 Comments

I skimmed another IBM publication today which I thought was a great piece – IBM Healthcare 2015: Win-win or lose-lose?. (A little long at ~70 pages, but good with concise charts.) It talks about what healthcare has to do to survive and create a win-win model. It looks at it from multiple perspectives – payor, provider, consumer, and supplier. They also do a good job of describing several unique models around the world and talking about several trends here in the US.

Here are a few quotes, facts, and charts from the publication which should tempt you to go read it…(note: I am not going to show all their sources, but you can get them from their publication.)

“The United States spends 22 percent more than second-ranked Luxembourg, 49 percent more than third-ranked Switzerland on healthcare per capita, and 2.4 times the average of the other OECD countries. Yet, the World Health Organization ranks it 37th in overall health system performance.

In Ontario, Canada’s most populous province, healthcare will account for 50 percent of governmental spending by 2011, two-thirds by 2017, and 100 percent by 2026.

In China, 39 percent of the rural population and 36 percent of urban population cannot afford professional medical treatment despite the success of the country’s economic and social reforms over the past 25 years.

Approximately 80 percent of coronary heart disease, up to 90 percent of type 2 diabetes, and more than half of cancers could be prevented through lifestyle changes, such as proper diet and exercise.

Preventable medical errors kill the equivalent of more than a jumbo jet full of people every day in the US and about 25 people per day in Australia.”

Table on IBM’s recommendations by stakeholder for what has to happen to transform to a value-based healthcare system (win-win).

ibm-table-1-on-change.png

IBM chart pointing out the obesity issue’s growth

ibm-on-obesity-trend.png

They talk a lot about the current system’s focus on episodic care while the problem is chronic disease.

ibm-3-chronic-disease.png

You will see lots of the buzzwords we hear today (transparency, empowerment, consumerism, infomediary, value-based) throughout the article, but they are delivered with facts and anecdotes to support their perspective.

ibm-4-transforming-health.png

I could go on, but I will leave it with a nice adaptation of Maslow’s Hierarchy of Needs which they present around healthcare.

ibm-healthcare-hierarchy-of-needs.png

You will find information in here around telemedicine, retail medicine, health tourism, and they tee up some of the hard discussions about when is it too much. How much should we spend (individually or as a society)? What expectations should we have? A lot of it requires a different mindset for all the constituents. This would be a good read for the presidential candidates.

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

Prioritization Framework

December 12, 2007 by George Van Antwerp 0 Comments

I was cleaning out some files over the weekend and came across an old prioritization matrix that we used at Ernst & Young when I was a consultant there. I found it to be relatively easy to use and understand so I thought I would share it. Ever person I know always struggles with how to select which project to do using a consistent framework that takes into account more than simply financial ROI.

We ranked each of the following on a scale of 1-5 and weighted each category to total 100%:

  • Potential Value
    • Strategic alignment (5 = enterprise sustaining and helps build learning organization vs. 1 = tactical)
    • Financial impact (5 = high ROI, lowers costs, and is growth oriented vs. 1 = lowers costs)
    • Customer satisfaction impact (5 = affects all constituents, builds loyalty, and creates differentiation vs. 1 = affects only one constituent)
    • Competitive status (5 = used by all traditional and evolving competitors vs. 1 = used by no competitors)
  • Ability to Execute
    • Organizational readiness (5 = requires minimal cultural, process, or technical change vs. 1 = requires new systems, business model, and staff)
    • Proven technology ( 5 = implemented at multiple sites with proven value proposition vs. 1 = concept only, no proven value proposition)
    • Time and resources required to implement ( 5 = resources easily accessible and can be broken into 3-6 month deliverables vs. 1 = scarce resources and no deliverables until after 12 months)
Business Tools, Methodology, Value Propositions

WSJ on the Future of Pharma

December 12, 2007 by George Van Antwerp 0 Comments

On 12/6/07, the WSJ had an article “Big Pharma Faces Grim Prognosis”. The manufacturers have been a good punching bag for a few years here as their creativity has slowed down (regardless of reality this is clearly the perception) and healthcare costs have become a front page issue. It is much easier to understand and compare drug prices than it is to look at provider costs. Now, with all the cost cutting at pharma, we will enter a new era.
In the article, the authors (Barbara Martinez and Jacob Goldstein) predict that “over the next few years, the pharmaceutical business will hit a wall”. Their statistics on the movement to generics is even bigger than I remember. They say that roughly half of the manufacturer’s US sales are scheduled to lose patent between 2007 and 2012 (or more than 36 drugs representing $67B in annual US sales). (See charts from the article)

“The rise of generics wouldn’t matter so much if research labs were creating a stream of new hits. But that isn’t happening. During the five years from 2002 through 2006, the industry brought to market 43% fewer new chemical-based drugs than in the last five years of the 1990s, despite more than doubling research-and-development spending.”

“It has never been easy to take a drug from the lab, through animal testing and into human trials. The industry estimates only one out of every 5,000 to 10,000 candidates makes it to human trials. And many drugs that work beautifully in animals fail miserably in people.”

The article goes on to talk about regulation and the FDA and whether the lack of new products is their issue or some other issue such as the R&D organizational model. It also talks about the fact that not much has changed since the 1800s in terms of the framework for developing drugs. Obviously, this has been the driver for biotech where the drugs are made of proteins and there is no generic competition.
Of course, targeting niche patient groups with biogenerics creates very expensive drugs such as the $200,000 a year that Genzyme charges for Cerezyme to treat Gaucher disease. [If you’re total market size is smaller but your costs to develop and bring a product to market stay the same, prices have to go up or no one will develop the products. It is a problem.]
Given the focus on generics in the market and by the payors along with the battle between brands and generics, I always find it interesting that some of the big companies own generic companies (e.g., Novartis owns Sandoz and Pfizer owns Greenstone). I guess if you can’t beat them…join them.
It will be interesting to see how the companies react. As I have talked about with friends for years, it is relatively easy to be a successful executive in a wildly growing company and industry. It is hard to be a successful executive and leader in a cost oriented industry that is contracting and where the competitive pressures are great. Can these guys make the transition?

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

Is Prior Auth Purely For Sentinel Effect?

December 12, 2007 by George Van Antwerp 1 Comment

In talking with a few PBMs, it is clear that they approve 90%+ of all prior authorization (PA) requests that come in. With that, I instinctively think of two questions:

  1. Why do it at all?
  2. If you’re going to do it, why have humans involved?

I haven’t seen the data on prior authorizations and how many people who hit a reject at the point-of-sale (POS) actually get a fill ever, but I imagine it is like step therapy (ST). With step therapy, only 50% of the people who hit the reject get a claim. (As I have mentioned before, 90% of those that don’t get a claim get samples, buy an OTC, pay cash, or find another solution.) But, the huge step therapy savings that plans and employers realize is not really about the movement to generics but about the lack of claims. Reduce your claims by 50% in a category and you save money.

So, I have to assume that PA has a similar role. The people that don’t really need it (or don’t understand the process) will either pay cash or find another solution, but they won’t have their doctor call the PBM for approval. (aka – The Sentinel Effect) Those that really need it (and understand the process) will call in and get approved.

So the next question is why are people doing this. I have heard from some pharmacists that it has to be humans so that physicians can’t figure out the approval algorithm and “game” the system. Somehow, I doubt that is what they are staying up at night trying to figure out. And, the agents taking the calls are following a very tight script anyways. I have argued for years that either a website or an inbound voice IVR that asks questions and based on answers determines the next question until the physician either fails the request or gets approval. Only exceptions would require a live person.

BPM / Process, Healthcare, PBM / Pharmacy, Technology, Value Propositions

Consumerism Impact on Productivity

December 12, 2007 by George Van Antwerp 0 Comments

Several years ago, I read an article in CFO magazine that talked about the drag on employee productivity that healthcare consumerism could have. I saw a factoid the other day that said that fantasy football could cost US organizations as much as $4,675,000,000 this season now that there are 13.6M fantasy footballers that devotes something like 2 hours per day to their teams. Now, of course 40% say that fantasy sports creates camaraderie, but I think there are cheaper options.

So, I am surprised that I haven’t seen more about what happens to consumers and workplace productivity as patient own more responsibility. If I have to research quality and price and make more decisions, I am likely to use more time to do this which will drag over into my work time directly or indirectly. I would love to find a study of this if anyone has seen it.

Consumerism, Healthcare, Value Propositions

Incentives in Healthcare

December 10, 2007 by George Van Antwerp 2 Comments

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

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

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

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

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

So, when could you use an incentive:

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

Cariten Article on Silverlink

December 10, 2007 by George Van Antwerp 0 Comments

There was a nice article in today’s Knoxville News Sentinel about a program that one of our clients did. The client is Cariten Healthcare, the insurance arm of Covenant Health. They used Silverlink to get a flu shot reminder out to their patients. The article includes several comments from Linda Lyle, VP of Operations.

“The words may be recorded, but real thought went into the message.”

“An effective way to get the message out in a timely manner.”

She points out that it would have taken their live agents 100 days to get out the message which Silverlink did in six days. (contacting 44,000 people)

The article also talks about the tweaking that they went through in trying to find the right voice. They are now using automated calls to seniors for other purposes (e.g., reminders for mammograms, cholesterol screenings and colonoscopies; brief information about diabetes and osteoporosis; a customer-satisfaction survey; and reminding patients with dual coverage to let them know).

“There’s not currently a way to track how many members follow the messages’ advice, but numbers from another national company indicate Cariten is having a 73 percent “reach rate” among seniors, compared to a national average reach rate of around 40 percent.”

Books / Articles, Consumerism, Healthcare, Managed Care, Marketing / Communications, Technology, Value Propositions
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Would You Pay for Disease Management?

December 10, 2007 by George Van Antwerp 4 Comments

After landing (I often blog on the plane), I posted the last post about the Medicare pilot.  When I looked at my iGoogle page that tracks many of the blogs I watch, I saw a new posting on the WorldHealthCareBlog about Disease Management.  It is a good discussion on the value (if any) and talks about the different types of value (i.e., absenteeism versus lowering medical spend).

With such ambiguity, I think I would think differently.  If you had $X to spend per year and you were responsible for your total healthcare spend, would you (a consumer) spend money on DM?  At least intuitively, I would…assuming I had a chronic disease which was high cost and complicated.  Having someone push me information, coach me on how to get better and/or manage the disease, helping me find resources, navigating my benefits, etc., seems like something of value.

Obviously, there are lots of challenges here, and I think the current models often use too high cost of channels and don’t leverage technology.  At the same time, patients don’t have the same incentives today so they don’t necessarily always do what’s best for them.  (Think of all the people that still smoke given all the research that shows how bad it is for you.)

Consumerism, Healthcare, Research, Value Propositions, Weblogs

Medicare Pilot Results

December 10, 2007 by George Van Antwerp 0 Comments

I saw some amazing results the other day for a Medicare pilot program (not a Silverlink or automated call program). The company was showing us their analytical solution and how a health plan had used it to drive enrollment in a disease management program. They were targeting a Medicare population to get them enrolled to see if they could control spend around the disease.

This vendor broke the population into 7 “clusters” based on similar attributes and then tested different messaging patterns (e.g., disease name then benefits then process versus benefit then process then disease) across 8 different messaging components. They were able to get an 83% enrollment rate within the population. From what I understand separately, several of the companies that signed up for the pilot dropped out since they couldn’t get any meaningful enrollment.

In this case, they used lifestage, household type (e.g., single), household size, race, and income as the five variables that defined a cluster.

And, you still wonder about the benefits of data-driven communications that use segmentation? As you append external data to your claims information, you can create a robust data set that allows you to create personalized messaging to a targeted niche of patients that is designed based on a predictive model of getting them to take action. That should be the key for your communications and marketing programs.

Here is a good blog entry on e-CareManagement on the pilot program. My quick take is that the pilot won’t serve to prove the DM has an ROI, but that doesn’t discount the success that this company had using targeting to drive enrollment.

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

Worker’s Compensation: Focus Moving to Prescription Optimization

December 7, 2007 by George Van Antwerp 0 Comments

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

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

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

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

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

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

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

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

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

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

December 7, 2007 by George Van Antwerp 0 Comments

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

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

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

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

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

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

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

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

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

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

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

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

IBM on HC 2015 – Part II

December 3, 2007 by George Van Antwerp 0 Comments

I think the entry got too long.  I got a system error that made me think I should split this up.  So, continuing on my review of the IBM publication on the future of healthcare, here are some additional notes I took:

  • They envision the growth of a “health infomediary” that helps people navigate their benefits and options within the healthcare marketplace:
    • A “health coach” – expert in lifestyle and behavioral change
    • A “value coach” – expert in benefits, pricing options, and cost-quality tradeoffs
    • A “wealth coach” – expert in financial planning for health related needs
  • They say that health plans as well as physicians could step into this role (along with new players).
    • 80% say hospitals are “doing a good job”
    • 60% say health plans are “doing a bad job” [which may challenge them in some of these future roles]

“Today, healthcare delivery is overly focused on the episodic treatment of acute care.  However, the emphasis of the healthcare system will contine to expand from episodic acute care services to include prevention, chronic condition management and better care coordination.”

value-based-ibm.png

  • There is good discussion about the needed change in the healthcare system to be more focused on wellness and greater alignment of incentives.  They say “today, there is more variability at the point of contact with the consumer (that is, the point of care) than in virtually any other industry.”
  • If you read the report, figure 8 summaries the current state versus future state that they envision along numerous dimensions – sponsorship, competition, innovation, revenues, networks, etc.  The things that captured my eye were:
    • Competition being based on information access [and in my opinion…easy of use of these tools across multiple channels]
    • Competition being drives by targeted products and services [one of my favorite topics…microsegmentation]
    • A wellness ROI
    • Value-based reimbursement [which I am sure is much more than P4P]
  • They talk about the blending of product and service (i.e., the offering as I would call it).  This has been a topic in other industries for years.  [Look at the book Blur from 1999.]
  • They layout four different roles for health plans:
    1. Health / Wealth Service Advisors – personal health concierges
    2. Health Services Optimizers – guide individuals to wellness and through healthcare maze
    3. Applied Research Advisors – aggregate knowledge to help patients
    4. Transaction Processors – clearinghouse
  • I didn’t know that the top 6 healthplans cover 60% of all insured Americans while their are another 500 plans.
  • They go on to propose some questions and sample indicators of readiness for the new healthcare environment.  Here are a few indicators:
    • single view of the member across products and business partners
    • proactive contact center
    • real-time analytics regarding wellness calls
    • member loyalty
    • value-based arrangement with providers
    • consistent answers across multiple channels

Hopefully, this is a helpful summary and enough for you to read the document.  Is a quick 18 pages with good facts and realistic proposals for the future.

Books / Articles, Consumerism, Healthcare, Innovation, Managed Care, Marketing / Communications, Research, Technology, Value Propositions
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IBM on HC 2015 – Part I

December 2, 2007 by George Van Antwerp 0 Comments

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

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

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

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

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

ibm-retirement-health-savings.png

 

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

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

HBR Health Consumer Segmentation

December 1, 2007 by George Van Antwerp 0 Comments

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

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

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

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

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

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

Books / Articles, Business Tools, Consumerism, Healthcare, Innovation, Managed Care, Marketing / Communications, PBM / Pharmacy, Research, Value Propositions
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Tivo For Your Communications Program

December 1, 2007 by George Van Antwerp 0 Comments

What I have been completely surprised by over the past few months at Silverlink has been the amount of calls from companies who need to execute an automated call program ASAP to address something wrong in a written communication.

  • The mail merge failed.
  • There was a spelling error that no one caught.
  • The date has changed.
  • The letter went to some group that wasn’t supposed to receive them.

[One client I mentioned this to was glad to know that their peers had the same challenges.]

That is certainly one of the benefits of a flexible application which allows us to execute call programs using recorded voice (not text to speech (TTS)) as quickly as same day. But, I have struggled with how to position that “feature” of speed as a benefit.

It’s a benefit when you make a mistake or when something big happens – e.g., black box warning issued by the FDA, drug recall, natural disaster. But, hopefully that is the minority of the time.

Finally, it hit me. As anyone that uses Tivo or another DVR (Digital Video Recorder) knows, it is very convenient to just pause a program to do something else and come back to it later. (There is also the benefit of being able to fast forward through advertisements and just watch your program but that’s not the point here.) So, in the world of communications, rapid implementation with the right application framework actually gives you the benefit of “real-time play calling”. [If you’re a football fan, this would be like the quarterback calling a new play at the line of scrimmage when they see the opponents defense.]

Imagine being able to launch your communication program to your target group of patients.

  • First, you don’t have to send out all million letters at once which crushes your call center with an inbound call spike. You actually can “dial” the rate of calls so that inbound calls are moderated based on your existing volume and ASA (average seconds to answer).
  • Second, you can send out 10,000 calls and watch the response rate to determine if it’s working.
    • How many patients answer?
    • How many stay on through the entire message?
    • How many take action (e.g., answer yes, ask to get transfered to a live agent)?
  • Then based on what you see you can “pause” the program and make modifications – change a word, incorporate a different message for one segment, use a different voice.

And, of course, if you make a mistake and catch it, you can stop the program at any time to fix it. This saves you money as does improving a program midstream to make it more effective. It still probably needs a little work on positioning.

Healthcare, Marketing / Communications, Technology, Value Propositions

PHR – Key for Improving Senior Care???

November 30, 2007 by George Van Antwerp 3 Comments

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

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

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

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

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

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

Pharmacy Satisfaction Is Declining

November 30, 2007 by George Van Antwerp 0 Comments

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

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

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

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

Patient (Customer) Value – Social Dimension?

November 28, 2007 by George Van Antwerp 0 Comments

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

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

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

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

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

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

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

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

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

Consumerism, Healthcare, Innovation, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Value Propositions, Weblogs
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HC Stocks Over Time

November 27, 2007 by George Van Antwerp 0 Comments

When you are in healthcare, all you ever hear about is how tight the margins are and how important it is to manage costs.  Obviously, healthcare has produced a lot of wealth over the years for a lot of people.  In my time at Express Scripts, the stock when from $37 in 2001 to (split adjusted) about $180 when I left in 2006.  (Not bad)

I thought this chart which I found in an IBM publication did a good job of portraying how the investment market has viewed and rewarded healthcare.  This is based on a payor (HMO) index.  The PBM index would probably be even higher over that same time period as Medco, Express Scripts, and Caremark have grown immensely over the past decade.

hc-stock-market-growth.png

Healthcare, Managed Care, Research, Value Propositions

Do We Know What We Want?

November 26, 2007 by George Van Antwerp 0 Comments

In the November 2007 issue of Harvard Business Review, there is an article called Mapping Your Competitive Position by Richard A. D’Aveni.  From a general business perspective, it’s a good article which presents an interesting case about how you could have predicted that Apple would have dropped the price on the iPhone.  (Hint: Look at their behavior around the iPod and where the competition was and was predicted to go with the Razr.)

It made me wonder what the competitive map for healthcare would look like.  What are the market groupings for pharmacies, providers, PBMs, MCOs?  What is the price line and what would people pay for or not pay for?

“Most customers are unable to identify the features that determine the prices they are willing to pay for products or services, according to a 2004 survey by Strativity, a global research and consulting firm.  Worse, 50% of salespeople don’t know what attributes justify the prices of the products and services they sell.”

The article points out that most people involved in the process don’t know or fully understand the value proposition.  So…if we are going to try and redesign and improve healthcare, how can we do that?  Do consumers understand what matters?  Do the politicians?  Will we citizens understand who to vote for?

Books / Articles, Business Tools, Healthcare, Value Propositions

CVS / Caremark / MinuteClinic Article and Comments

November 24, 2007 by George Van Antwerp 0 Comments

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

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

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

Here are a few things from the article:

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

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

P4P Survey and Comments

November 18, 2007 by George Van Antwerp 0 Comments

The American College of Physician Executives did a survey on P4P.  Here are a few of the survey results (from over 900 participants):

  1.  Only about 40% of the organizations had a P4P program.
  2. 58% of those without a P4P program are considering it.
  3. 60% think P4P will be a permanent part of healthcare.

I found the comments even more interesting.  Here are a few:

  • It is sad to see some HMOs to put the programs (carrott) out there and then look for every loop hole to deny payment.
  • The challenge is defining the performance and quality improvment. Clearly rewards for volume through the office or RVU’s per month work, but the real issue is the quality of the outcome for a given patient. Defining the clinical outcome is the slippery slope. I think physicians are going to resist being told what they get to create for fear of being judged less than capable. So, the tendency will be to set the bar lower that what could be achieved.
  • In California the P4P program is working very well with significant improvement in outcomes.

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Healthcare, Marketing / Communications, Research, Value Propositions

Are We Asking the Right Question?

November 15, 2007 by George Van Antwerp 0 Comments

Obviously, one of the big mistakes that people make when they are trying to solve a problem is to ask the wrong question.  I was thinking about this on the plane and wondered if we think about healthcare wrong.

In a fully-insured world, managed care companies make the most money when patients are healthy.  In an ASO (employer self-insured) world, employers save the most money when employees are healthy.

In both cases, prevention and wellness are drivers of business value.  Obviously, retention and turnover impacts companies ability to capitalize on their investments in these areas.  But, I don’t hear people asking how can I drive wellness and preventative activities to maximize savings and profits simultaneously.  All I hear people asking about is how to fix our confusing and broken system.

Maybe we need to find a way for insurance to stay with the individual (not a new scenario but not one I hear much about right now) – aka portability.  In that case, the company would want to drive satisfaction and minimize costs to retain the members and keep them healthy.  A win-win??

It’s certainly not that easy, but a quick thought on the topic.

Certainly someone can figure out tax incentives and a framework for crediting companies that invest and the member is no longer associated with them…As long as they have done something to improve the condition…

General Thoughts, Healthcare, Value Propositions
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