Tag Archives: healthcare marketing

Kroger Expansion – Digital, Physical, Strategic, and Specialty Pharma … Oh My!

Since one of my first jobs was at Kroger, I’ve always been intrigued to see what happens with them. (I can even still go back almost 30 years later and still have some of the General Managers at my old store come out and remember me.) So, I was initially intrigued a few weeks ago when the story came out in Drug Store News about their expansion plans.

“Over the course of a day-long investor conference Tuesday, Kroger outlined its future growth strategy. Across its physical store base, Kroger plans to enter one or two as-yet-to-be-named new markets along with boosting presence in existing markets. But Kroger also has significant designs on the multichannel consumer, and outlined for analysts the grocer’s plan to grow its marketshare across the digital landscape as well.”

Kroger has several interesting assets to leverage:

Now, with today’s announcement, they’ve made a jump into the Specialty Pharmacy Space with their acquisition of Axium. It begs the question of what they want to be – a grocer with a pharmacy, a pharmacy with groceries, a health destination, or something new.

Looking at some JD Powers data from 2010, they are positioned in the middle of the pack from a pharmacy satisfaction perspective.

On the other hand, if I look at their positioning from Bruce Tempkin’s analysis, they score well.

I have to believe there’s some great opportunity here. I’m a big believer that the retail assets create large opportunities for them to play in the broader healthcare market.

  • They have broad hours (in some cases 24/7).
  • They are natural destinations for people.
  • They can host clinics.
  • They already have pharmacies.
  • They have food which is a critical part of addressing obesity and for certain conditions like hypertension and diabetes.
  • They have patient specific data around things like home monitoring tests, food products, OTCs, and other products.
  • They are generally located in easy access locations.
  • They have good brand equity.

For example, just look at this press release from Target from a few years ago. This is a broad vision (that I’ve never heard or seen in the market). On the flipside, we know that CVS, Walgreens, and WalMart are spending considerable efforts trying to really “own” this space with their teams. We also know that specialty pharmacy (and even pharma in general) is trying to see how it gets out of its box and become broader players in the health continuum looking beyond just drugs to actual outcomes. (This is why healthcare is so exciting right now!)

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Are You Growing Your Vegetables

I read this interesting analogy this morning about marketing and comparing it to gardening.  I think the author’s points are very relevant when you think about patient retention within healthcare.  A few of the points that come through in the blog entry are:

  1.  It takes effort.  (i.e., vegetables don’t just grow by themselves)
  2. You have to be consistent.  (i.e., you can’t overwater one day and not water for weeks)
  3. Not all vegetables are the same.  (e.g., some like more water or light than others)
  4. You do get better with practice. 
  5. There is lots of competition (e.g., bugs, animals), but it is healthy.  You can’t simply kill the competition with pesticide (i.e., price war).

Two points that the author didn’t make which I think are relevant are:

  1. You can’t grow all vegetables at once.  (i.e., you have to focus on what will respond given your soil, environment, etc.)
  2. You have to plan long-term.  (e.g., some professional farmers rotate fields to optimize yield over multiple years)

IBM on HC 2015 – Part II

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.

HBR Health Consumer Segmentation

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.

Zyrtec to Go OTC

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

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

From some initial research, I found the following:

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

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

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

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

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

Scary or Interesting Technology

After my post the other night about analyzing your writing, I had a chance to talk with a technology company about how they digest and use text from things like letters, e-mails, and call recordings.  It was fascinating.  They were describing to me a system they developed for the military which is now available commercially.

They can take all these communications and use them as part of a segmentation or targeting model that is based on patient behavior.  How great (and scary) would that be?  (Big Brother is always watching.)  Imagine that you have a model that tries to identify how to best incent a person to improve their health.  If you could input any e-mails or letters they have sent into your company and input any call recordings using speech to text, you would have all types of indicators about personality and interests along with communication modes, time of day that they respond to information, etc.

big-brother.gif

Obviously, a patient-centric healthcare model means really understanding things about people.  To do that, we have to get multi-dimensional and think differently.  Rather than simply focusing on moving people to mail order from retail, shouldn’t you focus on attracting the people that are most likely to stay with it and not move right back?  If you are going to offer an incentive for taking a Health Risk Assessment, don’t you want to offer it only to the people that will act on the results?

Compliance with prescriptions or testing is a great example.  There are certain people that are more inclined to stay compliant.  But, it is also important to understand what message will motivate them to stay compliant – not dying, seeing their kids get married, saving money, not missing work, etc.

And, because we are in healthcare, there are some legal constraints about when you can make different offers within the same or similar populations.

Regional Differences

I remember one of the first thing that healthcare peope used to tell me 10 years ago when I first began working in healthcare.  “Healthcare is local.”  At the time, I took this for granted.  Since then, I have seen all the data that shows how prescription utilization, spend per person, obesity, and many other variables vary by geography.

As I have been traveling, I was thinking about this as I noticed lots of anxillary things that vary dramatically state-to-state:

Boston and some eastern states have Dunken Donuts everywhere.  They went out of business in St. Louis.

In Michigan, everyone drives faster than any other state I have been in.  The other day, I was going 90 in the left hand lane and got waived out of the lane by a minivan and an SUV going about 100. 

In LA, people consider an hour drive nothing.  In some smaller areas, a 30 minute drive wouldn’t be considered for some normal task. 

Yet, from what I can tell, many national companies don’t vary their healthcare marketing and communications per region.  Why is that?  Is it simply a data sophistication question?  If attitudes are going to vary, have you taken that into account?

It makes me think of a project I did with a retailer years ago.  One of their questions was about stocking inventory and how to develop a model to optimize the mix based on location.  They had just gone through a season where some stores had excess shorts which they had to dramatically discount and some stores that ran out of shorts.  At the time, WalMart had just begun their CFAR (Collaborative Forecasting and Replenishment) initiative which created an integrated application for sharing data across stores and with suppliers to optimize mix and maximize inventory turns. 

That CFAR model has now become a default SAP module and created an industry association that uses the model.  Will healthcare do the same?  Not for a while from what I can see.

But, it is critical in communicating.  Attitudes towards preventative care vary.  Willingness to try and exercise and wellness vary.  Perceptions vary.  The most simplistic example I saw a few years back was the doubling of the success of a call campaign when the person calling [into the South] had a southern accent.  People weren’t as responsive without that familiar accent.

The website for Premier (a non-profit hospital association) had some good facts about localization (pros and cons):

“All healthcare is local”: Good for innovation and personalization of care

  • Widespread, local experimentation among U.S. healthcare providers prompts innovation, which as New York Times columnist, Tyler Cowen points out, makes the United States the world leader in new treatments and technologies. Innovations include the development of new drugs and devices and better treatment protocols.
  • The U.S. healthcare system is anchored by community hospitals and healthcare organizations. These local hospitals and organizations are rooted in the community and are able to shape care in accordance with the needs of their specific populations, making healthcare more personal and direct.
  • “Community-based approaches act as a reality check of what is doable and practical: They can provide an actual model of what works; they help identify promising practices in key areas; and they can provide lessons about how to address political issues.”[1]

But local orientation results in variation of care, uneven outcomes and high costs

  • In a national study on quality of care, RAND found that American adults receive just half of recommended evidence-based care services.
  • The National Committee for Quality Assurance’s recent scorecard, The State of Health Care Quality: 2006, reports huge variation in healthcare performance exists in every region of the country and in every clinical area.
  • “Despite the billions of U.S. tax dollars spent on research and the more than a trillion spent on service delivery, movement of evidence-based interventions into communities and health systems is often slow.”[2]
  • Lack of scale and connectedness (“buying clout”) and unnecessary duplication result in high healthcare costs.

[1] Debbie I. Chang, “Applying Lesson Learned in Communities To Programs and Policies at the Federal Level,” Health Affairs 25, no. 3 (2006): w192-w194.

[2] Jonathan E. Fielding and Peter A. Briss, “Promoting Evidence-Based Public Health Policy: Can We Have Better Evidence and More Action?,” Health Affairs, 25, no. 4 (2006): 969-978.

Myers Briggs for Healthcare (1 of X)

I have been a big fan of Myers Briggs for years.  Every since I took the test and realized that it described me to a tee.  I even took an elective in graduate school to drill down on the testing and look at ways to use it in team development and other activities.

The purpose of the Myers-Briggs Type Indicator® (MBTI) personality inventory is to make the theory of psychological types described by C. G. Jung understandable and useful in people’s lives. The essence of the theory is that much seemingly random variation in the behavior is actually quite orderly and consistent, being due to basic differences in the ways individuals prefer to use their perception and judgment. (source)

If you haven’t taken the test, here is a site where you can answer a page of questions.  I took it and it matched my end result from numerous testings.  So why bring it up here?  And, why is this entry 1 of X?

First, I am a big believer in trying to categorize individuals to make some assumptions about how to deliver healthcare information to them.  This is one theoretical attempt to do this.  Second, I am certainly not going to solve this tonight so I will layout a few thoughts and likely pick the topic up again.

The first category is Introvert (I) or Extravert (E).  For me a healthcare introvert is someone who doesn’t talk about their family history or their individual ailments.  If they feel sick, they will research it before making an appointment.  Additionally, they may read online discussion groups but won’t participate.  The extravert will ask everyone’s opinion about their condition.  They want to tell you their cholesterol.  If they feel bad, they go right to the ER or Urgent Care.  And, if they have a chronic condition, they are active in online or physical groups.

The second variable is Sensing (S) or Intuitive (N).  For me, the sensing healthcare person has a deep memory of their condition.  They can tell you (and may even record) all the facts about their experience with a provider, drug, or disease.  The intuitive healthcare person remembers the general patterns (e.g., every time I eat after taking my pill) and speculates on what this might mean.  They aren’t focused on the specifics but more on the possibilities.

The third variable is Thinking (T) versus Feeling (F).  The thinking healthcare person is consumed by the facts.  They want to read the medical research and debate with their providers the treatment plan based on an article in the New England Journal of Medicine.  The feeling person is much more driven by experience.  If the placebo is helping them, they are willing to stick with it.  Or, if their neighbor says that generics are not good, then they won’t buy generics. 

The final category is Judging (J) or Perceiving (P).  The judging patient is planning their care path or wellness.  They participate in disease management.  They go to preventive clinics.  They get the flu shot even if they never get the flu.  The perceiving person reacts to the events.  They don’t have regular check-ups unless they are in pain.  They don’t participate in any programs unless they are sick.

These are some initial thoughts, but we all know that figuring out a healthcare segmentation model that would predict behavior is significant.  I don’t have the answer, but I think there is something here. 

If you know your type and want to learn more, here is a good site I found. (http://typelogic.com/)


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