The Three Rules Movement

We recently came across a website that is supporting a book by two Deloitte Consultants.  The book is The Three Rules by Micheal Raynor and Mumtaz Ahmed and here is a link to the site.  Here is another link to a radio interview on Bloomberg Radio. 

In short, it highlights for us the need to have companies focus on being better before cheaper. Our world today seems to be run by lawyers looking out more for risk mitigation, HR people who are looking for the exact specs on their job postings and finance personnel who are looking more at cost avoidance than revenue generation. Somewhere in all this advancement the last 4 years, industry and corporations focus less and less on the customer.  We believe this is very true in life science companies and to some degree we now see it in healthcare entities as they try to figure out how they are going to manage the US healthcare reform act.  

We are interested in your thoughts. Let us know what you think of the rules and the book.  

$4 Generics and Medication Non-Adherence

Let’s face it – the business of healthcare is enough to make anybody nuts.

Take the recent study, conducted in 2007, showing only a handful of people, relatively speaking, who took advantage of their healthcare insurance provision to buy $4 generic drugs. If all the people who could buy $4 generics did so at that time, society would have saved nearly $6 billion. A lot of money, no question. The study included 31,000 people; fewer than 6% bought $4 drugs.

It’s tough to imagine that 93% of these people hated society, so maybe there’s something else going on here. They didn’t know? Perhaps. They don’t like generics? Unlikely. According to the Kaiser Family Foundation, 72% of all scripts written in 2008 were generics, and sales of generics grew 8% from 2005 to 2006. The percentages wouldn’t have changed that much from 2007.

In that same study, “Over half of physicians say they frequently talk with patients about the out of-pocket costs of medicines they prescribe, 62% say they switch patients to less expensive drugs, and 58% say they give patients office samples.”

It's anybody guess why those patients chose to spend more money. But, none of the above is the good-grief part. The following is.

Back in November, the New England Journal of Medicine ran a piece about the possible damage that these $4 generic sales can do to long-term improvements in healthcare.

Normally, when a patient purchases a prescription with insurance, that purchase generates a claims record. The pharmacy sends the claim to the pharmacy benefit manager. These claims can be used for healthcare management, including medication safety, verifying clinical trial results, and ensuring medication adherence.

But, with the $4 generics, patients often pay in cash. The authors say the pharmacies often do not submit the claim information “since they have no incentive to do so.” The result: patients are classified as non-adherent or non-users. And, because these drugs are often prescribed for chronic diseases, “the consequences of these missing claims are not insignificant.” This is also important to the topic of medication adherence because it already suffers from a lack of awareness. With almost 80% of the prescriptions today being dispensed as generic, medication non-adherence will become more of a silent disease.

The authors, Niteesh K. Choudhry, M.D., Ph.D., and William H. Shrank, M.D., M.S.H.S., aren’t labeling the pharmacies as bad guys – their actions are unintentional, they say. But, as they point out, new systems need to be devised to make sure the claims are filed. 

ACOs and Fierce Communication

So here’s a question to ponder while you’re reading our carefully honed prose: How do you attract patients to sign up for an accountable care organization?

Last week, Cigna announced that its two ACO pilots were doing, at least preliminarily, what they should be doing: improving patients’ health and saving money. The giant insurer is so happy with the results that it is planning a national expansion of its ACO program this year.

Here’s why they’re happy: At its multi-specialty medical group practice division in Phoenix, the average annual savings per patient was $336; ambulatory surgery was down 11%; preventive care visits, overall, were up 3%, and up 12% for adults. And, its partner in New Hampshire is “closing gaps in care 10% better than the market.”

A few years ago, Cigna jumped on the ACO bandwagon. The goal: “Achieve the ‘triple aim’ of improved quality, lower medical costs and improved patient satisfaction by creating a care model anchored in the principles of the patient-centered medical home that also builds in accountability by rewarding physicians for results.”

In its press release Cigna says its collaborative ACO model is big on communication. Its doctors and nurses speak frequently with its customers’ doctors and nurses, “to help with coordination of patient care.” Cigna’s program also includes disease management programs and lifestyle management programs, including stress management.

Cigna doesn’t say how its customers reacted to the idea of participating in an ACO. That notion is even more interesting for Medicare patients. How will Medicare—by law, mandated to start pilot programs by next January—attract its seniors, normally an independent, privacy-loving lot? According to the new healthcare law, the pilot ACOs will take care of all the healthcare needs of at least 5,000 Medicare patients for three years, minimum.

FierceHealthcare says the success of these ACOS will require “fierce communication strategies,” like physicians doing things they don’t normally get paid for—contacting patients by e-mail, instant messaging and so on.

But as usual, it comes down to communication. We somehow doubt that it will matter what the medium is: word of mouth, Twitter, radio, smoke signal. If the ACO healthcare providers are communicating among themselves, sharing information about a patient’s well-being, and that patient’s health is improving, along with his quality of life, then that patient will spread the word.

And that can be pretty fierce, don’t you think?

The VA Shouldn't Hold Its BREATH

What a mess. In 2009, the Department of Veterans Affairs abruptly halted a study called the BREATH study, designed to help 413 veterans manage their advanced COPD, because of unspecified safety concerns.

Apparently the deadly type of safety concerns.

The VA, keeping mum about what happened until it publishes in a peer-reviewed journal, had all the right intentions. It wanted to help the sick vets cope with this chronic lung illness by teaching them how to manage it–-with the hope of then keeping them out of the hospital.

But apparently the trial backfired. While the study’s researchers wouldn’t give details, one told the Pittsburgh Tribune-Review, “If someone were to start a disease management program, I would suggest they probably not do it just yet, until the information is available," said Dennis Niewoehner, a pulmonary doctor in Minneapolis, a co-chair for the trial.

Forgive us, Dr. Niewoehner, but we disagree. One, the VA should tell healthcare providers now what happened. There may be a clinical trial going on that could benefit from your knowledge. And two, stalling the start of a disease management program until a paper is published is not right. For those with chronic diseases, every minute has got to be torture.

What is ironic is that maybe the VA should have waited to start its study. Just recently, a review was published in Current Opinion in Pulmonary Medicine on COPD and older adults. The researchers looked at various areas, including comorbidities and disease management.


Older adults with this disease have an average of nine other comorbidities, including depression, cardiovascular diseases and chronic renal failure. What they found was that research suggests that “aging is a determinant of the progression of disease and that management of this population requires different metrics and strategies.” According to the summary information of the VA study, the study group received an education program, an “action manager," plus care. They also received telephone calls. The control group received standardized care.

Since we have no clue as to what went wrong with the study, we can only speculate, but the take-away message is that patient monitoring and management could have potentially signaled these problems sooner. While we think publishing what goes wrong is as important as publishing what goes right, we also believe the use of monitoring technologies like MedAdherence can help providers manage patients with many comorbitities remotely, and possibly better.

Let us know what you think.

Pharma: Know Thine Enemy

Mindless habitual behavior is the enemy of innovation. 
Harvard Business Professor Rosabeth Moss Kanter 

Might we suggest that pharma begin thinking about investing serious money into healthcare that does not only involve drugs? We keep tripping over stories and studies of how non-traditionalists are stepping into the healthcare space using social media.

We found this interesting.

One group of researchers has published two papers on smoking cessation; both papers involved the same number of subjects, 27. Another group took a look at the 47 apps, designed to help smokers quit smoking, all of which are currently sold for iPhones only.

The two groups of researchers found different results.

In the first paper  the researchers first used fMRIs on the subjects, all heavy smokers, to learn which parts of the brain were fighting, or giving in, to the urges to smoke. Their description of this battle: “A war that consists of a series of momentary self-control skirmishes.”

The researchers theorized that by mapping the brain areas where these skirmishes are fought, they could predict which of the subjects would have more success at quitting–-because these brain areas were more active. The motivation they used on these subjects was text messages, eight messages a day for three weeks.

“We are really excited about this result because it means that the brain activation we see in the scanner is predictive of real-world outcomes across a much longer time span than we thought,” said one researcher. “The tasks that we use in the laboratory are simplified models of these real-world processes–-but they seem to be valid models.”

In the apps paper, the researchers checked out the 47 smoking cessation apps, just to see how effective they might be. They looked at how each app approached smoking cessation and its adherence to the U.S. Public Health Service's 2008 Clinical Practice Guidelines for Treating Tobacco Use and Dependence.

The conclusions? The apps had “low levels of adherence to key guidelines in the index. Few, if any, apps recommended or linked the user to proven treatments such as pharmacotherapy, counseling, and/or a quitline.”

What an opportunity for pharma; it’s tailor-made.

Pharma: It Must Invest in Improving Health Outcomes

If you're a businessperson and you see an opportunity, don't you take it? Especially if the opportunity is in a business that doesn't seem particularly interested in protecting its territory.

The territory we’re talking about: the quest for improving health outcomes. In a new Ernst and Young report, the authors say that non-traditional companies are investing in projects designed to improve health outcomes. To be sure, some of these partners are traditional, like Apple and Abbott Labs.

The non-traditional investments far outweigh those of Big Pharma. The non-traditionalists have spent $20 billion since 2006; Big Pharma’s figure was not given, but it wasn’t close to that, according to a Bloomberg story.

The authors say that Big Pharma has no choice but to invest in improving health outcomes, and for two reasons: the current health care system is not sustainable -- but new technologies can make it so. These technologies, the writers say, can drive behavioral change.

Examples of these projects include the insurer UnitedHealth Group, the YMCA, and Walgreens, which are working together in a diabetes management program. Others, according to Bloomberg, include GE, Telus Corp, a wireless carrier, and IBM.

One company, called PharmaTrust, based in Toronto, is creating a device called MedHome that dispenses the appropriate amount of medicines to patients in their homes. At the same time, it communicates with providers and caregivers about patients’ compliance, according to the report.

And Qualcomm, the mobile technology company, is hoping to increase compliance and health outcomes with its “connections:” an Internet-connected pill bottle cap designed to increase compliance and also lets patients refill prescriptions by pushing a button on the underside of the cap; and a “connected” blood glucose meter that tracks how often patients are testing themselves and reminds them when they are running low on supplies. They can even reorder from the device.

“Pharma is significantly behind the medical device industry in thinking about connectivity and using its power for productivity and business model innovation,” wrote one Qualcomm exec.

All we are suggesting is that innovation may quickly become the domain of others. What are the unintended consequences of this lack of pharma innovation? 

Investing in Health Outcomes: Does Pharma Get It?

A new Ernst and Young report on what it calls Pharma 3.0 – the industry’s migration from its sole focus on selling medicines to the inclusion of improved health outcomes – reminds us of the tale of the Big Three. Yes, we mean Detroit.

We’ll get to that analogy in a minute.

“In Pharma 3.0,” the authors write, “companies will succeed or fail based not on how many units of a drug they sell, but on how well their market offerings improve health outcomes.” Considering that this report included roundtable discussions and more from numerous Big Pharma execs, it’s safe to say it has lots of industry buy-in.

The report says that some pharma members are investing in such programs. By the authors’ count, 220 programs were launched between 2006 and 2010, with the lion’s share, 44%, coming last year. The authors say nearly all the top pharma houses “are active in the Pharma 3.0 space” with a few, such as Pfizer, Novartis and Roche “leading the charge” with more programs. (Pharma 1.0 is how business was conducted; Pharma 2.0 is considered Pharma’s pursuit of blockbuster drugs and is now coming to an end.)

The report doesn’t talk about how big the programs are, or how much money industry has spent.

But it does mention how much money other companies – non-traditional organizations like Apple and IBM – are spending: $20 billion.

And counting. The writers aren't pleased with industry's skimpiness.

“Pharma is still focused on investing in drug innovation,” says a Johnson and Johnson exec. “We’re not making the kinds of investments in Pharma 3.0 that many non-traditional entrants are making.”

And now for that Big Three connection.

For those of us old enough to remember, do you recall when Toyota and other foreign automakers seriously started selling their cars on American soil? The Big Three ignored their fuel efficiency, their smaller size, their better performance – until it was nearly too late.

The article authors make a similar connection.

“It is important, however, for pharma companies to recognize that they may have a limited window of opportunity. Today’s non-traditional entrants, though unfamiliar with the health care business, could prove to be quick learners, and the advantages that the pharma companies have because of their domain knowledge could shrink in a few years.”

Tomorrow: what those non-traditional entrants are doing.