May8

Is It “Health Insurance,” or Merely Prepaid Health Care?

Posted by Stephen Lubiak from OCH Payer Marketing- NJ, North America

By Stephen Lubiak from OCH Payer Marketing- NJ, North America | Published: May 8, 2013

PillThe Affordable Care Act’s (ACA) goal is to provide health insurance coverage to those without it now, and it uses 2 main mechanisms to do so. It penalizes individuals without insurance, thereby encouraging them to sign up for health insurance. (In order to support this effort, the law creates state insurance exchanges to offer health plans to consumers.) The law also penalizes employers (with 50 or more employees) that do not offer health insurance to their workers. So, these employers will either need to add insurance if they don’t currently offer it, or maintain or modify what they now offer to their employees…or else pay a fine.

As the ACA proceeds to full implementation, it’s probably polite to say that various “inconsistencies” in the law are emerging. While “self-pay” employers may still exercise some degree of freedom in adding, maintaining, or modifying their health insurance offerings, the law is determining many of the characteristics of health insurance offered to the public via health care exchanges.

It’s interesting to note that 2 key requirements of the law undermine the basics of insurance, which is defined simply as “coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.”

The first requirement is that all beneficiaries pay essentially identical rates, regardless of their risk factors. One of the few recognitions of varied risk among the population, an individual’s age, is still subject to constraint (older people cannot be charged more than 3 times the premiums charged to younger people). The other requirement is that insurance companies should ignore individuals’ preexisting conditions when writing new policies. While this rule is popular—no one wants to deny health insurance coverage to a cancer survivor—it also could encourage people to wait until they are sick before they purchase insurance.

Additionally, the law’s definition of an insurance plan’s “essential health benefits” may also contribute to an unintended result: a small set of insurance offerings on health care exchanges that are all generally very expensive, due to the fact that the policies are required to cover many things. One possible effect on consumers is that they will pay higher premiums.

Let’s go back to employers. Year-over-year health care cost increases have recently moderated, but over the long term they have traditionally been higher than the rate of overall consumer inflation. Some employers may use the soon-to-be-created state exchanges as an opportunity to withdraw the health insurance they offer to their employees. Employers who still plan to offer health insurance will continue to scrutinize costs and seek ways to mitigate their increases. They may continue to restrict the breadth of offerings in their health plans (a trend that is opposite to the expansion of essential health benefits above). Another mechanism that works is to shift more costs to their employees in the form of higher premiums, copays, coinsurance and deductibles.

So, in the 2 areas that the ACA seeks to create new health insurance opportunities (state-based exchanges and newly regulated employer markets), the individual will most likely pay a greater share of costs and have a greater responsibility to evaluate his insurance policy as well as the health care interventions he receives.

What does this mean for marketing communications?

One question facing employers, employees, payers and consumers will be the role and importance of deductibles, copays, and coinsurance. These patient payments are essentially behavioral-change tools, encouraging the patient to “shop wisely” because he is spending his own money on health care. Will these mechanisms continue to work as they have in the past? It may depend on which segment of the market grows larger: the state-based exchanges or the employer-provided plans.

On the one hand, if the law is encouraging fewer, similar insurance offerings on state exchanges, it will hardly be easy for insurance companies to differentiate one policy from another. If the offerings from health plans become expensive and undifferentiated, with most of their benefits “prepaid” by premiums, how much impact will deductibles, copays, and coinsurance have? Would this also complicate manufacturers’ efforts to differentiate their products to insurers, providers, and patients/members?

On the other hand, if employers are restricting benefits in their heath plans and shifting more and more costs to employees, employees will be using more of their funds to pay for premiums, and there may be less left for deductibles, copays, and coinsurance. With fewer health care dollars available, the employee may respond more to the cost effects of those patient payments.

Readers, what will be the health plan implications for related drug and device issues such as tier placement, contracting terms, and pricing? What marketing efforts are still needed? And to whom should they be directed?

Source:

  1. Merriam-Webster. Definition of “insurance.” http://www.merriam-webster.com/dictionary/insurance. Accessed April 22, 2013.

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Questions? Comments? You can contact the author directly at blog@ochww.com. Please allow 24 hours for response.

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Feb1

The Unintended Consequences of Personalized Medicine

Posted by Ashley George from Ogilvy Healthworld Payer Marketing - Parsippany, NJ

By Ashley George from Ogilvy Healthworld Payer Marketing - Parsippany, NJ | Published: February 1, 2013

Personalized-MedicineInnovative technological and scientific advancements in oncology have enabled scientists to unravel the biological complexity of more than 200 diseases commonly called cancer, and reexamine how these diseases should be classified, diagnosed, and treated.

Understanding how these diseases work and the applying of these insights to clinical practice have formed the foundation of personalized medicine, defined as the tailoring of drugs and other treatments to specific populations, based on their genetic profiles or other differentiating factors.

This concept provides a potential future in which prevention and treatment strategies will be individualized based on the molecular makeup of a patient and their disease, dramatically improving chances for better patient outcomes and reduced healthcare costs.

Those advancements may provide opportunities, but they also may pose potential unintended consequences to the healthcare system.

The aging American population, combined with an additional 32 million covered lives under the Affordable Care Act (ACA), and overall increased survivorship in patients have created new challenges surrounding affordability and accessibility to healthcare.

Increased pressure for greater clinical and economic advancements creates imbalance among innovation, quality, and cost. In addition, ACA requirements impose more disparity by requiring improved quality of care, greater transparency in reimbursement coverage, and performance-based payments.

Payers and providers who are responsible for the implementation and adoption of personalized medicine are challenged to navigate the new environment as they are the major stakeholders.

Full implementation of personalized medicine may create new challenges for stakeholders and their patients, such as:

  • More stringent regulatory framework requiring greater transparency and tighter reimbursement controls for costly diagnostic technologies
  • Loss of patients’ ability to make their own healthcare decisions
    • In an effort to optimize clinical outcomes and minimize costs, some current therapies are aligned with patients’ biomarkers in order to ensure therapies are targeted to a specific genotype mutation. A prime example of this can be seen in patients with advanced stage melanoma who have approximately a 3-month survival rate. There are two treatment options: one with a companion diagnostic test (personalized) and one without (non-personalized). Because the personalized therapy has a companion diagnostic test that specifically identifies appropriate patients, payers and providers may be influenced toward this therapy over the non-personalized in order to maximize therapeutic outcomes. However, this creates a potential unintended consequence involving the non-personalized treatment option, which demonstrates efficacy in approximately 20% of patients and can extend survivorship up to 3 years. Therefore, these patients may be denied potentially 33 months of extended life.

In an attempt to improve the overall healthcare system by managing costs through personalized, tailored treatments, new barriers are created that can directly impact patient outcomes and limit the personal choice of available healthcare options.

CONTINUE THE CONVERSATION:
Questions? Comments? You can contact the author directly at blog@ochww.com.
Please allow 24 hours for response.

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Aug29

Communicating Value in Our Changing Healthcare System

Posted by Emily Kidder from Ogilvy CommonHealth Specialty Marketing - NJ, North America

By Emily Kidder from Ogilvy CommonHealth Specialty Marketing - NJ, North America | Published: August 29, 2012

Recently, the Supreme Court of the United States issued a 5-4 ruling essentially upholding the entirety of the 2010 Affordable Care Act (ACA). Many Americans, including the millions working in the healthcare industry, have questions about what the SCOTUS decision means. As many of the provisions of the law come on-line in 2014, the full long-term impact is not yet clear. What is certain however is the healthcare sector is changing, fast. The shift toward more patient-centered care and measurable quality-based healthcare outcomes started prior to the 2010 law, and this movement will continue regardless of the ultimate outcome of health reform.

Moving from volume to value

In the healthcare delivery system of the past, providers were paid to treat problems, not prevent them; financial incentives were based on volume versus outcomes and multiple providers with little coordination delivered care. All of which contributed to healthcare costs rising at an unsustainable pace. Now, however, a paradigm shift is upon us.

In the idealized healthcare delivery system of tomorrow, providers are incentivized to increase quality and improve outcomes across their respective populations, infrastructure and processes are used to reduce variations and better coordinate care, and healthcare spending becomes a purposeful investment in value. Indeed, almost three-quarters (73%) of C-suite healthcare executives in a recent survey by Forbes Insights and Allscripts agreed that providers need to begin shifting their focus from “volume to value” immediately.1

The changing definition of “value”

But what does “value” mean in our brave new healthcare world? Value is one of those buzzwords flying around that has been absorbed and redefined by different stakeholders.  For patients, value means improved access to healthcare, high-quality patient-centric care, and improved patient engagement including better patient-provider communication.  For providers, value means ensuring patients receive high-quality accountable care based on best practices, including improved coordination across provider types and sites of care. Additionally, value for providers can mean receiving fair compensation—something that novel delivery systems and payment methods, including patient-centered medical homes and bundled payment schemes seek to address. For administrators, value means ensuring a sustainable healthcare system by placing particular emphasis on reducing waste, errors and redundancy.  The meaning of value in pharmaceuticals is changing as well. Now, not only are safety and efficacy evaluated, but effectiveness and appropriateness of treatment are also considered, while quality of reimbursement is downplayed. Wired health tools, such as electronic health records, are used to support treatment decisions, improve collaboration and measure behavior and outcomes.

How to communicate value now

With greater alignment across audiences, tomorrow’s healthcare delivery system demands more integrated value messages. New ways of communicating with patients and establishing value for the healthcare provider may become even more important. For example, development of safer drugs requiring less counseling, less paperwork, and drugs that have easier access to brand information could become important criteria of differentiation. Information and messages could be tailored to various HCPs and distributed in a less vertically structured environment. Outcomes research may help inform patient-centered value perspective in messages. Also, in the increasingly collaborative provider environment, the patient, her advocates, caregivers, and multidisciplinary HCP teams (social workers, MDs, RNs, NPs) may become even more important audiences to consider. This is especially true for serious diseases where care typically crosses into different disciplines and healthcare settings.

The US healthcare system is changing at a rapid pace. Still, however, the innovative delivery systems that seek to balance quality, cost and access are still in their early phases of implementation. Staying on top of these developments to identify strategic opportunity and translating insights into value-driven communication is more important now than ever before. Proactivity and adaptability will be the defining characteristics of winners on the changing healthcare landscape.

1   http://images.forbes.com/forbesinsights/StudyPDFs/AllscriptsVolumetoValue.pdf

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Jul31

Affordability of Medicines—the New Kid on the Block

Posted by Carsten Edwards from Ogilvy Healthworld Market Access-UK, London

By Carsten Edwards from Ogilvy Healthworld Market Access-UK, London | Published: July 31, 2012

You know the feeling: you pop into the shop and see something you want to buy, but times are tight and you simply can’t afford it. You want the best, but you feel compelled to consider all your spending priorities and choose to go for the less expensive brand—it’s a question of affordability.

In today’s environment, this is a challenge facing healthcare systems throughout the world. Coupled with this, more healthcare resources are being consumed as people are living longer with increasingly complex health problems. Add to this the increased complexity of how national health systems are assessing a medicine’s value, and you have the perfect storm.

Indeed, just as you weigh up whether you can afford to pay for something, those who pay for medicines (termed “payers”) all have affordability at the forefront of their minds. Governments are addressing the issue by driving further healthcare reforms, while payers are aggressively managing costs, limiting therapy choice, and shifting more of the cost burden to consumers.

However, if industry is to effectively support payers in their informed decision-making, it is important that they are viewed as investors in their community’s health and not simply gatekeepers of the budget.

As investors in health, payers deploy a variety of instruments to support medicines’ cost control. These can be broadly divided into supply-side and demand-side approaches.

Demand-side instruments include:

  • National-level price negotiations/price cuts
  • Reference pricing systems–using the cost of other similar drugs to set the price
  • Health technology assessments–assessing the value of a medicine using a range of tools including cost- and comparative-effectiveness
  • Promoting generic medicines and parallel imports–parallel imports refer to the practice of importing a medicine from another market where the medicine is cheaper

Supply-side instruments include:

  • Patient co-payments–this is the practice where patients will pay a certain percentage of the medicine’s cost
  • Reimbursement restrictions–restricting the money paid for a particular drug
  • Delisting–removing a product from a list of drugs that will be paid for
  • Prescribing budgets–setting financial budgets for the prescribing of medicines
  • Formularies and guidelines–a list of medicines that have been approved to be prescribed, or their incorporation within guidelines that should be adhered to

To date, the pharmaceutical industry has focused predominantly on communicating about cost and cost-effectiveness to secure optimal pricing and reimbursement for their brands at a market level. Arguably, more needs to be done to demonstrate the true benefit of treatment to patients, the communities in which they live, and society at large.

Some solutions to help demonstrate the true value of a treatment include:

  • Evaluating and demonstrating the longer-term patient outcomes
  • Demonstrating and communicating the economic value across all stages of a product lifecycle
  • Supporting payers to identify which patient segments would benefit most from treatment
  • Relating the outcomes demonstrated through clinical trials to local demographics

There is no doubt that the industry continues to go through a challenging time, while the economic crisis faced by many countries is only likely to get worse. In this environment, the issue of affordability is higher up on governments’ and payers’ agendas. However, by understanding and meeting the needs of payers and their communities, the industry will be better placed to ensure patient access to their medicines.

 

 

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Apr12

Specialty Pull-Through (It’s Not The Pull-Through We Grew Up With!)

Posted by William Renzo from OHW Payer Marketing - NJ, North America

By William Renzo from OHW Payer Marketing - NJ, North America | Published: April 12, 2012

As pharma companies continue to fight a more generic market and strive to maximize their access, the one term you hear time and time again in brand marketing circles is “pull-through.” For the past 15 years, pharma has viewed pull-through as the art of maximizing preferred tier status at a health plan—usually the result of a lucrative contract with the health plan. But now that the market for common chronic conditions such as branded ARBs, HMGs, PPIs and SSRIs has all but dried up, pharma companies are moving into new areas of rare cancers and orphan diseases where the traditional rules of pull-through do not apply. In the case of specialty markets, the focus is on identifying access opportunities and improving the “quality” of your access.

Quality of access is measured by factors such as:

  • Extent of PA (or SE in orals) [suggest expanding the acronyms]
  • Medical criteria
  • “Hassel factor” as perceived by office staff
  • Reimbursement support services (when all else is equal, providers will look at this)

In traditional pull-through, identifying the opportunity is relatively simple: you contract for a preferred position and announce your lower co-pay to providers by means of formulary grids and shelf-talkers. It’s not so simple in the world of specialty products that are often reimbursed as a medical benefit and not a pharmacy benefit. In this case, tier status may not apply, or all brands may be subject to coinsurance.

We generally divide pull-through in the specialty space into 4 steps: Step 1 – Opportunity Identification; Step 2 – Plan Development; Step 3 – Execution; Step 4 – Assess, Evaluate, and Refine

Although opportunity identification is fairly obvious in traditional pull-through, this step is the most challenging one in the specialty market space. Opportunities in the specialty market are more difficult to tease out. They include areas such as the following:

  • Your brand has moved up on a clinical pathway
  • A benefit design change that results in lower OOPs [suggest expanding[ for your brand
  • A change in indication that now expands the use of your brand
  • Additional clinical data become available that further differentiate your brand
  • Improved SPP [expand] services become available for your brand
  • Enhanced reimbursement HUB [expand] offerings further differentiate your brand
  • A change in medical policy benefits your brand
  • A price change makes your brand more affordable for the patient or the plan
  • Your competitor now requires companion diagnostic testing

Plan Development in specialty pull-through further demonstrates how this process differs from traditional pull-through. In the case of specialty pull-through, aspects of timeline development and success-metric formulation are not as clear. Traditional data resources (e.g., IMS, MediMedia) are not available for infused or provider-injected products. In addition, the traditional selling cycle is much longer in the specialty market and the number of patients is usually much smaller than in the primary care market.

Finally, the area of assessment, evaluation, and refinement is different in the specialty market. Due to the general lack of data mentioned earlier, assessment is not as straightforward. Areas such as number of benefit verifications, “time to fill,” and “time to reimbursement” for the provider are metrics often used in the specialty market.

As pharma manufacturers move into the specialty market, they will need to approach pull-through from a different perspective in order to compete. The traditional methods of pull-through do not fully apply. Furthermore, as the specialty market continues to become a mix of both orals and infused/injectable therapies and the lines between what is a medical benefit and what is a pharmacy benefit become more blurred, manufacturers will need to be able to quickly adapt their approach and message matrix to accommodate a rapidly evolving market.

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