The State of Convenient Care

Earlier this week, the Convenient Care Mini-Summit was held during the National Consumer Driven Healthcare Summit in Washington, DC. The Mini-Summit was sponsored by the Convenient Care Association. Speakers included: Tine Hansen-Turton, Executive Director, Convenient Care Association; Mary Kate Scott, President, Scott and Company; Chris Kersey, MD, Chief Business Development Officer and Chief Medical Officer, RediClinic; Ann Ritter, Policy Director, Convenient Care Association; Sarah Ratner, Senior Legal Counsel, MinuteClinic; and Brian Jones, Chairman and Chief Executive Officer, MedBasics.

Here's some key tidbits on what's going on in the Convenient Care sector that the faculty shared during the Mini-Summit:

• The first Convenient Care clinic opened in 2000, today there are 500 clinics operated by over 20 companies, and there may be as much as 700 clinics by the end of the year
• New facilities getting smaller - many around 220 square feet in size
• Health Plan formulary compliance has not a significant issue due to limited scope of services
• 30-35% of clinic patients represent a new Rx to the sponsoring Rx retailers
• Minute clinic has experienced 1 million cumulative visits with no malpractice cases. The lack of malpractice claims is at least partially due to the limited scope of services provided in a Convenient Care setting
• The target demographic, based on studies: the most typical Convenient Care consumer is female, the healthcare decision maker in their household, and a mom.
• BCBS Minnesota for example in their claims for Convenient Care found that 63% of patients were female and 48% under age 21
• The two big challenges facing Convenient Care are state regulations and proving the financial model. Regulation of the industry is fragmented on a state-by-state basis, with some states proactively welcoming the industry, while a few have hostile regulations that often don't apply to other types of providers. Problem regulation states cited included NY, CA, PA, and KY.
• A clinic system might have 85% fixed costs, with 100+ clinics needed for breakeven in a standard retail model
• A Hospital sponsored financial model is very different than the standard retail model

For any stakeholder interesting in Convenient Care Delivery, if they aren't already a member, they should consider joining the Convenient Care Association. More information about the Association can be obtained at their web site: www.convenientcareassociation.org , or by calling 215-731-7140

Health Literacy and the Misplaced Mantra, part 2 of 2

Health Literacy and the Misplaced Mantra, part 2 of 2

The Dilemma

Web-based decision support and concierge health services are on the rise, yet most people still believe (with considerable justification) that the most complete and objective advice remains reserved for the rich or well-connected. Meanwhile, system integrators believe that the best consumer is informed and would rather, for example, link her BMI to cash than evaluate plan designs. So, while incentives to “do the right thing” are coming into play, when/how to do it is still a very real issue for the consumer receiving constant, often contradictory, stimuli.

At the point of care, the patient, who still lacks access to much of her medical record, is told at one visit, "I can't decide for you," and acted for paternalistically the next, in both cases with the best of intentions, under a system that rewards speed, test orders and upcoding more than outcomes.

The Reality

The ability to limit health information stimuli to self-initiated searches no longer exists. What if you were as besieged with information about lawn mowers (which you may not even need) as you are with health information? How soon would you turn off and drop out? Now, what makes health information so compelling? At its root, it’s a catalog of ways to die. There are ways to dress it up, but charging ahead under the assumption that living’s easy is not the way. High utilizers are often the most likely to have at least one uncontrollable risk factor. How well are you illuminating what’s controllable and what’s not? And when you put together your health/disease education modules, shouldn’t you overlay all the content with incentive to actually use it?

We need to address the barriers to optimal decision-making head-on, rational or not. These include lack of self-efficacy, emotion/information overload and a perception that inputs relate poorly to outputs (everyone hears about the runner who dies of an early MI). P4P and CDHC designs in and of themselves cannot drive outcomes and may even make things worse. So we need to address the most pressing patient questions head-on:

• How important is making this decision? What are the risks and benefits of doing nothing vs. acting?
• How controllable is the risk of acting? Can the risks be spread out by making a series of decisions over time?
• What are the best and worst cases?
• How achievable is a positive outcome?
• How predictable are the positive and negative consequences?

In short, we can help deciders prioritize their decisions to optimize the achievable delta. Rather than agonize over which multivitamin to buy this month, what if I can spend that energy on overcoming my addiction to sweetened fruit drinks? The reason that so many people read Prevention, a monthly digest of often contradictory information, is that when its authors make a declarative statement, they are usually fairly good about telling readers how to implement it in their own lives. How well do your Web site, direct mail, brochures and e-mails do that? And no, “it’s easy to eat 5-7 vegetable servings per day” doesn’t count, because it’s not easy!

Imagine…

Today, tests for the extent of health literacy (e.g. the ability to read a product label) don’t measure the propensity to follow the label’s instructions, take it seriously, extrapolate it to other health decisions, etc. These are where motivation to spend time on the key decisions and wade through all the extraneous and repetitive information comes in.

Now imagine it’s 2017, and there are robust question batteries that reliably predict the capacity for and propensity to use health literacy. When rating or treating a group or individual, wouldn’t you want to combine this assay with medical underwriting and the patient’s past ratio of achieved to achievable health improvement, since the three together have a more direct effect on costs and outcomes?

So what is your organization putting into place today, to prepare you to develop, implement and/or integrate this algorithm in 2017? And underlying this entire fantasy has to be real-time access to claims and/or chart data, with the clinical and communication savvy to use these data intelligently. How close are you there?

Next…what self-administered risk assessments do and don’t do…and what might work better.

Brand Direct Marketing: Value Driven Action Lifts Topline

Brand Direct Marketing: Value Driven Action Lifts Topline

Branding and direct response have long been cornerstones of successful marketing campaigns.  On their own, each contributes an important piece of the marketing puzzle. Brand establishes position, generates awareness and builds preference for a company. Direct response is actionable. It gives people a reason to connect with your business and moves them into the sales cycle.

The wall between branding and direct response is coming down. It has to! The pace of marketplace change—technological advances, generational diversity and product commodization—demands an integrated, efficient approach that drives topline results. Effective marketing means opening up a dialogue with consumers and carefully tracking the conversation. Companies large and small are doing it and, they are seeing sales increase and their brand equity enhanced.

Brand direct is a way of combining the emotion evoked from brand advertising with the workhorse tools of direct response. A balanced approach means consistent communications that encourage interaction from prospects and promises a more meaningful customer experience. Here, direct response marketing tactics (data-driven segmentation and in-market learning supported by a strong call-to-action) take advantage of general advertising tactics. Using this model you get marketing for all media that is measurable and tied to specific sales goals—it’s where strategic thinking and persuasive creativity come together.

For brand direct marketing to achieve the best blend of branding and direct response, consider these three guiding principles:

All communications impact brand, so make sure your communications have brand impact. In other words, don’t think of brand or image campaigns as being separate and distinct from direct response. Awareness is only the first step. Every campaign should be designed to build your brand while eliciting a specific response from your target audience. The key is to educate prospective customers while pre-selling your product or service. Then, show them how to navigate the purchasing process to start a long-term relationship with your company.

Customers and prospects are always telling you something about themselves…listen. New tools and technologies are giving marketers access to an unprecedented amount of data about consumers. Turn this data into intelligence that helps you understand how and why your customers buy. Discover who are your biggest promoters…and most pesky detractors. Listening enables you to refine and replicate the purchasing process for prospective customers. By effectively profiling and segmenting your target audience you can deliver the right message at exactly the right time and in the right place.

Be ready for the next big opportunity. Today’s marketing environment is dynamic and fast-paced. It means your business is constantly evolving due to the constant flow of useful information—sales statistics, click streams, response analysis, competitive intelligence and more. You can use this knowledge to maximize your marketing performance, tweak messaging, adjust creative approaches and evaluate new media outlets. This allows for better opportunity analysis, plus newfound agility when it comes to:

•  Achieving product–price–promotion differentiation.
•  Addressing competitors head-on in sales situations.
•  Articulating customer preferences and perceptions.

Smart marketing can no longer depend on traditional silos. Brand direct marketing effectively leverages the value of your brand with proven direct response tactics. It enables a company to call for immediate action, initiate a customer relationship and then maintain an ongoing, one-on-one dialogue creating loyal followers. And, brand direct produces powerful, measurable results. 

Lindsay Resnick, Chief Marketing Officer, Finelight, lresnick@finelight.com

The Underinsured: 45 vs. 17 million

The Underinsured: 45 vs. 17 million
In addition to the uninsured, there is a significant population of underinsured Americans that don’t have adequate coverage to come close to addressing their medical needs. These underinsureds face significant financial burdens and barriers to receiving necessary care, and are a significant problem for health care providers as well.

But a basic problem in examining this population is defining the scope. While identifying the uninsured is pretty straight-forward, "under-insured" is a relative term that can mean different things to different groups of stakeholders. How many underinsured Americans are there? That depends upon how you define underinsured.

If we use a definition advanced by Consumer Reports, the number could be 45.2 million. If we use a definition advanced by AHRQ, the number could be 17.1 million. That’s quite a spread.

Consumer Reports recently released results from a health insurance survey conducted by the Consumer Reports National Research Center in May 2007, which sampled 2,905 Americans between ages 18 and 64 and among other things tackled the issue of the underinsured.

Consumer Reports defines the underinsured as persons with health plan coverage that have two or more of the following complaints about their health plans: "It does not adequately cover costs of prescription drugs; doctor visits; medical tests; surgery or other medical procedures; catastrophic medical conditions; or the deductible is too high."

Applying this definition to their survey respondents, Consumer Reports estimates 24% of the U.S. adult population under age 65, which based on current U.S. census figures of 188.4 million adults in this age group, works out to an estimated 45.2 million people. Consumer Reports indicated the "median household income of respondents who were "underinsured" was $58,950, well above the U.S. median. Twenty-two percent live in households making more than $100,000."

According to the survey, 43% o of the underinsured reported that they postponed going to the doctor because they couldn't afford it, 28% of the underinsured put off filling prescriptions, 27% said they were still in debt to doctors and hospitals, and 3% of the underinsured said medical bills had forced them to declare bankruptcy. Consumer Reports broke out responses to the following circumstances by "Well Insured" vs. Underinsured categories:

Circumstance	Well Insured	Underinsured
Prepared to handle unexpected major medical costs in next 12 months	65%	37%
Postponed needed medical care in past 12 months due to costs	22%	56%
Dug deep into savings to pay medical bills	9%	33%
Made important job-related decisions based mainly on health-care needs	11%	21%
Health plan does not adequately cover prescription-drug costs	7%	63%
Decisions about retirement affected by medical expenses (adults 50+)	12%	34%

Of course, the Consumer Reports definition is entirely subjective. Researchers from the Agency for Healthcare Research and Quality (AHRQ) last year tackled this definition with a more objective measure, and published their findings in JAMA. The AHRQ definition of underinsured?  "insured persons with health care service burdens in excess of 10% of tax-adjusted family income." 

On this basis AHRQ found that in "2003, there were 48.8 million individuals (19.2%) living in families spending more than 10% of family income on health care, an increase of 11.7 million persons since 1996. Of these individuals, about 18.7 million (7.3%) were spending more than 20% of family income. In 2003, individuals with higher-than-average risk of incurring high total burdens included poor and low-income persons and those with nongroup coverage, aged 55 to 64 years, living in a non-metropolitan statistical area, in fair or poor health, having any type of limitation, or having a chronic medical condition. Applying our definition of underinsured to the insured population, an estimated 17.1 million persons younger than 65 years were underinsured in 2003, including 9.3 million persons with private employment-related insurance, 1.3 million persons with private nongroup policies, and 6.6 million persons with public coverage."

Thus the number of underinsured under age 65 Americans might be 45.2 million, according to the Consumer Reports definition, or  17.1 million according to AHRQ. Quite a difference in numbers.

Health Insurance Top 10 Issues ‘07

Health Insurance Top 10 Issues ‘07

What’s going to drive change in 2007? How are health plans positioning for the future? Here’s a look at the trends shaping health insurance this coming year.

Technology From cybercondriacs to genomics, healthcare technology will be a huge force. With over 120 million people online searching for health information, the customer has embraced technology! For health plans, integrated benefit card technology promises a new era of administrative efficiency.

Differentiatio n Health insurance products have become indistinguishable. Going head-to-head with competitors means rising above this “sea of sameness”. Differentiation will come from unique brand positioning that connects with customers and has competitive muscle.

Boomers America’s 78 million baby boomers are expected to live longer than any generation this country has ever seen. They are educated, tech savvy and convenience driven. From empty nesters to Medicare, boomers are a growing opportunity for health insurers.

Consumerism “Proof-of-concept” will take center stage in 2007 as health plans justify Consumer Driven Healthcare investments. Employers are expecting premium savings and at the same time employees are suffering deductible shock and benefit intimidation.

Distribution Detailed customer profiles, psych-demographic data and predictive modeling are making multiple sales channels a competitive necessity. The result is improved product awareness and a one-on-one customer relationship that turns into sales growth.

Lifestyle Half of Americans now believe it is fair for people with unhealthy lifestyles to pay higher insurance premiums, deductibles and co-pays. New and innovative lifestyle management programs are embracing wellness and prevention and rewarding members to get healthy.

Individuals As employer-based health insurance shrinks and the uninsured population grows, the individual health insurance market is booming. Products need to be tailored to unique purchaser needs, striking the right balance between benefits, affordability and insurability.

Convergence Health insurers own banks and banks have healthcare business units. Financial planners are integrating benefits into long-term asset protection, and health brokers are weighing tax implications of HSAs. Today’s healthcare consumers are tomorrow’s payers.

Communication Customers are demanding information in user-friendly, readily accessible formats. Communications need to reflect demographic segmentation. It will take a new mix of strategies to ensure that companies are reaching their target customer.

Healthcare Concierge medicine, hospitalists, intensivists, retail clinics and medical tourism are changing health care delivery. Spending on prescription drugs will surge and employers will continue to cut back on sponsoring health benefits.

This year promises to be challenging. Smart health plan executives will set themselves up to anticipate market change, refine strategic vision and capture new market opportunities.

Health literacy: do we have the mantra right? (Part 1 of 2)

Health literacy: do we have the mantra right? (Part 1 of 2)

The Mantra

“Health literacy is increasing; consumers are becoming more sophisticated.”

This statement supports the textbook definition of health literacy: the ability to obtain and use health information and services. Unfortunately, patients’ motivation to (1) cultivate and (2) utilize that capacity is often missing from both the definition and reality.

In what other consumer behavior would we overlook the fact that action requires both motivation and capacity? Walk into any car dealership and you’ll see how quickly the salesperson assesses your motivation, as distinguished from your capacity to act!

The Gap

Unlike literacy in general, which has clear utility in daily life, there are significant disincentives for health literacy, e.g. the potential consequences of a bad choice, the effort of making it, etc. It is also relatively easy to choose not to exercise health literacy, whereas it would be difficult to choose not to read more generally. Moreover, a plethora of choices is a natural rationale for denial and shutting down.

We’ve all experienced some version of health care hell, in which decisions:

o Had to be made while in physical and/or emotional pain

o Were only supported by information that was either over-simplified, or in a foreign language

o Were clearly a “choice between evils” and/or offered less than even odds of the most favorable outcome

Thus, choice is often less about empowerment (the movement to redefine CDHC as “patient-empowered care” notwithstanding) than necessity and hope. Everyone who seeks to influence health behavior should consider daily that information-seeking, care-seeking and self-treatment each carries significant emotional, physical and economic (including opportunity) costs. Though making one’s own decisions with appropriate support may be better than the alternatives, it is not the pain-free, no-muss event too often portrayed.

So the circular incentive presented for exercising health literacy (“take charge of your health”) may be less than persuasive when it comes to action. For many, including the uninsured, that directive entails time and/or money they don’t think they have, and/or appears to be a code word for increasing OOP costs.

With great power comes great responsibility. Health literacy can increase both, yet, often, neither is desired.

Next, some thoughts on alleviating the huge burden of health decision-making. Please leave a comment (with a URL if appropriate) to let everyone know what your organization is thinking and doing, as well.

The Relationship Between Premium Increases and Reform

The Relationship Between Premium Increases and Reform

Never mind that PriceWaterhouseCoopers recently issued a study indicating the medical costs increases that health plans bear will further decelerate for 2008. Hewitt Associates just issued projections that initial premium increases quoted by the plans to employers will spike upwards for 2008. If indeed premiums increases reverse the trend of the past four years and accelerate again, such movement will in turn accelerate reform initiatives and market changes.

Lets take a step back and look at the premium pricing and underwriting cycle. Under this historical model, plans are driven by cyclical market share and premium price competitive behavior. There are periods where premium increases are significant, then decline, and then rapidly increase again. Here’s how the cycle works:

• During profitable periods: a) plans want to expand market share; b) they start to lower price to do so; c) other plans match lower prices to keep pace and not lose share; d) price wars similar to airline fare wars erupt and multi year contracts develop.
• Then a downswing develops: a) due to insulation of provider contract capitation and discounts and the time lag on fee for service claims, considerable time elapses before financial pressures are fully visible from the lowered premiums; b) due to multi-year contracts and price pressures nothing much can be done about the problem as it becomes apparent.
• A period of significant losses then occurs: finally enough of the market is losing money so that several major players break rank and begin increasing rates and everyone else follows suite.
• Finally there is a return to profits: the premium increases continue until profits are being generated, and the cycle begins anew.

However, with the new century, health plan economic behavior appears to have changed to some degree:

• Plans are now somewhat less driven by long-term market share
• Plans are now somewhat more driven by short-term bottom line profitability
• Plans are more willing to exit unprofitable markets and product lines
• Plan consolidation has occurred due to closures of failing plans, market exits and acquisition of plans.
• Premium competition has somewhat diminished because of all the above.

This doesn’t mean that the premium pricing cycle has disappeared. It does mean the down part of the cycle will be less pronounced due to reduced premium competition. Here’s how the cycle looks graphically:

Source: MCOL Managed Care Fact Sheets

Now let's correspond a little history of some major reform and market movements in the past twenty years to this premium increase graph. You will notice each of these major market movements correspond with shifts in the premium trends:

1. PPO marketshare diminished, and HMOs became the mainstream employer health plan option in the late 1980s as the vehicle to address double digit rate increases nearing 20%
2. HMO tight utilization controls, provider capitation arrangements and deeper discounted contracts rapidly increased in scope as HMOs gained marketshare clout in the first half of the 1990s, and health plans required cost savings to counter significant premium price competition. Pressure for health care reform erodes after 1993 as premium increases rapidly delerate.
3. Significant Managed care backlash emerged from providers, media and consumers in the late 1990s, causing a relaxation of utilization controls, a very large reduction of capitation programs and reduction of provider discounts. PPO enrollment again accelerated due to the backlash, and premium increased as resulting costs increased.
4. Consumer driven health plans and greater consumer cost sharing emerged with the new decade as cost increases reached double digit levels. the number of uninsured reach peak levels and pressures for reform increase.

So now plot the next points on the graphs fro 2008 - 2010. Will they continue downward or climb back upward. If they continue to decelerate, we would predict diminished enthusiasm for significant health care reform, and for movement to consumer driven plans. If they start accelerating, a fire should be lit under greater pressures for reform, as well as consumer driven programs. Of course, the reform movement and consumer driven movement will most likely be at odds in the direction they intend to take us, but momentum they may both well have in that scenario.

So the question is, what happens next? Will health plans keep decelerating their premium increases, as the PwC medical cost study would cause us to believe, or will premium increases accelerate, as the Hewitt analysis indicates?

The PwC study: "Behind the numbers Healthcare cost trends for 2008" from the PricewaterhouseCoopers' Health Research Institute, released this June 2007 is available at http://pwchealth.com/cgi-local/hregister.cgi?link=reg/numbers2008.pdf. The following is the PwC expected Medical Cost Trends for 2007 and 2008:

	2007	2008
PPOs	11.9%	9.9%
HMO/POS/EPO	11.8%	9.9%
Consumer Driven	10.7%	7.4%

The Hewitt Associates analysis can be reviewed in their June 28, 2007 press release "HMOs Propose Highest Rate Increases in Four Years, According to Hewitt Analysis" at http://www.hewittassociates.com/Intl/NA/en-US/AboutHewitt/Newsroom/PressReleaseDetail.aspx?cid=4159 . Overall, Hewitt projects these initial 2008 rates increases to average 14.1%, compared with 11.7% in 2007 and 12.4 % for 2006. How different are the final plan rates? Hewitt notes that after plan changes, negotiations and terminations, 2007 average HMO rates increased by 8.2%. If that same differential held for 2008, final 2008 rate increases would be around 9.9%, which if you round it, does bring us back to double digits even for the final numbers.

So, let's spin the premium rate wheel of fortune and see if we're headed into pressures for change or status quo as we inch along towards the election year.

Clive Riddle's Welcome

Greetings from BlogLand:

MCOL has launched the MCOLBlog, and I'm excited to be a part of it. Actually, we've been blogging to our MCOL paid members for years, but this inaugurates our public blog for all those in the universe wishing to take part in our discussion.

I will be commenting and reporting on a wide variety of topics regarding the business of health care. By way of background, I've been running MCOL, the B2B publisher of managed care and health care business information and resources for the past twelve years. Before that, I ran a regional health plan for over a decade.

In particular, I'll be addressing issues including consumer driven care, transparency, health care reform, strategies addressing plan design and costs, convenient care, international health care issues, Medicare and Medicaid managed care, and much more.

I look forward to your comments.

Lindsay Resnick's Welcome

As Chief Marketing Officer of Finelight, I lead business development and strategic advisory services. In this role, I make it a point to stay currenton health care trends and innovative approaches to marketing to insure our clients success in the competitive landscape.

I am excited to be a contributor to the MCOL Blog. With 25 years of professional experience in the health care and insurance industries, I will be discussing such topics as consumer directed health plans, product branding, Medicare, direct-to-consumer selling and how to achieve a dominant position in segmented markets such as young invincibles, boomers and seniors.

There is much to talk about. I encourage you to participate in the comments section as we work together to tackle these issues.

Thank you,
Lindsay Resnick

Laurie Gelb's Welcome

Welcome to the MCOL Blog. As a survey/outcomes researcher/strategist who's been on the hospital, payor, manufacturer and consultant sides of the table, I'm looking forward to some lively conversation on decision support, my particular passion. Anyone who delivers, funds, receives or regulates care these days faces an unprecedented burden of choice. How do we minimize this burden while optimizing health? Please bring your experience and insight to our discussion.

William Demarco's Welcome

Welcome:

As a contributor to the MCOLBlog, I’ll be sharing our perspectives on issues surrounding healthcare delivery system redesign and transformation, with particular respect to provider owned enterprises. Among other things, I’ll be discussing provider and employer prospective payment approaches in addressing Pay for Performance models, for purposes of developing direct employer/provider contracting entities, benchmarking collaboratives under the new value purchasing initiatives, as well as single specialty centers of excellence.

Of course, there’s lots more under the sun to talk about, and I do hope to hear from you as we continue down this path.