Medical Bankruptcies

I will give credit to the Health Care Reform Now blog for leading me to this article in The Indianapolis Star, but I think it is a sad reality.

“More and more of the middle class is finding out that even if they have jobs and insurance, they can be wiped out by medical events that are not even catastrophic,” says Dr. Christopher Stack, a retired orthopedist and co-founder of Hoosiers for a Commonsense Health Plan, the state’s chapter of Physicians for a National Health Program. “You can run up a high five-figure bill real easily.”

A Harvard study published in 2005 estimated that about half of all bankruptcies filed in the U.S. have their origins in medical costs, a ratio that jibes with Silver’s and other bankruptcy veterans’ observations here in Indianapolis. While the rest of the world’s industrialized nations provide health coverage to all or nearly all of their populations, the U.S. mass-produces the distinctly American phenomenon of medical bankruptcies.

I am not a big fan of the donut hole in Medicare, but perhaps we need a donut hole type concept for health insurance where people have a maximum out-of-pocket in any one year.  Although I am sure that would beg the question of what was optional versus required surgeries and treatments.  It just seems a shame that we can bankruptcy hard working people with insurance over their medical bills.

What is a Mail Order Pharmacy (Home Delivery Pharmacy)?

My most popular post ever is “What is a PBM?” which made me think that this is probably a relevant post for the average healthcare consumer.  And, given the historical push to mail combined with the current economy, you can expect mail order pharmacy (or home delivery pharmacy) along with 90-day retail pharmacy to be a hotter topic.

At Silverlink Communications, we work with a lot of companies on their retail-to-mail (RTM) communications strategy and execution.  One of the first things I point out to all of them is that over 50% of people don’t usually know what mail order pharmacy is.  So, you have to address awareness at the same time as recruiting new patients.

So, for all of you that receive a letter or call talking to you about moving your prescription to mail order, let me answer a few of your basic questions:

• Mail order pharmacies are also called home delivery pharmacies since they deliver your medications through the mail and directly to your home (or other address provided).
• The mail order pharmacy is typically owned by either your managed care company (aka health insurer) or by a pharmacy benefit management company that your insurer contracts with directly to provide this service.
• There is typically only one mail order pharmacy that you can use (i.e., is considered “in-network”).
• The service is typically the fulfillment of 90-day prescriptions of medications which you will take on a long term basis (aka maintenance medications).  This is not true for controlled substances which typically only allow a 30-day prescription and for some specialty and injectable drugs.
• You often have a financial incentive to choose mail order where you will get a 90-day supply for less than it would cost you to buy three 30-day prescriptions at your local pharmacy.  This discount is due to the buying power of the mail pharmacy, the automation which reduces the costs of dispensing the drugs, and the lower distribution costs (i.e., no need to move the drug to all 5,000 retail locations).
• The drugs are the same drugs you buy at your local pharmacy.
• You have the same access to a pharmacist but it is over the phone not face to face (which I personally prefer and think is more confidential).
• You can do your refills over the IVR (interactive voice response) line and over the Internet along with traditional means of live agents and using snail mail.
• These mail order pharmacies use robotics and other highly sophisticated solutions to dispense the drugs accurately and quickly.
• Many of the mail order pharmacies that we work with offer services around calling your physician to get new prescriptions and also use our automated outbound calls to provide you with order status (WISMO calls - what is the status of my order) and refill reminders.
• You shouldn’t typically start a new drug at mail order.  You want to wait until you have had two fills locally to make sure you are titrated to the right strength (i.e., your MD might switch your dosage initially so you don’t want to buy too much supply of a drug you might not use).

Are Involved Patients More Compliant?

This is a study from a few years ago from Harris Interactive and BCG that I found on the BioPlus website.  If I am interpreting it right, it would imply that those that are most involved in their healthcare are most likely to be non-compliant.  It doesn’t seem logical, but perhaps those are the people that want to play doctor and are most likely to think they know better.

Burning Calories – How Many?

I was with a friend and was talking about how many calories you burn per hour. The instructor at the aerobic kickboxing class I have gone to on and off for years always says that I could burn up to 800 calories per hour in the class. When I am on the treadmill, I always try to get it up close to 1,000 calories per hour. I have never been good about tracking calories in, but I always think about how much more I need to work out if I have been eating poorly.

So, if you’re looking for an estimators, here is a calculator and here is a great laundry list of activities from cooking to hiking and biking to broomball or calories burned per hour. I pulled a few common ones from their list here:

Activity (1 hour)	130 lbs	155 lbs	190 lbs
Biking (<10 mph)	236	281	345
Biking (>20 mph)	944	1126	1380
Golf (carrying clubs)	325	387	474
Ice Hockey	472	563	690
Pushing stroller with child	148	176	216
Running (6 mph)	590	704	863
Running (7 mph)	679	809	992

Why Can’t I Go To Any Physician?

In pharmacy, there is a rarely used benefit structure called Therapeutic MAC (Maximum Allowable Cost).  What this does is say that in any class of drugs (e.g., cholesterol lowering drugs) there is a maximum amount of money that will be paid by the plan.  But the individual can get any drug.

That can be controversial since a patient could end up being required to take a more expensive drug by their physician costing them a lot of money.  (Although most pharmacy plans allow for a clinical prior authorization in cases like this where they might pay less.)

My thought is why not do the same thing at least for physician visits.  If my health plan simply published statistics that said they will pay $100 for any visit to a physician’s office.  I could then go to any physician and that physician would know they were going to get $100 for my visit plus whatever they charge me.  It would eliminate a whole process of constantly managing the network and focus patients on the price that their physician charged.

I am sure there is something that I am oversimplifying, but it seems logical.

Would You Pay $100 To Be Told To Take Your Rx?

We know adherence is a serious issue that drives healthcare costs.  And, as I have talked about a little here and a lot with many of our pharmacy clients, it’s not a simple issue.  People aren’t adherent for a variety of reasons - cost, side effects, health literacy, or simply just forgetting (among others).

There are lots of tools out there to help you organize your medications and manage them.  Whose job is it to help you - yours, your physicians, your managed care company, your pharmacy, your pharmacy benefit manager?  Obviously, you (the patient) have the primary responsibility.  After that, your pharmacy is best positioned to help you with this.  But, the managed care company stands to benefit the most by preventing serious medical conditions associated with non-compliance.

So, I was a little surprised to see a new company come up that offers to send you calls, e-mails, or text messages to remind you to take your medications.  And, you can even talk to a pharmacist.

Let’s break this down:

• Whatever pharmacy you use (mail, retail, specialty) will offer you consultation with a pharmacist for free.
• I believe most pharmacy benefit management (PBM) companies offer automated e-mail reminders that you set up yourself off their website for free.

I don’t know why I as a consumer would pay for this.  And, it seems pretty high for a managed care charge.  If I went to a client of ours and told them I would send messages to patients for $100 PMPY (per member per year), I think they would choke on that price tag.

So, will it work??  Who knows?  I have been surprised by business models before.

Dental Experience

I am a big believer in the fact that the experience matters for healthcare.  From my architecture days, this means physical space, sequence of events, bedside manner of the staff, clarity of communications, and processing of the claim (at the simplest level).  Everything that the patient experiences as associated with an event drives their satisfaction.

So, I was pleasantly surprised taking my daughter to the dentist a few weeks ago.  We had gone to a “kid’s dentist” before which was an hour away that I thought did a good job (although the kids hated going).  But, this one was over the top.

When you walk in, the entire room is covered with art (e.g., there is a giant Spiderman climbing on the ceiling).  There are video game stations in the corner.  There is a large flatscreen TV playing a slide show of pictures of the kids coming to visit that day.

And, it doesn’t stop there.  Each room is decorated.  The staff talks to the kids (more than the parent).  Every tool and process is explained to the kids in simple terms.  They sometimes give out balloons.

Just something to think about when you try to look at things from an outside-in perspective.  How is the patient experiencing your service?

Genetic Art

I was reading about this company DNA 11 the other day, and I found it a pretty cool concept. They take your DNA and make it into art focusing on the 1% that is unique. According to the article in American Way magazine, prices ranged from $390 to $1,200 with 25 color options or the ability to request a custom color (to match your sofa perhaps).

They can do pets, fingerprints, and lip prints.

A Few New Blogs

I always enjoy coming across new blogs with interesting articles. Here are a few that I found yesterday and added to my blogroll:

The Health As Human Capital Blog (sponsored by a company described as “dedicated to providing better information for better decision-making in health care and business”)

The Doctor Comes To You Blog about the onsite healthcare industry

Medication Non-Adherence Blog by Alex Sicre who comments on my blog often

LinkedIn Question On HealthComm

I think it was earlier this year when LinkedIn rolled out a new feature called questions which allows you to pose questions to LinkedIn users and get answers. I continue to like this tool, and it has been interesting to watch it evolve from a “startup” (when I joined there were less than 2M members) to a tool that well over 10M people use and has gotten lots of press.

I finally decided to pose a question:

Do you have any good (or bad) examples of healthcare communications? I am looking for how your healthplan, disease management company, pharmacy, or PBM communicates with you. What worked or isn’t working? This could include letters, websites, phone calls, social media, etc. Examples might include communications around moving you to a 90-day prescription, moving you to a generic drug, improving your awareness of a disease, addressing compliance and adherence, reducing your out-of-pocket costs, etc.

I received four answers:

Answer One: I had some great success marketing to Medicare members by conducting health and fitness seminars as well as bring in experts to discuss retirement and other topics of interest. Initially, I’d obtain a 3% response through postcards and an additional 1.0% through phone calls. Conducting a series of seminars in one area can also bring in additional attendees (0.5%), through word-of-mouth buzz.

I found seminars to work well because the attendees were getting something of true value for their time (information and a social event with their peers) and I had a captive audience to market. A win, win situation.

Answer Two: My experiences with Blue Cross have been pretty good, there’s the health mag they send out with information articles, etc. I’ve never been able to access the website services though, something to do with the number that CS can never work out though I’ve tried on several occasions. I love my primary doctor and feel she and her partner give excellent care and plenty of information to their patients. They’re the only ones who’ve ever given me a reading list and web printouts! It was just a general question I had, not a condition I suffer from.

In addition to other tasks, I handle the health documents for the children enrolled with us and find that often the doctors have done a very poor job in informing the parents of what to watch for, what a result means, etc. Their offfice staff often do a shoddy job of filling out the forms correctly. Last month I recieved paperwork for a child, the physical form stated passed 20/20 for vision, it was accompanied by a referral from the doctor for a full eye exam as the child had failed the eye test miserably! I once received a normal hearing result for a child we knew was deaf as a door nail. When trying to get an insurance company to cover a needed service or therapy for such is incredibly difficult with that kind of paperwork.

Thanks for the opportunity to raise awareness!

Answer Three:
Aetna sent me a letter suggesting several plan options that may be cheaper than the one I currently have. That was a positive. I wish that I could compare the plans side by side on the website. It is difficult to remember the details of each one as you look at them individually.

Answer Four: As a health promotion practitioner, we are at a time when the national consciousness of health has never been higher. The most important thing we can do at a workplace is create individuals and systems that are health literate. We spend enormous amounts of money in our wrongly terms “health care” system. What we actually have is a “sick care” system, and what is truly missing are incentives and action by companies to recognize the billions of dollars we could save and then return to economy by protecting our workforce with sound health promotion. Our children are contracting early onset adult diabetes and we commonly refer to our bleak situation of the obesity epidemic. Our “health care” system, and thus the traditional “disease management” is from a biomedical chronic disease model.

It is time to work at reducing costs related to health care and absenteeism from a proactive rather than reactive approach. Many companies and organizations provide services that have yielded significant economic returns from building well companies.

According to the the NIH, most people are unhappy with our current system, and unable to continue to straddle the costs of ever increasing health care. We can avoid chronic disease by acknowledging new paradigms of business operations that include well companies. For information, contact www.positivepurposeinc.com

Tier Zero

Frank Koronkiewicz, the Director of Pharmacy, at Blue Cross of Northeastern Pennsylvania (BCNEPA) just launched a new plan where people can get 65 different generics focused on chronic diseases at no copay AND without any premium.  It’s called Tier Zero.

Frank has always been a progressive Director of Pharmacy.  We worked on several programs together at Express Scripts.   You can also find some of their collateral and videos on generics on their website - click here.

It would be interesting to look at the overlap between these drugs and the Wal-Mart list of drugs, but I think you would find that an individual could have a pretty comprehensive benefit of generic drugs between these two solutions with low out-of-pocket (OOP) costs and no increase to their medical premium.  A compelling story to many.

Three Sad Healthcare Stories

First, I think this is a very disappointing article about workplace violence in the healthcare industry.  I certainly could believe (unfortunately) in the verbal violence since people are very emotional about their healthcare and often stressed over the financial implications and unintuitive processes.  But, this story has some scary statistics which are an issue at a time when we need more healthcare service workers.  [Ask your friends in the industry.  I plan to.]

• Health care workers are 16 times more like to face violence at their job that workers in any other service-oriented profession.
• More than 50 percent of reports of aggression in the workplace come from the health care sector.
• Over 9,000 nurses and other health care workers are verbally or physically assaulted on the job every day, according to the National Institute of Occupational Safety and Health.
• A 5-year survey of 170 university hospitals showed that over half of all emergency room employees had been threatened by weapons.
• Almost 90 percent of nurses in every specialty said they were verbally assaulted during the past year and almost 75 percent claimed they were physically attacked, according to a study published in The Journal of Emergency Nursing, which related reports of 100 percent verbal and 80 percent physical assault rates for emergency room nurses.
• Almost half of all psychiatric physician residents reported an assault during their career and other medical residents in the hospital setting reported a 16 percent assault incidence.

The second article which I read which I think is also sad is about the rise in seniors filing bankruptcy.  Not only is it disappointing to see people reach retirement only to have their dreams dashed away from them with crashing house prices, rising food prices, rising gas prices, and lower return on their investments, but they are facing huge healthcare costs that are pushing them over the brink.  22.3% of the bankruptcy filings in 2007 were from seniors.  We also know that even without filing this stress can get people to skip medications or not take care of themselves only worsening their health.

The third story which I saw on CNN this morning was about a group of high school girls making a pregnancy pact.  Talk about a need for sex education and health literacy.  It’s one thing to happen by accident and quite another to intentionally put yourself in that challenging situation of getting a high school diploma and raising a child.

Diabetes or Depression: Which Comes First

Since many of us understand the risk of co-morbidities (i.e., two diseases that commonly exist together), I think it makes a lot of sense to ask this question.  Dr. Gupta from CNN had an article earlier this week on his blog about a study that was recently out on the relationship between diabetes and depression.

• Those that started with depression but no diabetes had a 42% higher risk of developing diabetes during a 3-year period.
• Patients with type 2 diabetes but no symptoms of depression were 54% higher risk for depression during that same period.

St. Louis - Less Beer More Health

Here in St. Louis there has been a lot of upset people about the potential buyout of Anheuser-Busch by InBev.  Isn’t that business?  Don’t the shareholders want to maximize their return?  Of course, we have lost several big companies to international entities which obviously changes the dynamics, charity support, and other things but isn’t that part of globalization.

So, I was a little surprised (not totally) that the WSJ blog talked about St. Louis moving more toward high growth health care than slow growth manufacturing companies.  St. Louis has been trying to drive a bio-tech focus now for many years, and it has the headquarters (or large presence) of several healthcare companies:

• Express Scripts
• Centene
• BJC
• SSM Healthcare
• Ascension Health
• Pfizer’s Research Group (1200 people)
  

And, there are numerous smaller companies and healthcare start-ups here.  According to the St. Louis RCGA’s information on the BioBelt area here, we have more that 15,000 employees and 400 companies in this life science space.

Brand Prices Up; Generics Down

For those of you who are interested in this type of stuff, I think the AARP Watchdog reports (Brand Report, Generic Report) which track prescription drug prices over time are pretty interesting.  (Note: This is for drugs most commonly used by Medicare recipients, but I think you’ll get the point.)

Why People Choose Mail Order Pharmacy?

I was looking for something else in the Express Scripts Drug Trend Report 2005 when I came across this study referenced on page 209. I should have remembered since I wrote this section (yes I was a contributor see page 332). This is a Morgan Stanley study which talks about why people choose mail order pharmacy. Of course, the primary reason here is savings. The more savings the higher the likelihood of a person moving to mail order. This is a factor of savings per Rx multiplied by the number of maintenance drugs that an individual has that can be filled at mail order (or home delivery). This study shows the frequency of the response. If you focus on the weighted scores, you would see a dramatic cliff after savings. (I.e., 61% of people may choose mail for convenience, but they are much less likely to do it than someone with significant savings) So, why don’t all PBMs communicate exact patient savings to each individual? It’s hard. Given minimums and maximums; deductibles; percentage copays; and other benefit plan designs, the systems are stressed to produce this.

Sprint Response

Just to continue on the Sprint story I posted the other day. The response time to get a live person was 5 days (but only 3 business days). I then received an e-mail and a voicemail message. Interestingly, when I call back the individual’s direct dial number (nice), her voicemail says “from the office of dan@sprint.com”. I am not sure if I will get the context to help relay my story to healthcare, but I look forward to the conversation.

Good afternoon Mr. Van Antwerp,

I am certainly happy to hear that you are enjoying the simply everything plan. I called and left you a message on your voice mail with my contact information. If you would like to call me that would be just fine. I am here Mon-Fri from 8 AM to 4 PM eastern time.

Thank you for your loyalty. We really do appreciate it. Have a great evening.

Sincerely,

Her Name
Sprint

Sell Your Captive PBM - Why?

I was a little surprised by the quote from Lisa Gill from JPMorgan Chase about why health plans should sell their in-house PBMs (Pharmacy Benefit Management):

“I think it makes a lot of sense for PBMs [pharmacy benefit managers] to be sold or spun off as a stand-alone business. The only time it will make sense for a managed care company to actually own a PBM is after they move to real-time [medical] claims processing. And that’s not going to happen near term.”

Maybe I am missing some context here, but I don’t understand.  Why would you have a “captive” PBM (i.e., owned by a managed care company)?

• Able to align total healthcare interests (e.g., drive Rx usage up to manage ER visits)
• No conflicts of interest (real or perceived)
• Able to keep margins of the PBMs (look at the stocks of Medco, Express Scripts, and CVS Caremark)
• Manage the customer service experience

What does any of this have to do with real-time claims access?

Why would you use a standalone PBM?  (Again an easy decision)

• Economies of scale on rebates
• Mail order pharmacy efficiencies
• Manage capital outlays
• Get a dedicated focus on pharmacy which as only 10% of the total healthcare spend will be a stepchild under a managed care plan no matter what
• Best practices being leveraged across companies

And, we all know from bidding on RFPs that managed care companies use this service to win business talking about the integrated solution and underwriting pharmacy with medical.

If you understand the rationale here, help me out.

Express Scripts Jumps Into Worker’s Compensation

Express Scripts has been in the Worker’s Compensation space for years now.  As I suggested several months ago (see #2), buying a worker’s compensation PBM makes some sense.  The margins are good, but it does require a different service model.

That being said, they jumped in last week with the announcement to buy the worker’s compensation PBM business from MSC down in Florida.  It would have been intriguing to see them buy the other ancillary business that MSC has to get their footprint a little bigger.  Now, this can go from being someone of a stepchild for Express Scripts to a major business unit.  As Joe Paduda points out in his blog post, they have good teams at both organizations so they should be able to make some things happen in the market with a focused team, financial resources, and some efficiencies.

Given that fact that PMSI has been on the block, this may create a reason for a Coventry or a CypressCare to step in and buy them to gain more marketshare to take on Express Scripts.

A Few AIS Quotes Of The Day

I have a few more to post, but I often find their quotes interesting (www.aispub.com).

“Specialty medications require significant education for patients to feel confident self-injecting and achieve a successful outcome. For many patients, injecting a medication into the skin or muscle can be very intimidating. Because of the expense and the complexity of the medication, we cannot assume that the patient is just going to figure it out on their own.” Kari Amundson, director of specialty pharmacy services at Fairview Pharmacy Services, LLC.

“I think it makes a lot of sense for PBMs [pharmacy benefit managers] to be sold or spun off as a stand-alone business. The only time it will make sense for a managed care company to actually own a PBM is after they move to real-time [medical] claims processing. And that’s not going to happen near term.” Lisa Gill, a JPMorgan Chase analyst, speaking with AIS’s Health Plan Week about why health plans should jettison their in-house PBM units to shore up ailing profits.

“We went back and asked the 37,000 consumers we surveyed how long they had been with their last health plan, and found that the plans with the highest levels of involuntary turnover had the lowest levels of customer satisfaction.” Jim Dougherty, health care practice leader at J.D. Power Associates.

“The hepatitis C medications are pretty effective, but patients will feel much more sick from the treatment than from the disease, [so] companies that make those drugs are very willing to education patients” to improve their chances of remaining on the medication.” Mark Rubino, chief pharmacy officer at Aetna Inc.

George Paz (Express Scripts) on Adherence

Paul Levy who is the CEO of a hospital has a blog called Running A Hospital.  He posted a summary the other day of a presentation by George Paz who is the CEO of Express Scripts.  It has some good facts and there are several good comments on there about defining the terms in this area (see my old post) and whether these are reasonable rates of compliance.  There is also a patient commenting about getting nurse calls and reminder e-mails which sounds great but puts them in the 1% of the population for which this happens.

The numbers do seem understated to me - 85% compliance with cholesterol lowering drugs.  That might be the amount of people that get a paper prescription and then fill the drug or it might be the amount of people that get one refill, but I believe by month 6 or certainly by month 12 most compliance rates are closer to 50%.

There is clear value in adherence.  Everyone should (in key therapeutic categories and using evidence-based standards) want to increase adherence to reduce total medical costs.

What surprised me most recently around this was what Kaiser had observed when looking at how doctors shared information with patients (Archives of Internal Medicine, Sept 2006):

• Only 74% of the time did the physician tell the patient the name of the prescription drug
• Only 35% of the time did the physician discuss adverse events with the patient
• Only 58% of the time did the physician explain the frequency and timing of dosing

A Few Blog Entries About The Think Different Event

We wrapped up the road show this week in Hartford and NY.  I missed both events to be at client meetings on the west coast (and now down south).  But, one of the presenters and someone who was in the audience posted entries on their blogs about the event:

• James Taylor on his blog Smart Enough Systems
• The Interactive Snack blog

The Automated Sprint Reply

As a reply to my e-mail (see my last posting), here is what I got.  Now let’s see how long it takes to get a real reply.

Thank you for taking the time to write.  To truly revolutionize wireless, we need your input. It’s people like you who are using our services everyday that can provide the best perspective. We’ll be looking through all the ideas and feedback we receive.

This will, of course, take some time. I appreciate your patience until we can get you a response. A representative from my office will be contacting you in about a week.

In the meantime, if you are interested in learning more about our new Simply Everything plan, you can find the details at www.sprint.com/everything.

Once again, from all of us at Sprint, thank you.

Dan Hesse

President and CEO – Sprint

Giving Out Your CEO’s E-mail

From the perspective of soliciting feedback, how many companies post their CEO’s or anybody’s real e-mail these days? Sometimes you can’t even find a number to call on the website. You simply get some generic form to fill out and get feedback. You sent it into the black hole and wonder if you’ll ever hear.

So, given Sprint’s challenges over the years, I think it was (is) a bold move to post the new CEO’s (Dan Hesse) e-mail (dan@sprint.com) at the end of some of their television commercials. I have been using Sprint as a great example of a company building loyalty because they reached out to me recently to move me to a better plan which reduced their revenue in ½. So, to test this e-mail address, I just sent the following. I will let you know what happens.

Dan (or whoever answers these for you):

I have been a loyal customer for 15 years now with Sprint PCS. I am not sure if that puts me in a minority, but I bet it does.

I was recently impressed when you guys called me to make sure I knew about the all inclusive plan (not sure of the actual name) which was something like $99 per month. Especially, since I was spending about $200 per month before. I work for a healthcare technology company and have been using that as an example about how to build loyalty.

I would be very interested (if you can share) how you guys made the decision to “down-sell” people and whether it has had the desired effect (which I assume is less churn).

The NY Times had an article about this on 6/9/08. Apparently, the initial response is an automated reply from Sprint, but most people then hear from someone on his staff (or likely a group of dedicated customer service agents) to address their questions.

“Yeah, we were worried,” said Mike Goff, vice president of advertising and marketing communications for Sprint. The company had a reputation for poor customer service, and soliciting critiques for the new chief to read was a risk. But, Mr. Goff said, Sprint wanted to “show we were serious about our intent to improve our customer service. We knew this was happening at a time when the perception of our customer service in the market was poor, so this is a chance for Dan to hear back from the market.”

The question is whether bold tactics like this can work to help change their image. If so, maybe health plans and PBMs should start posting their Chief Medical Officer, SVP of Customer Service, and CEO’s e-mails and see what happens. I can only image the look on some of their faces of doing something like this. Even though I am sure the reality is that he has a confidential e-mail address that gets used for internal purposes and personal purposes. As the Times article says, I am sure shareholders don’t want to think that the CEO sits in front of his PC all day answering questions.

Exercise Supercenter - Lifetime Fitness

Have you ever heard of Lifetime Fitness?  I didn’t until they started building this huge facility near my house outside St. Louis.  My first reaction was that somebody had the wrong business model.  A million square foot gym in this economy.  No way.

After an initial run in with an overly aggressive salesperson, my neighbors slowly signed up after their strong marketing push.  Given that I primarily run, it seemed hard to justify, but everyone who I talked to that had been to one of their facilities raves about them.  People compare them to country clubs (other than everyone in casual clothes) where there is great service and quality design and materials.

When you review their website, you get a much different view of the company.  Not your typical gym.  The facilities include a restaurant with healthy foods, a spa, and all of what you’d expect - classes, equipment, pools.  But, they also provide corporate wellness programs.

It finally opened, and I had a chance to go there Sunday.  Very nice.  Lots of staff.  Lots of equipment.  Lots of people (but not too many).  [I have no idea what the breakeven model is for a facility but it has to be 3,000+ members.]  And, a great example of old world social networking was the fact that there were tons of people who we knew and who knew each other there.  It was a destination to be at where hanging out at the pool was a social event by itself.

Since we know that peer pressure can influence wellness, it would be interesting to study the health dynamics in neighborhoods with a Lifetime Fitness versus other gyms and versus no facility.  Could it be the catalyst or tipping point?  It’s only a couple of days in, and I am on the west coast so we will see.

More On Silverlink’s Think Different Event

I am now up in Minneapolis at our 4th Think Different event on how to engage the healthcare consumer.  I talked about the first few speakers the other day, and I finally had a chance to hear the other speakers present.  This week, I had the chance to listen to  James Taylor (of Smart (enough) Systems fame not music) and Fred Jubitz (American Express).  Here are a couple of my takeaways.

[Again, if you are coming to the upcoming events, this might be a little bit of a spoiler.]

A few notes from James’ presentation:

• He gave a great example of a program they did at Fair Isaac where they compared the standard, baseline program with one that was highly personalized.  What was the improvement - 2,000%!!
• He gave a good real-life example of the need for channel coordination talking about buying tickets for the Chunnel and how he got different prices on the web and phone which were also different from the prices his father in England got using the same channels.
• The Chunnel example reminded me of something that someone told me the other day.  They were using the Dell self-service example and pointed out that Dell now uses real-time chat right before you buy.  They have found that this increases the average sale by 15%.
• The Chunnel example also made me think about how web technology allows us to do a lot of customization by visit, but most companies don’t do this.  At the simplest level, I remember a competitor of Firepond (previous employer) where if I visited their website from work it looked one way and from home looked different.
• James talked about ATM customization as an easy example.  How much money do you normally take out.  Only showing you services that you have access to.  Some of this is starting to happen, but not much.
• He also talked about rules creation and how that varies.  I think it is always interesting to trace the evolution of rules and policies within a company.  Are they there because of regulatory issues?  Is it because someone coded the legacy systems that way?  Is it based on a personal interpretation?  Or are they dynamic and regularly reviewed?  One of the worse examples that I have ever seen was a large healthcare company that believed that HIPAA required them to re-code everything as it moved from development to production.  (A very costly error in interpretation.)
• He also talked about the evolution of interactions:
  • Automate decisions
  • Apply rules
  • Segment customers
  • Predict risk and value
  • Optimize
• James hammered home the point of never stopping to try to optimize since as the environment and your customer base change the optimal solution might change.

Fred who ran the gold and green cards at AMEX talked about:

• American Express really wanted to be a lifestyle enabler not a payments company.
• He talked about the Centurian Card (black AMEX card) which apparently is able to charge $5,000 initiation fee plus a $2,500 annual fee.  (Surprising that people still pay it, but I have heard examples of people buying a plane with their black card so I guess that level of service requires something.)
• He gave examples of how companies think about cards and showed a lot of affinity cards which made me think about groups and how people like to affiliate with others (e.g., by diseases).
• He talked about the importance of several things:
  • Know your audience
  • Key metrics
  • Segmentation
  • Personalize
  • Continuous improvement
• He showed the standard framework for segmentation looking at size of wallet (i.e., how much you charge / spend per year) versus their share of wallet (i.e., how much of that is with AMEX).  Each box on the grid then had a strategy - invest, retain, focus, divest, etc.
• He showed a lot about how the financial services companies can personalize the web experience, but he pointed out that this took months to develop as they built up your profile.
• I think a key point he made relative to healthcare is that a lot of a new member’s behavior was determined in the initial months which led to how they used their card.  He gave an example of his blackberry.  The first couple features he learned are all he uses.
  • What are you doing in the initial months to “train” your members or be trained by your healthplan to use the website and leverage other ancillary services (e.g., gym membership) that they might offer?
• He stressed evolving your segments but not starting over each year or you will lose some of the lessons you have developed.
• Finally, as you always want to stress, he said to keep it simple.

Additionally, you can see some of Matthew Holt’s comments about the event at The Health Care Blog (here and here) and Les Masterson’s comments in The Health Plan Insider.

GINA – A Good First Step For Personalized Medicine

Whether you are a patient or a health care company, I think you should be happy about this. GINA is the Genetic Information Nondiscrimination Act of 2008 which was signed into law on May 21^st. It is a good step in encouraging individuals to participate in genetic testing without worrying about that information being used against them by an employer or health plan/insurer. It also bans companies from requiring genetic testing.

Based on an e-mail I got from Fulbright (a law firm where a friend practices), they offered the following definitions:

A. Genetic Information = includes the individual’s genetic tests, the genetic tests of family members of the individual, and the individual’s family medical history. Any information related to the individual’s or any family member’s participation in clinical research offering genetic services is included as is the genetic information of