Should Healthcare Run More Like Airlines?

While most people dread flying during the holidays, it’s hard to ignore how efficiently the airlines are able to move millions of people across the country.  While we tend to dramatize issues with flying, today I want to appreciate the tremendous job the industry has done to create an effective (and dare I say friendly?) member experience that healthcare could learn from.

Flight Purchasing

How The Airlines Do It: How do you like to buy plane tickets?  Some people use a travel agent, some people call the airline, others buy online (either directly from the airline or from flight comparison websites).  Airlines give customers several channels to buy tickets by creating their own infrastructure, but also opening up their data for other companies to use.  Freeing up their data also creates price transparency, leading to greater competition and lower prices.  While everybody hates the new fees airlines tack on, decoupling extras (e.g., checked luggage) can also lower costs or keep them steady since only the people who use these services are paying for them.  Finally, customers can also get lower prices through group buying, using companies like Egencia that exchange volume for price.

What Healthcare Can Learn: Right now, you have very few choices about how you can pay for healthcare – given the high cost, insurance is the only route for most people, and that’s often tied to your employer.  This may change with the individual exchanges, as employers may drop coverage and folks will get to choose which plan is best.  As a result, insurance companies will need to create more customer-friendly plans and interfaces to help customers understand their choices in a much more competitive market. 

While healthcare is mostly fee-for-service (i.e., you’re only charged for what you use), there remains a lack of price transparency – do you know how much your x-ray costs?  While new startups have emerged to address this (e.g., Change Health, Healthcare BlueBook), we need to continue to create easier tools and better incentives for people make the right treatment decisions.  Finally, group buying has existed in groups such as Pharmacy Benefit Managers, but newer incentive-based models (e.g., ACOs) have the opportunity to be scaled up.

Pre-Flight Experience

How The Airlines Do It: Airlines have embraced technology to make the pre-flight experience better.  First, airlines use code sharing agreements to fill less crowded flights on other airlines or transfer frequent flyer points across multiple carriers, completely blind to the customer.  Second, airlines have embraced newer consumer technologies – for example, United and American are two of the first businesses to work closely with Apple to integrate their apps with their mobile payment service, Passbook.  Finally, security, one of the most important parts of the operation, is handled by a centralized agency, the Transportation Security Administration, meaning airlines can focus on what they’re good at rather than the complexities of security.

What Healthcare Can Learn: The code sharing agreements are akin to hospitals and doctors seamlessly transmitting patient information across systems.  While hospital systems do this today, it needs to be more portable and touch more patients, possibly through larger alliances that cover more health systems using the same technology.  I also like how airlines are working closely with mobile companies on cutting edge consumer technology – major health systems may benefit from tighter alliances with those major tech companies.  Finally, ceding certain activities to a single group takes healthcare companies out of what their bad at (e.g., data management).  EHRs may be a good example – does it make sense for the industry to name a single standard, and then allow health systems to outsource the work to dedicated vendors?

In-Flight Experience

How The Airlines Do It: Sure, the seats are cramped and the food is mediocre (when there’s food at all), but airlines have done some things right.  First, any in-flight purchases are cash-free, limiting the payment options, but simplifying the process to make things more efficient.  Next, airlines have created partnerships with movie and television studios to present current entertainment options or started handing out tablets to personalize the experience.  Finally, frequent flyers are often rewarded in-flight through a variety of special perks (e.g., free checked bags, automatic upgrades).

What Healthcare Can Learn: Efficiencies gained through limited payment systems would be a clear benefit to healthcare (i.e., eliminating the complexities of the fragmented insurance system means less admin headaches for providers).  The entertainment partnerships are vaguely similar to ACO’s, where there’s an incentive to produce and deliver high quality products – in this case, the airline benefits from having an engaged, happy flyers, and the studios have a captive audience to pitch their best shows.  Finally, I’ve written about “frequent flyer” healthcare programs in the past – integrating something like this into a hospital system could be an effective way to gain loyalty with select consumer segments.

These are certainly pipedreams with a multitude of complexities and challenges, but after flying this past week, I’ve come to appreciate what the airlines have done in the face of tremendous challenges and I’m hopeful healthcare can do the same.

What Can Anthony Bourdain Teach Us About America’s Attitude Towards Healthcare?

If I could trade places with one person for a day, it would probably be Anthony Bourdain.  His shows allow him to travel to far flung regions and showcase culture beyond the landmarks.  Wrapped in beautiful cinematography, he often goes below the surface to uncover engaging people and stories better than any other travel show.  This past rainy weekend was the perfect opportunity to catch up on his recent trip to Paris, which showed a contrast to the US that I haven’t been able to shake.

One of the episode’s recurring themes was the newish trend of brasseries focusing on local, sustainable products, pushing aside traditional French recipes and preparations.  To accommodate this shift, many of these restaurants had prix fixe menus that changed daily, a concept Parisians were tolerant and accepting of.  This is no small task, since it requires diners to enter a restaurant blindly and trust that the chef will deliver something memorable.

A similar concept crossed my mind a few years ago when I visited Europe and was shocked to find art museums handing out iPods to visitors as audio guides.  It struck me that there was an implicit handshake between the museum and its visitors saying that the iPods would be returned unscathed, something that I couldn’t imagine seeing in the US at the time.

We may have iPods in museums now, but I believe we see less of this trust between authority and individuals in the US, substituted for rugged individualism and a need for personal control.  To illustrate using the restaurant industry, look first at the fast casual concept, which has experienced huge growth over the past few years.  Their business model (use Chipotle as an example) is that the customer can create and customize their meal however they want, no questions asked.  Many restaurants also now have open kitchens, allowing the diner to see what goes into their food preparation.  Finally, there’s been a big debate in the food community about substitutions, with many saying that chefs must accommodate a diner’s request even at the fanciest restaurants.  In all these cases, rather than trusting the chef or the kitchen, the diner has seized control back into their own hands.

While you can see this everywhere in the world, I think there’s a bit more of this in the US, the result of capitalism and our unique history of self-sufficiency.  We have been taught through history classes and the media that we need to act as an individual and control as much as possible, not letting others dictate how we should think or, in this case, eat.

I believe this ethos also extends to healthcare.  Recent areas of innovation have been focused on consumer empowerment as we plod towards exchanges and the internet becomes a bigger source of medical information.  Putting aside politics (e.g., the wisdom of the single payer system), is this a good trend?  Put another way, is our fear and mistrust of central authority, combined with the democratization of the digital age, a good thing for the US health system?

Think about the challenges a doctor faces.  After four years of med school, four years of residency, and countless more years practicing, patients now feel “empowered” to undermine, or worse ignore, a diagnosis or treatment.  At a higher level, I see this every day when our customers want us to customize our member engagement campaigns, outreaches that have been tested and tweaked to maximize their effectiveness.  Rather than trusting our approach, our country’s staunch individualism has made evidence and expertise seem like a bad thing.

Since when do we know better than experts?  In order for consumerism to be successful, I think we need to figure out how to marry up expertise and individual decision making so that we make the right decisions.  This starts with a fundamental conversation about our culture and authority – maybe in this case we need to be just a little more French.

“So, What Exactly Do You Do?”

I dread that question.  Insurance is unsexy, much less drug insurance which is obscure and sounds even more boring.  Then throw on top of that my actual role (product strategy and marketing), which is unique for our own company and tough to understand.  So even after I give the condensed version (“I help people get their drugs at the right place and at a low cost”), I still get quizzical looks before the conversation comes to a grinding halt.

Since the shortened version doesn't work, this week’s post is dedicated to the longer version, which also connects back to how the healthcare system needs to change and what small part my company is doing to help.

At a very high level, my group does three core things:

1) Create Network Products: Employers and health plans (“clients” in our terms) come to us because they don’t want to manage drug spend for the people they employ or cover.  Our company provides this service by acting as a middleman between the clients, their members, pharmacies and pharmaceuticals.  We negotiate drug discounts with pharmacies and drug companies that are then passed back to the client and members through other discounts and lower copays. 

My group specifically analyzes and markets the best combination of pharmacies and discounts to save clients the most money, while still giving members access to get their drugs.  For example, a client can choose to let members fill prescriptions at more pharmacies, making it easy for their members to get their drugs.  However, the client saves money by cutting out duplicative pharmacies and only allow members to fill at selected retailers (i.e., clients can save more money by cutting out the CVS or Wagreens that are within 5 miles of one another).

2) Create Incentives: In addition to choosing what type of pharmacy network they want, clients also need to create incentives for their members to use these networks and continue taking their medication.  These incentives are usually either financial or hard stops.  For example, to encourage folks to use the smaller pharmacy network, we can increase the copay for their drugs by $10 if they fill at a non-preferred retailer – some people will pay that penalty, but many will switch over to our network.  If a client is really serious about saving money through these restrictions, they will put fill limits in place, which means a member’s prescription is not covered if they try to fill that Rx outside of their plan.

3) Encourage Usage: While the incentives are the dollars and cents, we also develop consumer marketing materials to take a softer approach.  These come in the form of letters or calls or emails that tell you how you can save money and the importance of staying on your medications.  They are also used in conjunction with the incentives to make sure we avoid as many rejects and unhappy members as possible.

These efforts result in saving the client and member money by passing along the discounts from these restrictions. At the same time, our company makes a very small profit by charging dispensing fees for each drug processed or a small spread between what the pharmacies pay and what the client pays.  Some argue that we’re increasing the cost of drugs, but without taking advantage of our size (we’re the second largest purchaser of generic drugs in the country), we couldn't get these discounts that far outweigh the fees.

So what does my group teach us about the healthcare system as a whole?  First, there’s real value in intelligently limiting healthcare choices.  By changing the pharmacies a person can fill at, we can recognize up to 10% savings across all drug spend – combine that with other programs (e.g., drug formularies, clinical programs) and we’re talking serious money.  On top of that, our customer satisfaction is at an all-time high, meaning people are not up in arms about having fewer choices.

Second, this is a delicate system that requires incredible coordination.  If any one of these systems breaks – fewer clients come to us for drug benefits, pharmacies start playing hardball, members stop taking their drugs – we will not be able to provide the same services and everyone will be worse off.  Prime examples of this are the spat between Walgreens / Express Scripts and the argument for the individual mandate (i.e., if everyone doesn't participate, then we can’t pay for the people who use the most care).

Finally, it’s going to take a lot of smart people to get out of this mess.  I work with some very intelligent people, yet we’re only impacting a very small part of the healthcare problem, and imperfectly at that.  If we’re going to keep our country healthy, we need a lot more brainpower and energy behind big ideas that are going to make real change.

Can Shock and Awe Tactics Work For Healthcare?

One of the highlights of my Chicago summer is the Air and Water Show.  Every year, the city brings out stunt planes and jets to put on a big spectacle along the lake.  Regardless of whether I’m at North Beach or sitting in my apartment, I feel like I’m part of the action if for no other reason than the sound of these planes invading our city.

Listening to the jets in my apartment this year reminded me of the early tactics of the Iraq War.  At the beginning of the conflict, the US flew these same planes overhead and remotely bombed cities to scare Saddam Hussein and force him to surrender.  This “shock and awe” tactic certainly scared me into paying attention to the show this past weekend – could it do the same for patients?

A great example of this already in place are the cigarette pack labels that either warn smokers about the dangers smoking or show graphic images of its effects.  Another example is the annual drug or drunk driving seminars for middle and high school students, complete with a totaled car for dramatic effect.

But could this tactic be put in place for less severe problems and a more sophisticated group?  Let’s say we want to target heart disease.  While we read stories about it every day, people may benefit by seeing, firsthand, the impact of poor nutrition, low exercise, and not taking medications. 

For example, a company could require all employees to view an annual seminar on the topic, where they bring in a motivational speaker directly affected by the disease to talk about its impact on them and show how the disease has ravaged their life.   To get people to attend, the employer could provide insurance credits or a reward through attendance.  The seminar would be sponsored and facilitated either by the employer or their insurance company, who would both realize cost savings through better behavior.  At the end of the day, this type of event could promote better health by exposing realities first hand at a relatively low cost.

The tough part of this analogy, however, is that the tactic didn’t work in Iraq or with cigarettes.  While they both initially opened people’s eyes, these sounds and images became too commonplace, so people made it part of their daily routines and started to ignore them.  That’s why I think the key is limiting this type of marketing and making it as shocking and controversial as possible.  This solution would also need to be part of a larger effort that rewarded behavior rather than just scaring, but it could send a strong message like jet engines in Chicago each summer.

What Are Some New, Exciting Technologies With Potential Healthcare Applications?

For anybody with an interest in retail, I’d encourage you to check out PSFK’s Future of Retail Report, which has a lot of great quick hits on retail strategies.  One technology that I was particularly interested in was an app from Neiman Marcus that alerts sales associates when a customer visits a store.  The associate then has access to sales history and customer preferences, while the customer can access product information at their fingertips.

Let’s apply this to healthcare, where a patient might be able to broadcast medical history or preferences to different stakeholders.  At one end of the spectrum, a patient could list their health-related questions or ask for assistance through an app at a pharmacy or health provider, creating a better, more personalized experience.  At the other end, an electronic health record could be built into a phone and be able to be broadcast to or downloaded via secure line at a hospital when the patient enters.  Biggest hurdle is security and privacy, but could be overcome in the future.

The second technology, also via PSFK, is an extension of my fridge magnet idea from a previous post.  The Virtual Fridge Lock attaches to a refrigerator and monitors when a person opens it.  If that person uses it during an unauthorized time, the fridge sends a message to their social networks and gives friends the chance to comment (with either encouragement, similar to the Nike+ running app, or criticism).

This idea uses all the great elements of gamefication and social motivation, although I wonder how many people will invite this self-induced criticism.  Given that people use social networks more than ever to shape their personal image, will they be willing to admit weight is a problem and shame themselves to lose a few pounds?

What Can Travelling Through America Teach Us About Healthcare?

Every major company has a dedicated consumer research team that can conduct research on its own or let another company take the lead.  Unfortunately, this approach relies heavily on surveys and focus groups, which are notorious for capturing consumer preferences, but not explaining or predicting actual behavior.  Retrospective studies, especially data driven ones, can see what people are actually doing, but only for a single point in time and may miss nuances or actual causes of this behavior.  Is there a better way?

I've always loved the idea of tagging along with a patient or family to see how they really act in the real world, which is why I’m intrigued by The Odyssey Initiative.  This program will send three teachers across the country to the best schools to document what they do right, culminating with them taking these lessons to open a new school in 2014.  The group will also post videos and best practices online, creating a robust resource for other education leaders.

Let’s be honest: this is pretty ridiculous.  This group will spend a year on the road capturing anecdotal information and then try to connect these observations together to create a successful model.  This goes against the traditional model of collecting as much data as possible at the lowest possible cost (through surveys and focus groups) and drawing conclusions from that.  They think they can walk into a bunch of schools then create the ultimate school?

That’s what I love about this idea, that it’s so contradictory to our notions of consumer research.  This group is taking the hardest possible approach by visiting face-to-face with teachers around the country.  However, I think they will find insights and best practices that may apply to a single classroom or the entire system, but may not have been captured through traditional research.

And why can’t this same approach apply to healthcare?  A travelling team sits in doctors’ offices to understand how to improve the patient experience.  A team could embed themselves with the healthiest and unhealthiest people to understand how they make decisions.   Given all the changes in healthcare coming down the pipeline, a team like this could draw insights radically different from what we know today and create the next big idea because we haven’t taken the time to truly listen.

Why Isn’t Everyone Talking To Their Doctors On The Phone?

Imagine being sprawled across your bed with a cold compress to relieve your throbbing headache.  You haven’t eaten for days and every muscle in your body feels like it’s been through a heavyweight bout.  You know you should see a doctor, but that requires energy that you can’t muster up.

This is the dream scenario for Ringadoc, a startup I recently ran across that lets you call a doctor to diagnose your issue for a flat fee.  Telemedicine has the potential to play a significant role healthcare delivery, filling a gap in primary care that may not be covered through general practitioners and retail clinics.  But despite the explosion of smartphones and tablets, why don’t I know anybody who has used or considered this type of service?  There are a few hurdles for the industry:

1) Accurate Diagnosis and Patient Trust: My wife recently had a skin issue and, because of her busy schedule, was only able to talk with several doctors over the phone.  They recommended some topical solutions and suggested she needed to reduce her stress.  After three weeks it was clear that wasn’t working, so we went to a retail clinic where she was diagnosed immediately, given antibiotics, and felt better in a few days.

Medical diagnosis is a very intimate process and often requires more than just descriptions or pictures to be accurate.  I think the public recognizes this, which is why many folks may feel uncomfortable with this process.  Until telemedicine provides and communicates accurate diagnoses on a regular basis, the public may be reluctant to give it a go.

2) Seamless Technology: To assist in these diagnoses, doctors may also require data such as blood pressure, glucose level, etc.  While the technology to do this over your smartphone exists, it would require a whole other set of devices for the patient to own, be accessible, and be able to use correctly.

On top of that, in order for telemedicine to provide significant value, there needs to be greater connectivity.  For example, if my wife had been accurately diagnosed over the phone, she still would have needed medication, requiring the doctor to send a prescription to the pharmacy.  I’m unclear on whether this connection or the ability to pass along data to specialists or a hosipital exists, but I suspect it’s several years out. 

3) Cost: Of course, looming above everything else is cost.  Telemedicine solutions can range anywhere from multimillion dollar, state-of-the-art labs (as I Simon Cowell plunked down for his tour bus) to Ringadoc’s $40 per call model.  However, until this is promoted or supported through insurance, likely reducing costs and giving the industry more credibility, I’m not sure we’ll see stronger adoption.

That’s not to say the industry isn’t looking at this.  Recently, my company has thought about virtual pharmacies, complete with live connections to pharmacists over video.  While this solution has been well-received, it will be years before we roll this out due to the scale and complexity.

Like the newer retail clinic model, I see a lot of potential for telemedicine to play a larger role in healthcare delivery.  However, there are still several fundamental patient issues to work out before it’s normal to talk with your doctor on your bed.