Entries in Surveys & Reports (90)


The Prescription Drug Locomotive and the U.S Big Slice of the Global Rx Pie

by Clive Riddle, November 20, 2015

With prescription drug spending now having taken over the locomotive of the healthcare cost train, it behooves stakeholders to better get to know what lies on the tracks ahead. The IMS Institute for Healthcare Informatics has just released the 47-page report: Global Medicines Use in 2020:  Outlook and Implications in which they examine the global use of medicines and spending levels in 2020, including small and large molecules, brands and generics, those dispensed in retail pharmaceutics as well as those used in hospital or clinic settings.

IMS tells us the report “found that total global spend for pharmaceuticals will increase by $349 billion on a constant-dollar basis, compared with $182 billion during the past five years. Spending is measured at the ex-manufacturer level before adjusting for rebates, discounts, taxes and other adjustments that affect net sales received by manufacturers. The impact of these factors is estimated to reduce growth by $90 billion, or approximately 25 percent of the growth forecast through 2020.”

The report also tells as that “developed markets will contribute 63% of the spending, led by the U.S.  Original brands will represent 52% of spending and 85% of global spending will be for medicines to treat non-communicable diseases.” 

A pie chart exhibit in the report is telling in how large the U.S. slice of the medicine spending pie is projected for 2020 – 41% of global spending, with the next closest slice being the entire European Union at 13%.

Report findings on spending impacting U.S. costs include:

  • Brand spending in developed markets will rise by $298 billion as new products are launched and as price increases are applied in the U.S., most of which will be offset by off-invoice discounts and rebates. 
  • Patent expiries are expected to result in $178 billion in reduced spending on branded products, including $41 billion in savings on biologics as biosimilars become more widely adopted. 
  • Many of the newest treatments are specialty medicines used to address chronic, rare or genetic diseases and yielding significant clinical value. By 2020, global spending on these medicines is expected to reach 28 percent of the total.
  • More than 90 percent of U.S. medicines will be dispensed as generics by 2020. Generic medicines will continue to provide the vast majority of the prescription drug usage in the U.S., rising from 88 percent to 91-92 percent of all prescriptions dispensed by 2020. 
  • Spending on medicines in the U.S. will reach $560-590 billion, a 34 percent increase in spending over 2015 on an invoice price basis. 
  • While invoice price growth – which does not reflect discounts and rebates received by payers – is expected to continue at historic levels during the next five years, net price trends for protected brands will remain constrained by payers and competition, resulting in 5-7 percent annual price increases. 

Some international findings include:

  • Global medicine use in 2020 will reach 4.5 trillion doses, up 24 percent from 2015.
  • Most of the global increase in use of medicines over the next five years will take place in pharmerging markets, with India, China, Brazil and Indonesia representing nearly half of that growth.
  • Generics, non-original branded and over the counter (OTC) products will account for 88 percent of total medicine use in pharmerging markets by 2020, and provide the greatest contribution to increased access to medicines in those countries. 
  • Newer specialty medicines, which typically have low adoption rates in pharmerging countries lacking the necessary healthcare infrastructure, will represent less than one percent of the total volume in those markets.
  • Global spending will grow by 29-32 percent through 2020, compared with an increase of 35 percent in the prior five years. 
  • Spending levels will be driven by branded drugs primarily in developed markets, along with the greater use of generics in pharmerging markets—offset by the impact of patent expiries. 

A Definitive Study and Reference Resource on Healthcare Cost and Utilization

By Clive Riddle, October 30, 2015

The Health Care Cost Institute (HCCI) has just released its free 26-page 2014 Health Care Cost and Utilization Report, and 92-page Appendix, which provide a definitive examination of detailed U.S. health care cost and utilization component line items and demographics. Their study – as with other major cost studies released this year – put a lot of focus on increases in prescription drug prices.

They found the costs increased 3.4 percent in 2014, with overall utilization decreasing somewhat, while prices for all categories of services rose.  Average spending per person was $4,967, up $163, including out-of-pocket spending of $810 that grew 2.2%.

With prescription costs standing out, they note that “despite a nearly 16 percent decrease in use of brand prescriptions, spending on these prescriptions jumped by $45 per capita in 2014—an increase four times larger than in 2013. Much of this increase was due to use of high-priced Hepatitis C drugs Olysio, Sovaldi, and Harvoni, which became available starting in late 2013.”

Here’s some other key findings:

  • “In 2014, the largest decline in use (-2.7%) was for acute admissions, which fell by 1 admission per 1,000 individuals. The smallest decline in use (-0.9%) was for outpatient visits, which fell by 3 visits per 1,000 individuals.”
  • “The smallest average price increase was for professional services (3.1%), an increase of $3 per service. The largest average price increase was for acute inpatient admissions (4.6%), an increase of $831 per admission.”
  • “Spending out of pocket on acute inpatient admissions (–$1) and on brand (–$9) and generic (–$4) prescriptions decreased by $14 per capita in 2014 compared to the previous year, while spending out of pocket on outpatient ($16) and professional ($15) services increased by a total of $31 per capita in 2014.”
  • “Every year between 2010 and 2014, out-of-pocket spending was higher by women than by men. This difference grew every year, reaching $237 in 2014.”
  • “The difference in spending between the oldest and youngest age groups studied increased every year studied: from $6,281 in 2010 to $6,806 in 2014. In 2014, spending was $2,660 for children ages 0-18 and $9,466 for pre-Medicare adults, ages 55-64.”

Consumers and Physicians and Technology in 2015

by Clive Riddle, October 9, 2015
The Deloitte Center for Health Solutions has just released a survey report, Health Care Consumer Engagement: No One-Size-Fits-All Approach, which they say shows 'that Americans are increasing their use of technology to improve their health, navigate the health system and flex their shopping muscles in acting like consumers instead of passive patients."
Overall, how "techy" are American healthcare consumers? They found "22% used technology to access, store and transmit health records in the last year, up from 13% in 2013. Use was higher for those with major chronic conditions: 32% compared to 19% in 2013."
Deloitte’s findings are that consumer engagement is increasing three ways:
  1. "More consumers today prefer to partner with doctors instead of relying passively on them to make treatment decisions"
  2. "Consumers’ trust in the reliability of information sources is rising"
  3. Consumers are increasingly relying Relying on technology
Here's some of the numbers behind their report, regarding the oercentage of survey consumer respondents: 
  • 28% have used technology to measure fitness and health goals, up from 17% in 2013 (45% of Millennials this year)
  • 23% have used technology to monitor a health issue, versus 15% in 2013
  • 40% of the surveyed technology users have shared their fitness or monitoring information with their doctor
  • 39% with major chronic conditions use tech-based monitoring (22% in 2013)
  • 63% of the surveyed technology users say their use of fitness or monitoring technologies has led to a significant behavior change
  • 13% who take prescription drugs receive electronic alerts or reminders
  • 48% prefer to partner with doctors rather than have them make decisions for them, up from 40% in 2008
  • 34% strongly believe doctors should encourage patients to raise questions
  • 58% feel that doctors should explain treatment costs to them before decisions are made
  • 16% who received care report asking their doctor to consider treatment options other than the one initially recommended.
  • 52% report searching online for health or care-related information; 
  • 16% who needed care went online for cost information, up from 11% in 2013 (27% of Millennials this year)
  • 71% of all those surveyed said they have not gone online for cost information but are "very" or "somewhat" likely to use a pricing tool in the future
  • 25% used a scorecard to compare the performance of doctors, hospitals and/or health plans, up from 19% in 2013 (49% of millennials this year)
What do these numbers mean? Harry Greenspun, M.D.Director of the Deloitte Center for Health Solutions, tells us "not all consumers are alike in how they engage the system, and a large segment still remains disengaged. Companies likely won't take a one-size-fits-all approach in their marketing and operations, but a tailored strategy that considers the unique characteristics of the segments they are most interested in."
Greg Scott, Principal, Vice Chairman and national sector leader for Deloitte's health plans practice, adds "the specter of a more customer-driven industry is causing many health companies to transform into retail-focused organizations, impacting everything from strategy and scale to operations and human capital. For the enterprise, this is about more than a cool app – this is about making the end-to-end changes needed to better identify and engage a more empowered purchaser."
So at the other end of the stethescope, how do doctors feel about using technology in their practices? Geneia just released survey results on this topic - not addressing physician interaction with consumers as discussed above, but rather how physicians relate to EMR, data and analytics.
Heather Lavoie, Geneia's President & Chief Operating Officer, tells us that "seemingly, there is an inverse relationship between health IT spending and physician job satisfaction,..physician sentiment towards technology is surprisingly nuanced. Doctors are indicating that data and analytics tools have the potential to reduce time spent on recordkeeping, one of their primary frustrations, while also contributing to it."
24% of physicians said that EMR impact on practices was positive, 19% negative, 53% a little of both, and 5% said they do not use EMRs. 69% of physicians felt data and analytics tools positively impacted their ability to efficiently assess patient history and needs, 63% said they help them get value and improved outcomes from chart documentation, and nearly 60% felt they helped identify and triage the highest need patients and created greater efficiencies in office workflow.
But Geneia shares that "on the other hand, more than 60% of physicians say that data and analytics tools have negatively impacted recordkeeping time. In fact, when asked to identify the number one way data and analytics could improve their job, the most popular answer was to reduce the time spent on recordkeeping (41%) followed by more time with every patient (22%), better access to patients' complete medical profile and history (20%), and more time with the patients who require enhanced care (14%)."



The Patient Experience of the Very Elderly

by Clive Riddle, October 2, 2015

Press Ganey has just published a seven page white paper Patient Experience in the Very Elderly: An Emerging Strategic Focus, that in their words, “examines the clinical and strategic benefits for health care organizations creating targeted care strategies for the ‘Very Elderly’ population” which they  define as patients 80 years of age and older.

Thomas H. Lee, MD, Press Ganey’s Chief Medical Officer and a co-author of the paper tells us “most patients in this Very Elderly population claim a ‘poor’ or ‘fair’ health status and tend to have greater and more complex needs. The data suggest their needs are not being met reliably. Organizations that embrace a more focused, compassionate, connected care model have the potential to reduce suffering for this very vulnerable population and mitigate the impact of age and health status on patient experience ratings.”

Press Ganey points out that while only 3.5% of the U.S. population is over 80 years of age - this demographic is a dominant presence in hospitals, emergency departments and outpatient practices, representing “27% of medical service and 12% of surgical service admissions, and their lengths of stays are longer.” Press Ganey’s analysis examined HCAHPS data by service line and age group for 1.5 million patients.

Press Ganey uses HCAHPS patient service ratings as an argument that the medical needs of the Very Elderly are not being adequately met. They note that “the percentage of patients giving top ratings [to providers] steadily increases as patients get older—but then declines for patients above 80 years old. When data “change directions,” the reason is usually two different forces are at work. The most likely explanation for the data in Figure 1 is that the elderly patients have greater needs, and that, in the Very Elderly, failure to meet these needs overcomes the tendency of older patients to give higher ratings to their providers.”

Service ratings of providers that were a 9 or 10 (out of ten) increased by each age group (medical services from 58.6% for age 18-34to 71,2% for ages 65-79; and surgical services from 65.2% for ages 18-34 to 78.2% for ages 65-79; which fell to 69.2% for age 80+ medical services and 75.9% for age 80+ surgical services.)

Press Ganey also points out that “patients in poorer health give lower ratings to their hospitals than do those in better health, regardless of age,” and the HCAHPS data clearly shows a deterioration in reported health status by age. 83% of patients reporting excellent health rating medical service providers 9+ out of ten, compared to 61% reporting poor health. 86% of patients reporting excellent health rating surgical service providers 9+ out of ten, compared to 65% reporting poor health. Press Ganey provides graphs demonstrating that “older patients are more likely to describe their health as fair or poor, and few Very Elderly patients report being in very good or excellent health.”

Press Ganey emphasizes to providers that “taken together, these data demonstrate both an opportunity and a threat. The threat is the risk of losing the patient segments that account for a large proportion of the care delivered by most organizations—the sick elderly. Furthermore, hospital payments might be compromised by lower patient experience scores that result from having more sick Very Elderly patients.” Press Ganey concludes that “this group wants more thorough, communicative care that meets their needs for information, coordination, responsiveness and general hygiene;” and that “providers have the potential to reduce suffering for this very vulnerable population, improve patient experience and market share through focused efforts and team-based care.”

Royal Philips has also just published new study results relating to the elderly’s healthcare experience, with their analysis “demonstrating an insightful correlation between chronic conditions and falls risk. Their researchers” retrospectively analyzed the records of 145,000 seniors equipped with a standard Philips Lifeline medical alert service or a medical alert service with AutoAlert (automatic fall detection) between January 2012 and June 2014.”

Their findings, and national data they highlight in their report include:

  • Seniors with chronic conditions fell and required emergency transport up to 54 percent more often, compared to their peers with no chronic conditions. (they note that one in three seniors fall each year and that 80 percent of the senior population has at least one chronic condition and 68 percent has two or more.)
  • Seniors with physical conditions not typically tied to frailty, including COPD and diabetes, also were shown to fall more often.
  • Among Philips users, seniors who self-reported suffering from three chronic conditions had 15 percent more falls that required hospital transport, and those with five or more conditions had 40 percent more falls than those with no chronic conditions.
  • Within the study population, 72 percent reported having one or more chronic conditions, with 20 percent reporting five or more.
  • The data shows that seniors fell more often and needed hospital transport when reporting the following: Cognitive impairment by 54 percent; COPD by 42 percent; Diabetes by 30 percent; and Heart condition by 29 percent.

Pharmaceutical Industry in Transition

By Clive Riddle, August 7, 2015

KPMG has just conducted a survey of pharmaceutical and medical device companies, finding “their biggest commercial challenges coming from payers, surpassing hurdles posed by regulators, declining access to healthcare providers, and the move toward specialty drugs.”

Based on these findings, KPMG’s Bill Shew, Alison Little and Peter Gilmore have released a twelve-page report:  Change in pharma? Not optional; 10 Integrated imperatives for pharmaceutical commercial transformation.  Page two contains just these 35 words, in large font – which sums up the situation for pharma: “The pharmaceutical industry is caught between a blockbuster-driven past and a future  comprising precision medicine, curative therapies, and payment for outcomes. The years of consistent  double-digit growth and unconstrained pricing power are fading into memory.”

Author Alison Little tells us "life sciences companies face increasingly high demands from payers to prove the value of their products in terms of improved patient outcomes and lower costs. This requires not only clinical and analytical rigor, but increased focus on account management and strategy. This is a significant part of the commercial model for the pharma, biotech and medical device sectors, which need to evolve to compete in the future.  These are dramatic changes in bringing drugs to market and are far removed from the blockbuster model of marketing drugs with large direct-to-consumer advertising budgets and extensive physician detailing. Newer brand name drugs are treating much more complex medical conditions and have more stringent handling and administration requirements than those a decade ago. Pharmaceutical and biotechnology companies need to consider 'beyond the pill' services to help with patient engagement and helping them adhere to treatment."

Their report cites challenges for the industry including a paltry one percent annual growth rate for top 25 life sciences companies in 2014, down from double digits five years ago; and that seventy percent of recent brand launches underperformed analyst forecasts.

Without further adieu, here’s The ten “Imperatives for Commercial Transformation” they elaborate on, in their report:

  1. Use commercial tactics, not clinical data, to differentiate new products
  2. Elevate pricing and contracting within the organization
  3. Take a more holistic approach to stakeholder mapping and prioritization
  4. Base sales models on a collaborative approach to improving outcomes
  5. Play a larger role in the industry transformation from “volume to value”
  6. Support providers in improving quality and patient satisfaction
  7. Leverage data and analytics to enhance commercial strategies
  8. Allocate commercial resources optimally across markets and brands
  9. Evolve performance metrics and incentives to reflect new realities
  10. Drive the transformation agenda throughout the enterprise\

The author’s sum up where the industry needs go from here:  “Pharmaceutical companies need to transform their commercial models so that they can continue to thrive. In our evolving healthcare ecosystem, power centers are shifting, quantifiable outcomes are expected, and companies must demonstrate value for every healthcare dollar spent. We are approaching a tipping point when pharmaceutical companies, no matter the size or therapeutic focus, will no longer be able to view commercial transformation as an aspiration. Instead, they will need to recognize that it is a critical imperative.”