Slow Food, Slow Medicine: What Italy Can Teach America About Health

Obesity, diabesity, food deserts and food swamps co-exist across America, factors that cost the U.S. economy over $327 billion a year just in the costs of diagnosed diabetes. In addition, America’s overweight and obesity epidemic results in lost worker productivity, mental health and sleep challenges, and lower quality of life for millions of Americans.

Food — healthy, accessible, fairly-priced — is a key social determinant of individual health, wellness, and a public’s ability to pursue happiness.

There’s a lot the U.S. can learn from the food culture, policy and economy of Italy when it comes to health.

This week, I have the honor of being a part of a contingent of Italian friends in Philadelphia welcoming two esteemed members of Italy’s medical community to my hometown: Dr. Walter Ricciardi, who leads the Istituto Superiore di Sanità (Italy’s National Institute of Health); and, Dr. Cesar Faldini, president of the Istituto Ortopedico Rizzoli in Bologna, a top hospital, academic and research center for orthopedics and trauma.

Anticipating this meeting, I wrote this appreciation about what I believe American healthcare can learn from Italy in terms of how Italians make health via a key social determinant that bolsters public and individual wellness and resilience: good food, and especially Slow Food.

First, some health-economic context: note Italy’s health system performance compared with other OECD countries, pictured in the first image. Italy scores above-the-OECD-average for life expectancy, fewer deaths from heart disease, healthy weight (measured by obesity rate), and universal health insurance coverage via  a national health service. [Health insurance coverage is also an important social determinant of health, but for this post, I’ll forgo that discussion — albeit a key pillar of a healthy community].

Now look out image #2: the proportion of GDP spent on healthcare by OECD nation. In 2016, the U.S. ranked as the biggest spender, allocating 17.8% of national spending on healthcare. Italy spent 8.9% of its GDP on healthcare.

The simple math is that Italy devoted 50% less as a proportion of its national economy on healthcare as America did.

Yet Italians lived longer, healthier lives than Americans. In fact, life expectancy in Italy was the second highest among all the EU countries right after Spain, the OECD noted in this report on the state of health in the European Union.

Of the many social determinants of health that make a healthy citizenry, food systems play a primary role in Italians’ health and quality of life…and especially, Slow Food.

The third image depicts an illustration drawn during the Florentine Renaissance for De medicina, a text of Cornelius Celsus who lived between 14 BC and AD 37 and as a broad-thinking Renaissance Man, researched agriculture, medicine, and philosophy among his many intellectual interests. Celsus composed De medicina largely based on the teachings of Hippocrates.

Book I of the eight volumes Celsus wrote covered diet, hygiene, and the benefits of exercise.

Fast-forward two thousand years, and we’re still preaching the benefits of nutrition and physical activity. The Slow Food movement grew out of this understanding, beginning in Italy in 1986 in response to a McDonald’s franchise opening in Rome.

Carlo Petrini, a journalist, organized a group of people to greet passersby near the Spanish Steps where the fast-food restaurant was planning to open, passing out bowls of penne pasta.

“We don’t want fast food,” they said. “We want slow food.”

Thus the Slow Food organization was born, inspiring branches around the world, from towns from “A” to “Z” — from Adelaide, Australia, to Zagreb, Croatia. In fact, there are over 1,500 Slow Food “convivia,” or chapters, around the world.

Back to Italy, the birthplace of Slow Food, then inspired another “slow” phenomenon that can profoundly impact good health: Slow Medicine.

The first mention of Slow Medicine was in an Italian medical journal on cardiology, published sixteen years after the birth of Slow Food.

Dr. Alberto Dolara, an Italian cardiologist, wrote in the Italian Heart Journal (translated into English), “In clinical practice, hyperactivity is often unnecessary. Adopting a strategy of ‘slow medicine’ may be more rewarding in many situations. Such an approach would allow health professionals and in particular doctors and nurses, to have sufficient time to evaluate the personal, familial and social problems of the patient extensively, to reduce anxiety whilst waiting for non-urgent diagnostic and therapeutic procedures, to evaluate new methods and technologies carefully, to prevent premature dismissals from hospital and finally to offer an adequate emotional support to the terminal patient and their families.”

Note the three Italian words below the snails in the Slow Medicine image: “Sobria, Rispettosa, Giusta.” In English, these are,

– Measured

– Respectful, and

– Equitable.

Imagine if…in the U.S. doctor-patient relationship, we adopted “measured” medicine, in not over-treating or wasting resources, but using the right therapy and technology in the right patient at the right time? What if we baked respect into our system, between physicians and patients, between professionals at-work, where individuals’ values and desires were given voice? What if the U.S. health system embraced equity, first being honest about our health disparities and implementing policies and practices to eliminate those disparities, realizing quality, affordable care for all?

Health Populi’s Hot Points:  In full transparency, while I hold a U.S. passport as an American citizen, I am also a citizen of Italy. As such, I am a citizen of the EU. In the EU, people who live in the community are also known as “health citizens.”

We are not really health citizens in America. We don’t have what Dr. Ricciardi recently spoke about in this video — “la salute e uguale per tutti” — health and equality for all.

Dr. Ricciardi’s remarks were part of this campaign, shown here. Translated into English, the two sentences say:

Health is the same for everyone, and a right to be spread through Italy.

Do it with a kiss, like a virus that is good for our country and an appeal that cannot be stopped.

Would that we in America could embrace such a public health message for all.

 

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Oklahoma’s Medicaid program experiments with outcomes-based contracts

Pharmaceuticals on the one hand can greatly improve patients health and quality of life.  At the same time, some of these treatments are expensive and–despite clinical trial results–evidence from the real-world is lacking at the time of a drug launch.

To address these issues, Oklahoma’s Medicaid program is taking the lead by adopting two different outcomes-based contracts (OBCs).  As reported by the National Academy for State Health Policy, Oklahoma’s first OBC was with Alkermes for the long-acting injectable, anti-psychotic drug aripiprazole lauroxil (Aristada).

The contract is designed to reward increased patient adherence. Under the contract’s terms, as adherence targets are met – which result in greater drug usage, sales, and improved outcomes — the price the state pays for the drug decreases.

Now, Oklahoma’s Medicaid program has adopted an OBC with the drug company Melinta for treatment for bacterial skin infections called oritavancin (Orbativ).

Because oritavancin costs more than other treatments, the state Medicaid program had required prior authorization before paying for the drug. However, under the new value-based contract, prior authorization will no longer be required.

In return for having the drug listed as a first-line treatment, Melinta ensures that oritavancin will not result in a net increase in costs. While other drugs used to treat bacterial skin infections may require hospitalization for administration, oritavancin does not. While its purchase price is higher, oritavancin is not expected to cost the state Medicaid program more because it is expected to eliminate costly hospitalizations required by other drug options.

However, under the terms of the value-based contract, if the state does incur higher costs from oritavancin – despite the avoided hospitalizations — Melinta will be on the hook to cover those costs through additional rebates to the state.

OBCs are not perfect.  It costs states extra money to monitor outcomes and control for any differences between the patients who receive the new treatment and the old treatment.  However, if OBCs allow for patients to have access to better treatments while decreasing payer risk that treatments will significantly increase costs, they are an option worth exploring.

Oklahoma’s Medicaid program experiments with outcomes-based contracts posted first on http://dentistfortworth.blogspot.com

Friday Links

• Do “nudges” succeed or fail in the ACA marketplaces?
• NYT on bundled payments.
• Genetic instrumental variables.
• Cause of famine in China.
• Competition may improve efficiency, but how does it affect mental health?

Friday Links posted first on http://dentistfortworth.blogspot.com

Sicker Consumers Are More Willing to Share Health Data

People dealing with chronic conditions are keener to share personally-generated data than people that don’t have a chronic disease, Deloitte’s 2018 Survey of U.S> Health Care Consumers learned. This and other insights about the patient journey are published in Inside the patient journey, a report from Deloitte that assesses three key touch points for consumer health engagement.

These three patient journey milestones are searching for care, using new channels of care, and tracking and sharing health data, Deloitte maps.

What drives people to engage on their patient journeys has a lot  more to do with practical matters of care like convenience, cost, and bedside manner, Deloitte says, than what the firm terms “bells and whistles. Specifically,

• 50% of health consumers search to see their providers are in-network, to avoid surprise medical bills
• 31% want to know prices they have to pay for out-of-pocket expenses
• Convenience is top-of-mind: 46% look for convenient locations, and 32% seek convenient hours and accessibility
• 39% check reputations
• 34% assess the provider’s personality or bedside manner (to that objective, 20% take into account high user reviews from other patients).

One-half of consumers say that in the future, they will likely look online for information about prices of services, or look up a report card for a physician.

The freshest data points in this report deal with older and sicker patients — arguably, the folks who need digital health tools the most. The table illustrates the key point, that the sicker we are, the more likely we would be to share information tracked in our apps and devices — whether contributing out data for healthcare research, to a developer of an app or device, in an emergency situation, and especially to share with doctors to help them improve “my” care.

Deloitte surveyed 4,530 U.S. adults online in February and March 2018 for the study.

Health Populi’s Hot Points:  Trust is a precursor to health engagement, and especially underpins one’s willingness to share personal health data. Trust works in the other direction, too — as sources of medical information. The second image shows that health consumers most-trust academic medical centers (teaching hospitals) and professional medical associations, along with community hospitals and pharmacies, as sources of reliable information on treatments.

Expertise in the form of researchers, doctors, nurses and pharmacists remains highly valued in the eyes of health consumers. That’s why I consistently note the Gallup Poll on honesty and ethics in professions, which has ranked nurses, pharmacists and doctors very high on Americans’ list of most-trusted professionals in the nation.

The more we can bolster the relationship between the consumer-patient and her clinicians, the more we would be supporting the Quadruple Aim — to drive quality, health outcomes, lower cost, and a resilient healthcare workforce.

This is particularly important as we confront and grapple with a physician workforce that’s feeling burned out, unappreciated, and over-managed.

And did I mention consumer-patient satisfaction?

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Health Wonk Review is up

Andrew Sprung has posted Map of Malfunction: Health Wonk Review at the xpostfactoid blog.  Topics include the ACA, Republicans’ plans for Medicare, balance billing, pharmaceutical reference pricing, and protections for pre-existing conditions.

Go check it out!

Health Wonk Review is up posted first on http://dentistfortworth.blogspot.com

Brewers make the playoffs!

End of life care in China

An interesting article from Longreads on dealing with a grandmother’s terminal illness in China.

Guo Zhen didn’t know she had cancer, and my family had carefully devised a strategy to keep it that way. Doctors and nurses in the hospital had been instructed to never speak of her illness in her presence, and visitors to our home signed an invisible contract before entering, agreeing to act as if her recent hospitalization was due to a case of pneumonia. I never asked her to sit down when she’d get up after every few bites during lunch or dinner to restock the table with congee, buns, or pickles — I knew she did this out of habit rather than necessity. Fu Yuan and his wife never fought to take over her housework, though we worried about the strain of repetitive hunching on her weakening body. Any deviation from routine risked puncturing the facade of normalcy we all worked carefully to preserve, and, within a month, my family had become a theater troupe improvising their first performance, an intimate Truman Show designed to deceive its protagonist. At 78, there was no point in performing surgery or chemotherapy on Guo Zhen anymore, and any new miracle drug that might land in the world would only arrive in China years after its introduction on the American market.

The interesting part is not that a single family hid the illness their elderly family member, but rather that this is a not uncommon practice in China, one to which clinicians are completely accustomed.

…lying to ailing patients remains a common practice in China, despite an increasingly individualistic society. The hospital’s nurses had rehearsed similar consolations many times over, telling aging grandmothers and curious children that they had nothing more than the flu. Doctors used a well-worn thesaurus of medical exonerations: They’d look at her charts, ask her a few questions, and conclude with, “a yi” — auntie — “be careful not to catch another cold.” When Guo Zhen arrived at the oncology department to receive radiation treatment, the sign announcing the ward had been taped over. Instead, new characters now described it as the “general treatment room.”

Further, while in the U.S. providers typically rely on patient input over care decisions with some (sometimes a little, sometimes a lot) input from family members and caregivers, in China, money talks.

…in the country’s painfully commercial health-care system, it was those who footed the bill — or whichever kids or family members who pooled together their savings — who got the last say.

Very interesting throughout.

End of life care in China posted first on http://dentistfortworth.blogspot.com

Most U.S. Physicians, Burned Out, Favor A Flavor of Single Payer Health System

Most physicians feel some level of burnout, hassled by electronic health records and lost autonomy. No wonder, then, that a majority of doctors favor some type single payer health system — one-quarter fully single payer, a la Britain’s National Health Service; and another one-third a single payer combined with a private insurance option, discovered in the 2018 Survey of America’s Physicians report on practice patterns & perspectives, published by The Physicians Foundation.

Eight in ten physicians are working at full-capacity or are over-extended, the survey found. Furthermore, 62% of doctors are pessimistic about the future of medicine.

Physician burnout is a real challenge to the U.S. healthcare system and, thus, patient care. This year’s annual Medscape poll of physicians was titled “the National Physician Burnout and Depression” report to call out this top-line finding.

This is sobering through just the N=1 physician lens. But consider the statistic that, according to the Association of American Medical Colleges, there will be a shortage of 65,500 physicians expected in 2020, and 90,400 in 2025.

Contributing to this expected physician deficit is the expectation that 46% of doctors plan to change career paths.

 

 

 

 

 

 

 

 

 

 

 

 

 

Other studies on physician sentiment have found that the adoption of EHRs have negatively impacted workflow and, therefore, practice productivity — which is the financial lifeblood of a physician’s living. About one-quarter of physician-time is spent on non-clinical paperwork, Physicians Foundation found.

The loss of clinical autonomy, through strict utilization review, protocols, and heavy-handed health insurance interventions also contribute to doctors’ ill feelings and compromised productivity.

Health Populi’s Hot Points:  We now call upon our physicians to also be health economists, evaluating patients’ social determinants of health — personal factors related to poverty or other social conditions. About 9 in 10 doctors say at least some of their patients have a serious health problem that’s linked to a social determinant.

Here’s a New Yorker cartoon I’ve used in my meetings for over ten years. Physician burnout is not new; it’s normal.

Physicians said that patient relationships “far exceed” other sources of professional satisfaction like status or compensation. This, too, is a norm among most doctors polled in previous Medscape studies.

So what do we do with this single-payer idea? The U.S. has the opportunity to envision a new-and-improved healthcare system that’s really a “system.”

Across political party, most Americans also favor some flavor of universal health insurance.

That’s an idea on which doctors and patients can hug.

 

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Life expectancy declines in the U.S.

In general, one expects progress.  One expects that medical advances will improve life expectancy.  In recent years in the U.S., however, that is no longer the case.  The CDC reports that:

…life expectancy at birth decreased in recent years for the first time since 1993. Between 2014 and 2015, life expectancy at birth decreased 0.2 years. Between 2015 and 2016, life expectancy at birth decreased another 0.1 years.

What is the cause of this decline?  Is medicine failing us?

Actually, we observe sustained improvements in mortality for heart disease and cancer, two of the leading killers in the U.S.

During 2006–2016, heart disease and cancer (malignant neoplasms) were the top two causes of death. The age-adjusted heart disease death rate declined 19%, from 205.5 to 165.5 deaths per 100,000 resident population, over this period. The age-adjusted cancer death rate declined 14%, from 181.8 to 155.8 deaths per 100,000 resident population.

So what is the problem?  Suicide rates, alcohol abuse, and opioid overdoses are three areas where mortality has gotten worse:

During 2006–2016, the suicide rate increased by an average of 1.7% per year. Chronic liver disease death rates increased by an average of 5.3% per year during 2012–2016 after an initial period of no change. The homicide and unintentional injuries death rates also increased sharply at the end of the period…In 2016, there were 63,632 deaths from drug overdoses—two-thirds (66.4%) of which involved an opioid. Between 2006 and 2016, the age-adjusted death rate for drug overdose increased from 11.5 to 19.8 deaths per 100,000.

Overall, life expectancy in the U.S. sits at 81.1 years for women and 76.1 years for men.

How does life expectancy vary across Europe?  The Economist reports:

 Although in global terms citizens of the EU live long (2.5 years more than in America and 4.6 years more than in China), the continent is divided. At the farthest ends of the spectrum, Spaniards from Madrid can expect to live to 85, but Bulgarians from the region of Severozapaden are predicted to live just past their 73rd birthday—a gap of almost 12 years. The only exceptions are Slovenia, which scrapes in above the EU average, and Denmark, which falls a fraction below.

Previously, the divide in life expectancy narrowed between Eastern and Western Europe due to a improved childhood mortality in Eastern Europe.  However, higher rates of smoking and drinking in Eastern Europe has meant that Western Europe has pulled away in terms of life expectancy.

Life expectancy declines in the U.S. posted first on http://dentistfortworth.blogspot.com

When Life and Health Insurance Blur: John Hancock, Behavioral Economics, and Wearable Tech

Most consumers look to every industry sector to help them engage with their health.

And those companies include the insurance industry and financial services firms, we found in the 2010 Edelman Health Engagement Barometer.

John Hancock, which covers about 10 million consumers across a range of products, is changing their business model for life insurance. Here’s the press release, titled, “John Hancock Leaves Traditional Life Insurance Model Behind to Incentivize Longer, Healthier Lives.”

“We fundamentally believe life insurers should care about how long and well their customers live. With this decision, we are proud to become the only U.S. life insurance company to fully embrace behavioral-based wellness and leave the old way of doing business behind,” Marianne Harrison, John Hancock president and CEO, said in the press release.

This is not a new-new thing for the life insurer: I wrote about John Hancock’s initial foray into so-called “behavioral-based wellness” with Vitality here on Health Populi in April 2015. Note that was over 3 years ago, so this approach has been well-honed and -tested over time.

Since working with Vitality, John Hancock’s policyholders have taken nearly two times as many steps as average American adults, and have engaged with the company, on average, over 1.5 times a day per year — versus other insured customers with traditional health insurance (that is 576 times a year versus 1 to 2 times).

The financial bottom line is that participants in the program experienced 30% lower hospitalization costs versus other insureds, and appear to live many years longer than others.

John Hancock will offer two programs allying with Vitality: Vitality GO, bundled (for free) into all future life insurance policies. Insureds in GO will be able to freely download an app and use a web portal with health, fitness and nutrition advice, able to set and track personal goals. By participating in the tracking program, consumers can earn rewards for discounts, such as those shown in the illustration here.

The second program Vitality PLUS, is a premium version of the plan, costing enrollees $2 a month for single life premium plans, or 3% of the policy’s premium for other plans. In addition to the app and portal access, these insureds earn additional rewards and discounts, and potential premium savings up to 15% annually.

The Apple Watch and Fitbit trackers can be used among other wearable tech devices for the program.

These offerings will begin to be marketed to consumers in 2019.

Health Populi’s Hot Points: The health/care ecosystem continues to morph, with data-tracking-and-sharing, along with behavioral economics, baked into consumer-facing healthcare products and services. This is all about behavior change, and nudging (perhaps forcing) consumers to take on more responsibility: for financial and clinical decisions. Privacy, too, is a question in this and other data-sharing programs. Not only do wearable tech devices “leak” data that many consumers assume to be kept secure, but what about the opt-in for the insurance programs? What if a consumer wants to share certain data, but not other personally-generated information from, say, the bedroom or bathroom?

In the case of John Hancock, we see the disruption of a 156-year-old company looking to become more relevant and attractive to a generation of younger people who may not be that keen on the concept or product called “life insurance.” That generation may not be as sensitive to the privacy concerns of, say, Boomers or Greatest Generation consumers.

But discounts, rewards, gamification and wearable tech? That’s a Millennial value proposition at work.

And don’t forget that Amazon Prime membership.

Most Millennials don’t see the value of life insurance, a Life Happens + LIMRA survey found.

The John Hancock announcement coincided with one from Fitbit, the dominant fitness wearable supplier which helped to define the category. Fitbit expanded Fitbit Care, a program to work with employers looking to bolster wellness among workers. Fitbit has invested in a technology platform to scale this offering. The company already works with employers’ wellness programs, and this development builds on that service, which grew with the company’s acquisition of Twine Health earlier this year to support Fitbit’s health coaching capabilities.

Just don’t get Twine Health confused with Twine, a financial wellness subsidiary of John Hancock.

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When Life and Health Insurance Blur: John Hancock, Behavioral Economics, and Wearable Tech posted first on http://dentistfortworth.blogspot.com

The Trickiest Tooth Trivia

Here at Dr. Ku’s office we love trivia and have learned through the years that MANY of our patients do, too! And while we all hope that we’ll see a category on Jeopardy dedicated solely to tooth trivia, we continue to prepare ourselves until that day—and help you along the way. 

 

If you are able to win it big thanks to a fun fact that you learn here, just remember your friends here at Dr. Ku’s office! 

 

Let’s get started! Did you know… 

 

• Tooth enamel is the strongest substance in the human body. It’s made up of 96% minerals and is one of the only parts of the body that cannot regenerate or repair itself. That’s why it’s so important to practice good oral hygiene, limit sugary and acidic foods, and see your dentist regularly! 

 

• Just like a fingerprint, your tongue print is unique to you. No two people have the same one, and some cyber experts are looking at ways to use your tongue for biometrics. 

 

• We all have a dominant hand, which usually corresponds to the dominant side of your mouth. That means that if you’re right handed, you are more likely to chew on the right side of your mouth. Test it out! 

 

• The second most common disease in the United States isn’t cancer or the flu, it is tooth decay. But with good oral health practices, it’s also totally preventable. 

 

• Children, on average, only have 20 teeth. Compare this to adults who have 32 (including their four wisdom teeth). 

 

• You produce between two and four quarts of saliva every day! Over a lifetime that’s over 25,000 quarts! 

 

• Unlike bones or other parts of the body like your skin, the teeth are incapable of self-repair. And since they can’t heal themselves, that is why fillings are necessary. A filling prevents further destruction of the tooth when infection and decay happen. 

 

• The way to tell the difference between an alligator and a crocodile is by their teeth. And while we don’t endorse getting close enough to know, it comes down to the fourth tooth on the lower jaw. If that tooth protrudes out when the snout is closed, it’s a crocodile; if it doesn’t protrude out, it’s an alligator. 

 

• Americans purchase 3 million miles of dental floss every year. 

 

• George Washington did not have a set of wooden dentures. However, he did have notoriously bad teeth, and instead had a set of ivory dentures. 

 

• Sugar-laden cotton candy was actually invented by a dentist and introduced at the 1904 World’s Fair. 

 

• The earliest record of a toothbrush was noted in Chinese literature about 1600 AD. 

 

• The most popular remedy to get rid of a toothache in the Middle Ages was to kiss a donkey. 

 

• It takes 43 muscles to frown, while it only take 17 muscles to smile. 

 

• There are more bacteria in one mouth than people on the planet. 

 

• A snail has over 25,000 teeth, but its mouth is only the size of a pin head. 

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Do Medicaid discounts increase prices?

A number of people talk about Medicaid “best price”…but what is it really?  StatNews provides a concise overview:

The Medicaid best price law, enacted in 1990, requires drug manufacturers to charge the Medicaid program the lowest or “best” price they negotiate with any other buyer and send a rebate check to every state Medicaid department so they receive that same price. It sounds good on paper. After all, Medicaid serves the worthy purpose of providing health coverage to the poorest among us, and is paid for with scarce taxpayer dollars.

While in partial equilibrium, Medicaid rebates may serve to lower the cost that Medicaid pays, in a general equilibrium setting, that is not entirely clear.  Specifically, Medicaid rebates may lead to pharmaceutical prices to increase sticker prices.  If the target price is $X for Medicaid, and the mandated discount is 20%, then pharmaceutical firms may set prices at $X*(1.2).  If mandated discounts are 30%, then perhaps the retail price would be $X*1.3.  This is a simple example and ignores market dynamics, market power, and the ability of pharmaceutical firms to act as price takers rather than price makers.

However, empirical evidence tends to support the point that increased Medicaid rebates increases sticker prices.  A paper by Duggan and Morton (2006) uses data on the 200 top selling drugs between 1997 and 2002 and examine the relationship between Medicaid market share and the average prescription price.  They find the following:

 …a 10-percentage-point increase in the MMS is associated with a 7 to 10 percent increase in the average price of a prescription. In addition, the Medicaid rules increase a firm’s incentive to introduce new versions of a drug in order to raise price. We find empirical evidence that firms producing newer drugs with larger sales to Medicaid are more likely to introduce new versions. Taken together, our findings suggest that government procurement rules can alter equilibrium price and product proliferation in the private sector.

Clearly, increase Medicaid rebates lower the cost of drugs for the Medicaid program in the short-run but these rebate requirements may cause drug prices to rise for non-Medicaid patients.

Source:

• Duggan M, Scott Morton FM. The distortionary effects of government procurement: evidence from Medicaid prescription drug purchasing. The Quarterly Journal of Economics. 2006 Feb 1;121(1):1-30.

 

Do Medicaid discounts increase prices? posted first on http://dentistfortworth.blogspot.com

Links

• CEA and value-based care.
• Spending dynamics and health shocks.
• Are we ready for access restrictions based on CEA?
• Does Amazon lead to higher prices?
• The political power of pre-existing conditions.

Links posted first on http://dentistfortworth.blogspot.com

Prescription Drugs: From Costs and Bad Reputation to Civica Rx and Amazon to the Rescue

The prices of medicines prescribed in outpatient settings rose, on average. 10.3% in 2018. Wages increased about 2.6%, and consumer prices, 1.3%, based on the 2019 Segal Health Plan Cost Trend Survey.

Segal forecasts that medical cost trends will moderate for 2019, lower than 2018 rates.

But to the patient, now feeling like a consumer dealing with high-deductibles and the growing sticker shock of specialty drug prices, a so-called “moderate” trend still feels like a big bite in the household budget. Specifically, specialty drug trend is expected to be 14.3% in 2019, compared with 17.7% in 2018 — still several times greater than wage growth expectations.

Over the ten years 2006 to 2016, deductibles increased an average of 176% and coinsurance, 67%. Wage growth over that decade was relatively flat, as workers covered by insurance through employers traded off health benefits for wage increases.

In the Segal medical trend analysis, “it’s still the prices, stupid,” not utilization (volume/use) driving up medical spending.

Now consider a poll released this week by the West Health Institute and NORC at the University of Chicago on What Should Be Done About the High Cost of Prescription Drugs? 

 

Two-thirds of Americans are very concerned about the high cost of prescription drugs, and 88% of people say medication costs should be a priority issue for Congressional candidates in November 2018.

The vast majority of U.S. health consumers believe that Medicare should be allowed to negotiate with drug companies to fetch lower prices for prescription drugs, and that more drugs should switch to generic when possible. Eight in ten people say drug companies should reveal how they set prices in a very transparent process.

Interestingly, one-third of patients believe drug companies should be required to set the price of a drug based on its effectiveness.

Health politics are top-of-mind for most Americans, who don’t approve of how either President Trump or Congress are dealing with the high cost of Rx drugs in the U.S.

While this varies by political party affiliation, about 8 in 10 Americans across-the-party-landscape say health care costs are a very important issue — on par with jobs and the economy, but more than national security, immigration, or trade issues.

“Never mind the rhetoric. Most Americans think Trump is choking on drug prices,” Ed Silverman, pharma industry analyst, wrote in STAT in his analysis of the West Health/NORC poll.

Remember that President Trump promised American voters in his TIME magazine Person of the Year interview in December 2016 that he would drive down Rx costs for consumers — because, as he has often said, “Drug companies are getting away with murder” in terms of pricing.  [Here’s my take on the TIME interview in Health Populi].

A sobering and clinically important impact of high drug prices is self-rationing: The West Health/NORC survey found that one-third of Americans who take prescription drugs regularly had not filled a prescription or reduced their therapeutic recommended dose due to drug prices.

Research from the IQVIA Institute for Human Data Science, published in August, calculated that when cost sharing rises, patients were more likely to abandon their medicines. In 2017, 69% of commercially insured patients did not fill a new Rx if there was a $250 out-of-pocket cost. The bottom line for health consumers: prescription abandonment rises as patient out-of-pocket costs at the pharmacy increase. This short-term fiscal choice by the health consumer can lead to longer-term poor physical outcomes for the person-as-patient.

 

Health Populi’s Hot Points:  And now, to reputation risk. For several years, U.S. consumers have long-ranked the pharmaceutical industry relatively low, but above car salespeople and the Federal government. In Gallup’s latest poll on Americans’ industry rankings, both healthcare and pharma fell to the lowest net favorability score with the Federal government at rock bottom.

While this survey found the healthcare industry falling in reputation, consumers will come to appreciate a group of hospitals coming together to deal with the high price of medications: Civica Rx is a new effort, launched earlier this month, bringing together hospitals and foundations establishing a not-for-profit generic drug companies.

As the NORC/West Health poll found, generics are a beloved part of healthcare to consumers.

Civica Rx will begin with 14 hospital-administered generic drugs, some of which are in short supply. Thus far, about 500 U.S. hospitals have joined in this effort: they include some very large players, such as Catholic Health Initiatives, HCA, Intermountain Healthcare, Mayo Clinic, among others. The Veterans Administration with also work with the group in ways to-be-announced. They’ll begin to apply to the FDA in early 2019 to make and sell the generic drugs.

“We all pay a price, and lower-income patients shoulder a particularly heavy burden. This intolerable situation has escalated to a public health crisis. It’s time to put patients before profits and begin the transformation of healthcare that Americans deserve,” Shelley Lyford, President and CEO of the Gary and Mary West Foundation, is quoted about Civica Rx in Inside Philanthropy.

Another party-to-the-rescue could be Amazon. This week, Amazon announced that it would be opening 3,000 cashier-less brick-and-mortar stores, which could be used to distribute prescription drugs if that is in the ecommerce/retailer’s plans. Note that a Deutsche Bank analyst cited a consumer survey where most Prime members said they’d be open to buying drugs from Amazon. A similar study from LendEDU found the same in August. Americans love their pharmacies and pharmacists, I noted last week in the context of the latest J.D. Power pharmacy satisfaction study. But the nature of that pharmacy and prescription drug channeling may come to change quite quickly.

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340B Facts and Figures

The 340B program requires pharmaceutical firms to give large discounts to hospitals and clinics that serve high volumes of low-income patients.  This sounds like a good idea at first: give money to people who can’t afford their medicines.  However, when one reads the sentence above closely, it becomes clear that patients don’t receive these discounts: hospitals do.  Further, the program would only work if: (i) hospitals serve a homogeneous patient population (e.g., all poor or all rich), and (ii) a hospitlal’s savings from 340B are passed on to lowincome individuals.  Both of these conditions likely do not hold in practice.

In fact, Austin Frakt has a nice summary of the 340B program in his N.Y. Times article a few weeks back titled “A Little-Known Windfall for Some Hospitals, Now Facing Big Cuts“.  Below I highlight some of the literature cited in this article that hopefully can serve as a useful reference.

• The 340B program saved hospitals $6 billion in 2015.  McCaughan (Health Affairs 2017).
• 340B started off as a program to serve the poor, but increasingly funds are being used to help hospitals treating wealthier communities. Conti and Bach (Health Affairs 2014) and Nikpay, Buntin and Conti (JAMA Int Med 2018)
  • “We found that hospital-affiliated clinics that registered for the 340B program in 2004 or later served communities that were wealthier and had higher rates of health insurance compared to communities served by hospitals and clinics that registered for the program before 2004. Our findings support the criticism that the 340B program is being converted from one that serves vulnerable patient populations to one that enriches hospitals and their affiliated clinics.“
• 40% of hospitals participate in 340B. Tribble (Kaiser Health News 2017)
• Profits from 340B have not led to more access to care for low-income patients, or reductions in mortality rates among them. Desai and McWilliams (NEJM 2018)
  • “The 340B Program has been associated with hospital–physician consolidation in hematology–oncology and with more hospital-based administration of parenteral drugs in hematology–oncology and ophthalmology. Financial gains for hospitals have not been associated with clear evidence of expanded care or lower mortality among low-income patients.“
• 340B increases cost by increasing provision of care in-hospital.  Conti and Bach (JAMA 2013).

  • “[First, for] oncologists practicing in 340B-affiliated outpatient clinics, prescribing may shift toward more expensive drugs because profit margins will in general be larger…Second, the 340B program creates a widening disparity between noneligible and eligible hospitals and affiliated oncology practices in the profits they are able to obtain from the care of well-insured patients with cancer.⁷ This disparity is likely underlying trends toward consolidation and affiliations between community-based oncology practices and 340B-eligible hospitals…Third, drug manufacturers will likely seek to increase list prices even further to offset revenue losses incurred as a larger number of drug sales become eligible for 340B discounts (and thus fewer drugs are sold at full price).“

Why the sudden interest in 340B?  Frakt notes a recent policy change:

In January, Medicare lowered the prices it pays for 340B drugs by 27 percent. Although this move chips away at how much hospitals can benefit financially, it does little to address how much insurers and individuals pay for prescription drugs or the value they obtain from them. In addition, the move does nothing to increase hospital spending that could help the poor.

So is 340B likely to stay?  Only time will tell.

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What will happen when step therapy comes to Medicare Advantage?

CMS recently authorized Medicare Advantage (MA) plans the ability to apply step therapy protocols to Part B drugs.  Although it is not clear the degree to which the MA plans will implement step therapy, a good guide is to see what is happening in the commercial insurance market.  A Health Affairs blog by Chambers, Panzer and Neumann attempts to answer this question using the Specialty Drug Evidence and Coverage (SPEC) Database.  The authors describe these data as follows:

Information in SPEC is extracted from publicly available coverage decisions issued by 17 of the 20 largest commercial health plans relevant to their commercial lines of business…[using these data], we found wide variation in the frequency with which health plans apply step therapy protocols in their specialty drug coverage decisions, ranging from 2 percent to 49 percent across the included plans.

Not only is there wide variation in the use of step therapy across plans (the extensive margin), how step therapy is applied also varies (the intensive margin).

For example, of the 1,208 coverage decisions that include a step therapy protocol, …63 percent…require patients to step through a single therapy, while…37 percent…require stepping through multiple therapies. Moreover…15 percent…of protocols include three or more steps, and some require patients to fail up to five treatments before patients can gain access to a particular therapy.

The article also notes wide variability of how step therapy is applied.  Generally, step therapy is less common among oncology treatments and orphan drugs.

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Consumers Don’t Know What They Don’t Know About Healthcare Costs

The saving rate in the U.S. ranks among the lowest in the world, in a country that rates among the richest nations. So imagine how well Americans save for healthcare?

“Consumers are not disciplined about saving in general,” with saving for healthcare lagging behind other types of savings, Alegeus observes in the 2018 Alegeus Consumer Health & Financial Fluency Report.

Alegeus surveyed 1,400 U.S. healthcare consumers in September 2017 to gauge peoples’ views on healthcare finances, insurance, and levels of fluency.

As patients continue to take on more financial responsibility for healthcare spending in the U.S., they are struggling with finances and don’t believe they can save for medical expenses. One-half of Americans live paycheck to paycheck, Alegeus learned, and one-third have a problem with debt.

Exacerbating this picture of financial un-wellness among millions of Americans is the fact that consumers “don’t know what they don’t know” when it comes to how their health insurance works — that is, how to benefit from their health benefits.

One-half of people could not correctly answer simple questions about the definitions of a health premium or a deductible, for example. Thus Alegeus says that peoples’ overall health insurance fluency is low.

This lack of health financial literacy leads to real hard-dollar losses impacting health consumers’ pocketbooks. Americans’ estimated $371 billion out-of-pocket spending in 2018 could result in $85 bn in potential consumer savings were people to use pre-tax dollars conserved in financial and health savings accounts (FSAs and HSAs), Alegeus calculated.

Health Populi’s Hot Points:  Americans are stressed by out-of-pocket healthcare costs, the second chart shows, so there’s a double-whammy health effect here: first, financial, where people who could optimize healthcare spending by saving in an FSA or HSA. Second, a mental and potentially physical health impact from that financial stress.

The patient-as-payor lacks confidence and competence in being that envisioned consumer-directed-healthcare persona.

Thus Alegeus concludes that consumers need support to take a more active role in their healthcare, via tools, encouragement, access to information, time and knowledge.

At the root, though, will continue to be Americans’ low savings rates across-the-board, from simply saving for emergencies through healthcare — the lowest level of saving that Alegeus discovered as the first chart indicates.

 

In the U.S., saving would be a social determinant of health. This is a Catch-22 in America, because more people face first-dollar out-of-pocket costs in the face of fairly flat wage growth over the past decade.

While on a macroeconomic level, the nation’s economy is said to be well into recovery mode post-Recession, most Americans still don’t feel growth in their paychecks and disposable incomes.

The third chart illustrates the relatively low personal savings rate among U.S. consumers at the end of 2017. This has inched up above 6% in recent months of 2018, but still below 7%.

FYI and further knowledge, here’s an analysis from the IMF (International Monetary Fund) looking at the U.S. personal savings rate in a global context.

The bottom-line for American households: healthcare spending is an integral part of overall household spending, and leading to stress and self-rationing of care for millions of people — whether for EpiPens, cancer treatment, or simply (but profoundly, prevention-important) going to see a primary care provider.

Nudging people to save more overall – specifically for healthcare — will need a lot more than a clever digital tool and “knowledge.” We’ve known about the compelling triple-tax advantage of a health savings account since President Bush promoted them in 2006. Twelve years later, what looks fiscally compelling on paper just hasn’t inspired people to save more for much of anything — let alone healthcare expenses.

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Economics of the Pharmaceutical Industry

Darius Lakdawalla has an very interesting review article in the Journal of Economic Literature on the Economics of the pharmacuetical industry.  Do read the whole thing, but below I have listed some highlights.

A model of firm R&D decisions

Lakdawalla uses a simple model based on Nordhaus (1969) to derive some important implications about pharmaceutical firms’ decision to invest in R&D:

1. All else equal, innovation investment rises with the expected gain from discovery
2. Investment also rises with increases in the marginal productivity of investment (i.e., investment is more likely the higher the likelihood the marginal R&D dollar will find a drug discovery)
3. Increased cost of capital decreases R&D

 

What share of drugs in development ultimately become approved?

“Among the largest drug companies, roughly 20–30 percent of drugs that began in phase I end up being approved for use (Adams and Brantner 2006).”

 

The relationship between market size and innovation

Lakdawalla writes: “…expansions in expected market size stimulate innovation effort. There is widespread empirical support for this relationship, but much debate over its magnitude.”

Lakdawalla cites research from Acemoglu and Linn (2004), which finds that a 1% increase in market size is associated with a 4-6% increase in new drugs entering the market.  Other studies have found that subsidies to purchase vaccines have stimulated vaccine R&D (Finkelstein 2004) and Medicare Part D stimulated R&D for drugs targeted to Medicare beneficiaries (Blume-Kuhout and Sood 2013).  Some have claimed, however, that some of the Part D investments were more likely to be ‘me too’ products with multiple treatments already on the market rather than first in class innovation (Dranove, Garthwaite, and Hermosilla, 2014)

 

Regulation and prices

Prices for pharmaceuticals in more heavily regulated, non-U.S. markets are typically 18-67% lower than in the U.S.  A US Department of Commerce study found that price deregulation in 11 OECD countries would increase pharmaceutical revenues by 25 to 38 percent (U.S. Dept of Commerce 2004). Danzon and Chao (2000) and Sood et al. (2009) both find that more regulation leads to lower prices.

 

Tax credits spur R&D

A study by McCutchen (1993) found that for every dollar of tax credit given to pharmaceutical firms, R&D spending increased by 29 cents.  Mansfield (1986) finds that for every $1 of government spending on tax credits, R&D increases by 30-40 cents.  Publicly funding R&D also appears to spur private R&D. According to a paper by Toole (2007) “Each $1.00 increase in expenditures on basic and clinical research correlates with $8.38 and $2.35 more pharmaceutical R&D expenditures, respectively.”

 

The impact of innovation on clinical trial participation

Previous innovation may make increase the cost of R&D for future innovation.  Why?  Malani and Philipson (2012) propose that innovation discourages clinical trial participations, since there may already be good treatments available.  Thus, recruiting participants for clinical trials becomes more expensive for pharmaceutical firms among diseases with previous successful innovations.

 

How much social surplus to innovators capture

Based on a study from Nordhaus (2004) the answer is about 2%.  Looking specifically in the healthcare sector of the economy, Philipson and Jena (2006) put the figure at about 5-10% of social surplus.

Economics of the Pharmaceutical Industry posted first on http://dentistfortworth.blogspot.com

The Health Consumer Seeks Fresh, Free-From and…Turmeric

The impact of health and wellness is on most consumers’ minds, Nielsen’s consumer research has found.

Sarah Schmansky, Nielsen’s strategy leader for health, wellness and “fresh,” moderated a panel at the GMDC Health-Beauty-Wellness Conference in Orlando today that brainstormed how consumers are shopping for health.

Underneath that “how” is more than the next-best-me-too-product for allergy or acne. It’s about efficacy of the product at the core, but bundled with social responsibility and sustainability, informative packaging, transparency of ingredients, and education that empowers the individual.

“Self-care is the driver of growth,” Sarah began the discussion. But these needs under the self-care umbrella are complex. The way Nielsen looks at this, four macro trends of aging (as Boomers age into older and more fragile stages), ailments (with 4 in 10 U.S. households dealing with a chronic condition), nutrition (where most people look to food-as-medicine to treat those ailments, but need a lot more help to identify just what exactly feeds “my” health), and sustainability.

“We need clear sight-lines for what’s in the products,” Sarah explained, to the issue of consumers seeking transparency and responsibility. Thus, one of the growing facets of health-beauty-wellness products are those that feature “free-from” ingredients – such as paraben-free in cosmetics, and gluten-free in food for people managing gut-health issues.

This extends beyond human (parent and child) health to animal health: a growing cadre of pet food buyers who love their fur babies are scrutinizing ingredient meat in dog food, Sarah said.

The health consumer is also moving from episodic and reactive care to preventive and health-boosting purchases. In cough-cold, retailers are selling more Vitamin C and black elderberry-embedded products; in GI supplements, probiotics continue to grow. Retailers are seeing this throughout the store, not just in the shelves adjacent to the pharmacy: it’s around the perimeter as well as within the center aisles where consumers seek and find products with the promise of boosting resilience and to prevent the onset of a variety of conditions.

An important finding is that this trend is not just happening among Millennial Moms and younger shoppers. Clean label and the search for health benefits is happening across different consumer personae and shopping channels, from grocery stores to mass merchandisers, warehouse clubs, and — what may surprise you — convenience stores.

As an example of the C-store joining the trend to fresh and healthy, Sarah pointed to 7-11’s private label of cold-pressed juices. This seemingly premium product is now stocked where you typically think of picking up beef jerky, tobacco products, and maybe petrol at the pump.

From produce to packaged products like shampoo and skin care, watch for “fresh” to be inside: we saw tomato, grapefruit, coconut, and avocado in the new product Showcase exhibit this weekend. Avocado oil, Sarah told us, can be found now in 31 categories across the store, and has 11% household penetration in the U.S. whether in health, beauty, or food products. She says if we’re observant, we can see the same phenomenon with kale, cranberry, and even cauliflower growing as a fresh-inside component for healthy consumer shopping.

This week at the Expo East natural products show, it was all about turmeric: in the raw root in produce, ground turmeric at the spice kiosk, and inside supplements in the vitamins/supplements aisle.

One innovative grocer has education tables hosted by trained store staff that in fact feature these three turmeric SKUs, to educate prospective consumers on the category — showing the customer how to incorporate turmeric into their lifestyle.

The bottom-line that serves both the consumer and the retailer: one ingredient can make its way across and around the store. As long as it’s fresh, authentic, and efficacious.

Health Populi’s Hot Points:  With the health consumer always-on and connected, authenticity, evidence, and transparency are in-demand.

At Expo East, one of the trends was coined Trustworthiness, Tested:  that bottom line, Expo East trend-weavers explained, is that, “Living in an increasingly tainted world makes it all the more important for brands to know exactly what is—and more importantly what is not—in their products through rigorous testing to maintain consumer trust. Verifiable certifications can help communicate such test results to shoppers.”

Health consumers, can, in fact, handle the truth and want the truth from both the legacy healthcare industry — doctors, hospitals, health plans and pharma — and the retail health products and services that are shoppable.

In fact, more healthcare services are shoppable, especially with growing transparency of price and some quality metrics available to patients and caregivers.

There are lessons that the healthcare industry can and must learn from retail health — especially with respect to innovation, nimbleness, and meeting consumers based on their personal values and preferences.

Pay note: the social determinants of health can be bolstered at convenience stores, grocers, and mass merchants where millions of health citizens walk through doors every day.

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Getting Someone ELSE to Go to the Dentist

Getting your partner to go to the dentist—especially if there is a fear involved—is like pulling teeth (pun intended)! In fact, many couples admit that constant nagging to visit their health provider to address an ongoing issue is a point of stress in their relationship. 

 

However, if bad breath is the issue, we understand why you would want to get that sorted out sooner rather than later! And while we don’t specialize in relationships, we do want to help support all our patients and their partners achieve better oral health. 

 

Couples that practice healthy oral habits are more likely going to be happier and healthier. If you are having trouble convincing your partner to visit the dentist, we have outlined some tips and tricks that we have picked up from patients along the way. Surprisingly, nagging didn’t make the list! 

 

Determine why you want them to visit the dentist 

 

If you’re at the point that you’re frustrated with your partner’s disregard for oral health, it is important to identify exactly what’s bothering you so you can specifically address it instead of making it a more general complaint about the person. 

 

For example, if they have bad breath, a rotting tooth, or receding gums, it’s important to point out the specific problem and why it’s important that the issue be addressed. Avoid ad hominem attacks that deflect from the actual issue, because these can create unnecessary divisions. Have the conversation about what is bothering you in a private location that your partner feels at ease in. Avoiding making them feel attacked or ambushed is important. Once you are able to calmly discuss the problem, focus on solutions that will help your partner and strengthen your relationship.  

 

Make suggestions—not ultimatums  

 

More than 43% of men admit being anxious about dental visits, while three fourths of all adults admit to at least some fear of the dentist. 

 

Fear is a powerful force that can convince you out of doing things—including those that are beneficial. If your partner is experiencing fear or anxiety, that is completely normal. And due to that, it’s important to not make ultimatums or threats that “if they don’t” address their issue, you will force them to go to the dentist or do something equally drastic. 

 

Unlike children, who can be forced to an appointment, it is never advised you do the same to an adult. Offer suggestions on which dental provider to visit, or solicit options from their close friends. Encourage them to discuss their fear with confidants to get an understanding that these feelings are normal. And finally, discuss the overall health risks of not addressing oral health issues. This could include an increased risk of heart disease, complications from diabetes and infections. This conversation should come from a place of love; although, we understand that frustration can also play a major role. 

 

Give them a gift 

 

Dental services can be expensive, especially for cosmetic procedures such as Invisalign. If you know your partner is concerned about the alignment of their teeth, or feels like their teeth could be a few shades whiter for added confidence, then giving them gift of a better smile could be just what’s needed! We have many patients that have been gifted an Invisalign treatment by a loved one and are thrilled with the results and new outlook on life. 

 

Make appointments together 

 

If you are able to convince your partner to make an appointment, consider making one for yourself at the same time! Your partner will be much less likely to back out last minute if you’re going together. 

 

Going at the same time will also serve as a reminder for you both to schedule your bi-annual appointments together. If you have the time, make a full day date out of it. Grab breakfast after, or schedule time to grab a movie. Having something to look forward to at the end will take your mind off the appointment!  

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Precision Benefit Design

A recent viewpoint from Fendrick and Shope (2018) argues for the need for Precision Benefit Design.

Successful implementation of precision medicine will need to address several system-wide challenges, including administrative complexities, the creation of new financing models, and aligning provider- and patient-focused initiatives. The enormous clinical potential of precision medicine sheds light on the critical importance of using clinical benefit—not acquisition price—to guide and improve how we spend health care dollars. The model that we currently use to pay for medical services is clearly not suited for groundbreaking, one-time treatments, particularly those with clinical benefits that are incurred in the near and distant future.

While I largely agree with the the authors, in my Counterpoint published in the Journal of Clinical Pathways, I argue that any form of precision benefit design faces a number of challenges, including insuring that implementation reflects not only individual patient clinical characteristics but also their preferences as well.  The abstract from my counterpoint is below.

Precision benefit design is an extension of the concept of value-based insurance design (VBID), which aims to link patient benefit design and coinsurance to the likely benefit of a treatment net of its cost. Whereas VBID measures the value of a treatment for the average patient, the advent of precision medicine raises the possibility of implementing a VBID-style approach but measuring a treatment’s value—and concordant benefit design—based on the specific patient genotype information. While precision benefit design is conceptually appealing, to implement this approach in practice would require overcoming at least 3 key challenges.

Do read the full Viewpoint and Counterpoints HERE.

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Consumers Changing the Channel on Where They Shop for Health

Consumers who have long purchased over-the-counter medicines, anti-dandruff shampoo, whitening toothpaste, and cosmetics-with-benefits at food, drug and mass merchant retailers are switching to other places to shop for health, new data from AT Kearney and GMDC have found.

The two organizations have collaborated to launch a new  benchmarking study into health-beauty-wellness (HBW) sales, launched this weekend at the GMDC HBW Conference in Orlando.

Overall, 2017 to 2018 year-on-year, HBW sales were flat-to-no growth, notwithstanding the consumer and influencer buzz around the categories.

 

 

 

This study uncovered some very important trends underneath the macro numbers that tell a story of empowered health consumers and the evolving retail landscape.

Story-telling is part of the solution to the challenge that Food, Drug and Mass Merchant (FDM) retailers will increasingly face in and beyond 2019 for HBW goods and services. When we talk about “FDM,” think grocery stores, retail pharmacies (both chains and independents), and stores like Walmart, Costco, and Target, among others.

Some background, before I dive into the insights and implications of the benchmarking study.

GMDC and AT Kearney had a meeting in June 2017. On that day, Amazon announced that it would acquire Whole Foods. That deal was a sentinel event that has come to impact not only the food/grocery sector but the global ecommerce world in general, and health/care specifically.

So back to the benchmarking study results. “Everyone is excited about HBW,” Andrew Knight of AT Kearney observed, but it’s not a guaranteed silver bullet for retailers to put the goods on shelves and see consumers buy them, the study soberly discovered.

FDM retailers are facing unprecedented changes in how consumers shop for health, beauty and wellness products and services, Knight asserted. Why? Because of what the healthcare ecosystem stakeholders know — that consumers and patients are hyper-connected.

Today, technologies like augmented reality are enabling beauty shoppers, for example, to try out products on their own faces via apps now available to them. This allows the consumer to trial products at home before even walking into the pharmacy, mass merchant, or grocery store doors. It also bolsters the opportunity for education and inspiration, via storytelling, to that consumer.

That level of service-around-the-product is garnering loyalty (and spending) among consumers. While sales for HBW via FDM channels were pretty flat between 2017 and 2018, “the basket is upgrading,” Knight said. The average price for many goods is rising, as consumers will increasingly pay more for sustainable corporate practices, ethical sourcing, and more natural and “free-from” ingredients.

One of the categories that’s growing based on premiumization is oral hygiene. “It’s not just about brushing your teeth anymore,” the year-on-year data for oral care showed, Knight said, with the growth in higher-priced dental floss, “sensitive” gum picks, and specialty mouthwashes commanding higher price margins that some consumers are willing to pay.

Note this messaging found on the children’s wellness brand, Jack and Jill, one of the GMDC Showcase participants: “free from all nasties.” This, in products marketed to parents for kids.

This is the sort of branding Millennial Moms and many grandparents seek in health-motivated families.

The key takeaway is that innovation is key, and it’s the “smaller fish,” as Knight coins them, that are nimble and agile, serving up fads and trends and very current demands of health-hungry consumers.

Health Populi’s Hot Points:  Retailers can collaborate with producers, Knight recommends, with the Big Fish working with the Small Fish to co-create innovations that benefit consumers’ health and bolster the business at the same time.

The findings of this study are spot-on for healthcare industry stakeholders beyond retailers and CPG companies, as well, especially as we increasingly appreciate the impact of social determinants on patients’ health: food, education, safe and clean environments, transportation, among them.

Knight painted a continuum of wellness at retail: dietitians, nutritionists, cooking schools, flu shots, skincare, supplements like probiotics, water…asking the question, “how can we take these products and string them together?” For example, for a customer with dry skin, it’s not just about buying hand cream, but a continuum of solutions such as appropriate evidence-based supplements, drinking lots of water, and certain healthy food choices that, bundled together, could optimize the consumer-patient skin outcome.

“Be solution oriented,” Knight said.

Integral to that solution is embracing the fact that the consumer is multi-channel and connected, which I speak to so often — the concept of Homo informaticus, described in this Health Populi post.

Along with our being connected, three other factors are converging to re-shape us, Knight called out: aging, consumerization, and demand for personalization.

Together, these trends result in a broader consumer call for ownership of health for personal wellbeing. I see this as part of a growing call for health citizenship with its attendant rights and responsibilities.

With the need for greater consumer health education at retail, there’s a huge opportunity for the trusted, respected experts in the legacy healthcare ecosystem to partner with retail health channels: physicians, nurses, pharma researchers, patient advocates and associations like the American Heart Association and American Diabetes Association, hospital pharmacists and dietitians, in local and national programming.

Remember that consumers believe nurses, pharmacists and physicians are the most ethical and trustworthy professions in America; and, that retailers are valued for customer experience. That’s a powerful combination for health consuming.

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