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FROM CARE MANAGEMENTFROM CARE MANAGEMENTTO MANAGED CARETO MANAGED CARE

Professor Samir MossaConsultant Family Med., Pediatric &

Medical Education.

Director of Academic and Research Affairs

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The changing role of theThe changing role of thepharmaceutical industry;pharmaceutical industry;

From manufacturer of

pharmaceuticals to partner inhealth care.

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Presentation OverviewPresentation Overview

Background and history

Strategies for the future

Definition of

A) Disease ManagementB) Managed Care

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Background and historyBackground and history

Forces forchange

Forces forchange

RethinkingStrategy

RethinkingStrategy

NewCapabilities

NewCapabilities

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The State1. Demographics (more elderly people)

2. Health care costs continue to rise above inflation

3. Political reforms to control costs4. Formularies / prescription control / price control

5. Prioritization of health care service offered

6. Debating alternatives to existing structure7. New treatments / technologies (biotechnology)

8. Information technology

Forces to ChangeForces to Change Background and history..Background and history..

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The pharmaceutical industry.1. Rising costs of Research and Development

2. Generic competition (patents)

3. Parallel import4. Reimbursement / price control

5. Lower margins

6. New costumer constellations7. Changing customer expectations (patients)

8. Information technology

Forces to ChangeForces to Change Background and history..

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Strategies for the futureStrategies for the future

Forces forchange

Forces forchange

Rethinkingstrategy

Rethinkingstrategy

Newcapabilities

Newcapabilities

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Rethinking strategyRethinking strategy

The pharmaceutical industry faces

A number of strategic options.

Unique value added

pharmaceuticals (Innovation)

Distribution, channel blockcompetition (vertical integration)

Combine Rx, Gx, OTC, acquire or

merge critical mass, Disease man.Approaches (horizontal integration)

. Which may be adopted in combination

Globalization

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The traditional health value chainThe traditional health value chainThe traditional health value chain

Rethinking strategyRethinking strategy

Pharmaceuticalcompany

Provider

Purchaser

Patient

Sales and

Marketing

DistributionManufact.R&D

Follow-upTreatmentDiagnosisScreening

AuditContractingActivityRequirement

Needs

Assess.

Recovery orChronicman.

interventionSymptomsPre-

Symptoms

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The traditional health value chain isThe traditional health value chain is

beingbeing turnedturned upside down asupside down ascustomers and needs evolvecustomers and needs evolve

Rethinking strategy

Patient Serv ic e andin te rvent ion

In fo rmat ion Value

con t rac t

Agreed

hea lt h care goals

Purchaser ( Ka izen)

Improvequa l i t y

Purchase

ou t comes

Set

S t ra tegy

Aggregate

Populat ionneeds

Provider Improve cos t e f fec t i veness

Audi t Ef fect in te rvent ion

Setou t comes

Pharmacycompany

Improve

so lu t ions

Del iver

so lu t ions

Develop

so lu t ions

Assess

ou t come

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Disease Management and Manage CareDisease Management and Manage Care

Forces for changeForces for change

Rethinkingstrategy

Rethinkingstrategy

Newcapabilities

Newcapabilities

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New Capabilities Diseases Management and ManageCare

What is Diseases Managem ent ?

An integrated system of customized

Interventions, measurements, andrefinements to current processes of

care designed to optimize clinicaland economic outcomes within a

specific disease state.

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New capabilitiesNew capabilities

Disease Management and Managed

Care

What is Managed Care?

A process to maximize the health gain of a

community within limited resources, byensuring that an appropriate range and level of

services are provided, and by monitoring on a

case-by-case basis to ensure that they arecontinuously improved to meet national

targets for health and individual health needs

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New capabilitiesNew capabilities Disease management andManage Care

Manage Care cannot be owned, it must be

developed through partnership

purchaser/ provider

primary/ secondary/ community/ pharmacist hospital/ wholesaler/ supplier

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New capabilitiesNew capabilities Disease Management andManage Care

Support for patient groups to support treatment options

Development of outcomes data bases with commercial supportHealth Provider assisted to produce best practice guidelinesCommercial support for changes to clinical practice

Joint venture to redesign health processesUse of patient outcome and response measuresCollaboration to build health information systems

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New capabilitiesNew capabilitiesNew capabilitiesDisease Management andDisease Management and

Managed CareManaged Care

YesterdayDevelopment and marketing

based on products

TomorrowDevelopment and marketing

based on customers needs

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New capabilitiesNew capabilities Disease Management andDisease Management andManage careManage care

Considerable Barriers exist..

Lack of information and/or access to it

Professional skepticism in the health care sector

Un-conceived management

Risk aversiveness

New entries ( IT companies )

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New capabilitiesNew capabilities Disease ManagementDisease Management

and Managed Careand Managed Care....

The risk of NOT pursuing Managed

Care/Disease Management.

Loss of access to key customer/decisions

makers

Loss of access to information

Loss of access to innovation

Loss of access to opportunities & potential

rewards

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Patient

IndustryPayer

Provider

QOL Co-Payment Knowledge

Value of drugCustomer Focus

Cost Quality PR

Easier decision making

Efficiency

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NowNow

PharmaSurgical

7%7 + %

Direct

CostsCosts

Indirect

Future ?Future ?

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Before the 90-ties The 90-ties

Pharmacy

65% Hospital1%

PhysicianPhysician

3%3%

PsychiatricPsychiatricHospitalHospital

6%6%

PsychiatristPsychiatristPsychiatristPsychiatrist

24%24%

PsychiatricPsychiatric

HospitalHospital21%21%Physician

Physician

7%7%

Hospital27%

Pharmacy

21%

Depression-Related Direct Costs

TCA Mean Cost/Patient - $ 960

Depression-Related Direct Costs

SSRI Mean Cost/Patient - $508Source: Sciar DA ,et al. Antidepressant Pharmacotherapy: Economic

Outcomes in a Health Maintenance Organization ,Clinical Therapeutics, 1994;16:715-730

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A continuous process to optimize care outcomes

An integrated system of medical and paramedicalintervention, with continuous measurements and consequentrefinements, design to optimize clinical and economic out comeswithin a specific disease state.

DISEASE MANAGEMENT

MANAGED CARE

An Integrated System for Financing and

Delivering Health Care Services

(Integrating of prayer and provider)

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Disease ManagementDisease Management ....1 specific disease (diabetes, depression, asthma, etc.)1 specific disease (diabetes, depression, asthma, etc.)

Measurements

Clinical and/or

Economical and/or

Quality of Life

with the purpose to optimize a specific treatment

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Difference between diseaseDifference between disease

management and managed caremanagement and managed care

Dimensions:Dimensions:

Quality of care

Equity of funding Equity of access

Cost of care

Evidence based purchasing versus evidence based medicine?Source: Mercer report on Disease Management

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Searching for the Care OptimumSearching for the Care Optimum

Suboptimal Care: Too Little or too much !!

Ideal

Disease Management

Objective

QOL

Rationalizing

Rationing

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The disease Management WheelThe disease Management WheelPrevention and Screening

Objectives forImprovement

Diagnoses

Communicate

Intervention andTreatment

Monitor

Follow-up Guidelines

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The Process of Disease Management: action stepsThe Process of Disease Management: action steps

Situation

Analysis

Situation

Analysis

Delivery AuditDelivery Audit

Problem/opportunity

Identification

Problem/opportunity

Identification

OptionEvaluationOptionEvaluation

Action PlanAction Plan

ImplementationImplementation

Monitor & ReviewMonitor & Review

Healthcare market development

Population demands / influences

Current practice

Review / baseline outcomes

Meeting healthcare requirement

Financial Targets

Disease Management tools

Assessing potential impact

Actions to meet objectives

Measures & Milestone

Buy In at organizational level

Change management

Achievable measures

Feedback loops

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Disease Management Tools

The Disease MapUnderstanding the diseaseIdentifying problems and opportunitiesTailoring solutionsMeasuring outcomes

Patient Management ProgramsSelf help programmersEducations programmers

Healthcare Planning DatabasePlanning efficient healthcare facilitiesStudying variations in disease episodesAnalyzing referral patterns

Professional Education PackagesInfluencing behaviorEnsuring best practice

Re-organizing delivery of healthcare services

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What are we trying to do

and how are we trying to position ourselves?

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Emphasis shift:Emphasis shift:

new productnew product--market combinationsmarket combinationsTraditional Emerging

Costumers

Drugs

Doctors DoctorsPharmacist PharmacistGovernment Hospitals

Government

Private Insurance

Purchasers/consortia

Patients

For profit HC providers

Safety Safety-Efficacy

Efficacy Cost effectiveness

Outcomes

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Primary Disease Management ModelsPrimary Disease Management Models

Market and manageUtilization of

packages of

drugs used to treat

populations Drug Manager

Discover, develop,and market drugs

and offer selected

value-added

services that

enhance drug sales

Drug Supplier

Care Manager

Manage delivery of

services to a definedpatient population

ServiceProvider

Develop and sell a

variety of servicesto facilitate thedisease

management

process

Drug Supplier

Drug Supplier

Care Manager

ServiceProvider

Minor Significant

Involvement in Care Management & Delivery

Services

only

Drugs

only

F

ocus

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Characteristics of Disease Management

Addresses process of healthcare delivery Addresses structure of healthcare delivery

Hollistic not component focus

Success based on improving outcomes

Best practice and evidence

Payment based on benefits delivered

Partnerships

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Integrated Diabetes Management ExampleIntegrated Diabetes Management Example

PilotIncentiveProgram

Develop and get Buy in for

Incentive Program

Guideline

Development

FacilitateTeam

Decisions

Support Systems

Development

Process &OutcomeMeasures

GuidelineImplementation

Outcome

based

behavior( HbA1c )

Interventions

for:

Plan

Providers

Patients

Reimbursement: LOS Total costs/Survey HbAtc

OutpatientEducationProgram

Case Management

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Control Diabetes ServicesControl Diabetes ServicesPotential to Reduce Total Health Care CostsPotential to Reduce Total Health Care Costs

$ 10,000

$ 9,000

$ 8,000

$ 7,000

$ 6,000

$ 5,000

$ 4,000

$ 3,000

$ 2,000

$ 1,000

$ 0

Status Quo Control Intervention

Other

Homehealth

Drugs &DME

Office Visit

Outpatient

Inpatient *

( 25%

reduction )

Self mgmttraining

Diabetes Outpatient Education Program Demonstrating Reduced Hospitalization and cost savings, Centers, for DiseaseControl ( Summary of literaure : Diabetes Education reduced hospitalizations by 20 to 72%

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Disease Management: a logical next stepDisease Management: a logical next step

Medication

Management

Disease

Management

Drug

Interactions:Lower Cost

Therapy change

Acute to

MaintenanceDosage

Promote Patient

Compliance/Education

Conduct Intensive

Intervention topromote Most

Appropriate Diagnosis

and Treatment of

Patient

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Disease Management : Selection CriteriaDisease Management : Selection Criteria

Selection Criteria

Clear and unambiguous category High variability in treatmentpatterns and outcomes.

High per patient costs Low frequency of co-morbidity

Unrealised opportunities for near-

term cost savings and improvedoutcomes

Specialised expertise and/or data

needed to manage effectively

Likely DiseaseTargets

Diabetes

AsthmaMental Health

Cancer

Haemophilia

EpilepsyLow Back Pain

Post-Traumatic

Rehabilitation

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Key success factorsKey success factors

Commitment

Credibility

Culture

Data

Success

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Additional competences required forAdditional competences required for

Disease ManagementDisease Management

Risk analysis and actuarial skills ( Insurance )

Clinical decision making ( Medical Profession )

Care Management ( Hospital and Nurses )

Business Management

Information Technology

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Disease ManagementDisease Management People latch on to these buzzwordsbuzzwords and

start to equate them with something thatsmore concrete or tangible, like clinical

guidelines, product inserts, or patient

education.

Then they say theyre doing disease

management and thats a bunch of bull .

James Couch, M.D.

Johns Hopkins University