The healthcare industry is extraordinary. Over the last 200 years the global population increased by 600% whilst life expectancy has more than doubled. Longer lives aren’t leading to declines. In the last 30 years disability rates in the 1 over 65’s have fallen by over 20%. Because of the healthcare system’s ability to innovate, we are spending more time living and less time dying. But it has come at a cost.
JAMES OSMOND CEO, CLEAR
HOW TO CREATE VALUE IN A TIME OF CHANGE O
ver the past 60 years, healthcare costs have increased at the unsustainable rate of 5x GDP growth.2
There are many reasons for this, including the healthcare business model itself. As Chris Viebqcher, CEO Sanofi, has stated, “for every Euro spent on R&D, the industry gets back 70 cents and only 20% of the 400 drugs approved in the last decade have made their money back”. 3 No wonder payers are beginning to change the rules that pharma companies have to play by. Not only are they centralizing buying to increase their power but they are also changing the very definition of value in healthcare itself. To decide which drugs get funding, the UK’s National Institute of Clinical Excellence uses a measure based on Quality Adjusted Life Years (QALY). This simple idea redefines value away from pure efficacy and into a more patient oriented definition of quality of life. Payers are also trying to shift more of the financial burden onto patients so in the future patients will be increasingly important in the decision-making process. All of this has meant that value is becoming more patient-oriented.
CLEAR | 01
This is exciting as it presents huge opportunities to healthcare companies to differentiate and create more value. The provision of services, integrated treatments, physician, patient and carer support has the potential to improve outcomes and affect QALY. It even has the potential to align treatment and reduce costs across the illness journey. Organizing and innovating around patient’s lives can improve outcomes and better meet the demands of payers, but it isn’t widespread yet. This is because being more patient-centric requires change. In a study we recently conducted in the USA with over 100 senior marketers across healthcare, B2B and retail, we found that healthcare was by far the least customer-oriented industry. Not one of the 33 healthcare decision-makers viewed gathering patient insight as one of their top 7 priorities. This is despite 1 in 5 feeling that insight was being effectively used to drive innovation. 4 No wonder only a third of patients consider pharma companies to be doing a good job. 5 This is a cultural challenge. however, the solution is relatively simple.
There are 3 key strategies for creating more value across the patient journey 1. Gather insight about patient’s lives from multiple sources. AT RIPL A CASE STUDY The context of the lives of some HIV patients can be extremely challenging; being too weak to work and living off benefits, recovering from a drug addiction, or helping family come to terms with the fact that you have HIV. In this context, remembering which pills to take and when can be complicated, particularly when the pills are large and uncomfortable to swallow. A single pill made a real difference to adherence and outcomes for Atripla but creating differentiation and value in the future will require more than just creating a single dose, it will mean bringing more independence, control and dignity to patients’ lives.
The key to creating more value is in understanding where the opportunities to improve treatment efficacy are, across the whole illness journey. Analyzing publicly available health and treatment data allows us to identify where the inefficient treatment hotspots are, and where potential gains can be made across the whole healthcare ecosystem. When combined with insight from patients, carers and family, opportunities to improve adherence and outcomes become self-evident. Family, friends and colleagues can provide insight into the full impact an illness has on a patient’s behavior, performance and social contribution. This provides us with an ability to map the ways in which we can create more value.
2. Capture insight earlier and throughout the development pathway. Marketing and insight tend to get involved once a product has proof of concept or regulatory approval. This is too late. It means that we have lost the opportunity to develop a brand and experience that is truly differentiating, and gather the proof for its impact on QALY.
RESEARCH CREDENTIALS We have used illness diaries and video blogs to gather insight in the sexual wellbeing, analgesics and cough/cold categories. Online blogs revealed an opportunity to provide specific night-time relief for patients who most feared a lost night’s sleep, and to intervene earlier in the illness to reduce symptoms.
CLEAR | 02
PATIENTS
New technologies and techniques in market research enable us to create a far richer understanding of patients’ lives. This can be done in parallel with clinical trials to understand the impact of interventions. Through mobile, online patient diaries, online communities and social media monitoring, we can understand the effect an illness has, how perceptions change over time and the difference specific interventions make.
INSIGHT
VIRGINIA MASON CASE STUDY
PRODUCT PROPOSITION
VALUE PROPOSITION
POSITIONING
COMMS
ECONOMIC & CATEGORY INSIGHT COMMS
The Virginia Mason Spine Clinic combines physicians with physical therapists to provide patients with faster access to care. Since the clinic’s launch, patients at Virginia Mason’s Spine Clinic miss fewer days of work (4.3 vs. 9), and need fewer physical therapy visits (4.4 vs. 8.8). Also use of MRI scans to evaluate lower back pain has decreased by 23%. The clinic now sees 2,300 new patients per year compared with 1,404 under the old system, and it does so in the same space and with the same number of staff members.6
1. Sense about Science - Tallis 2007 2. McKinsey June 2011 3. Chris Viebqcher, CEO Sanofi. 4. Clear Cost of Change Study amongst over Healthcare (33), Retail (36) and B2B (34) senior marketers. 5. PatientView 2013 6. Michael Porter and Thomas H. Lee, Harvard Business Review, October 2013.
CARER INSIGHT
PRODUCT PROPOSITION
POSITIONING VALUE PROPOSITION
SOCIAL INSIGHT
SERVICE PROPOSITION
POINTS OF DIFFERENCE SALES EXPERIENCE
PATIENT INSIGHT
3. Use patient insight to design differentiated value propositions. Insight into the economic and social impact of an illness and the barriers and triggers patients have when it comes to managing a disease enables us to design a value proposition that brings together product and service elements into a differentiated experience. Apple created more value by combining hardware and software into one seamless experience. In healthcare we should be aiming for the iPod + iTunes of disease management. This means combining drugs with campaigns, providing apps that track enable the quantified self with education videos on prevention; providing home delivery of nutrition support and supporting patient communities. By viewing the patient experience as a whole system and designing the experience around the patient can create a positive impact on QALY. This has the potential to improve satisfaction, change outcomes, and even reduce costs. If you’d like to hear more about How to Create Value in a Time of Change, please get in touch. James Osmond, CEO Jameso@clear-ideas.com Adam Rowles, Head of Business Development Adamr@clear-ideas.com
In summary, due to the political and economic changes we have seen in recent years, we need to radically innovate the business model of healthcare. The key to success is clarity on how to create value in this changing context. Healthcare companies have the potential to create more value by using new insight tools to understand patients’ lives more deeply and so design more relevant and differentiated value propositions. Designing and integrating systems around the patient is the way that healthcare can dramatically improve human life over the next 200 years and still be affordable.
Clear is a global marketing strategy consultancy. Over the last 10 years we’ve worked with some of the world’s leading pharmaceutical and healthcare companies, including Novartis, GSK, Pfizer, and Reckitt Benckiser. CLEAR | 03
EXPERIENCE DESIGN