Wrapping Services Around Products: The New Pharma Model

File under: Digital Health, Healthcare innovation, Patient Engagement, Pharma innovation

“The home is ultimately going to be the major site of care for all but the sickest patients.”

This from an interview with George Halvorson, CEO of Kaiser Permanente, in which he expounds about healthcare reform and the vertically integrated model that is Kaiser.

Essentially, he’s saying that we will move from the traditional office-centric model to a new approach using technology like e-visits, e-connectivity, remote patient monitoring and smart phone apps to support home-based healthcare. Technology will be the backbone of patient care in a world in which more people are covered by health insurance and there is a shrinking population of primary care physicians

Technology and Patient Empowerment

Halvorson’s remarks suggest that the trends we’re seeing in patient empowerment, like The Quantified Self and websites like Patients Like Me, are all part of a future in which we won’t spend time in a hospital unless we are really sick. And we may actually be spending less time in a doctor’s office, too.

This brings up many questions. What does this mean for prevention? For treatment? How do we use technology to enable people to live healthier lives so that they don’t even need to use the healthcare system? And, ultimately, when we do need the healthcare system, how do we support the home environment to provide for effective treatment?

And what role will pharma play in an integrated healthcare delivery model?

prod serv 2The New Reality for Pharma
This comes back to a theme that I’ve talked about in the past. There is an important role for pharma in this new reality, but it means a change in identity from product manufacturer to healthcare services. Pharma has an opportunity to play a larger role in health services that enhance the value of the products it already provides.

Examples of Products + Services
For example, Google’s basic product, online advertising, provides most of its revenue. But they’ve surrounded it with all kinds of free and interesting analytical, coaching and survey tools. Google offers many of these services for free, like Google Analytics. These aren’t simple “freemium” products, however. They are serious tools. But Google knows that offering them for free enables adoption by the very people they want as customers, thus enhancing the value of their core business.

Brokerage firms make their money on investment products and trading. But they often offer free advisory services and retirement counseling to help clients build retirement models.

Banks are another example. I had a meeting a few weeks ago with a banker who was an also expert in health insurance plans. He had been hired specifically to advise the bank’s clients on innovative health insurance plans and models – advice that I would have had to pay for had I gone to a consultant. But the bank felt this was a service that they should offer their customers, wrapped around the core banking products where they make most of their money.

Pharma + Services?
So, consider pharma. We’ve got products – that’s our core business, our core revenue model. But there’s also tremendous potential in the services that could be wrapped around pharma products. Recently, we had an internal agency meeting about a couple of accounts – both in the metabolic category. I asked what else the brand teams were doing around the products to provide other services that would help people lose weight and exercise more. Crickets…

If there was a total solution that had a user-friendly meal planner, an exercise tracker and a rewards program wrapped around a pill offered to the patient as a total package, maybe that could tip the scales (so to speak). That package would not only be an enhanced service, but the total solution would likely increase the outcomes effectiveness of the product.

Services enhance outcomes
In a world where healthcare, and eventually pharma, are going to be reimbursed for outcomes and not just for products or services, we need to think about how we can provide a better outcome profile for our products. If a company can help a patient lose weight through better eating and exercise in addition to their pill, they will produce far better outcomes, giving them a much better story to tell.

The biggest missed opportunity would be to think of a pharma product itself as a total solution; there needs to be a total shift in mindset. We’re in the business of helping people live healthier and enjoy a better quality of life. The new mindset needs to be that when a product is prescribed, the patient is really getting a complete set of services and tools.

This “whole product” approach will earn pharma a place at the table when it comes to building new models for patient and consumer independence.

Pharma + 30,000 Mile Bumper-to-Bumper Free Service
Typically when you buy a car, you get three years or 30,000 miles of service included. The services are part of the package that comes bundled with the car. That’s what we need to do – find a way of wrapping services around a pill so they just come with the product. It’s part of a regimen — the patient takes a pill once or twice a day and is also given coaching for eating better, so they actually start to feel better.

The pill and services work together. Doctors are not just prescribing a pill, but a plan. They inform the patient that the pharma company supports its product with extra services like an exercise program, a three-month gym membership, access to a recipe finder and calorie counter or health-focused apps for their smartphone.

It’s this total lifestyle approach to healing and health that is needed to make the home a viable place for healthcare.

Building a platform that has impact
A platform of products and services can be pharma’s contribution to George Halvorson’s vision of the home becoming the primary site of care. It is a necessary step in the evolution of healthcare services in the US, and there is a path for pharma to play an over-sized role.

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  • Adrian Smith

    I wish this idea of true continuity of care could happen more in the Type 2 diabetes community or in the ‘progressive illness’ space. Most brands within these spaces have ultimately moved to becoming service brands. Alot of progressive conditions, such as diabetes, or high blood pressure are not actively monitored by patients “in between visits” so it leaves us (the marketer), left trying to figure out how to best position the brand as a service that aligns with their lifestyle (or the manner in which we want them to treat). It’s difficult if pharma isn’t ready to take the leap of faith and have a creative (oops..REAL CREATIVE STRATEGY) to drive the effort. This is a great ‘write up’ because it will challenge me, specifically, to come up with innovative ways within the metabolic franchise to sustain whatever is left. There seems to be opportunities in managed care/insurance, elevating the service offering of the brands and ‘out of office’ or continuity of care practices that can be started at patient point of care prior to them leaving the office, but must be pulled through in a fun and effective way. Sorry for the rambling…some very interesting points you touched.