Off the Grid

A few weeks ago, I was privileged to walk with several thousand other Chicago folks to protest all the hundreds of children shot in our city over the last year or so.  The march took place in the evening and ended in front of the old Cook County Hospital.  Looking at  the architecturally distinctive hospital I couldn’t help think how many people have walked through their doors for free medical care in their ER, trauma centers or outpatient clinics.  As everyone was listening to all the speeches, I was wondering if IMS measured all the prescriptions written in their clinics or how ZS considered these type places in their models for sales force alignment.

The Huffington Post had a piece last week discussing the huge growth in community health centers, where many poor and uninsured go for medical services.  They report that there has been an 18% growth in usage over the last three years with now over 20 million people receiving care in these clinics.  There are 8500 of these clinics around the US and the article announced a large government expenditure to build even more of these facilities in the near future.  Many of these clinics have their own pharmacies for those who use the facilities.  Again, the question would be how much of this business is captured in the numbers used by the industry to measure prescriptions and allocate resources.

If you are wondering how big these type of medical settings might really be take a look at the Health Resource and Services Administration web page where this division of HHS talks about the 340B Drug Pricing Program.  Look at all the various type clinics, centers and services that qualify for these deeply discounted drug prices.  If you really study this site and look at the FAQs you will see that patients that use these facilities can all get the discounted drug prices and they don’t even need to be officially signed up for Medicaid.  There is a wide variety of ways these drugs are distributed to patients and one again wonders how much of this business is tracked by the industry.

As the economy continues to struggle along, and unemployment does not seem to be getting a whole lot better, these type of facilities are becoming much more important to the delivery of healthcare in our country.  Even as people go back to work, they often get jobs without healthcare insurance and they still need to use these clinics.  At one time these type facilities were viewed by the industry as a minuscule part of healthcare but one might argue now that they have become more mainstream.  When IMS reports that doctor visits were down the last couple years I wonder if it is because more and more people were using these type facilities where it may be more difficult to accurately measure what is happening.

I fully recognize why many people don’t pay much attention to this part of the healthcare world.  Selling drugs at heavily discounted prices, even if you could, makes the ROI not quite so attractive.  There was a time when companies would aggressively try to get their drugs into hospitals and health clinics even at nominal prices as they recognized physicians in training needed to be aware of the brand name drugs and there was the hope that patients using the drugs would eventually move into the more “traditional” parts of the system.  These are two points that are still worth considering.

Perhaps the biggest thing to recognize from all of this is just how many patients, physicians and other healthcare providers don’t fall neatly into private offices that use neighborhood pharmacies.  Healthcare is now delivered in a plethora of settings and drugs are written and distributed in a wide variety of ways.  If marketing strategies and tactics are developed only using tracked prescription data and physicians that fall into decile buckets, many opportunities may be missed.

Start to notice the number of places healthcare is delivered and then really determine if the data you use to run your business includes what happens in those facilities.  Think about whether your competition looks at the same data you do and if they have made greater strides to enter the broader market.  Some companies are much better working the system that is “off the grid” than others.  Recognize the trends and constantly evaluate when and where market expansion may be wise.

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