The Secrets of Medical Policy

This is a modified version of a presentation I gave at the Clinically Validated Digital Therapeutics meeting in December of 2019.

Please note: This is an edited transcript of a presentation and therefore is more conversational in tone than most of my other posts.

I wanted to give you a perspective on how payers make decisions. I want to tell you not just what they do, but also how they do it, how they think, and how they feel.

Because it’s impossible to look at your business like an outsider, and so easy to become inwardly focused and miss opportunities, I help companies identify ways to innovate their business models so they can accelerate growth.

It’s also very hard to keep up on the trends that are going on in healthcare today and be able to navigate the ecosystem successfully. I help companies make better strategic decisions so they can avoid mistakes that could either delay revenue generation or could create even bigger problems.

Over the course of my career, I’ve been a catalyst for product and portfolio growth and organizational transformation.  I’ve had several diverse experiences growing products and portfolios in large multinational companies like Baxter Healthcare and Mylan pharmaceuticals. My time at Highmark Health has given me a truly unique perspective that others just don’t have.  

I’ve founded two successful companies.  One is a healthcare consultancy working with VC startups and other small companies in medical devices, diagnostics, or other MedTech categories.  The second was a regional medical device distributorship that included a portfolio of six medical devices used for plastic surgery and cosmetic procedures.

I perfected my commercialization and management approach at Baxter Healthcare where I learned to focus on building sustainable businesses that capitalize on opportunities over the long-term.  This taught me to avoid fly-by-night strategies that would ultimately create problems down the road.  I’m a coach and a mentor who has helped others do the best work of their careers.

My background is technical achieving my Bachelor’s in chemistry and my MBA with a focus on Global Finance. I’m a member of the Board of Directors at Facing Forward which is a nonprofit in Chicago working tirelessly to end homelessness.  I’m the author of the ‘Selfish Career,’ a book about taking ownership of your professional life which is available on Amazon for purchase.

I thought we’d start by delving into the mind of the payer and IDN. These are verbatim that I have heard routinely during my time inside the payer environment. They are a good sampling of the types of thoughts that payers have and are representative of the feelings they express.  It’s a window into the culture of payers as well, and what they return to over and over.

I hear a lot of manufacturers talk about how surprised they are that payer personnel don’t get excited about the innovations they are bringing to market. Payers are faced with so many different vendors all saying the same thing. In their eyes, manufacturers are only solving one small piece of the puzzle while they are dealing with significantly more complex problems as they attempt to control costs and deliver quality care.  It’s important to note that when you are talking with payers and IDNs they feel like they are the real advocate for the patient, and they are the ones who have the real interest of the patient in mind. To them, everyone else has some sort of ulterior motive or agenda.

Because of these reasons, it’s important when communicating with them to make sure you are connecting with them on an emotional level that is centered on improving patient care and helping patients manage their pocketbooks. This focus during your conversations can help you cultivate a positive relationship.

So what do payer personnel feel?

You’ll notice that there are a number of feelings that seem to be diametrically opposed. This is important because I wanted to make sure everyone understands the payers don’t think or act in only one way. Just like every other customer they have different problems, different approaches, different actions, and different feelings.

As you approach them you will definitely feel some skepticism, likely because other manufacturers have made promises that didn’t turn out to be true. But you also sense optimism, as they continue to seek out new ways to make patient care better. They see first hand how the pace of innovation is increasing, and are excited at the possibilities that exist in the future.

It’s very important to recognize their desire for risk avoidance, which balances out the desire for increased innovation. I do believe too many people forget that health insurance is a business grounded in risk management and mitigation. Because of this, most of the company cultures are built around the goal of trying to make sure that nothing bad happens. They minimize the downside and work to decrease variability in an effort to control costs. Therefore, it’s very important to make sure you are cognizant of the language you use so you don’t unintentionally say something that can turn your audience off.

I want you to know this information to help you communicate more effectively so your innovations aren’t viewed so skeptically and actually are adopted.

Be cautious of using phrases like disruption or innovation when talking about how your company is going to radically change how healthcare works. While these things seem exciting and you are trying to demonstrate the impact you deliver, the flipside is that you’re telling a story that can be interpreted as introducing extreme variability and lack of control into a system where predictability is very important to your customer.

Moving on past the feelings of individuals working at a payer, let’s understanding what they are really looking for. More than anything else, they are solutions to their problems.

Digging in and really trying to understand their hierarchy of needs is critically important. Understanding the problems that they been trying to solve, yet having been successful in doing so, is a great place to spend your time. When you’re in front of your customers and you’re having conversations with them, make sure you’re presenting things in a solution oriented fashion with customer needs at the center.

Over the course of the last year and a half as I have been talking to companies, the number one question asked is about how payers make the decision to cover a product.

Medical policy is designed to establish just three things. Those things are medical necessity, efficacy, and the safety of a product.

Medical policy professionals consider four key areas which help them validate the effectiveness, usability, and economics of a product. What I’ve noticed however is that most manufacturers overly focus on the evidence category when giving payers information, which limits their chances of adoption. It’s very important for everyone to know is that while clinical evidence is a very important piece of the puzzle, is not the only piece of the puzzle.

When the medical policies staff goes to evaluate a product there really focused on what problem it solves, what improvement it makes, and then use this framework to make the best decision they can. The first thing they do is to look at what other national or regional payers are doing with regards to a new technology. They will benchmark whether or not it’s covered by other payers. In the case of a Blue Cross Blue Shield affiliate, they will look to the blues Association as a reference. Their goal is to figure out how excepted your product is in the market and whether or not they would be doing something different than the norm if they covered your product. This is where you can really get hurt if you are a newer technology or if you are truly disruptive. You can be seen as an unknown or as something that is too risky.

If the payer doesn’t find evidence that your product has been covered by other payers, they will balance the information they are collecting by talking to clinician key opinion leaders. This could be at a local level, within the health systems most associated with their plan, or could be at a national level and using thought leaders at other health systems that are more nationally known. Going to clinicians in academic centers is very common. While plans don’t want to be overly risky, they do want to understand and be part of the adoption of valid innovations that can help improve clinical care, radically change the economics of care delivery, or would be a marketable technology that makes them look good to prospective patients.

The last category is off everyone’s radar. Payers evaluate the current treatment pathway and how a new product changes that pathway. They want to understand if it is significantly changing how providers are delivering care, if it changes ways of working or how the provider’s office may function. They are very sensitive to clinician disruption. You have to be cautious how you discuss your offer when you are significantly challenging the status quo by suggesting the replacement of one category of products for different one. If the product category is entrenched and ingrained in the workflow of the clinician’s office or treatment algorithm, sometimes it can be viewed as so disruptive the clinical or economic benefits don’t outweigh the ‘provider abrasion’ the payer will have to manage.

If you aren’t thoughtful in how you structure and plan your conversations, you can find yourself in an uphill battle against both providers and payers as they face the challenges of changing practice habits and behaviors that have been ingrained in doctors for decades..

I’d like to say one last thing about medical policy.

One of my favorite sports is fly fishing. But I don’t get to do it often enough and the fact of the matter is that I’m bad at it. Whenever I go out West, and have some time, I track down a local guide to take me out for the day and make sure that I catch as many fish as possible. They know exactly where the fishing holes are, know exactly what flies to tie. But before I can hire that guide, I have to stop by the Department of Natural Resources and get a fishing license.

Medical policy is the equivalent of going to the Department of Natural Resources and getting a fishing license. All it’s doing is giving you the opportunity to fish. It’s not guaranteeing that you are going to catch anything at all. This is also why I work with small and medium-sized companies as a commercial advisor. I know where the fishing holes are, I know what ties you have to tie, and I know how to get them in the net.

Care pathways however are the place after achieving medical policy coverage where you can amplify adoption and impact. They are pathways or roadmaps for how care is delivered and how patients are treated for any specific given condition. They are first and foremost designed to reduce variability and make sure that sub-optimal or ineffective therapies are not used. They are also designed to ensure that a minimum effective level of care is given. Care pathways start when a patient presents with a given set of symptoms, carries through an assessment and determination of their condition, and establishes the treatment algorithm which balances both effective treatments and economic costs. It maps out what happens when treatments fail, what the hierarchy of alternatives may be for given patient and how that patient is reassessed or what follow-ups need to happen.

When you have innovations that you are marketing, you can work with payers to identify if there is a specific care pathway that applies to your product, you can identify where along the care pathways your product may fit in. Once included, the care pathway can drive uptake in the adoption of your product. Usually these care pathways are executed through health information and EMR systems driving compliance from providers to utilize the products that are in the care pathway.

Given the complexity of medical policy and care pathways I tried to develop a product value algorithm that will help you develop and document the right information to give payers a comprehensive set of information.

Step one is to define and bring to life the current situation of how care is delivered currently. You would be surprised at how many people at a payer don’t fully understand what care delivery looks like for a given condition. If you take a step back and think of all of the disease states and conditions that are out there, you can imagine how difficult it is to stay up to date on every single one in an ecosystem that is as complex as healthcare. Your ability to articulate what care delivery looks like for that given condition, and being able to educate them on gaps in their knowledge will be an important value add that gives you credibility and helps you connect with them emotionally as you walk through the challenges every day patients face.

I then outlined questions you need to answer related to your product and reference back to the current situation of sub-optimal care. This will help you describe the ways your product is different and how it drives better clinical or economic results.

Lastly, being very descriptive about the about the product value must be done thoughtfully. Bringing clarity to what benefits your product brings and how they relate to the problems the payer or providers have is critical. It’s not enough just to see what it does, you need to focus on the problem it solves both clinically and economically. You can amplify this if you can discuss in a granular way the emotional benefits that may come about for your patient and how it can change their life.

Lastly, I’d like to give you a few tips and tricks for the success.

The first one is to develop authentic relationships that are grounded in helping patients and being their advocate. This is an emotional connection that you can make with payer personnel who believe that they are uniquely the only people with the patient’s best interests at heart.

Number two, tell comprehensive stories about your patient, the condition they face, their patient journey, how your product fits into make them better, and the economic, clinical, and emotional benefits your product delivers.

Third, focus conversations with your customer to be solutions oriented and try to help them fix things that are broken.

Lastly, be wary of insincere objections. Insincere objections come about when people ask you to come back to them with more information that likely is not critical to their decision-making process. You’ll often see this when peers are asking for significantly more evidence after an FDA approval or clearance, if they are asking for more detail on product adoption in other systems, or if they are looking to do pilots because they don’t believe straightforward economic or mathematical calculations. If you get the feeling that you’re getting an insincere objection, dig into their strategic priorities, and the greatest drivers of their business. If the greatest economic drivers aren’t aligned with the clinical problems your product solves, it’s possible they feel like there are bigger fish to fry. In their eyes, the amount of effort it takes to implement your product will not pay off and they are looking to spend their time elsewhere.

If you’d like to discuss how these principles apply to your business, or how I can help you navigate the changing healthcare ecosystem feel free to contact me directly by scheduling a meeting through my shared calendar at calendly.com/bgm