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Creating Satisfied Patients Begins With Developing Satisfied Employees

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‘The core issue in health care is the value of health care delivered,’ wrote Michael Porter in a paper titled, ‘Value-Based Health Care Delivery,’ published by the Institute of Strategy & Competitiveness of Harvard Business School (ISC-HBS) on January 15, 2014.

Building on this concept, EY in its 2018 edition of ‘New horizons: Executive insights on the future of health’ articulated: ‘Value-driven care means delivering the best clinical outcomes with optimized costs, while delivering a satisfying experience for patients and providers.’

Creating a ‘satisfying patient experience’ – or ‘satisfied patients’ for its brands, being the ultimate objective of a drug company, I shall add an interesting dimension to it, in this article. And that is: Will it necessitate creating satisfying employees within the organization to achieve this goal? To build a right perspective in this direction, let me begin with the core concept of Michael Porter on this subject. This starts with – what is generally regarded as ultimate ‘value’ to patients, in healthcare delivery?

Defining ultimate ‘value’ in health care delivery:

Porter defined this ‘value’ as ‘patient health outcomes per dollar spent’. He also made some key assertions in this context, which I am summarizing below:

  • Delivering high and improving value is the fundamental purposeof health care.
  • Value is the only goal that can unite the interestsof all system participants.
  • Creating positive-sum competition on value for patients is fundamental to health care reform in every country.

Are these assertions attainable?

To create ‘Value-Based Health Care Delivery (VBH),’ the people would also need a ‘Value-Based Pharma Industry (VBP)’, delivering ‘Value-Based Medicine (VBM)’, for all. The three key principles for any VBM are considered as follows:

  • Thoroughly selected values must be based on the best research evidence available and applied as treatment options. 
  • Values for patients are converted into measurable utility values to facilitate the integration.
  • The cost-utility level expected from selecting a particular treatment option is the basis for decision-making.

In other words, the whole purpose of offering a VBM is to provide cost effective, science-based healthcare that incorporates patient values. Nonetheless, effective implementation of both VBH and VBM would entail a radically different leadership mindset, with quite a different set of success requirements, both globally and locally.

To drive home this point, let me illustrate just the third point of the Porter’s model of VBH, as quoted above. This clearly articulates: ‘Creating positive-sum competition on value for patients is fundamental to health care reform in every country.’ But the current reality of ‘competition’ in the drug industry is far from what it should be, as evident from one of the Brookings studies.

How competitive is the pharma industry to reduce cost of health care?

The Brookings paper titled, ‘Enabling competition in pharmaceutical markets,’ published on May 02, 2017 shares its research findings on the subject, which in a broader context include the following points:

  • Over the years, industry participants have managed to disable many of the competitive mechanisms and create niches in which drugs can be sold with little to no competition.
  • When manufacturers can earn high profits by lobbying for regulations that weaken competition, or by developing mechanisms to sidestep competition – the system no longer incentivizes the invention of valuable drugs – incentivizes firms to locate regulatory niches where they are safe from competition on the merits with rivals.
  • But, health care system performs well when competitive forces are strong, yielding low prices for consumers, as well as innovation that they value.
  • Weak competitive forces often lead to a lack of market discipline with high drug prices and are more damaging to in the pharma consumers than some other sectors.
  • Without strong competitive conditions, healthcare expenditure will continue to grow, inviting public demand for drug price regulation through legislation.

These findings provide enough reasons to ponder how to overcome the barrier of ‘Creating positive-sum competition on value for patients’ to move towards VBH.

The good news is, VBH concept was soon put to use:

The good news is, soon after publication of Michael Porter’s paper – ‘Value-Based Health Care Delivery’ by (ISC-HBS) on January 15, 2014, it was put to practice by the American College of Cardiology (ACC).The article titled, ‘A New Era of Value-Driven Pharmaceuticals’, published by Health Standards on May 21, 2014, reported it.

The article wrote, at the end of March, the American College of Cardiology (ACC) and the American Heart Association (AHA) issued a joint statement saying they “will begin to include value assessments when developing guidelines and performance measures (for pharmaceuticals), in recognition of accelerating health care costs and the need for care to be of value to patients.”

The authors pondered, ‘are we entering a new era of value-based medications or value-driven pharma?’ There are several such reports. For example, another article titled, ‘Value-based healthcare’, published by the ‘Centre for Evidence-Based Medicine (CEBM)’ observed, value-based healthcare has emerged as a field of its own – feet firmly founded in ‘Evidence-based Medicine’ or ‘Value-Based-Medicine.

VBH concept is slowly gaining acceptance:

EY in its 2018 edition of ‘New horizons: Executive insights on the future of health’ also reiterated this point. The paper mentioned, ‘the trends of reducing costs and improving outcomes show no sign of receding, and new models for delivering health care are only adding pressure to traditional brick and mortar facilities.’ It further highlighted, some pharma companies have started systematically reviewing the business processes, procedure and patient interface within the organization to identify and eliminate waste and inefficiency.

But, still a lot of ground to cover:

In this regard, EY Health Advisory Survey 2017 came out with several interesting findings based on the responses of 700 qualified healthcare professionals. One such finding is, although high importance is attributed to creating both – a good ‘patient experience’ and a meaningful ‘patient engagement’, but a lot less is done on the ground. This was supported by the following data:

  • 93 percent of respondents reported, they are undertaking ‘patient experience’ initiative that year, but only 26 percent of them selected patient access or satisfaction as one of the top three for the same.
  • Although 81 percent of the professionals said ‘patient engagement’ is considerably important to them, but most of the top initiatives undertaken by their organizations don’t directly involve soliciting and analyzing patients’ needs and wants.

‘Employees satisfaction’ a prerequisite for ‘patient satisfaction’:

The same EY Health Advisory Survey 2017, found many respondents articulating that ‘employee satisfaction’ is a prerequisite to ‘patient satisfaction’. However, its importance gets diluted whiling translating the same into reality, as vindicated by the following finding:

  • 51 percent of respondents believe that employee satisfaction in health care drives patient satisfaction, but only 35 percent said that their organizations have already initiatives underway to create more positive work and environment. Interestingly, only 10 percent of them have undertaken any employee satisfaction survey soliciting employee input.

It is quite apparent from this situation that leaders of respective organizations don’t walk the talk, especially in this critical area. Harmonization of ‘patient satisfaction’ as a critical success factor for delivering VBH, with the core business value of the company, is not taking place. A deep-rooted belief that success in developing mostly transactional and partly emotional relationship with the heavy prescribers is the only ‘magic wand’ for business success in pharma. Thus, the old habits die hard, even today.

Conclusion:

Despite several barriers in its way, for a long-term survival in business, hopefully, many pharma companies would willy-nilly move towards delivering ‘value-based health care’ through ‘value-based medicine.’ This would necessitate having a clear goal to create an increasing number of satisfied patients for the brands. There are ample evidences today that ‘employee satisfaction’ is a basic prerequisite to ‘patient satisfaction’, where many drug companies are lagging behind, significantly.

Only the movers and shakers in the senior leadership of pharma industry can break this status-quo. It may be initiated with – example-setting activities, which should enable giving shape to developing a set of standard operating procedure – culminating into the culture and value for the organization.

Nurturing humane approach to employee commitment for creating satisfied employees is the primary step of this important initiative. Then, encouraging their active participation – willingly, to bring patients at the center stage of pharma business, should be the ongoing process.  It’s, therefore, imperative to note - the goal of creating ‘satisfied patients’, should always begin with developing ‘satisfied employees.’

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Leading Through The Challenge Of Change: Is Pharma Leadership Too Archaic?

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A recent major global survey titled “Testing The Health Of The Pharmaceutical Industry” has revealed that a sizable majority of executives polled, though believe the sector is in good shape, are concerned of its reputation. Interestingly, 73 percent of respondents believe that pharma companies should become “Genuine Healthcare Providers”.

From many other reports, as well, one gets to know that the overall image of the global pharmaceutical industry, despite the high profile personas being on the saddle, is currently as good or as bad as the same of, say, Tobacco or Alcoholic beverages sectors. Lamentably, the common perception is that the industry is hugely self-serving, problem making, largely exploitative and mostly surreptitious in its dealings.

This perception prevails, despite the fact that pharma industry exists to help mankind fighting against diseases continuously, thus improving the quality of life, quite unlike the other two industries, as indicated above.

Media reports on ignoble acts of this otherwise noble industry keep coming in tidal waves regularly and unabated, from many parts of the world, the latest being the alleged mega bribery scandal involving the large global majors in China, besides many others.

While industry leadership is generally smooth articulators, ‘Talking the Talk’ and ‘Walking the Walk’ slogans in the frontiers of ethics, values and shared goals of many of these much reported companies, are probably used to run expensive global ‘Public Relations (PR)’ campaigns, lobbying and advocacy initiatives in the corridors of power.

What then could possibly be the reason of such perception gap that this great industry is allowing to increase, over a long period of time? Could it be that pharma collective leadership has not been able to adequately adapt itself with the demands of changing healthcare environment and the needs of various nations in this space, across the globe? Is the leadership, therefore, too archaic?

Is Pharma leadership too archaic?

In this context, an interesting article titled, “Healthcare Leadership Must Shift From Cottage Industry To Big Business”, published in one of the latest issues of Forbes, though deals with issues pertaining to the ‘Healthcare Industry’ in America, nevertheless makes some interesting observations, which are relevant to India as well, just as many other countries of the world.

It states that the ‘Healthcare Leadership’ has not kept up with the industry’s evolution to big business over the past 25-30 years – nor does it possess the required change management competencies to effectively lead and rapidly turn-around an adaptive healthcare business model.

As a result, unlike many other knowledge industries, pharma sector is still struggling hard to convert the tough environmental challenges into bright business opportunities.

Inward looking leadership?

From the available details, it appears that today, mostly inward looking pharma leadership tends to ignore the serious voices demanding access to medicines, especially for dreaded diseases, such as, Cancer. Instead of engaging with the stakeholders in search of a win-win solution, global pharma leadership apparently tries to unleash yet another barrage of mundane and arrogant arguments highlighting the importance of ‘Drug Innovation’ and hyping how expensive it is. The leaders do it either themselves or mostly through their own funded trade associations.

In tandem and unhesitatingly, the leadership and/or their lobbyists reportedly exert all types of pressures even to get the relevant laws of sovereign countries amended or framed to further their business interests. The leadership continues to demonstrate its insensitivity to the concerns of a vast majority of patients, other stakeholders and their respective governments, further reinforcing its self-serving image.

Does anyone really talk against ‘Drug Innovation’?

The moot question, therefore, is: Why is this hype? Who on earth really talks against drug innovation? None, I reckon. On the contrary, drug innovation is considered by all as absolutely fundamental in the continuous combat of mankind against a galore of ailments. It should certainly be encouraged, protected and rewarded all the way, following a win-win pathway for providing access to these innovative drugs for all. There is no question about and no qualms on it.

Insensitive comments do matter:

Insensitive comments from the leadership further widens the perception gap. Let me give two examples:

I. Recently while justifying the price of US$ 1000/tab of the Hepatitis C drug Sovaldi of Gilead, the CEO of Sanofi reportedly highlighted, “Unprecedented innovation comes at a price.” This is of course true, but at what price…US$ 1000/tablet? If this comment is not insensitive and outrageous, does it at least not smack of arrogance?

II. Another such insensitivity was expressed through reported proclamation in public of the Global CEO of Bayer, not so long ago, which clarified that: “Bayer didn’t develop its cancer drug, Nexavar (sorafenib) for India but for Western Patients that can afford it.” Incidentally, the above comment came from the same Bayer whose research chemists synthesized Prontosil, the first antibiotic, in 1932, more than a decade before penicillin became commercially available. Prontosil and subsequent “Sulfa” drugs – the first chemicals used to treat bacterial infections, ushered in a new era for medicine, saving millions of lives of patients globally. At that time, the then Bayer CEO probably did not say that Prontosil was developed “just for the Western Patients that can afford it.”

‘Inclusive Innovation’ for greater access:

Any innovation has to have an impact on life or life-style, depending on its type. Each innovation has a target group and to be meaningful, this group has to have access to the innovative product.

So far as drugs and pharmaceuticals are concerned, the target group for innovation is predominantly the human beings at large. Thus, to make the drug innovation meaningful, the new medicines should be made accessible to all patients across the globe, with social equity, as per the healthcare environment of each country. This underscores the point that drug innovations would have to be inclusive to make meaningful impacts on lives.

New age pharma leadership should find out ways through stakeholder engagement that innovative drugs are made accessible to majority of the patients and not just to a privileged few…fixing a price tag such as US$ 1000/tab for Sovaldi, Sanofi CEO’s above comment notwithstanding.

Leadership lessons to learn from other industries:

Traditional pharma leadership has still got a lot to learn from other industries too. For example, to speed up development of electric cars by all manufacturers, the Co-Founder and Chief Executive Officer Elon Musk of Tesla Motors has reportedly decided to share its patents under ‘Open Source’ sharing of technologies with all others. Elon Musk further reiterated:

“If we clear a path to the creation of compelling electric vehicles, but then lay Intellectual property (IP) landmines behind us to inhibit others, we are acting in a manner contrary to that goal.”

In the important ‘green’ automobile space, this is indeed a gutsy and exemplary decision to underscore Tesla Motor’s concern on global warming.

Why such type of leadership is so rare in the global pharma world? Besides some tokenisms, why the global pharma leaders are not taking similar large scale initiatives for drug innovation, especially in the areas of dreaded and difficult diseases, such as, Cancer, Alzheimer’s, Multiple Sclerosis and Metabolic disorders, just to name a few?

Finding cost-effective ways for even ‘Unprecedented’ drug innovation:

Taking a lesson from the Tesla example and also from my earlier blog post, ‘Open Source’ model of drug discovery, would be quite appropriate in the current scenario not just to promote more innovative and intensive approaches in the drug discovery process, but also to improve profit.

According to available reports, one of the key advantages of the ‘Open Source’ model would be substantial reduction of cost even for ‘Unprecedented’ innovations, besides minimizing the high cost of failures of several R&D projects. These, coupled with significant savings in time, would immensely reduce ‘mind-to-market’ span of innovative drugs in various disease areas, making these medicines accessible to many more patients and the innovation inclusive.

Indian Pharma – promoter driven leadership:

Back home in India, fast growing India Pharma businesses predominantly consist of generic drugs and are family owned. A 2011 study conducted by ‘ASK Investment Managers’ reported, “Family Owned Businesses (FOB)” account for 60 percent of market cap among the top 500 companies in India and comprise 17 percent of the IT Industry, 10 percent of refineries, 7 percent of automobiles and 6 percent of telecom, in the country. In the domestic pharmaceutical sector, almost hundred percent of the companies are currently family owned and run, barring a few loss making Public Sector Units (PSUs).

As most of these companies started showing significant growth only after 1970, we usually see the first or second-generation entrepreneurs in these family run businesses, where the owners are also the business leaders, irrespective of size and scale of operations.

However, it is unlikely that the pharma business owners in India would be willing, just yet, to go for a regime change by hiring professional leaders at the helm of a business, like what the IT giant Infosys announced the week last or Cipla did sometime back. Nevertheless, they all should, at least, attune themselves with the mindset of the new age pharma leaders to reap a rich harvest out of the opportunities, at times veiled as threats.

New leadership to be ethically grounded and engage everyone:

Unlike what is happening with the current pharma leadership today, the new age leadership needs to be ethically grounded and engage all stakeholders effectively in a transparent manner with impeccable governance.

Quoting Dr. Michael Soman, President/Chief Medical Executive of Group Health Physicians, the above Forbes article states that in the new age healthcare leadership model, the leader may not have to have all of the answers to all the problems, but he would always have a clear vision of where we wants to lead the company to.

This new leadership should create a glorious future of the pharma industry together with all other stakeholders by asking: “How can we all be part of healthcare solutions?”

Conclusion:

Unfortunately, despite so much of good work done by the pharmaceutical industry in various fields across the world, including in India, the general public perception on the leadership of the pharma world, is still very negative for various reasons. Pharma industry also knows it well.

Thus, around the close of 2007, the Chairman of Eli Lilly reportedly said publicly what many industry observers have been saying privately for some time. He said: “I think the industry is doomed, if we don’t change”.

The available statistics also paints a grim picture of the traditional big pharma business model going from blockbuster to bust with the mindset of the leadership, by and large, remaining unchanged, barring some cosmetic touch-ups here or there.

The old business model – sprawling organizations, enormous capital investments, and spiraling costs, underwritten by a steady stream of multibillion blockbuster products – is simply a pipe dream today.

Has anything much changed even thereafter? May be not. Thus, to meet the new challenge of change in the healthcare space, doesn’t the new age pharma leadership still look too archaic, at least, in its mindset and governance pattern?

Is it, therefore, not high time for them to come out of the ‘Ostrich Mode’ collectively, face the demanding environmental needs squarely as they are, try to be a part of healthcare solutions of a nation in a win-win way and avoid being perceived as a part of the problem?

Effective leadership learning process has always been eclectic, borrowing ideas and experiences from other disciplines. In case of pharma, it could well be from other knowledge industries, such as, Information Technology (IT), Telecommunications etc. But change it must. Not just for business growth creating shareholders’ value, but for long-term survival too, basking in glory.

By: Tapan J. Ray 

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.