Well this is a little late, but here goes anyway. At the very start of the year I interviewed Katherine Binns, who runs Harris Interactive’s Strategic Health Perspectives (SHP) program. SHP is a survey based research program that interviews virtually all the major players in health care and has done since the late 1980s. Back then it was called Health Care Outlook and was run in conjunction with the Institute for the Future. IFTF has since gone in a somewhat different direction with its Health Horizons program, which looks further out into the future and focuses as much on the wider meaning of health as it does on health care. SHP is focused on the next couple of years in the health care marketplace and has great up to the moment data on the realities and attitudes of the key players like doctors, consumers, employers, health plans and legislators. Katherine also has the good fortune not to only have a great team lead by Kinga Zapert to do the actual work, but also within Harris to have Humphrey Taylor and Bob Leitman to add color, and to be able to bring in old friends futurist Ian Morrison, Harvard policy, polling and politics guru Bob Blendon, and industry veteran Bill Rosenberg to help out. Full disclosure–I was part of that team from 1993-1999, but don’t let that put you off!

So what were they telling their clients at the end of last year and beginning of this one?

1) The Demonization of Pharma

The first issue concerns the pharma industry, and as I’ve hinted in THCB before the news on the PR front is terrible. What’s driving the demonization of the pharma industry? Consumers now perceive costs and value are seriously out of whack 61% of the public now perceives generic drugs as very or fairly good value. The number for branded Rx is now at 21%, only 7% above health insurance (and trust me you don’t want a score anywhere close to health insurance!). Incidentally, while overall the public that the pharmas are greedy profiteers and believes that it’s profit margins driving prices, seniors who are of course the most politically important group in health care see prices as being driven up by marketing and advertising. Meanwhile the basic awareness of drug prices being higher here than other countries is getting out. In 2000 41% knew that drug prices were much higher in the US than in other countries, and most of the rest just didn’t know. By 2003 that number is up to 63% and as consequence the re-importation furor won’t go away. Here’s a very recent Harris poll showing that people know health care (read: pharma) prices are higher here in relation to Europe, know that every thing else is cheaper here, and don’t like it.

One by-product of this is that trust in the pharma industry has dropped by 30% since 1997. They used to be closer to the top of list at 79%. By mid-2003 they were at 49% with a fall of 10% in the previous year–and these numbers were before the anti-AARP anti-pharma backlash following the Medicare bill. This means that there is plenty of mileage yet for the Democrats in bashing the pharma industry and linking it to Bush and the Republicans–so expect plenty more where that came from.

2) Consumers and the impact of cost shifting

Cost shifting and rising out of pocket costs really are beginning to be felt by consumers. Harris has created a schematic of three levels of consumers. The "Trade-up Players", the "Reluctantly Empowered", and the "Needy Shoppers". When they first developed this schema in the late 1990s, of those who were forced into a choice in terms of health plan and/or medical selection, there was a roughly 1 to 2 ratio of trading-up to trading-down. The ratio has now changed with even more trading down, or more value shopping. This has also been associated with increased non-compliance (as has been shown elsewhere in terms of the impact of three tier formularies). Whether the non-compliance is caused by out-of-pocket costs or by tiers, the higher their rates of non-compliance (such as pill splitting, not filling Rx, or delaying care) is in direct relation to out-of-pocket costs going up. Finally, the needy shoppers are going to the Internet instead of going to the doctor. Harris found that those with increased out of pocket costs in last year have had fewer in doctor visits and have increased their cyberchondriac use of the internet.

3) The Employers and the CDHP mantra

Employers have bought into the CDHP mantra to some extent, although in their view it’s not really any different from cost shifting. Employers say that higher out-of-pocket cost forces employees to be wiser consumers. However, they also think it makes them forgo needed treatment when they have a higher out of pocket cost at point of care. And they do believe that if employees get the chunk of money up front they are less likely to go for care. However, compared to cost sharing at the point of care (via copays and deductibles), employers are less concerned that CDHPs will lead to consumers making bad decisions about their healthcare needs.

However, like managed care products in the 1990s the Harris conclusion is that CDH is a phase. Harris asked the same questions about CDHP as it use to ask about managed care; employers are still confused, cranky, aimless and spineless. And they’re not sure that they’ll save money from this brave new consumer world.

Of course this year the role of health care in insurance disputes is picking up, particularly in the recent grocery workers strike in California.

4) So who’s happier then?

In a somewhat stunning reverse, the crankiest people in the health care system are happier than they were 5-7 years ago. Yup, the doctors may be furious with the lawyers, but they’re no longer so pissed at the government or more particularly the managed care UR nurse, since she stopped calling a couple of years ago. How long their distemper will stay improved is anyone’s guest. But it’s a significant barometer when the most appalling person a doctor can think of is a lawyer (even if he is John Edwards).

You can get more information about SHP and Harris from Katherine, but be warned, they’re not quite as competitively priced as THCB!