David 0:00

Once you have the whole PBM thing figured out, how do you ensure that the people who are getting the meds are actually taking the meds? And why is that a problem? We'll find out on this episode of Shift Shapers.

Announcer 0:15

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David 1:06

And we've asked Ted Mills, CEO of Paragon Health, to help us answer that question and probably some additional questions. Welcome, Ted. Good morning, David. How are you? I'm well, thank you. Thanks for being here. So let's dive right in. We talk an awful lot about compliance. That's the word that we bang around in terms of people taking their meds. What is that exactly? And is that the term and the thought process that we ought to be using?

SPEAKER_02 1:30

It's a great question. You know, it's in very well documented. There's a tremendous amount of clinical research. Every healthcare provider, every pharmaceutical manufacturer, every nurse, everybody will acknowledge that therapy, monitoring, and management of medication is so critical. And historically, and it's it's the way it's run today, is that thinking of medication and medication, uh taking medication, compliance is generally used term. The way that people traditionally track compliance is basically a pharmacist calling a patient and calculating asking them at the end of the month or at the end of 90 days, you know, is the uh how many pills do you have left in your bottle? And human nature will just tell you that people tend to exaggerate a bit. And, you know, and it and so what we think how we've solved the problem or think of the problem is really adherence. Are people adhering to a recommended therapy plan rather than compliance? Compliant with a plan is one thing, but we we've created a an environment in which we can actually monitor on a real-time basis daily, whether people are actually adherent to a plan or not. And I think compliance is fine. That's the general term used in healthcare, but we're really trying to change the conversation a bit because we've got data now, David, that's so much more precise in real time. And so we can actually monitor, you know, if somebody took their medication to the minute today with a variety of tools. So we really view it as adherence and medication adherence and in adherence to a therapy medication plan.

David 2:56

So let's talk a little bit about what the problem is when folks don't take their meds and what the scope of that problem is, both in terms of health and in terms of dollars to plans.

SPEAKER_02 3:06

Yeah. It's a great question. So it varies, right? It varies by disease state, and there is efficacious levels of medication adherence. So if you're prescribed a medication for, let's say, HIV as an example, you have to stay very adherent to that medication therapy plan, 95, 100% for that medication to be the intended effectiveness. Other disease states generally, you know, they tend they tend to be in that 80 to 85% range. So if you take a medication four out of five days, you're generally gonna get the effectiveness of that medication and what it was intended for. But interestingly enough, what happens is when you drop from 80 and go to 75 and 75 to 65, it's like dropping off a cliff. Like there's big gaps in your therapy plan and the medication effectiveness deteriorates tremendously. By and large, human beings tend to be around 55% compliant with their medication therapy. When you add a cold morbid condition, so if you are hypertensive and diabetic, so you have two medications that you have to manage, it drops off even more. So you've got to, you know, you can think of a patient that has two conditions, very critical conditions, high cost conditions, and they go from a and they're diagnosed with maybe a second, the second condition, they'll go from generally 55%, anywhere from 35 to 45 to 50% range. And what you'll find is, and again, there's a tremendous amount of clinical research that shows if somebody drops from 80% to 55% or below, there's a direct correlation with healthcare costs. So there's a direct correlation with hospital readmissions, medication mismanagement, you know, it leads to urgent care visits, it leads to uh impromptu uh lab uh testing, impromptu appointments with the doctors. You know, there's a much better way to be able to monitor and help people and coach them along the way. And there's different reasons why people are not adherent to their medications for different disease states. So we've at Paragon here, we've really built a comprehensive platform, a digital health platform, to really monitor medication in many different forms. It could be a digital inhaler or it could be oral form medications for critical chronic conditions or multiple conditions for a senior citizen. So an average senior citizen, average 65-year-old in the United States is on five medications per day. And that gets fairly challenging for people to manage as they get older and have more medications.

David 5:31

Is there any quantifiable dollar value to what happens when people decrease that rate of compliance?

SPEAKER_02 5:38

Well, there is. Yeah, there's a tremendous amount of research. So you could look at, we often cite hypertension as an example. So if you take a person that is adherent to their medication, so diagnosed as hypertensive, they're adherent to their medication, say 82 to 85% plus, versus a patient that is non-adherent to their medication, there's a tremendous amount of research that shows that that patient will cost healthcare anywhere between $1,900 and $4,400 more per year. And that's per year for that one disease state. And when you think about the prevalence of hypertension in the United States and multiply that by the, you know, the millions of people that have high blood pressure, it's a huge burden on healthcare. And which is why CMS has issued over the last several months new codes to reimburse healthcare providers to compensate them for monitoring their patients in between visits, right? And they here in January they issued some new codes, CPT codes, for specifically monitoring therapy and a patient's response to therapy, and included in that definition of therapy is medication. So CMS and AMA are just dipping their toes into monitoring medication, but they're creating a pathway for physicians to be able to be reimbursed or compensated for monitoring patients. It's all based on the back of there's a new, you know, there's been so much advancements and digital tools available to be able to monitor medication. So I think by and large, what you're gonna see 10 years from now is there's gonna be significant improvements in how we monitor medication digitally, low cost, really efficient, large addressable markets of patients that are gonna be packaged up and put in a format that can really have a significant impact on healthcare costs and clinical outcomes, provide peace of mind for caregivers and loved ones, and really elevate the role of the pharmacist in the care plan. So yesterday I was just reading an article on hypertension that you know it's the silent killer, right? So people with high blood pressure don't necessarily have symptoms. The medications tend to have side effects. And so it's very, very common for a patient to be diagnosed with high blood pressure, be prescribed a medication, they're visiting their primary care physician, they might have a follow-up visit six or nine or 12 months later. They go to their local pharmacy, pick up a medication, and then stop using it because of the side effect. And then what you typically find is that patient will end up going back to the doctor nine months later or whatever it is, some point down the road, still has high blood pressure. Doctor has asked if you've been taking your medication, and then that's at the point in time where the patient says, no, I, you know, the side effects were too much for me. Well, now we've created a pathway for which our pharmacy team, our clinical team, pharmds, can monitor a patient on a daily basis. And we could intervene. We could say, David, you know, you know, you stopped taking your medication, what is it? And you could say, well, you know, I'm experiencing some bad side effects. And so then we could offer up and clinically intervene with your healthcare provider to recommend a different medication, but not let you go damaging your blood vessels for the next six to 12 months and deteriorating, you know, your overall, you know, health system. So these that's just one example. And you can do it by disease state. You can research, there's been a tremendous amount of research of overall healthcare costs tied to medication adherence by, I'm gonna guess, just about every disease state out there. Very well documented.

David 8:56

Are the complications the reason why compliance drops off when you add a second med to somebody?

SPEAKER_02 9:01

Yeah, I think there's a whole bunch of reasons. Some of the simple as just can't remember, right? And so you have one thing you're supposed to do every single day, and then you add on two things, and you just have a tendency to forget. It's really, really common people do it every single day of even taking vitamins. I go into the cabinet and did I take my vitamin today? I just don't remember. It's super common. So you've got the complexity and just forgetting. Uh, you have socioeconomic issues related to cost of medication, right? You have like the silent killer where you don't necessarily see the symptoms of your underlying disease. So if you don't see the symptoms, then you don't have that in quite the incentive to actually take the treatment. That's super common. And then you have the side effects, right? And it's a combination of four or five things that really contribute to, you know, to people. And then another one is too is they don't understand their medication and they don't understand the importance of taking their medic medication to treat and address that particular condition. So in our platform, patient outreach and patient education is super critical. People need to be informed why you're taking a medication, the importance of staying compliant, and then we just prompt people along the way to make sure that they are doing what they're supposed to do.

David 10:12

Well, isn't that the problem that I mean PillPAC's been around for a long time? Isn't that the problem that PillPack thought they were fixing and apparently have not?

SPEAKER_02 10:21

Yeah, you know, I can't comment on whether they have or not. I think adherence packaging such as the PillPAC format has proved beneficial, but I think the beneficial is maybe not quite as as much as you might hope, right? I think it's it's a movement in the right direction, but it's not taking large populations of people to a super meaningful level of uh of compliance. There's certain limitations of those smart packs, right? In terms of how many pills you can put in a pack, the complexity of the regimen, if you miss a pill or you miss a dose, really kind of screws up the sequence of the medication in the pill packs and creates some confusion. But I would say, you know, that endeavor for smart adhere or for adherence packaging is a good endeavor. I mean, they're trying to they're trying to solve for a very important problem, but it it's not the perfect solution, is what I would say.

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David 12:11

Well, I know that you guys talk a lot about unit dose verification. That's right. Is that just a fancy name for compliance, or is there more to that than just compliance?

SPEAKER_02 12:19

You know, we want to be the leader in unit dose verification, meaning we want to digitally record when somebody takes their medication, which the inverse of that means we know when they didn't take their medication, right? So we want to make it as efficient as possible for a patient to work with our pharmacy or our pharmacy partners. And we want to provide them the tools that enhance kind of their patient experience, help improve their clinical outcomes. But really, at the end of the day, we are focused intently on implementing either best in class technology or creating our own technology that we can digitally monitor every single serving. And that information is super beneficial.

David 13:01

Technology-wise, what's on the market now? What's available today? And what do you see coming?

SPEAKER_02 13:07

Yeah. So on the market today, you've got there's, I would say the market right now is generally geared towards aging in place, you know, senior citizens. And there are some devices in the marketplace today that are, again, are trying to solve a very complex problem, provide organization for seniors and peace of mind for their loved ones. So you've got like Hero Health has a device. There's other smart pack devices for monitoring called Spencer Health. These are great tools, and that's what's in the market today. They have their limitations and the complexities associated with programming it and measuring pill size and coordinating with a pharmacy. You've seen the traditional organizers where people put in seven days worth of medication. That's kind of like the baseline. And then you've got Bluetooth caps, right? So there's some Bluetooth injectable pens that are on the market, and there's Bluetooth vials, traditional vials for medication that are on the market. They have not uh experienced mass adoption just yet, but that's changing right now because CMS, as I mentioned, is providing a pathway to reimburse people and practitioners for monitoring medication. That medication reimbursement and that medication dispensing has to be done through registered medical devices. So we are just at the tip of the iceberg as it relates to insurance coverage for practitioners to monitor their medication. So you're gonna see an advancement in digital devices. We do not position ourselves as a device company. We're an aggregator of information, right? So we aggregate digital signals from medication dispensing devices. And what we do is we put it in a platform that can be accessed by either a healthcare provider or a nurse or a caregiver, but it's monitored continuously by our pharma d clinical team. So today the tools are really starting to get organized in a way to become very effective. They're getting supported by the government on being able to create a pathway to incentivize healthcare practitioners to use it. Down the road, we're working on some stuff. I can't share it all right at the moment, but we're working on some stuff that is, I would say, very mobile and transient and addresses a very large population with very little complexity to it. So I like to think of us as being a leader in innovation on devices, but we're not a device company. But really, we're, you know, our core strength is monitoring the medication and then the patient engagement and really providing a pathway for very efficient clinical engagement. So using digital signals to identify there's a problem, stratify the risk of a cohort, and send that information to people that need that information.

David 15:42

When you start the patient engagement journey, do you talk to patients using things like the Prochaska protocols or whatever to determine whether or not they're willing to change, ready to change, able to stay on that medication protocol? Or are there other techniques that you guys use? And do you create a relationship, a one-on-one relationship that endures?

SPEAKER_02 16:01

Yeah. The relationship is key. It's super important. So you have to make using these types of tools non-disruptive and very simple. So what you're going to see, and you're seeing right now, and what you're going to see over time, is the idea of reducing friction. So today it's very common for people to have to download an app. So you have to have a smartphone, connect a Bluetooth device, and pair it to your phone. In the case of certain devices, you have to connect your device to the um Wi-Fi network in your home. So that create that right there creates some complexities, but there are is an explosion in cellular capabilities. So we have some products where we can just ship it right into the home. The patient doesn't literally have to do anything other than press the button or put on the blood pressure cuff or use the medication dispensing device. And then we have that read on the back end. But building that patient patient relationship is critical. And one of the fundamental aspects of our strategy is we are the pharmacy, right? We have the clinical pharmacy team. And time and time again, literature and research will show you that the pharmacist is more the most trusted person within the healthcare, I guess, sphere for a patient, they trust their pharmacist more than they trust anybody else. So our pharmacy team is amazing in terms of the outreach with those patients. But patient selection today, when you go into an environment, so whether we're looking at a self-insured employer or we're looking at a healthcare practice, say it's a pulmonology practice and they have COPD asthma patients, or it's a primary care physician and they have hypertensive patients, that patient selection process is very, very important. You know, are we focusing on the patients that will experience the most success, right? That's a very important aspect of what we're doing. So that on the patient selection and onboarding is really critical. And then from there, it's all about relationships. You got to maintain very strong relationships. And as I mentioned earlier, we're elevating the role of the pharmacist. There is a much bigger role that pharmacists can play today in healthcare. There's a shortage of healthcare providers. It's very well documented right now. Uh, you look at the healthcare space, mental health is experiencing a, you know, it's a it's a tremendously bad growth of amount of mental health patients. At the same time, there's a huge shortage of qualified healthcare professionals in mental health. And so you start thinking about these medications and monitoring these young adults and people that are suffering from mental health. We need the tools to be able to help monitor the medication in a much more efficient way.

David 18:26

Well, that was one of the questions I was going to ask you. You know, as we record this in 2022, as you mentioned, we've got this huge mental health crisis. That's the spike everybody's worried about. And some of it has been delayed because of COVID and exacerbated because of COVID and whatnot. How do you reach out to those patients and how do you develop? Is it more difficult to develop a relationship with those patients?

SPEAKER_02 18:46

Yeah, so and it'd be perfectly clear, that is a category that is near and dear to our heart. It is something that's very important to us to solve for. It's a challenging segment to solve for. They're constantly uh changing medications. So if when you think of a pharmacy perspective, that the medications are changing or titrating all of the time. And patients move are very transient from practitioner to practitioner. So our devices today tend to be, and this is a category mental health where we want it to be unit dose. So the idea of using a Bluetooth vial is only so impactful for this particular category because somebody can unload the cap, dump out the entire vial of medications, and you don't know if it's one or 25, right? So for this space, this is a primary focus of our product development team, our mechanical and electrical engineering team, and the products that we'll be rolling out in 2023, but it has to be super mobile. It has to people need to be able to throw it in their purse. They need to be able to travel with it. And that technology related to be able to handle multiple meds uh in a very mobile perspective without having to be locked to an in-home device is really important. So our product plan for 2023 is really geared around building that physical product design for that space, and then our clinical team on the background and aligning with you know our monitoring those patients and getting ready for that mental health space is uh is a primary focus of ours. So it's gonna get better in in the market. People need these tools, and that's it's a big focus of ours. It's really, really important.

David 20:22

And that's a good place to end our conversation for today. Ted Mills, CEO of Paragon Health. Ted, thank you so much for sharing your expertise with our audience. We appreciate it. Thanks, David.

Announcer 20:33

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