Ask the Expert: The Difference between Qualitative and Quantitative U.S. Payer Research – with Use Cases

One of the biggest sources of confusion with my clients is whether to do small N or larger N qualitative payer research versus adding in Quantitative research. While the needs of each organization are different, here is my take.

Qualitative Payer Research:

One thing to keep in mind in any United States payer study is that the clear majority of lives in the U.S. are at least influence by the ‘Big Three’ PBMs. Estimates vary, but it’s clear that >80% of lives are covered by the biggest PBMs. Thus, I’ve made the argument that increasing the number of respondents can increase project budget without providing additional incremental insights. This is a little different if you find yourself with significant behavioral or attitudinal segmentation. But as I’ll demonstrate below, qualitative methods aren’t as good as Quantitative studies for market segmentation anyway.

So, what’s the right number of respondents? I consider the specifics company confidential to Chiral Logic – and I have a surprisingly high number of readers of my blog from competitors (thanks guys!) – but the basics are, if you can get 50% of lives for an early stage asset (and that’s all the money you have for a study…) you MIGHT be alright. Following the bouncing ball – you can get a ton of marketing insights, especially if response is homogeneous, from 10-12 conversations. The trick is you need the RIGHT Payers. It helps if your moderator has years of experience and isn’t intimidated to push back.

Large N (25-30 respondents) projects are often requested by pharma companies who want to go the extra mile. And, if your guide is too long to get through in an hour, or if you expect heterogenous responses, this might make sense. We moderators hate these studies though – it’s very difficult to stay excited about a project after the 25th HOUR of asking the same questions to different payers. Beyond that, you’re retreading the same path, repeatedly…

 

Quantitative Payer Research:

Quant is great for market segmentation. It’s ESSENTIAL to translate your qual research into the forecast and your qual was reported by respondent. (Chiral Logic doesn’t report our findings by respondent, instead using a methodology that can be directly tied to forecasting). Unfortunately, quant is expensive, requires longer timelines, requires a different skillset & partners, and can return the same insights that were found in qual.

 

Typical Use Cases:

Development assets typically need a small N assessment to get a developing picture of the competitive landscape, likely restrictions both at launch and at maturity, net pricing, and what kinds of value substantiating programs will maximize access.

Before launch (using either information from FDA submission or expected equivalents), I like to complete a comprehensive payer qual study. This study should be sufficiently powered to uncover attitudinal and behavioral segmentation. One of the benefits of the Chiral Logic approach is that we can scale the study, while it’s happening, to generate the insights required.

Then, in cases where forecasting requires, a follow-on quant study can fill in the gaps and eliminate any strategic discrepancies. Also, there are some launches that are so important to the company’s future that no stone should be left unturned…and in these cases a qual/quant methodology can be optimal.

There’s always the problem of getting a ‘normal’ distribution of U.S. payers (something that we’ve been thinking about for years and have a reasonable work-around). But this, I’ll leave for another blog. As my thoughts on the inherent dangers of these developing on-line platforms where marketers can communicate ‘directly with payers…’

Wait! This isn’t how it’s supposed to work…

https://www.marketplace.org/2017/09/06/health-care/large-hospital-systems-buy-independent-medical-practices-cost-healthcare-rises

This piece is worth listening to for a number of reasons. One of my pet peeves since our children’s birth is that consumerism doesn’t apply well to births in the United States. I’m all for women who elect to have a C-section. Personally, for our family that wasn’t the right choice, as my wife did extensive research that suggested that natural births produce better outcomes for the babies.

You can dispute that finding, but what you can’t dispute is that ELECTING to have a C-Section drives up the cost of care in a way that should justify increased costs to the family of the woman making that decision. Planned C-sections are easier to schedule for the doctor and provide an increased revenue stream – as per the report. Thus patients should bear the differential price, thus driving down costs for the rest of us.

This doesn’t apply to C-sections for medically necessary reasons. However, again we could look to the Finland and other developed nations with much lower C-Section rates AND higher infant and maternal survival rates. Nobody should be financially penalized for interventions that are medically necessary.

So why are reimbursements twice as high for OB-GYNs associated with large group practices? Oligopoly Power of course. And herein lies the pathway to truly reducing the (out sized) costs in our healthcare system – remove the perverse incentives for doctors to join these groups, and you’ve taken one step closer to reducing overall costs.

The increase of high deductible health plans SHOULD contribute to reducing costs – but only if healthcare consumers are smart enough to ask questions about cost and become educated enough to make informed decisions.

The most interesting part of this piece for me was the suggestion, toward the end, that consolidated group practices don’t improve the quality of care:

But Kristof Stremikis, associate director for policy at the Pacific Business Group on Health, which represents employers, said that studies suggest that is not the case. “All of the evidence that we see shows that the quality in these larger systems is the same or worse,” he said.

Jenny Gold aught to be careful not to bite the hand that feeds her. But a strong tip of the hat to the impartiality and independence of Kaiser Health News as I’d imagine that the Kaiser organization would argue that they make every effort to improve the quality of the care that they provide.