Information Assets and Outcomes Research Capabilities at The Medstat Group, Inc. Ron Ozminkowski, Ph.D. Director, Health and Productivity Management Research

Copyright 2002 Thomson Medstat2 Agenda Medstat is …. Thomson Corporation MarketScan ® Research Databases Pharmaceutical Research Capabilities How Do We Get Started? What Happens Next? Market Signals

Copyright 2002 Thomson Medstat3 Medstat is …. A healthcare information company that: Helps customers manage the cost and quality of health services and benefits –Research services –Analytical consulting –Software applications –Databases Serves all major market segments Has longest track record in industry (founded 1981) Employs approximately 750 employees in nine locations Is part of The Thomson Corporation

Copyright 2002 Thomson Medstat4 Medstat is Part of the Thomson Corporation Global e-information and solutions company with annual revenues of approximately $7.2 billion Operations organized into four market groups: –Thomson Legal & Regulatory –Thomson Financial (includes First Call) –Thomson Learning –Thomson Scientific & Healthcare Thomson Scientific Thomson Healthcare Medstat

Copyright 2002 Thomson Medstat5 Medstat Customer Profile PharmaceuticalMost U.S.-based manufacturers Employers 70+ large employers State Gov’t 20 state programs Federal Gov’tCMS, AHRQ, CDC, SAMHSA, DOD Health Plans100+ health plans Providers1,000+ hospitals, IDNs, etc. Market Sector Customer Overview

Copyright 2002 Thomson Medstat6 Three Principal Product Lines Decision Support Systems and Solutions –Adding value to internal information by developing databases, applying methods to help understand the data, and developing the tools necessary to organize the data for better decision making. Information Solutions –Integrating external market intelligence and applying methods to benchmark, forecast, and analyze for improved decision making. Research –Helping the research community uncover important information for better decision making and to fuel internal product development and innovation

Copyright 2002 Thomson Medstat7 Medstat MarketScan Databases Data Management Process Privacy Protection Integration Standardization Customization Enhancement QA/Improvement Customer Internal Data Eligibility Inpatient claims Outpatient claims Prescription drugs MarketScan Database Development 75 million facility and professional claim lines and 40 million drug claims annually

Copyright 2002 Thomson Medstat8 MarketScan ® Research Databases Large multi-source database of privately insured claim and encounter data –These sources ensure that MarketScan reflects the complexity of the real world of healthcare delivery –Databases represent true continuum of care, including carve- outs –4 million+ annual covered lives Longitudinal data –Databases support person-level analyses, with three to five years of follow up The basis of more than 40 peer-reviewed journal articles in the last three years

Copyright 2002 Thomson Medstat9 How MarketScan Databases Are Built Raw data are collected from approximately 100 payers to build individual client databases –Variables standardized –Clinical detail added –Inpatient cases built Standard variables from individual databases are combined to form the MarketScan Databases –Synthetic patient identifiers assigned, consistent across years –Clinical categories added (e.g., DRGs, DCGs) –Plan type identified (e.g., PPO, POS, comprehensive) –Place, service types, provider types, and industry classifications standardized –MSA and FIPS state-county codes added

Copyright 2002 Thomson Medstat10 MarketScan Features Fully adjudicated claims data Consistent data definitions Inpatient and outpatient claims can be linked to enrollment and drug data Consistent patient identifiers across years, for longitudinal analysis Linked drug files containing NDC, therapeutic class, copayment, total payment, etc. Clinical classification systems such as MDCs, DRGs, DCGs, and Disease Staging can be applied to the data

Copyright 2002 Thomson Medstat11 MarketScan Database Organization Standard Files –Inpatient Admissions File (one record per admission) – Inpatient Services File (one record for each service) –Outpatient Services File –Outpatient Pharmaceutical Claims File –Person-Level Enrollment Files

Copyright 2002 Thomson Medstat12 Medical Claims: Sample Data Elements DemographicClinicalProviderFinancial Patient IDAdmit DateProvider ID AgeAdmit TypeProvider TypeCopay Amount Gender Length of StayPlace of ServiceDeductible Amount Employment Class DRGProvider SpecialtyHospital Payment/Charge Relationship to Benefic. Principal DiagnosisPhysician Payment/Charge Geographic LocationDx2-Dx14 Industry MDCOther Payment/Charge Principal ProcedureTotal Payment/Charge Proc2-Proc14 Payment/Charge Service Date Service Type

Copyright 2002 Thomson Medstat13 Drug Claims: Sample Data Elements DemographicDrugProviderFinancial Patient IDNational Drug CodePharmacy IDPayment AgeDispense As Written Pharmacy Class CodeAverage Wholesale Price GenderDate Filled Copay Amount Employment Class Therapeutic ClassIngredient Cost Relationship of Therapeutic GroupDispensing Fee Patient to BeneficiaryDays Supply Geographic LocationGeneric Product ID Industry

Copyright 2002 Thomson Medstat14 Commercial Claims and Encounters (CC&E) Inpatient and outpatient medical claims linked to drug data, person-level enrollment data, and benefit plan design data Fee-for-service (FFS) with drug data available since 1992, encounter with drug data available since 1994 FFS and fully and partially capitated plans represented –Exclusive provider organizations –Preferred provider organizations –Point of service plans –Indemnity plans –Health maintenance organizations

Copyright 2002 Thomson Medstat15 Commercial Covered Lives *Numbers are roundedNote: Approximately 85 percent of covered lives have at least one claim

Copyright 2002 Thomson Medstat16 Medicare Supplemental and COB Inpatient and outpatient Medicare supplemental medical claims linked to drug data, person-level enrollment data, and benefit plan design data Available since 1995 Both the employer-paid and Medicare-paid components of care represented

Copyright 2002 Thomson Medstat17 Numbers are rounded Medicare Covered Lives

Copyright 2002 Thomson Medstat18 MarketScan Databases Commercial Claims and Encounters (1992–2002) –2002 data to be complete in December MarketScan Early View Data Set (July, 2002 – June, 2003) –A subset of the CCAE data set for 42 large employers Medicare Supplemental and COB (1995–2002) –Ditto re: 2002 data Benefit Plan Design (1995–2002) –2002 data to be complete in January Health and Productivity Management (1997–2001) –Contains information about illness-related absenteeism, STD, and WC use, linkable to medical and drug claims and enrollment files Medicaid – three states ( ) –2 more states to be added soon, with 2002 data

Copyright 2002 Thomson Medstat19 How Customers Access MarketScan Database licensure –Complete database, multiple years –Subset of database, multiple years Custom reports Outcomes research studies Web-based products Clinical trial recruitment products

Copyright 2002 Thomson Medstat20 Pharmaceutical Research Capabilities

Copyright 2002 Thomson Medstat21 Pharmaceutical Research Overview Total staff of more than 40 –Many with advanced degrees, including 10 PhDs 2 MDs –Widely published in peer-reviewed journals –Multiple research disciplines, including economics, health services research, psychology, and statistics Focus on pharmacoeconomics and clinical effectiveness –Retrospective database studies –Prospective observational studies –Disease management and program evaluations

Copyright 2002 Thomson Medstat22 Solutions for the Pharmaceutical Marketplace Burden of illness Product differentiation Market assessment –Pricing strategy –Market sizing –Portfolio selection Economic protocol design Decision analytic and budget impact modeling Clinical trial recruitment

Copyright 2002 Thomson Medstat23 Methods Often Used in Outcomes Research Studies Selection bias adjustments (Heckman, IV) Decision analytic models Treatment-effect models Multivariate techniques –Hazard regression –Linear regression (OLS) –Logit, probit, and propensity score models –Multinomial logit, ordered probit –Latent class analysis –Count models –Duration/time-to-event –Simultaneous equations

Copyright 2002 Thomson Medstat24 Prospective Studies: The Medstat Advantage Assessment of the economic implications of clinical trials Development of economic protocols for clinical trials Evaluation of quality of life, productivity, and health status Support for multi-site clinical and economic studies Site selection, training, and management

Copyright 2002 Thomson Medstat25 Sample Prospective Study Schizophrenia Care and Assessment Program (SCAP) –Multi-year study of 2,400 people with schizophrenia at six sites –Baseline and repeated assessments of functioning –Detailed medication tracking –Several research themes, including diffusion of new technologies, outcomes, differential treatment, and outcomes by race –Results described in several conference presentations and a few publications

Copyright 2002 Thomson Medstat26 Clinical Trials Examples Depression trial –Used MarketScan data to derive prices for service utilization observed during a clinical trial. Statistical bootstrapping was applied to compare cost effectiveness for alternative measures of effectiveness (responders and remitters) as well as direct and indirect costs. Bowel motility trial –Linked hospital discharge and UB-92 data to clinical trial data and found length of stay reductions and subsequent cost savings for study patients. Intermittent claudication trial –Assessed the cost-effectiveness of a medication for in the treatment of intermittent claudication (IC).

Copyright 2002 Thomson Medstat27 Decision Analytic and Budget Impact Modeling Combine clinical trial efficacy data on patient/drug response with cost information from naturalistic claims data Estimate real costs based on expected response using age, gender, dose, medication switching Model impact of proposed drug by entering characteristics of health plan or employer population into software Econometric modeling programs include those developed for allergic rhinitis, GERD, cholesterol management, and health risk reduction programs

Copyright 2002 Thomson Medstat28 Clinical Trial Recruitment We can locate the best clinical investigators in the best locations We can find the best patient groups to whom you should advertise We can tell you the best way to reach them This means much faster and more effective patient recruitment

Copyright 2002 Thomson Medstat29 Dr. Katz is in a high area (red) for depression office visits. He has a clear recruiting advantage.

Copyright 2002 Thomson Medstat30 Inner Cities (green) and Single City Blues (red) are the best PRIZM clusters near Dr. Katz. These are the perfect targets for direct mail.

Copyright 2002 Thomson Medstat31 How Do We Get Started? Sometimes prospective clients come to us with a question For example, do patients who use SSRIs for depression cost less than patients who use TCAs? –The issue is total cost, not just cost of the drug –(Want to know the consequences of drug choice) –Also want to know how it works in real life, not in a clinical trial in this case. We talk to the client, then write a proposal –Background on depression and pharmaceutical treatment –Description of study questions and hypotheses to test –Description of data assets that can be used to test those hypotheses –Statistical methods designed to provide most accurate answer to the questions of interest (descriptive and multivariate approaches) –Description of project tasks, timeline, logistics –Pricing –Medstat experience and capabilities –Project staff

Copyright 2002 Thomson Medstat32 What Happens Then? If we are selected to perform the work, a contract is negotiated. Then we do the work, and hopefully publish the results in a peer- reviewed journal and make conference presentations –In the past, we have done a lot of both. When clients are happy, they come back for more, and business thrives. If clients are not happy, we try to make them happy. But credibility comes first and is never sacrificed.

Copyright 2002 Thomson Medstat33 Market Signals The market suggests we are good at what we do. –Business has grown from about $0.5 million in 1998 to over $5 million this year. We recruit good people and often hear compliments about their work. We have fun!