ZIFFPAGE TITLEDoubling Market Share

By David F. Carr  |  Posted 2004-10-01 Print this article Print

The manager of pharmacy benefits gives customer what they want—quick answers to their questions—by supplementing a central data warehouse with smaller analytic databases to handle particular questions. The result: Market share has doubled.

Doubling Market Share

The prescription payments industry handles an estimated 2.6 billion drug purchase transactions a year. The volume of prescriptions handled by the industry has grown 44% since 2000.

The two largest benefits managers, Caremark and Medco, control 18.5% and 15% of the market, according to the Drug Cost Management Report survey published by Atlantic Information Services. But NMHC has more than doubled its share of that growing business, handling 0.7% of the volume this year, up from 0.3% in 2000, according to the survey.

NMHC has been growing through acquisitions—five in a little over three years—but also by building its basic business at a rate of 30% a year.

That has come by paying attention to customers like Skalitzky, whose thirst for information is sated through technology. Hall wants to make sure that anything a customer could possibly want to know about member status, claims eligibility and prescription cost data can be supplied on screen and over the Internet.

NMHC stores 32 trillion bytes of information in Oracle databases on HP SuperDome servers, with room to expand.

To give customers like Skalitzky the quick responses they want, NMHC supplements its central data warehouse with data marts. These are smaller analytic databases optimized for specialized queries, such as an executive summary of mail order and retail spending or a detailed analysis of specific physicians' prescribing patterns.

Integrail, the health data and risk analysis business NMHC bought in 2002, had built its software around a Microsoft SQL Server foundation, but that, too, will be converted to Oracle. "SQL Server exists and has a customer base for a reason, because it's small, light and easy to deploy," says Mark Deck, NMHC's director of technology. "But there is also a reason why you don't put big things on it."

Rather than worry that SQL Server might buckle under the strain of supporting the very large databases he sees in Integrail's future, switching to Oracle is a safer bet, Deck adds.

"We want to offer very personal quality service that the big guys can't offer"

Hall, who is also president of Integrail, focuses on speed as a key virtue in gaining and keeping customers. "The express purpose of speed is how fast can we satisfy the customer's request," she says.

For example, when a customer asks for it, NMHC commonly analyzes several years of data to suggest plan changes that will lower costs while preserving quality. Originally, this required a clinician to spend a week running and reviewing reports, then crafting a presentation to the customer. But by using artificial-intelligence techniques, NMHC wrote software that combs through the relevant databases and creates a near-complete presentation in 5 minutes, according to Hall. A clinician still reviews the recommendations and adds finishing touches, but can do so on the way to a customer meeting, she says.

"I can hardly think of anything that takes longer than 24 hours,'' she says.

David F. Carr David F. Carr is the Technology Editor for Baseline Magazine, a Ziff Davis publication focused on information technology and its management, with an emphasis on measurable, bottom-line results. He wrote two of Baseline's cover stories focused on the role of technology in disaster recovery, one focused on the response to the tsunami in Indonesia and another on the City of New Orleans after Hurricane Katrina.David has been the author or co-author of many Baseline Case Dissections on corporate technology successes and failures (such as the role of Kmart's inept supply chain implementation in its decline versus Wal-Mart or the successful use of technology to create new market opportunities for office furniture maker Herman Miller). He has also written about the FAA's halting attempts to modernize air traffic control, and in 2003 he traveled to Sierra Leone and Liberia to report on the role of technology in United Nations peacekeeping.David joined Baseline prior to the launch of the magazine in 2001 and helped define popular elements of the magazine such as Gotcha!, which offers cautionary tales about technology pitfalls and how to avoid them.

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