Silverlink Makes A Science of Healthcare Communication

When Merck recalled its arthritis drug Vioxx on September 30, 2004, Connecticut-based online pharmacy FamilyMeds wasted no time notifying customers. Within three hours after the recall was announced, an automated telephone system began calling Vioxx users to inform them about the change. But there was a twist—to comply with the federal healthcare privacy law known as HIPAA, the system had to verify that the person on the other end of the line was actually the patient taking the drug. If the answer was yes, the system would go on to explain the recall. If it was no, the system would leave a phone number and passcode so that the patient could call back later.

That kind of interactive voice response technology is all fairly standard today—but in 2004 it was brand new. The company that made it possible was Burlington, MA-based Silverlink Communications. And from this single application—HIPAA-compliant automated phone communications—Silverlink has since built a major consulting and service operation designed to help healthcare providers reach patients with behavior-related messages of all sorts.

Say a big health plan with millions of members wants to nudge members who take a certain drug toward buying a new, cheaper formulation at twice the dose, then splitting the pills before taking them. Silverlink can not only figure out the most cost-effective way to convey that message, but it can follow up by combing pharmacy claims data to see how many people actually switched.

Though I first met Silverlink CEO Stan Nowak at a local conference on “Health 2.0,” the movement to apply Web-based automation and communication to many aspects of the healthcare system, Silverlink doesn’t fit snugly into that category. The company is really about two things: communication—via whatever mechanism, even the old-fashioned telephone or snail mail—and analytics, to find out what effect each message is having and craft more effective ones.

Stan Nowak, co-founder and CEO of Silverlink CommunicationsBecause Silverlink’s customers have so many customers of their own, the company is able to package each message in many ways, deliver the variants over many channels, and quickly determine which combinations are most effective for each group. For example, if you want to encourage members who are in the 40-to-55 age group to switch from name-brand drugs to generic ones, is it better to emphasize the cost savings, the convenience, or the fact that everyone else is doing it (in other words, applying a bit of peer pressure)? “Effectively, we’re running multiple simultaneous controlled experiments at scale across populations and measuring the results within microsegments of that population,” says Nowak. “It works in a dramatic way to improve communication yields”—meaning real changes in patient behavior.

Founded in 2002, Silverlink has about 100 employees, and has increased its headcount by 40 percent in the past year. The company has raised about $14 million in venture backing, including a $2.1 million Series A round in 2003 led by Sigma Partners, a $5.6 million B round in 2004 led by HLM Venture Partners, and a $6 million Series C round in 2006, also led by HLM. Kaiser Permanente Ventures, the investment wing of the giant California HMO, joined for the C round. Customers include the nationwide health insurer Aetna and leading pharmacy benefit manager Pharmacare. The company doesn’t share financial figures, but it does say that 2008 revenues were up 47 percent over 2007, and that it recently passed the 200 million mark—meaning that many healthcare consumers have received communications administered by Silverlink.

Nowak says Silverlink’s market is still growing, thanks to some big, long-term shifts in the way health insurance works. “The role of the consumer in healthcare has expanded pretty dramatically since 2003, and looks to expand even more as we get another 47 million uninsured Americans into some version of individual health plans,” he says. “The paradigm has totally shifted—in the old group insurance model, there was a human resources administrator between the employee and the payer. These days there is no HR administrator. The consumer calls the health plan directly for all their questions.”

That increases the burden on insurers—but it also empowers them to reach plan members directly with suggestions for behavioral changes that could save them a lot of money, whether that means pill-splitting, taking generic drugs, or improving medication adherence. (As I noted in a story about local startup InnovationRx last year, the economic toll from health conditions that worsen when people don’t take their medicines as directed is estimated at $200 billion a year.)

All health plans have to communicate with their members, of course, but many of them leave savings on the table by sending out one-size-fits-all messages, Nowak says. The core of Silverlink’s customization method is a “champion-challenger” approach, reminiscent of advertising industry techniques, that shows within hours or days how members are responding to different variants of a specific messages. “You can get a lot of optimization right out of the gate by changing the messaging to seniors, retired populations, younger populations, women and men, regional differences,” Nowak says. “If there is a high value to moving a behavior, you want to ride that curve as far as you can until it becomes uneconomical to get to the next percentage.”

There’s little risk to health plans considering hiring Silverlink, because the company charges for performance. If it helps a pharmacy benefits management company save 20 percent on a certain drug by shifting members to a generic version, for example, it asks the company for a share of the net value. “That is very attractive for health plans today,” Nowak says. “They’ve been whacked by the financial meltdown, their income has dramatically dropped, their stock prices have been hammered, and healthcare reform may lead to reductions in reimbursements. We come in and say, ‘We’ll manage this communication process, align our incentives with yours, and drive better yields than you’ve ever seen before.'”

Interestingly, Nowak says, Silverlink can’t always tell exactly why one healthcare-related message works better than another. If the number of emergency-room visits for kids with asthma goes down after Silverlink sends families a message about the proper use of inhalers, for example, the company might not know which part of the message resonated with parents. But in the end, all that really matters is that it produced the desired outcome, that is, health improvements and cost savings. “It’s not important to know why the change occurred,” says Nowak. “It’s important to know that the change occured.

Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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