Retail Pharmacy Clinical Services: Influence of ACOs & Healthcare Financing Models
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1 Retail Pharmacy Clinical Services: Influence of ACOs & Healthcare Financing Models Tim Kosty, R.Ph., MBA President Pharmacy Healthcare Solu<on, Inc.
2 Disclosures Tim Kosty is an employee of Pharmacy Healthcare Solu<ons, Inc. The conflict of interest was resolved by peer review of the slide content. He declares no other conflicts of interest or financial interest in any product or service men<oned in this program, including grants, employment, gifs, stock holdings, and honoraria. ASAP s and NCPA s educa<on staff declares no conflicts of interest or financial interest in any product or service men<oned in this program, including grants, employment, gifs, stock holdings, and honoraria.
3 Learning ObjecEves Following this presenta<on, amendees should be able to: Describe ACO strategic mo<va<ons and <melines. Contrast retail pharmacy clinical services with ACO objec<ves. Evaluate the alignment between ACO objec<ves and retail pharmacy clinical services.
4 Overview Stakeholders Decision Criteria Poten<al Clinical Services Alignment of Incen<ves Ques<ons
5 Stakeholder: Risk- Bearing EnEty Risk- bearing en<ty may be ACO, health plan, insurer, or self- funded employer group Looking for lowest- cost provider that produces best outcomes Decreased healthcare expenditures ROI Economic HumanisEc Clinical Reduced hospital admissions/ readmissions Improved clinical metrics (BMI, lipid panels, A1c, BP) Improved pa?ent sa?sfac?on
6 ACO CharacterisEcs Responsible for all pa<ent care services Global capita<on payment Focus on elimina<ng inefficiencies by coordina<ng care Drive pa<ents to the most cost effec<ve site of care Transparent repor<ng of outcomes Crea<ve pa<ent engagement strategies
7 Pioneer ACO Program Results Demonstra<on project started in 2012 with 32 organiza<ons par<cipa<ng 1.2% reduc<on in overall spending, $118M $76M in bonus payments, 33% to 2 ACO s 40% of original 32 ACO s have dropped out Measurement comparisons Current program versus themselves Future? local marketplace
8 Stakeholder: Risk- Bearing EnEty Decision Criteria EvaluaEng PotenEal Clinical Services How big is the poten<al opportunity to save significant costs? How long will it take to realize the benefits? How will the benefits be measured and will it be challenging? Does the service target regulatory mandates? Example: Medicare Part D Star Ra<ngs What providers (Pharmacist, Nurse Prac<<oner, Physician Assistant, etc.) can perform the service and produce a posi<ve result?
9 Stakeholder: Risk- Bearing EnEty Decision Criteria EvaluaEng PotenEal Clinical Services How difficult will the service be to implement? Will implementa<on require working with external business partners? Do we have funds allocated to pay for a pilot or proof of concept? How can we structure the program to pay for posi<ve results/outcomes? How difficult will it be to scale the program? How quickly can it be scaled?
10 Stakeholder: Risk Bearing EnEty Decision Criteria for Clinical Services Risk stra<fy pa<ent popula<on to narrow focus? What is the interven<on modality? Provider? How difficult will it be for the pa<ent to understand the poten<al benefits and educa<on? What ac<on do we want the pa<ent to take? How quickly can we measure interven<on results? Will it be a one- <me benefit or a long las<ng one?
11 Stakeholder: Physician ACOs have accelerated the shif towards having health care teams provide pa<ent care Physicians may be skep<cal of pharmacy services Seen by some as compe<<on in providing care More recep<ve to pharmacists services in ACOs Pharmacist- provided clinical services can allow physicians to focus their <me on the most cri<cal pa<ents, increasing pa<ent access to care Improved medica<on management will lower overall healthcare costs
12 Stakeholder: PaEents Lack of knowledge of retail clinic service offerings and benefits OFen show a lack of health literacy Want convenience Pa<ents generally suppor<ve of pharmacist- provided MTM services 1 Approachability is key May have trouble dis<nguishing between different healthcare providers: Physician (DO, MD) Registered nurse Nurse prac<<oner Physician assistant Clinical pharmacist What is the value proposi<on for pa<ent? 1. DaVanzo, Joan; Medica<on Therapy Management Services: A Cri<cal Review; J Am Pharm Assoc. 2005;45(5): hmp://
13 Stakeholder: Pharmacist Have access to pa<ents full prescrip<on history (barring pa<ents do not use mul<ple pharmacies) OFen consumed with dispensing du<es Addi<onal revenue stream for pharmacy Always looking for ways to expand scope of prac<ce in a clinical direc<on Opportunity for pharmacy residents to drive MTM 1. Aggregate Demand Index Project; February 2015; hmp://
14 Stakeholder: Pharmacist Clinical appointments may require scheduling Lack of staffing to provide clinical services and perform dispensing func<ons simultaneously How many clinical service sessions need to be held per year to realize a profit? Progressive state Medicaid programs (NM, AZ, SD, MN) already compensate pharmacists for healthcare services via FFS or flat- rate fee model 3 Other states to follow? 1 1. Improving pa<ent and Health System Outcomes through Advanced Pharmacy Prac<ce; A Report to the US Surgeon General 2011; Page 23
15 Clinical Pharmacy Services Medica<on Therapy Management (MTM) Comprehensive Medica<on Review Transi<ons of Care Immuniza<ons Popula<on health management Star Ra<ngs Disease Management Focus Wellness Weight loss Smoking cessa<on
16 Pharmacist EvaluaEon Criteria How can I provide the service? Do we have the competency now? If not, what training is needed? What pa<ent popula<on will I target? What informa<on is needed? How can we cost effec<vely implement the service? What systems will be required? What documenta<on, repor<ng, and billing capabili<es do we have?
17 Business Issues: Clinical Services Pa<ent educa<on and understanding Opportunity Cost Analysis Dispensing vs. Clinical Service Margins Number of opportuni<es Workflow considera<ons and the ability to leverage lower cost employees Unique selling proposi<on characteris<cs
18 Program Costs Staffing: Fixed cost vs. variable cost Will staff have other non- clinical du<es or will they primarily be devoted to clinical services? Training required to implement clinical services SoFware updates to bill for services Overhead: Rent, u<li<es, etc.
19 Keys to Retail Service Success Management commitment Systems that support provisions of services, documenta<on and billing Competent staff that are knowledgeable and mo<vated Alignment with payers Philosophy pa<ent care and healthcare improvement
20 Stakeholder: AlternaEve Providers Nurse Prac<<oners and Physician Assistants Most have some prescrip<ve authority Usually well received by pa<ents Lower cost op<on than pharmacists but do not have breadth and depth of knowledge on drug therapy Risk bearing en<ty will evaluate perceived rela<ve effec<veness of the same clinical services from alterna<ve providers
21 AlternaEve Service Providers Clinical services can be provided by many: Nurse PracEEoner (NP) VA study showed pa<ent sa<sfac<on scores increased 5% when care provided by NPs (vs. 1.8% for physicians) 1 Have prescribing authority in most states Physician Assistant (PA) VA study showed that pa<ent sa<sfac<on scores did not significantly increase when care was provided by PAs 1 Have prescribing authority in most states Physician Cost prohibi<ve Lack of <me to provide pharmaceu<cal- related clinical services 1. Source: Comparing Care, Nurse Prac<<oner, Physician s Assistant, and Physician; Published May 4, 2010; Accessed March 31, hmp://
22 Stakeholder: Regulatory Bodies Medicare spending expected to grow MTM is a way to combat cost growth Interested in spending, quality, and outcomes
23 DECISION CRITERIA
24 Risk ReducEon & Improved PaEent Outcomes Evalua<on of MTM services in pa<ents with cardiovascular disease in a self- insured employer health plan 1 Differences in Clinical Outcomes Pre- Index Period Post- Index Period BP Goal Met 55% 70% BMI Goal Met 13.0% 21.7% Fairview Pharmacy Services Part of ACO 23 MTM pharmacists (18 FTEs) at 30 loca<ons Findings: Since 1998, resolved over 2,780 medica<on- related problems Op<mal care in diabetes pa<ents significantly higher for MTM pa<ents (21% vs. 45%) 12:1 ROI comparing overall healthcare costs of MTM pa<ents vs. those not receiving services 1. WiMayanukorn, Saranrat; Evalua<on of Medica<on Therapy Management Services for Pa<ents with Cardiovascular Disease in a Self- Insured Employer Health Plan; J Manag Care Pharm. 2013; 19(5): hmp:// 2. Brummel, Amanda; Best Prac<ces: Improving pa<ent Outcomes and Costs in an ACO Through Comprehensive Medica<on Therapy Management; J Manag Care Pham. 2014; 20(12): hnp://amcp.org/workarea/downloadasset.aspx?id=18838
25 Metrics to Measure Return & ROI Direct cost for pharmacy, medical, and total healthcare expenditures Employee sa<sfac<on scores Part of Star Ra<ngs Decreased hospital admissions Decreased physician office visits ROI = Es<mated cost savings / Cost of MTM Studies have shown varying ROI results $1.29 to upwards of $12 Increased medica<on adherence Decrease in adverse events reported Source: Ramalho, Dejenane; Medica<on Therapy Management: 10 Years of Experience in a Large Integrated Health Care System. J Manag Care Pharm. 2010; 16(3); hmp://
26 Program Costs Payment rates, as provided in interviews, shown in the chart to the right Costs rela<vely steady across all sevngs Industry es<mates: $1 2 per minute required to cover pharmacist labor costs $2 - $3 per minute to cover total costs of providing MTM Supermarket Pharmacy Ini<al Visit/Consult Reviews Immuniza<on Administra<on Chain Pharmacy Charges per Minute Limited Assessment Follow- Up New Problem Mandatory Follow- Up at 6mo Independent Pharmacy Per Minute Ini<al Visit Follow- Up Visits $40 $20 $10 $2.50 to $3.00 $75 $40 $40 $20 $1.00 to $2.00 $75 to $120 $35 to $60 Adapted From: DaVanzo, Joan; Medica<on Therapy Management Services: A Cri<cal Review; Table 1; J Am Pharm Assoc. 2005;45(5): hmp://
27 Funding & Sustainability Limited funding in PDPs, but greater opportunity with the increase in ACOs Number of MTM- eligible pa<ents on the rise as baby boomers age and Medicare enrollment increases Need to track pa<ent outcomes over <me to measure results and prove value Will risk- bearing en<ty refer pa<ents to pharmacy or will pharmacy need to recruit? Referrals more sustainable business model
28 Market/Regulatory MoEvaEon State Collabora<ve Prac<ce Agreement Laws Pharmacist- Physician collabora<ve prac<ce agreements (CPAs) or protocols allowed in 45 states 1 Nurse Prac<<oners and Physician Assistants have prescribing authority in almost all 50 states Physicians may favor NPs and PAs, since they may prac<ce in a more autonomous manner Medicare Moderniza<on Act notes pharmacists as only healthcare providers being able to deliver MTM services 2 1. NABP 2014 Survey of Pharmacy Law 2. DaVanzo, Joan; Medica<on Therapy Management Services: A Cri<cal Review; J Am Pharm Assoc. 2005;45(5): hmp://
29 POTENTIAL RETAIL PHARMACY CLINICAL SERVICES
30 Stakeholder: Risk- Bearing EnEty Most MTM services today are reimbursed via a fee- for- service (FFS) model PDP s not very recep<ve to clinical services, since they are not responsible for healthcare costs. Incen<ves aligned for MA- PD s MTM and clinical services may actually increase drug costs Most likely have a posi<ve view of pharmacist- provided clinical services in fully capitated plans Cause decrease in overall PMPM expenditures Biggest opportunity in ACOs/ capitated plans/ MA- PDs/ PCMH Some plans provide their own clinical services telephonically
31 PotenEal Clinical Services MedicaEon Therapy Management (ParEcularly in Part D PaEents) TransiEon of Care PopulaEon & Disease State Management (Diabetes, asthma, etc.) Comprehensive MedicaEon Review (CMR) Travel Health Service Clinics ImmunizaEons
32 ACO Retail Clinical Service EvaluaEon Criteria
33 Conclusions and Takeaways Focus on services that are aligned with risk bearing payors including ACO s Services must have clear measurements to document ac<vity, and hopefully outcomes ROI needs to be focused on short term results, i.e. less than 2 years Pharmacy management must ac<vely support provision of services and ensure staff is trained support endeavor with consistent policies and procedures
34 QuesEons? Tim Kosty, R.Ph, MBA President, Pharmacy Healthcare Solu<ons, Inc. (PHSI) Phone: (412)
Pharmacy Profitability What s Over the Horizon? Don Dietz, R.Ph, MS Vice President, Pharmacy Healthcare Solu;ons, Inc.
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