Medication Homes Play Vital Role in the ACO

Medication Homes Play Vital Role in the ACO

About PharmMD PharmMD offers a comprehensive MTM program that exceeds the requirements for MTM set forth by CMS and pharmacy professional organizations. Clients working with PharmMD receive customizable MTM solutions that support the healthcare strategy provided through existing health benefits. Samuel W. Bartholomew, III Chief Executive Officer PharmMD now has millions of lives under management and has delivered savings in excess of three times the costs to its clients. Most importantly, it has positively impacted the lives of patients by giving all providers the information necessary to improve the management of prescription medications. Brad Tice, PMP, FAPhA Chief Clinical Officer Phil Burgess President Babette S. Edgar, Pharm.D President Healthcare veteran and visionary Clayton McWhorter co-founded PharmMD in 2006 to help improve the administration of medicines. Fueled by his passion to see the nation s medication crisis addressed, he knew that if he could provide physicians, pharmacists and patients with a comprehensive view of the patient s situation, along with guidelines for best practices and evidence-based medicine, he could improve the care delivered and the lives of patients served. PharmMD 5200 Maryland Way, Suite 200 Brentwood, Tennessee 37027 www.pharmmd.com About Phil Burgess Consulting The primary focus of our organization is to assist clients in expanding patient access to quality and cost-effective healthcare. Healthcare systems cannot achieve cost-effective prescription services by only focusing on drug costs. Rather, the long-term negative financial impact of NOT providing adequate access to quality drug therapy management must be an integral part of any comprehensive healthcare analysis. Our organization assists clients in that effort, working closely with state regulatory and federal agencies. Phil Burgess Consulting, LLC 3800 N. Lake Shore Drive Chicago, IL 60613 www.philburgessconsulting.com About Edgar Consulting Group The Edgar Consulting Group (ECG) focuses on assisting health plans and pharmacy benefit management companies (PBMs) with managed care and Medicare compliance and operational solutions designed to improve operational efficiencies, government compliance and improve stakeholder value. ECG also works with pharmaceutical companies to assist with managed care and government marketing and reimbursement solutions and strategic planning for managed markets. Edgar Consulting Group Babette S. Edgar, Pharm.D. Babette@Edgarconsultinggroup.com 410.215.2997 2

Executive Summary In the post healthcare reform environment, healthcare providers and organizations are in one of two camps: They are either actively evaluating their healthcare delivery models or have already decided to completely reconstruct their entire way of delivering care and services. The era of the Accountable Care Organization (ACO) has officially arrived with the Patient Protection and Affordable Care Act (PPACA) of 2010, generating a frenzy of activity. In summary, organizations are looking for new, enhanced ways to deliver well-coordinated care that drives higher quality outcomes, while controlling and decreasing system-wide costs. Although the promise of potential is driving strategic change, the ACO and its many experimental, organizational models are in flux with the new high-level guidelines just released. Pilots are being launched daily with the end goal of aligning the interests of the major healthcare stakeholders hospitals, physicians and health plans. But the future success of ACOs hinges on a team of innovators, along with innovations that can advance patient services along the full spectrum of the care continuum. In particular, some healthcare organizations have started to create a medical home for patients. While these efforts are contributing best practices to ACO structures, it is the MEDICATION Home within the ACO that will be the most innovative aspect of the early phases of an ACO model s successful foundation. Why medication homes? Annual prescription drug spending in the United States has soared from roughly $40 billion to more than $230 billion in the last few decades 1. At the same time, misuse of medications results in the U.S. healthcare system spending an estimated $290 billion each year on unnecessary medical services 2. Creating a medication home within the ACO will lead to the fastest results when it comes to improving clinical outcomes and enhancing economic savings. Using medications appropriately and in a fully coordinated fashion dramatically impacts the entire patient care continuum of services for patients and their quality of life. Moreover, pharmacists, with their advanced clinical training, and proven track record of improving quality and dramatically controlling costs top reform goals have the ability to become the cornerstone asset in the ACO and the medication home at both leadership and patient-care levels. Pharmacists have been creating medication homes for patients long before health care reform began. Now, pharmacists can use this opportunity to showcase what they have been doing all along; providing high-quality, coordinated patient care that improves outcomes and decreases health care costs. A medication home serves as a complete source for each patient s health and pharmaceutical records, which can be updated and shared real-time with other providers. Through the medication home, pharmacists empower patients by providing them with a greater understanding of their drug therapies. In turn, all of a patient s physicians receive accurate, coordinated information they need to make important clinical decisions. 3 In the larger picture, medication homes enable the ACO to improve quality in mission-critical cost areas, with the potential to reduce hospital readmissions and unnecessary visits to the doctor s office and emergency room. Using evidence-based guidelines for medication use and coordinating care between the patient and the patient s physicians, the pharmacist delivers improved results and allows for ACOs that adopt this principle on the front end to gain ground fast in the new world of ACO markets.

ACO Overview ACOs, as envisioned by the leaders in the government, encourage the development of new care models that must meet specific quality and spending goals. The ACO manages the entire continuum of care as a real or virtually integrated delivery system, says Mark McClellan, MD, PhD, director, Engelberg Center for Health Care Reform, Brookings Institution, and the former administrator for the Centers for Medicare & Medicaid Services (CMS). The PPACA has numerous ACO pilots and programs. The most significant of these will be a Medicare Shared Savings Program starting in January 2012. In addition to government-sponsored ACOs, there are opportunities for organizations to form private-sector and state-based ACOs 3. Flurry of ACOs Break Ground in 2010 While the government is in the process of rolling out its ACO definitions and resulting rules and regulations, a growing number of forward-thinking healthcare organizations have already launched or are making plans to form an ACO. Hundreds of ACOs have already been formed across the country. The Brookings-Dartmouth Accountable Care Organization Learning Network, a hub of information and support for ACO pilot organizations, has helped in 2009-2010 some 100 organizations envision, plan and execute an ACO. Health System/Physician Group Atlantic Health in New Jersey launches ACO with 300 physicians Cape Cod Healthcare Partners and local physicians start ACO-precursor in Massachusetts Wisconsin-based ProHealth Care and Waukesha Elmbrook Health Care IPA partner in ACO Recent ACO Start-Ups Span Several Partnership Models Health System/Health Plan Norton Healthcare and Humana, Kentucky, form ACO Advocate Health care and Blue Cross and Blue Shield of Illinois sign three-year agreement to do business as an ACO Dartmouth-Hitchcock Health, New Hampshire, and Anthem Blue Cross and Blue Shield launch pilot payment program as first step toward ACO Health System, Hospital and Physician Group Blue Shield of California, Catholic Healthcare West and Hill Physicians form ACO with state employees Health System Wyoming Medical Centers starts process to form statewide ACO Steward Health Care System, Massachusetts is forming an ACO 4 IPA VISTA Health System and Central Jersey Physician Network, New Jersey, form Optimus Healthcare Partners 4...continued on next page

5 ACOs: Key Components Unlike past reform-related initiatives that U.S. healthcare providers have responded to, the ACO will be based on measurable alignment with defined rules and outcomes. Quality: ACOs are incented to offer higher quality care. Under the PPACA, the government states that ACOs must promote evidence-based medicine, patient engagement, and coordinated care that leverages the use of telehealth, remote patient monitoring and other enabling technologies. Collaboration: ACOs must form healthcare teams that will coordinate care as patients are transitioned to different care stages across the ACO. Accountability: The ACO assumes complete accountability for a patient population. ACOs will have established performance and quality measures. Providers may also assume some risk to help ensure accountable care outcomes 5. Aligned incentives: Several payment models are possible under the ACO, including fee-for-service, bundled payments and partial/full capitation 6. Members of the ACO team share savings based on total percapita costs. Incentives are based on the value of services provided as opposed to volume 7. What s in a Name? ACOs are often confused with other payment reform initiatives, including primary care medical home. However, the members of ACOs share both accountability and savings, while the primary care medical home does not provide accountability for total per-capita costs, according to the Brookings-Dartmouth Accountable Care Organization Learning Network.

Why ACOs Need a Medication Home Reducing costs are paramount to ACOs achieving and documenting success. To that end, the top line items are likely to focus on decreasing medication errors and controlling drug spending. For every $1 spent on prescription medications, more than $2 is spent to resolve a problem caused by inappropriate use of medication 8. As these costs continue to skyrocket, ACOs will require well run, efficient and scalable medication home solutions. A medication home serves as the umbrella structure for creating strategic drug therapy programs, with pharmacists playing key roles. Being true clinical connectors, pharmacists can influence all care processes from doctor s office visits to hospital admissions and discharges within the medication home. As such, they are uniquely qualified to lead the medication home across multiple ACO settings that include some combination of hospitals, health plans and physician groups. Technology and Pharmacists: Key Connectors Having a medication home will help ACOs successfully operate local networks while connecting and sharing healthcare information nationally. More than a repository of drug information, a medication home, through advanced technologies, enables pharmacists to clinically interact with patients by providing them with complete medical and pharmaceutical information in real-time. Pharmacists keep all points on the care continuum up to date, which reduces medication errors, unnecessary hospital and doctor s office visits, and hospital readmissions. The medication home, anchored by the EMR, supports pharmacists as they monitor drug therapies for the entire patient population. Similar to the narcotic s only management programs that monitor narcotics prescriptions across all providers in a specific geographic area, an effective medication home provides surveillance of all types of drug therapies, while offering clinical support to physicians and other members of the ACO healthcare team. The pharmacist can operate seamlessly within the medication home, interacting within the electronic medical record to deliver important information to the network. Clearly, health IT is the backbone, the enabler to an ACO, says Warren Skea, PhD, director, health industries advisory practice at PricewaterhouseCoopers. There won t be success unless information is free flowing between all entities 9. In addition, it will be important for the medication home to be seamlessly integrated with the case management, disease management and medications therapy management programs (MTM) that the ACO, health plan and/or hospitals employ. This will take integration of IT systems and clinical programs in order to deliver coordinated messaging to patients about their healthcare. The integration of these programs will lead 6 to improved outcomes and, ultimately, decreased costs across the ACO.

7 medication homes play Pharmacists Current Health System Roles Asking pharmacists to make the leap to a medication home is a logical next step based on their evolving roles in the U.S. healthcare system. Pharmacists, with their exceptional education and training, already perform patient care that ties directly to the goals of the ACO. Through MTM programs, for example, pharmacists provide a medication home and drive quality by working with patients and physicians to offer the following advanced clinical services: Medication therapy review Monitoring the patient s personal medication record Creating a Medication Action Plan Taking action to resolve medication-related problems Documenting patient goals and providing follow-up In the Hospital Pharmacists are essential members of the clinical team in hospitals, doing everything from dispensing medications and monitoring patients drug therapies to rounding with physicians and helping them choose and adjust medication protocols. In some progressive hospital settings, and where allowed by state regulations, pharmacists are allowed to initiate prescriptions and empowered to make changes to medication therapy. They also offer discharge counseling and patient education. In the Community Community pharmacists offer a broad spectrum of clinical services, including counseling patients with chronic diseases and conditions such as diabetes and high blood pressure. They provide vaccinations and seasonal flu shots while working collaboratively with providers throughout the community. These pharmacists also support the healthcare providers in their local communities and partner with them in managing the medication use within their patient population. In Health Plans Pharmacists offer key clinical services in the health plan setting. For example, some HMOs hire licensed pharmacists to work with physicians by providing MTM services to their patients. In this capacity, pharmacists monitor a patient s drug therapies to make sure they are taking the right medication, that it is working properly, and that it is not having an adverse effect or interaction with another drug. Pharmacists are even engaged at the health plan corporate level, developing and operationally administering MTM, clinical and disease management programs as well as monitoring claims.

8 medication homes play Pharmacists Drive Value Across the ACO Research shows pharmacists are delivering tremendous cost savings to hospitals, health plans, physicians and the government when asked to design and perform advanced clinical services. A 2009 study in the Journal of Managed Care Pharmacy found that over the course of seven years, pharmacist-initiated MTM services delivered through community pharmacies impacted nearly 24,000 patients in 47 states, resulting in an impressive $7.1 million in cost savings 10. Every $1 invested in pharmacist clinical services resulted in nearly $5 in cost savings, according to a 2008 Pharmacotherapy article that reviewed data from a variety of scientific studies on the economic value of clinical pharmacist services 11. Pharmacists working in the ambulatory care setting save the healthcare system $3.5 billion a year in avoidable hospitalizations by coordinating patient medications across the spectrum of prescribers 12. Making a Difference 175,000 annual visits to the emergency department are attributed to adverse drug effects (ADEs) 32% of adverse events that result in hospitalization are caused by medications 13 Pharmacists can improve these statistics within the ACO, by: Carefully monitoring drug usage among the elderly and chronically ill Staying involved in care transitions Addressing health literacy and cultural concerns

Expanding the Pharmacist s Role in the ACO The pharmacist is an ideal clinical partner in the ACO setting. At the highest level of engagement, pharmacists can dramatically improve quality and reduce costs by helping the ACO manage patients drug therapies through the medication home, much like they already do in MTM programs. When a pharmacist manages the medication use of a patient, it enables all providers to work together and provide the bestcoordinated care with the physician s clinical guidance. Pharmacists can flag groups of patients at risk for clinical problems, using an evidence-based rules engine to rank order a patient population s drug therapy problems by clinical and economic severity. The pharmacist can easily share this information across the ACO through technology channels without creating new and cumbersome processes. Improving Patient Care The ACO model is based on empowering patients, which makes it an ideal environment for pharmacists to help patients gain a greater understanding of their prescribed drug therapy programs. Pharmacists also boost and reinforce healthcare literacy by providing health education to patients. Having pharmacists spend more time with the patient also helps primary care physicians provide higher quality care. Moreover, pharmacists can expand their scope of care by providing additional outpatient care and working from several locations such as primary care offices, senior centers and remotely via online access 14. And like physicians, pharmacists can offer clinic hours with patients as well as log onto a virtual network and deliver valuable services to patients over the phone. Pharmacists Encouraged to Play Key Roles in Health Reform The PPACA encourages pharmacist involvement in ACOs and other innovative reform programs. For example: Medicare Shared Savings Program (Sec 3022) Promotes accountability for a patient population by allowing ACO professionals to work together to manage and coordinate care for Medicare fee-for-service beneficiaries under Medicare Parts A & B. The program encourages ACO professionals to set up an accountable care organization that includes redesigned care processes that allow for high quality, efficient delivery of care. After meeting specific quality measures, the ACO is eligible to receive payments for shared savings. Incentive payments may also be related to electronic prescribing. Health Homes for Patients With Chronic Conditions (Sec 2703) Allows states to provide comprehensive, coordinated care through a health home for those with chronic illnesses. This includes a designated provider/provider group and team of health professionals, including pharmacists. The designated provider must report back on quality measures using healthcare IT. Community Health Teams to Support Patient-centered Medical Homes (Sec 3502) Allows for the establishment of community-based, interdisciplinary health teams revolved around primary care, including pharmacists. In particular, the health teams must provide access to pharmacistdelivered medication management services, including medication reconciliation. 9 MTM Services in the Treatment of Chronic Diseases (Sec 3503) The PPACA designates a program that provides grants or contracts to develop MTM services provided by a licensed pharmacist as a collaborative, multidisciplinary, inter-professional approach to the treatment of chronic diseases for targeted individuals, to improve the quality of care and reduce overall cost in the treatment of such diseases.

Case Study 1: Pharmacists Participate in ACO Pilot with Norton Healthcare New program highlights the importance of expanding pharmacists services. Goal: Under the pilot, sponsored by the Brookings Institution and the Center for Population Health at the Dartmouth Institute, Norton, with five hospitals and 45 percent local market share, asked system pharmacists to engage with heart failure patients during admission and upon discharge to reduce medication errors, improve medication adherence and insure correct treatments. Process: During the pilot, pharmacists engaged with patients at admission and discharge, reviewing medications to reduce duplication and flagging any problems such as ADEs. Pharmacists also communicated back to physicians noting any changes. Results: Overall, the results were positive. By involving pharmacists at strategic points along the healthcare continuum, patients were more compliant with physician guidance after discharge. Norton experienced a reduction in medication errors and found more patients taking the right medications at the right dosage when they left the hospital. The one greatest value of a pharmacist is their knowledge of medications and their ability to interact with the patient that s something that hospital pharmacists haven t really taken full advantage of, William Paul Allen, PharmD, associate vice president of pharmacy services, Norton Healthcare, told the American Pharmacists Association in an article titled Evolving roles: Pharmacists at Norton prepare for new ACO 15. Case Study 2: MTM Program Eliminates Need for Chronic Medication Receiving personalized, ongoing care from a pharmacist improved one patient s health outcomes while reducing costs. Goal: A 71-year-old male patient was on anticoagulation medication for atrial fibrillation needed monitoring at least every four weeks. He decided to take advantage of the medication therapy management program offered by his health plan, with more than 400,000 enrollees. Under the program, pharmacists set out to work with the patient and his medical team to insure he was safely taking the right medications at the right doses and at the right time. Process: Network pharmacists reviewed and regularly monitored the patient s drug therapies and medical records to identify drug safety problems as well as cost-savings opportunities. A pharmacist met with the patient, providing him with a personalized medication review and ongoing education about his treatment and medical condition. Results: Regular monitoring revealed the patient, who had a CHADS-2 score of 0, no longer needed anticoagulation treatment. The patient received a medication action plan from a pharmacist, discussed it with his provider and today is no longer on anticoagulation medication. Ultimately, stopping the chronic medication saved more than $1,000 a year in pharmacy and medical costs, eliminated the possibility of an adverse drug reaction, and saved the patient the inconvenience of monthly monitoring. 10

11 medication homes play Conclusion As healthcare reform takes root, the healthcare landscape is about to be dotted with ACOs and colored by aggressive payment reform. The formation of connected ACO healthcare teams will ultimately determine efficiency and drive a vast majority of beneficial cost savings. While uncertainty looms regarding the assumption of risk under the ACO model, it is clear that the medication home is the surest way of achieving results and seeing them happen within the first 12 months of implementation. The medication home plays the critical role of the clinical connector within an ACO, ensuring everyone on the team has complete knowledge of each patient s drug therapy. Finally, the pharmacist serving as the medication manager will lead the medication home to positively impact an ACO s financial viability. In the end, establishing medication homes as key components in the care model will lead to lower utilization of healthcare services and consequently healthier patients, communities and bottom lines.

1 Kaiser Family Foundation. Prescription Drug Trends. May 2010. 2 New England Healthcare Institute. Thinking Outside the Pillbox: A System-wide Approach to Improving Patient Medication Adherence for Chronic Disease. Aug. 11, 2009. 3 McClellan, Mark. Key ACO Principles. Engelberg Center for Health Care Reform, Brookings Institution. 4 Gamble, Molly. 10 ACOs Recently Formed by Hospitals and Health Systems. Becker s Hospital Review. Dec. 22, 2010. 5 Fisher, Elliot. McClellan, Mark. The Accountable Care Organization Learning Network Toolkit. The Engelberg Center for Health Care Reform at Brookings and the Dartmouth Institute for Health Policy & Clinical Practice. Jan. 2011. 6 McClellan, Mark. Key ACO Principles. Engelberg Center for Health Care Reform, Brookings Institution. 7 Fisher, Elliot. McClellan, Mark. The Accountable Care Organization Learning Network Toolkit. The Engelberg Center for Health Care Reform at Brookings and the Dartmouth Institute for Health Policy & Clinical Practice. Jan. 2011. 8 Ernst, FR. Grizzle, AJ. Drug-Related Morbidity and Mortality: Updating the Cost of Illness Sources Model. Journal of the American Pharmacists Association. January 2001. (adjusted for CPI). 9 Shaw, Gienna. Technology a Key Driver to ACO Adoption. HealthLeaders Media. Feb. 1, 2011. 10 Barnett, MJ. Frank, J. Wehring, H. Newland, B. VonMuenster, S. Kumbera, P, et al. Analysis of Pharmacist-Provided Medication Therapy Management (MTM) Services in Community Pharmacies Over 7 Years. Journal of Managed Care Pharmacy. 2009;15(1):18-31. American Pharmacists Association. Improving Medication Use Lowering Health Care Costs. July 2, 2009. 11 Perez, A. Hoffman, JM. Meek, PD. Touchette, DR. Vermeulen, LC, et al. Ecomomic Evaluation of Clinical Pharmacy Services 2001-2005. Pharmacotherapy. 2008:28(11):285e 323e. American Pharmacists Association. Improving Medication Use Lowering Health Care Costs. July 2, 2009. 12 Persell, SD. Osborn, CY. Richard, R, et al. Limited health literacy is a barrier to medication reconciliation in ambulatory care. Journal General Internal Medicine. 2007;22:1523-6. American Pharmacists Association. Improving Medication Use Lowering Health Care Costs. July 2, 2009. 13 Smith, Marie. Patient Centered Medical Home and Accountable Care Organizations Their Growing Roles Today under Health Care Reform. Academy of Managed Care Pharmacy 2010 Educational Conference, St. Louis, Missouri. Oct. 14, 2010. 12 14 Smith, Marie. Patient Centered Medical Home and Accountable Care Organizations Their Growing Roles Today under Health Care Reform. Academy of Managed Care Pharmacy 2010 Educational Conference, St. Louis, Missouri. Oct. 14, 2010. 15 American Pharmacists Association. Evolving roles: Pharmacists at Norton prepare for new ACO. Nov. 29, 2010.