‘Health for Tomorrow’ summit explores future of U.S. healthcare delivery
“We have a system that needs fixing.”
That comment on the state of the nation’s healthcare system, shared by physician and New York Times correspondent and senior writer Elisabeth Rosenthal, served as the springboard for a high-level summit on the future of health care in the United States. The event drew a who’s who of nationally known health experts, scientists and government officials.
(For the full chain pharmacy section of DSN's Aug. 25 issue, click here.)
Rosenthal, author of a yearlong special series in the Times titled “Paying Till it Hurts,” moderated the event, dubbed the New York Times “Health for Tomorrow” conference. Held in late spring on the campus of the University of California-San Francisco, the summit featured a range of experts, including Marilyn Tavenner, administrator of the Centers for Medicare and Medicaid Services; Toby Cosgrove, president and CEO of Cleveland Clinic; Bernard Tyson, chairman and CEO of Kaiser Permanente; Diana Dooley, secretary of California’s Health and Human Services agency; and Eric Topol, director and professor of genomics at Scripps Translational Science Institute.
Speakers and panelists at the daylong summit grappled with a host of issues surrounding the nation’s fractured healthcare system, the impact of health reform and possible solutions to the urgent challenges of unsustainable health costs, patient access, rising chronic disease rates and new technologies.
Those challenges are considerable, conference speakers agreed. But along with the hurdles to better, more cost-effective care they explored throughout the day, participants also offered plenty of ideas aimed at putting the nation’s $3 trillion-plus healthcare system on a path to a more sustainable, rational and integrated network of patient-centered care.
Underlying much of the discussion: the need to align health spending more effectively with the goals of improved patient outcomes, healthier behaviors and a reimbursement system that will “change the incentives to wellness,” in Dooley’s words.
“The system of delivery of care and the incentives for that are dramatically changing, and California has embraced that,” Dooley added. “We will have to push the system to create this integration and coordination of care.”
Much of the discussion at the summit revolved around health reform spawned by the Affordable Care Act. “The ACA,” Dooley said, “is changing everything about health care. The theory is that if you have everyone in a system of care, you can manage their care earlier and avoid catastrophic circumstances to a larger degree. But it also creates the opportunity for payment and delivery reform” as the focus by health plan payers and insurers shifts to wellness and disease prevention.
Leading health systems like Cleveland Clinic are helping to drive the revolution in patient-centered wellness programs, disease management and accessible, community-based care, Cosgrove said.
“As a healthcare industry and frankly, as physicians who are going to lead this [change], we have to create a vision of greater health care and what we want it to be, and take the steps that will get us there,” he told an audience of physicians, health plan administrators, insurance experts and other stakeholders. “We have a once-in-a-century opportunity to make a new healthcare delivery system that can be better for everybody. And we have to remember that the reason we’re in health … is so that we can look after and take care of people.”
Nexium 24HR’s impact: How top brands respond
In May 2014, Pfizer introduced Nexium 24HR, one of the top-selling acid blockers, over the counter in the United States. Nexium has been a leader in prescription acid blockers for more than 10 years, and its approval to be sold as an OTC medication makes it much more accessible to consumers. Nexium has clearly found its place in the OTC antacid category in the short time it has been available, but how have other top brands responded? How has this introduction affected both retailers and consumers?
(For the full report, including charts, click here.)
DSN has partnered with Competitive Promotion Report and IRI to create an exclusive report on the initial impact Nexium has created in the OTC antacids category. This analysis looks at the changing trends in sales, list and retail prices, and retailer margin of top national brands of competing OTC acid blockers.
For drug retailers, Nexium has contributed to a nearly 30% increase in incremental retail dollar sales year over year — about $10.1 million in OTC acid blockers alone for June and July. At an average retailer margin of 24.7%, it added another $2.5 million margin dollars to the OTC drug channel. Additionally, as with any large new product introduction, increased advertising draws more consumers, who, in turn, benefit from increased competition in the marketplace.
While all this is beneficial for drug stores, it is at the expense of Nexium’s competitors. While the actions to be taken by competing brands are not yet known, it will be interesting to observe how each competitor responds to this important development, as well as to each other’s actions. Specifically, Prilosec, Nexium’s leading OTC competitor did not immediately show a noticeable change in promotional strategy, as its mix of promoted units stayed essentially static through the months of June and July. The lack of competitive pricing and more aggressive promotional strategies to brace the impact of Nexium’s presence allowed Nexium to take immediate control of the antacids category.
The following are some additional findings in the study:
- Dollar sales of Nexium’s competitors dropped by an average of 19% in the two months following Nexium’s introduction as an OTC.
- Nexium surpassed Prilosec, the leading acid blocking brand, in July 2014 and is poised to become the dominant brand in the OTC antacids category.
- Total OTC acid blocker units increased by 570,714 year over year in the drug channel. Nexium accounted for 691,325, meaning Nexium has added consumers to the category but also has drawn away sales from other brands.
- Though Nexium and Prilosec are similarly priced at retail, drug stores are positioned to benefit further from the introduction of Nexium, with it providing an additional 5.5% more in margin per unit than Prilosec.
- Pfizer is the only manufacturer to gain ground in antacid tablet retail sales between May and July. Total private label dropped by 4.8%. Prilosec dropped by 21.2%.
Pharmacy’s battle for provider status reaches crescendo at state, federal level
“All providers in the healthcare system should practice to the fullest extent allowed by their license.”
That principle, espoused by a national coalition of pharmacy interest groups working fervently to achieve provider status and recognition for pharmacists, seems straightforward enough. But gaining full provider status — and the fair reimbursement for pharmacy care services that would come if government and private health plan payers included pharmacists in the federal and state definition of a healthcare provider — continues to elude the profession.
The ongoing debate over pharmacists’ value and contribution to better health outcomes persists in the face of clear evidence that “community pharmacy can play an important role in helping to prevent and treat acute and chronic conditions,” said Kermit Crawford, Walgreens president of pharmacy, health and wellness. Earlier this month, Crawford announced his retirement from Walgreens at the end of the year.
“With new patients entering the system, a primary care physician shortage, an aging population and a growing prevalence of chronic diseases, there is a great need for convenient access to quality health care services,” Crawford said.
Pharmacy’s battle over recognition also lingers despite the fact that many health professionals other than physicians have provider status under Medicare Part B, the American Society of Health-System Pharmacists reported. The list includes physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, certified nurse-midwives, clinical social workers, clinical psychologists and registered dietitians or nutrition professionals, ASHP noted.
Nevertheless, “pharmacists are not currently recognized as healthcare providers under federal law, despite having more medication education and training than any other health care professional,” noted Tom Menighan, EVP and CEO of the American Pharmacists Association. “Beyond being unfair to our profession, this lack of federal recognition restricts the contributions pharmacists can make to improving patient care.”
Achieving recognition as designated health providers by Medicare, Medicaid and for-profit managed care plans would mean that “pharmacists are compensated directly by a third-party payer for providing medication therapy management” and other patient care services, noted ASHP. So the lack of provider status also hits community pharmacy hard in the pocketbook. Without that professional recognition, the industry is locked in a perpetual struggle with health plan payers to establish commonly accepted payment standards for medication therapy management, advanced counseling, and disease monitoring and man agement for patients with chronic conditions, among other services.
This is the case despite a growing mountain of evidence showing the cost-saving value to managed health plans and plan payers of pharmacist interventions and collaborative care models that incorporate pharmacists in a team-based approach to patient care. “The evidence shows that when pharmacists are included in medication management, costs go down and quality improves,” Menighan said.
Simply put, “patients’ access to pharmacist-provided patient care is critical to ensuring optimal health outcomes and efficient healthcare delivery,” declared Rebecca Snead, EVP and CEO of the National Alliance of State Pharmacy Associations, one of the organizations on the forefront of the campaign for provider status.
“If spending and outcomes are to be optimized, benefits and healthcare systems must include pharmacist services in collaboration with other providers,” said Lawrence Brown, associate dean and professor of pharmacoeco-nomics and health policy for Chapman University School of Pharmacy.
“When pharmacists are involved, costs go down and quality improves,” Brown declared in a presentation to the Illinois Pharmacists Association last fall. “Provider status for pharmacists will result in a team-based, patient-centered healthcare system, providing improved care and value.”
The absence of uniform payment standards — and the continuing resistance to adopting any reimbursement standard for pharmacists by many health plans and payers — presents pharmacy with one of its toughest fundamental challenges going forward. It undercuts the profession’s evolution beyond drug dispensing and basic counseling, and threatens the in-dustry’s future as a viable, sustainable business model, as margins continue to contract for prescription dispensing and the health payment system shifts inexorably to evidence-based reimbursements and accountable care.
Chipping away at federal, state barriers
The battle for full professional recognition has been taken up by virtually every pharmacy advocacy group, including APhA, NASPA, the National Association of Chain Drug Stores, the National Community Pharmacists Association, ASHP and the Food Marketing Institute. In turn, it’s spawned the formation of ad hoc coalitions like Patient Access to Pharmacists’ Care Coalition, whose purpose is to persuade federal and state legislators and regulators to pass laws and regulations that would grant full provider status to pharmacists.
“A campaign to advance pharmacist provider status … addresses one of the most critical issues for our profession and remains APhA’s primary focus,” APhA’s Monighan reported. “This is a long-term, strategic effort that must be pursued vigorously if patients are to use their medicines successfully, and if our profession is to be relevant in an evolving healthcare system.
“That’s why APhA has embarked on a campaign to achieve provider status, which will recognize pharmacists as valued members of the healthcare team, and allow us to use our unique skills and extensive education to enhance patient health,” he said.
Through coalitions like PAPCC, the industry is working across a broad front to educate lawmakers at the federal and state level and promote new legislation and regulations aimed at gaining full provider status. The outreach campaign extends to Congress, state legislatures, the Federal Trade Commission and the U.S. Centers for Medicare and Medicaid Services.
One key goal: to “promote and facilitate pharmacist registration for National Provider Identifier numbers,” according to a report from the Florida Pharmacy Association and Kayla Mackanin, a PharmD candidate from the University of South Florida.
“The NPI number is the CMS HIPAA standard for identifying healthcare providers,” Mackanin reported. “In order to submit claims to … CMS for services provided to patients, recognized health providers must have and use their NPI.”
Thus, wrote Mackanin, “pharmacist inclusion in the CMS definition [for health providers] is key. CMS recognition will remove current limitations on the type of services and amount of reimbursement pharmacists are eligible for when submitting claims to CMS.”
PAPCC and other groups also have focused their lobbying effort on the FTC, urging federal antitrust regulators focused on healthcare competition to back legislation “that would help pharmacists practice at the top of their education level.”
In a direct appeal to the agency, NACDS urged the FTC “to support the removal of needless barriers to the effective functioning of innovative healthcare delivery for the patients we seek to serve; support fairer scope of practice, supervision and reimbursement laws across states to advance competition and patient choice; and support federal legislation that would designate pharmacists as healthcare providers under Medicare Part B, removing an unwarranted and harmful exclusionary, competition barrier.”
Beyond their work with federal regulators, PAPCC and other pharmacy advocates are steadily chipping away at the barriers to provider status at the state and federal level. In all, 34 states now recognize pharmacists “as providers or practitioners in at least one section of their state statute or in their state Medicaid program,” according to NASPA, which conducted a nationwide analysis of state practice regulations and statutes. However, noted Krystalyn Weaver, director of policy and state relations for NASPA, “little correlation existed between the recognition of pharmacists as providers within state law or the Medicaid program, and payment for pharmacists’ patient care services.”
Industry hails Guthrie bill
The most promising development this year may be in Congress, where new legislation is being considered to expand pharmacists’ status and provide payment standards for pharmacy services to many Medicare beneficiaries. The bill, HR 4190, “will enable patient access to, and payment for, Medicare Part B services by state-licensed pharmacists in medically underserved communities,” said consultant and PAPCC adviser Vince Ventimiglia.
“The shortage of healthcare workers is a major limitation on access to care in medically underserved communities,” Ventimiglia said. “This legislation seeks to fill critical needs and increase access to quality health care in medically underserved communities by enabling pharmacists to practice to the full extent of their education, training and license.”
APhA called the bill — introduced by Reps. Brett Guthrie, R-Ky.; G.K. Butterfield, D-N.C.; and Todd Young, R-Ind. — “critically important” to pharmacy’s future.
“Many patients view their pharmacist as a critical member of their healthcare team,” Guthrie said, following the introduction of H.R. 4190. “This legislation will increase patient access to basic services in a cost-effective and responsible way.”
The Guthrie bill “definitely” reflects the growing awareness and acceptance of pharmacy-based care services as part of a new, broad-based coalition of care, said NASPA’s Weaver. “I think we’re seeing a lot of support — and we’ve even seen a lot of support in federal documents lately for medication therapy management and pharmacy services from CMS and CDC,” Weaver told DSN. “We’re seeing more Medicaid departments recognizing pharmacists and paying for services. And we continue to see pharmacists’ scope of practice evolving as more states adopt more broad collaborative practice provisions.”
Indeed, she added, nine state Medicaid agencies around the United States are now “paying for comprehensive pharmacist services,” and 15 states are providing partial payment for MTM or other services. “And a lot more pay for vaccine administrations by pharmacists,” Weaver said. “So there’s definitely growing support.”
Weaver said some states, such as California and Nevada, already “define pharmacists as healthcare providers in their business, professional or occupation codes. And, she reported, “a handful of states, such as Minnesota and Michigan, recognize pharmacists in their public health provisions; Minnesota also recognizes pharmacists as providers in the insurance code.”
Provider status and accountable care
Even before the term came into wide usage, the push for provider status and a full seat at the table of healthcare providers has long been one of pharmacy’s top priorities, in both professional and business terms. And the passage of health reform — particularly the federal government’s subsequent endorsement of accountable care organizations, collaborative care groups, medical homes and evidence-based, patient-centered health care — added rocket fuel to that campaign.
Indeed, the pharmacy industry put its call for provider status on record more than three years ago, when it called on CMS to explicitly include pharmacists among the health professionals eligible to serve as fully qualified members of health provider teams serving ACOs. In June 2011, an ad hoc group of 14 pharmacy organizations called Health Care Reform Pharmacy Stakeholders appealed in writing to CMS as it was preparing to issue final rules governing CMOs.
“Pharmacists’ participation in ACOs will help ACOs reach CMS-determined clinical and financial performance targets that will show improved patient results and lower health costs,” the group asserted. “Pharmacists can help patients better manage their medications and chronic conditions, thereby reducing hospitalizations and re-hospitalizations.”
Responding to more than 1,300 comments from pharmacists and other health stakeholders, CMS issued final rules governing ACOs in November of that year. The rules established the Medicare Shared Savings Program as part of the rollout of the Affordable Care Act, making ACOs eligible for higher Medicare payments if they met specific quality and savings benchmarks.
CMS’ final regulations essentially made it easier for pharmacies to participate in ACOs by cutting in half the number of quality measures required for participating organizations, lowering the bar for sharing electronic health records with other health stakeholders and creating an advance payment program to allow providers access to some evidence-based reimbursements before the actual savings were realized. Importantly, however, the agency’s final rules — which took effect in January 2012 — didn’t include pharmacists as eligible professionals qualified to form ACOs. Nor did they allow pharmacists to share directly in the health savings generated by the new ACO model of care.
Proving pharmacy’s value
Increasingly, managed care plans are waking up to the cost-saving potential offered by pharmacies when pharmacist-provided health services are aligned with plan goals and the activities of integrated healthcare teams. One recent example: a medication therapy management program offered through OutcomesMTM to some 900,000 Medicaid-eligible patients in Ohio enrolled in CareSource, a major Medicaid managed care plan. “All plan members are eligible for face-to-face MTM services from specially trained local pharmacists to help them achieve safe and effective results from their medications, while controlling costs,” OutcomesMTM reported. “Participating local pharmacists receive alerts and information regarding medication use patterns, as well as guidance on working with patients and doctors to close key therapy gaps.”
Services provided by pharmacists in the program include comprehensive medication review, adherence consultation and ongoing education and monitoring of patients’ progress. The program pays pharmacists for their services, and “allows pharmacists to work collaboratively with physicians to enhance quality of care, improve medication compliance and address our members’ medication needs,” said Jim Gartner, CareSource VP pharmacy and medical management
“Pharmacists are probably the healthcare professional that our members see the most, so they should be a part of the healthcare team that serves our members,” Gartner said.