Pharmacy: The Missing Piece of the Value Puzzle

The necessary push for the health care industry to move to whole-person care instead of condition-oriented models and tactics for applying a value-based model in pharmacy benefits.

The topics of patient-centered care and value-based care (VBC) dominate a lot of health care discussions. Almost uniformly, though, those conversations leave out one of the most valuable elements of whole-person VBC: the pharmacy.

How often do we hear about scenarios such as this: A heart specialist prescribes oral atorvastatin to help lower a patient’s low-density lipoprotein cholesterol. Unaware of this, a dermatologist at a completely different health system prescribes topical ketoconazole to treat the patient’s tinea versicolor—and liver damage ensues.

Both prescriptions appear perfectly fine when viewed from a purely condition-oriented perspective. When viewed through the lens of whole-person VBC, however, they are entirely inappropriate, of course.

Not only can a condition-oriented approach to patient care increase clinical risks, but it can also raise resulting costs for patients and health care overall. Recognizing these impacts, many health care providers and payers are moving from condition-oriented, volume-based reimbursement models to whole-person VBC delivery models.

Rather than getting paid for each service provided—which naturally incentivizes service volume—providers in VBC contracts are paid based on how well they improve care quality and reduce costs.

So, if other providers are moving in that direction, why is pharmacy still focused on volume? More importantly, what would happen if pharmacy took a seat at the value-based table?

Pharmacy’s Influence

In addition to pharmacy’s crucial effect on clinical outcomes, consider pharmacy’s influence on health spending.

Recent projections estimate that retail and non-retail prescription drug spending will grow from 13.7% of national health expenditures (NHE) in 2018 to 13.9% of NHE by 2028. In actual dollars, those numbers represent approximately $500 billion in 2018 and approximately $863 billion in 2028—and all without considering any of the impacts of COVID-19.1

As health care grapples with both the clinical and financial after-effects of the pandemic, the entire pharmaceutical industry has an excellent opportunity to think about how to inject more value into health care. Two questions every pharmacy organization should be asking itself include:

  1. Where is our organization in the context of VBC?
  2. What role can we play to promote whole-person VBC?

There is a growing recognition of the value pharmacy can bring to whole-person VBC. For starters, the Pharmacy and Medically Underserved Area Enhancement Act recently introduced in Congress finally aims to give Medicare provider status to certain pharmacists.2

Yet, even absent such legislation, every pharmacy organization can look for new ways to insert pharmacists into multidisciplinary care teams and create a whole-person approach to care.

Case Examples

The transition from volume to value is a complex challenge all across health care—but it can be overcome. If entities like pharmacy benefit managers (PBMs) can do it, there is no reason why other pharmacy organizations can’t follow suit.

If we think about it, most PBMs epitomize a volume-based model. Whether they adopt a traditional or pass-through paradigm, volume is typically the revenue lever. They rely on volume-based discounts. This creates misaligned incentives between PBMs and their self-funded clients, with little motivation to control drug spend or improve care quality.

Nevertheless, one PBM has taken a whole-person VBC approach to its client relationships. As a result, it can provide consistent examples of how better health outcomes ultimately lead to sustainable savings.

In this PBM’s model, pharmacists become part of the multidisciplinary care team and truly partner with patients’ physicians. They share data and initiate conversations to help optimize medication therapies. All patients can benefit, but those with complex or costly chronic conditions may benefit the most.

For example, a physician prescribes 2 injections per month of Humira 40 mg for a patient with psoriatic arthritis. However, a clinical pharmacist at the PBM uncovers several office visits and procedures associated with chronic sinus infections when looking through the patient’s clinical profile.

Since Humira isn’t recommended for use in people with chronic infections, the pharmacist contacts the prescribing physician to recommend changing the prescription to Otezla 30 mg, 1 tablet, twice daily. This patient-focused collaboration reduced the risk of potential adverse effects and comorbidities while also saving the health plan $16,457 annually.

Another scenario involved a 9-year-old child prescribed weekly Humira injections to manage Crohn disease. Alerted that the drug dosage and frequency were unusually high for a patient of that age, the PBM’s pharmacist called the child’s physician. Together, they decided to initiate lab testing to see how well the treatment was working.

When the lab results came back, it was clear that the $128,000 treatment was not effective. So, once again, the pharmacist consulted with the child’s physician. They switched the treatment to Remicade, and lab tests showed positive outcomes within 3 months.

Just as significant, the child enjoyed a higher quality of life on the new regimen. Net-net: Working collaboratively toward whole-person care, the pharmacist and physician achieved better clinical care that also happened to save the health plan $100,000 annually.

Advocate for Value

If we ever hope to improve patient outcomes and lower unsustainable costs, pharmacy must feel empowered to join the groundswell toward whole-person VBC. Pharmacy should request representation at the value-based table and become a key contributor to interdisciplinary care teams in places in which they’re not already doing so.

When every facet of health care is incentivized to do better instead of more, we will inject greater value into health care.

About the Author

Karthik Ganesh is CEO at EmpiRx Health, the industry’s only value-based PBM with a clinically-focused and tech-enabled approach to bending the Rx cost curve. He is also the author of The Happiness Model, a book that explores resilience and finding inner peace under the most difficult of circumstances.

Karthik is passionate about maximizing value at health service companies while also creating a culture of belonging that embraces new ideas and deliberate approaches to tackling key healthcare challenges. Applying these leadership principles, he has built EmpiRx Health into an Inc. 1000 company and certified Great Place To Work, while transforming it into a high-growth and high-innovation engine.

References

  1. Conti RM, Turner A, Hughes-Cromwick P. “Projections of US Prescription Drug Spending and Key Policy Implications.” JAMA Health Forum. Jan. 29, 2021. https://jamanetwork.com/channels/health-forum/fullarticle/2776040#:~:text=Total%20drug%20spending%20will%20grow,%24165%20billion%20to%20%24302%20billion. Accessed April 27, 2021.
  2. Hippensteele A. “‘Pharmacy Is Literally Saving the World Through Immunizations,’ Says APhA CEO, EVP Scott Knoer.” Pharmacy Times. April 26, 2021. https://www.pharmacytimes.com/view/-pharmacy-is-literally-saving-the-world-through-immunizations-says-apha-ceo-evp-scott-knoer Accessed April 27, 2021.