Pharmacy Executive Forum

Pharmacy Executive Forum

The Future of Health

System Pharmacy

Colleen Keenan

Senior Research Analyst

[email protected]

Rebecca Tyrrell

Practice Manager

[email protected]

© 2019 Advisory Board • All rights reserved • advisory.com

6

Ensuring pharmacy is viewed as a strategic partner

Six trends to guide strategic planning efforts

Source: Pharmacy Executive Forum interviews and analysis.

1. As Medicare not only

grows – but ages – case

mix shifts will exacerbate

payer mix challenges

1Major demographic shifts

impacting care delivery,

volumes, and financing

5. The need to deliver on

scale is no longer an

option – it’s a mandate

6. Recognizing the

limitations of HDHPs

in inflecting price,

employers are pivoting

from delegation to

active steerage

3Consumers driving

heightened focus

on value

New disruptors competing

for traditional health

system business

2

2. Mega-mergers lack an

acute care asset

3. New market entrants are

rebuilding the front door to

the health system to meet

patients where they are

4. Failing to prepare for a

consumer-driven market

puts health system

finances in jeopardy

http://www.advisory.com/


7

Health system loses if pharmacy’s voice isn’t heard

Uninformed strategic decisions can lead to lost revenue or higher costs


Loss of revenue Poor cost projections

External retail pharmacy approached

health system for med-to-bed partnership

Impact: shifted business from health

system retail pharmacy for both initial

and follow-up fills; created disjointed

care post-discharge

Health system purchased a neurology

practice without consulting pharmacy

about drug implications

Impact: leaders surprised by high drug

costs associated with neurology practice

External specialty pharmacy approached

health system to partner; health system

agreed without considering system-

owned strategy

Impact: removed potential for health

system to gain specialty pharmacy

business from provider referrals

System’s stroke center started using tPA1

without looping in pharmacy

Impact: system shocked by high cost

of tPA and low reimbursement

System planned to realign community

health network and relocated 340B-

eligible provider-based sites

Impact: jeopardized at least $1M in

profit margin from 340B prescriptions

System purchased an oncology practice

and planned to convert to hospital-

based sites

Impact: leaders were unaware of the

costs associated with getting new

practices up to The Joint Commission’s

standards

1) Tissue plasminogen activator.



ROAD MAP8

Major demographic shifts impacting care delivery, volumes, and financing 1

2 New disruptors competing for traditional health system business

3 Consumers driving heightened focus on value

4 Q&A



9

Trend #1: Medicare population growing and aging

Case mix shifts will exacerbate payer mix challenges

Source: CMS Standard Analytical Files (SAF), January 1 – December 31, 2017; Advisory

Board interviews and analysis; Pharmacy Executive Forum interviews and analysis.

1) Excludes MS-DRGs with fewer than 11 cases.

Highest volume inpatient

conditions, 2017

1Major hip and knee joint

replacement

2 Septicemia

3 Heart failure

4 COPD

5Pulmonary edema &

respiratory failure


conditions, 2017

1 Septicemia

2 Heart failure

3Kidney & urinary tract

infection


replacement

5 Simple pneumonia

34.1%Surgical portion of

MS-DRG volumes1

“Young-old” (65-74) “Old-old” (85+)


conditions, 2017

1 Septicemia


replacement

3 Heart failure

4 COPD

5Pulmonary edema &

respiratory failure

“Old” (75-84)

113.95Hospitalizations

per 1,000 enrollees


MS-DRG volumes1


per 1,000 enrollees


MS-DRG volumes1


per 1,000 enrollees



10

Driving pressure to address complex, unmet needs

Many stakeholders designing programs that target seniors

High disease burden

81% of adults 65+ years old live with

two or more chronic conditions

Declining function

32% of all Medicare beneficiaries need

assistance with one or more ADLs1

High utilization

26% of all physician office visits are

with adults 65+ years old

Specialized care needs…

Poorly met needs

38% of 65+ year old adults experience

“treatment burden”2

…driving significant investment

United Health Care3

expands data-

driven navigation

program for

Medicare

Advantage

members

ChenMed

opens it’s 50th

senior medical

center

Apple is in talks

with private

Medicare plans

about bringing

its watch to at-

risk seniors

1) Activities of daily living.

2) “Treatment burden” is experienced when patients indicate

that managing health care needs is difficult for patients or their

families, that medical appointments or tests get delayed or

don't get done, or when all of their health care needs are too

much to handle.

3) Advisory Board is a subsidiary of Optum, which is a subsidiary

of United Health Group. All Advisory Board research, expert

perspectives, and recommendations remain independent.

Source: “An Overview of Medicare,” Kaiser Family Foundation, https://www.kff.org/medicare/issue-brief/an-overview-of-medicare/; Wolff, JL, Boyd CM,

“A Look at Person-Centered and Family-Centered Care Among Older Adults: Results from a National Survey,” Journal of General Internal Medicine,

2015, 30(10):1497-1504; Hing, E., et al., ”National ambulatory medical care survey: 2004 summary” CDC, 2006, 374; Burtoff, C, et al., “Multiple Chronic

Conditions in the United States,” Rand Corporation, 2017; Truong, K, “UnitedHealthcare expands data-driven care navigation program for Medicare

Advantage member,” MedCity News, 21 Feb 2019; “ChenMed Opens Its 50th Senior Medical Center,” ChenMed, 1 Feb 2018; Farr, Christina, “Apple is in

talks with private Medicare plans about bringing its watch to at-risk seniors,” CNBC, 16 Jan 2019; Pharmacy Executive Forum interviews and analysis.



11

Implications for pharmacy leaders

Increased margin pressure

will intensify demands to

contain drug spending and

pursue new revenue streams

Growth in the volume of high-

risk, polypharmacy patients

who require more intensive

care management



12

Health system should play central role in filling gaps

Pharmacy, in particular, is well-positioned to support senior population

1) Medication therapy management.

2) Transitional care management.

How to respond

Strategies pharmacy can employ

Care delivery

• Use automated risk stratification

tools to prioritize high-risk

patients for MTM1, TCM2, and

other clinical pharmacy services

• De-prescribe medications

when appropriate

• Ensure patient call centers are

staffed to handle or appropriately

route medication questions

from seniors

• Synchronize medication refills

and consider adherence

packaging

Financial

• Determine case-mix shift impact on

inpatient drug spend

• Tighten formulary, switch to generics

and/or biosimilars when possible

• Play an active role in managing

palliative care drugs:

– Assess the appropriateness of

medication orders

– Ensure timely provision of

medications

– Counsel care teams and patients

about medications

Growth

• Ensure specialty pharmacy

services are accessible and

easy-to-use for the Medicare

population

• Market 24/7 clinical

pharmacist access

• Make retail pharmacy

services physically accessible

to senior population (e.g.,

parking, wheelchair

accessible, large signage)

• Improve pharmacy revenue

cycle management




13

Integrate pharmacists in existing older adult services

Huge potential for de-prescribing and better medication education

Source: Cleveland Clinic, Cleveland, OH; Pharmacy Executive Forum interviews and analysis.

Cleveland Clinic geriatric clinic embedded pharmacist model

• Center for Geriatric Medicine

outpatient clinic launched

• Physicians refer patients over

50 years old for cognitive

impairment, frailty, falls, and

goals of care assessments

• Geriatricians often serve as

patient’s primary care provider

• Center initially staffed by:

– Six outpatient geriatricians

– Two geriatric fellows

– One nurse practitioner

(Falls Clinic)

• Previously, clinic lacked a

dedicated resource to review

older adult’s complex medication

regimens and provided

education and counseling

Geriatric clinic identified need

for medication support

Created a geriatric

pharmacist clinic position

• Physicians advocated for a

pharmacist resource to

conduct comprehensive

medication reviews (CMRs)

• Embedded a full-time, board-

certified geriatric pharmacist in

the outpatient geriatric clinic

– Pharmacist created a

consult agreement that

allows physicians to refer

patients to the geriatric

pharmacist—mainly for

polypharmacy

– Pharmacist focuses on

holistic CMR, with data from

multiple specialists, rather

than focusing

on chronic disease

management

Generated pathways for patient

care involving pharmacist

• Proactive involvement in new

patient visits for geriatric

assessment

– Provide CMR and assess

ongoing or long-term

medication-related needs

– Patients referred to pharmacist

under consult agreement for

polypharmacy and medication

adherence issues

• Under consult agreement,

pharmacist may add, modify,

remove medications

• Assessment completed and care

plan developed, wherein

pharmacist adjusts total

medication regimen to minimize

pill burden, while emphasizing

care priorities for the patient



14

Partnering with your leadership team

Proactively demonstrate pharmacy’s value in managing older adults

Don’t wait to be asked to partner.

Initiate collaborative conversations with

service line leaders to identify medication

savings opportunities associated with high-

cost, high-volume procedures and conditions.

1

Focus on the patient journey—not just

individual touchpoints.

Finding low-cost ways of engaging seniors

between visits will help build stronger

pharmacy-patient relationships, reinforce

medication-related education, boost

medication adherence, and prevent

adverse events.

2

Have a plan for quantifying your impact.

Any effective program focused on the senior

population will require data that shows you

can reduce spending and improve

experience for this cohort.

3

Guiding principles Questions to ask your leadership

Anticipating change:

How do you anticipate our case mix shift

will change over the next five years?

Existing resources:

What dedicated resources or services

do we already have in place for the

senior population?

Future services:

Will we roll out any new initiatives

for patients who are 65+? 85+?

Predicting needs:

Are there specific unmet needs

you’re hoping to fill for the 65+

and 85+ populations?




ROAD MAP15




4 Q&A



16

Trend #2: Mega-mergers lack an acute care asset

Source: Google Finance; Health Care Advisory Board interviews

and analysis; Pharmacy Executive Forum interviews and analysis.

1) Integrated delivery network.

2) As of May 15, 2018.

$249.5B

$230.2B

$66.9B

$40B

$42.8B

$11.6B

$57.9B

$41.4B

Com

bin

ed M

ark

et

Valu

ation

2

Potential Industry Disruption

Unprecedented Mega-Mergers Claiming the SpotlightDrivers of Deal Activity

Tax reform brings

for-profit companies

an influx of cash

Margin pressure

intensifies capital needs

in certain sectors

Shifting administrative

priorities changes sources

of projected growth

Competitors are building hospital-less IDNs1



17

Assessing the challenges and opportunities

Systems must redefine relationship with new delivery models

Source: Health Care Advisory Board interviews and analysis;

Pharmacy Executive Forum interviews and analysis.

Key elements of new delivery models

Robust primary

care capabilities

Control over specialty

referral chain

Propensity to refer to

non-hospital settings

Ability to refer to

high-value hospitals

• Own extensive

primary care network

• No investments or

partnerships with

convenient care entities

Potential health system upside:

• Own comprehensive

multispecialty network

• No existing

relationships with

competitive entities

• High-cost acute

care provider

• Haven’t invested

heavily in alternative

sites of care

• High-cost acute

care provider

• Limited differentiation

on basis of quality,

unique offerings

• Provide clinic staff

• Fill network gaps

• Utilize as low-cost

sites of care for at

risk patients

• Become efficient

specialist referral

of choice

• Build indispensable

specialist network

• Become low-cost

acute care provider

of choice

• Build indispensable

OP procedural

network

• Become low-cost

acute care provider

of choice

• Offer true

differentiated

clinical value

Health systems most at risk:



18


Heightened pressure to

improve care coordination—

especially at and after

discharge—to ensure strong

patient outcomes

Increased need to support

partnership with physicians

and nurses to reduce care

variation and total spending

Greater demand for data that

demonstrates the impact of

any given pharmacy initiative

on both quality and costs

Increased pressure to

improve patient experience

and to market services

directly to consumers




19

Do your part to be a low-cost, high-quality partner

Pharmacy has many levers for reducing costs and unwarranted variation

How to respond


FinancialCare

delivery

Growth

• Use automated risk stratification

tools to prioritize high-risk patients

• Perform med rec at and after

discharge for high-risk patients

• Offer consultative services

for prescribers

• Staff pharmacists on

multidisciplinary palliative

care teams

• Enhance diversion prevention to

avoid safety-related events

• Maximize supply chain efficiencies

through contracting and centralization

• Enforce formulary adherence to

reduce prescriber variation

• Provide pharmacogenomics testing

and pharmacist consultative support

• Automate refills and offer medication-

related chat bots to free up pharmacist

time for more clinical tasks

• Use telepharmacy to centrally review

orders and reach new service areas

• Future state: use AI to replace

pharmacist order reviews altogether

• Provide meds-to-beds service

to increase prescription capture

rate and create patient loyalty

• Demonstrate value of health

system pharmacy with

specialty pharmacy services

(i.e., better patient outcomes,

lower drug costs, revenues)

• Use pharmacist-patient

relationship in the retail setting

to expand patient touchpoints

and drive refills




20

Medication utilization review for CVR1 opportunities

Partnering with physicians to reduce unwarranted drug spend

Source: Cleveland Clinic, Cleveland OH; Pharmacy Executive Forum interviews and analysis.

Four steps for identifying cost savings initiatives

1Collaborate with finance: Pharmacy

works with finance team to pull quarterly

cost data by service line to identify

highest spend items

2

Meet with service line leadership:

dedicated pharmacy team meets with each

physician institute to discuss utilization of

10 highest spend items

3

Partner with physicians: pharmacy works

with physicians to identify cost-reduction

initiatives for each service line based on

their high-spend items

4

Develop protocol: pharmacy team works

with physicians to create new protocols

for review at P&T committee meetings

Case in brief:

Cleveland Clinic

• Not-for-profit, multi-specialty

academic medical center;

system comprised of 11

regional hospitals

• Dedicated pharmacy finance

team created a formulary

dashboard to monitor price

changes that spur P&T to

make changes when

warranted

• Corporate pharmacy team also

works closely with pharmacy

finance to pull spend data by

service line to collaborate on

cost-savings initiatives

1) Care variation reduction.



21


Show how pharmacy reduces costs and improves care standardization

Cost and quality track together.

Becoming an acute care partner of

choice requires competing on both

cost and quality simultaneously.

1

Better coordination across care

teams is the Holy Grail.

Aggressively pursue opportunities to

improve handoffs and support between

visits, using data as your guide.

2

Communicating your value is more

essential than ever.

Any choice of preferred providers and

any partnership between those

providers will involve many leadership

conversations, so have your value

pitch ready at all times.

3



Competition:

How do we plan to compete with

new mega-entities like CVS/Aetna

and Walgreens/Humana?

Branding:

What is our identity in the market

today? How do we want to change

that in light of new competitors?

Position in market:

What steps are we taking to establish

ourselves as a low-cost, high-quality

provider of choice? What role do

drugs play in that equation?



22

Trend #3: New entrants rebuilding front door to care

Strategy focuses on meeting patients where they are

Growth opportunities with Aetna integration

Connect members to screening

services, smart devices, and apps

to manage diseases

Chronic

disease

management

Offer low-cost alternative to ED

and direct Aetna members to

preferred providers for downstream

care on the basis of price

ED avoidance,

downstream

navigation

Promote wellness through on-site

dieticians and group activities

(e.g., yoga classes, weight

management, smoking cessation)

Member

engagement

in wellness

Adjust cost-sharing to promote

use of HealthHUB ® services,

including pharmacy

Cross-sell

products

Non-Aetna members who use

the HealthHUBs ® can be

converted to Aetna’s MA plan

Growth of MA

membership

CVS HealthHUBs

Phlebotomy services

Care concierge and consultation

On-site dieticians and

nutrition support

Yoga & wellness seminars

Chronic disease management

CVS MinuteClinics

Asthma & respiratory care

Source: Ramsey, L, “Take a Look Inside CVS’s New Health Hubs That Are a Key Part of Its Plan to Change How Americans Get Healthcare,” Business Insider,

February 13, 2019; Paavola, A, “CVS Unveils HealthHub Store Design,” Becker’s Hospital Review, February 13, 2019; LaVito, A and Coombs, B, “CVS Health

Shows off New HealthHUB Store Design,” CNBC, February 13, 2019; “CVS Health testing new HealthHUB store format,” CVSHealth, February 13, 2019; Health

Care Advisory Board interviews and analysis; Market Innovation Center interviews and analysis; Pharmacy Executive Forum interviews and analysis.



23

Need to aggressively and

professionally advertise pharmacy

services to patients and clinical

care teams to boost awareness

and utilization

Need to deliver on customer

experience at every pharmacy

touchpoint, which likely requires

growing pharmacy staff’s

customer service skills


This includes evaluating services and

products offered, locations and modes

of delivery, and patients served


Increased urgency to boost

prescription capture rate,

particularly at discharge



24

Expand or refine services to focus on convenience

Telepharmacy and retail are two avenues with growth potential

How to respond


Care delivery

• Strengthen pharmacist-patient

relationships in the retail pharmacy

with more consultative interaction

and medication-related support

• Expand MTM offerings in retail

pharmacy, urgent care

• Support patients between

physician office visits through

phone calls and video chats

• Use technology to offer at-home

prescription monitoring support

• Boost medication adherence using

apps and text-based reminders

Financial

• Offer in-house mail order

pharmacy services

• Offer telepharmacy to support

patients between physician

office visits

• Optimize retail inventory (e.g.,

generate retail prescriptions in

new services areas on an

ongoing basis)

Growth

• Expand retail pharmacy

offerings to additional locations

• Market pharmacy services

more widely in the community

• Offer additional clinical/health

goods and services in the retail

pharmacy to minimize the

number of stops a consumer

needs to make after visiting a

care provider




25

Using telepharmacy to lower cost and extend reach

SSM Health used savings to scale services to new locations

Central hub

• Located in a large clinic with both

specialty and primary care services

• Staff: two full time pharmacists who

were previously located in an SSM

retail pharmacy that is now run virtually

1

Existing high-volume retail sites

• Three existing retail pharmacies with

volumes over 200 prescriptions per day

• Staff: one full time pharmacist with

pharmacy technician support (one to

two onsite technicians); additional

pharmacists moved to central hub

2

Existing low-volume retail sites

• Three existing retail pharmacies with

volumes under 100 prescriptions per

day transitioned to remote dispensing

sites (RDS)

• Staff: onsite pharmacy technician;

additional pharmacists at central hub

3

Clinics with no existing retail site

• Opened an RDS at one, soon to be two,

primary care clinics that generate high

prescription volumes (over 40,000

prescriptions per year) and lobby space

that can easily accommodate a RDS

• Staff: onsite pharmacy technician;

remote pharmacist support from the

central hub

4

Source: SSM Health, Madison, WI; Pharmacy

Executive Forum interviews and analysis.



26

Principled analysis keeps program cost-neutral

Maximizes skills of existing staff

Keys to success

Use a principled site selection strategy:

1) Volumes (over 40,000 prescriptions per year)

2) Services provided (primary, specialty, urgent care)

3) Location (remote and/or underserved communities)

1

Present the risks of maintaining current status quo:

Gain physician buy-in by presenting the telepharmacy model as the alternative to

having to close low-volume retail pharmacies2

Use existing staff and space:

Redeploy staff from existing retail pharmacy locations to staff the central remote hub and

other outpatient pharmacy roles3

Staff the right people:

Staff pharmacy technicians with strong communication and problem-solving skills, drawing

on existing staff whenever possible to preserve relationship continuity4

Source: SSM Health, Madison WI; Pharmacy




27

Linking retail to other parts of the care continuum

Touchpoints allow frequent monitoring and timely medication adjustments

Carilion Clinic’s IHARP model leverages pharmacy across care continuum

Hospital pharmacists

• Identify patients who

qualify for program

• Introduce patient to

PCCP1 with brochure

• Fax hospital discharge

summary to PCCP

Primary care pharmacists

• Contact patient within 72 hours

of discharge to assess transition

to home and schedule

face-to-face appointment

• Integrate medication care plan

into existing care plan

• Contact patient every three

months to assess status and

resolve medication-related

problems

• Provide education, monitoring,

and medication management

Community pharmacists

• Notify PCCP of all new

drugs prescribed

• Check blood pressure,

weight, and other clinical

status markers when

patients fill prescriptions

• Report results back

to PCCP

Source: Carilion Clinic, Roanoke, VA; Pharmacy Executive Forum interviews and analysis.

1) Primary care clinical pharmacist.



28

Collaborative effort proves beneficial

Source: Carilion Clinic, Roanoke, VA; Pharmacy Executive Forum interviews and analysis.

Carilion Clinic’s IHARP Staffing Model

Seven PCCPs embedded in 22 practices

(cover three to five practices each, depending

on panel size and geographic proximity)

Hospital pharmacists at seven hospitals

Community pharmacists at 30 independent

and chain pharmacies throughout region

Time spent on direct patient care: 33 hours

per week for PCCPs, split between clinics

(1-2 days per clinic)

$1.7MTotal cost of care savings

from reduced drug use and

ED utilization

5,500IHARP pharmacy interventions

in 2017

Error prevalence and impact



29


Evolve your retail strategy to compete

Focus on building loyalty.

Best-in-class organizations build durable

consumer loyalty by fostering trust-based

relationships. View each touchpoint you

have with patients as an opportunity to

build lasting relationships —starting with

discharge prescription capture.

1

Think like a patient.

Before making any strategic decision,

assess the impact on affordability,

convenience, and patient experience.

2

Prepare your elevator pitch.

Assume patients, providers, and health

system leaders do not know what

services your retail pharmacy and

clinical pharmacists can offer, and be

prepared to explain—using patient

stories whenever possible.

3



Telemedicine:

Have we made or do we plan to

make investments in telemedicine?

If so, what patients or service lines

are we starting with?

Branding:

What is our identity in the market

today? How do we want to change

that in light of new competitors?

Target audience:

Are there particular demographics

we’re trying to boost loyalty among?



30

Trend #4: Consumers increasingly taking the reins

Providers engaging with new technology will earn consumer loyalty

Source: Phillips, Kathryn A. et al., “Genetic Test Availability And Spending: Where Are We Now? Where Are We Going?,” Health affairs 37.5 (2018): 710–716, 2

Oct. 2018; “Prenatal and New-born Genetic Testing Market worth over $7 Billion by 2024,” Global Market Insights Inc., 5 June 2018; “2018 Funding Part 2: Seven

more takeaways from digital health’s $8.1B year,” Rock Health, 2018; “Rise of the Practical Patient: 2018 Consumer Healthcare Report,” Urgent Care Association

of America; “91% of Consumers Are Demanding Price Transparency,” InstaMed, 19 July 2019; Kirzinger A, et al., “KFF Health Tracking Poll – February 2019:

Prescription Drugs,” KFF, March 1, 2019; Population Health Advisor interviews and analysis; Pharmacy Executive Forum interviews and analysis.

Convenience

Reducing barriers

to care (e.g., house-calls,

telemedicine)

Investment in

on-demand

health care

services in

2018

$1.4B 64%Patients under

age 45 go to PCP-

alternative first

• ChenMed

• Oak Street

Health

• CityMD

• Maven Clinic

Examples of disruptors :

Sizing the market:

Size of US

genetic

testing market

in 2017

$10.6B 28%Annual growth

rate of clinical

sequencing1

market

Providing patient-centered

experiences and precise

clinical care

Personalization

• 23 and Me

• Helix

• Color

Genomics

Transparency

Providing insight into

scheduling and financial

responsibility

Of adults

say it is

“difficult” to

afford

prescriptions

24%91% Of consumers

think it is important

to know payment

responsibility

before a visit

• Medlio

• Healthcare

Blue Book

• Castlight

• GoodRx



31


Heightened demand for

customer-facing tools and

services that improve

access, convenience, and

transparency

Increased need to proactively

educate consumers about the

range of services pharmacists

can offer and how to access

those services




32

Pharmacy can provide personalized, transparent care

How to respond


Care delivery

• Provide pharmacogenomics testing and

consultative support

• Strengthen pharmacist-patient relationships

in the retail pharmacy with more

consultative interaction and medication-

related support

• Use technology to offer at-home

prescription monitoring support

• Conduct pharmacist home visits

• Install community-based medication kiosks

• Facilitate caregiver access to family

member prescription information

• Offer medication sync for family members’

medications

Financial

• Equip clinicians with

point-of-prescribing price

information

• Offer patient financial

assistance support

Growth

• Automate refills and

reminders with a retail

pharmacy mobile application

• Offer medication-related chat

bots to free up pharmacist

time for more clinical tasks




33

• Pharmacy department is

certifying several pharmacists

from each hospital to become

pharmacogenomics

consultants

• Team will manage hospital-

based pharmacogenomics

work, answer prescriber

questions, and provide support

when patients request

pharmacogenomics testing or

results interpretation

Pharmacogenomics enables targeted medications

MedStar Health taking steps now to build the infrastructure

1 2 3

Provide general

physician education

Establish pharmacogenomics

P&T subcommittee

Prepare to deploy

direct clinical support

Paving the way for a pharmacy-led pharmacogenomics program

• Pharmacogenomics pharmacist

leads education sessions with

providers during grand rounds

and lunch-and-learn meetings

• Education covers: basics of

pharmacogenomics, health

system offerings, pharmacy

support

• Pharmacy hosts an annual

interdisciplinary continuing

education conference on

pharmacogenomics

• Program is preparing for a

clinical launch and may start

with pain management and

psychiatry

• Subcommittee reviews literature to

identify testing with the best evidence

• Engages small group of physician

advisors who

are interested in pharmacogenomics

• Identifies drug-gene pairs that could

cause ADEs

• Builds EHR alerts to flag drug-gene

pairs at point of prescribing

• Negotiates test reimbursement with

payers

Source: MedStar Health, Columbia, MD; Pharmacy Executive Forum interviews and analysis.



34

Increasing price transparency at point of prescribing

Enable more collaborative care planning conversations

Sources: “CVS Health Fights Back on High Cost Drugs by Launching Industry’s Most Comprehensive Approach to Saving Patients Money”,

PR News Wire, April 11, 2018; Monica, Kate, “CVS Offering Prescription Benefit Information Through Surescripts”, EHR Intelligence,

November 28, 2017; Nicky Lineaweaver, “Epic and Humana are teaming up on a tool for ,” prescribing medication,” Business Insider, June

12, 2019; Health Plan Advisory Council interviews and analysis; Pharmacy Executive Forum interviews and analysis.

Frequency of prescriber

switching to drugs on formulary

85%

Average difference per prescription when

prescriber switches to lower-cost drug

$75

There are three clinically appropriate alternatives:

Illustration1 of CVS Health’s real-time pharmacy cost tool

An Ecotrin prescription will cost $170.00

and this patient will pay $14.99.

X

Switch

Lovenox costs $24.00; patient pays $4.00

Plavis costs $11.99; patient pays $1.60

Coumadin costs $50.99; patient pays $9.20

Switch

Switch

Pilot results

1) The drug costs are for illustrative purposes only.

2) Advisory Board is a subsidiary of Optum, which is a subsidiary of United

Health Group. All Advisory Board research, expert perspectives, and

recommendations remain independent.

Other prescription pricing tools

40%Of consultations result in

selection of a more cost-

effective treatment

19%Decrease in patient out-of-

pocket costs when prescriber

uses this tool

UnitedHealthcare2

& DrFirst

PreCheck MyScript

Humana & Epic

IntelligentRx



35


Clearly define pharmacy’s role in improving patient experience

Set clear goals and definitions.

Patient engagement and patient-

centricity are often unwieldly

concepts. Understand what your C-

suite is focused on to prioritize your

efforts and define more precise goals.

1

Recognize your responsibility in

improving patient experience.

Many access and convenience

challenges have links to pharmacy,

so start by surfacing and addressing

consumer pain points.

2



System consumer strategy:

How would you articulate the guiding

principles of our consumer strategy?

How do you see pharmacy fitting in?

Patient demands:

Are there particular gaps we need to

fill when it comes to meeting our

patients’ access, convenience, and

quality demands?

New health care entrants:

What concerns do you have about

mergers such as CVS/Aetna and

Amazon/PillPack and how they’ll

impact our health system?



ROAD MAP36




4 Q&A



37

Trend #5: Delivering on scale is no longer an option

Systemness is a now a prerequisite for success



Operational

advantage

De

gre

e o

f m

ark

et a

dvanta

ge

Degree of “systemness”

Product

advantage

Structural

advantage

Transformational

advantage

• Centralized

business functions

• Supply chain

efficiencies

• Scalable process

efficiencies

• Clinical

standardization

• Solution-oriented

product portfolio

• Footprint

rationalization

• Optimal capital

allocation

• Transition

to population

health identity

Typical scope

of ambition

Necessary scope of ambition



38


Increased pressure to improve

supply chain efficiencies,

reduce clinical variation, and

eliminate waste

Greater urgency to

centralize, automate, or

eliminate repetitive or low-

value-add pharmacy tasks to

free up resources for higher-

value activities




39

Leverage technology to drive pharmacy systemness

Focus on cost control wherever possible

How to respond


Care delivery

• Centralize select clinical

functions (e.g., post-discharge

calls, refill authorizations,

virtual medication history)

• Use automated risk

stratification tools to prioritize

high-risk patients needing a

pharmacist intervention

• Use AI as an “assistant” to

identify ADEs, high-risk drugs

• Install community-based

medication kiosks

Financial

• Centrally manage and distribute drugs

• Centralize sterile compounding, using

robots and other automation

technologies (stop/prevent

outsourcing)

• Introduce supply chain management

technologies to reduce manual

processes related to inventory checks,

recalls, and maintenance

• Create system-level formularies to

reduce variation and unnecessary

drug spend

• Establish ambulatory formulary

• Maximize existing partnerships (e.g.,

with manufacturers, GPO)

Growth

• Package and sell

medication-related

capabilities to local

employers

(e.g., PBM offering)

• Compound drugs for other

health systems (503B)

• Engage providers across

the system to refer patients

to the internal pharmacy

given strong specialty

pharmacy outcomes




40

NDC standardization reduces retail costs

Review pricing and utilization for WAC and 340B accounts

1) MU Health Care.

Evaluate current NDC prices

Identify which NDCs have the best 340B or WAC prices,

and the lowest WAC spread. MUHC used a data algorithm

to evaluate the best of four pricing scenarios based on drug

pricing and 340B capture.

1

Examine store-level 340B capture rates

Calculate historical 340B and non-340B purchase data. Use

340B capture rates to guide product selection and baseline

par levels.

2

Consider clinical and logistical variables

Other considerations include: drug schedule, narrow

therapeutic index, package size, and NDC availability

3

MUHC1 has varied their

approach to site-level

purchasing

• In Phase I, pharmacy

leaders directed each

retail site to purchase

the preferred NDC, but

sites retained ultimate

purchasing autonomy

• In Phase II, MUHC

hardwired the adoption

of preferred NDCs that

were advantageous for

all retail locations

Source: MU Health Care, Columbia, MO; Pharmacy Executive Forum interviews and analysis.

MU Health Care’s strategies to reduce drug prices



41

Standardization significantly reduced drug spend

Gains in supply chain efficiency also contributed to savings

Source: MU Health Care, Columbia, MO; Pharmacy


1) Percentage of orders that can be

successfully filled by your wholesaler.

Streamlined

processes

Better inventory

management

Hard savingstotal savings (both phases)$1.39M

phase I savings (106 NDCs)$936K

phase II savings (135 NDCs)$459K

generic products standardized241

increase in store-level compliance

from phase I to phase II17%

fewer NDCs to maintain (80% reduction)843

increase in inventory turns17%

reduction in inventory$88K

increase in wholesaler service level110%



42

Seek to standardize prescription supply chain

Blockchain technology promises supply chain efficiency enhancement

Emerging blockchain partnerships

Implement blockchain technology

to target intra- and inter-health

system medication transport in

NC, IN, and TN

Track specialty medicines across

provider locations within their

networks and transfers to other

provider networks to help mitigate

regional inventory shortages

Use a data platform that is able to

track medicines from wholesale

distributors and third-party

logistics providers

Reduce time to track and trace

inventory and allow for the

timely retrieval of distribution

information

Determine product integrity in the

distribution chain—including

whether products are kept at the

correct temperature

Increase accuracy of data shared

among network members

WakeMed and IU Health

CASE EXAMPLE

IBM, KPMG, Walmart, Merck

CASE EXAMPLE

Source: Landi, H, “Indiana University Health, WakeMed testing blockchain to track specialty prescriptions,”

Fierce Healthcare, April 30, 2019; Garrity, M, “IBM, Walmart, Merck, KPMG partner for FDA's blockchain

program,” Becker’s Hospital Review, June 13, 2019; Pharmacy Executive Forum interviews and analysis.



43


Strategically build on pharmacy’s systemness efforts

Acknowledge your power.

Pharmacy’s actions directly impact the health

system’s ability to execute on strategy.

Whether pharmacy operating expenses rise

or fall dictates whether system plans

constrict or expand.

1

Assume that your existing partners can

be doing more for you.

Make sure you’re capitalizing on all

opportunities for better scale, pricing, and

support (e.g., manufacturers, distributors).

2

Invest in change management.

Aligning operations across sites requires

building trust and system-level structures

that support integration.

3

Guiding principles


Questions to ask your leadership

Systemness goals:

What does our long-term vision of

systemness look like and how are

we tracking?

Current challenges:

What are the greatest hurdles you’re

facing related to systemness?

Justifying ROI:

What ROI do you expect on new

investments (in programs or FTEs)?

How do you think about the “return”

on cost savings initiatives in particular?

Prove yourself as a strategic partner.

You can prove your value by helping your C-

suite uncover hidden cost savings, supporting

clinical pathway development, and enhancing

real-time information access.

4 Savings threshold:

What cost savings would an initiative

need to produce to pique your interest?



44

Trend #6: Employers turn from delegation to steerage

Not much room left for employers to inflect price using HDHPs



• Encourage employee

uptake of HDHPs

• Outsource administrative

burden to third party such

as a private exchange

Shift risk

Delegation

• Shift employees to

public exchange

• Trade Cadillac tax

for employer

mandate penalty

Drop coverage

Abdication Activation

• Curate network design

to influence employee

choice

• Active episodic-specific

steerage

Manage proactively

Recent era of employer strategy

Emerging era of employer strategy

Spectrum of options for controlling health benefits expense



45


Increased pressure

to contain drug

costs and improve

outcomes for

defined populations

Greater demands for

differentiated services

that make the health

system’s products more

attractive to purchasers


Heightened need to track

pharmacy interventions

and communicate

pharmacy outcomes to

a range of internal and

external stakeholders



46

Demonstrate pharmacy’s clinical value

Avoid being your own enemy when calculating and sharing impact data

How to respond


Care delivery

• Embed pharmacists in clinics, employer

onsite clinics, and/or call centers to

manage medications and provide self-

management education for patients

with multiple chronic conditions

• Expand clinical pharmacy offerings that

align with health system goals

(e.g., reduce readmissions by offering

med rec/TCM support)

• Track pharmacy interventions and

estimated savings for each clinical

activity (e.g., de-prescribing, dosing

changes)

• Partner with other service lines to

establish Centers of Excellence

(e.g., pharmacogenomics, HIV)

Financial

• Bring PBM services in house

to reduce prescription benefit

spend for covered lives

• Create an ambulatory

formulary to standardize

clinic drug purchases and

achieve cost savings

• Centralize purchasing,

inventory, and distribution

of clinic drugs

Growth

• Market and grow health

system-owned specialty

pharmacy volumes by

demonstrating superior

outcomes and savings to

customers (i.e. payers,

employers, physicians,

patients)

• Use pharmacist-patient

relationship in the retail

setting to expand patient

touchpoints and drive refills




47

Get credit for every single pharmacy intervention

Banner Health links pharmacy interventions to direct cost savings

Source: Banner Health, Phoenix, AZ; Pharmacy


Intervention type Example

Clinical adherence assessment

Proactively contact patients or intervene to remove adherence

barriers

Delay medication shipment if patient is

unable to pick up on time; contact patient to

track missed doses

Clinical intervention with physician

Suggest therapeutic options that generate savings or are more

convenient for patient

Switch patient who is afraid of needles from

an injectable medication to an oral

medication

Clinical intervention with patient

Interact with patient outside of normal counseling or follow-up

Provide suggestions to mitigate injection site

reactions

Clinical intervention on patient care plan

Partner with care team to optimize medication outcomes

Provide recommendations for addressing

side effects or improving therapy

effectiveness

Clinical intervention with other health care professional

Identify additional opportunities to improve patient care

and outcomes

Recommend a vaccine, connect patient to

smoking cessation program or diabetes

education program

Categorizing and quantifying cost savings associated with pharmacist intervention



48

Take ownership of pharmacy benefits management

Vendor administers benefits and negotiates rebates

UNCHCS functions

Benefit oversight, utilization

and cost trend management

• Performs all PBM functions

for PAP2

• Creates custom pharmacy

benefit reports

• Reviews reports with key

UNCHCS leaders

Audits

• Establishes daily, weekly and

monthly audit processes

• Reviews claim activity to

ensure accurate processing,

identify inappropriate

utilization and high cost drugs

Division of responsibilities in UNCHCS’s1 PBM partnership model

Vendor functions

Claims adjudication

• Codes the benefit according to

UNCHCS’s requirements

• Utilizes existing infrastructure

to process claims

Rebate negotiation

• Negotiates and processes

rebates via an aggregator on

behalf of UNCHCS

Tools

• Provides access to key tools

that allow UNCHCS staff to

make formulary changes,

administer PAs and create/run

timely reports

Shared functions

Formulary management

• UNCHCS leverages vendor’s

process for clinical evaluation

of drugs/drug classes for

inclusion on the formulary

• Identifies and evaluates

savings opportunities

• Customizes formulary

only when it makes

financial sense

PA program

• UNCHCS administers

custom PA protocols;

Vendor administers standard

PA protocols

Source: UNC Health Care System, Chapel Hill, NC;


1) UNC Health Care System.

2) Patient assistance program.



49


Understand and share pharmacy’s value story with range of stakeholders

Broadcast pharmacy’s value.

As your internal and external customers

grow in number, broadcasting your value

and successes is essential. No one is

going to do this for you.

2



Use drug price hype to your advantage.

Purchasers are wary of the rising cost of

drugs, given their resulting impact on total

employee or member health costs. Use

this as leverage to get a seat at the table

for strategic decision making and

contracting discussions.

1Internal PBM opportunities:

What does our employee benefit

spending look like?

Are there particular high-spend or

growth areas you’re concerned about?

External revenue options:

Are there any services that we are

actively trying to package and sell to

employers?

Pharmacy value conversation:

Are you aware of the role pharmacy

can play in managing employee drug

costs and specialty drug spending?



ROAD MAP50




4 Q&A



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