Every hospital and health system in the country has a robust workforce – typically between 600 and 30,000 doctors, nurses, pharmacists, and support staff – for whom it must provide medical and prescription insurance. When you factor in the additional coverage of those employees’ beneficiaries and dependents, some health systems end up providing insurance for as many as 100,000 people.
In recent years, rising drugs prices and several other factors have caused pharmacy benefit costs to increase, leaving many hospitals and health systems in search of a solution to optimize their employee health plan prescription benefit design.
Here is a closer look at the importance of pharmacy benefit management (PBM) program design and opportunities, the relationship between health systems and brokers/outside PBMs, and the critical role Visante plays in helping optimize employee health plan prescription benefit outcomes for organizations across the country.
The Importance of Employee Health Plan PBM Design and Strong Performance
The majority of hospitals in the U.S. are self-insured – including the risk involved with the high-cost employee retail and specialty pharmacy benefit – and are thus incentivized to manage insurance plans to keep costs down. But unlike most employers, health systems are in a unique position within the employee pharmacy benefit marketplace because they can maximize total plan savings by leveraging their own internal pharmacy resources.
This is important because proper coordination between a health system’s plan and pharmacy can almost always result in improved employee health and organizational financial outcomes – not to mention employee convenience and savings. However, many of these plans are managed with support from outside brokers and their partner PBMs that can create a significant hurdle within the optimization process.
Brokers and Outside PBMs
Most PBM contracts seek to retain as much revenue as possible within the PBM (and broker) ecosystem. As a result, PBM contracts are typically built without consideration to the health system’s many inherent advantages – especially when the health system has internal pharmacy expertise as well as an internal retail pharmacy option available to serve employees.
Visante can play a critical role in helping hospitals and health systems craft well-designed benefits programs that offer more to team members at a reduced cost, while also making the most of their internal pharmacy program to drive significant savings and employee wellbeing.
Visante’s Approach to Employee Pharmacy Benefit Design
Visante takes a unique approach to improving pharmacy benefit design and prescription access for our clients, typically leveraging five steps in doing so:
- Review and reconciliation of PBM contract(s) and current plan design to understand structure, performance, and hurdles to success.
- Analysis of pharmacy claims data to establish a plan performance baseline, which often identifies savings opportunities from initiatives allowed by the current PBM contract and initiatives that may be negotiated into future contracts.
- Creation of a customized PBM assessment report that provides an unbiased perspective on current PBM performance and proposed strategies and recommendations for next steps – including anticipated savings to be achieved upon implementation.
- Determination of strategies best-suited to help the client move forward to maximize savings, including support of the client in PBM negotiation and/or RFP support if requested.
- Strengthening of partnership between internal pharmacy and HR leaders to ensure strong plan performance and savings are maintained on a long-term basis.
There is always an opportunity to redesign benefits programs, perform routine performance reviews, and implement mitigation strategies to help hospitals leverage their unique ability to lower drug expenses and drive savings. Visante does not seek to replace broker or PBM services, but rather to provide contemporary, unbiased insight into PBM performance, as well as a roadmap toward unique financial savings and future entrepreneurial growth.
Contact us today to learn more about optimizing your own employee pharmacy benefit program.
On August 16, President Joe Biden signed the $750 billion health care, tax and climate bill the Inflation Reduction Act (IRA) into law. This followed passage by the Senate through the budget reconciliation process which required votes from all 50 Democratic senators and the Vice President’s tie-breaking vote – since no Republican senators voted in favor of the bill. The measures in the bill are restricted to those that directly change federal spending and revenue, and all elements were subject to review by the Senate parliamentarian who did indeed make some cuts.
With the passage and signing of the IRA, there is now some forward movement toward prescription drug price control. The bill finally recognizes the federal government as the largest purchaser of drugs and includes a measure that allows the federal health secretary to negotiate the prices of certain drugs each year for Medicare. However, the measure applies to only a very limited number of drugs and it won’t take effect quickly.
Under the new provisions, Medicare would be able to negotiate “a fair price” for 10 drugs covered by Medicare Part D starting in 2026. Medicare would select from those drugs with the highest total annual Medicare costs. The negotiated price list would then expand to 15 drugs in 2027 and 2028. In 2029 and subsequent years, 20 more drugs would be added. Medicare will only be allowed to select part B drugs starting in 2028, and a drug would be removed from the list if a generic alternative becomes available.
Overall, to be eligible for negotiation, drugs must have been approved for nine years for small molecule entities and 13 years for biologics. While these changes will have no immediate impact for patients or Medicare spending, it at least opens the door to expanded opportunities to leverage better drug pricing moving forward.
The cost of insulin nationwide has been a critical issue and the bill attempted to cap the price of insulin at $35 per month. However, that was ruled out of order by the Senate parliamentarian, who ruled the cap could apply on Medicare, a government program, but not on private insurance. As a result of that ruling, the Democrats split the measure between Medicare and private insurance, but Republicans ultimately blocked the measure for private insurance.
As part of the “vote-a-rama” of amendments initiated by Republicans, there was also a failed amendment to reintroduce a defunct Trump administration regulation that would have required federally qualified health centers (FQHCs) to make insulin and injectable epinephrine available to patients at or below 340B costs.
The parliamentarian also ruled that a measure that was in the bill to force drug companies to offer rebates if prescription prices outpaced inflation was not totally in line with the rules for budget reconciliation and could only apply to Medicare patients – but not those with private insurers. This provision is expected to begin in October for Part D drugs and in January 2023 for Part B drugs.
The bill puts a cap of $2,000 on out-of-pocket prescription drug costs for people on Medicare, effective in 2025. While this is a positive move, it also offers no immediate relief to patients struggling with current out-of-pocket prescription drug costs.
Finally, there is also a three-year extension on healthcare subsidies in the Affordable Care Act originally passed in a pandemic relief bill last year, intended to help keep premiums for eligible enrollees at $10 per month or lower and helping millions of Americans avoid spikes in their health care costs.
Employee burnout has become a key issue for many healthcare organizations, as people begin finding themselves in increasingly stressful working conditions. Because of this, how to prevent burnout has become a top priority for many organizations.
In this month’s Entrepreneur magazine, Adam Bornstein wrote a great piece titled “Recovery Is Part of the Race” on considering this issue from a different perspective. Rather than trying to reduce work-related stress, he suggests thinking about how much we are draining our people, and then focusing on filling them back up again.
We want people to “work hard, care deeply, and push the limits they think they can achieve,” and that requires a balance between intense work and rest. Much like someone training for a marathon, a winning formula requires hard work to build endurance – but it also adequate rest periods to recover.
To “fill people back up,” Bornstein suggests five different approaches:
Embrace Time Off
Consider a different approach to time off for people. The old approach of two weeks’ vacation is outdated and gets magnified with all the remote work where the tendency is to be “plugged in” all the time. If organizations are hiring good people that understand the commitment to the organization and that are trusted employees, many organizations are extending the flexibility to take the time they need – rather than boxing people into a defined time limit (e.g., two weeks’ PTO).
Remove Fear of Failure
People inherently don’t want to make mistakes, and no one enjoys getting reprimanded for a mistake by their boss. A culture that doesn’t encourage people to push some limits and that is intolerant of mistakes is draining on employees. If organizations can remove the fear associated with making a mistake, they can reduce stress and improve creativity and innovation. Treat mistakes like a learning experience that everyone can use to get better and grow.
Invest in Personal Growth
Take an interest in people and really make an effort to find out where they would like to improve, and then encourage them and help them find actual opportunities to achieve their goals. A small investment in helping people grow can pay big dividends toward employees actually doing more work because it’s fulfilling.
Understand Career Goals
Similar to investing in personal growth, it’s also important to understand how people would like to progress within an organization. It’s about not only what people can do for the organization, but also what the organization can do for the people.
Encourage Deep Thought
Give people some time to think and experiment without any boundaries. That’s often hard to do given the pace that everyone is working at, but letting people consider “what if” scenarios and encouraging people to consider multiple options to current challenges stimulates creativity – which in turn helps to keep people excited and motivated.
It’s OK to be working hard, but if organizations consistently also work to show people that they care, are investing in their growth, and are providing opportunities to recharge and recover, the issue of burnout will come up far less frequently.
IQVIA has released their 2022 Report on the Use of Medicines and as usual it is jam packed with great information. Three key things you should know:
- Prescription drug expenses are continuing to rise at a very significant rate.
- Specialty pharmaceuticals now comprise over 50% of the U.S. drug spend .
- Prescription abandonment is an important yet “hidden” problem.
Additional data and trends include:
- Retail drugs currently represent 86% of medicine use in the U.S. and non-retail drugs are only 14% of use, a number that has been declining since 2017. These statistics are very consistent with what we see in our practice. For our 60 largest IDNs, health systems and hospital clients, outpatient drug spend now exceeds inpatient drug expense. This situation emphasizes the need for an overall pharmacy strategy that looks beyond pharmacy as a “cost center” and recognizes the significant contribution to revenue and operating margin that well-run retail, specialty and infusion programs can generate. It also emphasizes the growing importance of ambulatory pharmacy patient care services to assure patients are on the right drugs, off the wrong ones, and adherent to their regimens to prevent costly drug related hospital admissions.
- In total, dispensed prescriptions increased at an average 2.1% over the past five years with minimal impacts due to the pandemic. Prescription growth has been driven by the aging population as seniors use more medicines per capita than other age groups, and the 65+ population has grown on average 3.6% annually 2017- 2021. In our experience, each senior typically has at least one chronic condition and each chronic condition generates on average of two prescriptions. Projections are that by 2030, fully 30% of the U.S. population will be classified as seniors. This trend certainly points toward continued growth in the retail prescription market and the need for health systems to have a coordinated strategy around retail/specialty pharmacy and population health/disease management programs.
- While the percent of prescriptions distributed at retail pharmacies has grown 12% since 2017, mail order prescriptions have declined 4% despite a slight increase in 2020 due to shifts to mail order. The emergence of major players in the mail order prescription space, like Amazon, were expected to create some significant market shifts. However, as evidenced by these data, those shifts have failed to materialize. As a result, there is a continuing opportunity for hospital-based retail/specialty programs. With the increased need for chronic conditions management, hospital-based programs are in a great position to be able to provide fully integrated, longitudinal care for these patients which includes their prescription needs. Being able to fill retail/specialty prescriptions through hospital-based programs provides access to key medication-related data that is vital to an overall patient management approach.
- Specialty medicines now account for 56% of spending, up from 28% in 2011 and driven by growth in autoimmune, oncology and diabetes use. While specialty medicines now account for the majority of the prescription drug spend, they still represent less than 5% of total prescription volume. These data highlight the need for a robust hospital strategy around specialty medications that can help control expense on the inpatient side and optimize revenue/margin on the outpatient side. Understanding growth trends in populations that rely on specialty medications, and keeping ahead of the release of new specialty agents, is imperative for overall hospital success as this class of medications continues to grow.
- Reflecting the growing number of people seeking care for mental health disorders in the U.S , prescriptions for mental health disorders grew 5.5% in 2021 and 7.6% in 2020, an increase of more than 64Mn prescriptions in two years. Providing care for this rapidly growing segment remains a challenge for many organizations, but these data point toward continuing growth in this market segment.
- Drugs remain one of the fastest growing elements of U.S. healthcare spending. Over the past five years, spending at list prices [Wholesaler Acquisition Cost (WAC)] has increased from $581Bn to $776Bn — an average of 5.9% per year. Payer net spending has increased from $463Bn to $586Bn over five years at a compound annual growth rate of 4.8%. Spending at manufacturer net prices, including all products, are estimated to have grown an average of 4.6% over five years and 12.1% from 2020 to 2021, including $26Bn of growth from COVID-19 vaccines and therapeutics. In our experience, hospital and health systems are often under resourced in terms of business infrastructure, supply chain management and analytics to most effectively track and manage this growing expense. As hospital margins continue to be squeezed, investing in the infrastructure to optimize the management of pharmaceuticals continues to make good business sense.
- In 2021, use of opioids declined by 6.9%, dropping back to per capita levels of use seen in the middle of the year 2000. While this is great progress, the issue of opioid related deaths is far from controlled. Data from CDC’s National Center for Health Statistics indicate that there were an estimated 100,306 drug overdose deaths in the United States during 12-month period ending in April 2021, an increase of 28.5% from the 78,056 deaths during the same period the year before. Clearly this issue involves more than just controlling prescription opioid use and given the primary focus on the pandemic the past two years organizations should not lose sight of the continuing need to improve in this area.
- 81Mn new prescriptions were abandoned at the pharmacy in 2021 by patients. Of prescriptions with a final cost above $250, 61% are not picked up by patients, as compared with 7% of patients who do not fill when the cost is less than $10. When examining causes for 30-day readmissions failure to take prescribed medication is often a major driver of readmission with several studies showing this to be 25-30% of the total readmission volume. Ensuring an effective discharge medication reconciliation and discharge prescription capture program supported by a well-developed patient medication assistance program are sound strategies to address this opportunity.
While these are just a few of the key data points from the IQVIA report, they do highlight the continued importance of medications for effective outcome, expense and revenue management for hospitals and health system. Having a high-performance pharmacy system in place to optimize all aspects of medication use is critical and will continue to increase in importance as part of an overall strategy for hospital and health system success.
Visante launches interim pharmacy leadership and search services to consulting portfolio
One of the more challenging aspects of health system pharmacy leadership can be the recruitment and development of leadership team members. Whether this need arises from a newly approved position, a promotion, a resignation, retirement or other circumstance, the identification, recruitment and ongoing professional and personal growth of a pharmacy leader is critical to the success of any pharmacy program. In addition to our current leadership development and executive coaching services, Visante now offers interim pharmacy leadership support services as well as retained search services for permanent placement.
Visante is pleased to announce the offering of interim pharmacy leadership support services for our clients. Many healthcare systems have successfully utilized interim leaders in key operational, clinical and administrative positions to keep the organization running effectively and moving forward in this rapid paced healthcare environment while the permanent placement recruitment process, which can take several months or longer, gets underway. Visante works with a network of well-qualified interim pharmacy leaders in numerous specialties and high-impact change agents with extensive pharmacy backgrounds. Utilizing an interim leader is an alternative that fits many current situations.
In addition, Visante is also pleased to announce the addition of permanent placement pharmacy leadership retained search services for our clients. Debi Verrill, an experienced recruiter within healthcare and health system pharmacy, in particular, has joined Visante as our Coordinator for Professional Recruitment Services. Backed by the full support, expertise and professional networks of Visante’s leadership team members and our consultants, Debi works on an exclusive basis with client companies to fill operational, clinical and administrative pharmacy leadership roles.
Visante has built our collective success largely on the trusted relationships, accomplishments and resulting value that we bring to you, our clients. Our retained search services continue to build upon these foundational elements. We serve as a trusted advisor to our clients, which begins with truly understanding the culture of the client company, the details of the business, and the tailored template for the open position(s). From that point, we provide a nationwide pool of candidates, based on need, which has been vetted thoroughly against the position’s detailed profile, work with the client through the interview process and the ultimate negotiation and offer to the successful candidate.
Visante is pleased to provide interim and permanent healthcare leadership solutions focusing on the clinical and non-clinical executive. We are constantly researching to make sure we keep an up-to-date database of potential networked candidates, most of whom are not currently searching for a change. We use the connections we have within the industry to find these individuals, including networking with other recruiters and professionals, in order to help you find the best and right fit for your pharmacy leadership team members.
Visante also understands the importance of ongoing professional and personal development to achieve a high performing pharmacy program. We also know leadership varies based on the size and culture of an organization, among other factors. Visante Senior Consultants Ron Small and Ann Getz offer executive coaching and leadership development services for your pharmacy leaders. Our experts will work alongside your executive team to deliver industry-leading coaching techniques and develop the top end of your organization into an elite leadership group. This investment has an impact on your entire structure from top to bottom and can produce lasting benefit to morale, performance and bottom line.
Professional coaching brings many benefits: fresh perspectives on personal challenges, enhanced decision-making, greater interpersonal skills and increased confidence. Those who undertake coaching also can expect appreciable improvement in productivity, satisfaction with life and work, and the attainment of relevant goals. We bring our expertise with leaders and teams to support leadership growth and foster potential across your organization
Questions You Should Ask to Determine If You Need Visante Interim Leadership Support Services and/or Executive Coaching
- Are there serious problems that may be better handled by a leader who will be exiting after the issues are fixed?
- Does the existing leadership staff need to develop their skills further?
- Do you need to produce a change in the unit’s organizational culture?
If the answer is yes to any of the above questions, then Visante could be a valuable resource for you.
In-house recruiting and leadership development are an option, of course. However, there are time and money benefits to utilizing Visante’s services as adding transformational leadership can be an arduous process. Leading pharmacy clinical programs and operational services in hospitals and health systems is an increasingly complex area of expertise. Interim Leadership during a systematic approach to a search for the best candidate may be beneficial to an organization. Leadership development may also be needed, and executive coaching may be necessary to further develop an area of expertise within the leadership team.
We look forward to being of service.
Growing consulting firm adds pharmacotherapy and critical care specialist to team to help meet growing demand
MINNEAPOLIS – April 22, 2019– Visante, Inc. announces Judi Jacobi, PharmD, FCCP, MCCM, BCCCP, joins the firm as a Senior Consultant. Jacobi will provide leadership and project management to Integrated Delivery Networks (IDNs), hospitals, and health systems as well as support for business to business work nationwide and helps Visante to meet a growing demand for consulting services in these markets.
Judi was most recently a critical care pharmacist with Indiana University Health where she provided advanced pharmacist services to cardiac surgery/ECMO critical care patients and direct pharmacy quality services with experience treating all types of critical care patients. Judi has held society leadership positions, including past-president positions at American College of Clinical Pharmacy (ACCP) and Society of Critical Care Medicine (SCCM).
Visante CEO James Jorgenson, RPh, FASHP, said, “We are absolutely delighted for Judi to join Visante at this exciting time in our business. Judi is known across the industry for her expertise and leadership in clinical pharmacy practice.” Jorgenson explained, “Our clients will greatly benefit from Judi’s knowledge of all aspects of pharmacy practice. Hospital leaders in 2019 continue to face increasing financial pressure while working to provide excellent patient care. Judi, along with our other consultants, brings real-world experience and a track record of success in complex health system pharmacy. We see extraordinary potential in the opportunity to advance the business of pharmacy.”
“As an experienced critical care specialist, I have a perspective on patient safety, efficient medication use, and formulary management,” said Jacobi. “As part of Visante’s team, I will lend expertise to research design, patient safety initiatives, and other aspects of pharmacy practice,” she added. Judi is a Board Certified Critical Care Pharmacist (BCCCP).
Visante is a multidisciplinary, clinician-composed consulting firm specializing in the business of pharmacy and healthcare compliance. By diagnosing and solving complex problems, we help hospitals, health systems, pharmaceutical companies, and managed care firms more effectively deliver compliant healthcare and pharmacy services. Our 60-plus consultants include experienced pharmacists, nurses, physicians, IT professionals and business experts.
Hospitals & Health Networks recently published an article on reining in hospital inpatient drug costs. They spoke with a number of hospital pharmacy leaders who offered several tactics to reduce drug spend:
Seven ways to manage drug costs
- Explore “gray” indications. Check medications to see if there are gray areas or questions about whether an expensive drug is indicated or whether a less expensive alternative with the same efficacy and safety could be substituted.
- Identify drugs that have gone up in price. Develop a data analytics tool that alerts pharmacy staff to significant spikes in pricing so they can work with clinicians to rapidly identify lower-cost options. The tool could also calculate the financial impact to the hospital based on annual usage of the drug.
- Negotiate volume discounts. Using the process of therapeutic interchange — where a pharmacist and doctors identify a few drugs in each drug class that will be used exclusively by the hospital — you can seek discounts on your first-line drugs through a GPO that negotiates prices directly with a drug manufacturer.
- Manage drug inventories. Maintain tighter control over automated dispensing cabinets on nursing units. Weed out unused, duplicate and low-use drugs from storage areas.
- Try extended dating. Work in tandem with an analytical laboratory to test the stability of some medications and extend their expiration dates.
- Use consignment services. Identify certain high-cost, low-use drugs and partner with a consignment service to have these drugs delivered on an as-needed basis, rather than storing them in house.
- EHR transparency tools. Build an alert system into your EHR that can prompt physicians at the point of prescribing medications to explore other similar drug options. Similar drugs are rated by costs so physicians know exactly what the cost of the drug is that they are prescribing.
Foundational to these suggestions, however, is the ability to quickly determine what is driving cost increases. Is it price, volume or utilization? Generally, drug cost increases are a combination of these three elements but strategy and tactics to address these elements will differ and it is important for hospitals to be able to understand their cost drivers and adjust accordingly. Too often organizations do not invest in proper drug cost analytics capabilities. Having data analytics software that can quickly identify cost trends and point you to the source is a wise investment. Also, having data analysts that can focus on creating actionable information for decision-making on drug costs is a wise investment. Far too often the highest price pharmacy talent is working to mine and analyze data when this could be done much more effectively and economically by well trained analysts.
At Visante, we talk at length about how A+O=D2 TM. In this article, we will focus on every day practices that create Access and Opportunity for drug diversion to happen within the “four walls” of the pharmacy. The things we see and do every day blind us to bad practices that leave the door open for drug diversion we are trying to prevent.
First, let’s talk about “key security.” Where do you keep “the keys?” We are never surprised by the answer we get when posing this question… as the person being questioned reaches behind them to pull “the keys” off a hook on the wall, or from an unlocked drawer beside “the cabinet.” This is an example of the Culture of Trust and how we can’t believe one of our own would steal drugs. This type of access creates opportunity where there is no accountability or definitive way to identify who the diverter may have been.
Second, let’s talk about “camera security.” You may say, “If someone were to steal drugs, they would be on camera.” That’s when we identify that there is no camera or only one camera in the entire pharmacy… and it is pointed at the door to the pharmacy, not the controlled substance cabinet. In this day and age, we thought automated controlled substances cabinets were the norm… wrong! We are surprised to find out all too frequently there are automated dispensing cabinets on the patient care units, but the drugs in the pharmacy are still in a locked cabinet. So, there’s no way to track access through automated means and often there is no camera either. For those who do have cameras in the pharmacy, how many and where? Have you actually viewed them to make sure they capture the angles and activity to detect a diversion event? Often, the answer we get is “I don’t know.” This is one area we can almost universally say that most pharmacies are under resourced.
Third, let’s talk about “receiving and restocking security.” Do you have separation of duties? (Not the same person ordering and receiving.) This is still one of the most problematic areas we see in smaller hospitals. The feeling is that “we are a family” and “know each other very well” so there isn’t anything to be concerned about… wrong! Again, the Culture of Trust rears its ugly head. Another common finding is when the pharmacy stages their controlled substance restocking in the central hub of activity in the pharmacy thinking no one will steal when the drugs are in the middle of everything and everyone is watching. In actuality, in the middle of everything and everybody, no one is really watching. When something is everyone’s responsibility, no one is accountable. Take the time to segregate duties and create accountability within your processes and practices.
“Drug Diversion: In Plain Sight” is a major source of organizational risk often overlooked by internal assessments. Having an external set of eyes review your policies and practices will help mitigate risk points not “seen” because they are In Plain Sight.