Here at the Thriving Pharmacist, we often write about where we believe the practice of pharmacy should going, and given the feedback we receive, there are more than a few pharmacists that agree with our direction. In a nutshell, we believe that pharmacists and pharmacies should be documenting patient care, evaluating outcomes of therapy and working with patients and prescribers to optimize medication use. There is evidence already available (some discussed on this blog previously) that pharmacists, when used in this manner, can benefit the healthcare system in significant and meaningful ways. This includes financial benefits to the healthcare systems, with significant savings realized in total health spend.
But healthcare today is very fragmented, and this creates the potential for inefficiency. The companies paid to manage the prescription benefit (Pharmacy Benefit Managers or PBMs) often have no stake in the total health spend. The primary mechanisms used by the benefit managers to save the healthcare systems money are downward pressure on the cost of medications and (more recently) DIR fees taken from member pharmacies and shifted back to the health plan. The health plans appear to be mostly unaware that pharmacists, used properly, can positively impact their bottom line in other ways.
This myopic doctrine manifested when Congress handed the Medicare Drug Benefit (Medicare Part D) over to the PBMs to run. The PBMs are only responsible for drug costs. The accountability for total health spend falls to Medicare Part B, so any programs under Medicare Part D that leverage pharmacists to increase medication compliance and improve medication related outcomes come at the expense of the PBMs with no return on the PBM investment. It comes as no surprise, then, that Medicare Part D MTM programs have been mostly non-starters, with very few patients eligible, and plans using internal resources instead of the patient’s own pharmacist to implement them. The PBMs appear to view these programs as added expense without a return on their investment.
This fragmentation is allowing the tail to wag the dog. The Medicare Part D benefit has become a “success” from the prospective of congress, with the savings the PBMs have shown. These savings have largely come at the expense of the bottom lines of the actual providers in the trenches, though. One only has to look as far as Medicare’s own reports to see that the PBM industry is doing quite well, quite possibly making as much money managing the benefit (charging a spread on each prescription) as the pharmacies actually caring for the patients. The recognition by the government that the current problem is a success further propagates the currently popular PBM strategies that have forced down the price paid to pharmacies for medications without looking at the bigger picture: medications (when used correctly) are an incredibly cost-effective way to save total healthcare costs. It is not always the least expensive medication that is going to save the system the most money in the long run, but the tail continues to argue cheap is better, and the dog doesn’t seem to be complaining.
The solution for health care, however, is just waiting to make it through congress. By giving provider status (with Medicare) to pharmacists, the real benefits of pharmacy can grow beyond Medicare Part D’s emphasis on cheap drug product. Paying pharmacists to make interventions that ultimately save the provider (Medicare part A and B) in total health spend makes significantly more sense than the current model focusing almost exclusively on drug cost. In effect, provider status for pharmacists will ultimately use pharmacists where they can save the most for the system.
Today’s assignment is for every pharmacist to have an encounter with their elected officials in Washington DC. Refer them to some of the examples discussed previously on this blog (things like the Army’s own reports, and studies looking at savings by improving compliance and other examples) where pharmacists can save the payor money. Help them understand that pharmacists are an important asset to help Medicare survive. Make your encounters count. Get help them understand the importance of Medicare acknowledged provider status to pharmacists. If they have not already signed on in support of the current bill, encourage them to do so. Help stop the tail from wagging the dog.