Author: Michael Deninger

PBMs came into being as a convenience service that originated when third party prescription benefits began to emerge. Pharmacies were required to send paper claims to insurance for reimbursement. This was a time-consuming process, both in the preparation of the submissions and the time to receive payment. The fledgeling PBM industry enabled pharmacies to submit claims electronically, get instant approval and get paid faster. A win-win-win.

That was then, and now things are a lot different. Today, pharmacy has been flipped upside-down. Literally. Instead of servicing pharmacies for convenience, PBMs sell pharmacies in aggregate as a network and extract money for the pharmacies work. PBMs, as an industry, are far more profitable than the pharmacies they depend on and pharmacies are at the mercy of the PBM for their customers and future. So how can a pharmacy remove the PBM from having this undue influence on pharmacy? The answer is simple: turn back the clock to the days before middlemen. To do this, we need to influence a change in perspective at the employer (the payer) level with respect to healthcare benefits.

For the employer, health insurance creates an illusion of risk mitigation. If an employee ends up with a very costly medical condition, the insurance is at risk, and not the employee or the employer. But this thought process if flawed. Insurance premiums will always adjust to ensure that the insurance company is not at significant risk. Insurance companies are not altruistic; They strive to turn a profit. The amount of money paid in premiums, both the employer and employee contributions, closely follows the actual health expenditures. This is key, because even though an insurance company is involved, you are self-funding, or pre-funding the benefit.

If an employer is essentially self-funding the health insurance by pre-funding the insurance, you may be able to save significant money by opting to self-fund. This sounds scary but it is not all that different from using an insurance company, though having a more than a few dozen employees makes this easier. Self-funded companies hire a third party administrator to manage the medical benefit. The hospital and physician network is attached to that administrator just like with insurance.

The difference is that premiums for insurance, both the employee and employer contributions, are banked by the employer to pay medical bills as they come are received from the administrator. These bills would be paid from the money collected from the employer and employee contributions to the health insurance premium. The premiums can be adjusted yearly to match the actual spend just like the insurance company did before.

Note that with fewer employees, it is possible to re-insure the company to prevent a catastrophic event from putting undue strain on the employer. This additional security measure has a cost and will decrease the potential savings an employer can see.

The prescription benefit is similarly streamlined and self-funded. This is where the direct contracting with the pharmacy comes into play. An employer would first contract with a transparent PBM to manage the national prescription benefit. Just like with the medical administrator, he employer would receive a bill from the PBM for the cost of the medications plus an administrative fee minus the amount collected as a copay. The employer would pay these from the banked premiums.

The PBM is necessary here: it creates national prescription benefit coverage for cases where employees are traveling. But the PBM would not be the preferred mechanism for the drug benefit. Instead, the employer partners with a with a local pharmacy. A direct contract that benefits both the pharmacy and the employer. Doing this, the pharmacy makes significantly more than they would if using even a transparent PBM and the employer will pay significantly less. The employer can set up the copay and deductible system to incentivize employees to use the local direct contract by reducing employee copays to incentivize savings for the employer.

This whole process is both simple and complicated. And it is not necessarily an easy sell to an employer because it takes them out of their comfort zone. But once successfully implemented it can both decrease costs to both the employer and its employees.

For the pharmacy doing the direct contract, however, things are just getting started. Next week we will talk about what it takes to manage a direct contract on the pharmacy side. Until, then, make your next encounter with local business owners count: talk to them about their insurance.

This week, there have been numerous states that have began the process of re-opening non-essential businesses. There are valid arguments both for and against these decisions, but ultimately the decisions are being made for political and financial reasons.

State and local government tax revenues during the shut-down are essentially non-existent in many jurisdictions. Unlike the federal government, which can essentially create money from thin air, the states need tax revenue to operate, and without an active economy their budgets are in intensive care on ventilators. The pressure on governors to open up the economy is undoubtedly intense.

The implications of any official re-opening, however, are significant. If a jurisdiction allows restaurants, for example, to re-open, restaurant owners are put in a difficult position. All employees currently on unemployment are no longer eligible for the federal emergency unemployment benefit. If the business owner does not want to risk re-opening, or opens at lower capacity and only needs some of the employees back, any remaining unemployment burden will likely shift back to the employer. This creates a significant pressure for the owner to re-open even if they don’t feel comfortable doing so at the time.

Pharmacies, for the most part, have not closed. Sure, many have gone to curbside service and delivery in place of having an open store, but they have continued to serve the public. A “re-opening” will not directly create the economic ramifications described above. That being said, there are still ramifications.

It is important to recognize that any re-opening does not mean turning the clock back to December 2019 and doing things the same way as before. When my area begins to re-open non-essential businesses, things will still be very different. In our pharmacy, I anticipate changes happening when our doors re-open. Perhaps a plexiglass screen, or a limit to how many people we let in the door at a time. We might take patient temperatures or measure blood oxygen levels with a pulse oximeter before letting a patient inside. I also expect that some of the procedure we put in place during the crisis will continue to be popular. Many patients appear to like the curbside service and delivery, for example.

My father-in-law has a great expression. He may not have originated it but I always attribute it to him: “Don’t look back, we aren’t going there.” For any re-opened economy this quote pretty much sums it up. So instead, look forward. Acknowledge that everyone, including community pharmacies, will be making changes to work in a post Covid-19 pandemic world. Look at these changes not as burdens, but opportunities. It is time to make this encounter with re-opening count.

I own and operate an independent community pharmacy. Since the middle of March, we have made numerous changes to our operating procedures to accommodate the safety of my patients and my staff. One significant change that we had to make was to close our doors to the public and instead rely on delivery and curbside service. This has been very well received by our customers and I anticipate that even after the global pandemic is over, we will have customers that will continue to want these conveniences.

Many of the things we have done have cost the business. These costs has spanned across all areas including a large uptick in our expenditures for personal protective equipment to an increase in staff required for the additional services. But not all costs are so easy to quantify or realize.

Recently I was on a conference with some outstanding pharmacy owners and a hidden cost and risk was brought to the forefront. This increased cost of doing business is subtile but significant, and I suspect that many pharmacy owners and managers have given it very little thought. The culprit? Credit card transaction fees.

Since we closed our doors and have relied exclusively on curbside and delivery for our prescriptions, we have also necessarily increased our use of “card-not-present” transactions on or register. This may seem obvious, but the ramifications are not: credit card companies stratify their fee schedules based on the types of transactions.

Swiped or “dipped” (chip) card transactions have lower transaction fees, with these fees increasing depending on the card type, the presence of reward incentives like cash back, and ultimately the transaction type. Card-not-present transactions have some of the highest fees per transaction because they also have the highest risk to the card issuer. Fraudulent transactions are almost exclusively this way.

All of the pharmacists I was talking to had noted a significant increase in transaction fees due to the abrupt decrease in in-person transactions inside the store. To date, I am unaware of any announcements from card issuers to waive the differential fees during the pandemic. And while this is not deliberate, the card issuers are profiting because of this.

To make matters more worrisome are the possible ramifications this change in business model has from your credit card processor. Processors are a lot like PBMs: they sit between the card issuer and the merchant. These companies look at a businesses card history when drawing up contracts. The client’s rate of “card-not-present” category, which poses additional risk, is looked at carefully when they draw up contracts and agree to process for you. A drastic change could put you in jeopardy of being dropped by your processor!

There are some things you can do to ammilorate some of the damage, though these changes do come with additional overhead of their own. First, you could create in house charge accounts for regular customers and get their permission to put their card on file and bill them at the end of the month. This can decrease the number of fees you see. This means the pharmacy will be carrying additional accounts receivable burden. A second option is to move card transactions out of the pharmacy with a mobile payment terminal: the patient could to insert their card and complete the transaction at curbside or at their door. Of course this creates yet another surface that needs to be disinfected each time a customer touches the device. In a perfect world, all customers would have a contactless payment method they could use with that terminal. Finally, you could carry the card into the pharmacy and complete a swipe transaction. This defeats some of the advantages of curbside service or delivery offer.

Incorporating measures like these may help decrease the pain, but the added expense is still there. And pharmacy is not the only industry being hit in this manner. Many restaurants in my area are now limited delivery and curbside as well. The financial windfall to the credit card companies is undoubtedly large. I spent some time this week talking to my State Attorney General’s office about this problem, and they informed me that they are not able to take action. Any action must happen at the Federal level.

So today’s “Encounter” is an assignment: contact your US Representative and Senators. Talk to them about this issue, and ask them if there is something that they could do to address the unintentional profiteering taking place in the credit card industry. Spend a few minutes of your time today to make this encounter count.

A few days ago, Will Maddox wrote a column for D Magazine entitled Amazon Teams Up With Local Pharmacy Benefits Manager. This news article, discussing the partnership between CerPassRx (a PBM) and Amazon’s PillPak, demonstrates the huge discrepancy in how the profession of pharmacy is perceived today.

Maddox’s article describes the hot-button issues of medication adherence and cost in the pharmacy world. The PBM industry has a long history of touting its success in reducing costs to payers, but cost is generally not an issue anymore. Pharmacies routinely receive reimbursement that does not even cover the cost of the medication on a large percent of the prescriptions they dispense. So PBMs are looking for something else to keep themselves relevant.

Adherence has become a big part of the PBM marketing focus. This started several years ago with the emergence of EQuIPP’s metrics for Percentage of Days Covered (PDC) as applied to specific medications being taken by Medicare Patients. The general premise: medications do not help if you don’t take them regularly. Adherence is often touted as a main driver in keeping overall healthcare costs down, but as we will see below, it is not the complete picture.

Near the end of the article, you will find the following statement:

Buscetto sees this move as one more step on the way to eliminating retail pharmacies, which he doesn’t see as part of the future of medication delivery.

Now this is not a direct quote from Mr. Buscetto, so I cannot take him to task. But clearly Will Maddox was left with this impression after interviewing the CerPassRx executive. This is where the descrepancy I alluded to above becomes apparent.

If you read the 409 words penned by Mr. Maddux, you will find the word care just once: when describing his company as a value-based care PBM. The word cost and the word patient appear 3 times each. What is entirely missing in the article, and what is missing in most discussions of medications coming from PBMs, is the combination of the two words to make patient care.

You see, while adherence is important, it is not the end-game. Patient outcomes are what matter. Is the patient achieving their blood pressure goal? Are they experiencing any adverse effects? Adherence means nothing if the medication is not achieving the desired goal, or the patient is not reaching the appropriate outcome. The wrong medication taken 100% of the time is still the wrong medication. Adherence alone does not ensure that the patient won’t end up in the ER or the hospital.

Outcomes are what matter in drug therapy management. And these are the things that are not strengths of mail order pharmacy. It is the personal relationship with the patient and the repetitive nature of monthly refills that allow the pharmacist to do far more than just dispense medication.

The PBM industry has focused entirely on drug spend for decades, but they completely ignore the bigger picture: patient care by the pharmacist has a large impact on the effective utilization and optimization of medications. Other subtleties, like the fact that sometimes a more expensive medication will actually save the payer significantly more in overall health spend than the differential drug cost, or that making formulary choices based on rebates does not improve patient care, are largely ignored by PBMs.

So ignoring the inherent limitations of mail-order packaged medications* and the challenges that mail order would face should we end up living in a world without “retail” pharmacies**, we still have to come to grips with the fact that drug product by itself is not a panacea. Pharmacists are essential health care workers, and the personal relationship between the pharmacist and the patient is an important part of patient care.

There will always be someone pushing an agenda that runs counter to patient care. The PBM industry has been doing this for years under the guise of saving money. But there is something more important: pharmacists pushing the patient care agenda. And it is imperative that every community pharmacist works their hardest to ensure that they are actually taking care of their patients. If you don’t make THIS encounter count, perhaps Amazon truly is going to replace the community pharmacy.

Footnotes

* PillPack, like many of the similar options used for commingled drug packaging, works well until a medication change is made. Adding a medication is fairly easy: one just sends a second strip pack with the new medication This is not ideal, but it is a generally accepted work-around. Discontinued medications, however, create real problems. The patient has to manually remove the medication from the pack each time they take medications until the pack ends, and that completely erases the advantage of the med packaging. The problem is aggravated by the use of extended day-supply (90 day) orders. If PillPack were to send a new pack out the the patient, they would necessarily have to waste the medications, and no insurance will pay the pharmacy, even if they are Amazon, for dispensing the same medication twice.

** There are many cases where patients require same-day fills of medications. While these are mostly acute medications, mail order really cannot do this. If Amazon were to create the capacity to do same-day delivery of medications around the country, they would essentially have “retail” pharmacies in or near every community and their supposed “competitive advantage” would be completely eliminated.

I have been hearing complaints about Allowable Drug Prices (ADPs) in the pharmacy community for years. Most recently, I have listened as pharmacists have described significant prices drops on medications during the current Covid-19 pandemic.

The trouble with these prices, and by extension, any complaints about them, is that most ADPs are MAC (Maximum Allowable Cost) applied to generic medications, and these are considered proprietary information by the Pharmacy Benefit Managers (PBMs). For this reason, one cannot just download the data and analyze what is happening. Furthermore, because every pharmacy has a slightly different profile of medications it dispenses each month, each pharmacy is impacted by these prices and their changes differently.

Like online reviews, people are much more likely to take time to complain about a bad experience than they are to take the time to provide positive feedback. It is possible that I am only hearing the unsatisfied pharmacies complaining while many, perhaps even a majority, might be satisfied.

I am skeptical of my last statement, of course. ADPs, and especially MAC prices, serve only the PBM. Which brings me back to the question: How are these prices changing, and do they make sense?

There is not a good way to answer this. It would take data from an aggregator like a switch to do a proper analysis across all regions, PBMs and drugs, and I don’t have that type of access. But I do have access to my own pharmacy’s data, and I thought it might be timely to look at where my own ADPs have gone in the last 6 months.

To do this, I calculated the an ADP per unit (tablet, capsule etc) for each month the past 6+ months. This represented 3715 different medications from claims processed between October 2019 and early April 2020. ADP was calculated by subtracting the dispensing fee allowed from Adjudicated Amount and dividing it by the units dispensed. These results aggregate the allowable price over one or more different insurance plans during any given month.

Because I wanted meaningful trends, I further segregated the data to look only at medications where I had dispensing data in every one of the 7 discreet months sampled. The net result was 855 medications with data in all 7 month. Below is a histogram of items dispensed at my pharmacy during one month, March, grouped by their Allowable Drug Price per Unit.

The shape of this histogram is definitely not a normal distribution. It shows that a majority of medications dispensed–nearly 70%–are adjudicated at less than $0.50 per unit. These low cost medications also represent a majority of all claims (53%) during the month. To put this into perspective, if a PBM pays the pharmacy a high (by PBM standards) $1 dispensing fee, a medication with an allowable cost of $0.50/unit equates to a $16 transaction for a 1 month supply. That is not profit, that is the total paid to the pharmacy.

Because the raw Allowable Cost data represented multiple carriers, many medications showed a some variability in price from month to month. For this reason, regression lines were run on all 855 medications over the 6+ month period. Allowable Price increases were defined as a slope of at least $0.01 per month and Allowable Price decreases were similarly defined by a slope of -$0.01 per month.

The average change up or down in the price of a medication was actually much higher than the $0.01/month used to define changing prices, with price increases averaging $0.15 per unit per month and decreases averaging $0.10 per unit per month.

Looking at this table, one see that price increases appear to outpace price decreases. This runs contrary to what I regularly hear. A closer look is probably in order. Perhaps we should look at how prices change with respect to the allowable cost of the medications. Below is a graph showing the price changes broken down by the overall allowable cost per unit.

This begins to paint a picture that agrees more closely with what I have long observed. In short, price decreases outpace price increases for all inexpensive medications. Only after about $0.70/unit do price increases outpace decreases. Remember, left third of the graph represents almost 70% of products in the sample, and well over half of all claims.

The nature of these decreases at the low end of the price scale are actually amplified by the low dollar nature of the claims: a change of only a few cents per unit can create a 10-30% decrease in reimbursement for a medication with a cost of less that $0.30 per unit. Remember that these items are the most commonly dispensed items.

The increases in ADPs are predominantly on the higher priced medication. The problem with this type of “balancing” is that every pharmacy sees a significant number of price decreases because they are happening mostly to inexpensive maintenance medications that represent a majority of prescriptions filled. Price increases, which are skewed toward the more expensive medications, happen less often and are a smaller percentage of total sales. A pharmacy must fill a significant mix of prescriptions that pick up enough winners on this end just to keep level on the low end. There is no skill involved. It is random, and this is the reason so many pharmacy complain.

Which brings be back to the original question: are prices continuing to be pushed lower during the COVID-19 pandemic. The answer for me appears to be yes. This is disappointing, as both independent and pharmacies are being asked to man the front lines to ensure continued access of medications for everyone. While operating expenses are going up due to changes we have to make to work around the current crisis, the PBMs are doing business as usual and continuing to drive prices to the floor.

But it is not all doom and gloom. The prize here is the opportunity for pharmacies to show that they are more than just a provider of drug product. We are seeing many new opportunities during these trying times. These opportunities further our goal of being paid not for product, but for the value and service we provide. So be sure to watch your bottom line, but don’t forget to Make Every Encounter Count. Especially now.

March 2020 was one I will likely never forget. Living in a University town, March means spring break—the university and the local schools are on break one week in March each year. University students often head south to the beaches of Texas or Florida. My family was planning a ski trip to Rocky Mountains in Colorado.

As March progressed, the pandemic was gradually becoming more real to those in the United States. Things were beginning to become serious during the second week of the month, with a few states announcing the close of schools. We were concerned with the potential interruption of our travel plan, so we called the ski resort the day before we left to see if there were any changes in their plans for operations.

The resort had no plans to shut down, so on Friday March 13th we began driving from Iowa to Colorado. In retrospect, perhaps we should have been more circumspect about our departure date: Friday the 13 is not generally associated with good luck.

We stayed overnight in Kearney Nebraska and continued our trip the next morning. After a quick stop at the Denver Airport to pick up a family member, we finished our drive into the mountains, arriving Saturday after about 2 pm. We were all excited: this was a very good snow year and we were ready to hit the slopes.

That afternoon, while we were in line to rent our ski equipment, several resorts, thankfully not ours, announced on Twitter that they were closing immediately. By 10 pm, every ski resort in the state of Colorado was shut down by order of the Governor. Disappointed, but understanding the gravity of the situation, we left for home the next morning.

People of a certain age can tell you where they were when historic events happened: the assassination of JFK, the moon landing, the Challenger explosion or September 11th. In many ways, the moment that the current Pandemic became real to each of us will likely make it onto the list. This pandemic is truly that type of event. My pandemic shortened “road trip” weekend is when this pandemic became very real for me.

Now, Every morning and every evening, on my drive to and from my store, I listen to CNN on my radio. Over the past couple of week, I have become almost numb to the numbers. At our pharmacy, our preventative measures and procedures change almost daily. The new normal is decidedly NOT normal

But with great turmoil also comes potential. With doctors and hospitals overwhelmed, pharmacies have an opportunity to take a more central role in health care. Pharmacists, technicians and pharmacy students have an opening to become recognized for more than just being a source of medication.

So at the same time you are navigating your way through your new normal, keeping both your staff and patients safe, be thinking about what you can do to enhance your practice. Become accountable. Make this opportunity count.

Recently I received a call from a person who had a walker they received from the Veterans Hospital. The walker had a broken cable, and they wanted to know if I could repair it. Having done a fair amount of work on bikes over the years, I agreed to take a look.

The next day he presented to the pharmacy with his walker. After taking a quick look at it, I determined that the manufacturer went out of its way to prevent simple cable replacements. It was designed to require a new hand brake set from the manufacturer: there was not a way to anchor a standard cable to the brake mechanism.

I am not one to shy away from a challenge. I had a cable and a casing in my toolbox so I went ahead and started the repair knowing that I was going to have to improvise. I spent a lot longer making the repair (30 minutes) than I would normally budget, but in the end I did manage cobble together a solution. The brakes worked and I was confident that they would hold.

I took the walker back out the waiting area and presented it to its owner. He was not one of my patients. Because he was a veteran, he receives his medications and other needs from the VA Hospital. He was very happy to see his walker functional again. I spent some time chatting with him. After a bit, he informed me that he was one day shy of his 99th birthday.

After a bit, he asked me what he owed me for the walker repair. I have always maintained that pharmacies should always charge for their service. To give service away minimizes the pharmacy’s contributions to health care. But in this case I made an exception. I thanked him for is service, helped him out of his chair, and sent him on his way. Today, he made HIS encounter count. I was proud to just have met and talked with him.

Back when my father-in-law first went to work as a pharmacy student, there were no fewer than 4 different independent pharmacies in downtown Iowa City, Iowa. There were numerous other independent pharmacies in the area, as well as a few different local and national chain pharmacies. Pharmacies were local businesses. Each pharmacy primarily serviced its immediate area in town. If you lived in one part of town, you were very likely to utilize one of the apothecaries nearest to your home or work.

Today, we are one of the only remaining independent pharmacies in the area, and chain pharmacies are on most every major intersection. More importantly, we have entered a very different era in pharmacy. While there are still a significant number of pharmacies in Iowa City, we also have a large number of other pharmacy competitors: mail order and internet pharmacies have proliferated wildly in the past few years. None of these competitors reside in our area.

This very fundamental change in our competitive landscape makes it important to ask ourselves an important question: are we, as an independent pharmacy, ready to compete with pharmacies that do not even have a local presence? Or, to put it another way — does an independent local pharmacy want to compete, and how does it do this?

These are not easy questions, and there is no one right answer. Because many of these newcomer pharmacies offer services like compliance packaging, something that we have used as a competitive advantage for years, we must compete. We must have a plan.

We decided awhile back that we could not let zip code define our pharmacy. In today’s market, our reach has to be far broader than it has ever been. Before we serviced patients in a 5 mile radius. If we are to compete today, our service area needed to grow at least by a factor of 10.

To accomplish this, we expanded our delivery service. We went from one vehicle and a part-time driver, to having two vehicles and multiple drivers available. Before, a long delivery was 10 miles round trip. Today, we routinely will make deliveries 50 miles away or 100 miles round-trip. We also still leverage mail and parcel services for less time-sensitive needs, or where it makes more economic sense.

This increase in service area has, of course, increased our delivery and postage expenses. For delivery, if you use a rough approximation of delivery costs at $0.58/mile (the standard IRS mileage rate for 2019) and add in salary plus fringe, our per-delivery cost works out to $5-7. This may seem high, but in fact it is a value if you compare it to postal or parcel services. USPS Priority Mail Flat Rate pricing starts at $7.50 and goes up from there. Local delivery has the additional advantage of being more prompt: same day service beats even Amazon’s best delivery options in my area of the country.

One note on our delivery service: we offer free delivery. For this reason, we have to put some reasonable restrictions on delivery so that we are not delivering one item to a location 5 different days each week. We delivery at no charge to a given patient once a week. Additional deliveries are billed at $5 each unless the reason for our repeat delivery is due to issues on our side. This has been a nice compromise for our patients, and it helps optimize our deliveries as well.

There are two main upsides to expanding your zone of influence your pharmacy maintains. First, you can more easily maintain your current customers as you can meet or exceed expectations of the new competitors. Second, it opens doors to new customers that were previously outside your zone of influence.

Additionally, delivery has an additional and significant potential bonus for a pharmacy. Our drivers are our employees, and they are directed to be observant. When they deal with a patient, they are to assess if there has been any notable changes since their last visit. This allows us to become alerted to social determinants of health issues, or other health changes in these patients and potentially refer the patient to help if needed.

In our case, our willingness to expand our zone of influence has gained us many new patients we previously would never have seen. Each patient has not only potential prescription revenue, but they are also a new target for our other services and offerings, many of which are more profitable to our business than prescriptions alone.

All of this has happened without us actually advertising our extended service area. Admittedly, a lot of this is because we are well known regionally for some of our unique service offerings as well as our overall customer service. In fact, this has actually created a few problems, as we are now receiving solicitations to service customers that are outside of our state. If we wish to service these customers, we will need to license our pharmacy into additional jurisdictions.

Expanding your pharmacy’s zone of influence outside of your zip-code is something all independent pharmacies need to consider. It is an opportunity to pick up profitable new opportunities. It is just another way to Make Every Encounter Count!

Back in February, Managed Care Contributing Editor Joseph Burns wrote an article about Express Scripts (ESI) and their attempt to branch out behind its traditional Pharmacy Benefit Manager role and foray into managing overall health for a select group of companies. This appears to be a response to ever increasing pressure for transparent PBM contacts, and the idea has merit.

The companies trying this approach with Express Scripts are trying to remove some of the financial incentives that have traditionally been hidden in PBM contracts by negotiating a more transparent contract. They have, however, taken it a step further, looking to manage not only drug spend, but also to decrease overall health spend.

Express Scripts has spent the last year working with these companies trying to improve outcomes in disease states like diabetes and asthma, as well as some more specific areas desired by the employers. This is a significant change to how they have traditionally done business. This, of course, required that they make some changes.

Under the contract, Express Scripts hired population health managers to do daily monitoring of employees to identify gaps in care such as screenings or tests that are recommended for patients based on their age and gender. It also has hired academic detailers to educate prescribing physicians about the evidence of the clinical effectiveness of the most appropriate medications for each patient

Snezana Mahon, Express Scripts vice president of clinical programs

The project appears includes more traditional financial performance guarantees designed to decrease per-member-per-month drug dispensing in addition the new features included in a per-member-per-month administrative fee to implement the clinical program. This is an at-risk model. If the PBM fails to meet the metrics for either program, the company forfeits some or all of the additional fees. If they succeed, the are rewarded with a bonus.

The inclusion of clinical programs targeting things like Hemoglobin A1c levels for diabetic patients, and blood pressure for hypertensive patients is a good start. The savings potential on drug spend continues to diminish. Pharmacies are being paid rock-bottom for the drug product and the PBMs, while they unquestionably mark this up, have precious little room to further reduce drug spend. The potential savings on the medical spend is both a much larger, and a more productive target.

What is being attempted, however, is not a new or novel concept. These types of programs are have been, and are currently being implemented by community-based pharmacists around the country. Engaging community-based pharmacists who, not only have therapeutic relationships with patients (pharmacist-patient relationship), but also a collaborative working relationships with physicians and other providers, has positively affected patient care and health outcomes. It is through these relationships, and a team approach, that patients become engaged participants in their own health care leading to improved health and overall reduction in health care spend.

Additionally, community-based pharmacists are accessible to patients and can assess them for social determinants of health (SDoH) issues that may be affecting their access to medications. If an SDoH issue is identified, community-based pharmacists are integrated within their communities and can connect patients to the appropriate community-based organization (CBO) or social services department.

Utilizing pharmacists out in the community to manage and optimize drug therapy has been shown to significantly decrease overall health spend measured per-member-per-month. Using pharmacists in call-centers, as a PBM would do, may help move the needle some, but the real force in healthcare is in the trenches: with the pharmacists and pharmacies that already have a relationship with the patient.

Community-based pharmacists are better potential partners to accomplish the type of savings in health spend mentioned in the article. Local and national high-performing networks of pharmacies already exist around the country. These networks have already proven that they can move the needle to save on health spend. These networks have significant advantages over a PBM administered program because they use highly trained, local pharmacists who already have relationships with the patients and local providers. Pharmacists that are able to work personally, face-to-face with the patient.

This project mentioned in the article is exciting. It means that pharmacy’s attempt to transform the profession is working. We need to continue to push forward. We have an opportunity to remove pharmacy from the grips of the PBM industry if we can continue this movement. It is time to Flip the Pharmacy (FtP). Flip your pharmacy and Make every encounter count with your patients!

During the last part of 2019, like every year in the last decade, I spent many hours each week working with patients to determine the best Medicare Part D plan for them in the upcoming year. Open enrollment is an important event for the those eligible of Medicare Part D, but it also has significant implications on the pharmacy as well. For this reason, we actually leave signs up all year long letting people that we can help them navigate this yearly task.

Medicare Part D is very complicated. I hear my patients lament its complexity constantly. It is no wonder that many regularly seek help with this process. A successful open enrollment for a Medicare Part D participant typically is a balancing act between ensuring that they are getting the best total out of pocket costs for their medications and ensuring that they continue to have access to the pharmacies that they want to use.

There are a number of resources available for Medicare Part D enrollee to use during open enrollment. The most obvious is the Medicare.gov website. This site aggregates the data from all of the plans and allows one to compare available options. Unfortunately for everyone, while the site has done a good job making the process as smooth as possible, there are still a number of challenges: the complexity of the task cannot be fully masked by a good user interface. Something as simple as searching for your specific medications on the site, for example, is often confusing to someone without a detailed knowledge of medications.

These difficulties are further compounded by the occasional inaccuracies in the data being loaded by the plans. Several times in the last few years we have found incorrect copays on drugs, or pharmacies listed incorrectly as participating or non-participating on the Medicare.gov site. The data the tool uses is provided by the plans, not Medicare.

It is important to point out that even a savvy enrollee with a good understanding of Medicare Part D and their medications may not be fully comfortable working with this fairly complex web tool. Even these consumers will seek outside help. Family members, insurance agents, and volunteers regularly assist enrollees every year. But all help is not created equal: there can be significant differences in the experience and expertise.

This might be self-serving, but the in my opinion, the best resource for help with Medicare Part D is a pharmacist or pharmacy technician. They have daily experience with the complexities of these plans and have the dded advantage of understanding drug therapy and medications. Pharmacy employees can help patients pick plans as long as they follow the guidelines set up by CMS: they cannot direct a patient to a plan based upon financial benefit to the pharmacy. In other words, we have to be completely transparent when we do this.

When I help an enrollee, I first establish the patient’s choice of pharmacy. My motto has always been to choose the pharmacy first, the plan second. This will limit which plans they see listed, but before we finish we will compare other pharmacies. Because I work with the medications every day, correctly selecting the patient’s medications is not a problem. If they are a current patient, I have access to their medication list. If not, I spend a few minutes collecting a medication history (just like if I were doing a clinical review).

This gives the enrollee their first look at the best plans available for them. The plans that save them the most money are typically plans in which the patient’s choice of pharmacy is a preferred provider. After looking at the best options for their choice of pharmacy, we then go back and use a different pharmacy to perform the same search again. The second pharmacy is chosen explicitly because it has one or more preferred contracts that the patient’s first choice of pharmacy does not have. Alternatively, the search can simply omit pharmacy choice altogether. The result of this search allows the patient to see other plan options, albeit options that would necessitate them changing pharmacies.

This second search also demonstrates a general trait of Medicare Part D plans: out of pocket costs for a given patient and plan are very similar when using a preferred pharmacy. Stated another way, if a pharmacy is a preferred provider for one or more plans, using another pharmacy and a different plan does not impact total out of pocket expense significantly.

It should be apparent that the analysis I do with may patients enrolling in a Part D plan is meticulous. We discuss the plans they are considering, including looking at star ratings and plan policies like mail order. They are shown all of the options, including a look to see if switching pharmacies would save money. Fortunately for me, because we have a few preferred plans each year and we have not lost a customer for this reason. Even more satisfying is the fact that almost every customer I work with is adamant that their number one concern is maintaining their choice in pharmacy providers.

Fallout

Every year I have upset patients calling me. For whatever reason, they used someone else to help them pick their plan. Inevitably, they are surprised by a higher than expected copay, a non-covered medication, or the fact that their preferred pharmacy is NOT a preferred pharmacy under the plan in which they enrolled. They are stuck, even if they were given bad information from the Medicare.gov website!

Unfortunately, there is not an easy fix for these errors. Open enrollment happens only once a year. Changing plans between companies is not currently possible. Even changing plans within a given company is not possible. Every year I lose a few patients to these errors. Every year I also gain back some patients that learned their lesson the previous year. The end result is frustration for both the patient and the pharmacy.

There may eventually be some recourse. According to this report, there is a push from several US Senators to create a “special enrollment period” for Part D for just these types of problems. I know that if this happens, I will have fewer unhappy patients when January arrives.