Technology Corner: July/August 2014
Is a Vendor-Driven Market a Bad Thing?
We believe that the vendor community can help pharmacists in two very important ways. The first is to help their clients with information on how to be at the table when decisions are being made about who will provide medication services as physicians and hospitals take on the role of population health in the form of accountable care organizations (ACOs). ACOs are willing to take a set amount of dollars to care for a defined population of patients and be given bonuses when they do this with exceptional quality. The federal government is already providing millions of dollars in bonuses to ACOs that are performing to high standards. ACOs have to either own or be tightly affiliated with every provider on the continuum of care, starting at the womb and going to the tomb. For pharmacy services, they will either build a competitive operation or tightly affiliate with pharmacists who can add value to the population being served. Are you ready to be accountable for the quality of care you provide?
Getting at the table can start with a single luncheon meeting with the chief information officer of your local health system. Initial topics for discussion can focus on how the health system’s electronic health record (EHR) data can be accessed, finding what data formats can be received for transmitting medication histories within the system, and finding how patient and provider portals will operate. Before ACOs, we had physician hospital organizations (PHOs) that also received the premium dollar to take care of specific populations. Pharmacy fared pretty well in these environments, because these organizations operated as their own insurance companies and they have historically had up to 35% of each dollar available that was previously going to administrative costs of the insurance company.
Another form of getting at the table would be for the local community pharmacist organization, if one exists in your town, to invite the health system CEO to attend a fact-finding meeting for how the health system is positioning itself for the future. We have knowledge that the major chains are using all of their corporate organizational skills to communicate their readiness to provide services in this new environment. This meeting would also be an opportunity for the pharmacy community to inform the CEO that they are willing to become tightly affiliated, so that the needs of an accountable care organization being formed by the health system can be accommodated by the existing infrastructure of community pharmacies.
PHOs historically discovered that they can select just enough of a specific medical specialty to provide the needs of a particular population and contain costs. For example, if the community has eight ophthalmologists practicing, each of these eight providers are trying to use their surgery time and procedure time in the office to generate the maximum amount of fee-for-service revenue possible. If it can be determined that only five ophthalmologists are needed to provide services for the population of patients being served, then these five providers will be kept very busy — but limiting the number of practitioners controls the overall cost for this care specialty. The three ophthalmologists not affiliated with the PHO will find that their patients must move to the exclusive providers specified by the organization. If a major chain or two proposed that their five local pharmacies could handle all of the distribution and provide all of the MTM services needed for that population of patients, the independent practitioners could experience a similar problem.
The Connectivity Problem
The second area that we see where vendors can assist their clients is through the realization that connectivity costs are currently going to increase significantly in this environment, where every provider is purchasing health IT products and expecting pharmacists to be able to communicate with each new software purchased. Unfortunately, pharmacists have no recourse when the product has already been purchased but to turn to their pharmacy management system vendor and ask it to build and support an interface to this new software product.
For example, for long-term care pharmacists, their clients are purchasing electronic medical records and electronic medication administration record applications. These nursing home and assisted-living facilities then expect pharmacists to electronically send and receive data between these new systems. The mounting cost of transactions through claims processing, electronic prescription processing, increasing health information exchange data processing, and the cost of interfaces and certification are slowly chipping away at profitability. While these expenses can be looked at as a cost of doing business, we are concerned that the need for connectivity by each client is mission critical; but this connectivity needs to have vendors help pharmacists minimize the cost of this connectivity whenever possible.
This is truly a time, in our opinion, when we all need to pull together or we will all be pulled apart at a later date. New IT standards are emerging, such as the consolidated clinical document architecture (CCDA) that is required for meaningful-use certification. Vendors need to get a jump on being able to work with the standard on behalf of their pharmacy clients. Pharmacists need to start making those appointments we mentioned above and serve as scouts for their pharmacy management system vendor on what is coming down the interface road next. User meetings need to have presentations where priorities are set on development projects so that a clear understanding of the difficulties of getting ready for the future can be appreciated. We are ready to continue this conversation. CT
Bill G. Felkey, M.S., is professor emeritus, and Brent I. Fox, Pharm.D., Ph.D., is an associate professor, in the Department of Health Outcomes Research and Policy, Harrison School of Pharmacy, Auburn University. They can be reached at felkebg@ auburn.edu and email@example.com, or write on their blog at www.pharmacyinformatics.com.