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Pharmacies have faced a constant struggle to obtain reimbursement for providing clinical services in the retail pharmacy space outside of the Medicare Part D market. Medicare Part D plans have been required to provide medication therapy management services since the inception of the program in 2006. Prescription drug plans (PDPs) have little incentive in promoting or providing clinical services, since they are only responsible for the drug spend and do not realize the benefits of decreased healthcare costs. Medicare Advantage plans are responsible for the patient’s entire healthcare spend and are interested in investing in pharmacy services that may lower overall healthcare costs but potentially increase the pharmacy costs.

There are new healthcare financing models that have been introduced in recent years that provide incentives to take a holistic approach to patient management. These organizations include accountable care organizations (ACOs) and patient-centered medical homes. These organizations provide new opportunities for pharmacists to provide clinical services. These organizations have also assumed financial risk for managing patients’ healthcare costs and should be willing to pay for pharmacist clinical services with a demonstrable return on investment (ROI). ACOs are responsible for all patient care services and have a focus on eliminating inefficiencies by coordinating care. They drive patients to the most cost-effective site of care and focus on creating patient engagement. Because ACOs look at a patient’s health holistically, there is greater opportunity for the expansion of pharmacy clinical services.

Pharmacy Clinical Services

While most think of pharmacy clinical services as providing immunizations or conducting medication therapy management, other clinical service offerings exist. Weight loss counseling, smoking cessation support, assisting in transitions of care, and operating travel health service clinics are all additional clinical service areas that provide opportunities for retail pharmacists. 

 

Stakeholder: Risk-Bearing Entity

 


Decreased healthcare expenditures »

ROI »


« Reduced hospital admissions/readmissions
« Improved clinical metrics (BMI, lipid panels, A1c, BP)

 

» Improved patient satisfaction

 

Pharmacies should consider several factors when planning to implement clinical services. Clinical service providers are often required to have robust IT systems and reporting capabilities. A strict process for evaluating the cost versus benefit of the new services is necessary. Before considering implementing a clinical service, pharmacies should ask themselves these questions:

• How can we provide the service?

• Do we have the competency now? If not, what training is needed

• What patient population will be targeted?

• What information is needed?

• How can we cost-effectively implement the service?

• What documentation, reporting, and billing capabilities do we have?

• Will patients be pushed to us by the payer, or do we have to recruit patients to the new service?

• What is the revenue stream from the new clinical service? What will it cost to provide the service? Is there an ROI for the pharmacy for investing in providing the new service?

Once a pharmacy has decided to provide a clinical service, management must be committed to the program’s success. Management support is essential for the new clinical services to gain traction. Staff must also be properly trained and competent. For example, a pharmacy cannot decide to start a travel health service without having pharmacists fully trained and certified in this area. Staff must be committed to taking part in new program initiatives. Finally, retail pharmacies must be aligned with payers. A pharmacy may have a model clinical service offering, but without payer alignment, uptake may be limited.

It is beneficial to take a look from the payer perspective as to the evaluation process for potential clinical programs. Payers are evaluating many different clinical service programs from different healthcare providers. Risk-bearing payers are in the population health business and have specific decision criteria that evaluate answers to the following questions:

• How big is the potential opportunity to save costs?

• How long will it take to realize benefits?

• How will the benefits be measured, and will this be challenging?

• Does the service target any regulatory mandates?

• What providers (pharmacists, nurse practitioners, physician assistants, etc.) can perform the service and produce a positive result?

• How difficult will the service be to implement?

• Will implementation require working with external business partners?

• Do we have the funds allocated to pay for a pilot or proof-of-concept program?

• How do we structure the program to pay for positive results/outcomes?

• How difficult will it be to scale the program?

• How quickly can the program be scaled if the pilot proves successful?

• How can the service become self-funding?

Payers also focus on their return on investment when deciding whether to invest in new clinical programs and the healthcare provider(s) that will implement the service. Benefits of clinical services include, but are not limited to

• Decreased hospital readmissions.

• Improved Medicare star ratings.

• Preventative care scores — immunization participation rates.

• Improved medication adherence.

• Reduced hospitalizations.

• Cost-effective delivery of services — lowest-cost provider channel.

The diagram we show describes the various attributes payers evaluate when deciding on clinical services to implement.

Another major issue payers must decide on when introducing a new clinical service is the strategies to educate and engage patients who would benefit. Patients need to be educated on why a new clinical service would benefit them and how they can learn more about participating. They must also know that programs may require multiple follow-ups to use the new service. Patient engagement strategies present a new research area where various tactics are being tested for effectiveness. For example, phone apps and websites are designed to engage patients in managing their care by tracking metrics, providing helpful tips, and creating communities where they can communicate with other patients on their specific treatment questions and experiences.

Takeaways

In order to align with payers and prove value, pharmacies need to measure return on investment and agree to measure and manage the clinical metrics that drive the most value. Pharmacists should focus on services that are aligned with risk-bearing entities. They also need to develop patient engagement strategies and concentrate on their time horizon for outcomes. The ROI needs to be focused on shorter-term results, typically less than two years from delivery of the service. Since star ratings are on a two-year delay, savings need to be proven in a timeframe commensurate with receiving benefits. If pharmacies can align services with the needs of risk-bearing entities like ACOs, there is great potential in retail-provided clinical services.

While ACOs and pharmacies may see great potential in collaborating to provide clinical services, this takes both a time and capital commitment on the part of pharmacies to engage payers and design mutually beneficial clinical programs supported by trained staff and systems capabilities. As the healthcare system shifts to accommodate more ACOs and other new healthcare financing models, retail pharmacy clinical services have the opportunity to expand. Risk-bearing entities are a prime candidate for these services and should be willing to pay for services that improve the healthcare of their members. This collaboration will take time as pilot programs are tested, evaluated, and then rolled out to the pharmacy community. Pharmacy owners and management must decide if they want to be pioneers in developing these programs, early adopters after the pilot phase, or participants after the service has been developed and implemented. CT


Tim Kosty, R.Ph., M.B.A., is president, and Ann Johnson, Pharm.D., a consultant, at Pharmacy Healthcare Solutions, Inc., which provides consulting solutions to pharmaceutical manufacturers, PBMs, retail pharmacy chains, and software companies on strategic business and marketing issues. The authors can be reached at tkosty@phsirx.com and ajohnson@phsirx.com.