Aligning ‘pay-for-outcomes’ pharmacy model with reimbursement
LAS VEGAS — As the healthcare industry moves toward adopting outcomes-based reimbursement, independent pharmacy owners are faced with a stark reality — they need to invest in the ability to deliver clinical outcomes long before that ability is adequately reimbursed by an evolving payment model.
Good Neighbor Pharmacy, however, is looking to ease that burden.
The question on how to successfully transition from the fee-for-service payment model in place today to the pay-for-outcomes model of the future is “one of the most complicated questions that the industry has been wrestling with for years,” noted Dave Neu, EVP Retail Strategy at AmerisourceBergen and President of Good Neighbor Pharmacy. “It’s interesting that before medication therapy management, we had reimbursement for cognitive services. We had in there a bit of clinical consulting, and it has always been about who’s going to pay for it?” he said. “And the other piece — without a centralized patient record, what value is there?”
That’s all starting to change now, slowly but surely, Neu said. “One of the things that’s happened recently with the change in health care and the Star measures, is that there is now a difference in technology to capture this information,” he said. “It’s not perfect, but the payers and the PBMs have gotten smart, and they have put incentives and disincentives in place,” he said. If you don’t show specific changes or outcomes, the reimbursement for that work may be cut or, even worse, eliminated altogether.
The recent J.D. Power’s 2015 U.S. Pharmacy Study, which ranked AmerisourceBergen’s Good Neighbor Pharmacy network the highest in customer satisfaction among chain drug stores, also found that a pharmacist’s individual attention can have an impact on loyalty, as 44% of customers who talk to their pharmacists strongly agree that they feel loyal to a pharmacy, compared with 35% of people who don’t talk to a pharmacist. The findings emphasize the importance of pharmacist’s involvement beyond a fee-for-service model.
Eventually there will be a balance, a kind of payment for services and reimbursement for outcomes management that will morph over time, Neu suggested. “But I think we are moving forward now in a way that’s much different than the last 10 or 15 years,” he said. “And there really wasn’t a financial incentive or disincentive there [before], so that’s really started to change.”
Star ratings are taking on a greater degree of importance, noted Tripp Logan, Senior Performance Consultant at MedHere Today, during a continuing education session on “The Evolution of Star Ratings,” at Good Neighbor Pharmacy’s ThoughtSpot 2015. “Studies have been done to show that if a family member or Medicare beneficiary are looking for a Medicare Part D plan, [the Star rating] is a big deal,” he said. “On the flip side, if you have a low-performing icon on the plan finder, for Medicare Part D plans that have had three years in a row of poor performance, this is a deterrent.” The Centers for Medicare and Medicaid Services is attempting to weed out poor performers, Logan said. And that means those plans with Star measures will look for partners who can help them move the outcomes needle toward better performance.
Pharmacists can help with many of the known problems in the current healthcare system, noted Anne Burns, VP Professional Affairs of the American Pharmacists Association during a CE session titled “National Initiatives to Advance Pharmacist’s Patient Care Services.” “When pharmacists are involved, access is increased, quality is improved and costs are reduced,” she said. Access increases by tapping a health profession that’s ready and willing to help address the primary care provider shortage; quality is improved as more seniors turn to prescription medications to help manage their chronic conditions; and costs are better managed as pharmacists play a greater role in helping to manage those medications.
One key strategy to improving Star ratings is collaborating with local physician groups on patient care, as outlined by Marc Sweeney, CEO Profero Team and dean and professor of Cedarville University School of Pharmacy during his ThoughtSpot CE presentation titled, “Improvement of Patient Outcomes Through Physician-Pharmacist Collaboration.”
“My general tips for beginning these types of practices is to start with one service and expand,” Sweeney said. “Do whatever is really easy to get off the ground [like hypertension],” he said. “The number of patients who have hypertension, the medication management of it, you can assess their blood pressure and you can make a dose adjustment on their hypertensive med relatively quickly.”
According to Teresa Ash, Manager of The Medication Management Clinics at St. Rita’s at Mercy Health in Lima, Ohio, high blood pressure costs the U.S. healthcare system as much as $46 billion each year. In her CE presentation titled, “Blood Pressure Management Trying to Hit a Moving Target,” Ash noted that better controlled blood pressure ratings could result in a 35% to 40% reduction in risk of stroke, and a greater than 50% reduction in risk of heart failure.
Other opportunities Good Neighbor Pharmacy members have in linking solid outcomes to their respective pharmacy practices include incorporating a long-term care facilities service into the practice as a consultant pharmacist. Charles Mosler, professor of pharmacy practice for the University of Findlay College of Pharmacy, who moderated a continuing education course titled “The Consultant Pharmacist in Medication Regiment Review in Long-Term Care Facilities” at ThoughtSpot 2015, identified five key resources for pharmacists interested in LTC.
“If you want to get more involved with consultant pharmacy or help train new consultant pharmacists, these are the five resources that I’d really push people to [review],” he said, including the website at the Centers for Medicare and Medicaid, the Nursing Facility Survey and Regulations on www.ascp.com and TR Clark’s “Introduction to the medication regimen review,” which comes in three parts.
Good Neighbor Pharmacy sets sights on future initiatives
LAS VEGAS — There is plenty to look forward to in the coming year for Good Neighbor Pharmacy on both the pharmacy side of the business — medication therapy management and vaccinations, for example — as well as at the front-end of the store.
One of the themes teased during Good Neighbor Pharmacy’s ThoughtSpot 2015 conference was rejuvenating the front-end of the store as a strong revenue stream that helps differentiate the community pharmacy against big-box competitors. Improving product placement, promotion and pricing strategies can generate some $25,000 in incremental revenue each year, if not more, noted Bob Condelora, Managing Partner at Retail Insights, during a continuing education course titled, “The Best Defense is a Good Offense: Making the Most of the Pharmacy Front-End.”
“It’s all about the four ‘P’s.’ Right products, right placement, right promotion, right price. Every merchant works on those four key principles,” he said. “There’s an easy $25,000 opportunity to improve your sales and profitability.”
Front-end can be a significant profit driver for independent pharmacies, especially across five key OTC categories — cough-cold-allergy, digestive, vitamins and supplements, pain relief and home health care, added Greg Hanlon, Director of Client Engagement at Retail Insights.
And realizing that opportunity doesn’t necessarily mean shifting focus from the core pharmacy business to the front-end. Retail Insights provides performance dashboards that help Good Neighbor Pharmacy members ascertain their performance in any given category against a peer group. It’s a tool that can help operators better refine their front-end mix. “[Dashboards] should be simple and easy-to-read,” Hanlon said. “You don’t want to spend hours mining through this. You want to be able to open it and, at a glance, start to understand what’s happening or identify an area to investigate further.”
Good Neighbor Pharmacy members can also help differentiate themselves through Good Neighbor Pharmacy’s Temporary Price Reduction program, which allows independent pharmacies to access the same manufacturer promotional dollars the chains do. Good Neighbor Pharmacy remains price competitive, as price reductions are subsidized by supplier partners. “Through TPR we’ve seen a 36% increase in unit sales last year to this year, so it’s a significant change,” noted Christine Lane, VP, Good Neighbor Pharmacy.
“How do you get that incremental item in the basket to drive those additional sales?” asked Hanlon. “That’s where looking at those TPRs, those promotions [pays off]. The customers might not even know you’re in that business or you have that category.”
Hamacher Resource Group VP Dave Wendland also provided sage advice on boosting the front-end business in a CE presentation designed for pharmacy technicians titled, “Understanding Who Shops Independent Pharmacy.” “My favorite sign is ‘Pharmacist recommends,’” he said. “If you have a ‘Pharmacist recommends’ sign or a ‘Pharmacist recommends’ endcap, it engages the conversation. … There’s a way to engage [the patient] in the dialogue.”
Another key insight that Wendland shared is when categories are located closer to the pharmacy, or dual-placed, the number of recommendations increase, and as many as 80% of merchandise recommended by the pharmacist results in a sale, he added.
Other major announcements Good Neighbor Pharmacy made this year at ThoughtSpot 2015 included how it’s supporting members with a significant investment in its Pharmacy Services Administration Organization,newly named Elevate Provider Network.
The network is appropriately named, as the key priorities for the new network are to lift up Good Neighbor Pharmacy operations by maximizing reimbursement and providing tools to improve operational efficiency. Elevate Provider Network is the only fully-integrated bundle that exists in the marketplace for one price, enabling members to evaluate data, maximize reimbursement, optimize their patient mix, track patient compliance and help engineer higher Star ratings. The new Elevate Provider Network leverages centralized data to support reimbursement discussions with payers — a key pain point for anyone in retail pharmacy, and especially for independents. The network also supports the transition from a fee-for-service model to an outcomes-based model.
Also at the 2015 ThoughtSpot conference, Good Neighbor Pharmacy rolled out improvements in medication therapy management, prescription adherence, Star ratings performance, medication synchronization and overall marketing effectiveness. Combined with merchandising, business coaching and advertising resources, the Good Neighbor Pharmacy relationship creates an optimal platform from which independents can maximize both their patient relationships as well as their clinical partnerships.
For example, one of the biggest differentiators associated with Good Neighbor Pharmacy's premier level offering is its Business Coaching program, led by Jennifer Zilka, Good Neighbor Pharmacy national director of business coaching and pharmacy ownership. “Using your pharmacy’s data, our coaches offer a second set of eyes on your business,” said David Neu, EVP retail strategy at AmerisourceBergen and president of Good Neighbor Pharmacy. “Actual results from the stores that Jenni and her team coach — stores increase their inventory on average by 1.4 turns. From a labor standpoint, coached stores realize a 5% increase in sales-per-employee on average.”
Moving into 2016, Good Neighbor Pharmacy will be making a big push around emphasizing a true point-of-differentiation — the company’s tagline being “Locally owned. Locally operated. Locally loved.” “We believe that to the consumer that’s a pretty powerful message,” Lane said. “When it comes to the core messages that we’re looking for consumers to receive, obviously it’s the pride in local community, but also the service that they’re going to get from their pharmacist. Customer service is the ticket to entry for any business today, … but it’s really the personalized care that we provide that helps set Good Neighbor Pharmacy apart.”
Good Neighbor Pharmacy also will be promoting its ability to help manage a different disease state each quarter, such as Alzheimer’s, for example. And there will be a big push around the network’s social properties, Lane said.