Big transitions in care — next wave in the health reform revolution

BY Jim Frederick

Consider this: 1-in-5 hospital patients end up back in the hospital within 30 days of their discharge. And the biggest factors pulling them back all have to do with medications — either through medication errors, nonadherence or adverse drug events.

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That’s according to the Centers for Medicare and Medicaid Services, which put the cost of those revolving-door readmissions at $25 billion or more a year. Other estimates peg the cost as high as $44 billion, according to physician Stephen Jencks, a health consultant and senior fellow at the Institute for Healthcare Improvement.

With better systems for transitioning patients from the hospital to the home or long-term-care center — and improved coordination of care between the hospital and a local safety net of health providers including pharmacies, clinics and physician groups — the vast majority of those readmissions could be avoided, Jencks and other health experts said.

Strategies to keep patients out of the hospital “will include not only hospitals, but also practitioners and other providers, as well as patient/ family education, support and empowerment,” Jencks said.

Even at this late stage, however — nearly two years after full implementation of the Affordable Care Act, and well into the quality- and outcomes-based health payment reforms mandated by the ACA for Medicare — not enough attention is being given to the potential contributions that community pharmacy can make to reducing the readmission rate for patients transitioning from hospital to home.

Many of those patients are in relatively fragile condition. But thus far, Jencks said, payment reforms that “reward low re-hospitalization rates or penalize high rates” are “generally directed at hospitals” through such quality ratings metrics as the Medicare Star Ratings system. This, despite the fact that “other providers and practitioners are vital” in the campaign to reduce readmission rates.

Curbing hospital costs through medication management
It’s no secret that “high-cost hospital care … is a major driver of national health expenditures,” said Karen Utterback, VP strategy and business development at McKesson’s Extended Care Solutions Group. In a September report, Utterback said getting and keeping patients out of hospitals and back into the home care setting is a critical ingredient in the urgent national campaign for cost-containment.

“If you want to tame national health expenditures, … you must lower inpatient hospitalization rates, and one of the best ways to do that is through expanded use of home care services,” she wrote. “Home care can be the alternative care delivery model that can have the biggest impact on health spending by reducing the instances and costs of inpatient hospitalization.”

The high cost of hospital readmissions has become a hot-button issue for health reform advocates. “Ineffective care transition processes lead to adverse events and higher hospital readmission rates and costs,” the Joint Commission’s Center for Transforming Healthcare noted in a report. “One study estimated that 80% of serious medical errors involve miscommunication during the hand-off between medical providers.”

However, noted the Joint Commission, “Readmissions within 30 days of discharge can often be prevented by providing a safe and effective transition of care from the hospital to home or another setting.” And among the collaborative care activities that can have a “very positive effects on transitions,” its report added, is “medication reconciliation, with the involvement of pharmacists.”

NEHI, a national health policy institute, agreed. In a study, the group found that a large percentage of hospital readmissions are caused by medication-related adverse events. “Medication management is at the core of advanced discharge planning and transitional care,” the health policy group reported. “This reflects three realities — adverse events are a major cause of avoidable hospital readmissions; more post-discharge adverse events are related to drugs than other causes; and lack of adherence to medications prescribed at discharge has been shown to be a driver of post-discharge adverse drug [events].”

NEHI urged the creation of integrated, multidisciplinary healthcare teams — including community pharmacists — to improve post-discharge patients’ health and lower hospitalization costs.

Focusing pharmacy on readmissions
Much of the flow of patients back into the hospital can be traced to medication nonadherence. “The lack of adherence — not taking medications, not taking the right medications or taking the right medications the wrong way — is estimated to be the cause of nearly one-third of readmissions of patients with chronic medical illnesses,” Utterback noted.

It’s a problem that goes right to the heart of community pharmacy’s core competencies. Boosting adherence levels among post-discharge patients is an increasingly critical focus for pharmacy providers, particularly those that are allying with hospital systems to reduce readmissions and extend the continuum of care back into the community and the patient home.

Chain and independent pharmacies around the country are stepping up efforts to partner with local hospital groups and health systems in a massive campaign to create a long-term, post-discharge safety net for patients after their release from the hospital. Such national pharmacy providers as Walgreens, CVS Caremark, Rite Aid and Walmart all have long-term initiatives in place to align with hospital systems and help patients transition back into the community, as do such regional players as Thrifty White and Hy-Vee.

Walgreens’ WellTransitions program, launched in 2012 in partnership with local hospital systems in several markets, has shown solid results, yielding a 46% reduction in unplanned hospital readmissions within 30 days of discharge for patients who were part of an outcomes study, according to the company. And Rite Aid has grown its Health Alliance transition-of-care partnership to some 60 of its pharmacies in collaboration with seven health systems around the United States. The program is reducing readmissions and improving patient outcomes through close collaboration with post-discharge patients and their physicians, said a Rite Aid official, and through a careful tracking of all pharmacist-patient interactions and results. With support from their wholesaler partners, many independents also are forming post-discharge patient-care networks.

Community pharmacy, said NACDS Foundation president Kathleen Jaeger, has an important role to play “in helping patients to avoid hospital readmissions and adverse events post-discharge.”

The NACDS Foundation in 2014 awarded $1.8 million in research grants to study the impact of pharmacists’ collaboration with patients following their discharge from hospitals. The two-year research effort centers on three ongoing studies:

  • A collaboration between Walgreens and the University of Mississippi’s School of Pharmacy and Medical Center to examine the impact of pharmacist-provided medication management on hospital readmissions. Participants include 20 local Walgreens pharmacies and the Mississippi division of Medicaid.
  • A study of how pharmacists’ interventions and continuous care can reduce hospital readmissions among high-risk patients in Pennsylvania. Participants include Geisinger Health System, Weis Markets, Medicine Shoppe and Medicap pharmacies, and Wilkes University College of Pharmacy and Nursing.
  • An analysis of the impact of integrating electronic health information with pharmacist-provided medication management following a patient’s discharge from the hospital in several counties in Ohio. Partners include 45 Kroger pharmacies, the University of Cincinnati’s James L. Winkle College of Pharmacy, UC Health West Chester Hospital, Mercy Health Hospitals and the Greater Cincinnati Health Council.

Another, separate NACDS Foundation-funded study of emerging healthcare models and their impact on patient outcomes involves Thrifty White Pharmacy, Walgreens, the University of Iowa, University of Nebraska Medical Center, North Dakota State University, Blue Cross Blue Shield, OutcomesMTM and the Community Pharmacy Foundation.

The benefits of collaboration
By participating in these post-discharge transitions of care and coordinated-care models, pharmacy providers also are helping to drive a fundamental shift in the healthcare system. “While the sickest patients will continue to be served in acute care settings, it’s clear that many patients with lower acuity will be served in different settings — whether that’s a community hospital, a surgery center, a clinic, a physician’s office or even the home,” George Barrett, chairman and CEO of Cardinal Health, reported. “This has been at the heart of our strategy to serve patients across the continuum of care.”

To that end, the Cardinal Health Foundation established a funding program, dubbed the E3 Patient Safety Grant, to spur innovative transitional care programs at hospitals around the United States. Among other projects, E3 sponsored the Bridges of Care Partnership between Culpeper Regional Hospital in Culpeper, Va., and the Rappahannock-Rapidan Community Services Board/Area Agency on Aging. Employing hospital case managers, social workers and “senior advocates” to help post-discharge patients obtain needed medications and follow-up services, the two health entities “collaborated to provide care during the transition from hospital to home for residents in the rural county of Culpeper,” Cardinal reported.

“Their overarching goal was to reduce 30-day readmissions for Medicare patients who had been diagnosed with diabetes, chronic obstructive pulmonary disease, heart failure or acute myocardial infraction,” noted Dianne Radigan, VP community relations for Cardinal. “The results? Culpeper Regional Hospital experienced a 23% decrease in readmissions for hospital-to-home patients, a 44% decrease in readmissions for nursing home patients and more than $1 million in savings.”

Another study from the University of Michigan College of Pharmacy and Health System found clear benefits for older patients on Medicare who participated in a Transitional Care Program offered at an affiliated geriatric clinic. The program was conducted by a community-based team of clinical pharmacists, physicians and nurse practitioners for patients transition-ing from the hospital or long-term-care facility, with the primary goal being “to prevent re-hospitalization … using a team-based approach,” according to the American Journal of Managed Care in a report earlier this year. “Those who did not receive or complete the TCP within 30 days of discharge had … increased odds of being readmitted within 30 days,” noted the journal. “Based on results of the as-treated analysis, hospitalization cost avoidance was estimated to be $737,673 among the 345 completed interventions, or $2,138 per intervention.”


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MD Labs brings pharmacogenetics to masses

BY Michael Johnsen

As health care continues to shift to an evidence-based model, ensuring patients are on the right therapy — right from the start — is a critical part of delivering improved health outcomes. Enter MD Labs and the company’s RxIGHT Pharmacogenetic test, which uses the DNA from a cheek swab sample to help determine the best course of pharmacotherapy for an individual patient across 200 medicines — a number that’s growing.

“Pharmacogenetics as an industry, the technology, the training, the awareness, has really come to a head,” MD Labs president and founder Matthew Rutledge told Drug Store News. “This has become something that we can bring to the masses.”

The new RxIGHT Pharmacogenetic Test, which retails for $399, can eliminate trial-and-error prescribing of medicine, in which a doctor prescribes a medicine and measures the impact of that course of therapy after the fact, rather than quickly identifying the most appropriate course of therapy.

It drives adherence and — perhaps most importantly — improves outcomes.

“This is the biggest [product] that we have seen coming out of the pharmacy,” said Scott Emerson, corporate president, chairman and CEO at Emerson Group, which is representing MD Labs to retail pharmacy. MD Labs’ solution advances the potential of pharmacogenetics by a factor of 10, he said, comparing this test to others on the market today.

“The role of the pharmacist as a person’s medication specialist [will change],” Rutledge said. A medicine that works in 70% of the population is great, but what does the other 30% do? “Now we can tailor it to one specific person [and] help that 30% not experience the problems and get on the right medication right from the start. That is fundamentally going to change the pharmacist’s role in the equation.”

Pharmacogenetics technology will elevate the role of the pharmacist, Rutledge added.

“Physicians have really stepped back from pharmacogenetics technology — they realize they don’t have the time to meaningfully integrate this into their practice,” Rutledge said. “The one person who is the key focal point for this is the pharmacist, and physicians are understanding that more and more.”

“We’re standing on the shoulders of a lot of great research,” Rutledge said. In the past few years, pharmaceutical manufacturers have been investing in pharmacogenetic performance of their medicines. “The history of this technology has gotten to the point where we are able to take it to the masses, to retail pharmacy, and make it available and make it affordable.”


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6 things you should know about the Walgreens-Rite Aid deal

BY Michael Johnsen

Walgreens Boots Alliance made headlines late last month with its announcement that it would acquire No. 3 retail pharmacy player Rite Aid in a $17.2 billion deal that would give the new company about 25% combined share of the U.S. retail prescription drug market.

Below are the six things you need to know about the deal.

1. Rite Aid owned a small PBM — what will Walgreens do with it? 
In February, Rite Aid acquired EnvisionRx, a pharmacy benefit manager that manages 21 million lives as part of a $5-billion enterprise. Does this put Walgreens into the PBM business à la CVS Health? Not necessarily.

“[EnvisionRx] is an important but relatively small PBM business,” said Alex Gourlay, EVP WBA and president of Walgreens. “It’s in the top 10, but not a big one. Once we get beyond the closure of the FTC review, [we need to] understand more about the business and how it could really help us understand access in America better.” In the short term at least, it seems Walgreens will be content to watch and learn what it can from the PBM.

2. What happens if the deal falls apart? 
The merger agreement between WBA and Rite Aid must be consummated in exactly one year (Oct. 27, 2016), or the deal is off. And while that deadline could be extended to Jan. 27 if necessary, not completing the transaction could prove costly for the partner who walks away first.

If the deal collapses on account of Rite Aid, the Pennsylvania retailer will pay a $325 million termination fee and an additional $45 million to cover expenses. Conversely, Walgreens will forfeit $325 million to Rite Aid if it’s not able to secure regulatory approval of the deal, a figure that could double to $650 million if Walgreens “enters into, consummates or announces certain acquisitions within eight to 12 months of the date of the merger agreement [with Rite Aid].”

3. Wholesaler agreements — Rite Aid was partnered with McKesson, Walgreens with AmerisourceBergen … what can we expect?
Last year, Rite Aid signed an extension with McKesson through March 2019. But WBA owns a 5.2% stake in AmerisourceBergen today and can increase that allotment to 23%. At the very least, McKesson will be pressured to deliver significant value through the duration of its contract.

“You don’t have to assume the fact that we will change the contract or will move the contract,” Steffano Pessina, EVP WBA and CEO of Walgreens, said. “[But] it’s obvious that we will try to extract as much value as possible.”

But don’t count McKesson out.

“When we expanded the relationship last year, Rite Aid was attracted to closer ties to McKesson because of our generic purchasing scale, our sourcing expertise, our leading industry distribution capabilities … and the significant working capital and cash flow benefits available through this closer relationship,” McKesson chief John Hammergren told analysts after the WBA/ Rite Aid deal was announced. “Since that time, McKesson has added significant additional scale to our generics program.”

4. What will the FTC do?
It all depends on how you define retail pharmacy. If retail pharmacy is defined strictly by channel, and a Walgreens Boots Alliance/Rite Aid deal essentially creates a drug channel duopoly with CVS Health, then there’s a chance the FTC could oppose the deal.

If the definition of retail pharmacy is opened up to include such pharmacy operations as Walmart and Kroger, then it’s a much larger retail pharmacy world out there. Walgreens is willing to divest as many as 1,000 locations. If the deal is approved, Rite Aid’s store density will beef up WBA’s position in California and the Northeast.

5. Where will the synergies come from?
Walgreens Boots Alliance has earmarked $1 billion in internal synergies. And given WBA’s penchant for delivering greater synergies than initially projected, that may be on the low end of what’s possible. First, there will be cost synergies as WBA drives efficiency through the collective WBA/Rite Aid enterprise, reducing duplicative supply chain costs and other overhead items.

But the real prize here will be revenue synergies, the deal opens up more doors for Walgreens to drive front-end profits and will accelerate Rite Aid’s remodel program. As of Rite Aid’s second quarter, 1,859 stores featured the Wellness model, representing only 41% of the store’s base. There could be a lot of upside in upgrading and remodeling the remaining stores. According to Seeking Alpha’s Moid Shaikh, that could move Rite Aid’s current operating margin of 3.2% closer to WBA’s operating margin of 5.5%.

6. What about tobacco?
CVS Health may have celebrated its one-year anniversary in quitting tobacco sales this past September, but don’t expect WBA/Rite Aid to make the same move anytime soon. When asked about it, Gourlay suggested that WBA remained focused on investing to help people quit smoking. “Our Balance Rewards for Healthy Choices program we launched about 12 months ago has been incredibly successful, and we’ve chosen to invest there,” he said. “Our fundamental choice is to invest to help people who are ready [and] prepared to stop.”


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Which area of the industry do you think Amazon's entry would shake up the most?