The value of retail clinics
With the expansion of coverage to millions of more Americans in the years since the Affordable Care Act was fully implemented, access to care is becoming more strained than ever before, seemingly creating more interest among payers, insurers, health systems and patients in the use of retail clinics.
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“Retail clinics are increasingly expanding their service offerings to include behavioral health screenings, more comprehensive primary care and chronic care management,” noted the Robert Wood Johnson Foundation’s April 2015 report, “Building a culture of health: The value proposition of retail clinics.” The RWJF study sought to “examine the potential value proposition in building a ‘Culture of Health’ in the United States.” This ‘Culture of Health’ is the RWJF’s own version of the Triple Aim goals first introduced by the Institute of Health in 2008: to provide better access to care for individual patients; to improve health outcomes for large patient populations and lower costs.
There are currently about 2,000 retail clinics in operation, a number that is expected to grow to some 3,000 locations by 2016, according to research from the Convenient Care Association. Annual clinic visits totaled more than 10.5 million last year.
According to Kalorama Information, retail clinics generated sales of more than $1 billion in 2014 — this, of course, only measures the sale of retail clinic services and procedures, and excludes any impact to the host pharmacy in terms of pharmacy and OTC sales. One-third of those visits were driven by a prescription refill, according to Kalorama.
Tagging authentication: Q&A with TruTag Technologies’ Kent Mansfield
TruTag Technologies is looking to impact the food and drug industry with its edible security platform. “TruTags,” the company's microtags, can help to authenticate products without packaging or labels. For example, the surface of every pill could be encoded with a TruTag, according to the company, that could hold all of the information from a drug package insert. DSN spoke with Kent Mansfield, president of TruTag Technologies.
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DSN: Why edible bar codes?
Kent Mansfield: The term “edible bar code” was coined as a descriptor for our coded silicon dioxide material that is used in the drug and food industry. We chose this term because our specialized, coded material acts like a traditional bar code in that it contains a unique serial identifier. However, the spectral codes associated with our microtags are covert, and these tiny particles are made of silica, a completely safe, edible material that has been used for decades in food and drugs. TruTag’s ability to batch code serial identifiers into our specialized SiO2 material enables any product to ‘self identify’ without the need for a package … . For example, TruTag has developed an application for solid oral dosage form products where the TruTag coded SiO2 material is added during the manufacturing process and becomes ‘embedded’ in the pill’s outer coating, thus enabling a scan of any pill that will identify and reveal the product, dosage, image of pill, image of package and other key attributes, such as lot number and date of manufacture.
DSN: What are some of the applications?
Mansfield: Applications of TruTag include tagging and authenticating high-volume, low-cost items, such as pharmaceutical products, medical devices, food products and packaging, industrial products, auto parts, electronics, batteries, aerospace and consumer goods.
DSN: What can TruTag do for retail pharmacy and manufacturers?
Mansfield: Over time, TruTag’s patented SiO2 coded material can change the entire pharmaceutical industry. Initially, manufacturers and brand owners will be able to have better control over specific high-profile drugs by understanding the provenance of the medicine in the supply chain and where compromise or diversion may be occurring. Further, this tool will help with administration of returns and recalls since it can quickly identify where and when the specific product at issue was made. On-dose authentication can even help drug manufacturers in the drug development process by invisibly marking drug product used in clinical trials, where placebo and active batches are designed to look identical, but where simple mix-ups could jeopardize major new drug development research.
As more drug products become ‘tagged’ in the marketplace, the TruTag authentication platform could revolutionize the prescription and OTC drug business by enabling the interrogation of drugs directly by point-of-dispensing outlets, such as pharmacies or clinics, to confirm authenticity, dosage, manufacturing origin, inventory count and more. This also could significantly bring credibility to legitimate online pharmaceutical outlets by enabling participation in the tagging program. Ultimately, as TruTag becomes more pervasive in the industry, pharmacies will be able to scan and confirm multiple pieces of product intelligence automatically at the time of prescription fulfillment. Also, this could play a major role in patient compliance and provide data interaction between the patient, the pharmacist and other stakeholders.
DSN: What does it mean for patients?
Mansfield: Once tagging is used by retail outlets, the next step in the value chain is consumer participation. At that point, TruTag would be launching a consumer reader where patients could interrogate their own medicine to verify that it is authentic, that it has been properly prescribed, and that there are no adverse interactions between the various medicines that the patient is taking. Through this activity, the various stakeholders in the healthcare ecosystem could build more direct relationships to end-users. The use by patients of these readers would provide massive amounts of product intelligence and behavior trends. For example, in the area of patient compliance, doctors, drug makers and health insurance providers would have access to information about if and when patients are taking their medicine, which would allow each of them to better understand the effectiveness of the drug regimes.
Building understanding: Q&A with KPMG’s Larry Kocot
Since 2007, Larry Kocot has helped spearhead health policy initiatives at the Brookings Institution, and prior to that was senior adviser to Mark McClellan, administrator of the Centers for Medicare and Medicaid Services, where Kocot was instrumental in the design and launch of the Medicare Part D drug benefit program — and in advocating a larger role for pharmacists in the delivery of such Part D services as medication therapy management. Kocot also has served as SVP and general counsel for the National Association of Chain Drug Stores, and with the Commonwealth Health Research Board and the Center for Strategic and International Studies. DSN recently sat down with Kocot — who now heads up KPMG’s Center for Healthcare Regulatory Insight — to discuss the future of payment system reforms.
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DSN: What do you see as KPMG’s part in helping business and government align more effectively, and preparing pharmacy and other health stakeholders for payment system reforms?
Larry Kocot: There’s been a lot of talk [within the healthcare industry and government] about the way things are, but not as much about what needs to be done in terms of understanding the regulations, and understanding what government and business [need to be] doing … both to make government work better in regulating business and, frankly, to make it easier for business to work with government and the regulations government has established.
So we seized on this notion of insights to help bridge those gaps. That’s really what we’re designed to do — to help various constituencies understand regulation and put it in context and perspective, so that they might benefit from the opportunities regulation can bring, instead of always feeling the crushing burden of regulation.
DSN: How does that translate into action on behalf of pharmacy chains?
Kocot: There’s a number of things we can do … in providing those insights and then building on them for our clients. There are a lot of interesting changes coming that we hope to be thought leaders on, in terms not only of the Medicare program but of payment delivery forms in general.
I’m at the forefront, along with others in the [accountable care organization] world, of trying to push that [outcomes-driven payment reform] concept. There are now 33 million Americans in ACOs, and the future of that program and other payment reforms emanating from them are evolving very quickly. And we’ll see a lot more of this coming in 2019, where we’ll see increased penalties and payment incentives … as we move to alternative payment designs [based on patient outcomes instead of fee-for-service].
So … we’re looking at what we can do down the road to encourage a move away from fee for service. How do various providers coalesce around ideas and notions of reform? We’ve got the bare bones, so how do we put meat on those bones? We continue to move in that direction.
DSN: How do you shift the payment model in a way that’s workable and transparent, and can evolve into a standardized reimbursement model?
Kocot: As you look at [the Medicare Modernization Act, which created Part D], you start to think, Congress just handed a bunch of concepts to [CMS] and said, basically, ‘Make them work.’ That’s a big challenge for the agency. They’re going to need a lot of help and support from industry to come up with models that actually do work and come up with a workable program.
DSN: There are a lot of programs around the country now where health systems and pharmacies are working together to come up with a workable payment system. But it sounds like it will take years for all this to totally smooth out.
Kocot: I think that’s right. Community pharmacies stepped up in a way that’s pretty impressive for the future. You can see the way that chains like CVS and Walgreens and … Target have put forth innovations recently. Rite Aid is getting more aggressive, and some of the food chains are becoming even more prominent in the health-and-wellness space. It’s pretty impressive to watch how they are stepping up not only to the opportunities, but also the challenges that we’ll face as a system going forward.
DSN: What should pharmacy retailers be looking out for as the pharmaceutical market evolves, boomers age and health reform continues?
Kocot: As I look down the road, we’re going to see more opportunity to help government and industry understand structural changes with evolving markets and maturing programs.
For example, in Part D, in 2020, 50% of the cost of pharmaceuticals is going to be in specialty drugs. Now, if the specialty tier is 25% to 33% co-pay and 50% of the cost … there’s going to be access issues, first of all, for many beneficiaries who have to pay a substantial amount of those dollars out of pocket.
In addition, the insurance is only going to increase. It’s the most expensive part of the benefit now, because people are going to get to catastrophic [coverage levels] much sooner.
So you’ve got those structural issues. And the drug pipelines being what they are, that really begs the question: do we need to revise the benefit? You have to start thinking structurally. Are there things we need to do to the Part D benefit to create reform in the law that will better align with where we are in the pipeline — especially with specialty drugs?
Another big focus is with the Medicare Advantage program, which now accounts for about one-third of the beneficiaries. With the wave of boomers more accustomed to managed care, you’re seeing more gravitation toward that program and away from traditional fee-for-service Medicare [delivery]. So changes are needed for that program as well.