10/10/2017. Show Me the Door. Tripp Logan, PharmD Community Pharmacist

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1 Show Me the ROI or Show Me the Door Tripp Logan, PharmD Community Pharmacist 1

2 Disclosure Tripp Logan, PharmD, L and S Pharmacy declares no conflicts of interest or financial interest in any product or service mentioned in this program, including grants, employment, gifts, stock holdings, and honoraria. Learning Objectives Discuss the criteria to evaluate expansion projects for your pharmacy. Determine what factors beyond income have an impact on the cost benefit ratio for your business. Outline the most common cost centers for a program expansion an dhow to weigh them in decision making. 2

3 My Background: COMMUNITY PHARMACIST / PHARMACY OWNER 2 nd generation multi pharmacy owner in Southeast Missouri Strong focus on appropriate medication use Quality focused pharmacy practices Residency program, care coordination, disease state management, diabetes support group, medication use monitoring, MTM, compliance packaging, TOC, etc. PHARMACY QUALITY CONSULTANT / PARTNER MedHere Today is a healthcare quality and performance consulting firm created to help healthcare stakeholders expand and grow their quality and value based initiatives by leveraging community pharmacy. SERVICE ORGANIZATIONS Pharmacy Quality Alliance (PQA) Board Liaison NCPA Innovation Center Board Member CPESN USA National Luminary CPESN Missouri Lead Luminary Local Department of Health Board of Directors Disclosures Tripp Logan, PharmD NCPA Innovation Center Board Member CPESN USA National Luminary Partner, MedHere Today Consulting Vice President, Logan & Seiler Inc. (L&S Pharmacy / Medical Arts Pharmacy) 3

4 Personal Disclaimer The content of this presentation reflects my personal experiences in our pharmacies, our consulting firm, and my service within pharmacy advocacy groups. Each pharmacist & pharmacy is unique, with a unique payer mix, unique set of offered services, unique opportunities, and most of all unique patient populations. The purpose of this presentation is to walk you through our ROI exploration process in our businesses. The purpose of this presentation IS NOT for it to be used as specific guidance on how you should operate your pharmacy practice, how you work within your current or future pharmacy contracts, or how you care for your unique set of patients. Tripp Logan, PharmD Most Taboo Words in Health Care: Provider Profitability 4

5 Pharmacy Staff Orientation Speech: As a community pharmacy, our primary responsibility is to the patients that walk through our doors. If we make poor business decisions, we close our doors, and FAIL EVERY PATIENT WE SERVE. The Community Pharmacy Conundrum: Pharmacies must: 1. Think PATIENT FIRST PAYER SECOND, 2. While we ensure that our patients have access to the medication they need, 3. And maintain pharmacy profitability at the same time. 5

6 This isn t easy Shift from Volume to Value Painful Transition for Pharmacy 6

7 Pharmacy Service Litmus Test How Do You Identify a Return On Investment? Good Investments Are Typically: Good for Prescriber Good for Employers Good for Third Parties Good for Pharmacy Staff Good for Pharmacy Good for Patients 7

8 Standard Question: How Can I Afford This? Pharmacist time is limited Pharmacist time is expensive Enhanced pharmacy service reimbursement is not always available My dispensing reimbursement is shrinking and my DIR fees are rising Begin With a Business Plan How much time will this service take to implement? Can I start small and scale? What is my target market? What will this cost in labor? What will this cost to implement? Will this service also provide advertising? What is the short term & long term program budget? 8

9 Begin With a Business Plan There is a How much time will this service take to implement? Can I start small and scale? What is my target market? What will this cost in labor? What will this cost to implement? Will this service also provide advertising? What is the short term & long term program budget? difference between REIMBURSABLE and PROFITABLE Consider Services That Are Profitable and/or Marketable Profitable Marketable Adherence monitoring program with packaging Transition of care with hospital Care coordination with mental health provider Immunizations Medication Therapy Management Clinical services (blood pressure, blood glucose testing, Etc.) 9

10 Ask yourself: Is This? Good for my patients? Revenue producing & profitable? Good for my pharmacy s image? Something my staff will buy in to? Is this sustainable? If the answer is NO, that s OK. Don t force it. What s Out There? To seize opportunities, you MUST look beyond the counter at things like: Your current business model and processes Your unique patient mix Your exposure to national markets Your exposure to LOCAL markets 10

11 Key Universal Targets: Patients Rx Volume / New Patients / Foot Traffic Pharmacy Operations Workflow / Efficiency / Labor / Wages Providers Health Systems / Clinics / Prescribers Payers Health Plans / PBMs / Employers Adherence Monitoring Manage inventory with just in time fills Push high volume patient filling to down time Create a predictable pharmacy work environment Create free time for MTM, immunizations, etc. Create free time to coordinate care with providers Create free time to counsel patients and caregivers 11

12 Adherence Monitoring: ROI Increase in ADDITIONAL program driven Rx volume * Number of patients enrolled in program Additional Rxs per patient annually *Armstrong T., Impact of the MedHere Today Program on Persistence and Adherence, A Descriptive Report; Pfizer, May Adherence Monitoring: ROI Cash flow savings for pro active medication management of 20 patients $ Pharmacy Cost of Each Prescription Number of patients filling one $500 Rx/mo 12

13 Adherence Monitoring: ROI Cash flow savings for pro active medication management of 20 patients $ That s a Pharmacist Salary!!!! Pharmacy Cost of Each Prescription $10,000/mo = $120,000/year Number of patients filling one $500 Rx/mo All Rxs ARE NOT Created Equal 13

14 All Rxs ARE NOT Created Equal All Rxs ARE NOT Created Equal 14

15 Targeting Exercise 1. Who is my most profitable third party payer? 2. Which prescriber accounts for the most prescriptions from that payer? 3. What is my average margin per patient per month from this third party payer and prescriber 4. How many patients do I have from that prescriber and how could I get more? Targeting Exercise 1. Who is my most profitable third party payer? 2. Which prescriber accounts for the most prescriptions from that payer? 3. What is my average margin per patient per month from this third party payer and prescriber 4. How many patients do I have from that prescriber and how could I get more? Local Results 1. State Medicaid 2. Multi Site Mental and Behavioral Health Clinic 3. Average 4 Rx/patient but most see multiple prescribers ($63 avg margin/mo) 4. We see 88 patients/month 15

16 Targeting Exercise 1. Who is my most profitable third party payer? 2. Which prescriber accounts for the most prescriptions from that payer? 3. What is my average margin per patient per month from this third party payer and prescriber 4. How many patients do I have from that prescriber and how could I get more? Local Results 1. State Medicaid 2. Multi Site Mental and Behavioral Health Clinic 3. Average 4 Rx/patient but most see multiple prescribers ($63 avg margin/mo) 4. We see 88 patients/month Targeting Exercise 1. Who is my most profitable third party payer? 2. Which prescriber accounts for the most prescriptions from that payer? 3. What is my average margin per patient per month from this third party payer and prescriber 4. How many patients do I have from that prescriber and how could I get more? Local Results 1. State Medicaid 2. Multi Site Mental and Behavioral Health Clinic 3. Average 4 Rx/patient but most see multiple prescribers ($63 avg margin/mo) 4. We see 88 patients/month 16

17 Targeting Exercise 1. Who is my most profitable third party payer? 2. Which prescriber accounts for the most prescriptions from that payer? 3. What is my average margin per patient per month from this third party payer and prescriber 4. How many patients do I have from that prescriber and how could I get more? Local Results 1. State Medicaid 2. Multi Site Mental and Behavioral Health Clinic 3. Average 4 Rx/patient but most see multiple prescribers ($63 avg margin/mo) Don t Forget to Factor in average DIR Fees 4. We see 88 patients/month Internal DIR Fee Assessment Plan A $0.00 / Rx Plan E $2.76 / Rx Plan B $0.00/ Rx Plan F $5.00 / Rx Plan C $0.00 / Rx Plan G $7.00 / Rx Plan D $2.17 / Rx Plan H $20.16 / Rx 17

18 Targeting Exercise 1. Who is my most profitable third party payer? 2. Which prescriber accounts for the most prescriptions from that payer? 3. What is my average margin per patient per month from this third party payer and prescriber 4. How many patients do I have from that prescriber and how could I get more? Local Results 1. State Medicaid 2. Multi Site Mental and Behavioral Health Clinic 3. Average 4 Rx/patient but most see multiple prescribers ($63 avg margin/mo) 4. We see 88 patients/month Targeting Exercise 1. Started with Research in Mental Health, Medicaid, the Clinic 2. Became familiar with some pharmacy best practices in mental and behavioral health 3. Learned who was on the board and who was in administration 4. Explored common barriers and pharmacy solutions that could positively impact mental and behavioral health 18

19 Targeting Exercise: Gaps Primary non adherence Never get first fill Routine non adherence Doesn t continue medication Formulary issues patients unable to acquire medication Lack of Care Coordination Patients unable to navigate the health care maze Transportation Patients struggle with acquisition of meds Lack of communication among providers Patients receive sub optimal care due to health care silos Limited continuity of care Treatment often stops once the patient walks out of the clinic Targeting Exercise: Use What You Have Our care coordination and adherence monitoring leads to improvements in medication adherence across multiple chronic conditions *Armstrong T., Impact of the MedHere Today Program on Persistence and Adherence, A Descriptive Report; Pfizer, May

20 Targeting Exercise: Solutions? Adherence Packaging Targeting Exercise: Adherence Packaging Business Planning How much does a vial cost? How much does a cap cost? How much does a label cost? How much does a package / card cost? How many vials equal the cost of one package / card? How many cards will each new clinic patient purchase? 20

21 Targeting Exercise: Adherence Packaging Results Found packaging solution that allowed us to start with minimal investment and automation upgrade opportunities Estimated that patients with 10 or more prescriptions would cost us around $20/year to covert to packaging Estimated that each new clinic Medicaid patient is worth the cost of around 870 packages/cards Targeting Exercise: Questions for Clinic What can we do to help you? Adherence packaging? 28 vs 30 day supply packages? Increasing communication with the pharmacy? Reporting back on dispensing, refill status, adherence, clinical markers, etc? Would extra patient monitoring post visit help? PHQs, waist circumference, weight, blood glucose, 7,14,28 day package pickup/delivery to increase touch points, etc? Patient bring in package to office visit? Suggestions? 21

22 Targeting Exercise: Secondary Solutions Medication Reconciliation 28 vs 30 day dispensing Consolidation of medication + home visit Coordinate & communicate with clinic & PCPs Patient Health Questionnaire PHQ2 used on previous project to target depression in DM and could be used here PHQ9 could be used if preferred Metabolic monitoring Waist circumference Weight BG checks Medicaid MTM Interventions Standardized reporting back to Clinic after assessment and medication is delivered Referrals to Clinic for at risk patients not currently receiving mental health care Targeting Exercise: ROI Held meetings with administrator for clinic needs assessment and pharmacy service detailing Hosted in service for case managers to detail pharmacy services Immediately began receiving referrals from case managers for packaging, care coordination, and other pharmacy services Prescription volume & referrals from target clinic and target payer increased Ongoing communication with clinic exploring new collaboration opportunities, despite clinic plans to open an on site pharmacy 22

23 Key Universal Targets: Patients Rx Volume / New Patients / Foot Traffic Pharmacy Operations Workflow / Efficiency / Labor / Wages Providers Health Systems / Clinics / Prescribers Payers Health Plans / PBMs / Employers Good Investments Are Typically: Good for Prescriber Good for Employers Good for Third Parties Good for Pharmacy Staff Good for Pharmacy Good for Patients 23

24 Payer Programs: ROI? Is the program Pay for Performance or Pay to Play? Is it the program an Incentive Program or a Penalty Program? Are the metrics movable? Is the workflow process achievable and sustainable? Is the program in the best interest of your target patients? Will the program bring you patients? Revenue? Volume? Marketing? Is the Rx volume worth the investment with this payer? Is the program worth investing time, money, and valuable resources? ROI: The Payers Themselves Began by looking at the payers themselves BEFORE we looked at their programs. Specifically looked at: Average margin per Rx Average DIR per Rx Our pharmacy s cost to dispense Average annual Rx volume per Rx Determined which plans had patients we wanted more of, and which plans we were losing money on. Created a list of positive ROI partners and poor ROI partners 24

25 ROI: Payer Programs Examples: 90 day supply conversion FFS Traditional Medicare Part D FFS Medication Therapy Management Medicare Part D adherence interventions through MTM vendors Medicare Part D performance program using health plan quality metrics Per member per month disease state management programs Enhanced MTM opportunities, Chronic Care Management, Etc. Patient attribution for enhanced pharmacy services Drug Manufacturers (PHARMA) are becoming payers Currently LOTS of innovation and experimentation in this space!!!! Payer Strategies There is more value in hitting the measure's star rebate level, than a focus on the medical cost reduction Medicare Part D Plan Executive, August

26 Pharmacy Strategies Claims Based Fill reminders Med sync Fill gaps in care Medication safety CMR Packaging Days supply DIR reduction Patient Based Copay assistance Medication access Transition of care Health literacy/social Care coordination Transportation Education Empathy ROI Targeting Exercise Why 90 Day Supply? 26

27 Positive ROI: 90 Day Supply? There is a difference between ADHERENCE and POSSESSION Proportion of Days Covered (PDC) is a claims based method to measure possession Health Plans are held accountable for various PDC measures Some Health Plan programs offer financial incentives for conversion to 90 day supply ROI Targeting Exercise Is traditional Medicare Part D MTM a sustainable source of revenue? 27

28 Positive ROI: Part D MTM? Historically Community Pharmacies have had low CMR completion rates According to PHSI*, pharmacies had approximately 50% grater profit dispensing prescriptions vs doing MTM work Community pharmacy owners must be good business people If pharmacies feel they are properly incentivized for MTM services, they perform the FFS activities** * Pharmacy Profitability What s Over the Horizon? Don Dietz, R.Ph, MS, Vice President; Pharmacy Healthcare Solutions Inc. American Society for Automation in Pharmacy 2014 Annual Conference; January 2014 ; 2014 NCPA Digest Sponsored by Cardinal Health ** MedHere Today GSO CMR Completion Bonus Project; January 2015-December 2015; FFS for pharmacies that qualified for the bonus in 2015 ROI Targeting Exercise Are there truly Pay for Performance programs that are worthwhile? 28

29 Positive ROI: P4P? All P4P Programs are not created equally What is seen as an incentive to one side may not be seen as the same on the other Each business must determine the value and impact of a P4P Program to their specific bottom line P4P market is evolving and we can look to hospitals for historical guidance A lot of pressure on payers to get it right the first time fair? ROI Targeting Exercise What do future opportunities look like? 29

30 Positive ROI: Current & Future Examples: Outcomes based programs, contracts, and collaboration opportunities A1C, BP, Lipids, Asthma, Admissions, Readmissions, CHF, etc Drug manufacturer programs Surveys, trainings, education, etc. Medicare Part D programs BEYOND claims based metrics Admissions per 1000, ER visits/1000, Complaints to Medicare, $PMPM (medical & drug), etc. Community Pharmacy Enhanced Service Network expansion The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Risk sharing with Health Systems & Hospitals No one knows what the future holds is it Amazon? Good Investments Are Typically: Good for Prescriber Good for Employers Good for Third Parties Good for Pharmacy Staff Good for Pharmacy Good for Patients 30

31 Return On Investment Tripp Logan, PharmD Thank you! 31

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