Pharmacy Track. Presenters: Mary Beth Lang, EVP Pensiamo and VP, HC Pharmacy Frank Lloyd Wright GH September 19 1:00 pm - 2:15 pm

Transcription

1 Pharmacy Track Lessons Learned from the Restructuring of UPMC Pharmacy Presenters: Mary Beth Lang, EVP Pensiamo and VP, HC Pharmacy Frank Lloyd Wright GH September 19 1:00 pm - 2:15 pm

2 Faced with compressed reimbursement and significant expense reductions, UPMC implemented the adoption of horizontal service line management. UPMC executives asked supply chain management to assume responsibility for running the pharmacy supply chain's horizontally integrated, centralized mechanism for controlling pharmaceutical spend under a consolidated services procure-to-pay for-profit company, HC Pharmacy. In this session, attendees will learn how SCM has added operational efficiency through focus on people, process and technology. Additionally, HC Pharmacy leadership has been added to the UPMC Health System Pharmacy & Therapeutics Committee, to expand the pharmacy service line efforts to increase formulary compliance and limit product selection.

3 Learning Objectives: 1. Define methods for creating a management structure that fosters innovation as well as alignment with your strategic plan. 2. Analyze the decisions that need to be made in order for service lines to be truly effective. 3. Identify the benefits of having supply chain involved in the pharmacy service line model

4 The Power of One

5 New Delivery Models Person- Centered Medical Homes Increase Preventive Care Promote Early Intervention Improve the Coordination of Care Source: Lang: Accountable care: Physicians' perceptions to changes in care Expand Use of Evidence-Informed Care Decrease Overuse and Underuse of Services Reduce Error Rates Inpatient: Reducing Errors & Waste Need to invert the resource allocation triangle Develop patient-centered care teams Prevention activities must be funded and widely deployed Primary care must become a desirable occupation with reduction in demand for specialty and acute care systems science

6 Competing on Cost and Quality Impact of Value Based Purchasing for UPMC FY Medicare Spend per Beneficiary Value based Purchasing 1.0% 1.25% 1.5% 1.75% 2.0% Hospital Acquired Conditions Reporting Reporting 1.0% 1.0% 1.0% Readmissions 1.0% 3.25% 5.5% 5.75% 3.0% TOTAL 1.0% 3.25% 5.5% 5.75% 6.0% One UPMC Hospital, 2% = $14 million By 2017, Total at risk from CMS = $42 million Lower MSPB ratio = Higher reimbursement Source: Lang: Accountable care: Physicians' perceptions to changes in care decisions

7 CMS Comprehensive Care For Joint Replacement (CJR) Program Final rule November 16, 2015 mandatory program for hospitals in 67 MSA Program begins April 1, 2016 through 2020 One bundled payment and quality measurement for entire episode of care for hip and knee replacements Hospitals, physicians, post-acute providers Pre-surgery to post recovery

8 UPMC UPMC is a $12 billion integrated health enterprise with big numbers. On any given day, UPMC: Admits 700 patients Delivers 40 babies Cares for 1,650 patients in our emergency departments Has more than 10,000 outpatient visits Performs 500 surgeries, 375 MRIs, and 1,300 CTs Provides housing and care for more than 2,200 seniors Provides jobs for more than 55,000 people as the largest employer in the state Western PA Primary Locations Italy

9 There s been an accident. Come to the hospital. This is Jason. A trauma patient headed to UPMC Presbyterian. 9

10 Complex Coordination and Oversight of Jason s Care Department of Labor Employee Standards Administration Wages and Hour Division American Society of Clinical Oncology and Oncology Nurses Society Allegheny County Sanitary Authority American College of Surgeons Bureau of Drug and Alcohol Programs City of Pittsburgh Fire Department Department of Justice Commission on Dietetic Education United Network for Organ Sharing Department of Transportation Department of Public Welfare Scrub Tech Anesthesia MD 54+ Roles Joint Commission for Accreditation of Healthcare Organizations Department of Labor and Industry Children and Youth Services State Board of Pharmacy Drug Enforcement Agency Allegheny County Health, Division of Air Pollution Control Allegheny County Department of Law, Bureau of Weights & Measures Environmental Protection Agency Phlebotomist CCM MD Department of Health Home Care Aide Surgeon Social Worker OR Nurse Registration Staff Home Care Nurse CRNA Flight Nurse Paramedic RN Pharmacist Nuclear Regulatory Commission Immigration and Naturalization Service Division of Line Safety Family Support Staff State Bureau of Integrity Respiratory Therapist ED Trauma Fellows Biomed Tech Accreditation Council for Graduate Medical Education ED Trauma Residents Radiology Tech Occupational Therapist CCM Fellows Dietician Jason Emergency Physician Pilot MedCall Operator Trauma Surgeon ED Trauma Nurse Physicians American Trauma Society Residency Review Commission Allegheny County Health Department, Bureau of Waste Management Quality Improvement Specialists Housekeeping Patient Access Safety & Security Officers Physical Therapist Centers for Medicare and Medicaid Services Parking Attendant CFO Surgical Resident & Fellows IT Systems Analyst Corporate Comm. Human Resources Patient Business Services Financial Analysts Transport ED Tech Perfusionist Occupational Safety and Health Administration Liaison Committee for Medical Education College of American Pathologists COLA Maintenance IRS Health Information Mgmt Food Service Dietary Scheduling Strategic Strategic Planning Planning Care Manager Med Student Central Sterile Supply Health and Human Services Nursing Division Federal Communications Commission Food and Drug Administration Office of the Inspector General Office of Program Integrity 50+ Regulatory Agencies Association for Assessment and Accreditation of Laboratory Animal Care Commission on Accreditation of Rehab Facilities Office of Civil Rights Foundation for Accreditation of Cellular Therapy Allegheny County, Food Safety National Cancer Institute Clinical Laboratory Improvements Amendments Department of Environmental Protection City of Pittsburgh Bureau of Building Inspection Federal Aviation Agency 10

11 Accident Hospital Home 11

12 Evolution of Care Model National Quality Forum Integrated Measurement Framework 50% 40% Family & Patient Engagement Care Coordination Population Management Strategies 1. evisits 2. Walk-in Clinics 3. Medical Homes 4. Multidisciplinary Teams 5. Centers of Excellence Time Population at Risk Phase 1 10% Population Health Clinical Episode Begins Evaluation & Initial Management Phase 2 Overuse 65% Spend Follow up Care Phase 3 Palliative Care Safety Schneider et al. Payment Reform Analysis of Models and Performance Measurement Implications End of Episode Risk-Adjusted Health Outcomes and Total Cost of Care

13 Good Science UPMC Strategic Framework Focused research New approaches to more effectively treat diseases Reduce over-diagnosis and over-treatment Optimize outcomes at each stage of life New models for end of life care Patient Centered Accountable Care New seamless and streamlined cost effective care models Patient centered medical home Payer-provider pilots in chronic disease management Community based services Smart Technology Transform disparate data and information into actionable intelligence Broad-based telemedicine capabilities Health Information Exchange 13

14 Physicians Perceptions of Changes Current Autonomous Care Decisions Adversarial Relationships Mistrust Defensive Separate technology Separate metrics Accountable Care Aligned Care Decisions Extended Care Team Shared Culture Value-Based Shared accountability Appropriate Evidenced-based Guidelines Physicians are willing to adapt to changing payment models and mandatory reporting if they are surrounded by the technology, protocols, leadership and care team Source: Lang, MB Accountable Care: Physicians Perceptions of Care Coordination

15 2. Analyze the decisions that need to be made in order for service lines to be truly effective.

16 New Technology and Contracting Experts say that spending on new health technology not just fancy machines but also drugs, devices, and procedures makes up as much as two thirds of the more than 6 percent annual increase in healthcare. US News & World Reports, July

17 Increased Costs of New Technology From 1965 to 2005, real per capita health care expenditures increased nearly six-fold in the US [the] CBO concludes that roughly half of the increase In health care spending during the past several decades was associated with technological advances. 17

18 >7,000 Potential Drugs in Development Specialty Drugs Driving Pharmacy Trends More Drugs, More Patients and More Uses Record Number of FDA Approvals 38X Innovation Will Be Expensive More Expensive 10 Pipeline Drugs $50B 18

19 HS P&T: Stakeholder Alignment Physicians Decision Process Product Selection Structure Clinicians Administration

20 Health System P&T Process Recast July 2012 Pharmacy and Therapeutics Committee: A multidisciplinary team approach to a decision-making process to perform product and service selection in the context of cost effective, safe and quality patient care. This process is supported at the top, has buy-in from physicians and is infused throughout the health system as a way of doing business. A process used to identify, grow and sustain savings opportunities. Drug Panel Review Board: An organized process of decision making that is applied consistently across the organization. This process serves as the decision-making platform for all supplies and services, including clinical and physician preference items and new technology. Align clinical, financial and strategic objectives of the organization

21 Purchasing Loop Evaluate Supplier Performance Standardize Product Formulary System P&T Monitor Compliance Implement Optimal Contract HC Pharmacy Experience Improves Process! Optimize Logistics Streamline Purchasing 21 21

22 3. Identify the benefits of having supply chain involved in the pharmacy service line model

23 Preparing Tomorrow s Pharmacy Leaders Today Pharmacy Leaders should look to supply chain leaders The AHRMM Cost-Quality-Outcomes (CQO) Movement is designed to prepare supply chain professionals for the critical role they play in helping hospitals and healthcare system understand what drives better quality care at a more affordable cost and delivers greater value to patients.

24 UPMC AT A GLANCE 2.2 Million alcohol prep pads 1.6 Million syringes used 4.1 Million isolation & cover gowns 542,523 lbs of poultry 31,035 Miles of toilet paper 956 Miles of rolled paper towels 6,400 Airline tickets 11 Million minutes of audio conferencing 26 Million lbs municipal solid waste 33,739 lbs of ground coffee 8.1M Clorox wipes 84 Million exam gloves 24

25 UPMC Supply Chain Imperatives Optimize the entire supply chain organization Focus on total cost not purchase price Redeploy resources to more strategic activity Upgrade talent and improve skill sets Expand sphere of influence Require more evidence and greater returns on investment Segment all spend to appropriate buying channel 25

26 UPMC S SINGLE SUPPLY CHAIN Significant Spend >$3B Spend under control Self-Contracted ~85% under local agreements Self Distributed Consolidated Service Center 150k sq ft distribution facility High Volume Shop 74,000+ invoices per month 9,000+ purchase requisitions/week Technology Driven Automation ProdigoMarketplace ProdigoXchange Voice Directed Picking Peoplesoft Oracle WMS HC Pharmacy Regional GPO 21 UPMC and 2 Affiliate Hospitals 8 Cancer Centers (PA, OH, NY) Outpatient Pharmacies 2012 SCM Dept of Year 26

27 HC Pharmacy Group Purchasing Organization 26 UPMC Hospitals Spend Managed: $900 million 5 External HCP Shareholders HC Pharmacy, Southside Distribution Center Oncology Cancer Centers and Clinics 20 UPMC 6 External in PA, Ohio, NY Outpatient Falk Chartwell RxPartners Physician Offices Long Term Care Pharmacies 27

28 HCP Programs Procure to Pay Self-GPO/ Self-Distributor Returned Goods 340B Shortage Management Quarterly ASP analysis Support bedside barcoding initiative Rebates Annual Drug Inflation Index Budgeting Support centralized Robot packaging Support centralized physician office replenishment Legal Considerations Robinson-Patman Act Safe harbor regulations Uniform commercial code Sarbanes-Oxley Act Corporate compliance Credits & rebates 28

29 Complexities of IDFS Sourcing Class of Trade Inpatient Outpatient 340B Clinics Long Term Care Physician Offices Health Plan The 2016 Economic Report on Retail, Mail, and Specialty Pharmacies Adam J. Fein, Ph.D

30 Vigilance of Appropriate Use February 2014 Mallinckrodt Plc. agrees to buy Cadence Pharmaceuticals, Inc. May 2014 IV acetaminophen price increased 75% ($1.8M) Company stated product was under valued Drug Utilization Standardization Practice Variation No Buy 30

31 UPMC HCP Standard Strategic Sourcing Process 1. Assess Opportunity 2. Data Collection 3. Gather Market Intelligence 4. Develop Sourcing Strategy 5. Develop RFx & Invite Suppliers 6. Negotiate & Implement 7. Manage Supplier Relationship Purchasing, Inventory Management (Hospital/warehouse), Source-to-Pay Consolidated Services 31

32 Drug Shortages 1,000 different generic shortages / 3,500 alternatives Source: Weekly Conference calls with clinicians, Clinical conversion plans, Physician Support 32

33 Collaboration: Think Differently As long as interactions between customers and suppliers occur primarily or exclusively between their sales and procurement personnel, significant value is bound to be lost. Gartner s View: Be prepared to devote significant resources. Must have top management buy-in (even if you cannot yet define all the value) Trust is required Start with a rigorous business case (not a transaction) Balance supplier buyer needs and dependency It is OK to measure soft value. SMI: Gartner, Best Practices: Segmenting Collaborative Relationships in the Healthcare Value Chain Published: 27 September 2012 Sourceamilla, Strategic supplier relationship management a true source of competitive differentiation, 2009 Vantage Group

34 Business side of Pharmacy Determine where to source product Attempt a contract balance access, risk and legal Consider distribution channel Maximize discounts (GPO) Establish ordering process Purchasing terms and conditions Consider legal aspects of purchasing Consider insourcing versus outsourcing Align with formulary and therapeutic class interchanges Consider owned or consigned inventory Strategic Planning and Leadership Budgeting and Cost Savings Performance Dashboards/Key Indicators Financial Planning 34

35 Analytics Across Continuum of Care Enterprise Analytics Analytics capabilities & tools for all Data from the whole enterprise Data in all forms from all systems

36 Patient Care: Think Differently Be part of the Patient Experience

37 Cost? Complexity of Defining Value: Effectiveness and Efficiency Metrics. Clinical Outcome Patient Satisfaction