preferred rx networks: aligning for quality improvement ... · aligning for quality improvement...

Preferred Rx Networks:

Aligning for Quality Improvement

& Financial Gain

August 2015 Image Area

Walmart Health & Wellness - Confidential

2

Agenda

• Introduction & overview

•Preferred Rx Networks

•Aligned goals

•Buying decisions

•Summary, Q&A


These are the thoughts of the Health &

Wellness group. These are NOT the

thoughts or programs of Walmart Human

Resources.

Preferred Rx Networks


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Preferred Rx Networks (PPN)

A group of pharmacy providers willing to

trade larger discounts and lower fees for

decreased competition and a preferential

position within the pharmacy benefit.


Wikipedia 2015

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Preferred Rx Networks (PPN):


Topic Trend Comment

Medicare (2014) 75% of Med D beneficiaries

have preferred Rx network

Up from 43% in 2013

Commercial

exchange (2014)

70% of enrollees plans have

narrow Rx network

ACA complaint

Chains Aggressively compete for

narrow networks

More so in recent years

Ind. pharmacies At an administrative

disadvantage

Simple contracting and

management are

desired

Savings 2%-8% (PBM sales materials)

5% - 15% (Milliman 2014)

Contract dependent

Varying models Open

Benefit design (Incentive based)

Closed: No coverage OON

Plan and member

needs drive creativity

Drug Topics, March 2014

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CONSIDERATION RULE

Broad Rx Network Most of 60,000+ Pharmacies in USA

(more than top 8 Fast Food chains combined*)

Med D (Primary Rx Network) Urban: 90% within 2 miles

Suburban: 90% within 5 miles

Rural: 70% within 15 miles

State requirements Vary across country

Expectation 10,000 – 40,000 Rx across country (typically

under 30,000)

Consumer perception General resistance is not demonstrated

Savings • CMS confirmed top 25 B/G less

expensive @ pref. pharmacies (2013)

• Share savings with enrollees

Regulatory involvement Getting the attention of CMS!


Managed Healthcare Executive: March 2014

*McDonalds, Burger King, Pizza Hut, Wendy’s, Taco bell, KFC, Dominos, Dunkin Donuts (Visante, 2013)

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Ten-Year Savings from Preferred/Limited Rx Networks*

Medicaid Medicare Commercial Total

$26 Billion $35 Billion $54 Billion $115 Billion


Visante* 2013 PCMA deck

JP Morgan PBM Survey 2012

Pharmacy Satisfaction Pulse, BI, 2012

Lowering pharmacy costs thru PPN:

• 80%+ Large businesses

• 70%+ Small business

Consumers:

• Vote with their wallet

• Cost a consideration

• Perception is acceptable

“As far as savings that can result from narrow networks, Brian Anderson, a Milliman consultant and the third speaker at the webinar, said plan sponsors can reduce drug costs by anywhere from 5% to 15% through deeper average wholesale price (AWP) discounts, lower dispensing fees, and improved generic dispensing and/or formulary compliance and access. “

Featured Health Business Daily Story, Sept. 19, 2014

To Ease the Move to Narrow Networks, Experts Advise Strong Communication

Reprinted from DRUG BENEFIT NEWS, biweekly news and proven cost management strategies for health plans,

PBMs, pharma companies and employers.

By Lauren Flynn Kelly, Editor - September 12, 2014 - Volume 15 Issue 17

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Growing Support for Preferred Networks


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• Recognize health related spending

“choices” can be guided

– Financial impact

– Quality measures

– Access options

• Support health plan goals

– Alignment of incentives

– Consideration of environment

– Integrated

• Continuous quality improvement

measurement

– Clinical

– Financial

• Location and convenience

• Demographic considerations

• Legal environment

Aligning Goals


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Aligning goals:


Optimizing Value for PPN: • Integrating all information into the delivery system

• Quality measures

• Improving compliance

• Support quality initiatives

• Support a business case for all involved

• Support a culture of health!

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Aligning goals:

Plan sponsor goals:

• Quality measures

– GFR

– Compliance packaging

– MTM capability

– Vaccinations/Screenings

– PDC/MPR impact

• Financials

– PBM relationships

– Competitive environment to

owned distribution assets

– Expert revenue streams

– 5% savings is reasonable

(2-8%)

• Members/Patients


Adam J. Fein, “The Big Squeeze,” Pharmaceutical Executive, Pharmacy Benefit Networks, May 2013.

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Systematic Review of Scientific Evidence About Adherence & Adherence Packaging

A systematic review of randomized controlled trial evidence of the adherence benefits and preventable harms of calendar blister packaging and calendar pill organizers.

– Published in Clinical Therapeutics, 33 (1), 2011

Conclusion: “Calendar packaging, especially in combination with education and other reminder strategies, may improve medication adherence.” “An adherence strategy of even small effect size that is broadly implemented on a population level could significantly leverage therapeutic effect and achieve significant public health benefit.”

Aligning goals:

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Aligning goals:


HCPC: Improving Medication Adherence through Packaging.

BioMed Central Syst Rev 2014-3-29. Accessed 8-5-2015

“As you will see, those focusing on the issue of medication adherence,

which is defined as the “extent to which patients follow provider

recommendations about day-to-day treatment with respect to the

timing, dosage, and frequency, are realizing that calendarized blister

packaging can have a positive impact. And, as recent data has

shown, medication persistence, or the duration of medication-taking

from initiation to discontinuation can also be assisted by calendarized

packaging by influencing the rate at which a patient will refill their

prescriptions.”

Effect of drug reminder packaging on medication adherence: a systematic review

revealing research gaps (published on-line 2014 March 24: 10.1186/2046-4053-3-29):

Conclusion:

“Overall, the studies showed a positive effect of drug reminder packaging on

adherence and clinical outcomes.”

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Aligning goals:


Adherence packaging helps prompt, educate and remind patients

5. A Pharmacoepidimeologic Analysis of the Impact of Calendar Packaging on Adherence to Self-administered Medications for long term use. Clinical Therapeutics, 33(5) 2011

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Aligning goals:

Improving ROI:

• Pressing utilization of lower priced prescription drugs

• Engaging in programs to drive increased medication adherence and compliance

• Compare providers average Rx price (*) to your plans current average Rx price.

Performance

Metric Large Drug Chain Walmart Benefits

Average Rx Price

(Excludes Specialty Rx’s) $43.XX*

Delivering Lowest

Prescription Drug

Costs Generic Disp. Rate (GDR)

*Based on day Supply

~88.3%

~91.5%

Compliance Packaging (%

of dispensed) <5% >28% Delivering High-level of

Medication

Adherence/Compliance Refill Reminder Services Electronic Text, email, AVR, other


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Aligning goals:

Considerations:

• B to G substitution rate (within X days - 30 or 45)

• Where are my members shopping today?

• Overall discounts & fees (PBM contract related)

– Plan & Member savings

– Percentage of Rx’s billed at Usual &

customary (not membership programs)

• Overall pricing philosophy of company

• Over communicate

• Role of convenient access in plan design

• How do your members want to receive

medications (retail or mail)?

• Immunization network

• Clinical program support

• Leverage moving forward


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Aligning Goals: Network providers


IMS Health; Customer Loyalty Case Study

Rx Providers want: Payers can provide:

New & Loyal customers Limited options

Larger portion of wallet Additional programs

Margin improvement Incentive programs

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Aligning goals:

Operational considerations

• PBM contract must support PPN

– Most PBM’s have options available

– Impacts business model • Spread pricing/Transparency

• Competitive to internal distribution

• Advisor awareness and knowledge

– Build into your contract NOW

– Impacts other business relationships

– Modeling of disruption v savings

– Impacts coalition & GPO

arrangements

• May require new reporting package for

payer

– Document $avings

– Continuous improvement efforts

– Utilization patterns

– Comparative analytics


Buying Decisions


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Buying Decisions: Consumer


Address member needs!

Add comfort into the process

United Hopeful

Empowered Savvy

Passive Consumers Confident Consumers

Adapted from: 2015 Consumer Mindset Survey, Aon, NBGH 2015

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Buying decisions: Consumer


Sharing savings with Members can improve data collection!

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Buying Decisions: Consumer

Consumer Frustrations:

• Complexity

• Competing life priorities

• $’s

• Time

• Clear information

• Terminology

• Consistency where

possible

• Expectations

• Lack of experience

• Change!!


Respond to consumer wants:

• Simple choice & process

• Comprehensive

communication

• Incentives

• Personalized & relevant

• Third party trust with

recognizable brands!

• Brand recognition within

offering

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Buying decisions: Consumer


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Buying Decisions: Payer

• Bigger is not always better

– Networks need to be adequate

– Appropriate alignment & care

• Employer decision points do not reflect consumer decision points

– Consumer cost is an issue based (on disposable income): U&C!

– Consumerism can work

– Payer savings can be very real!

• Tools and modeling are a “Must have!” for payers

– Transparency is a consideration

– Cost sharing & Total costs

– Access modeling

• Timing is relevant

– Employees need adjustment time

– Low unemployment may hinder ability

• Each component needs to support the complete health plan!


Questions

Michael S Jacobs RPh

404.661.1903

[email protected]


mailto:[email protected]

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