Q&A with Dennis Killian, PharmD, PhD; William C. Cooper, RPh, PD; and Gregory K. Shaeffer, MBA, RPh, FASHP
Pharmacy Purchasing & Products: What strategy directed Peninsula Regional Medical Center’s efforts in opening an outpatient pharmacy?
Dennis Killian, William C. Cooper, and Gregory K. Shaeffer: Peninsula Regional Medical Center (PRMC) in Salisbury, Maryland, a 266-bed subsidiary of the Peninsula Regional Health System, has operated an ambulatory pharmacy since 2013. Our reasons for opening the outpatient pharmacy were threefold:
To accomplish these goals, our strategy was to capture as many employee and patient prescriptions as possible.
PP&P: What processes do you leverage to optimize employee prescriptions in the outpatient pharmacy?
Killian, Cooper, and Shaeffer: To operate a successful outpatient pharmacy, it is essential to incentivize employees to fill their prescriptions at the pharmacy. At PRMC, it took about 3 to 4 months after go-live to capture a significant percentage of employee prescriptions. When we evaluated why this was more challenging than anticipated, we discovered that the pharmacy that previously managed employee refills often relied on automatic refills that did not take dosage changes or discontinuations into consideration, and in some cases, had not been requested. For example, some employees reported having 6 months’ worth of a given medication as well as test strips in their homes. This haphazard medication management practice initially soured employees’ opinions of the more regimented outpatient pharmacy program. To change this attitude (and to reduce medication waste), we focused on supplying employees with only a 30-day initial supply and then migrated to a 90-day supply once the patient’s status was reviewed and the regimen was determined to be effective. While the 30-day supply could be filled at any pharmacy, the 90-day supply could only be filled in the hospital’s outpatient pharmacy.
Communicating the additional benefits of the outpatient pharmacy was crucial to gaining staff buy-in for its use. For example, we were able to offer staff significant discounts, including a reduced copay; generic medications from the outpatient pharmacy have a $10 copay, while the same medications sourced from a retail pharmacy carry a $20 copay. The lower cost and increased convenience were extremely effective in incentivizing employees to use our service; from January through May of 2019 we realized a 91% prescription capture rate for non-specialty medications on almost 20,000 prescriptions and a 95% prescription capture for specialty medications on 300 prescriptions (see online-only FIGURES 1 and 2 at pppmag.com/outpatientfigures).
Active communication with Human Resources (HR) was crucial to PRMC’s ability to offer these employee benefits. To incentivize use of the outpatient pharmacy, be sure to work in close collaboration with the HR department.
PP&P: What were your top considerations when choosing a pharmacy benefits manager (PBM) to manage the prescription drug plan?
Killian, Cooper, and Shaeffer: When choosing a PBM, it is critical that the hospital take the lead in delineating what is required. Rather than letting the PBM direct the conversation, the hospital should drive negotiations. Use the request for proposal (RFP) process to establish any non-negotiable priorities, such as lower copays and benefit design that preferences the ambulatory pharmacy for all medications including refill and specialty pharmacy prescriptions. Ultimately, PRMC’s top priorities in choosing a PBM were flexibility and customizability; the PBM must be willing to make concessions that benefit the hospital.
Important tips to keep in mind when choosing a PBM include the following:
PP&P: What are the benefits of the Meds-in-Hand Program?
Killian, Cooper, and Shaeffer: It is not uncommon for a patient to leave the hospital with a prescription they will never fill. Also known as a Meds-to-Beds program, the goal of our Meds-in-Hand program is to capture patient prescriptions in our outpatient pharmacy and ensure patients leave the facility with the medications they need. This can reduce readmissions, and it is also convenient for patients, as they can go straight home without needing to stop at a retail pharmacy to fill a prescription.
Nationally, about 26% of hospital readmissions within 30 days are a direct result of a preventable medication-related incident or error.1 We face a unique challenge in that the state of Maryland is under a Center for Medicare and Medicaid Innovation (CMMI) project; one facet of this demonstration project requires that patient readmissions be tracked for all patients (regardless of their insurance source) and for all disease states. As an all-risk state, it is important for hospitals in Maryland to be able to minimize the re-admission rate related to medications.
Increasing our capture rate via the Meds-in-Hand program is a critical task for the outpatient pharmacy. Our strategies to achieve this include the following:
PP&P: How is the new telehealth program furthering the goals of the Meds-in-Hand program?
Killian, Cooper, and Shaeffer: The 30-day readmission window is a crucial time during which patients must be closely monitored. PRMC recently began a new telehealth program that monitors the patient from the time they return home through the ensuing 30 days. The program utilizes a population health transition team, which works collaboratively with the Meds-in-Hand program. The team focuses intently on the patient to ensure they will remain healthy to avoid readmission within 30 days of discharge. Because the day of discharge can be hectic, making it challenging for a patient to absorb all of the information that is being conveyed, a robust 30-day plan is critical.
PRMC’s strategy to reduce 30-day readmissions includes the following elements:
PP&P: In your experience, what are the keys to successfully optimizing ambulatory pharmacy services?
Killian, Cooper, and Shaeffer: Two elements are crucial to the success of an outpatient pharmacy enterprise: pharmacy ownership of ambulatory initiatives and developing a culture of trust among all relevant stakeholders.
The most important element contributing to the success of the outpatient pharmacy is pharmacy’s rigorous involvement in the day-to-day management of the department’s offerings. Pharmacy must have a prominent seat at the table in order to capture employee and patient prescriptions and to prevent readmissions post-discharge.
Secondly, developing trust among pharmacy staff, other hospital employees, patients, and hospital management is essential to capturing business in the outpatient pharmacy. For example, employees may fear that if they fill their prescriptions with the outpatient pharmacy, their privacy may be compromised. Pharmacy is integral in educating patients that their health information is private and will remain secure. Employees must trust that the ambulatory pharmacy staff will protect their private medical information properly. Moreover, hospital management must trust the ambulatory pharmacy team to get the job done and maintain focus on the best interests of the hospital.
Dennis Killian, PharmD, PhD, graduated from the University of Maryland-Baltimore School of Pharmacy, obtaining a PharmD in 1999 and a PhD in Pharmaceutical Sciences in 2001. He currently serves as director of pharmacy services at Peninsula Regional Medical Center (PRMC) in Salisbury, Maryland, where he has been employed since 2005. Dennis has also served as an associate professor of pharmacy practice and administration at the University of Maryland Eastern Shore (UMES) School of Pharmacy since 2010.
William C. Cooper, RPh, PD, received his BS in Pharmacy in 1984 from the University of Maryland-Baltimore School of Pharmacy. He currently serves as the ambulatory pharmacy manager at PRMC, where he has been employed since 1994.
Gregory K. Shaeffer, MBA, RPh, FASHP, graduated from the Temple University School of Pharmacy in 1974 with a Bachelor of Science in Pharmacy and the Temple University Fox School of Business with an MBA in 1988. He recently joined the faculty of the UMES School of Pharmacy as an assistant professor of pharmacy practice and administration. Greg is also the principal at Shaeffer Consulting Group, LLC.
Pharmacy Benefit Manager Cost Structure Options:
Pay As Submit vs Pass Through
When we first opened the outpatient pharmacy we were reimbursed under the traditional model, often referred to as Pass Through, wherein the PBM uses an algorithm to determine pricing. For example, PBMs typically use a Maximum Allowable Change (MAC) table to determine pricing. However, experience has shown that PBMs may not proactively update the table, and it is not unusual for drug shortages to impact pricing. So when using an algorithm, it is necessary to continually manage the process to ensure reimbursement remains accurate.
The benefit of using the Pay As Submit cost structure is that the PBM pays the amount we specify, based on our costs to provide the medication to the patient, including an administration fee. When using Pay As Submit, we can be confident we will receive a predictable amount, as this method is simple and transparent. When using the Pass Through model, our margins deteriorated over time; under the Pay As Submit model, we were able to significantly improve our margins. Receiving a predictable margin facilitates a profitable, self-sustaining program, while at the same time minimizing the organization’s costs.
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