The growing movement toward value-based reimbursement continues to have tremendous impact on health systems as they increasingly look to pharmacy as a source of revenue growth.
The
McKesson Pharmacy Optimization team, a group of trusted advisors that work with health systems to help elevate the value that pharmacy brings to the health system, has identified the top five trends that will impact hospital and health system pharmacies in 2016.
2016 Health System Pharmacy Trends
Continued Growth in Specialty Market: The growth in specialty pharmaceuticals spend continues to outpace the growth in the overall pharmaceutical market and is the top spend category for health systems pharmacies. As more biosimilars reach the market, specialty pharmaceuticals will start to face increased competition, which will have a positive impact on pharmacies’ cost reduction efforts. However, health systems treating patients in the ambulatory setting and reimbursed through the average sales price (ASP) model will see a corresponding drop in revenue. While the growth of limited networks and exclusive distribution channels for many specialty pharmaceuticals challenge health systems’ continuity of care initiatives, opportunities still exist for those that understand and can demonstrate the unique clinical and operational competencies and expertise required for specialty pharmacy.
Health System Pharmacy Seen as a Revenue and Margin Generator: Managing costs will always be important; however, health systems’ leaders are increasingly looking at the pharmacy as more of a revenue and margin generator and less as a cost center. Whether still operating in a fee-for-service environment or shifting to a performance or value-based reimbursement model, the pharmacy can have significant impact on the overall P&L of a health system by focusing on incremental revenue opportunities such as ambulatory, specialty and mail-order pharmacy services. Not only does an integrated pharmacy care model impact the bottom line; the focus on optimal medication therapy management in the ambulatory care setting can help health systems improve continuity of care and medication adherence, and reduce readmissions.
Industry Consolidation Increasing Need for Supply Chain Efficiency: In 2015, there has continued to be significant consolidation among hospitals and health systems, pharmaceutical manufacturers, retail pharmacy chains, and payers. Since nearly half of a hospital’s total operating expenses are for supplies, drugs and consumables, large health systems are looking for better integration and efficiency across the supply chain. An
efficient pharmacy supply chain that is scaled properly can help streamline workflow, improve productivity and enable tighter inventory management. With an enterprise-wide analysis of total supply spend and patient utilization and outcomes, health system pharmacies can improve network access, analyze contract performance and improve payer performance.
Increasing Oversight of 340B Program: The Health Resources and Services Administration (HRSA) proposed 340B Omnibus Guidance recently underwent public comment. Also known as the Mega-Guidance, it contains clarifications of existing 340B program elements such as patient definition, covered outpatient drugs and contract pharmacy. There are also several new areas covered including specialty pharmacy and limited distribution arrangements. While the final guidance has not yet been promulgated by HRSA, all health systems – even well-established, successful 340B health systems and pharmacies – should conduct a comprehensive evaluation of their current programs to identify if the guidance will create any gaps in their program and develop action plans to address the potential business impact of these changes.
Leveraging Pharmacy Analytics to Make Strategic Business Decisions: Big Data is still a buzzword across healthcare and other industries. Integrating comprehensive pharmacy analytics to track and monitor drug spend and use, patient care, and quality is a top priority for health systems. Organizations can use this information to make better financial, clinical and operational decisions and drive improved outcomes. Lack of connectivity or interoperability of health records between pharmacy and other providers can be a major patient safety issue and continues to plague the industry overall. However, initiatives such as the
Commonwell Health Alliance are making progress to make healthcare data available and accessible to providers across care settings.