Pharmaceuticals Play a Key Role in Value-Based Care

By Dan Leonard, President, National Pharmaceutical Council

Public and private sector health care stakeholders have been struggling with how best to achieve the triple aim of better care for individuals, improved health for populations, and slower cost growth. Figuring out the best health care delivery structures and approaches is a complex challenge with many variables and moving parts. That’s why there is a great deal of debate and research into what changes can support the successful implementation of accountable care organizations (ACOs), medical homes, and other value-based care programs.

Dan Leonard

Dan Leonard, President, National Pharmaceutical Council

Some health care stakeholders believe that one of those variables, the use of pharmaceuticals, is nothing more than an expense that must be mitigated in order to achieve greater value and savings. A new article published in the July 2012 issue of the American Journal of Managed Care makes a compelling case that it’s time to redefine our thinking on the relationship between medications and cost-effective, value-centered health care.

The article, written by experts from the National Pharmaceutical Council (NPC), the American Medical Group Association, and the Premier health care alliance, explains how ACOs and other value-based healthcare delivery systems should, in the words of NPC Chief Science Officer Robert Dubois, MD, PhD, “view prescription drugs as a tool, not simply an expense.” As the article explains, the appropriate use of medications can achieve the key goals of value-based healthcare—improving patient outcomes and reducing overall costs.”

That last element is critical. As the authors make clear, integrated properly into the health delivery structure, pharmaceuticals could be an important factor in reducing health spending.

A fundamental issue, the authors write, is in integrating pharmaceuticals into a health delivery mechanism that has both quality benchmarks and incentives for reducing costs. There are several illustrative examples they include in the paper.

On one hand, for patients with congestive heart failure, the effective use of pharmaceuticals can be a cost saver. The article contrasts the roughly $440 per year for an effective medication regimen for these patients with the more than $7,000, on average, that it costs for a single hospitalization. Medication utilization and adherence is a critical element in cost-saving, quality-improvement strategies.

By contrast, a delivery system that emphasizes cost-cutting without quality measurements may be harmful for patients. For rheumatoid arthritis patients, the authors note, medications are a key component in treatment. An approach intensely focused on costs, without quality monitoring, may dictate minimizing the use of pharmaceuticals to save money. The end result would be short-term savings, but at the cost of potentially deteriorating patient outcomes.

The Working Group on Optimizing Medical Therapy, which includes the three aforementioned organizations as well as seven of the country’s most-respected health providers, outlined five elements regarding pharmaceuticals that should be part of a value-based framework. These elements, highlighted in the article, include:

  • Understanding the unique contributions of medications and utilizing them optimally across different health conditions and populations.
  • Viewing medications not as an isolated, “siloed” expense, but rather integrating them into a value-based environment so that the cost offsets and quality benefits from optimized pharmaceutical use can be recognized and calculated.
  • Realizing that the use of pharmaceuticals cannot be undertaken as a one-size-fits-all approach; the role, impact and characteristics of these services will vary by patient and condition.
  • Utilizing overall risk factors to identify medication therapy patient candidates who are vulnerable to drug-drug, drug-disease, or polypharmacy concerns.
  • Maintaining quality metrics to detect underuse of pharmaceuticals in circumstances where there are condition-specific incentives to achieve cost savings.

As the article notes, one of the keys to success is in understanding how the variable components of value-based systems will either lower or elevate costs and either improve or undermine patient outcomes. The thinking and research that led to the American Journal of Managed Care article provides vitally important clarity on the impact pharmaceuticals will have on the value-based equation.

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