I've decided that 2014 is the "Year of the Pharmacist." As we see the pharmacy profession and pharmacy industry transform before our eyes, stay tuned for information you need to stay current. We try to explore subjects that are timely and relevant to pharmacy, and propose topics you may be thinking about.

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Happy New Year! Wecome to the Year of the Pharmacist!

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It's all about the dollars. And the change.

On March 23, 3010, President Obama signed the Affordable Care Act, a law allowing comprehensive health care reform to roll out over several years.  We have already seen a number of these changes influence public and private insurance, with many more policy changes to come.  Good or bad, we are experiencing a complete overall of the healthcare industry as we know it.   Perhaps the gradual changes allow us to steadily adapt instead of throwing us into the deep end of the reform pool.  All of these alterations appear to be building up to the backbone of the health reform laws – The Health Insurance Exchanges.

Mandated to be in place by January 1, 2014, these state-based health insurance marketplaces will be enrolling 32 million of the 50 million Americans who, at present, do not have health coverage.  The exchanges represent a grand plan to make health insurance accessible and affordable to those who now struggle to find and keep coverage.  Individual consumers and small business will be able to shop online for competitively priced coverage, and many will receive government subsidies to help pay premiums or be granted tax credits.

According to a recent study, 44 percent of employers believe they will provide employee health benefits through a corporate exchange in the next three to five years, although 72 percent declared they are “very or somewhat interested” in exploring corporate exchange models.  To give employers power in numbers many are trying to create a group purchasing option to negotiate lower rates from the insurers.  Corporate or private exchanges solicit group-specific insured rates while the employer determines the contribution for employees to use in purchasing coverage.  The employee then makes their final decision about coverage.  In the same study, 86 percent voted that the ability to reduce costs was the most important feature of a corporate exchange.    

States will be submitting their “Exchange Blueprint” for approval in 2013, but if a state hasn’t made much progress, the federal government can intervene and make the final decisions.  The Obama administration's request for $800 million to operate federal exchanges has gotten a frosty reception from congressional Republicans.  For things to go smoothly, state and federal officials must work together to verify private personal and financial details for millions of people, make sure that consumers are enrolled in the right health plan, and accurately calculate how much government aid, if any, each household is entitled to.

The White House is giving states some flexibility in setting standards for their marketplace, as the state gets to decide who runs the new market and which insurance companies get to participate, however Health and Human Services will certify which exchanges are – and are not – able to deliver the customer experience that the White House wants to see, including things like allowing consumers to easily compare plans and having an enrollment mechanism for both private insurance and Medicaid.

The Affordable Care Act assigns most Americans a legal responsibility to carry health insurance, either through their employer, a government program or by buying their own.  Millions will receive financial assistance for their premiums.  Whether that amounts to an unconstitutional expansion of federal power, as a group of Republican governors allege, is among the subjects of a showdown that began March 26 when the Supreme Court heard three days of arguments.  A decision is expected by June.

It’s a Managed World, After All.

With much fanfare, anticipation, anxiety and expectancy, March 1st hales the beginning of Medicaid Managed Care in Texas.  We’re certainly not the first state experiencing this transition; many have come before us and lit the path.  But because it’s happening to US, this change is much BIGGER and MORE IMPORTANT than any state has experienced prior to NOW.
Texas’ expanded Medicaid Managed Care Organizations will provide incentive payments for health care improvements, monthly stipends to physicians for coordinating patients’ care (including preventative care, acute care, and hospitalization), and direct more funding to hospitals that serve large numbers of uninsured patients.  Communities and hospitals will form regional health partnerships that support more localized health care solutions, and the partnerships will qualify for incentives by identifying ways to improve health services in their region.
Under MCOs, Texas pays a set fee each month to a health plan to provide care for the Medicaid client, who selects a primary doctor from the plan’s network to coordinate his or her care.  MCOs boast more coordinated and efficient patient treatment and by their calculation Texas is expected to save about $100 million over the next two years.  Patients are being assured “benefits will not be cut to those in need” and MCO’s are looking for even more populations to enroll in an effort to save everyone more money.  Wink, wink.
Prescription drug benefits for Texas’ 3,313,960 Medicaid patients will be delivered through Pharmacy Benefits Managers with a state-approved formulary.  A recent study showed that Texas’ dispensing fee under the Medicaid/Vendor Drug Program-administered prescription plan was among the highest in the country, although pharmacies were paid less of the product cost.  According to a coalition of Texas pharmacists, the dispensing fee per prescription is predicted to fall from about $6.50 with VDP system to as little as $1.35 with the new PBM system.
Many things are confusing but this nugget jumps to front of mind: adding multiple for-profit MCO and PBM middlemen will probably increase total healthcare costs.  Why would Texas want to surrender day-to-day management of prescription drug plans to the most highly litigated and highest profit-margin vendors in health care - PBMs?
A quick Google search showed PBM Express Scripts 2010 net income of $1.2 billion, an increase of 82%; 2011 net income reached $1.3 billion, an increase of 8%.  PBM SXC Health Solutions 2011 revenue was $5 billion, a 42% increase from 2010.  PBM Medco’s 2011 net revenue was $19 billion, an increase of 12.2% from 2010.
A final thought:  Americans have been fighting the good fight, but many are still feeling the residual effects of the recession that began in late 2008.  It’s impossible to calculate the number of people who left prescriptions go unfilled because money was needed for other things.  Millions are trying to make their way in this new economy, and we see proof of that every day in our stores.  Meanwhile PBMs are posting record profits and MCOs are promising to save everyone more money.  But at what cost to the patient?