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Employers as Plan Sponsors: Direct to Purchaser

Written in collaboration with F. Randy Vogenberg, PhD, RPh
Partner, Access Market Intelligence and The National Institute of Collaborative Healthcare

Pharmacists are some of the most visible health professionals to the public eye, but they often stand misunderstood by purchasers of health care. They are best known for dispensing medications in accordance with a prescription or over-the-counter regulations in community settings, but their roles in hospitals and health systems also suffer from a lack of understanding by the market. Pharmacists’ professional activities include counseling patients on both prescription and non-prescription medications, providing drug information to health professionals and consumers, and participating in health-promotion programs. These advanced clinical roles, however, are not well known among purchasers of care.

With this said, the purchasers of care must be identified. Aside from government programs like Medicare, Medicaid, and other public sector entitlement programs, purchasers of healthcare include private employers, unions, municipalities, and state government. The private sector remains a major purchaser of care despite the significant amount of attention placed on public exchanges and other public sector programs. Many employers exist as self-funded plan sponsors, operating under the federal Employee Retirement, Income and Security Act (ERISA), and represent nearly 95,000 health plans that pay claims for care—including the coverage of prescription drugs.

Pharmacy practice settings and their associated professional services vary by state and geographic location. The spectrum of patient care is broad and demanding as patients' medication use involves self-care, acute care, and long-term or chronic care. These different needs transcend all practice settings and add complexity to care delivery along with confusion among purchasers of care.

Implementation of the Affordable Care Act (ACA) in 2010 has accelerated the shift in care from acute to community-based settings. While reimbursement for services in those community settings has lagged, changes in practice and individual pharmacist roles are evolving. As the profession shifts to impact population health through contemporary transitions in healthcare delivery, changes toward payment for clinical care outcomes will continue to accelerate. Educating and exploring effective options to collaborate with employers as plan sponsors offers an innovative route for more direct control over payment for services in the rapidly transitioning environment.

Pharmacists already devote a great amount of time and attention to offer a wide spectrum of services while remaining dependent on medication dispensing for revenue. Screening tests, wellness programs, vaccinations, walk-in clinics, and on-site educational events make pharmacists more valuable to consumers and establish value in community pharmacists as a healthcare resource. Finding new methods of reimbursement for those services is similar to what physicians and hospitals have already begun in alternative or direct contracting scenarios with purchasers of care instead of health plan or pharmacy benefit manager contracts.

Current examples of the main activities offered to self-funded employers by community pharmacists include:

  • Processing, dispensing, and claims management of prescriptions
  • Care of patients or clinical pharmacy for outcomes management
  • Monitoring of drug utilization and medication therapy management
  • Preparation and small-scale manufacture of medicines
  • Traditional and alternative medicines that are helpful as complimentary therapy
  • Responding to symptoms of minor ailments as an alternative to an emergency room
  • Informing health care professionals and the public about safe medication use or immunizations
  • Health promotion and disease prevention for population health

Pharmacists in all patient care settings are dealing with challenging reimbursement situations in a post-ACA marketplace. Those challenges began prior to ACA and have worsened during its implementation, and the pharmacy profession must adapt with the changing times. This requires a focus on the value of pharmacists’ impact on patients as a part of the healthcare system. To the extent pharmacists can identify, demonstrate, and educate the market of that value proposition, success will follow.

Access Market Intelligence is an affiliate of the Institute for Integrated Healthcare and National Institute of Collaborative Healthcare