2017 14th Annual MHA Business Summit Highlights
The 2017 14th Annual MHA Business Summit that took place March 29-31 in Las Vegas, Nevada, was a resounding success. More than 20 different educational sessions took place over the three days, with more than 1,400 long-term care, home infusion, specialty, hospice, and durable medical equipment pharmacies, health care executives, and industry partners participating.
The sessions on March 29 included five Business Breakout educational tracks, with three focusing on the most important issues affecting long-term care (LTC) pharmacy and two focusing on the most important issues among home infusion and specialty pharmacies. Participants explored new and innovative ways to improve their businesses and were provided with tools to maximize business opportunities and meet ongoing challenges.
With this background, the March 30 and 31 general sessions provided participants with a high-level background on the ACA, the AHCA, and other federal initiatives that are affecting LTC, home infusion, and specialty pharmacy. There also were active discussions on coming federal legislation and health care trends.
This highlighter provides an overview of selected sessions that took place during the three-day Summit
Michael J. Sicilian,
President, Managed Health Care Associates, Inc.
Mr. Sicilian kicked off the 14th Annual MHA Business Summit general session by highlighting the state of the health care industry. He provided an overview of the current commercial health plan landscape in context to the proposed replacement of the Affordable Care Act.
Mr. Sicilian next outlined the drug cost landscape, with global prescription drug spend estimated to rise to $1.5 trillion by 2021. The annual growth in drug spending will range from 4% to 7%, driven by new medications in oncology, diabetes, and autoimmune diseases. The United States will provide more than half of the growth.
How will the federal government and insurers manage costs? Mr. Sicilian noted that the current President has suggested allowing the federal government to negotiate directly with pharmaceutical companies. There has been, and continues to be, legislation like the Prescription Drug and Medical Review Board to negotiate drug pricing. He also shared that certain pharmaceutical companies have publicly committed to once-a-year single-digit price increases.
Mr. Sicilian closed by describing MHA initiatives in the LTC, home infusion, specialty pharmacy, complex rehabilitation, and sleep disorder markets. He highlighted MHA’s support of legislative activities in 2016, including over 350 legislative meetings, over 150 LTC meetings, and 55 home infusion/specialty pharmacy meetings. MHA will continue to be a major supporter of legislative activities affecting LTC, home infusion/specialty pharmacy, and home medical equipment pharmacies.
Award-Winning Veteran Journalist & Host of FOX News Sunday
Mr. Wallace provided his perspective on President Trump’s early days in office. He emphasized that this election was a surprise to most people. He noted that President Trump’s win was based on his being an agent of change, and the people of the United States are looking for change in both the domestic and international agendas. The Trump administration will focus on the domestic economy, with health care reform, tax reform, and infrastructure being key areas of interest. If President Trump can jump-start the economy, reduce the regulatory burden, and keep jobs in the U.S. his presidency will be a success.
Mr. Wallace also provided his perspective on the recent defeat of health care reform. The governing Congress and the President have had difficulty getting their legislation passed. It was thought that with an all-Republican legislature, things would be different and key initiatives would pass quickly. However, this would not be the case with health care reform. Congress still has to learn about the “new reality” — it can no longer merely oppose proposed legislation, but must reach agreement to get things done. Mr. Wallace believes it will be very tough for any entitlement program to be repealed in the future.
He closed by talking about the “war on the media.” He emphasized that it is very important for everyone to hear all sides of a story and to be very aware of where information comes from.
Evolving With the Transforming Customer Environment
Phil Fogg Jr.
President & Chief Executive Officer
Mr. Fogg’s presentation began with an overview of changes in nursing home reimbursement, from the prospective payment system in 1998 through the Affordable Care Act in 2010, to the unknown future of the ACA under the new President and Congress. He then reviewed the driving forces in the skilled nursing facility (SNF) marketplace:
- Managed care
- New requirements for participation
- Medicare and Medicaid reform
- Alternative payment models
Mr. Fogg emphasized the increasing use of conveners to monitor and manage costs within nursing homes. He stated that it is important for LTC pharmacies to be aware of conveners and work with nursing homes to effectively manage the role and influence of conveners within facilities.
He closed by providing attendees with scenarios that will result in failure or success in the new health care environment and highlighting LTC pharmacy success strategies, including:
- Support SNFs in reducing drug spending
- Adapt contracts that can change to market dynamics and be stable when needed
- Invest in technology that reduces defects or creates efficiencies in the SNF
- Align quality goals within the SNF, including reducing hospital readmissions and improving Five Star Quality Ratings
- Be able to scale to a customer’s size and needs
Alan L. Deutschendorf Jr.
Vice President, Operational Excellence
Christopher E. Olson
Director, Operational Excellence
In this two-part program, Mr. Deutschendorf and Mr. Olson began their presentation with an overview of the Lean Six Sigma principles and goals, including how Lean Six Sigma processes can positively impact business performance and actively engage pharmacy employees. The result is improvement in pharmacy efficiencies, quality, and overall value. Mr. Deutschendorf defined “lean” as the elimination of all processes that do not add value to the end result. He described these added steps as “waste.” An example was an evaluation of one pharmacy found technicians walked many miles every day to fill prescriptions, which translated into thousands of dollars of wasted labor. The goal is to minimize those steps and waste not involved with filling the prescription. He and Mr. Olson then discussed the key principles of Lean Six Sigma:
- Value — define what is of value to the customer
- Value Stream — identify the value and determine what is waste
- Flow — create a constant approach to improving quality
- Pull — produce results based on demand
- Perfection — the goal is continuous improvement
Jonathan E. Levitt, Esq.
Frier Levitt, LLC
Mr. Levitt focused on payor trends and reimbursement, highlighting federal initiatives that currently impact home infusion and specialty pharmacy. He initiated his presentation with a history and overview of the 21st Century Cures Act and how this legislation will affect services provided by home infusion and specialty pharmacies, as well as reimbursement provided for these services. He highlighted how the Act has changed pharmacy reimbursement from average wholesale price (AWP) to average sale price (ASP) plus 6% — a change that results in a lack of pharmacy reimbursement for many of the services required to provide medications and monitor patients in their homes.
This was followed by a discussion of direct and indirect remuneration (DIR) fees and how they have been applied. The Centers for Medicare and Medicaid Services initiated use of this term and it is used to determine the true cost/price of medication. Unfortunately, DIR fees have been used by pharmacy benefit managers (PBMs) to obtain additional fees from pharmacies after the prescription has been adjudicated.
Mr. Levitt highlighted how pharmacy associations and organizations have responded to DIR fees and summarized actions that health care providers and home infusion/specialty pharmacies can take to combat these changes of reimbursement and eliminate DIR fees from PBMs. He closed with a proposed three-step process to challenge any additional fees incurred with dispensing of a medication.
Elizabeth H. DeMeo
Vice President, LTC Pharmacy Account Management
Managed Health Care Associates, Inc.
Ms. DeMeo provided an overview of the 2017 MHA Independent LTC Member Study. Over 1,300 pharmacies were surveyed, encompassing over 199 million prescriptions. This represents close to 3.6 million patients across all 50 states.
Ms. DeMeo noted that most pharmacies serviced fewer than 3,000 residents. These pharmacies dispensed an average of 12,700 prescriptions per month, with five times the number of generics (10,668) being dispensed compared to branded (2,032) pharmaceuticals. Staffing in these pharmacies averaged fewer than 40 full-time employees (FTEs) and less than eight part-time employees (PTEs).
When pharmacies were asked about key indicators they monitor, Ms. DeMeo stated that average annual spend per pharmacy and average cost per prescription per month were key tracking indices. She also noted that staffing — including both pharmacists and support staff — within the pharmacy was also “top of mind” with these operators.
Ms. DeMeo closed by highlighting three key issues — generic reimbursement, generic pricing, and “pay for performance”— that either are affecting or will affect LTC pharmacies, and how to identify potential opportunities to increase efficiencies in the pharmacy’s operations.
Chester “Chip” Davis Jr.
President & Chief Executive Officer
Association for Accessible Medicines
Mr. Davis began his presentation by announcing that the Generic Pharmaceutical Association recently changed its name to the Association for Accessible Medicines (AAM). The overall goal of AAM is to improve access to safe, quality, effective medications. This organization advocates for the development of generic and biosimilar alternatives so people can afford the medicine they need, and it promotes competition to drive down cost for patients and payers.
Mr. Davis then provided an overview of the political environment under the new administration and focused on those issues affecting pharmaceuticals, including increasing Congressional scrutiny of prescription drug costs and pricing, the potential repeal and replacement of the Affordable Care Act, and reauthorization of the Generic Drug User Fee Act (GDUFA) and Biosimilar User Fee Act. He also provided an overview of key regulatory issues, including rule negotiation for generic drug labeling and drug user fees under GDUFA II.
Mr. Davis emphasized that GDUFA II is important because the backlog for new drug approvals has grown to over 4,000 pending applications, with a median approval time for the pre-GDUFA and year one and two applications of over 50 months. However, the year three and four applications have a median approval time of approximately 18 months. He anticipated that approvals of Abbreviated New Drug Applications (ANDA) applications will increase significantly under GDUFA II.
Mr. Davis closed by stating that the political environment around pharmaceuticals has never been more uncertain, and a “one size fits all” policy solution could inhibit generic competition. The pharmaceutical industry is at a critical juncture in demonstrating its important role and positive influence on improving health care in the United States.
Ms. Lunner opened her presentation by summarizing the current and likely future of value-based payment (VBP) models, with a focus on their continued growth in the market. She noted that there are over 925 accountable care organizations (ACOs) currently covering 32.2 million lives. Ms. Lunner then provided four different growth models that could occur with VBPs, with a range of 41 million to 177 million lives by 2020.
Ms. Lunner next highlighted Leavitt Partners research showing medication usage within designated ACOs. She noted that this research found that optimization of medication use is not yet a high priority for most ACOs, though it is gaining attention; ACOs are more prepared to manage the quality than the cost of pharmaceutical care; and issues related to feasibility (technology, workforce) are greater barriers to implementing practices to optimize medication use than issues related to leadership and budgets.
The study found that a major barrier to ACOs implementing services to optimize medication use is lack of reimbursement for these additional services.
Ms. Lunner closed her presentation with a discussion of how value-based payment may influence pharmacy practice. She noted that pharmacies can provide specific services to improve care, including:
- Enhancing care coordination
- Increasing the ability of a care setting to handle higher-acuity patients in lower-acuity settings
- Reducing unnecessary hospital readmissions
- Shortening hospital lengths of stay
- Providing transparency on the effect of care on quality and overall cost
- Decreasing care variation across the health care continuum
- Proactively identifying and addressing gaps in care and potential adverse events
Douglas M. Long
Vice President, Industry Relations
IMS Health, Inc.
Mr. Long began his presentation by providing an overview of key highlights from 2016, including market performance, mergers and alliances, major reimbursement issues, and pricing and policy issues. He noted that there was a deceleration in drug revenue from 2015 to 2016 due to factors such as the introduction of new generics and a drop in hepatitis C and narcotic sales.
Mr. Long then discussed how LTC and specialty pharmacy sales have trended over the last year. He noted that LTC “traditional” pharmaceutical sales decreased by 1.5% in 2016 while specialty pharmaceutical sales increased 3.7%. Antipsychotics and hepatitis C medications led the decrease in revenue. With regard to generics, overall sales are decreasing, but total prescriptions continue to increase. He noted that generics have been in a price deflation since 2016. Overall drug net price growth slowed in 2016 to 2.8% as price concessions by manufacturers rose sharply.
Mr. Long closed by highlighting those areas where avoidable medications errors and costs are occurring and focused on six key areas:
- Medication nonadherence
- Delayed evidence-based treatment
- Antibiotic misuse
- Medication errors
- Suboptimal generic usage
- Mismanaged polypharmacy
Chief Research Officer
The Advisory Board Company
Mr. Roades opened his presentation by discussing the next steps regarding health care reform now that the American Health Care Act (AHCA) will not be moving forward, and highlighting key health care initiatives that continue to move ahead. He believes that Medicaid financing is a focus of the new Congress, with an emphasis on ways to maximize flexibility of program administration at the state level. Under the proposed AHCA, the impact will vary from state to state.
Mr. Roades next spoke about the increasing importance of the consumer and the role and influence that consumers have today and will continue to have in the future. Consumers are willing to bear high health care cost exposure to keep their premiums down. Unfortunately, when a high-deductible plan was selected by a group of consumers, he noted a reduction in physician and emergency room spending, an increase in failure to pay, and an increase in research for pricing on health care.
Mr. Roades closed by providing a prediction on three key steps to succeed in the new era of health care reform:
- Radically reduce cost structure to enable pricing flexibility
- Build a consumer loyalty platform
- Elevate physician network performance
Mr. Elrod presented his inspirational Miracle Morning story in three parts:
Part 1 — The Accident
Part 2 — The Financial Downfall
Part 3 — The Miracle Morning 30-Day Challenge
In Part 1, the accident took place when Mr. Elrod was in college. Driving in his car, he was hit head-on by a car driving in the wrong direction at 70 miles per hour. Initially declared dead by physicians, Mr. Elrod worked his way back from crippling injuries to a normal functional life.
In Part 2, the financial downfall, he lost everything — including his home. He was deeply depressed, felt hopeless and afraid, and his health suffered. Through all of these challenges, he could only think of one quote from Jim Rohm: “Your level of success will seldom exceed your level of personal development, because success is something you attract by the person you become.” Mr. Elrod credits this quote for transforming him into the person he is today. From this quote he developed the Life S.A.V.E.R.S:
S = Silence
A = Affirmations
V = Visualization
E = Exercise
R = Reading
S = Scribing
He closed Part 3 by emphasizing that the #1 cause of unfulfilled potential is never deciding that NOW always matters more than any other time in your life. IT DOES. Take the Miracle Morning 30-Day Challenge!