Alternate sites woo payers

Administering high-touch, expensive and complex medications to patients intravenously in their homes — or in a setting other than a hospital — is essentially a large-scale bid to “reduce costs by transferring non-self-administered drugs to the most cost-effective and clinically appropriate site of care,” said pharmacist Michael Einodshofer, senior director of specialty strategy and innovation at Walgreens Specialty Pharmacy.

The strategy saves big dollars. “Moving infusions from high-cost sites of care — typically outpatient hospital — to alternate treatment sites while maintaining the same drug, dose and dosing frequency can generate savings of 20% to 60% savings per infusion,” Einodshofer said.

Pharmacy benefit managers, health plan payers and patients themselves should take note. In one study of nearly 5.4 million patients in managed care, “the top 25 infused drugs cost 110% more when billed from an outpatient hospital instead of an alternate treatment site,” Einodshofer noted at a meeting of insurers. That equals approximately $38 million in additional costs per 1 million covered lives, he added — and significantly higher out-of-pocket costs for patients, as well.

Despite that, said the Walgreens executive, the current reimbursement system practiced by many health plan payers is hamstrung by “misaligned incentives” that lead to much higher overall costs for some plans that pay for specialty pharmaceutical treatment for their patients. The reason: Those plans force patients to pay up to four times as much in out-of-pocket co-pays if they have their specialty medicines administered for far lower cost at a Walgreens Specialty Care Center rather than at a much more expensive acute care setting like an outpatient hospital.

This perverse reimbursement system — a legacy of an earlier provider network system with fewer treatment location options — encourages patients to seek treatment at hospitals and acute care centers that charge the maximum for infusion services, despite the fact that Walgreens can provide those services at a fraction of the cost, Einodshofer said.

Nevertheless, payers are looking for more cost-effective ways to treat chronic care patients with specialized medication needs. And retail pharmacy providers are aligning their businesses and clinical capabilities to meet those needs.