Pharmacy’s battle for recognition continues
Fifty years ago this summer, President Lyndon B. Johnson secured his place in history by signing into law the legislation that created Medicare and Medicaid. It was a landmark in the nation’s social and political development and an evolutionary leap for community pharmacy.
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The law, passed under Title XVIII of the Social Security Act, established a healthcare safety net for older Americans and low-income adults, children, pregnant women and people with disabilities. In time, it also made the federal government the largest purchaser of health services and medicines in the United States, and set in motion a series of tectonic shifts in health care and society that continue to reverberate today.
For generations of older Americans — not to mention the entire U.S. healthcare system, including physicians, pharmacists, hospitals, and public and private health plans — the program’s impact has been transformative.
“These programs have extended coverage of life-improving and life-saving drug treatment to millions of Americans and, through the creation of the Medicare Part D program, have better positioned healthcare professionals to deliver high-quality support to older Americans who are at greater risk of chronic and multiple conditions,” said Richard Ashworth, president of pharmacy and retail operations for Walgreens.
“The enactment of Medicare had an immediate and dramatic impact on access to healthcare services for beneficiaries,” noted the Commonwealth Fund in a new report issued in April and titled “Medicare: 50 Years of Ensuring Coverage and Care.”
“Prior to Medicare, older people and their adult children faced a high risk of financial burden because of medical bills,” the fund reported. “In 1966, older Americans paid 56% of their medical expenses directly out-of-pocket.”
“Medicare was designed to eliminate this financial pressure and ensure access to needed care,” the report added. “Today, older Americans pay just 13% of their healthcare expenses directly.”
Those “reduced financial barriers,” noted the report, “resulted in increased demand and use of services. From 1963 to 1970, the hospital admission rate for older Americans increased from 18% to 21%. Additionally, the proportion of elderly Americans seeing a physician rose from 68% to 76%.”
“For 50 years, Medicare has accomplished its two key goals: ensure access to health care for its elderly and disabled beneficiaries, and protect them against the financial hardship of healthcare costs,” the Commonwealth Fund reported. “As the single-largest source of health insurance in the United States, with 55 million covered through the program, Medicare has both shaped the U.S. health system and responded as needs have demanded.”
Doctors and hospitals — and the ways in which they practice and administer care — certainly were affected by the massive shift in the financial framework for much of the healthcare system under Medicare Parts A and B, which cover, respectively, hospital stays of up to 60 days in most cases, and, under Part B, many outpatient services such as physician visits, x-rays, lab tests and diagnostic screenings. Medicare Part C, spawned by the Balanced Budget Act of 1997, created the Medicare + Choice program and, eventually, the Medicare Advantage program, by which eligible seniors can obtain Medicare benefits through a private, capitated health plan.
Also impacted in a big way were the nation’s community pharmacists. With federal and state governments suddenly assuming responsibility for paying for many healthcare services under Medicare and Medicaid — services that were formerly covered by employers’ pension plans, patients themselves or not at all — a wave of tens of millions of newly or more fully insured seniors and lower-income Americans swept into doctors’ offices, hospitals and retail pharmacies. Those patients pushed up demand for a litany of health services — and unleashed a decades-long campaign by retail pharmacies to expand the menu of home health supplies and chronic care supplies they could sell, as well as services they could provide for a fee, under Part B.
The availability of Part D to America’s seniors, in particular, has had a clear impact on the prescription drug market. In 2011, five years after implementation of Part D, beginning on Jan. 1, 2006, Medicare paid for 21.5% of all U.S. prescriptions dispensed, with commercial third-party plans picking up the tab for 58.4% of all scripts, IMS Health reported. And Part D’s roll in pharmacy payments has continued to increase as baby boomers enter Medicare, and Part D participation grows, according to IMS. By 2014, 25.7% of all prescriptions were purchased by Medicare, IMS reported, with private plans’ share declining to 53.1% of all scripts dispensed.
Meanwhile, Medicaid also has played an increasingly important role as a purchaser of prescription medicines, accounting for 13.3% of the 3.7 billion prescriptions dispensed at retail in the United States in 2014, according to IMS.
“Seniors, disabled and economically disadvantaged Americans have benefited from Medicare and Medicaid, which has made health care more affordable and accessible. That’s a good thing for community pharmacists who are committed to the health of their patients,” said Doug Hoey, president and CEO of the National Community Pharmacists Association. Citing the 2014 NCPA Digest, sponsored by Cardinal Health, Hoey added, “these programs combine to cover over 50% of the prescription drugs dispensed in the average independent community pharmacy. As Medicare and Medicaid celebrate their 50th anniversary, we hope real progress is made in the next 50 years to ensure these programs remain structurally sound and find more innovative ways to deliver even better health care to the programs’ beneficiaries, with a greater emphasis on utilizing community pharmacists.”
“We are pleased to be positioned to help provide education and medication adherence support to these patients on their journey to improved health,” said Walgreens’ Ashworth. “And, we look forward to the future of Medicare and Medicaid, including the opportunity for pharmacists to be recognized as a provider of preventive care and disease management services.”
Expanding pharmacy services
But the rise in prescription revenues is just the tip of the iceberg as far as the long-term impact that both Medicare and Medicaid have had on the practice and business of community pharmacy. Besides expanding access to prescription drugs, both federal programs have been a powerful impetus for the expansion of pharmacy-based clinical and counseling services, such as medication therapy management, immunizations and disease management services for a variety of conditions, including diabetes, asthma and hyperlipidemia.
Given their critical importance as a health safety net for older and lower-income Americans — and as the nation’s single-largest healthcare payer — Medicare and Medicaid also serve as the focal point for community pharmacy’s long effort to achieve full professional status as a fully recognized healthcare provider. Medicare, in particular, has become the primary battleground for the retail pharmacy in