Wednesday, May 21, 2008

Pharmacy Benefit Managers and Disease Management

'Hello Mrs. Smith. This is John the pharmacist calling to ask how it's going with that new medicine you're taking for diabetes....'

Why is this announcement noteworthy?

The Disease Management Care Blog suspects Pharmacy Benefit Managers (PBMs), which act as intermediaries between (seller) pharmaceutical manufacturers and (buyer) managed care health insurers, will be finding it more difficult use arbitrage, volume or generics alone to maintain profitability. In this case, volume didn’t appear to meet expectations, making investors skittish about possible over-reliance on that part of the business. Hence, the PBMs’ interest in using disease management as another additional way to bring value to their customers and defend their market cap.

And why not?

Pharmacists know a lot of medical science and are trained in patient education in the course of their career. PBMs have plenty of them. It makes good sense to task a portion of them to coaching patients who are using medications for chronic illness. Plus, that’s less cost for the partnering disease management company.

What’s more, the claims turn around for pharmaceutical agents is far quicker than for medical claims (which have a ‘claims lag’ up to 3 months), are potentially more accurate and organized in huge well-run registries. That means indentifying and intervening more quickly. Disease management companies will like that, since having access to drug data for predictive modeling and to drive outcomes translates to a competitive advantage.

This is also one more example of the growing approach of a modular coordinated approach to population-based care. While this particular PBM-DM partnership looks like it’s for keeps (both companies are huge and are likely to share many clients in the future anyway), the big picture is that the PBM is now being increasingly “inserted” in the population-based care machine as one more important component.

You have to wonder why it took so long.


Anonymous said...

Can you suggest where to find more than anecdotal data around the "claims turn around" time for pharmaceuticals and other claims?

Jaan Sidorov said...

Good question. That was just the assumption based on my personal experience as a doc: pharmacy claims are adjudicated at the 'pharmacy window,' otherwise PBMs wouldn't be able to deny payment for off-formulary drugs. It was also what I observed as in a past life as a managed care medical director.

But I did find this quote from an article in Health Affairs. Note the term "real time claim payment technology..."

"PBMs may use their databases and real-time claim-payment technology to check for medication problems at the point of dispensing: for example,adverse interactions between two or more drugs prescribed to a patient, or over- and underuse, as when a beneficiary refills a prescription too early or too late."

Atlas R: The role of PBMs in
implementing the Medicare
prescription drug benefit. Health Affairs web exclusive Oct 29, 2004.

Jaan Sidorov said...

Make that the Oct 28 (not 29) issue

The link

(no space between the two lines).

Good review of PBMs in general also.