Clinical Pharmacy Management Programs Improve Care While Reducing Medicaid Costs; New Study Provides Framework for State Action

4/28/2003

From: Sarah Gegenheimer, 202-337-0808, for The Health Strategies Consultancy

WASHINGTON, April 28 -- As state policymakers search for ways to deal with overwhelming budget deficits, clinical pharmacy management programs are surfacing as viable ways to reduce Medicaid costs while also improving care among our most vulnerable populations, according to a new study conducted by The Health Strategies Consultancy LLC (Health Strategies) and the Center for Health Care Strategies (CHCS). A diverse group of stakeholders including pharmaceutical companies, pharmacy chains, state and Federal Medicaid officials, and policy experts was brought together to develop a framework for states to follow in implementing cost containment policies that show promise in improving quality.

Medicaid is the second largest program in most states' budgets with anticipated increases in 2003 averaging nine percent. Within the Medicaid budget, prescription drug spending is the fastest growing item and, thus, has become a target for cost-containment measures. Most state officials attribute the growth in drug spending to a combination of factors including increased use and price of drugs, the growing number of available products and the mix of drugs taken by beneficiaries.

"States are increasingly looking for ways to reduce rapidly growing Medicaid costs," said Dan Mendelson, president and founder of Health Strategies. "Our research shows that the clinical pharmacy management framework provides opportunities to manage costs without compromising quality. By bringing together a diverse group of individuals involved in providing care to Medicaid populations, we were able to identify workable strategies that extend beyond the traditional cost-only approach and have the potential to garner support at the state and federal level."

The study released today highlights the CHCS Quality Improvement Framework, which addresses how clinical pharmacy management programs can achieve the dual goal of helping to ensure quality care and contain costs. The study outlines a four-part Quality Framework for states to follow in developing a clinical pharmacy management program:

-- Identification/Stratification -- Patients (or physicians) are identified for interventions; beneficiaries may be stratified based on risk level. -- Clinical Goals -- Goals are established to guide the development of the intervention. -- Outreach/Intervention -- A process is put in place for enrolling and keeping patients in the program, and affecting change in their care regimens. -- Monitoring/Evaluation -- Ongoing studies are conducted to measure effectiveness of the program and ensure continuous improvement.

Some states that have implemented clinical management programs are realizing meaningful quality and cost savings. For example:

-- North Carolina -- Implemented a pilot case management program after learning that an overwhelming number of nursing home beneficiaries were taking six or more drugs daily, and that a significant and disproportionate share of the Medicaid prescription drug budget was being spent in the nursing home setting. Chart reviews by a pharmacist-physician team identified the need for medication changes for 37 percent of patients - and the economic benefits of the program outweighed the program implementation costs by a ratio of 13 to 1.

-- Maryland -- Maryland Physicians Care, a Medicaid managed care plan, implemented a management program for physicians treating diabetes patients. The program, developed collaboratively and sponsored in part by manufacturers, provides physicians with comprehensive information, tools, and counseling relative to treating beneficiaries with diabetes through an integrated approach. A preliminary analysis of the program found a 14 percent decrease in the number of beneficiaries with a high level of blood glucose.

-- Texas -- In conjunction with key stakeholders from provider and beneficiary groups as well as industry, Texas created the Texas Medication Algorithm Project (TMAP) to help standardize the prescribing practices affecting adults receiving state services for depression, schizophrenia and/or bipolar disorder. The project -- which incorporates development of prescribing protocols and physician education -- was so successful that Texas implemented a similar program for children's behavioral health, and the state is considering its application in new disease states.

CHCS, with consultation from Health Strategies, will now work to assist more states in developing clinical management programs in their Medicaid drug programs.

"These collaborations between states and other stakeholders, including provider and beneficiary groups and pharmaceutical companies, show clearly that cost savings and quality can go hand in hand," said Cathy Bernasek, lead Medicaid consultant for Health Strategies. "We are pleased to work with CHCS to expand these programs to additional states."

A copy of the report is available at http://www.chcs.org and http://www.healthstrategies.net.

About The Health Strategies Consultancy LLC Health Strategies is a Washington-based health policy think tank and strategic consulting firm that focuses on the commercialization of new medical technology. The firm's diverse client base includes Fortune 500 health care technology companies, Federal Government agencies and major medical foundations. Its team includes health care specialists with unparalleled expertise in pharmaceutical and medical device policy, with collective experience spanning the White House, the U.S. Office of Management and Budget (OMB), the U.S. Department of Health and Human Services (HHS), and the U.S. Congress. Additional information about Health Strategies is available on our website at http://www.healthstrategies.net.

About The Center for Health Care Strategies The Center for Health Care Strategies promotes high quality health care services for low-income populations and people with chronic illnesses and disabilities. CHCS achieves this objective through training, technical assistance, and grant making to state purchasers of publicly financed health care, health plans, and consumer groups. Its program priorities are: quality improvement, reducing racial and ethnic disparities, and increasing community options for people with disabilities. More information on CHCS is available at http://www.chcs.org.