PharmExec Blog

Why Patient Adherence is a Policy Issue

Joe Ganley, Director of State Government Affairs at McKesson, spoke earlier this year on public health policy and its implications for patient adherence. Here, he provides PharmExec with some highlights of that presentation.
PEGD: Why is adherence getting so much attention lately?
Medication adherence has always been important to maintaining patient health; however, the enormous economic pressures that have historically plagued the healthcare system have placed greater emphasis on reducing costs. Increased adherence leads to overall reduction in healthcare costs in America. For example, according to a recent report from the Congressional Budget Office (CBO), “a 1% increase in the number of prescriptions filled by Medicare beneficiaries would cause Medicare spending on medical services to fall by roughly 0.2% ($1.7B).” Put another way, non-adherence costs the healthcare system nearly $290 billion annually and accounts for approximately 13 percent of the total healthcare expenditures.
PEGD: Why is adherence a policy issue?
The high cost of healthcare has reached a critical condition, thanks in part to two simple facts. The largest customers of the healthcare system are the federal and state governments, and those entities are facing staggering budget deficits. From a government perspective, the need to reign in healthcare costs, was long a political priority for some, is now a fiscal necessity for all of us.
From a public policy standpoint, there are three trends originating from two landmark pieces of legislation — the Affordable Care Act and HITECH Act:
Delivery and Payment Reform: Accountability and shared savings
Insurance Reform: Expanded coverage, but at a price
Health IT: Meaningful use to foster connectivity.
PEGD: Which public policies are impacting adherence either positively or negatively?
There are some macro trends in public policy that will impact adherence significantly. The industry is shifting from a closed “black box” system where there was little transparency about costs of patient care to a more open system where patients will have greater visibility and accountability for the cost of care, and where providers are paid not based on the number of tests/procedures/visits but rather on healthcare outcomes. The Affordable Care Act in particular has made both patients and providers more accountable for the costs of healthcare, which should incentivize better medication adherence since it is proven that good adherence leads to positive health outcomes at lower costs.
PEGD: What new challenges does this present?
First, if we want patients to take more control over their own healthcare, we need to dramatically improve connectivity. To make an informed decision about your healthcare requires a broader view of the system for patients both in terms of cost and quality. Additionally patients need better connectivity to their doctors, and the ability to use Patient Health Records (PHR’s) to see and communicate with their provider about the complete picture of their medical history.
Secondly, we may need to rethink some of the regulations that have traditionally governed healthcare. For example, regulations prohibit pharmaceutical manufacturers from offering co-pay assistance to “federal beneficiaries” both through Medicaid and Medicare. But what about new enrollees who purchase commercial insurance through an exchange and has the cost subsidized under provisions of the ACA? Is that person a “federal beneficiary” and are they therefore excluded from a manufacturer sponsored co-pay assistance program? Furthermore, if they are to be excluded how can service providers like McKesson who provide these co-pay assistance programs distinguish the “subsidized” from the “unsubsidized” at the pharmacy counter or in the providers office? If these questions cannot be answered, it may be more challenging for tens of thousands, if not more, of new enrollees to benefit from co-pay assistance programs. While our co-assistance programs have some unique methods to help screen out government beneficiaries, McKesson will continue to inform and seek clarity around any upcoming policy decisions.
PEGD: How do you see Healthcare IT’s role in the changing industry?
Simply put, healthcare IT is foundational to everything we’re trying to do in healthcare. Whether it’s improving quality, giving patients more accountability and control, reducing costs and inefficiencies, preventing medical errors, or improving quality — a better connected interoperable healthcare system is essential. Healthcare IT is not the silver bullet. But it is an essential part of the solution to these challenges. It’s necessary, but not alone sufficient.
PEGD: What role can industry play in impacting policy to promote adherence?
Adherence will be paramount in reducing cost, measuring HCP performance, and overall system reform. The industry must become much more tough minded about quality transparency and measurement, including unbiased ROI studies to measure the impact of adherence.
The healthcare industry needs to come together and focus on long-term reform of the system rather than short-term competitive agendas. Manufacturers, providers, and other healthcare services must work together to get it right for our business and our patients.
While the industry is shifting, healthcare is notoriously slow to adopt new methodologies.
Conclusion
When I was a kid, I remember going with my dad to the bank to deposit his paycheck. He took his check and handed it to a person who verified his identification and processed his deposit. Think of how far we’ve come. Last week, I deposited a check into my account by taking a picture of it with my smart phone and the funds were available immediately. Now, look at healthcare. When I was a kid, your medical record was a clipboard that hung on the end of the bed, and every caregiver who treated you would add their notes to the next page. Recently, my wife and I were meeting with her OB/GYN trying to resolve an allergy issue that could affect the delivery of our baby and there was the doctor, in 2013, going through a paper record of my wife’s allergic reactions over the last year or two. It is remarkable how far we have to go.
While the industry is shifting, healthcare is notoriously slow to adopt new methodologies. This gives manufacturers the ability to understand and get involved in public policy. One of the most cost effective and impactful solutions to healthcare reform is better medication adherence. Brands are encouraged to find opportunities to provide guidance and services to help consumers (HCPs, pharmacists, patients) to differentiate your product while improving patient outcomes. With reimbursement directly linked to outcomes, and outcomes improved by adherence, everyone in healthcare will be looking to enhance and better understand adherence.
About Joe Ganley
Director of State Government Affairs, Corporate Public Affairs at McKesson, Joe Ganley has more than 13 years’ experience in the fields of public affairs, government relations, corporate communications, crisis management and political campaigns.
McKesson Corporation is a healthcare services and information technology company currently ranked 14th on the FORTUNE 500. Its Patient Relationship Solutions (MPRS) was created to deliver patient adherence programs that enable manufacturers to develop closer relationships with consumers.

Joe Ganley, Director of State Government Affairs at McKesson, spoke earlier this year on public health policy and its implications for patient adherence. Here, he provides PharmExec with some highlights of that presentation.

PE: Why is adherence getting so much attention lately?
Medication adherence has always been important to maintaining patient health; however, the enormous economic pressures that have historically plagued the healthcare system have placed greater emphasis on reducing costs. Increased adherence leads to overall reduction in healthcare costs in America. For example, according to a recent report from the Congressional Budget Office (CBO), “a 1% increase in the number of prescriptions filled by Medicare beneficiaries would cause Medicare spending on medical services to fall by roughly 0.2% ($1.7B).” Put another way, non-adherence costs the healthcare system nearly $290 billion annually and accounts for approximately 13 percent of the total healthcare expenditures.

PE: Why is adherence a policy issue?
The high cost of healthcare has reached a critical condition, thanks in part to two simple facts. The largest customers of the healthcare system are the federal and state governments, and those entities are facing staggering budget deficits. From a government perspective, the need to reign in healthcare costs, was long a political priority for some, is now a fiscal necessity for all of us.

From a public policy standpoint, there are three trends originating from two landmark pieces of legislation — the Affordable Care Act and HITECH Act:

  • Delivery and Payment Reform: Accountability and shared savings
  • Insurance Reform: Expanded coverage, but at a price
  • Health IT: Meaningful use to foster connectivity.

PE: Which public policies are impacting adherence either positively or negatively?
There are some macro trends in public policy that will impact adherence significantly. The industry is shifting from a closed “black box” system where there was little transparency about costs of patient care to a more open system where patients will have greater visibility and accountability for the cost of care, and where providers are paid not based on the number of tests/procedures/visits but rather on healthcare outcomes. The Affordable Care Act in particular has made both patients and providers more accountable for the costs of healthcare, which should incentivize better medication adherence since it is proven that good adherence leads to positive health outcomes at lower costs.

PE: What new challenges does this present?
First, if we want patients to take more control over their own healthcare, we need to dramatically improve connectivity. To make an informed decision about your healthcare requires a broader view of the system for patients both in terms of cost and quality. Additionally patients need better connectivity to their doctors, and the ability to use Patient Health Records (PHR’s) to see and communicate with their provider about the complete picture of their medical history.

Secondly, we may need to rethink some of the regulations that have traditionally governed healthcare. For example, regulations prohibit pharmaceutical manufacturers from offering co-pay assistance to “federal beneficiaries” both through Medicaid and Medicare. But what about new enrollees who purchase commercial insurance through an exchange and has the cost subsidized under provisions of the ACA? Is that person a “federal beneficiary” and are they therefore excluded from a manufacturer sponsored co-pay assistance program? Furthermore, if they are to be excluded how can service providers like McKesson who provide these co-pay assistance programs distinguish the “subsidized” from the “unsubsidized” at the pharmacy counter or in the providers office? If these questions cannot be answered, it may be more challenging for tens of thousands, if not more, of new enrollees to benefit from co-pay assistance programs. While our co-assistance programs have some unique methods to help screen out government beneficiaries, McKesson will continue to inform and seek clarity around any upcoming policy decisions.

PE: How do you see Healthcare IT’s role in the changing industry?
Simply put, healthcare IT is foundational to everything we’re trying to do in healthcare. Whether it’s improving quality, giving patients more accountability and control, reducing costs and inefficiencies, preventing medical errors, or improving quality — a better connected interoperable healthcare system is essential. Healthcare IT is not the silver bullet. But it is an essential part of the solution to these challenges. It’s necessary, but not alone sufficient.

PE: What role can industry play in impacting policy to promote adherence?
Adherence will be paramount in reducing cost, measuring HCP performance, and overall system reform. The industry must become much more tough minded about quality transparency and measurement, including unbiased ROI studies to measure the impact of adherence.

The healthcare industry needs to come together and focus on long-term reform of the system rather than short-term competitive agendas. Manufacturers, providers, and other healthcare services must work together to get it right for our business and our patients.

While the industry is shifting, healthcare is notoriously slow to adopt new methodologies.

Conclusion
When I was a kid, I remember going with my dad to the bank to deposit his paycheck. He took his check and handed it to a person who verified his identification and processed his deposit. Think of how far we’ve come. Last week, I deposited a check into my account by taking a picture of it with my smart phone and the funds were available immediately. Now, look at healthcare. When I was a kid, your medical record was a clipboard that hung on the end of the bed, and every caregiver who treated you would add their notes to the next page. Recently, my wife and I were meeting with her OB/GYN trying to resolve an allergy issue that could affect the delivery of our baby and there was the doctor, in 2013, going through a paper record of my wife’s allergic reactions over the last year or two. It is remarkable how far we have to go.

While the industry is shifting, healthcare is notoriously slow to adopt new methodologies. This gives manufacturers the ability to understand and get involved in public policy. One of the most cost effective and impactful solutions to healthcare reform is better medication adherence. Brands are encouraged to find opportunities to provide guidance and services to help consumers (HCPs, pharmacists, patients) to differentiate your product while improving patient outcomes. With reimbursement directly linked to outcomes, and outcomes improved by adherence, everyone in healthcare will be looking to enhance and better understand adherence.

About Joe Ganley
Director of State Government Affairs, Corporate Public Affairs at McKesson, Joe Ganley has more than 13 years’ experience in the fields of public affairs, government relations, corporate communications, crisis management and political campaigns. McKesson Corporation is a healthcare services and information technology company currently ranked 14th on the FORTUNE 500. Its Patient Relationship Solutions (MPRS) was created to deliver patient adherence programs that enable manufacturers to develop closer relationships with consumers.

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One Comment

  1. Posted July 11, 2013 at 7:36 pm | Permalink

    I agree with the premise that adherence should be a policy issue. However, policy can be molded by both push and pull. To that end, I also believe that adherence is driven by patient education. At MediSafe we have realized that if patients are educated about the consequences or lack of adherence, it is a big stimulator for better adherence. This is a key place where the pharmaceutical industry can play a big part. They have information about the disease, the treatment and the complications caused by lack of adherence as well as the benefits derived from adherence. They need to get closer to the patient – and can build this digitally. To add to Joe’s story “when I was a kid”, when I was a kid in the Bronx, the first stop was the pharmacist for any ailment I had. Andy the neighborhood pharmacist (known as Doc) would advise us on what to do and why – - and we would follow his instructions. In the digital world the pharmaceutical industry and the pharmacists on the front line need to get back into that role.

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