MTMS Business Plan: Pharmacy Store Model

1. MTMS Business Plan:Pharmacy Store Model Marc Young Linda Byrd Brad Barker Harshal Pandya Wes Wilkerson

2. Outline • Business Concept • Assessing Clinical and Quality Management and Operations • Marketing Strategy • Financial Data & Projections

3. MTMS: What is it and where did it come from? Marc Young, PharmD, Wes Wilkerson

4. Background of Medication Management • The cost of healthcare is steadily increasing. • Better control of a disease state should lower the overall cost to treat that disease. • What have past studies shown us about this idea?

5. The Literature • Studies such as the Asheville Project used pharmaceutical care disease state management to improve personal health outcomes as well as decrease health system costs. • Project ImPACT demonstrated that a pharmacist-physician team approach improved medication therapy compliance and treatment goals.

6. The Asheville Project • Employees of the city of Asheville, NC and Mission-St. Joseph’s Health System were provided Pharmaceutical Care Services for the treatment of diabetes. • Demonstrated successful economic and clinical outcomes attributed to pharmacist participation in disease management.

7. “Asheville Project” (con’t) • Economic Outcomes • Decreased Direct Medical Costs • Ranged from $1622 to $3356 per patient per year • Increased Productivity • Decreased sick leave every year from 1997-2001 • One employer estimated an $18,000 per year increase in productivity “The Asheville Project: Long-Term Clinical and Economic Outcomes of a Community Pharmacy Diabetes Care Program”. Journal of the American Pharmaceutical Association. (43)2. March/April 2000.173-184.

8. “Asheville Project” (con’t) • Clinical Outcomes • Disease State Improvement Compared to Baseline • Increased number of patients with optimal Hemoglobin A1c levels at each follow-up • 57.7 – 81.8% of patients had improved A1c levels at every follow-up • Increased number of patients with optimal LDL levels “The Asheville Project: Long-Term Clinical and Economic Outcomes of a Community Pharmacy Diabetes Care Program”. Journal of the American Pharmaceutical Association. (43)2. March/April 2000.173-184.

9. “Asheville Project” (con’t) • Clinical Outcomes (con’t) • Disease State Improvement Compared to Baseline (con’t) • 50.0 – 66.7% of patients had improved LDL levels at every follow-up • Increased number of patients with optimal HDL levels • 53.3 – 75.0% of patients had improved HDL levels at every follow-up “The Asheville Project: Long-Term Clinical and Economic Outcomes of a Community Pharmacy Diabetes Care Program”. Journal of the American Pharmaceutical Association. (43)2. March/April 2000.173-184.

10. “Asheville Project” (con’t) • Clinical Outcomes (con’t) • Improved Quality of Life Measures • The following are some the patients self-reported findings as a result of the intervention: • Patients felt more in control of their lives • Patients felt they were healthier • Patients were instilled with a sense of hope that they could control their diabetes • Patients cited changes in lifestyle and an improved overall quality of life as a result of the program “The Asheville Project: Participants’ Perceptions of Factors Contributing to the Success of a Patient Self-Management Diabetes Program”. Journal of the American Pharmaceutical Association. (43)2. March/April 2000.173-184.

11. “ Project ImPACT” • ImPACT (Improve Persistence And Compliance with Therapy) conducted by the APhA Foundation between March 1996 and October 1999 • Idea was to demonstrate that pharmacist/physician collaboration could promote patient persistence and compliance with dyslipidemic therapy “Pharmaceutical Care Services and Results in Project ImPACT: Hyperlipidemia”. Journal of the American Pharmaceutical Association. (40)2. March/April 2000.157-165.

12. “ Project ImPACT” (con’t) Therapy goals were based on the National Cholesterol Education Program (NCEP) • Persistence defined as “a patient who started on medication, remained on medication subsequent to drug therapy initiation, and continued to be on medication as of his or her last visit”. • Compliance defined as “determined through an evaluation based on the number of missed doses for each lipid-lowering medication and refill timing” “Pharmaceutical Care Services and Results in Project ImPACT: Hyperlipidemia”. Journal of the American Pharmaceutical Association. (40)2. March/April 2000.157-165.

13. “Project ImPACT” (con’t) • Previously Published Data • Patients treated without provider collaboration with Coronary Artery Disease (CAD) on therapy for dyslipidemia: • Showed that only 40% of patients continued therapy at the end of 12 months, a measure of compliance. • Had only a range from 8-33% of patients being successfully treated to goal lipid levels. “Pharmaceutical Care Services and Results in Project ImPACT: Hyperlipidemia”. Journal of the American Pharmaceutical Association. (40)2. March/April 2000.157-165.

14. “Project ImPACT” (con’t) • Results of Project ImPACT: • 62.5% of patientswere at NCEP goals at their last full lipid profile. • 73.2% of patients were at or below NCEP goals on two or more visits during the study. • The persistence rate was 90.1% over an average of 24 months • The compliance rate was 93.6% over an average of 24 months “Pharmaceutical Care Services and Results in Project ImPACT: Hyperlipidemia”. Journal of the American Pharmaceutical Association. (40)2. March/April 2000.157-165.

15. Putting it all together • The Asheville Project demonstrated that pharmaceutical care could improve long term health management outcomes in several key areas: • Economic • Increased Productivity • Decreased Direct Medical Costs • Physiological • Improved Disease State Management • Psychological • Improved Quality of Life

16. Putting it all together • Project ImPACT showed that: • Patients are more compliant with their medication therapy with pharmacist involvement. • Patients have a better chance of meeting therapy goals when pharmacists are actively involved with physicians in their treatment.

17. Medication Therapy Management Services (MTMS) • Combining the principles explored by these two studies leads to the concepts pursued by MTMS • Economic • Increase Productivity • Decrease Health System Costs • Improve Medication Utilization and Decrease Waste • Physiological • Improve Disease State Management • Maximize Benefits Associated with Medication Compliance • Psychological • Improve Quality of Life • Maximize Patient Independence • Improve Patient-Provider Relationship

18. Medicare Modernization Act (MMA) • The MMA recognizes pharmacists as “providers” eligible to bill Medicare for cognitive services. • As of January 1, 2006 eligible patients will be able to receive drug therapy management from an eligible provider to assist with the maintenance of their chronic diseases.

19. Medicare • Patients are eligible for Medication Therapy Management services provided they: • Are enrolled in Medicare Part D • Have multiple chronic diseases such as diabetes, asthma, hypertension, hyperlipidemia, heart failure, etc. • Take multiple drugs covered by Medicare Part D • Are likely to incur annual costs associated with Medicare Part D drugs that exceed a level set by the Department of Health and Human Services.

20. Description of Medication Therapy Management Services (MTMS) :MTMS Consensus Definition • A distinct service or group of services that optimize therapeutic outcomes for individual patients • Independent of, but can occur in conjunction with, the provision of a medication product • Encompasses a broad range of professional activities and responsibilities within the licensed pharmacist’s, or other qualified health care provider’s, scope of practice Outcome Pharmaceutical Healthcare, LC

21. MTMS Business Concept Most prevalent MTM-related activities : • Medication therapy management/polypharmacy • Disease management • Lab testing/screening • Wellness programs/ immunizations • Important to distinguish between disease state management and medication use management

22. The Lewin Report 2005. The Lewin Group International

23. MTMS: How do we do it? • Comprehensive Medication Review • Prescriber Consultation • Cost Efficacy Management • Identifying & Resolving Drug Therapy Problems • Patient Compliance Consultation • Patient Education & Monitoring Outcome Pharmaceutical Healthcare, LC

24. Description of MTM Services • Assess patient’s health status: • Understand why the prescription was written for that patient. • During education, the pharmacists confirms why the medication was prescribed Outcome Pharmaceutical Healthcare, LC

25. Description of MTM Services • Monitoring and evaluating the patient’s response to therapy, including safety and effectiveness • Patient prescribed new medication, educated, follow up call to monitor • Pharmacist counsels patient on new medication, schedules follow up call, upon follow up, therapeutic success. Outcome Pharmaceutical Healthcare, LC

26. Description of MTM Services • Perform a comprehensive medication review to identify, resolve, and prevent medication-related problems, including adverse drug events • Comprehensive Medication Review (CMR) or “Brown Bag” • Pharmacist calls patient to notify them of their new MTMS visit and schedules a 30 minutes sit down. Pharmacist reviews Rx, OTC, herbal , vitamin, etc. looking for potential drug therapy problems. Outcome Pharmaceutical Healthcare, LC

27. Description of MTM Services • Provide verbal education and training designed to enhance patient understanding and appropriate use of his/her medications • Compliance intervention regarding administration technique (i.e. asthma rescue inhaler) education • Patient is refilling their rescue asthma inhaler too soon, and the pharmacist discovers it is due to poor technique, which is causing the overuse. Outcome Pharmaceutical Healthcare, LC

28. MTMS Business Concept Pharmacy Store Model • Goal: Provide MTMS in accordance with collaborative practice standards • MTMS is “a distinct service or group of services that optimize therapeutic outcomes for individual patients.

29. Driving Forces • Improve quality of care • Make money • Attract new business • Keep current customers

30. Driving Forces • MTMS will reimburse based on outcomes and time spent with a patient. • This new clinical service increases job satisfaction of those involved.

31. Driving Forces • With good marketing and product differentiation, new customers may seek out our service who currently don’t receive medications from our store. • Potential exists to collect revenue from product management as well as product provision.

32. Prospective Customers • All Medicare eligible beneficiaries within our store’s local radius. • Potential for having fee-for-service and insured customers for those who meet same criteria.

33. Prospective Customers

34. Prospective Customers • To be eligible for MTMS reimbursement from CMS, a patient must: • Have multiple chronic diseases • Have multiple Part D drugs • Likely Incur annual costs above level set by Dept. Health/Human Services (DHHS) ($4,000) • A provider must register with CMS to receive reimbursement. The Lewin Report. The Lewin Group International

35. Strategic Plan • Provide pharmaceutical care • Identify new revenue • Maintain a positive cash flow after “XX” months

36. Issues that may affect service • The reimbursement for these services may negatively affect the bottom line for the PDP and potentially ours as well. • Fee-for-service and other insured customers help defray negative reimbursement issues.

37. Issues that may affect service • Software and facility upgrades may eventually be necessary. • Legal: Alabama does not have an explicit collaborative practice agreement for pharmacists. Tennessee has collaborative practice under medical order provision

38. Critical relationships • Physicians need to refer and maintain patients within our service. • Patients need to know about our service and realize its value to return for visits. • Staff needs communication, coordination and training.

39. Critical Risks and Opportunities Internal Factors Profitability: • Strength- Potential new revenue stream from CMS, insured and fee for service customers. • Weakness- If reimbursement is lower than expected or enrollment low, could be negative cash flow.

40. Critical Risks and Opportunities Internal Factors Quality: • Strength- Spending more time with patients gives us an opportunity to demonstrate our value to patients and physicians. • Weakness- Our staff could fail to provide the expected standard of care.

41. Critical Risks and Opportunities Internal Factors Customer Service: • Strength- Our community location and pharmacy access allows us a leveraged opportunity versus stand alone clinics. • Weakness- Our employees might not meet customer expectations, especially if customer expectations aren’t known.

42. Critical Risks and Opportunities Internal Factors Facilities: • Strength- Open, friendly environment where patients feel less threatened to approach providers. • Weakness- Environment may send mixed message (retail vs. professional). Hard to separate in customers mind the provision of MTMS service from dispensing service.

43. Critical Risks and Opportunities Internal Factors Staff: • Strength- Pharmacists rated as very trustworthy over multi-year surveys, can capitalize on this established perception. • Weakness- Will patients feel comfortable with this new role?

44. Critical Risks and OpportunitiesExternal Factors Competition: • Opportunity- If no or few others provide this service, could dominate the market. • Threat- May be difficult to differentiate amongst competition to customers.

45. Critical Risks and Opportunities External Factors Technology: • Opportunity- Use of technology can provide efficiencies and decision support for evidence based patient care. • Threat- Vital new technology may not exist or may be too expensive.

46. Critical Risks and Opportunities External Factors Regulation: MTMS approved at federal level • Opportunity- In Tennessee, stated directly for collaborative practice in pharmacy practice act. • Threat- Not directly stated in Alabama Pharmacy Law.

47. Critical Risks and Opportunities External Factors Reimbursement: • Opportunity- Potential for both CMS, insured and cash customers for MTMS. • Threat- If expected CMS and insurance reimbursement incorrect, cash customers may not exist in high enough volume for profitability.

48. Critical Risks and OpportunitiesExternal Factors Costs: • Opportunity- Initially can use low-tech approach with small number of personnel until reimbursement level determined. • Threat- Software upgrades by vendors, new equipment and space may eventually decrease profitability.

49. Critical Risks and Opportunities External Factors Political Climate: • Opportunity- Pharmacy community very positive about potential outcomes, great recruitment/retention tool. • Threat- Physicians might feel patient care is being taken away from them.

50. Critical Risks and Opportunities External Factors Customers: • Opportunity- There is no out of pocket expense for CMS patients. • Threat- Need to communicate the value of the service to potential clients to create a demand for the service.