The year 2020 holds many exciting changes in the ever-evolving world of managed care. Experts say that organizations can expect to see the launch of new therapies and the payer-related nuances-a direct reflection of the continued push toward personalized medicine.

“We are living through an era of exponential change,” observes Ross Hoffman, MD, chief medical officer at Envolve Pharmacy Solutions.

These changes will impact several areas across a variety of therapeutic areas while driving formulary changes and new payment considerations.

Specialty Drugs and Drugs for Rare Diseases Abound

New specialty drugs emerging from the pipeline will enter the market at an accelerating pace. According to Melissa Duke, PharmD, executive director of population health pharmacy solutions at Banner Health in Phoenix, Arizona, this forthcoming trend will have a significant impact on the managed care industry while altering the patient experience.

"Payers who support these industries are experiencing unprecedented growth-especially with rare diseases and orphan drugs," Duke observes. "These new drugs for rare diseases are life extending and improve quality of life in patients who previously didn't have a therapy available to them.”

More specifically, therapeutic categories with new products on the horizon include gene replacement therapy, gene editing, cell therapy, and cancer immunotherapy-significant industry disruptors that Hoffman says will only help enhance the industry-wide progression to more individualized therapy.

However, the benefits do not come risk free. Many of these drugs are first-in-class with never-before-seen mechanisms of action, unique drug development processes, and special supply chain considerations. And the novel breakthroughs often come at a steep price, with the cost of some of these drugs exceeding $1 million per dose.

Additionally, Sheila Arquette, RPh, executive director at the National Association of Specialty Pharmacy, points out that patients will continue to face challenges accessing specialty drugs, a direct consequence of health plans and payers continuing to limit access to participation in certain networks. Pharmacy carve-outs and channels, or carve-ins, only add to this problem.

The result leaves patients dealing with the fallout-many of whom find the degree of autonomy in selecting pharmacies increasingly more limited. Hoffman believes the price points associated with specialty therapies carry transformative potential while leaving some controversy surrounding unanswered questions regarding the long-term value of these novel drugs.

“We’re seeing accelerated FDA approvals of breakthrough status agents, with only partial evidence of long-term treatment efficacy or durability,” he notes.

Curative Therapies Potentially Disruptive Therapeutically and Financially

Duke cites Zolgensma-the drug that famously, or infamously-broke records as the world's most expensive drug at the cost of more than $2 million-as a game-changer. And its impact exceeds its hefty price tag.

While the drug’s high cost is disruptive in itself, the potential for curative therapy it offers enhances its impact in the healthcare world. 

“Previously, kids who had spinal muscular atrophy didn’t live beyond 2 to 6 years old,” Duke says. “Now, they have a normal life expectancy." 

The new year will also include the launch of several novel therapies for hemophilia, a condition which Hoffman says now holds the promise to cure a subset of the affected population. Like their predecessor Zolgensma, the curative potential of these drugs promises to transform the patient experience as well as the lives of their families. The emergence of such therapies could potentially disrupt industry providers associated with hemophilia support products and factor replacement therapies.

Despite having received FDA approval in early 2019, Novo Nordisk’s Esperoct (turoctocog alfa pegol, N8-GP) for the treatment of hemophilia A in children and adults will not make its market debut until 2020. Biomarin has its sights set on gaining approval for valoctogene roxaparvovec (BMN 270) for hemophilia in 2020.

Formulary and Payer Changes Create Hurdles as Well as Solutions

To help address the costs of higher-end drugs, such as Zolgensma and other gene therapies, organizations might want to consider cost modeling. Zolgensma manufacturer Novartis reportedly engaged in a payment plan with the hospital for the first recipient who received the drug in the summer of 2019-an arrangement Duke says is a new payment model. In such cases, the agreement is made between the hospital administering the drug and the manufacturer.

 both Duke and Sheila Arquette, RPh, executive director of the National Association of Specialty Pharmacy, agree that biosimilars will receive the greatest focus, as their price point typically falls lower than the reference drug. Payers have an opportunity to negotiate a lower price point.

In fact, nearly 70% of specialty drugs currently in the pipeline share an association with an identified biomarker. Identifying a biomarker serves two important purposes: (1) it plays an important role in helping providers select and customize the most appropriate therapy for the patients-especially when combined with pharmacogenomics-and (2) it also offers manufacturers positive reassurance regarding the value of their products. The combination of these two features helps to ensure superior outcomes for patients, notes Arquette.

In an effort to contain costs, step therapy will also become more of a trend. According to Duke, this phenomenon will follow suit behind 2019 initiatives by CMS that encourage step therapy. The organization expanded step therapy to include Medicare Part B. The rule requires that Part D sponsors expand their formularies to include all drugs listed as protected classes of psychoactive drugs such as anticonvulsants, antidepressants, antipsychotics, antineoplastics, antiretrovirals, and immunosuppressants for transplant rejection treatment. The rule offers Part D sponsors the option of requiring prior authorization and step therapy requirements for new patients.

There will also be an uptick in enhanced efforts to implement value-based contracting-a feature Arquette says will reach an unprecedented level of interest.

“While managing the cost of specialty products has focused mainly on drug prices in the past, value-based contracting seeks to link the price of a drug to clinical or economic performance,” she says.

These demands illustrate the benefit of specialty pharmacies, which make significant contributions to the patient care paradigm through the provision of what Arquette defines as “high-touch patient care” and coordination of care with other healthcare providers, resulting in enhanced healthcare outcomes.

Despite the apparent benefits, Arquette cautions that implementing value-based contracting is no small undertaking. Instead, this type of contracting demands tremendous efforts on behalf of healthcare providers in the form of collaboration and coordination among healthcare providers while requiring organizations to assume some degree of financial risk.

Drug Pricing Reform, Improving Adherence May Help Ease Economic Burden

Legislative and regulatory activity aimed at addressing the high cost of prescription drugs, including specialty drugs, is underway. The federal government is currently mulling over policies that would directly reduce drug costs at the point of sale-regardless of whether the transaction occurs at the pharmacy counter or during the provision of care.

In the world of specialty pharmacy, Arquette says a form of payment overhaul known as "pharmacy direct and indirect remuneration (DIR) reform” would bring these patients immediate financial relief, and senior citizens would enjoy copay reductions on expensive therapies for which no generic alternatives exist.

"Pharmacy DIR reform ensures all pharmacy price concessions are used by a plan to reduce a Medicare patient's upfront cost," Arquette explains. "This reform also would support services needed to improve patient outcomes through drug management."

Another critical element in easing the financial burden is addressing medication adherence. Optimizing patient adherence amplifies the patient outcomes and utilization of the healthcare system by optimizing therapeutic value, reducing waste, and improving cost containment. Implementing quantity limits (30-day fill) can be helpful, but Arquette says partial fills can also prove beneficial when ascertaining a patient's tolerance for a medication. Additional cost management strategies include prior authorization and utilization management edits, such as step therapy.

In addition to new drugs that will help mitigate chronic conditions such as hemophilia A, hemophilia B, and beta thalassemia, patients who have sickle cell anemia also have new hope.

The approval of Endari (L-glutamine) for sickle cell anemia in 2017 marked the first approval of a new drug for sickle cell anemia in nearly 20 years. In 2020 there will be two new drugs for the condition on the market-both of which gained approval in late 2019. The FDA approved Advakveo (crizanlizumab) in November 2019, and Oxbryta (voxelotor) gained accelerated approval several days later.

Cancer will continue to remain a hot therapeutic area experiencing tremendous growth, according to Hoffman, who says more than 400 immunotherapies are in development.

While generic options for specialty medications have been minimal, the future may paint a different picture.

“Substantial investments in the development of generic specialty medications are being made, and it is expected within the next five years that alternatives to significant specialty drugs will be available soon,” Arquette says.

With numerous biosimilars in the pipeline, she projects 2020 may see a few blockbusters. Given the high cost of the biological reference drug after which these drugs are patterned to emulate in effect, the prospect of more biosimilars on the horizon could have a tremendous impact on patient access as well as healthcare spending.

Frieda Wiley, PharmD, RPh, is a contract writer and consultant pharmacist.

Articles

Novel drugs, value-based contracting, biosimilars, and regulatory activity addressing costs will be among the hot button issues in the coming year.

Top Issues Facing Pharma in 2020

With intense legislative pressure on drug pricing and healthcare transparency as well as broad public support for changes to the healthcare model, managed healthcare executives will need to focus on several areas in 2020 including better transparency, stable or lower healthcare costs, and reinforcing the value managed healthcare organizations provide in the healthcare market of the United States.

“Success in these measures will be defined by stakeholders including patients, providers, and employers having a better understanding and view of their healthcare costs; stable or reduced costs of healthcare that patients and employers actually feel through premiums and cost share; and improvement in the perception of health plans and PBMs by the public,” says Jeremy Schafer, PharmD, senior vice president of New York-based Precision for Value, a group of consultants providing payer insights. “Achieving these objectives will be critical to reduce the risk of seismic changes to healthcare after the 2020 election.”

Here are some other thoughts on what will define success in 2020.

Chris Wing, CEO of SCAN Health Plan, a not-for-profit, Medicare Advantage, health maintenance organization based in Long Beach, California, says there is no shortage of challenges and opportunities ahead.

“In 2020, I expect to see increased competition within the Medicare Advantage market,” he says. “As the population ages and more seniors seek the resources and services needed to age independently, plans must offer flexible benefits that will align with a variety of needs. Along with more entrants into the market, we believe the curve for CMS star ratings will become steeper as a result.”

He adds that the company will continue to measure success by such standard metrics as enrollment growth and operating margin.

“SCAN also measures how well we are meeting the needs of the older adults in our communities,” he says. “For example, we will continue to monitor the impact of our investments in digital technology, as well as our progress toward addressing social determinants of health.”

Pat A. Basu MD, president & CEO of Boca Raton, Florida-based Cancer Treatment Centers of America, a group of five cancer research centers, notes success is always about the patient so his measure of success includes being in the top 1% nationally in cancer survival rates, patient satisfaction, patient accessibility and affordability, and clinical trial enrollment and access for underserved patients.

“We also believe that to defeat cancer we must combine forces instead of being siloed,” Basu says. “I’d like to expand our partnerships with other providers, payers, employers, and pharma by 100%.”

Christopher Maiona, MD, CMO of Newton, Massachusetts-based PatientKeeper, Inc.,  develops physician healthcare information systems, says that for many of the company’s hospital clients, a key goal in 2020 is to improve physician satisfaction.

“The physician burnout problem is real, and well-managed healthcare provider organizations are extremely sensitive to the causes of it,” he says. “Cumbersome, intrusive technology-particularly EHRs-is one, which is why so many organizations are evaluating and implementing EHR optimization solutions to improve physician work flow and clinicians’ user experience. Successfully improving physician satisfaction will be measured in various ways, including higher patient satisfaction scores, improved quality of care, and reduced medical staff turnover.”

Todd Latz, CEO of GoHealth Urgent Care, a national group of walk-in clinics, believes success in 2020 should be defined by significantly greater consumer self-advocacy.

“We live in an age when there has never been more information available-on quality, on price, on provider reputation. Yet, it is still very difficult for the average healthcare consumer to sort through everything, to understand their benefits, to decide how to best access care, and-perhaps most importantly-to discern how to assess true ‘value,’” he says. “Self-advocacy can and should be measured by how well all of us, as providers, payers, and other participants across the healthcare continuum, help educate consumers on how and what to value in the care they receive.”

When it comes to transparency, Schafer notes the implementation of systems that provide understandable information to patients, providers, and employers on the cost of different healthcare services as well as the cost of alternative services or drugs that may help patients or employers save money will be the measure of success.
	
	Terry Rowinski, president & CEO of Milwaukee-based Health Payment Systems, Inc., a healthcare tech and services solution company, says his company is focusing on the social contract between providers of healthcare services, employers, and employees to provide for and then appropriate use of healthcare insurance products.

“Our healthcare provider network is accessed by partially self-funded employer groups that wish to have a differentiated approach of procuring, measuring, and rationalizing healthcare expense,” he says. “We wish to support their employers’ desires by providing additional resources to the enrolled employees and their families to understand their medical spend and help them pay for their medical expenses thereby fulfilling this social contract.”
	
	

Keith Loria is an award-winning journalist who has been writing for major newspapers and magazines for close to 20 years.

Health executives weigh in on what success will mean to them in 2020.

Defining Success in Healthcare

After analyzing data about risk of death and emergency department usage for its cancer patients, Northwest Medical Specialties opened a walk-in clinic.

A nurse practitioner staffs the clinic, which is open from 9 a.m. to 5 p.m. on weekdays. The goal is to treat the acute symptoms that cancer patients experience-such as pain, dizziness, and diarrhea-and avoid trips to the emergency department.

The practice-with six locations in the Tacoma, Washington area-plans to hire a second advanced practice provider to staff the acute-care service at a second location.

Before launching the clinic, the practice conducted a six-month pilot, demonstrating sufficient patient demand and satisfaction with the service to justify the cost.

“This was an example of a practice transformation-of how this practice took information and made a dramatic change in the clinic,” says Sibel Blau, MD, medical director, hematology and oncology divisions at the 10-physican practice. The overall goal, she says, is to position the practice for success under value-based reimbursement models.

Northwest Medical Specialties is not alone. As value-based payment arrangements become more common, community cancer providers are installing data-analysis tools to help them figure out how to meet cost and quality targets.

Can Data Analytics Lower Hospital-Acquired Condition Incidence?

Payers and providers are focusing on improving the quality and efficiency of cancer care because of the disease’s prevalence and treatment costs. The American Cancer Society projects that there will be more than 1.7 million new cancer cases and 606,880 cancer deaths in the United States in 2019.

The costs to treat those patients keep rising. The National Institutes of Health estimates that the United States will spend at least $158 billion on cancer care in 2020, a 27% increase over expenditures in 2010.

Because a significant proportion of those patients are Medicare beneficiaries, CMS developed a five-year pilot project, the Oncology Care Model (OCM), which began on July 1, 2016. Nearly 200 physician groups and 17 commercial payers are participating in the program, according to CMS.

CMS reimburses providers based on their performance during six-month episodes of care for chemotherapy treatment using either a one-sided or a two-sided risk model.

West Palm Beach, Florida-based Integra Connect, which develops information technology solutions for healthcare providers, has tracked the performance of its customers involved in the OCM program, which totals about 16 practices and 1,000 oncologists. “What we see is a steady improvement,” says Charles Saunders, MD, CEO, Integra Connect. With each successive performance period, more of the practices have kept their actual costs of care under the target cost set by CMS, he says.

Nonetheless, Saunders says some of his clients did not earn a bonus payment during any of four performance periods, ending with the first half of 2018. Those practices would have decided by December 2019 whether to accept two-sided risk, or drop out of the program.

In cancer care, the largest buckets of costs are chemotherapy and other medications; facility services, such as hospitals and skilled nursing facilities; and care at the end of life, says Saunders, who regularly writes and speaks about value-based cancer treatment.

CMS isn’t the only payer applying value-based care models to cancer treatment. In April, Humana announced its value-based program for oncology in which it will reward oncology practices for exceeding quality and cost benchmarks over a one-year period.

Like Northwest Medical Specialties, Texas Oncology-a large cancer treatment and research provider in Texas specializing in hematology, pediatric and radiation oncology, which also participates in CMS’ OCM-has worked to decrease rates of hospital admissions and emergency department visits.

For example, the oncology practice analyzed data on telephone calls and response times for patients reporting acute medical issues. What Texas Oncology learned was that when patients called, they usually left a voicemail but often for the wrong department. The inefficient approach made it difficult for staff to return calls quickly.

Call back times are “a huge barrier,” says Lalan Wilfong, MD, executive vice president of value-based care and quality programs, Texas Oncology. If patients don’t receive a timely return call, they go the emergency department for help, he says.

To solve the problem, Texas Oncology, with more than 460 physicians and 210 locations, is in the midst of implementing an electronic triage platform from Navigating Care.

This is how the new process works: When a patient calls, a locally based operator working with an electronic dashboard determines which department should respond to the call. If it is a nursing issue, the operator asks targeted questions to triage the patient. “Somebody who calls in with a fever of 102 [degrees] is a higher risk than somebody who calls in because his or her toe hurts,” Wilfong says.

When dedicated triage nurses return calls, they also have access to the pre-screened patient information on an electronic dashboard, Wilfong says. Because the tool is electronic, nursing managers monitor the dashboards, and assign additional staff to return calls on unusually busy days, he adds.

The objectives of the electronic triage program are straight-forward: A “live person” answers the calls. When the call involves an acute medical issue, triage nurses call the patient back within 30 minutes, Wilfong says.

In addition to improving acute symptom management, oncology practices nationally are also using data analytics to improve their care coordination programs.

Northwest Medical Specialties uses a machine learning­–enabled tool from Jvion to risk stratify patients. The tool produces lists of patients at risk of clinical deterioration on seven vectors, including 30-day mortality and avoidable hospital admissions. The tool also details the clinical and non-clinical factors driving the risk and recommended actions to mitigate the risk.

By feeding data from its electronic health record into the tool, Northwest Medical Specialties gets a daily list of patients who score high on at least five of the seven vectors. A care coordinator works with those patients to schedule the appropriate services, such as evaluation and treatment for pain, distress, or depression; completing advance directives; or referral to hospice care.

By risk stratifying patients and acting on the information, Northwest Medical Specialties has increased referrals for palliative and hospice care by 81%, depression screenings by 68%, and case management evaluations by 80%.

In addition to heading off adverse events before they occur, it’s also important to quickly find out when patients visit an emergency department or are admitted to a hospital or skilled nursing facility.

To gain reliable access to that type of information, Regional Cancer Care Associates recently implemented software from PatientPing, which electronically notifies the 34-location cancer provider when one of its patients receives care outside of its facilities in New Jersey, Maryland, and Connecticut.

Using the software, staff at Regional Cancer Care Associates can also drill down to find out “the working diagnosis” for each of its patients, says Lani Alison, vice president, clinical affairs, Regional Cancer Care Associates.

The tool also allows Alison to look for opportunities to improve performance by analyzing aggregated data, such as how often a patient has been admitted to a hospital or how many of a doctor’s patients have been hospitalized.

Before implementing PatientPing, gaining access to such timely data was haphazard, manually driven, and didn’t lend itself to data analytics. As Alison says, “It was clunky.”

Linda Wilson is an experienced writer and editor specializing in the healthcare industry.

Risk-stratification and electronic triage programs are improving patient care and decreasing costs for health systems.

Data Analytics Improving Care Coordination Programs  

Personalized services are already a huge part of retail and financial sectors. Being able to reach patients with direct services using technology is even more critical as the need for chronic care continues to grow.

“Personalized approaches are so important because each individual’s health and well-being is highly complex,” says Yoona Kim, CEO and co-founder, 

a healthcare technology company located in San Francisco, that combines data science with clinical expertise via artificial intelligence (AI).

Many healthcare organizations are using technology as a way to add value to services. “We want our technology experiences to enhance human connection, not replace it,” says Nikki Caputo, senior director of experience and innovation, UCHealth.

, a nonprofit network of 12 acute care hospitals and more than 150 clinics throughout Colorado, Wyoming, and Nebraska, using voice-enabled technology started with a comprehensive AI strategy.

“Two years ago, we began to operationalize our conversational AI strategy. Voice has always been a piece of that. More importantly, it's about giving people choices to access information,” Caputo says.

Health Technology Disruption: Why It’s Here to Stay

In summer 2019, UCHealth began utilizing the Livi skill on Amazon Alexa smart speakers, as a virtual assistant for patients and their caregivers. Users are able to ask questions about health conditions and location information for practitioners or specific doctors.

“You can ask Livi to find the nearest urgent care and she'll tell you the closest location and follow up with a text message that includes contact information and driving directions,” Caputo says.

Caputo says that there are several use cases for voice-enacted technology and that the organization is cognizant of possible challenges.

“If Alexa can't understand the customer's voice when asking for a doctor's phone number, that's an issue,” Caputo says. “We want to use conversational AI to deliver more personalized experiences to build stronger relationships with our customers. To do that we need to make sure our integrations are fully secure.”

Telehealth is growing faster than any other healthcare option, according to a national study of insurance claims from 2016 to 2017 by 

. The study found that telehealth claims increased by 53%, while claims to urgent care centers increased by 14% and retail clinics by 7%.

Retailers are investing in telehealth to increase engagement by offering more convenient options to patients. Walgreens

 plans to close 160 clinics and increase the reach of its telehealth platform, Walgreens Find Care, focusing on diabetes, chronic obstructive pulmonary disease, and asthma patients.

“We believe that by integrating connected care devices, digital therapeutics and the pharmacy experience, we’ll help individuals better manage their chronic conditions while also lowering the overall cost of care,” said Giovanni Monti, vice president and director of healthcare innovation, Walgreens Boots Alliance, Inc.

Though telehealth options continue to grow, 

 conducted by J.D. Power found that only 10% of healthcare consumers have used it.

“Once providers and payers refine the formula for awareness and adoption, telehealth will change the landscape of how affordable and quality care is delivered,” says Greg Truex, managing director of health intelligence, J.D. Power.

 who need user-friendly medication monitoring has expanded across the health system of more than 800,000 patients.

 platform to continuously monitor patients’ conditions and recommend changes to care plans and medications. During the pilot, 92% of care plan adjustments were implemented by physicians and the health system saw a 40% reduction in hospitalizations.

“Our platform makes use of a sophisticated feedback loop where our data-driven clinical interventions can be continuously improved upon to achieve specific treatment goals for an individual, driving clinical and economic outcomes,” Kim says, adding that a combination of hands-on care from practitioners informed by AI’s personalization will give patients the maximum benefit.

“One of the biggest things we learned was that patients don’t respond to generic interventions or engagement techniques, even if these are aimed at improving their well-being at no additional out-of-pocket cost,” Kim says. “AI can help healthcare organizations understand how and when to best intervene on a patient given their unique circumstances.”

Donna Marbury is a writer in Columbus, Ohio.

Increasing chronic care needs are incentivizing direct-tech services.

3 Technologies Providing Personalized Healthcare

Pharmacogenetics presents clinicians an attractive option to optimize drug therapy, minimize harmful effects, and contain costs; but, payers may not be taking full advantage of cost-saving potential by choosing only to cover the costs associated with interrogating a single gene.

Reports vary, but the cost of testing a single gene appears to range from $100 to $500, depending on the source. The cost of running an entire panel is a similar price. 

Despite the virtually negative cost differential, payers are reluctant to cover the cost of running a full panel of tests. This common practice raises the question of why many payer organizations do not pay for running an entire test panel. Experts differ in their speculations as to why this is the case.

“I don’t think they’re familiar with the total body of knowledge,” says Ruben Bonilla-Guerrero, MD, FACMG, FAACC, MB(ASCP), CGMBS, medical director of medical affairs at Admera Health, a leader in personalized medicine and non-invasive cancer testing in South Plainfield, New Jersey. “Insurance companies consider running a pharmacogenetic test panel as experimental even though the labels on more than 200 drugs mention pharmacogenetics testing.”

Genetic Testing in Treatment Decision Making Goes Mainstream

Pharmacogenetic testing offers important advantages by facilitating the prescriber’s ability to select, initiate, and adjust a pharmaceutical drug product with a much higher level of precision than previously available with conventional dose titration. Pre-emptive testing also helps prevent adverse drug events that occur as a result of overdosing medications.

However, like many areas of healthcare, weighing the cost against the purported benefits is also critical.

“Payers want to reimburse for tests that are done for a specific indication and that have evidence-based, actionable treatments based on the results,” says Erin Lopata, PharmD, MPH, senior director of the Access Experience Team at Precision for Value, part of Precision Value & Health, which performs value and access consulting services for entities that may be involved in value-based contracting.

Some provider habits may inadvertently contribute to payer pushback. In some cases, providers may order tests on certain populations, medications, genes, and gene–drug pairs or add their own tests. Sometimes, they base their decisions to order these tests on misleading information purported by the mainstream media that is devoid of clinical application or value to the patient. In such cases, ordering extra tests would be impractical.

Here, Bonilla-Guerrero says it would be impractical to have payers cover these tests. He believes providing education to payers about the circumstances under which interrogating a gene panel would prove most beneficial for the patient. He encourages organizations to have conversations with payers and other stakeholders involved determining coverage for pharmacogenetic testing.

“It’s about having a conversation about what’s actionable, the available sources, and the clinical utility,” says Bonilla-Guerrero.

Lopata points out that organizations should exercise prudence when ordering panels, as failure to do so could promote negative stigmas associated with testing while giving rise to ineffective medication use.

For example, “fishing expeditions” occur when prescribers run large panels to diagnose or identify a treatment for a condition. Engaging in such practices can promote off-label prescribing for specific mutations in cases where sufficient evidence is lacking. Off-label medication use tends to be relatively common in the oncology world-a therapeutic area in which Lopata says research evolves quickly and exhausting treatment options is common.

However, having sufficient evidence does not always guarantee therapeutic success.  The evidence derived from pharmacogenetic testing may translate to poorer outcomes when presented to some patients. A study published in Pharmacogenomics Journal in 2013 found that pharmacogenetic testing can create patient doubt or distrust when the results indicated that a drug preferred or trusted by a patient is less effective or safe for the patient. The anxiety and distrust that may follow can negatively affect patient perceptions and adherence-a direct consequence of being prescribed a therapy the patient perceives as less effective or inferior.

Looking forward, Lopata anticipates payers will shift their focus on containing costs in oncology. She believes evidence will continue to play an essential role across all therapeutic areas. 

“Evidence generation to determine the best timing and test to use (panel vs. single-mutation) will support better payer coverage and patient access to these tests,” she says.

Payer education, evidence critical to providing cost-effective, beneficial treatment in pharmacogenetics.

The Benefits of Pharmacogenetic Testing

As providers of medicine, our primary focus is-and always should be-the care and comfort of our patients.

But it can’t be our only focus. From affordability issues to the caregiver burnout epidemic, many of the challenges that face our industry in 2020 and beyond will require us to rethink the way we engage with our various stakeholders, taking a more holistic view of the entire healthcare system. These include:


	Of course, we want to create the best possible experience for our patients and customers. But to do that, we also have to create healthier workplaces for our employees, particularly on the provider side.

Medicine is a demanding field, and some clinical settings are inherently more stressful than others. We continuously ask a lot of our employees.

Which is why we need to have their backs, particularly when it comes to creating a culture of wellness. There’s a growing body of evidence suggesting a direct correlation between employee engagement and well-being, patient experience, and quality of care. Improving the overall workplace culture often improves patient outcomes.

In other words, it’s all interrelated-and if our employees aren’t at their best, our patients can’t be, either.

IT’s Influence on Patient Care, Provider Accountability

There are a lot of complex pieces to this puzzle.

It means doing more to secure the safety of our caregivers, protecting nurses and aides from the violence that occasionally visits the emergency department. It means ensuring employees have enough time for meal breaks, so that they are properly hydrated and nourished. It means tightening the mental health safety net, deploying wellness resources proactively rather than reactively.

Above all, it means taking better care of each other.


	These are separate concepts, but from the perspective of the patient and the consumer, they go hand-in-hand.

Why? Because patients, while they may not understand the full complexity of our industry, understand at a basic level that health care simply costs too much. According to CMS, nearly one in five dollars in this country is spent on healthcare services or prescription medicine. And as high-deductible health plans continue to surge-about half of the pre-Medicare commercial market now has a high-deductible health plan-our patients are exposed to more and more out-of-pocket costs. 

Bending the cost curve will require more preventive medicine, reducing overutilized testing and procedures, and delivering lower-acuity care in less-expensive settings.

It also requires a greater commitment to value-based care. As an industry, we’ve been predicting this shift for a while, but it’s happening slowly. At some point, we’ll have to jump in feet first.


	On one hand, our national goal is to provide better care for lower cost.

On the other hand, in order to achieve that goal, we know that we have to invest in the future -artificial intelligence, robotics, virtual health systems, and more modern care facilities. Over the coming decade, medicine will be virtualized and access will be democratized. All of this will come at a cost.

How do we bear the cost together, while minimizing financial impact to our customers? It will require increasing collaboration-and in some cases, full-scale integration-between payers, providers, and ancillary stakeholders.

Traditional boundaries between payer and provider, between pharmacy and supplier, have been blurring for years, and for good reason: Without clear sightlines among stakeholders, it’s hard for providers and insurers to align on the future state of healthcare.

Integration promotes that alignment and understanding. It also provides a shared platform to address current and future cost burdens, to streamline patient billing, to create value from big data, and to simplify the overall navigation of the healthcare industry for our patients.

Vertical integration won’t solve all of the industry challenges, but it can allow a more unified approach toward advancing the goals of improved health, greater affordability, and better experiences for employees and patients.

Cynthia Hundorfean is president and CEO of Allegheny Health Network (AHN), an integrated healthcare delivery system that serves Western Pennsylvania. AHN is part of the Highmark Health family of companies.

Many of the challenges that face our industry in 2020 will require a fresh way of thinking.

Investing in the Future

As a new decade begins, healthcare executives will continue to grapple with challenges of the past as well as new issues that emerge. We asked healthcare leaders to cite their top challenges, as well as coping strategies. It was no surprise, particularly with 2020 being a presidential election year, that dealing with an ever-changing landscape of government regulations topped the list. Here’s a closer look at what they said.

Challenge 1: Complying with new government requirements and mandates

Efforts to repeal the Affordable Care Act seem unlikely in the near term. “Nonetheless, healthcare executives always need to proactively stay on top of regulatory developments so they can position their organizations for the opportunities and challenges that may emerge as a result of changes,” says Kim Bell, senior vice president of health services, NFP, an insurance broker and consulting firm in Austin, Texas.

New mandates, both at the state and federal level, add a layer of complexity to running a business. Healthcare remains one of the most highly regulated industries, since approximately half of all of the industry’s spending comes from government sources (e.g., Medicare, Medicaid, Veterans Affairs, and government employee benefits), says Ashraf Shehata, MBA, MHA, national sector leader for healthcare and life sciences, KPMG LLP, an audit, tax, and advisory firm. “They update their rules with great regularity, so it’s important for healthcare organizations to stay current with the latest regulatory developments,” he says.

In particular, CMS’ push toward price transparency has resulted in many questions from payers and providers. “In 2020, we will see the price transparency mandate continue to play out and likely encounter more uncertainties,” says Tara Bradley, chief operating officer, Vitalware, a mid-cycle revenue software as a service solutions provider, in Yakima, Washington. “Specifically, hospitals have been tasked with the complicated duty of posting their chargemasters online. This process is not only difficult, but the information presented in a chargemaster is confusing and does little to further transparency or education.”

In addition, HHS recently released proposed changes to the antikickback statute and Stark Law. “Although we don’t know which portions of the proposed changes will be implemented in final rule-making, there will be changes that will more than likely come in 2020,” says Kelli Carpenter Fleming, Esq., a partner in the healthcare group at Burr & Forman LLP, a law firm located in Birmingham, Alabama.

Regarding the Stark Law changes, healthcare providers should review the proposed changes and start thinking about what relationships, if any, will be impacted by them. “Getting up to speed on the changes and ensuring that existing relationships are compliant should be a priority in 2020,” Fleming says.

Bradley’s advice for dealing with the uncertainty of CMS’ mandates is to always stay one step ahead. “Instead of waiting for CMS directives, hospitals should feel empowered to initiate processes and programs to educate patients and make pricing less complicated,” Bradley says. “Hospitals will need to improve their ability to understand their own pricing data, how they can operationalize that insight, and then continuously measure the effects of their actions and adjust accordingly.”

The push for pricing transparency will require hospitals to review pricing quarterly or even monthly. Hospitals can also hire billing specialists, who can better handle the influx of customer questions related to pricing and serve as middlemen between the hospital and insurance company to help patients better understand their out-of-pocket costs, Bradley says.

To comply with government regulations in general, a well-resourced, internal audit function can address many issues. “If an organization is well funded and has the resources to investigate and address potential risks, it can protect relationships with stakeholders, including patients, regulators, and contractual counterparties,” Shehata says.

Challenge 2: Shifting to value-based payment models

The shift from fee-for-service reimbursement to value-based payment models will continue in 2020, including the trend for healthcare providers and third-party vendors operating in the healthcare space to assume some of the financial risk along with the health insurer. “While these relationships are appealing, there is the risk that they will be unprofitable if not structured properly,” says Layna Cook Rush, JD, shareholder, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, a law firm with offices in the Southeastern United States and Washington, D.C.

Along these lines, Matt Gagalis, head of payer market development, CarePort Health, a care coordination software company, says that as value-based care continues to take hold and the number of stakeholders responsible for improving patient outcomes increases, the fragmentation within the healthcare industry has become increasingly apparent. There will be a critical need for alignment and coordination across the continuum.

“With multiple stakeholders trying to manage a patient’s care, there is immense opportunity for enhanced stakeholder interoperability to reduce disparate systems of care and align a network on one centralized platform,” Gagalis says. To share existing data, synchronize workflows and streamline processes between various stakeholders, payers, and providers should use care coordination technology that collects, analyzes, and shares information across the continuum.

Because payments in these models are contingent, at least in part, on the provider meeting certain metrics, it is imperative that those metrics are within the provider’s control, Cook Rush says. Also, it’s important from both parties’ perspectives that the metrics and data being measured are an actual assessment of improved health that will result in cost savings. “When entering into an outcome- or value-based contract, healthcare executives need to analyze historical data to ensure that the metrics are an attainable and appropriate measurement of health improvement,” she says.

Furthermore, as parties enter into these types of agreements and providers take on additional responsibilities and financial risk, it is important to assess whether the relationship will be subject to regulation under state insurance or managed care regulations, Cook Rush says. Because of the shift in responsibilities, the provider may be required to register or seek licensure as a regulated entity. For instance, the California Department of Managed Health Care has oversight of risk-bearing organizations, which can encompass physician-owned entities that bear risk. A review of state laws and regulations should be conducted when structuring the relationship.

To gain meaningful data insights, payers must adopt technology that makes the data actionable and contextual-using it to inform clinical decision-making and improve care management, Gagalis says. Health plans should seek solutions that not only provide data from disparate sources, but that can also display data in a way that is meaningful and actionable.

For example, the recently enacted California Consumer Privacy Act requires businesses to inform consumers about the personal information they collect and how it will be used; consumers’ personal information cannot be used for any purpose that wasn’t disclosed at collection, Cook Rush says.

Businesses need to be cognizant of state and federal privacy laws that may limit how big data can be used. Monitoring data’s security is also key. The information may constitute protected health information under Health Insurance Portability and Accountability Act or personal information under state privacy and security laws. “Companies may need to employ protections such as firewalls, encryption, and other security measures to guard against unauthorized access to the data,” Cook Rush says. And, if data is hacked or stolen, there is the potential that individuals may require notice of the incident.

Challenge 4: Implementing cybersecurity measures

Healthcare entities are continuing to see a rise in the number of cyberattacks. Attackers are getting smarter and more persistent. Employees are getting more comfortable working with electronic information (which sometimes makes them more relaxed and susceptible to oversights). Records maintained within the healthcare industry are valuable due to the vast amount of information contained therein, and providers typically maintain several electronic systems containing patient information (e.g., electronic medical records, billing, practice management, email), all of which are susceptible to attack, Fleming says.

Since many recent threats to security arise from phishing scams and ransomware attacks, it is imperative that companies not only have policies and procedures in place, but that they also create a culture of “cyber hygiene.” Employees must be trained on, and continually reminded of, how to detect and respond to a potential phishing email, Cook Rush says. And, sanctions for continued violators should be implemented. Given the prevalence of ransomware attacks, companies should routinely back up critical data and have an incident response plan that addresses swift access to back-up data to ensure that operations and services can continue with minimal interruption. Incident response plans should be reviewed and tested routinely.

Furthermore, entities should implement plans for stopping an attack and mitigating harm, as well as notifying those who have been affected, Fleming says. Regarding notification, providers must not only be familiar with the laws in their state but also the states in which their patients reside. This is because a number of state data privacy and security laws are attempting to impose obligations on entities located outside of the state that maintain information on residents living within the state.

According to Kaiser Family Foundation research, the annual cost of a family health insurance plan has now surpassed $20,000. Some of the primary reasons include escalating drug prices, particularly in specialty drugs; high-cost therapies coming to market; and industry consolidation, Bell says.

Employers have traditionally shifted higher costs to employees. But as costs continue to rise, employers are discovering a number of ways to mitigate the impact of rising costs, such as narrowing networks, promoting medical tourism through centers of excellence, creating reference-based pricing structures, and offering bundled pricing, direct primary care access, and expert opinions, Bell says.

Payers and providers should continue their efforts to be a part of the solution, working to partner with employer coalitions and work groups to help solve the problems that contribute to the high cost of healthcare. In addition, they should increase their focus on innovative solutions to the problem. “Consider what can be done differently to enhance efficiency and effectiveness, both in terms of improving what is working and fixing what’s not,” Bell says.

Challenge 6: Rising cost of specialty drugs

Plan sponsors recognize the value that specialty medications have in treating complex and rare diseases; the trend is up by 9.4%. But specialty drugs cost 50 times more than traditional drugs. In most cases, price increases directly affect Americans who, in some cases, can no longer afford medications they so desperately need, Bell says. 

In May 2018, the Trump administration issued a strategy blueprint, “American Patients First,” designed to tackle U.S. drug pricing and healthcare costs. According to Bell, a few of the key components related to reducing drug pricing are:

Promoting the use of biosimilars and reducing utilization barriers;

Preventing branded drug manufacturers from gaming FDA risk management strategies and 180-day generic launch rules to forestall generic competition;

Requiring drug rebates negotiated by pharmacy benefit managers to be passed directly to patients;

Requiring drug companies to disclose list prices for their drugs in television ads, just as they do for side effects and other drug risks.

While many components have not yet been addressed, areas such as providing avenues to bring more generics to market have.

On October 16, 2019, HHS Secretary Alex Azar announced that in fiscal year 2019, the FDA approved a total of 1,171 generic drugs, an all-time record, following a record 971 approvals in fiscal year 2018 and a record 937 approvals in fiscal year 2017.

In addition, Azar said that legislation, such as HR-3’s Title I of The Lower Drug Cost Act of 2019, is proposing that HHS be allowed to negotiate drug prices based on international standards. “We have also seen significant moves toward bringing more transparency to consumers, through removal of gag orders on pharmacists not to mention lower cost drugs and requirements that drug ads disclose the cost of the drug being advertised,” Azar said.

Diligently monitoring and understanding these changes is critical, as is making sure they are aligned with the best industry solutions in the space, Bell says. Also consider their effect on programs such as value-based care and established clinical pathways.

Karen Appold is a medical writer in Lehigh Valley, Pennsylvania.

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