As pharmacies get deeper into chronic care treatment, what will it mean for both pharmacy and the world of managed care?
Peter A. L. Bonis, MD
National health expenditures are expected to grow 5.5% annually between 2018 and 2027 according to the most recent report from CMS. The overall healthcare tab will increase from $3.8 trillion in 2019 to $5.9 trillion in 2027.
A major component that increase in healthcare spending is money spent on chronic diseases, which provide both challenges and opportunities for healthcare organizations-even those that traditionally have not been heavily involved in that arena. To help fill gaps in the system-and to stay competitive in the ever-shifting healthcare landscape- retail pharmacies CVS and Walgreens are looking to diversify their business model and are remodeling hundreds of stores into medical-service centers targeted at customers with chronic conditions.
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“As predominantly brick-and-mortar pharmacies, Walgreens and CVS are looking for new ways to stay competitive against online operations, such as Amazon, which threaten to eat into their market share,” says Jose Rivero, CEO of HealthComp, a health benefits administrator serving the needs of employers, plan members, and brokers. “This means coming up with new ways to bring customers into their stores. Today, there are many healthcare services that still require a local, hands-on approach.”
Rivero cites current offerings like flu shots and health screenings as examples of this approach becoming more and more common. But using those same offering to help people with chronic conditions like diabetes or high blood pressure, Rivero says, could help to address a “significant health challenge”-and also to bring many more patients through their doors.
Here’s what other experts say about the pharmacies’ move toward chronic care:
Peter A. L. Bonis, MD, chief medical officer, clinical effectiveness, at Wolters Kluwer, Health:
“A lot will have to go right. Retail pharmacies can legitimately claim a right to participate more directly in healthcare delivery. They are ubiquitous in the community and thus provide easy access to care. They also can potentially deliver certain services less expensively than traditional healthcare settings. Both aspects play well with rising consumerism in healthcare where cost-shifting has intensified price sensitivity and where the widespread availability of new technology (such as a video, texting, and other forms of communication) makes interactions within traditional care delivery models seem frustratingly primitive.
“At the same time, those who finance healthcare recognize that the current cost structure is unsustainable and new care delivery models must evolve potentially leading them to embrace alternative care settings.
“However, integrating chronic care into alternative care settings is easier said than done. Patients currently receive care through their health systems (hospitals and clinics) which are also embarking on new care delivery models that are both cost-effective and consumer-friendly. Retail pharmacies will need to insert themselves into an existing care-delivery system, making transitions and communications across care settings safe and effective.
“One way to drive change is to align payment with preferred care settings. Thus, the alliance between CVS and Aetna, for example, has the potential to create insurance products and other incentives that help catalyze the change. Still, the swim lanes are currently murky.
“Healthcare is complex and bubbling with innovation. But it is also notoriously slow to change. A shift in how and where patients with chronic illness are cared for will not be immune to this cadence.”
David Pittard, managing principal at OneDigital:
“As CVS references, brick and mortar retail stores are losing market-share for convenience consumer goods; thus, their physical locations must evolve to remain relevant beyond episodic medication fill. This reality coupled with a desire to capitalize on the acquired insured population with Aetna is the genesis of why CVS is taking this step. The feeling is more that there are assets that need to be reinvented than CVS is modernizing healthcare delivery.
“An interesting consideration for health plan sponsors, especially those with Aetna, is will CVS capture more drug fills within its retail stores as a result of engagements with the HealthHUB concierges? If so, this could increase drug pricing for the plans as CVS has historically been one of the higher cost retail providers; and, the HealthHUB model could deter members from considering lower cost pharmacy options, such as Walmart, Costco, or Amazon.
“If CVS demonstrates success in patient capture rates through the HealthHUB models, plan sponsors may be less likely to change from Aetna insurance, since there could be greater disruption for their membership. This approach will cause all stakeholders to reconsider if their approach to consumer engagement is vulnerable. As more plan sponsors look to carve-out their PBM services, will CVS/Aetna’s combined offering encourage the market to gravitate to a definitive carved-in model?
“There is no doubt that the mergers of insurance carriers, PBMs, and retail pharmacies is a major transformation in the healthcare market that the remaining PBMs will need to figure out how to respond to, as the major stakeholders work to change the rules of engagement. Historically, comprehensive solutions provided by insurance carriers have proven ineffective; however, the new approaches are adding consumer convenience. If independent PBMs want to retain and grow their market share, they will have to demonstrate quantifiable decision points that will keep the insurers from forcibly capturing the remaining market. With the four major insurers controlling the majority of the provider networks, we now have the dominant players in the PBM space, and we expect to see more market consolidation of boutique and mid-sized PBMs as they seek to capitalize on the businesses they have built if they fear they will not be competitive in the future.”
“Healthcare executives are always looking for effective ways to help patients manage chronic conditions. If done right, this model has the potential to provide a convenient, low-cost, and effective solution. To enable plan members to try new approaches and to leverage the solutions that work for them, health plans should consider building flexibility into their plans, such as flexible spending accounts, that would allow their plan members to give it a try.
“There are a lot of potential impacts this could have on healthcare, which executives should consider. One is it could give patients access to one-on-one, ongoing coaching to keep their conditions in check. Many patients with chronic conditions know what they should be doing, whether it’s eating right, lowering stress levels or getting regular exercise, but they’re missing that convenient, low-cost way to stay accountable in taking those actions. Second, as these programs develop, healthcare executives need to think about giving members access to those services through their plans, and third, they need to proactively think of ways to collect and share information with such programs to monitor outcomes.”
Laurie Groven, VP strategic marketing and business development at Smart Meter LLC:
“With retail pharmacies now having access to millions of patients all over the country, it is clear that they are well-positioned to take action and be go-to treatment centers for managing chronic illnesses. However, with the adoption of remote patient monitoring (RPM) growing rapidly as evidenced by healthcare reimbursement through new 2019 CMS CPT codes, clinicians are recognizing that there are cost-effective ways of managing chronic disease patients remotely if they can get a complete and reliable picture of a patient’s health status. With cellular technology, that is now possible. Patients easily share their blood glucose testing results and a healthcare provider can effectively monitor them between visits. The race for the chronic care patient’s loyalty and their associated revenue dollars has begun. With cellular technology, many different providers within the patient’s healthcare team can implement an effective remote patient monitoring program that will engage them.
“To remain competitive, healthcare hospital/health system executives and providers are implementing RPM programs to improve patient interaction, track medication adherence, and monitor test results.”
“With such extreme numbers surrounding the scale and importance of managing chronic disease, payers, employers, healthcare organizations, and retail pharmacies are taking more and more steps to keep their patient population healthy and blood glucose levels on track. There is also a growing understanding that costs can be reduced by all of these contributors of the patient’s circle of care through more effective management of diabetic patients by utilizing population health strategies like RPM. The news of CVS Walgreens remodeling hundreds of stores into health-based centers, focused on providing services to treat patients with diabetes, heart disease, and hypertension, is just an example of the value being put on RPM and connected health technology.
“Second, we may start to see more and more strategic partnerships between hospital systems and retail pharmacy. It is well known that hospitals and emergency departments are overwhelmed with patients that suffer from chronic disease. Retail clinics may be the best way for patients to easily access affordable and trusted care. At the same time, the hospital systems and the provider will still want to play a vital role in their patient’s care. With tools like cellular diabetes management solutions, many in the patient Circle of Care can monitor their care and stay engaged.
“Finally, key to any connected health strategy is the patient’s participation. As an example, with a cellular diabetes solution, all a patient does is test. There are no extra steps asked of them to share their data. We’ve moved past the days of depending on the patient to download data or work with apps to get their results to their healthcare team. RPM has to be effortless for the patient yet provide information a healthcare team can trust. Choosing the right technology makes all the difference in an effective RPM program.”
Shital Mars, CEO of Progressive Care Inc. Progressive Care Inc. a personalized healthcare services and technology company based in South Florida
“With Amazon entering the healthcare space, we will begin to see more companies look to close the healthcare loops. This can be a good thing and a bad thing. A closed loop means shared systems, more communication, and integration which the healthcare space badly needs. However, this could also lead to abuse of monopolization through decreased competition and choice. CVS and Aetna may no longer have to work hard to provide great healthcare and service, because the patient has no other choice but to use them. Other companies will see this as an opportunity to close their loops and do the same, with all major healthcare players choosing teams and leaving smaller providers behind.
“Integration of medical and pharmacy data is a must to lower healthcare costs and other execs can look for ways to do this in their own networks. It is true that monitoring medication adherence can greatly reduce medical spending. But that number has yet to be fully quantified because holders of medical data and pharmacy data do not talk to each other, each party being very possessive of its information. But if these two things were to unify, we could determine best pharmaceutical practices and best treatment regimens that lead to lower costs and best outcomes.
“Health care execs must find a way to keep personal engagement with their patients, or otherwise risk losing them to the influence of other healthcare players. Walgreens and CVS both intend to use patient data to increase engagement, increase adherence, and increase system use. If healthcare execs want to have influence over their patients’ choices, they can either buy into the Walgreens/CVS model and team up or they can send out their own messaging and control that messaging. If you want your company to be the go to for healthcare, you are going to have to step and compete on a higher level for patient attention.”