1

A Value-Based PBM: Implications for Various Stakeholders

**The following blog post was co-authored by Dr. Maria Lopes, chief medical officer of Magellan Rx Management, and Dr. Karen Amstutz, chief medical officer of Magellan Health.

Value is more than a buzz word among health care stakeholders, but stakeholders – payers, providers, patients and pharmaceutical manufacturers — define value differently, based on their needs, obligations and roles within the evolving healthcare and managed care paradigm. Each stakeholder, while looking out for its unique interests, must also consider how its priorities, perspectives and business model affect the others — their counterparts, and in some cases, partners. Payers are a common thread intertwined within this continuum of healthcare services, interfacing with each stakeholder in a significant, although different manner. As they navigate the changing managed healthcare marketplace, payers must proceed in a manner that protects their interests, even as they give consideration to the impact their strategies and initiatives may have internally and upon other healthcare stakeholders. One unique opportunity for payers exists within the management of prescription drug utilization, specifically in assessing and refining expectations surrounding their pharmacy benefit management (PBM) services and relationships, and how these translate into value for payers and ultimately, all healthcare stakeholders.

Historically, measures of success in the PBM industry focused on leveraging volume as a means of managing drug costs. PBMs demonstrated value by offering what are now considered standard, or core services. Typically these offerings consist of claim adjudication, utilization management, mail order, customer service, some clinical support services, and of course, financial support in the form of volume-driven rebates and discounts. Times have changed as the Affordable Care Act (ACA), increasing government regulation, rising drug prices, and growing availability and demand for specialty pharmacy drug products have profoundly impacted the use, costs, and management of prescription drug therapies within the managed healthcare marketplace.

Accordingly, expectations surrounding prescription drug benefit management among stakeholders have been, and will continue to be, profoundly impacted by the shifting healthcare environment. Specifically, as payers seek to provide patient or member support, access to care and expanded services, while maintaining profitability, they are reassessing business models and relationships. For payers, this includes taking a close look at the manner in which prescription drugs are managed, giving consideration to the clinical and financial impact of specialty drug spending, in particular. In response, payers are increasingly looking to PBMs to refine their services, with an eye toward driving outcomes. It is no longer sufficient for a PBM to provide products at a discounted price. Essentially, payers are looking for PBMs to provide “value over volume.”

Challenges Facing PBMs

This evolution in payer expectations of PBMs is highly driven by the pressures of rising prescription drug costs — particularly specialty drug spending. Make no mistake about it, volume-based savings remain a significant facet of PBM and payer relationships, but they are no longer the key financial objective of payer- PBM agreements, as they once were.

PBMs are now challenged to stretch beyond their traditional scope of offerings to provide the services payers expect — they are tasked with providing and demonstrating value. What is value and how is it defined in the PBM-payer relationship? First and foremost, PBM-payer relationships moving forward must be partnerships in order to successfully navigate these formerly uncharted waters. It’s not sufficient for a PBM to provide expanded services, such as clinical programs, in name only. Successful implementation of these initiatives will require tomorrow’s successful value based PBMs to have an innovative culture, a modular and flexible service model, and a platform utilizing leading edge technology. PBMs capable of providing adequate support to payer partners must actively integrate and apply clinical expertise into programs that support improved patient outcomes and consider patients comprehensively, while giving appropriate consideration of unique patient needs — and offering comprehensive solutions, which may include unique program components, such as integrating behavioral health support as warranted.

Clearly, the PBM of the future must have a new orientation – no longer focused exclusively on volume-based strategies. Tomorrow’s value-based PBM must provide value by looking beyond the current silos that commonly focus upon pharmacy drug benefit approaches that apply “traditional“ utilization management strategies (step therapy, prior authorization, etc.) to maximize rebates and manage prescription drug spending. Effective management of the future must bridge the management of prescription therapies, particularly specialty drugs, via either the medical or pharmacy benefit. Applying innovative strategies to optimize management of the use of and administration of prescription drugs through whichever benefit, medical or pharmacy, the therapy is processed will be an essential attribute of PBMs’ demonstrating value to payer partners. Focus upon coordination of specialty drug management through both the pharmacy and medical pharmacy benefits will only gain importance as the availability, costs, and utilization of expensive specialty therapies rises, as acceleration of specialty drug utilization is projected.

These current and anticipated shifts in the clinical and economic landscape will drive the challenges and amplify the financial importance of managing medical pharmacy spend. PBMs providing value will do so by offering comprehensive prescription drug management support for payers, across the benefit design, with particular attention to effectively managing drug utilization and spending within the medical benefit arm of the organization. As an example, Magellan Rx Management has focused on developing patient and provider engagement strategies, and employing advanced analytics and comprehensive specialty drug management programs for both the medical and pharmacy benefit.

Interpreting Data is Key

This application of advanced analytics is integral to the service and offerings of the value-based PBM of the future. It is insufficient to simply capture and possess data. Going to the next level, the ability to analyze and report data, while beneficial, falls short of having a demonstrable clinical and economic impact. Data capture and reporting alone are inadequate as a means of providing value to payers if this data is not properly evaluated, interpreted, and then integrated into effective clinical management strategies. These identified strategies must be capable of serving as a platform for significant clinical improvement and development of cutting edge programs that enhance care and manage costs, across both the medical and pharmacy components of the benefit. PBMs with an eye to the future are those capable of:

  • Providing rigorous analytical support to payer data in order to help payers identify opportunities to improve outcomes, while realizing savings
  • Collaboration to ensure providers have information needed to optimize treatment –promoting access to and use of the most efficacious and cost-effective drugs
  • Enhanced customer-facing strategies to increase member understanding and effective utilization of pharmacy and medical benefit therapies

With data management capabilities as a cornerstone, the value-based PBM is poised to assess payer data, applying predictive analytics as appropriate to conduct a robust and meaningful cross-functional analysis of costs, utilization of therapies, and outcomes. A well-constructed and executed analysis supports both the financial and clinical objectives of the payer – financially supporting cost management while simultaneously creating an opportunity to identify and address existing or emerging gaps in care. As a result of these analyses, payers will be poised to support providers, provider groups, hospitals, outpatient treatment facilities and other partners such as accountable care organizations

(ACOs) by providing feedback regarding current clinical and economic opportunities to improve outcomes and manage costs – ultimately benefiting the patient. As one dimension of these analyses, value-based PBMs can support payers in developing targeted initiatives that address identified gaps in care. For example, programs may be developed to improve member adherence with therapy and the selection of the most clinically appropriate treatment, as they simultaneously support payer objectives such as improving the identification, recognition, and understanding of opportunities for managing trend drivers and helping to identify other areas of concern or opportunities to improve care.

With the support of value-based PBM, payers have the opportunity to expand specialty drug management capabilities, developing new clinical programs for specific disease states, with the ability to target diseases that are highly significant for each organization, either due to cost, clinical relevance, prevalence, or demonstrated gaps in care. Some examples of programs with such experience that exist within Magellan Rx Management include the clinical programs to guide the treatment of age-related macular degeneration, hepatitis C, and chronic myelogenous leukemia (CML). These programs might include clinical interventions, product preferencing and targeted clinical patient and provider support programs.

A Case in Point

For a large regional health plan, representing about 1 million commercial lives, Magellan Rx Management partnered to offer medical formulary management programs in the following areas:

  • Viscosupplementation
  • Botulinum Toxins
  • Contraceptives
  • Gaucher’s Disease

Magellan Rx also worked with this payer to implement a variable reimbursement fee schedule, with a maximum allowable cost (MAC) / least cost alternative (LCA) product selection strategy. A proprietary methodology was applied to promote generic utilization and equalize margins on products within several therapeutic classes, including intravenous immunoglobulin (IVIG), taxanes, folinic acids, ophthalmic injections, viscosupplementation, and antiemetics. Savings in the antiemetic category alone have exceeded $3.5 million since the program’s inception in 2010, by removing incentives for physicians to prescribe higher-cost, branded antiemetics, rather than the low-cost preferred alternatives.

Additionally, value-based PBMs are equipped to support payers in the development and implementation of unique initiatives, such as site of care management programs. These programs create an opportunity to administer initiatives focused on oversight and management of the treatment and administration location for certain high-cost therapies, typically administered at either a provider office or an alternative administration site such as a hospital outpatient administration facility. By encouraging the use of the most clinically, therapeutically and financially cost-effective therapy, site of care management programs offer a means of assuring treatment is administered in the most clinically and financially appropriate setting. As an example of success in this area, Magellan Rx’s site of service netted over a million dollars in savings for two regional health plans in a six-month period. The program, which also received positive feedback from patients, demonstrated the possibilities such programs have to generate savings, while improving patient access to care. Characterized as a solution which places the patient first, the program was overseen by a collaborative team of healthcare professionals, including nurses, pharmacists and physicians.

Innovative strategies, such as outcomes-based contracting, are another means by which value-based PBMs further support payer objectives. Outcomes-based contracts are a unique and customized partnership opportunity that considers stakeholder interests by giving consideration to payer-specific data, supported by robust analytics to define opportunities for optimizing clinical and economic outcomes in the best interest of all stakeholders.

Additionally, value-based PBMs can assist payers in the identification of gaps, and the development and implementation of cutting edge and customized clinical programs designed to improve STAR ratings and HEDIS measures. Such programs are relevant and valuable to payers, as they support clinical initiatives, assisting payers in meeting objectives that translate into financial benefits for the organization.

In light of specialty drug trends, such as a burgeoning pharmaceutical pipeline — dominated by specialty drugs that are estimated to comprise 50 percent of overall drug spend by 2018, payers are changing their view of essential PBM support services. Forward-thinking payers are seeking the support of a value-based PBM with expertise in management of complex and costly therapies, including specialty drugs administered within the medical benefit. With a decade of experience in this arena, Magellan Rx is one example of a full-service PBM, with the distinction of having significant expertise in managing specialty drugs, including those covered under the medical benefit. The additional benefit of clinical expertise and robust analytical support are critical in the development of cutting edge clinical programs that simultaneously support the objectives of payers and consider the interests of other stakeholders in the managed care marketplace. These are critical strengths that value-based PBMs of the future must possesses in order to effectively support payers in meeting the demands of tomorrow’s health care marketplace; providing tailor-made, disease-specific services that provide value and drive healthier outcomes for members.




Person-first language: It’s time to bring healthcare into the 21st century

Written by Thomas Lane, NCPS, CRPS

What’s in a word? Much more than many of us realize.

In the context of behavioral health, substance use and even physical health challenges, using terms and phrases that group people by diagnosis, disability, disease and other characteristics perpetuates stigma, discrimination and exclusion. Yet this type of language has been part of the healthcare lexicon for decades. Outdated terms such as “addict,” “crazy” or “diabetic” are just a few common examples.

We live in a time when individuals are at the center of the healthcare field. As healthcare consumers, individuals are empowered to make their own health choices. As healthcare professionals and activists, we need to mirror this empowerment, and seize the opportunity to pivot how we portray what we do. We need to move away from archaic language that contradicts all of the positive changes we help individuals make in their lives on a daily basis.

This is where “person-first language” can make a big difference.

What is person-first language?

Person-first language means seeing people as “people first,” and not as their disease, illness or disability, or as part of a homogeneous group. It portrays individuals living with behavioral health, substance use or physical health challenges beyond a lens of illness, diagnosis and hopelessness. It helps address issues relating to illness-identity and self-stigma, keeping in mind that we are all unique individuals, with unique lived experiences.

At Magellan Health, our use of person-first language stems from our work in behavioral health, but it applies to everything we do with equal emphasis. It shows our commitment to being culturally and linguistically appropriate in all of our communications. It models our principles of recovery and resiliency, and contributes to evolving and improving our organizational culture.

On a personal level, as an individual in recovery myself I can tell you how important person-first language became to me as I discovered the often unintended consequences of using language that robs one of their individuality. We all deserve respect and appreciation for our unique qualities.

How is person-first language used?

Using person-first language is an intentional practice. Here are some examples of old language that is commonly used in comparison to newer, person-centered language that can be applied by anyone:

  • From “chronic disease management” to “improving health outcomes for people living with chronic health conditions.”
  • From “illness self-management” to “improving health education, support and community inclusion to promote individual wellness and self-direction.”
  • From “crazy, nuts, lunatic” to “someone who may benefit from services and supports.”
  • From “individuals suffering with a mental illness” to “individuals with a mental illness.”

For practice, try to recognize when others use the outdated or inappropriate terms and phrases above. And ask yourself how often you use them. Then, make the conscious choice to omit them from your vocabulary and replace them with new terms. While changing an old habit can be a challenge, consciously developing a new one is an easier path to meaningful change.

Remember, we all have choices about the words we speak and write. Those choices can either affirm the distinctive individuals that we are — or diminish us with labels. The words we use can fill us with hope, or burden us with despair. So let’s choose hope.

Changing the way you speak and write is a gradual process. But by putting the person first when you do, you can play a role in bringing our healthcare language into the 21st century.

For more information and resources, please visit Magellan’s e-Learning Center: http://www.magellanhealth.com/training-site/home.aspx




October is Substance Abuse Prevention Month

Magellan Health marked October as Substance Abuse Prevention Month, with its chief medical officer, Dr. Karen Amstutz, releasing the following statement:

“Substance abuse does not discriminate. It pays no mind to gender, race, age or income level. According to the National Institute on Drug Abuse, the abuse of alcohol, tobacco and illicit drugs costs the United States more than $700 billion annually related to crime, lost work productivity and healthcare. Substance abuse, and in particular, our nation’s opioid epidemic, is gripping families and communities all across the country. Chances are, you know someone who is coping with substance abuse, though they might be doing so in silence.

“Magellan Health has worked in the field of behavioral health management for over 40 years, and we believe strongly that the treatment of substance abuse, including opioid misuse and addiction, is possible. Magellan Health advocates for medication assisted treatment (MAT), a well-researched and highly effective approach combining medication to treat the physical effects of opiate dependence, with counseling and recovery support services. Magellan Health is poised to support treatment professionals, legislators, third-party payers and patient advocates in the implementation of prevention efforts, best clinical practices, and elimination of potential barriers to treatment and recovery. Working together, it is important to shine a light on this dark epidemic and provide hope to people seeking to live a healthier, more vibrant life.

“If you or someone you know is dealing with substance, please call the Substance Abuse and Mental Health Services Administration’s Help Line at 1-800-662-HELP (4357). For Magellan’s resources related to substance abuse, please visit http://magellanhealthcare.com/opioids




Painkillers, Heroin and Addiction: The Opiate Crisis Laid Bare

Painkillers, Heroin and Addiction: The Opiate Crisis Laid Bare

From East to West, North to South, the Opiate addiction continues, almost unchecked, to claim lives, destroy families and ruin communities.

Opiate Addiction: The Overdose Emergency

Fueled by both prescription painkillers and illegal substances, opiate addiction kills thousands every year. In 2014, for example:

Despite those shocking numbers, the problem continues to grow. (It quadrupled in the first decade of this century and continues to explode). In the past twelve months, the Drug Enforcement Agency (DEA) has been forced to issue warnings on new drugs such as Fentanyl, a potent opiate more than 100 times more powerful than morphine and 30-50 times stronger than heroin. While Fentanyl has killed thousands of people over the past few years, many only heard of it recently, when it was attributed to the death of the musician Prince.

Still, by far the most prevalent cause of overdose is prescription painkillers. This encompasses a much broader swath of the Opioid family (Opiates and their synthetic and semi-synthetic variants). The most common culprits are:

In 2014, the United States saw nearly 4.3 million people ages 12 or older using prescription painkillers non-medically. To put that into perspective, that is almost 2% of the entire population. According to the Centers for Disease Control, more than 1,000 people are treated in emergency departments for misusing prescription opioids every day. Finally, almost 2 million Americans either abused or were dependent on prescription opioids in 2014.

Painkillers, Addiction and the Economy: What the Opiate Crisis is Costing America

The opiate addiction crisis has an obvious and tragic human cost. Addiction to painkillers and illegal opiates cause death and healthcare emergencies every day. But they also have a profound economic cost that affects people, employers and governments all over the country.

One estimate, conducted in 2011, put the economic cost at $55.7 billion

Of those figures, the study’s authors offered the following breakdown:

To put that in perspective, the $55.7 billion that opiate addiction erases from the economy is roughly equivalent to the annual Gross Domestic Product of the entire state of Maine. It is greater than that of Alaska, North Dakota, Montana, South Dakota, Wyoming and Vermont.

Medication, Therapy and Shifting Thinking: Opiate Addiction Solutions

Opiate addiction is deadly, it’s costly, but it is anything but simple; especially when it comes to finding solutions or even identifying the root causes of this crisis. Some point to the high availability of opiates compared to the past — the number of prescriptions for opioids (like hydrocodone and oxycodone products) escalated from around 76 million in 1991 to nearly 207 million in 2013 — others point to socioeconomic factors or to the increased focus on pain management in recent decades.

The answer is, most likely, that all of these answers are correct, at least some of the time. Tackling opiate addiction and prescription painkiller abuse will take a multi-faceted approach which recognizes that while opiate addiction and overdoses are the hurdles, there are many different paths to overcoming them.

One such solution is increasing the availability of medication-based treatments for opiate addiction. Both Medication Assisted Treatment (MAT) and Office Based Opioid Treatment (OBOT) offer physician-supervised treatment options that use several medications to treat and even prevent addiction to opioid painkillers. These treatments combine medication with behavioral therapy to help ease a patient away from their opioid addiction over time and have been proven to be highly effective. However, both MAT and OBOT have obstacles to overcome before becoming more widely accepted for use.

There are challenges matching medication providers with supportive counselors as well as a lack of access to prescribing physicians. Furthermore, there is some opposition to MAT and OBOT from providers that support 12-step programs as well as among providers who view such methods as swapping one addiction for another. Both MAT and OBOT have been clinically proven to be an effective tool for overcoming addiction to both prescription painkillers and illegal analogs such as heroin as well as alcohol.

A second option for solving the opiate addiction crisis is to change techniques for pain management entirely. For example, back pain is one of the most common reasons Americans go to the doctor. From 2001 to 2011, the number of spinal fusions in U.S. hospitals increased 70 percent, making them more frequently performed than even hip replacements.

This reliance on surgery is controversial. Although many patients expressed satisfaction with the outcome of surgery, 51% of patients who were using opioids before the surgery still were using the drugs one year later, and among those who were not using the drugs before surgery, 18% were using them a year after their surgery.

An increasingly popular alternative is to channel more people, where appropriate, away from opioids and surgery and into more effective treatments such as physical-therapy. By reducing the number of people being introduced to opiate painkillers, the number of people who develop an addiction is reduced.

Thirdly, there is increased interest in deploying Cognitive Behavioral Therapy (CBT) to improve treatment response as a primary or conjunctive treatment option. CBT is a particularly appealing solution for some as it can be deployed in very innovative ways, both in-person and online and it remains just as effective. CBT can help people with an opiate addiction by teaching the patient to recognize and avoid negative and destructive thought patterns and behaviors.  This teaches the individual to recognize the triggers that cause a craving for drugs, then avoid or manage those triggers. CBT works well in conjunction with other treatments.

Other non-opiate based interventions for pain include mindfulness therapy, the use of non-addicting medications such as non-steroidal anti-inflammatory agents (NSAIDS) and anti-depressants to name a few.

A Pioneer in Substance Use Management

Magellan Health is a pioneer in offering integrated, comprehensive opioid risk and substance use management programs. We have an unyielding commitment to ending the current epidemic. And we are uniquely positioned to bring together behavioral, medical and pharmaceutical programs to positively impact overall population health and reduce cost.

We offer many substance use solutions, including medication assisted treatment (MAT), shown in the monograph as an invaluable tool in the fight against substance abuse. We continue to evolve our MAT program and other offerings to most effectively meet the needs of our customers and those they serve.




Autism’s Impact

1 in 68*. It’s not the number – it’s the impact.

Increasing prevalence and high treatment costs make providing quality care and supportive services for children with autism and their families more important than ever.  Many families struggle to obtain access to appropriate autism services.  Providing care for a child with autism can be challenging and can create significant stress impacting a caregiver’s health and even their productivity at work.

Autism Connections from Magellan Health on Vimeo.

Employers are feeling the impact. 

Balancing life’s demands is hard enough, but for parents of children living with autism, it can impact their productivity and lead to lost time at work.

To retain these valuable employees, increase productivity and decrease benefit costs for issues such as stress, depression and even physical health challenges, it’s critical that employers and health plans develop solutions to help address their needs.

Autism Connections

Our industry-leading Autism Connections program provides children and their families with the support they need to navigate the complex healthcare system, enhanced care coordination, access quality providers and receive support both for themselves and their children.

Please view the video above to learn more about this program and our specially trained, caring and supportive clinical specialists in our Autism Center of Excellence.

*The Centers for Disease Control and Prevention (CDC) estimates that 1 in 68 children in the United States has been identifi ed with autism spectrum disorder (ASD). March, 2014.

Sources: CDC Data and Statistics on Autism, 2014; Autism Fact Sheet, National Autism Association, 2013; The Autism Society, 2013; Autism Speaks, 2013; National Business Group on Health: Therapies for Children with Autism Spectrum Disorders, May 2012, p.1.




September is Suicide Prevention Awareness Month

Magellan Health marked September as Suicide Prevention Awareness Month, with Barry M. Smith, chairman and chief executive officer of Magellan Health, and Sam Srivastava, chief executive officer of Magellan Healthcare, releasing the following statement:

“Suicide produces a ripple effect through communities of friends, family, loved ones and co-workers, and its effects are devastating. There are people in our own communities, too, who have attempted suicide and may be coping with the after-effects of their decision, both physically and emotionally.

“Magellan Health has long believed that suicide should be a ‘never’ event, and that even one suicide is one too many.

“Consider these facts:
• Every 13 minutes, someone dies from suicide in the United States.
• Suicide is the second leading cause of death in the military, with roughly 20 veterans each day committing suicide.
• For each suicide, six other people are directly impacted.
• Ninety percent of individuals who die by suicide have experienced mental illness.

“During Suicide Prevention Awareness Month, and always, we each have an obligation to extend a hand to individuals at risk, as well as to their families, and the five million survivors of suicide living among us.

“If you or someone you know is considering suicide, please call the National Suicide Prevention Lifeline at 1-800-273-TALK (8255).”




The Behavioral Health Impact of Zika

Mosquitoes carrying the Zika virus have been identified in Florida, so it’s critical that individuals living in the affected region and across the country know where to go to access information about prevention, detection and treatment. The Substance Abuse and Mental Health Services Administration (SAMHSA) has put together a website with resources about Zika, including those specific to certain groups of people, including pregnant women, parents, travelers and employers and workers. 

The impact of Zika in the United States is more than just physical. Many individuals, particularly those who live in a region where Zika has been found, may be experiencing anxiety or stress simply as a result of hearing about the disease from newspapers, television and on social media. SAMHSA has put together a tip sheet to help people cope with these feelings.

In their tip sheet, SAMHSA makes two important points:

  • Set limits on how much time you spend reading or watching news about the outbreak. You will want to stay up to date on news of the outbreak, particularly if you have loved ones in places where people have become sick. But make sure to take time away from the news to focus on things in your life that are going well and that you can control.
  • Find people and resources you can depend on for accurate health information. Learn about the outbreak and how you can protect yourself against illness if you are at risk. You may turn to your family doctor, a state or local health department, U.S. government agencies, or an international organization. Check out the sidebar on the next page for links to good sources of information about infectious disease outbreaks.

With 24/7 news cycles and the prevalence on social media and online news sites, it’s critical to set boundaries around how often and where you get your news. SAMHSA or other government websites, such as the Centers for Disease Control and Prevention, offer an updated overview of the current situation.

If you feel you need additional assistance, please call SAMHSA’s Disaster Distress Helpline at 1-800-985-5990 to access additional services in both English and Spanish.




Topics and Trends at Magellan Rx Management’s 13th Annual Specialty Summit

Specialty drug costs are skyrocketing and are projected to represent half of total drug costs within the next two years, approximately 50 percent of which will occur on the medical benefit. Without an understanding of the unique dynamics around specialty drug management, payers run the risk of overlooking or misunderstanding this critical area of pharmacy spend.

 This August marks the 13th annual Magellan Rx Management Specialty Summit, again taking place in New York City. For two days, industry leaders from across the pharmacy landscape, including payers, doctors, health plans, consultants, and others will meet to discuss cutting edge topics across specialty pharmacy management, and share best practices and techniques to help improve care while lowering cost.

From its beginnings 13 years ago, this conference has exploded in terms of attendance and the caliber of our programming. This year, we’re expecting over 500 attendees, with numerous opportunities to network and meet with our peers, as well as compelling programming and dialogue around the most pressing topics in our industry. I’m particularly looking forward to the presentations and panels about biosimilars, the future of oncology, trends in medical pharmacy and site of service.

by August 26, and make sure to follow Magellan Rx Management on Twitter (@magellanrx) for updates and insights from the conference.