Economic Evaluations of Clinical Pharmacy Services 2001–2005

Fred Doloresco, PharmD, MS Clinical Assistant Professor

frediii@buffalo.edu

Objectives

• Discuss literature examining the clinical and financial benefits of clinical pharmacy services.

• Identify opportunities for implementing financially viable clinical pharmacy services in multiple practice settings.

• Identify resources available to assist with the development of a business plan for clinical pharmacy services.

Over the past 40 years there has been dramatic changes in the practice of pharmacy.Most notable is the transition from a product orientation to a patient orientation.◦ Clinical pharmacy services (1970s)◦ Consultant pharmacy services (1980s)◦ Pharmaceutical care (1990s)◦ Medication therapy management (2000s)◦ Medical home/patient-centered care (2010s)

Background

• The value of the pharmacist in product-related functions has been closely tied to the price of the prescription.

• However, pharmacists clinical services have been more difficult to put value on. We believe that clinical pharmacy services can:• Improve outcomes.• Save money.• Make money (i.e., bill for clinical pharmacy

services, where applicable).

Background

Save moneyBill for CPS

Improve Outcomes

• Value = Quality ÷ Cost• Where Quality = Outcomes• We can measure economic, clinical, or humanistic

outcomes (ECHO)

Thus, the value of clinical pharmacy is defined by ability to improve clinical, humanistic, and/or economic outcomes, given the cost to provide such services.

Value of Clinical Pharmacy Services

How to Evaluate Value of CPS

Input OutputIntervention(CPS)

MeasurementCOSTSResources consumedCost of providing service“investment”

Units = $

CONSEQUENCES(outcomes, effect)

clinical outcomehumanistic outcomeeconomic outcome

Units = depends on outcome

Measurement

Input No intervention(control or comparator) Output

• Cost-effectiveness• Compare average cost-effectiveness ratios ($C:E, e.g. cost per life

saved) or compute incremental cost-effectiveness ($C1-$C2)/(E1-E2).

• Cost-utility• Compare average cost-utility ratios ($C:U, e.g., cost per quality-

adjusted life year) or compute incremental cost-effectiveness ($C1-$C2)/(U1-U2).

• Cost-benefit• Compare average benefit-to-cost ratios ($B:$C, e.g. cost per dollar

invested) or compute incremental benefit-to-cost ($C1-$C2)/(B1-B2).

• Net benefit ($B-$C).• Return on investment ($B-$C)/($C).

Metrics

Evidence from Literature

Economic

Clinical

Humanistic

ECHO Model =

Literature

Nkansah et al. Cochran Database Syst Rev 2010; 7.• Systematic review of studies investigating the health-

related outcomes of CPS. • Time-period: 1966-2007. • Pharmacist interventions resulted in improvement in

most clinical outcomes (not always statistically significant).

• Meta-analysis of studies measuring effect of CPS on BP: -6.32 mmHg/-3.12 mmHg (P<0.001).

• Meta-analysis of studies measuring effect of CPS on blood glucose: -0.75% HbA1c (P=0.03).

Clinical Outcomes of CPS

Kaboli et al. Arch Intern Med 2006;166:955-64.• Systematic review of studies investigating the clinical

effectiveness of CPS in inpatient medical care. • Time-period: 1985-2005. • 36 studies included; evaluated medical rounds

participation, medication reconciliation, drug-specific services.

• Adverse drug events or medication errors reduced in 7 or 12, medication adherence improved in 7 of 11 studies.

Clinical Outcomes of CPS

Pickard, Hung. Ann Pharmacother 2006; 40: 1623-34. • Systematic review of studies of the humanistic impact of

CPSTime period: Mar 1999-Dec 2004.Number of studies that evaluated HRQOL outcomes more than tripled.Study designs improved (longer length of follow-up and a wider breadth of CPS types).For certain services (asthma management) evidence of HRQOL benefit is most convincing.

Humanistic Outcomes of CPS

Nkansah et al. Cochran Database Syst Rev 2010; 7.

• Systematic review of studies investigating the health-related outcomes of CPS.

• Time-period: 1966-2007. • 8 studies report QOL outcomes, 3

showed improvement in at least 3 sub-domains in patients with asthma and high risk medication-related problems.

Humanistic Outcomes of CPS

• 1988-1995: Schumock GT, Meek PD, Ploetz PA, Vermeulen LC. Economic evaluations of clinical pharmacy services—1988–1995. Pharmacotherapy 1996;16:1188–208.

• 1996-2000: Schumock GT, Butler MG, Meek PD, Vermeulen LC, Arondekar BV, Bauman JL; Evidence of the economic benefit of clinical pharmacy services: 1996-2000. Pharmacotherapy. 2003;23(1):113-32.

• 2001-2005: Perez A, Doloresco F, Hoffman JM, Meek PD, Touchette D, Vermeulen LC, Schumock GT. Economic evaluations of clinical pharmacy services 2001-2005. Pharmacotherapy 2009;29(1):128.

Economic Outcomes of CPS

• Quality and safety of medication therapy • Cost reduction (cost effectiveness)• Growing role of pharmacists (provider status)

• Medicare Prescription Drug Improvement and Modernization Act of 2003

• Healthcare reform• Development of Current Procedural Terminology

codes• Growing health care costs

• Importance of cost justification of CPS

Why are CPS important?

Doloresco F, et al. Projecting Future Drug Expenditures – 2011. AJHP. Publication pending.

US

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Clinical Outcomes of CPS (Inpatient)

Bond CA, Raehl CL, Patry RL. Pharmacotherapy 2004;24:427-440.

Admission Medication Histories

Medical Rounds Participation

Drug ProtocolManagement

ADR Management

Drug Information

Medication Errors

Length of Stay

Total Cost of Care

Drug Costs

Mortality Rate

?

Importance of Continued Economic Evaluations

• Rise in pharmaceutical costs• Pharmacist salaries

• Evaluation of Medication Therapy Management programs (Medicare Part D)

• Effect of outpatient CPS in long-term outcomes

Results

Results→ 3793 hits

→ 3217 articles excluded after title review

→ 297 articles excluded through abstract review

→ 186 articles excluded after full review

→ 93 papers included→ 15 papers included in benefit:cost ratio calculation (Calculated by reviewers when data available)

Economic Outcomes of CPS%

of S

tudi

es

Economic Outcomes of CPS%

of S

tudi

es

General Pharmacotherapeutic Management

Target Drug Monitoring

Pharmacokinetics

Study Perspective

Provider, 58%Payer, 24%

Various, 10%Societal, 4%

Unspecified, 4%

N=93

Benefit:Cost Ratios (pooled)(Financial benefit per dollar invested, $benefit :$1 invested)

1988-1995N=7

1996-2000N=5

2001-2005N=15

Lowest 1.08:1 1.7:1 1:1

Highest 75.84:1 17.01:1 34.60:1

Median 4.09:1 4.68:1 4.81:1

Mean 16.70:1 5.54:1 8.00:1

• CPS are likely to improve clinical and humanistic outcomes, particularly for certain services or diseases, effect size and statistical significance may depend on many factors.

• CPS likely to improve economic outcomes, reduce healthcare utilization, save money.

Summary: Clinical, Humanistic, Economic Outcomes of CPS

Literature – Conclusion

• CPS continue to be economically viable• Pharmacist wages

• Although improvement has been observed:• Studies with more rigorous design need to be

conducted • Reporting of input costs is lacking

Opportunities

Considerations

• Some factors to consider (regardless of setting):• Patient population (which patients?)• Your organization’s focus and strategic initiatives• Overall feasibility• Evidence/experience to indicate the service works

• May want to consider evidence for effectiveness versus feasibility in your specific situation.

• Patient desires?

Considerations

• Partnerships available

• Funding sources• Internal• Payers (Part D plans)

• Loans

• Grants

Who are the stakeholders?

What do they care about?

Decision Matrix

HIGH Level of Evidence LOW

HIGH

Feasibility

LOW

Practical Approaches to Justify CPS

• Possible strategies 1. Interpret/generalize from other studies2. Economic modeling/projection3. Prospective evaluation

• Advantages and disadvantages exist

More difficultLess difficult

Less reliable More reliable

1 2 3

• Possible strategies 1. Interpret/generalize from other studies2. Economic modeling/projection3. Prospective evaluation

• Advantages and disadvantages exist

Practical Approaches to Justify CPS

More difficultLess difficult

Less reliable More reliable1 2 3

Strategy 1: Generalize from published studies• Advantages

• Quick• Inexpensive • Peer reviewed• Variety of services and results • Information available before implementation

• Disadvantages• External validity• Study quality?• Available applicable studies?• Available studies may not be convincing to decision makers

• Possible strategies 1. Interpret/generalize from other studies2. Economic modeling/projection3. Prospective evaluation

• Advantages and disadvantages exist

Practical Approaches to Justify CPS

More difficultLess difficult

Less reliable More reliable1 2 3

Strategy 2: Modeling/Projection

• Combine evidence from literature with own internal estimates (costs)• Costs • Benefits (in financial terms, if possible)

• Determine when/if program will break even

• Incorporate sensitivity analysis in projections (what if…?)• Patients miss appointments• Pharmacist wage increases/other cost increases over time

Advantages/Disadvantages

• Advantages• Inexpensive• Quick• Yields organization specific results• Sensitivity analysis can be used to confirm results• Data collection is unobtrusive• Can be conducted pre-implementation

• Disadvantages• Results depend on assumptions• Potential for bias• Decision makers may not accept results of projection

• Possible strategies 1. Interpret/generalize from other studies2. Economic modeling/projection3. Prospective evaluation

• Advantages and disadvantages exist

Practical Approaches to Justify CPS

More difficultLess difficult

Less reliable More reliable1 2 3

Strategy 3: Prospective Evaluation

• Implement program (perhaps on a trial basis)• Measure actual costs• Measure actual benefits• Compare to “no service” or next best opportunity

Advantages/Disadvantages

• Advantages• Flexible • Organization specific data• High internal validity (when appropriately designed)• Reflects “usual care” or effectiveness• More likely to be accepted by decision makers

• Disadvantages• Expensive (time and money)• Design challenges (control/randomization may not be feasible)• Potential for selection bias• Need adequate sample size• Need resources and authorization to start

• May be helpful to develop a business plan.• Includes financial analysis as well as other

considerations.

Business Planning for CPS

PDCA

Eleven Steps in Prospective Evaluation of CPS

1. Define the problem and determine your perspective2. State your specific objectives3. Design your intervention4. Identify the alternatives for evaluation5. Choose a study design6. Determine the cost and consequences of interest7. Implement, measure the costs and consequences8. Analyze the data9. Summarize the data and present the results10. Decide on implementation11. Follow-up analysis

P

DC

A

Stakeholders

• Who are the stakeholders?• What motivates them?

Stakeholders in Different Settings

• The “Ps”• Patients• Prescribers• Pharmacists• Payers• “Penny pinchers”• Policy makers

Possible Motivators

•Patients•Health/quality of life improvement•Out of pocket savings•Convenience•Specific goals

•Prescribers•Patient outcomes

• Clinical• Satisfaction

•Throughput• Billing

•Quality of care• Guidelines

Possible Motivators

• Pharmacists• Patient outcomes

• Clinical• Satisfaction

• Financial• Job satisfaction

Possible Motivators

•Payers•Patient outcomes

• Clinical• Satisfaction

•External reporting• NCQA/HEDIS

•Financial

•“Penny Pinchers”•Financial

• Cost-saving• Revenue producing• Market share

NCQA and HEDIS

Possible Motivators

• Policy makers• Who are they?

• “Boss” or payers• CEO, Director, etc.

• Revenue versus cost-saving• Quality

• Patient outcomes – satisfaction• Accreditation• Core measures (hospitalcompare.gov)

Hospital Compare Core Measures

• The hospital process of care measures include: • 7 - heart attack care • 4 - heart failure care • 6 - pneumonia care • 8 - surgical care improvement project • 3 - asthma care for children only

Generated via www.hospitalcompare.gov

Top Hospital Lists

• Thompson-Reuters• http://www.100tophospitals.com/

• US-News and World Reports• http://health.usnews.com/best-hospitals

US News and World Reports

From http://health.usnews.com/best-hospitals

Side Note: Process versus Outcomes

• Some quality scoring systems look at process, outcomes, or both• Process – Measures desirable actions

• % of patients on a beta-antagonist post-MI

• Outcome – measures desirable outcomes• 30-day readmission rate

Quality reporting is nice, but…

• What argument can I build around it?• Inpatient setting

• “Never events”• Financial benefit of reporting

• Hospitals docked 2% of CMS reimbursement• The future: Top/bottom hospital reimbursement

changes?• Payer

• NCQA accreditation• Community

• PQA – MPR and gaps in coverage for specific medications

http://www.pqaalliance.org/measures.htm

Resources for Business Plans

• Find articles similar to the service you want to offer:• Perez A, et al. ACCP White Paper: Economic

Evaluations of Clinical Pharmacy Services 2001 –2005. Pharmacotherapy. 2008;28:285e-323e

• Business plan resources• Harris IM et al. Developing a Business-Practice

Model for Pharmacy Services in Ambulatory Settings. Pharmacotherapy 2008;28(2):7e–34e.

• How to Develop a Business Plan for Pharmacy Services. Glen T. Schumock and JoAnn Stubbings; 2007; ISBN:978-1-932658-57-6; ACCP Product Code: PD_01HDBP

Conclusions

• Clinical pharmacy services provide value• Cost-reducing or revenue generating

• Median of > $4 per $1 invested• Next review expected to be published late 2011

• Justification and business plan presentations should focus on benefits that will appeal to the decision-makers

• Resources are available to assist with developing the business plan and proposal

Questions?