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Doctors seek more pharma involvement in ACOs

A majority of physicians surveyed said drugmakers have a role in reducing costs and improving outcomes, but don’t have the incentive to help out.

By — Posted May 6, 2013

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Many physicians want the pharmaceutical industry to play a bigger role in achieving accountable care organization goals but are dubious that the industry will move in that direction.

About 61% of surveyed physicians agreed that there is a role for branded drug therapies in reducing the overall cost of patient care, according to an April survey by Oliver Wyman, a management consulting firm. However, only 37% agreed or strongly agreed that pharmaceutical companies have the capabilities to reduce the total cost of care and improve patient outcomes.

Drug spending “is not considered today in most contracts between ACOs and payers,” said Mark H. Mozeson, a partner at Oliver Wyman and co-director of the survey, in a statement. “Many in the industry expect that to change in the near future. And as it does, drugmakers will have the opportunity in many cases to move away from negotiating unit price with commercial health plans and instead contract directly with providers based on outcomes and ability to manage total disease costs. Their ability to demonstrate value will determine whether they have a seat at the table.” He said separate interviews with executives involved in ACOs showed similar feelings.

Oliver Wyman officials didn’t say why the majority of the 208 surveyed physicians, all of whom make at least 25% of their income through value-based arrangements, believe the pharmaceutical industry should do more for ACOs. But it probably has something to do with the disconnect between ACOs’ goals and pharmaceutical industry’s incentives, said Harold Miller, executive director of the Pittsburgh-based Center for Healthcare Quality and Payment Reform, which promotes value-based care arrangements.

Outcome-based care

Physicians who are part of ACOs are tasked with keeping patients healthy, Miller said. In many instances, the medication that is prescribed is the primary treatment. While pay for physicians may be tied to outcomes, income for pharmaceutical companies is not. If pharmaceuticals offered their medications with outcome guarantees and shared in the cost saving, the companies would have a reason to work more with ACOs on such tasks as patient compliance and comparative effectiveness, he said.

Miller gave the example of packaging for inhalers for patients with chronic obstructive pulmonary disease. Some inhalers are more difficult for seniors citizens to use, but the industry has no incentive to change the product, because drugmakers are paid for the inhalers and not how they are used or whether they are used.

However, the pharmaceutical industry has been trending more toward outcomes after the formation of ACOs, said Michelle Drozd, director of policy and research at the Pharmaceutical Research and Manufacturers of America. Medical adherence programs that have been started and promoted by pharmaceutical companies have been growing in recent years as a result.

“I think it’s a great opportunity for pharmaceutical companies to provide value to ACOs and to increase health outcomes and decrease medical spending,” Drozd said. “It’s an ongoing effort, and we are adjusting.”

The most prominent, direct pharmaceutical involvement so far in ACOs has come from Walgreens. Earlier in 2013, the Centers for Medicare & Medicaid Services approved the company as the first pharmacy chain to be part of an accountable care organization. It is partnering with physicians and hospitals to form ACOs in Florida, New Jersey and Texas.

The company’s goal is to support and complement traditional health care settings regardless of an ACO relationship, said Jeffrey Kang, MD, MPH, Walgreen’s senior vice president of health and wellness services and solutions, in an email.

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