Partnerships and Value

It Takes a Multifaceted Approach

January 25, 2018 10:59 am

It is estimated that 5 percent of the U.S. population generates about 50 percent of healthcare costs. a Specialty drugs, including those used to treat cancer and hepatitis, are a contributor to these costs. Although only 1 to 2 percent of Americans rely on specialty drugs, they account for nearly 40 percent of total drug expenditures. b Given these statistics, it stands to reason that organizations that can effectively manage specialty medication patients will put themselves in a stronger position to navigate the shift to value-based care—and thrive.

Evolving marketplace dynamics

Several years ago, hospitals and health systems began entering the specialty pharmacy space primarily due to the relatively high margins associated with these drugs. However, the environment is changing, which is causing some organizations to rethink their strategies. “It is much more competitive for specialty pharmacies today than it was three to five years ago,” says Mike Moloney, group vice president for Premier Inc. “There’s been continuing reimbursement and cost pressure on providers. Additionally, payer networks have narrowed significantly, with many pharmacy benefit managers (PBMs) and payers owning their own specialty pharmacies. Because of these shifts, healthcare organizations are becoming less inclined to pursue this opportunity merely to achieve financial gain. Instead, they are viewing it as something that will help them improve the health of patient populations by better managing high-cost patients, reducing risk, and delivering greater value.”

Provider organizations are also realizing that a well-designed specialty pharmacy presence can improve patient satisfaction. “Specialty pharmacies provide a much more comprehensive experience than a typical pharmacy encounter,” says Moloney. “The specialty pharmacist works directly with the patient and his or her clinical team to provide disease-specific medication therapy management. As an integral member of the care team, the pharmacist’s performance has a bigger influence on overall patient outcomes and satisfaction than a retail provider.”

Moreover, a poorly managed specialty pharmacy can increase patient risk for poor outcomes, leading to complications in care and cost management. When there isn’t a reliable communication mechanism between the patient, provider, and specialty pharmacy, gaps can result, which may lead to medication adherence issues, lapses in care, and missed doses.

Given these dynamics, along with the fact that the population is aging and more high-end drugs are entering the market, it is paramount for organizations to understand and develop expertise within the specialty pharmaceutical space.

Helping providers look before they leap

Before committing to any kind of specialty pharmacy program, hospitals and health systems should carefully evaluate their specific markets, organizational goals, and financial resources. They should also try to gauge their return on investment to make sure the benefits are worth the outlay. “We take an objective look at a healthcare organization’s assets and capabilities, and we use our deep knowledge and experience to recommend next steps,” says Moloney. “Not only do we facilitate a well-considered decision, we also accelerate time to market and/or help to identify and lower risks for an initiative, depending on what the organization’s goals are.”

Premier is already serving many member health systems. “Every organization is different—and our motto is that if you’ve seen one hospital, you’ve seen one hospital,” he adds. With that said, Premier’s specialty pharmacy solutions tend to fall into three general categories:

A fully outsourced model. “We take this approach when a health system is not interested in becoming a full-service specialty pharmacy but still needs a trusted partner to manage its specialty patients,” says Moloney. “We provide a complete solution that supports the entire patient experience. This is a private-label offering, meaning that everything—from the materials to the drug labels to how we answer the phone—represents our partnership with the healthcare organization.”

A partially outsourced model. “A number of our member health systems have some pharmacy capabilities, such as retail or closed-door pharmacies, and they want to dispense certain specialty pharmaceuticals in-house,” says Moloney. “However, they need to fill in the gaps between what they can offer and what they want to provide. For example, they may choose to break down their program by disease state, handling specific patients in-house but outsourcing others to us. Again, this is a private-label experience, so it’s all seamless to the patients and providers.”

A “wrap” model. Several Premier members already have a specialty pharmacy program in place, but they need help filling a few holes. “It could be they don’t have access to some of the limited-distribution drugs, and they rely on us to meet their needs using a limited-distribution portfolio that is wrapped around their existing services,” says Moloney. “Or, they may want to outsource certain business aspects of specialty pharmacy delivery, such as front-end services, prior authorizations, and financial assistance programs. We have invested in those areas and supply a strong product. By working with us, they can capitalize on our investments, even if they’re dispensing the drugs in-house.”

Many times, an organization starts out wanting to pursue one option, but after Premier assesses the organization’s goals and existing capabilities, it becomes clear that a different approach is warranted to achieve more value. “We can flex our offerings to provide clarity during the decision-making process,” says Moloney. “For example, before one of our members began working with us, the organization thought it wanted to invest in and build its own specialty pharmacy. However, as we walked them through what investments would be required and what to expect from a financial return perspective, it became apparent that an outsourcing model made more sense. To help visualize the decision, we began piloting a demonstration project. After it is completed, the health system will revisit the issue and decide if it wants to keep outsourcing or build more of an internal program. This approach has lowered the risk to the health system’s investment, allowing it to see what operating a specialty pharmacy would look like and what the competitive advantages would be, without having to make any up-front capital investments.”

Infrastructure insights

Premier’s comprehensive technology infrastructure is a key differentiator in the specialty pharmacy space. “Because we are, at our core, a technology company, we’re able to develop robust solutions that support our member health systems in realizing change,” says Moloney. “For instance, we have developed a fully HIPAA-compliant provider portal with clinical insights that is unique in the industry. Our members use it to give their providers a view into a patient’s care across the continuum. Through the portal, we also send alerts to physicians and their staff, prompting them to action. We provide benchmarking information as well so users can employ best practices to enable long-term improvement.”

Overall, Premier brings a unique perspective to specialty pharmacy initiatives. “We are foundationally suited to this work because we’re a company that is majority-owned by health systems, and that viewpoint is part of our DNA,” says Moloney. “As such, we always keep the patient and provider top of mind. In addition, our specialty pharmacy work is part of a broader, integrated pharmacy strategy designed to help members reduce costs while increasing value to their patients. We partner with healthcare organizations to fully realize a unique specialty pharmacy offering that meets the needs of patients as well as the health system’s strategic objectives.”

Large-scale healthcare transformation is not easy, but it is possible when healthcare organizations work together to solve problems using effective tools, resources, and services. Premier Inc. is partnering with health systems to improve how specialty pharmacy patients are managed across the continuum, enabling collaboration while driving improvement in cost and quality outcomes.


a. Jan. 2013 (Accessed Dec. 19, 2017).
b. Nov. 2015 (Accessed Dec. 19, 2017).


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