Part 2: Recapping ‘The 2018 HCEG Top 10 Healthcare Opportunities, Challenges & Issues’ Webinar

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The theme of last month’s HCEG Webinar Series event was The 2018 HCEG Top 10 – Healthcare Opportunities, Challenges & Issues. In a previous post, highlights of the following two topics that were discussed by moderator Kim Sinclair, HCEG board chair and CIO at Boston Medical Center Health Plan, and panelists Ferris Taylor, HCEG’s Executive Director and Consultant to Arches Health Plan and David Gallegos, Sr VP of Consulting Services at Change Healthcare, were reviewed:

  • Which three items on the 2018 HCEG Top Ten list three areas were of most interest?
  • What’s the state of healthcare consumerism and what’s being seen in the industry?

This second post recaps highlights from the second half of the webinar where the topics of Cybersecurity (Ranked #6 on the 2018 HCEG Top 10) and Addressing Pharmacy Costs (Ranked #9) were discussed. The webinar presentation materials and a recording of webinar can be found here.

Cybersecurity – 2018 HCEG Top Ten Item #6

Topic #3: How are you seeing cyber security and cyber threats impact healthcare organizations beyond the tactical day-to-day prevention activities?

HCEG Healthcare Executive Group Webinar-Top-10 Trends Cybersecurity

Ferris Taylor: “I think it’s (cybersecurity) fundamental that we need to innovate and improve cybersecurity in all of our healthcare processes. That really means giving people a confidence that their personal information won’t be used in ways that a person doesn’t want it to be used. So, it ties back to consumerism.

Real World Impact of Medical Identity Theft

“Here in Utah, about three years ago, there was a baby born in the hospital that was heroin addicted. And of course, the Department of Social Services immediately went to the home and removed the three other children from that home. The fundamental problem was that the mother of that heroin baby was not the mother in that home. And it took that mother three months to get her children back. It was a case of medical identity theft where the baby was born. The real mother checked out.  We can understand the personal impact that that lack of security around medical information caused for that family.”

David Gallegos: “The world has gotten a lot smaller and technology a lot more complex over the past decade. And clearly cyber terrorism is a big part and a growing concern that every organization needs to take seriously. But you need to keep in mind that the safest computer is one that’s turned off and unplugged. And clearly that’s not very useful.

“We need to balance both security and usability and the sharing of clinical information. It’s going to be critical to our care model redesigns and our clinical collaboration. This data is also going to be important for us to leverage artificial intelligence and, to help us determine optimal courses of treatment. In some cases, this information is even going to be needed to help really define how whole populations are treated.”

Addressing Pharmacy Costs – 2018 HCEG Top Ten Item #9

Kim Sinclair shared that pharmacy costs continue to rise and is a topic constantly in the news, noting that non-profit hospitals have stated intent of joining together to form their own pharmacy organizations.

Topic #4: What are your thoughts about what healthcare leaders can do about rising pharmacy costs?

Ferris Taylor: “I saw some statistics on pharmacy costs that struck me to the heart. It was from the Health Care Cost Institute over the last four years. It was actually 2012 to 2016 and the cost of prescriptions in the marketplace had gone up by 25%. But the utilization of prescriptions had only gone up by 1.8%. And it wasn’t just pharmacy costs. Emergency Room prices have gone up by 30% and visits went up by 2%.”

Free-Market Economy and Governance

“So, I think, once again, we haven’t transitioned from the buyer being the employer to the consumer becoming more and more important in that purchasing decision. As we discuss pharmacy costs, the other thing that I think we need to recognize is that we have a free-market economy. But industries have responsibilities to govern themselves. And I know some of the bad players in the pharmacy industry are outside of the Pharmacy Association. So, it’s hard to regulate them. But I use those key issues as the things to help us start to address the pharmacy costs”

David Gallegos on the State We’re in with Pharmacy Costs

pharmacy costs increases hceg healthcare executive group

“What I look at the state we’re in with pharmacy costs. To me it’s entirely self-made. We’ve created these regulations that allow schemes like pay to delay, or evergreening – that’s really pushed generics out further in terms of their development. We create, in a sense, quasi monopolies.”

“We criminalize the ability to negotiate for larger population blocks. I mean it seems ridiculous to me, actually, that drugs that were invented and manufactured here in the United States can often be purchased cheaper outside of our country.”

“Clearly drugs are very important. They reduce admissions that would use other high cost care. And some of them are miracles. They can literally cure diseases – cure the incurable. So, I understand this is not a simple problem. But if a drug cost a million dollars and the person can’t afford it, is it really a miracle?”

“And in any other market, if there was a product that nobody could afford, the supplier would price it differently. And that’s what we have in our market.”

Previous Webinar: Strategies to Address Rising Pharmacy Costs

For more about pharmacy costs, see this recap of last December’s webinar titled “Strategies to Address Rising Pharmacy Costs” presented by our sponsor partner Cumberland Consulting Group.

Check out the Webinar Recording for More

For more insight on 2018 HCEG Top 10 and the perspective of healthcare executives, check the webinar recording and subscribe to our eNewsletter where we’ll be sharing more information, insight, opinions and ideas of value to healthcare executives and thought leaders. Our newsletter will also share information on future webinars and events like our Executive Leadership Roundtable in Las Vegas this coming May 9th.

Rising Pharmacy Costs – Strategies to Address – Webinar Recap

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It’s no secret that rising pharmacy costs are a serious challenge for the health plans, health systems, sponsors and individuals on the hook for paying for them. Our healthcare executive members ranked “Addressing Pharmacy Costs” as #9 on the 2018 HCEG Top 10 list.

How Can Health Plans and Health Systems Address Rising Pharmacy Costs?

On Wednesday, November 13, 2017, Pete Biagioni, Managing Partner at Cumberland Consulting Group, and Marcia Lambert, Partner at Cumberland Consulting Group presented “Strategies to Address Rising Pharmacy Costs,” Cumberland Consulting Group’s entry in this month’s HCEG Webinar Series. 

The webinar provided attendees with a lot of great insight and information on the following:

  1. An overview of trends in growth of pharmacy costs
  2. Pharmaceutical Distribution Channels
  3. Drivers of specialty pharmacy spend
  4. Drug cost management strategies
  5. What strategies health plans and health systems can implement to address rising pharmacy costs

Trends in Rising Pharmacy Costs

Rising pharmacy costs trends Specialty Pharmaceuticals Management Strategies Distribution Reimbursement System Provider Administered, Outpatient Prescription Drugs

Specialty Pharmaceuticals – a 95% increase in just two years!

Pete Biagioni kicked off the presentation by highlighting that prescription drug spending is now the largest category in healthcare benefit spending – outpacing specialty care, inpatient and outpatient costs. Pete added that not only is prescription drug spending the largest healthcare expense but it’s also the fastest-growing category of benefit spending!

Largest contributor to increases in rising pharmacy costs are Specialty Drugs – with a 95% increase* in just two years!

How Drug Prices are Determined in the United States

One interesting part of the presentation was Marcia Lambert’s overview of the Pharmacy Distribution and Reimbursement System for Patient-Administered vs. Provider Administered, Outpatient Prescription Drugs in the U.S.  Several very detailed and informative slides were shared.  These slides identified the product flow, contractual arrangements and financial payments between the myriad of entities involved with pharmacy distribution in the U.S.

Specialty Pharmacy Trends & Drivers of Specialty Pharmacy Spend

A good part of the presentation covered specialty pharmaceuticals, which are growing at a CAGR of 17% as more products are being developed to treat orphan diseases and provide newer therapies. Some specialty pharmacy trends include:

  • As more specialty drugs are dispensed, a shift away from the buy-and-bill system (reimbursement through medical benefit) to the pharmacy (reimbursement through prescription drug benefit) can be expected.
  • As SPs gain more revenue and market share, they’ll come under more scrutiny and attempts at cost containments from payers.
  • The healthcare system’s grudging acceptance of high-priced orphan disease drugs has given manufacturers more incentive to develop low-volume SP drugs.
  • The high cost of SP’s will demand more Value-Based/Outcomes-Based evidence

Pharmacy Cost Management StrategiesRising pharmacy costs trends specialty pharmacy Management Strategies Distribution Reimbursement System Provider Administered, Outpatient Prescription Drugs

The Cumberland presenters provided an overview of traditional Strategies to Manage Rising Pharmacy Costs and then dived into a LOT of detailed information on the pros and cons of newer, novel strategies for managing pharmacy costs including:

  • Comprehensive Medication Review / Medication Therapy Management
  • Specialty Pharmacy Coordination & Management
  • Outcomes-based Contracting
  • ‘DIR’ Fees – Direct and Indirect Reimbursement

The Future – Pharmacy Trends and Government Intervention

This rapid paced presentation moved toward its conclusion with Pete Biagioni sharing a few slides listing some ways that government intervention might impact prescription drug prices. And the webinar completed with a short listing of future trends for prescription drugs in the U.S. The entry of Amazon and mega deals like CVS buying Aetna being two likely major impacts.

The Recording, The Content and More Insight from Cumberland Consulting Group

The above is just a portion of the information presented by our sponsor partner Cumberland Consulting Group. You can learn more about “Strategies to Address Rising Pharmacy Costs” by reviewing the entire recording of the webinar available here.  If you’d like more information or if you have any questions on the content of this webinar, please feel free to contact Cumberland Consulting Group. You may also want to follow Cumberland on Twitter.

*Per CMS 2014  fact sheet: