The road ahead for PBMs: Disease management or oblivion?
With traditional roles evaporating, can they transform fast enough?
As managed care continues to consolidate the health care industry, health maintenance organizations are learning the benefits of in-house pharmacy management, while employers are increasingly signing up with HMOs. These two trends mean pharmacy benefit managers (PBMs) are watching their traditional roles of providing claims data, formulary management, and pharmacy networks disappear.
A recent survey of managed care pharmacists found that 32% plan to bring PBM services in-house, while just 11% plan to outsource pharmacy components to PBMs. PBMs are seeking new roles, but forays into disease management an area with strong potential growth are being met with skepticism, despite some initial successes.
Expanded data analysis and integrating existing claims data with clinical information is another growth area PBMs are embracing, but getting those services on-line and linking them to physicians are still down the road.
Alliances with insurers, such as Merck-Medco’s case management program with Blue Cross and Blue Shield of Michigan, is another potential growth area for PBMs. That program tracks changes in patients’ conditions via claims histories to target high-risk patients for intervention.
But will any of these business lines develop fast enough to save the PBMs? HMOs know that by bringing pharmacy benefits in-house, they can own the pharmacy data previously cornered by PBMs and, in turn, use that information to enhance formulary management and conduct outcomes studies and wellness programs.
In the early stages of this race to link these pharmacological databases to physicians and system providers, there is no clear leader. A recent survey found that 85% of responding PBMs cannot offer interfaced data on formulary information, treatment, guidelines, and medication use evaluation results with health care providers. However, 62.5% plan to provide such services by early 1998. Meanwhile, PBMs have even more urgent problems looming on the immediate horizon.
Surveys offer a conflicting future
A survey of 299 employers and 52 HMOs by the Pharmacy Benefit Management Institute in Scottsdale, AZ, found that of 21 services offered by PBMs, disease management ranked dead last in desirability when compared with traditional PBM services such as formulary management, overall customer service, and savings.
While HMOs may not want disease management from PBMs, they do want disease management: Use of disease management programs by employers increased from 14% in 1995 to 31% in 1996, according to the study.
A survey by Novartis Pharmaceutical Corp. as part of its 1997 Pharmacy Benefit Report found that employers believe provider groups physicians and hospital health systems are better providers of disease management. Nonetheless, employers are more open to pursuing PBM-provided disease management programs (30% to 50%), than are HMOs (2% to 20%).
The solution seems simple. If employers are more open to PBM-supplied disease management, then PBMs need to market themselves aggressively to employers. Some 75% of employer groups already contract with PBMs (vs. 17.6% HMO-supplied pharmacy benefit management), which constitutes a huge foot in the door.
"The market more open to PBMs is the non-HMO marketplace," says Michael Deskin, president of the Pharmacy Benefit Management Institute, citing employer and preferred provider organizations (PPOs). "That’s where there are opportunities, but I’m not sure the mechanisms they’re using are terribly effective, getting literature to physicians and patients. In some ways that’s the limit right now.
"PBMs are trying to link physicians electronically, and there are pilot programs for long-term connection to docs at the point of prescribing. That’s where the market will go, and it’s more of a physicians’ management evolution," Deskin continues. "Once doctors get standardized and linked, the PBMs can communicate with them to pass data and link in. If that becomes standardized, then the question will be who will define what the interventions are. That could be their value-added role, and I think PBMs have a future there because it will take a long time for doctors themselves to use computers for patient intervention."
Health care consultants working to match clients with PBMs say pharmacy benefit management has some, but not all, of the pieces to pull off such a feat. "PBMs have information on the drug side but typically don’t have the diagnosis for the prescription. So, oftentimes, they must infer or piece together what that diagnosis is. That’s easy with diabetes or asthma, but it can get complicated after that," says Barbara Hawes, RPh, MBA, a consultant with Towers Perrin in Atlanta.
"PBMs can identify high-risk patients but have been totally reluctant to capture that data so they can improve the dispensing of the pharmacy product. They’ve been woefully lacking in the ability of capturing the data directly in terms of patient profiling," says Patricia Wilson of Associated & Wilson in Rosemont, PA.
Given these constraints, do PBMs really have a future in disease management? "I’m not sure the PBMs will be involved as time goes by with standards of care and disease management," Deskin admits. "These really are physician management, and the PBMs are not in a position to manage. Disease management extends into health care management, which means administering other means of health care, which PBMs are not set up to do. What they’re doing is really not disease management programs but doctor programs to get doctors working more with patients."
"We don’t want to manage disease," Wilson says, "we want to manage health. The term is all wrong, it’s more wellness prevention. PBMs don’t do aggressive case management."
"Almost any provider will offer some DM programs," says Hawes of Towers Perrin. "Some are more directed at patient education, or compliance, or nurse educators. I think the jury is still out on who’s the best provider of disease management. The bigger question is, does everybody need asthma or diabetes or cardio programs, or should you pick and choose based on employee population, and then who should be telling you which way to go?"
Managing the care
"Forward-thinking PBMs are moving into care management, not disease management, because you’re not managing the disease but the care to prevent significant problems," says Leslie Epstein, PD, president of the health care consulting firm Think Zebras LLC in Owings Mills, MD. "Their customer base is demanding change. More pharmacists are in charge of health plans and have managed care backgrounds. They know what they want. They’ve had formulary and rebate experience, and they may be running large programs. HMOs get tools from PBMs. It can be just informational or entire program layout or data analysis, depending on the size of the HMO and its needs. A successful PBM has to be able to provide all that to be successful," she says.
But for Deskin, the bottom line is more severe: "The growth rate of HMOs and the PBMs’ ability to play an active role with HMO management will be two big factors in their future, and right now [PBMs] are not getting into the HMOs, while the non-HMO market is shrinking. The PBM core services are becoming a commodity. Linking to doctors is their future, not disease management."
[For more information, contact: Barbara Hawes, RPh, MBA, Consultant, Towers Perrin, 950 E. Paces Ferry Road, Atlanta, GA 30326. Telephone: (404) 365-1600. Michael Deskin, President, Pharmacy Benefit Management Institute, P.O. Box 9427, Scottsdale, AZ 85252. Telephone: (602) 941-0328. Patricia Wilson, Consultant, Associates & Wilson, 1084 E. Lancaster Ave., Rosemont, PA 19010. Telephone: (610) 519-0602. Leslie Epstein, PD, President, Think Zebras LLC, 12116 Faulkner Drive, Owings Mills, MD 21117. Telephone: (410) 998-3272.]
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