When We Incentivize Treatment Over Outcomes, People Suffer

DATE: October 31, 2021

By Gil Bashe
Medika Life

Long-Term Care Pharmacy Elevates Quality of Life + Quality of Care

Our health ecosystem is vast and siloed. Payers, providers, product innovators, and policymakers should be rallying to the needs of patients, but the reality is quite different. Policies and economics drive decisions, and sometimes the result is that our nation’s most vulnerable populations are placed at risk. In this special interview, we explore the essential role of long-term pharmacies in the health care system — a role far different and more complex than that of consumer-facing retail pharmacies.

Alan Rosenbloom, president, and CEO of the national non-profit Senior Care Pharmacy Coalition is the voice for many of the nation’s independent, long-term care (LTC) pharmacies. LTC pharmacies serve daily some 850,000 people residing in skilled nursing facilities, assisted-living facilities, and other long-term care settings. In this exclusive conversation, Rosenbloom provides insights into why lower medical costs and better outcomes are possible but require health ecosystem fair-play and clear Congressional support.

Bashe: You are a noted antitrust attorney dedicated to patient health access. How did you embark on your public health career and what attracted you to the Senior Care Pharmacy Coalition (SCPC) as the next step in that journey?

Rosenbloom: After law school, I developed expertise in long-term care (LTC) issues, including senior care. I represented nursing homes, assisted living, and continuing care retirement communities, and also ran healthcare trade associations. When SCPC approached me, I already knew the important role medications and access to them play in seniors’ quality of life and quality of care — and that of others with LTC needs. It was a natural extension of my expertise.

Policymakers Need to Prioritize Senior Care Needs

Bashe: Could you define the differences between LTC and retail pharmacies?

Rosenbloom: This is precisely why the SCPC, which represents LTC pharmacies exclusively, came together: policymakers often don’t understand the difference. This results in less-than-ideal outcomes for LTC pharmacies and the people they serve.

A retail pharmacy is in a store. People come in for medication and then buy chips, shampoo, and other kinds of convenience items; that’s where retail makes most of their profits. LTC pharmacies don’t provide anything but medications and services; they only get paid for those essentials.

Retail pharmacists are aware of the prescriptions consumers fill at their location. However, they have no legal or professional obligation to have insights into prescriptions that may be filled at other retail locations. When you leave the pharmacy, that clinical relationship ends. LTC pharmacies are very different. The pharmacy is required by Medicare and Medicaid (and typically by states) to know much more about each patient’s overall condition including their entire medication profile. Often, people are coming from hospitals into LTC settings with a discharge summary including a detailed history of all their medications.

Bashe: The reality is we’ll all be under the senior care umbrella at some point and need a structure in place. In a nation where some 25% of the population will be over the age of 60 by 2030, what does SCPC see as the looming need?

Rosenbloom: If you need LTC, you ought to have access to the services that LTC pharmacies provide that retail pharmacies don’t. These services affect your quality of care and quality of life. Our mission is to influence public policy so that people who need LTC pharmacy services have access to them, regardless of who they are or where they live.

An estimated 14 million in America need LTC; a meaningful percentage are younger and disabled. They suffer physical and sometimes mental impairments that impact so-called Activities of Daily Living, such as getting out of bed in the morning, dressing, feeding themselves, and going to the bathroom independently. LTC is crucial for them.

Long-Term Care Pharmacies Prioritize Care Outcomes

Bashe: You and SCPC also conduct research on the LTC needs of Medicare beneficiaries. Can you share your insights?

Rosenbloom: We partnered with ATI Advisory and published a report in July 2021 analyzing Medicare patient data. This is part of what we hope will be an effective test of our hypothesis that LTC pharmacy services improve medication therapy for people in very meaningful ways.

For almost 30 years there’s been a movement to expand choices for seniors. Our research found that people dual-enrolled in Medicare and Medicaid, due to lower incomes and assets, are more likely to be women, and they are more likely to be Black or Latinx and living at home.

That’s a very important finding. It challenges some of the assumptions made about the need for expanded LTC services in the community by policymakers and advocates, who tend to divorce health care needs from LTC needs. Our analysis showed that if an individual needs LTC they are likely to have substantial health care needs, whether they’re living in a facility or at home.

As We Age, How Can Our Policy Leaders Protect Our Health

Bashe: What role does policy play in protecting our citizens’ interests, and which policies need to be addressed to ensure equitable care?

Rosenbloom: LTC pharmacy is overlooked in public policy to ill effect. A few years ago, there was an ongoing battle between two branches of the U.S. Department of Health and Human Services (HSS) — The Centers for Medicare and Medicaid Services (CMS) and the U.S. Food and Drug Administration (FDA), which had conflicting guidance. It took two years of effort and lobbying in Congress, with HHS, and with the White House to get an incomplete solution. Such conflicts put patients at risk and that’s why we are advocating for the Long-Term Care Pharmacy Definition Act, which would finally define LTC pharmacies in statute.

Also significant is the effort to expand Medicaid-funded home- and community-based services (HCBS) as part of the current reconciliation bill. Congress, the Biden Administration, and the Democrats have proposed adding at least $150 to $175 billion over 10 years for Medicaid-funded HCBS. We support expanding HCBS; it’s a good opportunity for LTC pharmacies to play a role in home-based settings.

Bashe: I appreciate your analysis of the complexities of rules, law, and policy and the internal conflict within HHS. Why don’t people realize that someone has to pay when people without sufficient economic resources arrive at an ER, not to mention that a hospital discharge staffer has to find a place — good, bad, or indifferent — for that patient’s post-acute care setting follow-up?

Rosenbloom: That’s a challenging question and it’s not unique to LTC policy or health care policy. I do think that the American health care system, which has been supported by government payment programs since 1965, has evolved into one that focuses on treatment, not prevention.

Silos exist throughout the Federal payment programs. Medicare pays for hospital care and skilled nursing care, which is a small percentage of LTC, but part of the LTC system. If a skilled nursing facility transfers a patient to the hospital, it hits the hospital’s Medicare budget. It’s then an issue for Medicare policymakers on the hospital side but lowers costs on the nursing home side. This creates very perverse incentives from both budgeting and payment points of view, especially if the payers are incentivizing treatment over outcomes.

Bashe: LTC pharmacies strike me as organizations that cut out that middle layer — they get the medications in, they deliver them. It’s a tight link of the supply chain, which in other places is stretched out with several players taking their little percentage. What’s your perspective?

Among the Many Reasons Drug Costs Climb

Rosenbloom: One of the significant drivers of higher drug costs are the middlemen: pharmacy benefit managers (PBMs) and the insurance companies that provide drug coverage. The Medicare Part D program was created in such a way that the health insurers and Part D plans get payments, called rebates, from the manufacturer, which keeps premiums down. The Part D program is an unwitting accomplice: insurance companies demand ever-higher rebates through their PBMs, and manufacturers raise prices. Each blames the other, but insurance companies, manufacturers, and PBMs see their revenues go up.

Pharmacies do not see a revenue increase, it’s quite the opposite as insurance companies and PBMs charge pharmacies administrative fees well beyond what would be reasonable for processing claims. The projections for Part D expenditures are going down, in part due to increasing fees charged to pharmacies. Pharmacies subsidize the Federal spend to their own detriment; there aren’t huge margins in the pharmacy business, especially in the LTC pharmacy business.

If there’s a new fee that’s going to cost you 2% each claim, you pay the fee — you don’t have a lot of choices. You cannot exist as an LTC pharmacy if you don’t participate in Part D. Even if you are the largest LTC pharmacy, you have limited negotiating power compared to health insurers and PBMs.

Bashe: It seems that one hand pays the other. They’re making money on the spread on both sides of the patient-care model — on the drugs themselves and then on the margin. Do any existing policy solutions support lowering drug prices?

Rosenbloom: There are some proposals currently pending to address having Medicare negotiate drug prices with an international reference point, which would dramatically reduce rebates. Independent pharmacies are at risk of financial instability and possible bankruptcies because policymakers are not considering the downstream consequences on smaller market players. If we change models, we have to ensure LTC pharmacies don’t get stuck with the bill.

What we’ve seen on the insurance company, health care provider, PBM, and the large pharmacy chain side is both vertical and horizontal integration into health care conglomerates that dominate significant chunks of the market. We need to seriously look at enforcing the antitrust laws because when competition is suppressed, consumers may pay more for their medications or be directed to less effective medications if they are more profitable than the plans and PBMs.

Bashe: What concerns me is that health is more than a product or a pill that’s delivered on time. There’s also an inherent duty to help the patient. As we move towards scale and away from individualized care are we endangering the relationship between care provider and patient?

Rosenbloom: There are state laws and Medicare and Medicaid requirements that medications get to a resident in a facility within a certain period of time; in some cases, as quickly as four hours. Historically the LTC pharmacy was the model for serving people in nursing facilities, and there, the relationship is primarily with the facility. The LTC pharmacy has expanded into the assisted living environment, where the relationship is more directly with the patient. As we expand more into the home care environment, that personal dynamic becomes even more important.

Bashe: What’s the one thing health professionals, policy leaders, and people reading this piece really need to remember when looking at LTC pharmacies?

Rosenbloom: People should know the value that LTC pharmacy services provide to people with LTC needs, and recognize their positive impact on patient care outcomes. And then, pay for it appropriately.

Bashe: Mr. Rosenbloom, thank you. Health professionals must recognize that when the office visit is over, a patient still has health needs that must be addressed. The right medicine at the right time at the right cost will always be a lifesaving factor in the care relationship. In order for us to live long, sustainable lives, then supply chain management, digital information, and access to affordable medicines are essential. But, along with high-tech, the high-touch of long-term pharmacies is a key piece in the fragmented health ecosystem puzzle.

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