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March 2003 CE.
* Describe the roles of physicians and other healthcare professionals within the managed care environment.
* Explain the trends affecting hospitals, long-term care and home healthcare providers under managed care systems.
* Describe the evolving roles of the pharmacist and pharmacy benefit management companies in the pharmacy.
* Explain the emerging trends impacting the pharmaceutical industry as a result of managed care.
* Identify the opportunities managed care has created for the healthcare representative.
This final article in a three-part series focuses on the impact of managed care on healthcare providers, the pharmacy and the pharmaceutical industry. The roles of physicians, other healthcare professionals, hospitals, long-term care and home healthcare providers are discussed, as well as opportunities for the healthcare representative within the managed care environment.
J. Lyle Bootman, Ph.D., dean, College of Pharmacy, professor of pharmacy, medicine and public health, executive director of the Center for Health Outcomes and PharmacoEconomic (HOPE) Research, Arizona Health Sciences Center, The University of Arizona, Tucson, AZ; and Mark Callahan, M.D., director of outcomes research, New York Presbyterian Healthcare Network, assistant professor of medicine, Graduate School of Medical Sciences, Weill Medical College of Cornell University, New York, served as consultants for this article for the Certified Medical Representatives Institute Inc.
The roles of providers, hospitals and the pharmacy continue to shift within the ever-changing managed healthcare environment. Furthermore, the widespread influence of managed care has expanded the role of the pharmaceutical industry beyond simply providing products, to a focus on the delivery of total healthcare.
The roles of physicians and specialists
Physicians are working under greater professional oversight, new practice infrastructures and varying types of incentive systems. More and more physicians are banding together to create their own integrated systems. In addition, a greater number of specialists are participating in carve-out contracts (as outsourced providers) to offer services to the members of a managed care plan, and carve-in contracts (as in-house providers) to more fully integrate healthcare.
Other healthcare professionals
The rapid growth of "gatekeeper medicine" within large provider networks has resulted in critical shortages of primary care physicians. For many systems, this has resulted in the expanded use of other healthcare professionals, so-called "physician extenders," to fill in the primary care gaps. These providers are important contacts for healthcare representatives. Examples include:
Nurse practitioners. These are registered nurses, qualified through advanced education and clinical training, who provide a wide range of preventive and acute healthcare services. Nurse practitioners focus largely on primary care in areas such as neonatology, nurse midwifery, pediatrics, school health, family and adult health, mental health, home care, geriatrics, and acute care. Some states allow NPs to practice independently. Nurse practitioners are authorized to write prescriptions in most states.
Physician assistants. Like NPs, PAs are trained to diagnose, manage and treat common illnesses, provide preventive services, and respond to common emergency care situations. Physician assistants have prescribing privileges in 47 states.
Physical therapists. These professionals are licensed to assist in the examination, testing and treatment of physically disabled people. They may specialize in a number of areas, including sports medicine, orthopedics and neurology. Physical therapists also engage in research activity.
Respiratory care personnel. This class of providers, which includes respiratory therapists and respiratory technicians, treats patients with breathing difficulties resulting from cardiopulmonary problems. Respiratory therapists may provide temporary or long-term care, as well as emergency care.
Case managers. Case managers guide the activities of a patient care team, with the goal of facilitating communication among the team members and eliminating redundancies in services provided.
Trends in managed care
Managed care has shifted patient care from the hospital setting to other, less expensive settings. As a result, hospitals are filling fewer beds and shortening the length of stays. As medicine becomes more specialized and specialties more interdependent, hospitals need a high volume of patients to afford the required professional and technological expertise. Several trends have developed in response to these forces:
* Consolidations and alliances. Many hospitals are consolidating or forming alliances to ensure their survival in the managed care environment.
* Hospitalists. These hospital-based physicians are an emerging subspecialty of internal medicine. They take responsibility for managing the entire care of patients once they arrive in the hospital. This intensive, on-site management by hospitalists can produce considerable efficiencies and savings.
* Outpatient centers. More and more short-term care is now allocated to outpatient centers, either within a special area of the hospital or in freestanding ambulatory facilities.
* Geriatric services. An entire industry for outsourcing geriatric services (services for the elderly) has evolved. These companies are forming partnerships with hospitals that want to become providers of geriatric services.
Long-term care providers
Long-term care facilities provide care for patients who have chronic, complex health problems and functional disabilities that prevent them from managing their own day-to-day needs. Recent trends in the long-term care industry focus on:
* Diversification. This entails integrating several types of long-term care, such as nursing homes, Meals on Wheels, assisted living and adult day care.
* Standardization of care. Providers are achieving cost efficiencies by employing standardized products, critical pathways (standardized treatment regimens), appropriate resource management and integration of care throughout the whole patient care spectrum.
* Capitation. Facilities are receiving capitated payments for at least some patients.
* Federally mandated reviews. Federal regulations require a registered pharmacist to review each resident's drug regimen for irregularities at least once per month.
* Information management. Facilities are improving their performance through better information systems and better management of information.
The managed care pharmacy
Prescription drug use in the United States is greater than ever before, and MCOs continue to develop policies that will ensure cost-effective management of the pharmacy benefit. Trends in spending controls include increased use of mail-order plans and continued use of formularies, generic substitution and therapeutic interchange. In HMOs, there is a growing use of drug-utilization review, clinical practice guidelines, quality assurance and other measures. Preferred provider organizations are increasing their use of formularies and mail-order pharmacies.
The role of the pharmacist under managed care is changing. Many industry experts foresee the clinical pharmacist moving increasingly in the direction of "pharmaceutical care," the provision of drugs as an integral component of total patient management. Consequently, pharmacists' responsibilities are increasing to include new roles in outcomes assessment, development of clinical practice guidelines, and physician and patient education initiatives.
Pharmacy benefit management (PBM) companies contract with HMOs or other health provider organizations to administer the total pharmacy benefit. Purchasing drugs in bulk from pharmaceutical companies or wholesalers, these firms serve as intermediaries for the provider organization in order to obtain better pricing through volume discounts. They may assist their customers in areas such as formulary development, rebate contracting and claims processing. Evolving PBM activities include: developing comprehensive pharmacy-based disease management programs, participation in risk-sharing or capitation agreements, and offering prescription card programs for seniors and others needing assistance.
Pharmaceutical industry trends
* Pharmacoeconomic and outcomes research. These activities can help healthcare organizations identify treatment methods that offer the best clinical and humanistic outcomes in the most efficient manner possible. Many pharmaceutical companies have experience designing and conducting clinical trials and computer modeling studies.
* Clinical practice guidelines. The goals of these guidelines are to minimize practice variations and to improve patient outcomes overall. Through educational materials and seminars, pharmaceutical companies can help healthcare organizations increase provider acceptance of these guidelines. Healthcare representatives need to be aware of the particular guidelines in use at a healthcare organization, the extent of physician compliance with these guidelines and the position of relevant drug products in relation to the guidelines.
* Disease management. Pharmaceutical companies commonly tailor a disease management program based on guidelines that have already been developed and accepted at a healthcare organization. Pharmaceutical manufacturers and representatives are increasingly acting as healthcare consultants by demonstrating the value of the entire medical intervention, not just the pharmaceutical product.
* Evidence-based medicine. This concept focuses on developing guidelines for care that reflect the most current medical and scientific research obtained from clinical trials, published literature and experts in the field. Pharmaceutical companies play an important role in evidence-based medicine through the clinical studies they sponsor and conduct.
* New contractual relationships. Increasingly, IDSs are calling on pharmaceutical manufacturers to share in the goals -- and risks -- of delivering cost-effective healthcare within a capitated environment. One type of arrangement involves performance guarantees, whereby the manufacturer agrees to refund the cost of a product to an IDS or MCO for any patient who either does not respond or discontinues use for a variety of other reasons. Another method of risk-sharing is capitated compensation. Under this type of contract, a pharmaceutical manufacturer agrees to manage a patient's symptoms within a designated clinical setting for a prenegotiated fee. A third contract variation occurs when a pharmaceutical manufacturer has a more direct business arrangement with a managed care provider (for example, if a manufacturer arranges to supply all the cancer treatments to an operator of cancer-care facilities).
* New decision makers. There is a trend toward team negotiations involving the pharmaceutical company and the MCO or IDS. The decision makers may include medical officers, PBM administrators, pharmaceutical boards, pharmacy and therapeutics committees, drug purchasing groups and utilization review managers.
* Direct-to-consumer advertising. This type of advertising appears in newspapers, magazines, radio, television and the Internet. Direct-to-consumer advertising aims to increase the public's awareness of the pharmaceutical products available for certain conditions, and to promote recognition of brand names that consumers may request from their physicians.
Developing new skills
Today's healthcare representatives must develop consulting and partnering skills in order to build relationships with key providers in IDSs. They must also become knowledgeable about the operations and objectives of MCOs and IDSs to develop effective sales strategies. Areas in which representatives may have opportunities to develop new skills include:
National account management. Many major pharmaceutical manufacturers have created national account management teams to develop and service large system-based accounts. The role of the field sales force in maintaining these accounts includes gathering information on new products, clinical data and outcomes assessments, and presenting key points to providers and purchasers.
Positioning. Representatives may broaden their sales dialogues to include the value of a product in terms of overall long-term costs to the system. The challenge will be to determine just how each product can be effectively positioned under differing considerations within the system (see illustration on page 35).
Sales strategies. Healthcare representatives will need to reconsider their sales strategies in light of the diminishing role of the physician as a primary sales target, increasingly restricted access to healthcare professionals in general and the continuing importance of gaining formulary acceptance for frequently prescribed drugs.
Territory management. Some healthcare representatives are being asked to take on greater territory management responsibilities, which require additional business skills like managing budgets, preparing financial analyses or writing a business plan. PR
* Physicians are experiencing growing restrictions on their autonomy and are increasingly emphasizing primary care and preventive medicine.
* Physician extenders are being used to fill in primary care gaps. Examples of these professionals include:
- Nurse practitioners.
- Physician assistants.
- Physical therapists.
- Respiratory care personnel.
- Case managers.
* The role of hospitals under managed care has reflected the following trends:
- Outpatient centers.
- Geriatric services.
* Long-term care facilities provide care for patients who have chronic, complex health problems and functional disabilities. Recent trends in this industry focus on:
- Standardization of care.
- Federally mandated reviews.
- Information management.
* Managed care organizations continue to develop policies that will ensure cost-effective management of the pharmacy benefit.
* "Pharmaceutical care" is the provision of drugs not simply as an isolated service, but as an integral component of total patient management. Consequently, pharmacists' responsibilities are increasing to include new roles.
* Pharmacy benefit management companies contract with HMOs or other health provider organizations, and may provide a wide range of pharmacy benefit services.
* The roles of pharmaceutical companies are evolving to encompass:
- Pharmacoeconomic and outcomes research.
- Clinical practice guidelines.
- Disease management.
- Evidence-based medicine.
- New contractual relationships.
- New decision makers.
- Direct-to-consumer advertising.
* Today's healthcare representative must develop new skills to adapt to developments in:
- National account management.
- Sales strategies.
- Territory management.
© 2003 The Certified Medical Representatives Institute Inc., Roanoke, VA 24018. All rights reserved. No part of this article may be reproduced by any method or in any form without written permission from the CMR Institute. Reprints of this article are available from the CMR Institute. Request Continuing Education article MH-3.