By Robert Aanonsen, VP Business Development
Lower reimbursement rates, increased manufacturer 340B pricing restrictions, monopolization of the PBM landscape and the financial instability from state Medicaid arrangements which lead to staffing challenges. Sound familiar? Unfortunately, it is commonplace in healthcare today.
In the attempt to meet projections and budgets, many health centers have been forced to layoff talented employees and/or reduce community outreach. These decisions are an afront to the very mission and vision community health centers have set forth in their charters. We cannot continue maintaining a state of emergency waiting for the next letter to come in our inbox.
It will be my attempt in the next several articles to address the inequities and abuses within healthcare that are causing disruption to patient care. I do have an ask: what are the areas that are impacting your specific health center? In learning from industry experts and those being directly impacted, will help to frame the topics and strive to address not only the challenges but also provide a solution. Because, you do not have to keep taking the BLUE pill (reference from the Matrix, not THAT blue pill). That was for all my pharmacy folks.
For the past decade, I have been involved with various aspects of healthcare as it relates to pharmacy, 340B, consulting, account management, PBMs and strategic selling. Those experiences and opportunities have brought me to a conclusion: the system is broken! The intent and purpose of some healthcare organizations have been abandoned, to bow before quick fixes and minimal options. May I offer my perspective and see if you agree? It is the escalation of corporate greed that has brought about our current distress.
Let me explain.
The “American dream” is to work hard and attain a prosperous way of life. Strategic investments can be made to increase current value for future dividends. From the least to the greatest investors, we all look for and even expect incremental growth. As inflationary standards of living increase, it is necessary to match or exceed that growth to maintain our standard of living and plan for retirement. Healthcare is similar when it comes to their investors. Manufacturers, PBMs, independent and contract pharmacies, TPAs and consultants all have business models that are built on growth and shareholder returns. Did you notice who was left out of that list? Not for profit health care facilities who are bound by their mission to provide equitable care for those patients who may have financial, cultural or geographic barriers to transformative health care. Billion-dollar corporations continue to post sustained earnings and dividends while decreasing access to covered entities providing lifesaving medical oversight.
In further demonstration of this principle, consider the manufacturer concerns over 340B contract pharmacy use. Under the umbrella of Medicaid duplicate discount concerns, 23 manufacturers have imposed various pricing restrictions upon contract pharmacies. Based upon the update provided in 2010 that included unlimited contract pharmacies, manufacturers contend they are following the intent of the 340B Drug Discount Program instituted in 1992. With a single contract pharmacy, manufacturers were able to marginalize the purchases as they were offset with rebates. In 2010, the exponential growth of contract pharmacies led to almost vertical growth in discounted drug purchases. It was so prolific that in just a few years, congressional oversight was created to review the 340B program and the use of contract pharmacies. Senator Chuck Grassley (IA) lead the campaign to establish appropriate contract pharmacy networks and slight changes were made. This was just but one change, yet more would come.
Please note, this practice has been seen and heard, not just by politicians, but by angry citizens who continue to see their healthcare expenses increase. Prescription price legislation, PBM responsibility, contract pharmacy expansion, Medicaid duplicate discount prevention and Medicare billing practices are all topics currently being investigated by Congress. We are at the precipice of change. Lives are in the balance. Sitting idly by and hoping that others will speak on your behalf is no longer an option. Your patients, your staff and your community need your focused efforts. There is a time and place for the impact of handwritten signs to voice opposition or support. This will take much more than that.
I am suggesting taking that RED pill. See the world and the healthcare industry in its reality. Look at the faces of your patients and connect with your staff, are they worth your time? It may be hard to open your mind to alternatives. The only other option is to accept what others are forcing you, to play by their rules and accept their fee structures.
Yes, we believe there is an alternative. It is actually returning federally scarce healthcare dollars back to the covered entities. Novel idea, right? For just a moment, rather than someone taking an educated guess, look at your own current contracts for your healthcare partners. Did you want better terms and lower fees? Did you conform to the demand providing data that would exceed PHI requirements to secure discount drug pricing? Did your administrative fees increase with providing a health plan to your employees? Have you seen increases in fees despite the challenges and barriers to healthcare savings? Eliminating your staff and turning away patients cannot be the answer.