Month: December 2022

Upgrading existing software can be a daunting task to undertake, one that requires planning and freeing of resources to be successful. It’s one of the reasons health plans might put off keeping their systems up to date. But upgrading software presents an opportunity to evaluate current workflows while preparing your organization for growth.

In a recent ACAP Webinar entitled “It’s About the Digital Journey, Not the Destination” Dr. Christine Messersmith, CMO of Denver Health Medical Plan, discussed the decision to upgrade their GuidingCare system and how they optimized this opportunity with the support of the HealthEdge team.

Dr. Messersmith outlined some key considerations when planning an upgrade:

• Upgrading can be resource-heavy but it’s necessary for growth: Without it, you can’t take advantage of new features and prepare yourself for growth, but by resourcing properly and ensuring operational processes are streamlined, you can maximize what the product can do for your organization
• Be thoughtful and planful: Consider and plan for known challenges before beginning an upgrade, such as regulatory requirements and the need to re-evaluate and ensure the requirements are addressed.
• Don’t expect the software to fix workflow issues: Existing workflow challenges and inefficiencies may continue after an upgrade unless they are addressed. Be clear about anything that isn’t going well and work to ensure that erroneous workflows aren’t being embedded into the new product.
• Leverage the upgrade to uncover and solve internal issues: An upgrade can be an opportunity to uncover any challenges that exist and to solve them.

When Denver Health Medical Plan began planning for an upgrade, they knew that they wanted to optimize the opportunity. Several questions began to arise – what is the goal? what are we trying to accomplish? What things don’t we know about our system that we should? And so, they reached out to the HealthEdge team to leverage their knowledge and expertise through a service called .

During a , from the HealthEdge team go to the client site to sit with the end users and understand how they are currently using the system. They look for opportunities for improvement, which may take the form of additional training or different configurations of the software.

“As a vendor, we are your partners, and we want to make sure that you succeed. We want to be a partner of yours and the ultimate goal is to make sure that your members are taken care of,” says Jennie Giuliany, RN, Lead Clinician of Client Management at HealthEdge, who partnered with throughout the upgrade process.

Dr. Messersmith promotes taking advantage of the team that knows the software best – the vendor – and acknowledging that the users may often need to relearn a product to optimize it. “We identified opportunities that we didn’t know existed, things that were in our contract… that we weren’t really using. We figured out how to take ownership of the product.”

To learn more about Denver Health Medical Plan’s upgrade journey and how the HealthEdge team was able to help them optimize and accelerate their digital transformation, listen to this webinar or contact us.

Healthcare Spending in the US

In 2020, U.S. health care spending increased 9.7 percent to reach $4.1 trillion – a much faster rate than the 4.3% increase experienced in 2019. Of this, $359 billion was spent on prescription drugs, around 8% of the total expenditure.

Pharmaceutical Industry & Brand Drugs

The pharmaceutical industry in the US has many stakeholders and a wide variety of pricing structures, rebates, fees, discounts, and other types of payments. Over the last few years there has been a steady increase in Rx costs which has triggered renewed calls for greater visibility into the pricing, distribution, and payment process. More than half of total spending on brand medicines went to the supply chain, middlemen and other stakeholders in 2020 according to an analysis from the Berkeley Research Group (BRG).

The analysis by the BRG group illuminates how different stakeholders realized payments through the 340B program.

340B Program Overview

This program was originally enacted by Congress as part of the Veterans Health Care Act of 1992. The intention of this program was to provide assistance to the low income and uninsured population. The program provides hospitals and medical care providers discounts on outpatient drugs as rebates similar to Medicaid Drug Rebate Program.

Let’s take a look at how the program has evolved over the years:

1. Participation in the Health Resources and Services Administration (HRSA) grew by a staggering 4,228% during the period from 2010 to 2020
2. Now the 340B program is the second largest federal Rx program behind Medicare Part D
3. While the gross expenditure of generic drugs has shown a decreasing trend from 2015, brand drug sales show an increase starting from 2013 due to the 340B program
4. There is an exponential growth in hospitals and their outpatient clinics enrolled in 340B program from 2013-2020
   • The count went up from 3,994 to 94,000 Pharmacies at outpatient clinics
   • The margin of profits for brand drugs increased 12X during the time period from 2013 to 2020

The Pharmaceutical Supply Chain: Key Findings

• Manufacturers retain just over 37% and 49% of total spending on all Rx drugs in general and brand drugs respectively
• 2020 marked the first year when non-manufacturing stakeholders like pharmacy benefit managers (PBM’s), health plans, facilities, pharmacies, and others received more than 35% of spending on brand drugs between 2019 and 2020
• The growth of the 340B program resulted in an increase of 1,100% in the amount that facilities and pharmacies received from the sale of brand drugs between 2013 and 2020

Impact on Smaller Health Plans

Small and medium businesses makeup 409 of the country’s 493 health insurance plans. A lot of the plans are relatively new, with Medicare Advantage the growing trend. 35 percent of small and medium businesses offer a Medicare Advantage plan. Another 35 percent offer Medicaid, with 26 percent of that business in managed Medicaid.

While the larger health plans have the leverage to have contracts with more pharmacies and facilities with 340B Program coverage, the smaller plans might find it difficult to get contracts with those facilities and pharmacy chains. This in-turn leads to more out of pocket cost and more reimbursements to PBM’s from smaller health plans.

How can HealthEdge Help

HealthEdge provides health plans with the option to bring in pharmacy data to HealthRules DataLake. This data can be used to generate reports and dashboards to:

1. Identify the key providers who prescribe the bulk of brand name drugs
   • A single medical oncologist who practices at an outpatient clinic affiliated with a 340B hospital could prescribe $1 million of brand drugs per year
2. Identify the brand drugs where there is an alternate generic medicine available
3. Compare the cost and create an outreach program to include incentives in provider contracts for prescribing generic drugs
4. Savings of more than $5 million can be realized for a health plan with member count of 500K to 750K by reducing brand drug prescriptions by 15-20%
5. Savings of more than $10 Million can be realized for health plans with more than 1 million memberships by reducing brand name prescriptions by 10%

Learn more about HealthEdge’s core administrative processing system HealthRules Payer.