|  2017 TGC Penrose Healthcare Solutions

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The Rx VBHC Series: SESSION 4 Part 1| IMPLEMENTATION | Implementing Effective Efficiencies . Building a Collaborative Pharmacist Care Delivery Model . Creating an Economic Engine (Reimbursement)



In the introduction to the Rx VBHC (Prescription for Value-Based Health Care) Series, we introduced you to the Smith Family and their challenges as well as the challenges that millions of people experience with the current healthcare system.

  • SESSION 1: We introduced you to Dr. Sam, the Director of Pharmacy of a major healthcare delivery system, one of the first leaders to adopt the prescription strategy based on his CEO’s goals, the pharmacy’s hedgehog concept, and the core stakeholder team. 

  • SESSION 2: We focused on the details of the Medication A.R.E.A.S. Bundle (MAB) Prescription Strategy, the Waste in silos . Synergy in Interdependence . Strength in Structures.

  • SESSION 3: We focused on implementing MAB, starting with a mental framework to help Providers and Team Members incorporate MAB into clinical practice and apply it 100% of the time in patients with multiple chronic conditions (MCC) across the continuum of care for optimal health outcomes.

  • SESSION 4: We will make MAB real by:

    • PART 1: Implementing Effective Efficiencies . Building a Collaborative Pharmacist Care Delivery Model . Creating an Economic Engine (Reimbursement)

    • PART 2: Executing MAB effectively in moderate and high-risk populations with MCC – African American Population with Diabetes






     In many organizations when  a new program or strategy is introduced, teams automatically ask for more resources for implementation.  While  some  programs and strategies may require new resources, it is becoming increasingly challenging to provide them. Over the last several years, many organizations have been focusing on what to stop doing instead of just doing more. Some organizations make this an annual review and reward teams that are able to take a look at the organizational and operational infrastructures to assess for efficiency and effectiveness. Questions being asked include: What three things can we stop doing that will not impact patient care? What are we doing that has been proven to be of low value? What can we stop doing or repurpose to more effectively meet the Triple Aim on behalf of our members? As Steve Jobs said, “Deciding what not to do is as important as deciding what to do.”

    Each year, many organizations automatically add a percentage of dollars to the previous year’s budget, which perpetuates the idea that to do more, we need more. Imagine, however, your institution’s budget for the following year was cut by 3%, and you wanted to implement one or two new strategies that would bring tremendous value to the organization but would require resources. What would you do?

     This was the dilemma faced by Dr. Sam, the pharmacy director mentioned in Session 2 who wanted to implement the MAB prescription strategy and have the new collaborative pharmacist care delivery model (that emphasized MAB), but had a 3% reduction in his budget. Fortunately, a few years prior, his organization had adopted a program that focused on lean techniques to improve efficiencies and identify projects and initiatives that had very little value- add and needed to be eliminated. Over the past two years, the pharmacy team had implemented the lean review to identify the low or non-value-added processes and projects that they could eliminate. His senior leaders had agreed to allow him to re-purpose most of the savings and resources from this process toward implementing the new MAB Rx strategy and care delivery model.


Effective Operational Efficiencies: The Lean Review & the CO + NVC + NT/NP = NVO

     The lean review is an adaptation of the Toyota Production System (TPS). TPS was developed by top Toyota executives in the late 1940s to improve the company's manufacturing processes and is now used by companies across various industries to reduce inefficiencies, eliminate waste, improve the cost structure, and enhance the overall value of their end product to customers. The TPS elements have been transferred to healthcare to accomplish these same goals.

     Dr. Sam worked with his team members and the staff developed the following six-step plan to ensure effective efficiencies in all their pharmacies: eliminate non-value-added activities, optimize key activities, leverage technology areas, implement continuous improvement activities, standardize key processes, and train and develop staff to keep improving the processes. This six-step plan would be continuously reviewed by each pharmacy team with an official evaluation (proposed every 18-24 months) by the Rx Lean Team, to assess how they had reduced inefficiencies, eliminated waste, improved the cost structure, and enhanced the overall value of care.

  • Eliminate non-value-added activities: By using work stream and process mapping to evaluate all the steps in the prescription-filling to the prescription-dispensing processes, the teams were able to improve efficiency of filling prescriptions. Also, eliminating the non-value-added steps resulted in reduced wait times and decreased the prescription processing time.

  • Optimize key activities: Working with the supply chain organization and leveraging technology, the pharmacy team implemented a “just-in-time” inventory strategy, which aimed to reduce inventory and associated carrying costs. They were able to reduce their inventory costs by 15% due to fewer medications sitting on the shelves, increasing turns, and significantly eliminating outdates. They also improved the return-to-stock process, which saved staff resources and inventory.

  • Leverage technology: The teams adopted this modified saying from a senior leader in the organization:                                                                                                                              

    • Current Organization + New Technology or New Practices = Costly Current Organization (CO + NT/NP = CCO) Instead, they focused on:                                                              

    • Current Organization + New Value Culture + New Technology / New Practices = New Value Organization  (CO + NVC + NT/NP = NVO).

    • So they leveraged technology systems in their pharmacies such as automated dispensing systems in the large pharmacies to increase efficiencies and an “operations effectiveness room” was created to support workload balancing, remove administrative and nonessential activities out of the pharmacies (for example, drug reviews), and monitor stores for optimal effectiveness. They then leveraged their PBM more effectively to receive better prices, became part of the preferred network of pharmacies, and combined their central specialty and mail services with the PBM to improve operating and purchasing efficiencies for both organizations.

  • Implement continuous improvement activities: As part of the overall operations, teams were given time to take an identified process that could be stopped and operationalize it. The teams also were encouraged to continuously ask the following three questions (adopted from IHI) about the core activities of their pharmacies:

    • How good are we relative to the best? Often teams had no idea. They looked at their own processes and performances, but they were not always aware of the gaps between what they are seeing in their data and what the best were doing. Acknowledging the gaps became a profound motivator for the teams.

    • Do we know where our variation exists? Why was this question asked? Because hidden in the average number the team typically reviewed lied both good and bad performance—exceptionally good and exceptionally bad sometimes. When the team started to look at variation, it gave them real insight. To remove that variation, they would need the poor performers to learn from the better ones.

    • Are we looking at our rate of improvement over time? Sometimes, teams thought that the strategies they were implementing was helping them improve, but in looking at the data over time, gave objective information – sometimes they were improving and other times, they were not.

    • These questions helped the teams focus their attention on the right measures, set the right priorities, and stay focused.

  • Standardize key processes: Standardization is still a controversial topic in healthcare as many providers and teams believe it removes their ability to personalize   care and adversely impacts innovation. Research,  however,  shows  that standardizing practices and processes in healthcare can—when done correctly—be very effective in reducing costs for health systems, promoting quality patient care at an affordable cost, and positively impacting patient outcomes. The challenge is to know what to standardize, when to standardize, and, simultaneously, how to remain flexible to change processes in the advent of new information. When proposing standardization in any organization, it is best to start by identifying processes that will yield operational efficiency, are evidence-based, and currently cause confusion and errors, due to the significance in variation. For example, clinical pathways, surgical checklists, the medication dispensing process, back room operations, and other processes are good examples of things to be standardized. When the right processes are standardized, spread, and embedded into the operational workflow—and additional waste is taken out of the system—there is reduction in errors and unwarranted variations. This leads to improved operational effectiveness and potential resources, which can be used to fund and take on new opportunities. The pharmacy team experienced this when they standardized the prescription-filling and dispensing process, the inventory system, drug use management processes, some of their clinical processes (using the BSMART checklist), and other processes identified by the teams.

  • Train and develop staff to keep improving the processes: The pharmacy trained its staff on lean principles and involved them in analyzing the pharmacy and patient workflows. Staff identified over 20 processes that could be stopped, along with 15 initiatives that improved efficiencies and inventory management without adversely impacting care. Stopping these processes and initiatives actually improved their service. The savings allowed the team to reinvest and re-purpose the resources needed for new services and innovations and to build a competitive advantage.

Care Delivery Transformation – Collaborative Pharmacist Care Delivery Model to optimize MAB

With the resources gained from the effective operational efficiencies implemented and the positive Triple Aim outcomes of the MAB pilots with patients and populations, Dr. Sam and key physician leaders in the organization proposed that clinical pharmacists work alongside providers to implement MAB in moderate- to high-risk patients. They also proposed to have clinical pharmacists in the outpatient pharmacies implement the core MAB actions in low-risk MCC populations, regardless of the chronic disease condition. Finally, they proposed implementing the Enhanced MTM  (medication  therapy  management)  pilot  program they were selected for by CMS. The clinical pharmacists would be supplemented with nurses, medical assistants or pharmacy technicians, so they would work at their highest scope of practice at least 80% of the time.

  • MAB Clinical Pharmacists (MCP) in the Collaborative Pharmacist Care Delivery Model:  Dr. Sam, in collaboration with key stakeholders, put forward a proposal for a new collaborative care delivery model: for every 10 physicians/ providers budgeted for in the organization, there would be one MCP budgeted in the primary care setting, and one MCP to five providers in the specialty settings (for example oncology, endocrinology, infectious disease) where medications were a significant mode of treatment. This MCP, under the governance laws and under approved protocols in collaboration with providers, would manage a select MCC population emphasizing MAB and other pertinent activities to optimize patient outcomes (for the details, see chapter 7 of the Medication A.R.E.A.S. Bundle Handbook).

  • Outpatient Clinical Pharmacists in the Collaborative Care Delivery Model: Dr. Sam proposed all outpatient clinical pharmacists use the core MAB actions when the pharmacy system identified a patient as potentially having medication adherence issues with key chronic medications, starting with MCC patients with cardiovascular diseases (diabetes, hypertension, and dyslipidemia). For more complex patients who met the MCP criteria, the outpatient clinical pharmacists (OCP) would refer the patient to the MCP service for further follow up.

  • Enhanced MTM Services:  Dr. Sam’s organization was one of the selected groups to participate in the new CMS demonstration model to test changes in the Medicare Part D program. The changes made in the new Enhanced MTM services were designed to better align the standalone prescription drug plan sponsor and government financial interests,  while  also  creating  incentives  for more robust investment and innovation in targeting medication therapy interventions.  The goal of the Enhanced MTM model is to deliver greater value and better health outcomes for Medicare Part  D beneficiaries and Medicare. The team believed that MAB would unlock the potential of this Enhanced MTM program to make good on its goal.

Economic Engine - Reimbursement for these Services

In addition to the resources and funding redirected from their effective operational efficiencies programs, Dr. Sam found out that the new proposed collaborative pharmacist care delivery model (that emphasized MAB) that his team was developing fell under the definition of Medication Therapy Management Services (MTMS).  This enabled them to directly bill for these services (based on additional criteria) using the Medication Therapy Management Codes and other direct and indirect approaches. He worked with his finance leader and local pharmacy society to determine the steps necessary for reimbursement for these services.  Dr. Sam is also working with the one of the national pharmacy societies to investigate the possibilities of pharmacists becoming eligible providers under MIPS / MACRA when new categories of professionals will be added. More information about billing for pharmacy clinical services can be found on the ASHP and APhA websites.


Benefits of the MCP and OCP Care Delivery Models

Dr. Sam informed the senior leaders that they would work to get most of the resources for these services from re-purposing many of their existing pharmacists and using the resources gained from the operational efficiencies put in place, however, he may need additional clinical pharmacists. The additional resources were provided because the triple aim return on investment from the proposal gave the senior leaders confidence that Dr. Sam and these new services would yield the following in 12-18 months:

  • Improvement in adherence rates → directly and indirectly leading to better treatment outcomes, better patient outcomes, and better organizational performance in HEDIS, MIPS, Medicare Stars, and other treatment-related quality measures à leading to better reimbursement for the organization

  • Reduction in medication-related readmissions → reducing the HRRP penalties, reducing hospital costs, and improving hospital Medicare Stars ratings

  • Improvement in patient care coordination and engagement → leading to better service scores and improved and sustained patient outcomes

  • Bending the curve of total costs of care and per-member-per- month (PMPM) costs → from effective drug use management and prescribing recommendations

  • Improved patient safety outcomes and measures → fewer medication-related adverse events and admissions, and improved organizational performance in patient and medication safety

In Session 4 PART 2 of this 10-Part Series, we will discuss the following in detail:

The Case Study focusing on implementing MAB in High-Risk Populations - Diabetes in African Americans

  • The Background

  • Implementing the Bundle using the BSMART Checklist

  • The Results

  • The African American Diabetic Group Economic, Clinical, and Humanistic Outcomes (ECHO)


More information about the MAB Rx Strategy can be found at:


My hope and goal is to provide you with a prescription strategy that will make a difference in the lives of patients with multiple chronic conditions – the most frequent and expensive users of healthcare, contribute to making healthcare value a reality for all, and give you a competitive advantage in this new era of value-based healthcare!

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