Supporting Innovation in Pharmacy for a Healthier Canada

Value-based care can be better care for patients

JANUARY 2018 - Profitability is not the only bottom line affected by a value-based pharmacy (VBP) payment system. Patient care can also be impacted—and for the better, according to U.S. panelists at the Canadian Foundation for Pharmacy’s Pharmacy Forum event in November 2017. The U.S. pharmacists shared their experiences with VBP—also referred to as value-based payment or pharmacy-based care—to help Canadian pharmacy retailers and associations prepare for its likely emergence here, beginning with the launch of Green Shield Canada’s program in October 2017.

VBP began to take shape in the U.S. in 2006 with the creation of the Medicare Part D prescription drug plan for citizens aged 65 and older. The new plan included a reimbursement model based on pharmacy’s scores for a number of metrics for certain drug categories, most of them tied to adherence levels (based on refill rates). Pharmacies that exceed the performance goals are paid more than pharmacies that fall short.

In the U.S., it’s estimated that about half of all Medicare Part D claims are attached to a value-based payment model. In recent years, commercial plans began adopting VBP. It’s too soon to know the numbers, but all four of the U.S. panelists expect VBP to steadily accelerate in the U.S. Controversy is also growing, as pharmacies and pharmacy advocacy bodies push back against U.S. pharmacy benefit managers that use VBP as a cost-containment measure, by financially penalizing pharmacies that score below certain levels in addition to (or instead of) rewarding the top-performers.

Yet, despite the controversies caused by payers, the U.S. speakers stressed that VBP is in fact better for patient care.

“Value-based care is here to stay and in the end it’s better for patients and it’s helping us be better at what we do,” said Jim Kirby, Senior Director of Pharmacy Services at Kroger. Added Crystal Lennartz, Chief Pharmacist for Health Mart, McKesson Corporation: “We are really being challenged to shift our business model from distribution to patient-centric, performance-based care.”

“We need to think of value-based payment models as just a new term for patient-centred care,” echoed Elliott Sogol, Senior Vice President, Strategy, for Pharmacy Quality Solutions, who also spoke on behalf of the American Pharmacists Association.

In fact, when done right by insurers and pharmacies, value-based payment or value-based care is good for both profitability and patient care. “If you’re a five-star pharmacy then you will get more reimbursement,” said Joe Moose, co-owner of Moose Pharmacy in North Carolina, adding that the model can work especially well for complex patients.

The U.S. panelists included (l-r): Jim Kirby, Kroger; Joe Moose, Moose Pharmacy; and Elliott Sogol, Pharmacy Quality Solutions

Having said that, the U.S. panelists also agreed it is a long road to realize the benefits for both patients and pharmacies and, south of the border at least, not all value-based payment contracts are created equal. Some contain pitfalls that negatively affect pharmacy revenue, despite efforts to meet the metrics for quality care. With this mind, the panelists presented two main missions for Canadian pharmacy associations and pharmacy retailers: be part of the development process with insurers, and get your house in order to establish efficiencies in dispensing as well as in the provision of patient services.

Click here for more on this story and a full report summarizing CFP’s 2017 Pharmacy Forum, entitled “Increasing Our Value to Canadians."