How Northwell, Banner Health approach formulary management

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  • Sep 26, 2019

From RevCycle Intelligence – September 26, 2019

Health systems’ pharmaceutical spending is expected to rise by up to 6 percent in 2019, according to a study published in the American Journal of Health-System Pharmacy. For these organizations — which already devote a large portion of their budgets to drugs — effective formulary management is more important than ever, according to Bonnie Lai, PhD, vice president of product management for Lumere.

During a Sept. 19 webinar hosted by Becker’s Hospital Review and sponsored by Lumere, Russ Funk, CEO of Phoenix-based Banner Health Pharmacy Services, and Onisis Stefas, PharmD, vice president and chief pharmacy officer at Great Neck, N.Y.-based Northwell Health, detailed their organizations’ evidence-based approaches to formulary management and shared best practices for other health systems to follow. Dr. Lai moderated the discussion.

Building an evidence-based formulary

Historically, formulary management relied on primary literature such as published clinical trial results to drive decisions. Today, a more robust evidence-based approach to formulary management is essential, according to Dr. Stefas. This means developing a formulary based on three factors: relevant scientific literature, input from a multidisciplinary team, and real-world evidence.

Dr. Stefas’ team leverages scientific literature and real-world evidence to predict how a drug will affect outcomes — for instance, whether it will decrease length of stay or other healthcare costs. It’s critical to have real-world evidence to gauge whether what is found in clinical literature actually plays out in practice. For example, a drug might demonstrate reduced length of stay in trials, but environmental factors could have a counteracting effect, causing patients to remain admitted, thus reducing the overall value of the drug.

According to Dr. Stefas, retrospective or real-time data analysis is critical in determining perceived versus actual value. Ideally, data detailing a drug’s utilization patterns and outcomes would be evaluated by pharmacists every three to six months. “From there, we can then make further adjustments to the formulary as we see fit,” Dr. Stefas said.

This approach ensures assumptions about cost and outcomes are continuously assessed and pharmacy leaders are better equipped to manage potential creep of medication use into patient populations that don’t see real benefit.

Mr. Funk agreed formulary management is critical not only from a clinical efficacy perspective, but also from a cost perspective. With new biosimilars and high-cost drugs frequently coming to market, it’s important to have the right reimbursement for the drugs that health systems can use for prior authorization for the outpatient setting, as well as the most cost-effective and therapeutically appropriate for our patients, he said.

Implementing systemwide or differentiated formularies

Over the past few years, there’s been a move toward systemwide formulary management “in part driven by health system mergers and acquisitions as well as growing integrated delivery networks like Banner and Northwell,” Dr. Lai noted.

One advantage of a systemwide approach, Dr. Stefas said, is protection against drug shortages. Northwell is moving toward a single standardized crash cart so that if a drug’s supply runs low, a therapeutic interchange can quickly be made for the entire organization without disruption to providers or patients. A systemwide method also ensures no one physician can sway the formulary, Mr. Funk said.

When it comes to implementing a systemwide formulary, having a common IT system across facilities is instrumental, Mr. Funk added.

Beyond establishing a systemwide approach, it’s also critical to differentiate formularies — especially with increased consolidation, according to Mr. Funk. Inpatient, ambulatory, provider and insurance formularies should each have clear criteria for drug inclusion.

“Having continuity of formularies across [facilities helps] minimize the number of switches of medications as [patients] go through the process,” he said. “The more we can minimize those transitions of medications, the better off we are and the less confused our patients will be.”

Guiding medication adherence

By helping patients better understand their drug regimens, the importance of adherence, and how to remain compliant, pharmacists can have a tremendous impact on the total cost of care, Dr. Stefas said. Simple initiatives, like creating resources on how to mitigate side effects, facilitate ease of use, lessen patient confusion and help avoid costly medical issues in the future.

“When I look at medications, I look at them as an investment in a patient’s care and well-being,” Dr. Stefas said. “If they don’t take the medication properly, it’s not just the cost of the medication that gets wasted, but all the downstream impact from a medical expense perspective.”

Mr. Funk suggested using population health teams to identify which patients need the most support throughout their care journey. Those teams can refer patients at risk of readmission to pharmacy-run clinics.

“The more we can do as pharmacists to continue that care outside the hospital, the more successful we’ll be [at] keeping patients out [of] the hospital and treating them in a lower-cost environment,” Mr. Funk said.

To view the webinar, click here