Although accountable care organizations are now up and running throughout the country, they still generate more questions than answers, including a critical one for pharma: Do ACOs have their own formularies
The answer is mixed, according to a recent survey by Decision Resources Group's U.S. Physician & Payer Forum, which surveys both physicians and MCOs. The survey of 100 pulmonologists found that of the 30 who said they are now participating in an ACO, only 13 percent use an ACO formulary; most are guided by either a hospital or MCO formulary. The biggest reason is that ACOs do not have enough patients to justify developing a formulary. The surveyed pulmonologists indicated that their ACOs have about 10,000 patients, projected to increase to 17,000 in the next year but they would need to be about twice that size to justify a distinct ACO formulary.
On the other hand, MCOs believe ACO-specific formularies are highly likely. Although only a limited number of surveyed pharmacy directors said the ACOs they contract with have their own distinct formularies, more than three fourths of the 40 surveyed expect there to be a formulary in place in three years, pointing to a sea change in the industry. Among those that already have separate formularies, the trend is toward greater restrictions or similar restrictions compared with MCO formularies.
Whether or not ACOs do have distinct formularies, they still have a decided influence on the choices physicians are making in prescribing. ACOs are charged with reducing cost, increasing quality, and improving outcomes, and their primary tools for doing so are clinical integration programs that offer very specific protocols for treating certain conditions. These protocols generally call for using the lowest-cost drug with the greatest efficacy.
ACOs are the most visible of the reimbursement pilots underway that aim to radically change our healthcare system moving to a system that rewards for quality and outcomes rather than for volume. Many are skeptical that this can be accomplished by setting up these complex organizations that require strict management and razor-sharp efficiency. But it wasn't skepticism that prevailed in the PPF survey: The majority of the pulmonologists 60 percent indicated there is potential or great potential for ACOs to improve treatment outcomes in asthma and chronic obstructive pulmonary disease within two years. (Granted, more than a third indicated ACOs have no chance of improving outcomes). Similarly, a large number of MCOs surveyed report that they expect improved patient outcomes in asthma, type 2 diabetes and congestive heart failure under ACO arrangements, highlighting the role that ACOs will play in the cardio-metabolic space over the next several years.
At last count there were close to 500 commercial, Medicare and Medicaid ACOs operating or under development, affecting the care of millions of patients. As they grow, they will increasingly have distinct formularies and restrictions, pushing pharma to demonstrate overall savings in medical care (reduced readmissions, fewer ER visits) and improved outcomes in order to be on formulary.
-ACOs are among the most dynamic trends underway in the healthcare market. They're already resulting in improved prescribing among specific brands, said Roy Moore, senior director of U.S. Physician & Payer Forum at Decision Resources. The drug industry clearly must adapt to the metrics used in this model or risk losing patient share to competitors.
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