The Reimbursement Riddle: Part II Asking the Right Question

The Rei",burse",ent Riddle: Part II Asking the Right Questions By MICHAEL A. RIDDIOUGH

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f pharmacy continues to rely solely on the dispensing fee and revenue generated from sales of nondrug items for its economic basis, then the profession will continue to be perceived as an obscure, impotent entity in the delivery of health care in this country. During the past 15 years, leaders within the profession have worked hard to expand the patient care responsibilities of pharmacists. Now it is time to test the validity, wisdom and political acceptance of these leaders' visions for pharmacy practice. Listed below are questions that either have been or will be asked about comprehensive pharmaceutical service by legislators and their staffs, health economists, attorneys and health services researchers. It is incumbent on each pharmacist interested in providing comprehensive services to help answer these and related questions. Pharmacists ' responses to these questions can help pharmacy organizations, pharmacy schools, and other concerned individuals find the appropriate answers . Many of these questions have no answers, and new research should be conducted. Readers who can suggest research projects that may help find answers to these and related questions are urged to do so. This author Michael A. Riddiough, PharmD , MPH, is a congress~onal fellow with the health programs division of the Office of Technology Assessment, United States Congress, Wash ington, DC 20510. In this article Dr. Riddiough is writing in a private capacity, and no endorsement by the federal government or Congress is meant or should be inferred. The author invites responses to this article; they may be mailed to the editor of American Pharmacy. Dr. Riddiough 's references are available from the editor. American Pharmacy Vol . NS18, No.10 Sept. 1978/543

suggests that the following topics be researched. General Questions 1. What are comprehensive pharmaceutical services? These services should be described in behavioral terms, such as providing drug information to physicians and patients, monitoring the prescribing behavior of physicians; monitoring the drug-taking behavior of patients; monitoring patients' responses to drugs; detecting and reporting the results of these monitoring activities to physicians, patients and government agencies; prescribing drugs; and providing primary care services. Also, a brief historical perspective on the development of these services should be provided. 2. Why are these services important? Research must describe problems related to the use of drugs that theoretically can be corrected through the use of pharmaceutical service. Examples include: • Adverse drug reactions (ADRs) and drug interactions (DIs); • Use of drugs for unapproved purposes; • Misuse of drugs by patients; • Use of expensive or duplicative drugs; • Overutilization of questionably effective drugs; • Underutilization of some important drugs. Investigators should state the incidence and prevalence with which each of these problems occur, the morbidity and mortality associated with their occurrence, and the cost of detecting and correcting them. Relying on a good epidemiologist who understands drug-related problems seems a wise course. 3. What effects do pharmaceutical services have on these problems? Where are the research data to sup-

port the effectiveness of these services? Research findings that demonstrate a direct causal relationship between the use of one or more types of pharmaceutical services and the reduction of these drug-related problems are needed. This research should be conducted in several different health care settings, should involve a statistically significant number of subjects (pharmacists, physicians and patients), and should use rigorous research methodology. To date, such research findings have been limited. A few studies have convincingly documented either improved drug-taking behavior on the part of patients 22 or potential cost savings23 related to the use of comprehensive pharmaceutical service. Unfortunately, many reports on the subject are anecdotal, lack objective research methodology, and concern only small populations. The best available reports should be collated into an initial working document that identifies those areas that have been well-researched and those that require future research. Researchers who concentrate on medical care -people often found in schools of public health-may prove useful in this area. 4. Who provides comprehensive pharmaceutical services? What is their training? How accessible are they to the public? Reports should describe the phar-

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macy work force, including the number of pharmacists qualified and available to provide these services, their geographical locations, and the types of health care settings in which they practice. Investigators should describe the training pharmacists receive in pharmacy schools, postgraduate training programs, and continuing education programs; they should also calculate ratios that describe the availability of pharmacists to patients and physicians in different geographical locations and types of practice. A Question from Health Care Administrators 1. What levels of intensity of pharmaceutical services are needed in each type of health care setting in order to reduce drug-related problems to an acceptable level? The types and intensity of pharmaceutical services vary among different health care settings. For each setting, pharmacists need to develop an acceptable level of service and use either "process" or (preferably) "outcome" criteria to measure the level of service being provided. Examples of process criteria include : • The number of prescriptions filled per unit of time; • The number of drug therapy consultations or number of patient interviews performed per unit of time; • The number of patients monitored per unit of time. Examples of outcome criteria include: • A reduction in the incidence of adverse drug reactions (and the resulting morbidity and mortality) per unit of time; • A reduction in hospital expenditures (because of improved drug therapy) per unit of time; • A reduction in the number of physician visits per unit of time. Once an acceptable level of service is achieved, resources such as pharmacists, technicians, equipment and supplies can be calculated.

Questions from Health Economists 1. What is the cost-effectiveness of comprehensive pharmaceutical services, especially when compared

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with other mechanisms that can be used to achieve the same objectives? Every economist has his or her own way of calculating cost-effectiveness. There is no uniformly accepted method. McGhan and his associates, IS as well as Weinstein and Stason,24 describe commonly accepted techniques. The basic idea of cost-effectiveness analysis is to identify one or more measurable objectives, such as reduction in the incidence of ADRs, reduction in hospital expenditures, or changes in patients' behavior and then create the most effective and least costly mechanism to achieve these objectives in different health care settings. The most difficult tasks include selecting appropriate objectives and accurately calculating the costs. Costs are foregone benefits and usually are expressed in dollars spent. Objectives do not have to be converted to units of monetary value. Other mechanisms against which pharmaceutical services can be compared include the use of clinical pharmacology services, increased pharmacology education for medical students and physicians, and the increased use of the media for patient education . (The mechanism chosen for comparison obviously depends upon the objectives one selects to achieve.) 2. What is the benefit-cost ratio of implementing pharmaceutical service? Benefit-cost analysis differs from cost-effectiveness analysis because all benefits and all costs usually are converted into dollars . In addition, measurable objectives for the intervention being studied (e .g ., pharmaceutical services) are not determined before the analysis is performed. Again, no two economists agree on methodology. Klarman discusses benefit-cost analysis in depth. 2s Costs may be converted into dollars more easily than benefits. For example, if a benefit of pharmaceutical service is a reduction in the incidence of fatal ADRs, then this benefit could be expressed in the dollar value of the number of lives saved. As harsh or difficult as this task may sound, it is being done by some economists using factors such as income saved. Some economists or administra-

tors will suggest that saving the life of a person who receives public assistance funds (e.g., Medicaid benefits) may- in economic terms-be a cost rather than a benefit. Fortunately, this philosophy is not universally held by health care administrators. An obvious potential benefit of pharmaceutical service is the reduction in hospital expenditures related to a reduction in the incidence of ADRs . If such reductions can be directly attributable to pharmaceutical services, its monetary value can then be compared to the costs of providing the service. Again, McGhan and his associates have described techniques for applying benefit-cost analysis to the delivery of pharmaceutical services. IS Both benefits and costs are viewed differently by different people. For example, the administrator of a health insurance program would tend to view a reduction in hospital expenditures as a benefit. A hospital administrator, however, may view this reduction as a cost, at least under the current system of hospital financing. When used to help establish public policy, this type of analysis usually considers costs and benefits to society. Costs and benefits must be calculated carefully. A good economist should understand this typ'e of analysis. 3.

H proven

effective and access-

American Pharmacy Vol. NS18, No .10 Sept. 1978/ 544

ible, how should pharmacists be paid for providing comprehensive services? Should a fee-for-service mechanism be used? Should this fee be attached to the dispensing of a drug? Can we use prospective payment mechanisms based on the number of units of service provided per pharmacist per unit of time? Should pharmacists be salaried by the institution or agency using their services? Reimbursement for nondispensing services should not be attached to the dispensing of a prescription, because such services may actually reduce drug use and thus might reduce the pharmacist's income. This situation is paradoxical and (in the author's view) untenable, although it exists today in most pharmacies. Reimbursement on a fee-for-service basis would require attaching a dollar value to each service rendered. The author is not aware that anyone had done this, although certainly the method deserves attention . Prospective reimbursement would require pharmacists to calculate the costs and value of their services over a designated period of time, such as a year. Virtually every institution-based pharmacist in the country today is salaried. Obviously, this mechanism is acceptable to most, but this reimbursement arrangement also hinders the establishment of private pharmacy practice . These reimbursement issues are important because the payment mechanism used may dictate how, where, and if comprehensive pharmaceutical services are provided . A Question from Watchdog Bureaucrats 1. How can the federal government be assured that these services will be provided, once payment is authorized? Research papers should discuss possible ways of monitoring pharmacists' services through the use of such mechanisms as peer review and computer surveillance . Undoubtedly, these mechanisms will be used to monitor the activities of other health care providers, even though such methods have not yet proven themselves.

American Pharmacy Vol. NS18, No.10 Sept . 1978/ 545

A Question from Attorneys and Some Pharmacists 1. What effect will expanded patient care responsibilities have on pharmacists' professional liability? What are the malpractice ramifications? A pharmacist's eagerness to assume new responsibilities must be accompanied by his or her willingness to assume new professionalliabilities. (The malpractice attorneys and the insurance companies are most eager to work out the details.)

Questions from Congress 1. Are the drug-related problems

'This author has not observed major efforts by pharmacy organizations to obtain reimbursement for comprehensive pharmaceutical services. Until pharmacists themselves actively support the development of and reimbursement for these services, other professions, consumers and government cannot be ~xpected to do so.'

cited above serious enough to warrant congressional action? Answers to this question require analysis and extrapolation of data regarding drug problems from clinical studies and national surveys to the general population. Populations at risk must be identified. If these popula tions are large enough to cross state and local boundaries, and no national program exists to correct these problems, congressional action may be warranted. The visibility of the problems is as important as the visibility of the proposed corrective actions . 2. Does the private sector currently purchase comprehensive pharmaceutical services? Do publicly or privately funded health insurance programs purchase them? If not, why should national health insurance (NHI) pay for them? Very few individuals or health insurance programs pay for pharmaceutical services other than drug dispensing. The Blue Cross Plan of Central Ohio is a notable exception. 16 In most cases, comprehensive pharmacy services are paid for indirectly through the dispensing fee . Many pharmacists are salaried by schools of pharmacy and do not charge patients for their services. Hospitals hire pharmacists but seldom submit charges for their clinical services. At least one hospital directly bills users of its drug information service. 17 Arguments for reimbursing for comprehensive pharmaceutical services under NHI will have to be based on evidence other than the current willingness of insurance companies and individuals to pay for them . 3. Are comprehensive pharmaceutical services compatible with other health care services? Are these services acceptable to physicians and other health care providers? To answer these questions, pharmacists must collect data from existing situations in which comprehensive pharmaceutical services have been successfully incorporated into various types of health care settings. Also, data can be collected from surveys regarding the attitudes of physicians, nurses and others about such services. In addition, these answers require

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political support from health professional and consumer organizations. With rare exceptions, the author seldom hears such support voiced by these types of organizations. Pharmacists must lobby politically influential health professional organizations and consumer groups, in order to gain their support for the development of and reimbursement for these services. 4. Does the profession of pharmacy support the use of clinically trained pharmacists, or is this development the idealistic dream of an ambitious few? Pharmacy itself has not convincingly demonstrated its willingness to support the full development and use of comprehensive pharmaceutical service. Granted, support mechanisms such as discussion forums within professional organizations and publication space in pharmacy journals have been established. However, this author has not observed major efforts by pharmacy organizations to obtain reimbursement for comprehensive pharmaceutical services. Until pharmacists themselves actively support the development of and reimbursement for these services, other professions, consumers and government cannot be expected to do so. s. How are public officials' peers and constituents going to react to their support for comprehensive pharmaceutical services? This is a legitimate concern for elected public officials. Politically unacceptable proposals are often discarded quickly. This concern among legislators requires proposal advocates to gain as much support as possible for their ideas. Professional lobbying is an essential-and expensive -activity in legislative arenas. Traditionally, pharmacists have not been willing financially or ideologically to support professional lobbying services at the national level. The diminishing economic base and lackluster public image of pharmacy practice seems in part directly related to pharmacists' unwillingness to support competent lobbying services. Pharmacists who desire to be compensated for providing comprehensive service under NHI should demand that their pharmacy organi-

zations provide effective representation on Capitol Hill. Conclusion Obviously, the questions presented here are not all-inclusive. Others also need to be asked. Readers questions and suggestions should be shared with peers in a unified attempt to place the right answers to the right questions in front of the right people at the right time, with due consideration for costs. Equally obvious is the fact that generating even the most complete answers to all of these questions will not guarantee inclusion of comprehensive pharmaceutical services in whatever NHI benefit package is eventually adopted. The influence of adverse political forces may negate the influence of objective research and logical policy analysis . This situation is not uncommon in poli tical decision-making environments. The author suggests that the pharmacy profession establish a clearinghouse for information related to comprehensive pharmaceutical services. Such a clearinghouse could be established within a professional organization or within a selected academic setting. This clearinghouse could provide data needed by those who attempt to document the value of pharmaceutical services to individuals and agencies outside the profession . There is the possibility that federal health administrators and members of Congress will ask no questions about comprehensive pharmaceutical services. This situation could arise if (1) they never hear about such services, or (2) they are easily convinced of the virtues of these services. Theoretically, it is possible that the words "comprehensive pharmaceutical services" will appear magically under the list of benefits in the NHI bill that emerges from Congress, without anyone posing any of the questions given above. Magic is always a remote possibility, however. Advocates of comprehensive pharmaceutical services must be prepared to answer very difficult questions with respectable data and to lobby decision-makers within the health care arena with both finesse and determina tion. 0 American Pharmacy Vol. NS18, No .10 Sept. 1978/ 546