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Consultant Pharmacists: Saving Lives and Money

August 1, 2003
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Interview with Steve Feldman, RPh, FASCP, President, American Society of Consultant Pharmacists

In contrast, there is better news in some states, such as New Jersey. Medicaid regulations there provide additional reimbursement to pharmacies that fill prescriptions for nursing homes in unit-dose packaging, which enables the pharmacies to take returns of unused medi-cations. This dramatically reduces the amount of waste, so it saves both the state and the facilities a great deal of money.

Zinn: What do you see as a solution for all this?

Feldman: The big problem with Medicaid is that states are looking at line items and drug expenditures. They focus on reducing costs in only two ways: Pay less for products and dispensing, or influence utilization (e.g., by restrictive formularies and prior approvals). What government agencies often don't understand-and the American Society of Consultant Pharmacists [ASCP] is spending a lot of time trying to help them understand-is that pharmacists can evaluate medication regimens and find ways to decrease utilization and improve therapy outcomes, but they need to be paid for these services. Instead of decreasing drug costs, per se, we should be looking for ways to reduce medication-related problems, which are costly not only financially, but also in terms of compromising residents' health and quality of life.

A few years ago, the ASCP Education and Research Foundation conducted a large study, the Fleetwood Project, to examine the value consultant pharmacists bring to nursing homes. The study determined that within the nursing home population, every dollar that is spent on medications translates into another $1.33 in costs of medication-related problems, such as treatment failures, side effects management, etc. But so far, most Medicaid agencies haven't had enough insight to see that. They want an absolute guarantee of how much can be saved-a quick fix.

We found in our study that if a consultant pharmacist intervened in a facility, he or she could rather quickly change that $1.33 to $0.67-a 50% reduction in the cost of medication-related problems commonly associated with decreasing drug utilization. Nursing home residents take more medications than any other population, so in real numbers, that $1.33 is really $4 billion. We're talking about the potential to save at least $2 billion per year!

There are some models being used, one in Ohio and two in North Carolina, that acknowledge the value of consultant pharmacists' expertise in controlling costs by recommending the most appropriate drug therapy. Medicaid officials in Ohio were ready to decrease reimbursement to pharmacies filling prescriptions. Nursing home pharmacy providers told the state, "We know you have to save money, but we believe that if you pay us to use our cognitive ability to reduce medication-related problems, we can save you more than we can by cutting our dispensing rates." Acting on this suggestion, Ohio launched a demonstration project called CATALYST, giving the pharmacists a chance to show how much they could save and how long it took.

The demonstration saved the state enough money that it agreed to split the savings with the pharmacists. This enabled the participating long-term care pharmacies to hire additional consultant pharmacists-the equivalent of approximately two FTEs per pharmacy. This model resulted in the state and the pharmacies getting back approximately $200,000 each per year and, therefore, the demonstration project became policy for the Ohio long-term care segment. This is a voluntary program; pharmacies may choose not to participate.

One of the projects in North Carolina was launched by the city of Asheville and the Mission of St. Joseph Health System. The city manager there, who oversees the city's risk management, was trying to find a way to save money. He examined the rising costs of medications and healthcare for city employees, noting that costs were especially high for those with diabetes. Some pharmacists proposed that they could save the city money by offering patient education to the employees with diabetes and therefore achieving better patient compliance with treatment. The city manager told the pharmacists that if they could prove they could save money, the city would pay them for their time. The patient-education effort improved patient outcomes and saved so much money that the city ended up being able to pay the pharmacists retroactively to day 1 of the initiative. Because of its success, the educational program has been expanded to include four additional disease states, including asthma and hypertension. [For more information on the Ashville project, visit]

Another North Carolina project, called the North Carolina Nursing Home Poly-pharmacy Initiative, was implemented by the state Medicaid program, in collaboration with the North Carolina chapter of ASCP, to reduce costs of medications for nursing home residents. This approach uses a pharmacist-physician team to evaluate high-cost drug regimens for residents. For every $1 invested in this project, $13 in savings has resul-ted. [Note: The North Carolina Nursing Home Polypharmacy Initiative is discussed in a recent report from the Center for Health Care Strategies: "Clinical Pharmacy Management Initiative: Integrating Quality Into Medicaid Cost Containment. April 2003; available free at]

Zinn: What can consultant pharmacists do when a state has a restrictive formulary and the best drug for the treatment of a Medicaid resident is not included?