Q&A: How Health Systems Must Navigate Pharmacy, Medical Benefits
Eric Tichy, PharmD, MBA, BCPS, FCCP, FAST, sat down with Drug Topics to discuss challenges within the business behind health-system pharmacies.
With health systems uniquely positioned to witness the growth of both pharmacy and primary care, the pharmacists within health-systems pharmacies are too expected to understand the nuances of prescription drug and medical benefits amongst their setting.
“Health-system pharmacy has grown alongside the rapid growth of specialty pharmacy,” said Eric Tichy, PharmD, MBA, BCPS, FCCP, FAST, Mayo Clinic Division Chair and Associate Professor at the Mayo Clinic College of Medicine and Science. “Because of the high numbers of specialty medications that are generated out of health systems and the special care that goes into providing those medications, health systems have found that they play an important role in making sure patients get those medications.”
In part 1 of our interview with Tichy, he joined Drug Topics to discuss the American Society of Health-System Pharmacists (ASHP) 2025 Pharmacy Forecast. More specifically, Tichy helped co-author a section of the report titled “The Business of Health Care: Strategic Challenges in Health-System Pharmacy.” He delved into health-systems’ growth in the past 5 years and the specific knowledge necessary to operate a successful health-system pharmacy.
Tichy joined Drug Topics to discuss the ASHP 2025 Pharmacy Forecast and the section he helped co-author, titled “The Business of Health Care: Strategic Challenges in Health-System Pharmacy.” | image credit: My Stock 4 U / stock.adobe.com
READ MORE: Q&A: Identifying, Addressing Gaps in Primary Care
Stay tuned for more Drug Topics interviews regarding the ASHP 2025 Pharmacy Forecast. As we meet with authors and industry leaders that contributed to the report, we will discuss some of its most important sections.
Drug Topics: This section of the report starts by detailing health-system pharmacy’s service growth in the past 5 years. Can you summarize that growth and explain exactly how health-system pharmacy has grown in the recent past?
Eric Tichy: Health-system pharmacy has grown alongside the rapid growth of specialty pharmacy. Because of the high numbers of specialty medications that are generated out of health systems and the special care that goes into providing those medications, health systems have found that they play an important role in making sure patients get those medications. Those 2 have kind of grown hand in hand, and this has become also an opportunity because of drug discount programs like the 340B program as well.
Drug Topics: Before getting into issues within the business of health systems—like market pressures on the industry that we’ll get to shortly—Can you describe the unique position health systems are in regarding reimbursements and overall financial stability needed to stay operating at a full capacity?
Eric Tichy: I think one of the big overall challenges in health care is that the cost continues to increase. A lot of that is because of the population demographics, with the age of citizens in the US skewing older and older. People are living longer. We have new emerging technologies that allow us to treat conditions that we didn't otherwise have treatments for. This is leading to some overall pressures on health care costs.
Different entities are trying to control their costs, so they're trying to lessen reimbursement. Some of that is government payers like Medicare and Medicaid, and then that's also commercial payers too, especially employers. For many employers, health care spending is their number 2 spend after salary. This is a big opportunity that a lot of entities are looking to and putting scrutiny on.
Drug Topics: The aging population is a big theme in the pharmacy forecast. Do you expect that to change in the future, or do you think that the aging population is something that primary care providers need to get used to in the long-term future?
Eric Tichy: It's certainly something we need to get used to, and it's only going to get worse. A lot of problems that we have in the United States center around these issues. So even things like Social Security funding are under strain because of this aging population. We’re actually just sort of entering the early phases of this being a major challenge.
Drug Topics: The report goes right into market pressures on health systems’ infusion services and how injection and infusion services are key sources of income for health systems. What exactly are these market pressures and how have they impacted health-system services?
Eric Tichy: We talked earlier about organizations looking at different ways of controlling costs. The different payer groups are looking at infusions and they're seeing that this is a larger and larger portion of the expense that they have. As people come up with creative ways of navigating this, there's sometimes like an arbitrage, where people identify an opportunity and they try to push things in that direction. One of the things that we talk about in the paper is that there's this difference between out-of-pocket expense for medical benefits versus pharmacy benefits.
In general—so this is broadly speaking—patients have a higher out-of-pocket for pharmacy benefits than they do for medical benefits. A lot of this is because, if you run into a big problem with medical benefits, you hit maximum out of pocket. With pharmacy benefits, [it’s] a little bit less likely that you're going to hit those things. A lot of times, payers have found that if you push drugs that could go either direction towards the pharmacy benefit, the patient out of pocket is greater. And that means the employer contribution would be less; or the payer, the insurance contribution is less. So that is one of the big things that we talk about in the paper: Can they basically apply pharmacy benefit methodology to things that are being given by health care providers?
READ MORE: Health System Resource Center
Stay tuned for more from our conversation with Watanabe and other ASHP 2025 Pharmacy Forecast authors. Drug Topics will be posting weekly podcast episodes from our conversations with forecast panelists, all available on our Over the Counter platform with new episodes coming out every Thursday.
Ready to impress your pharmacy colleagues with the latest drug information, industry trends, and patient care tips? Sign up today for our free Drug Topics newsletter.
