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Contemporary Pharmaceutical Hospital Sales

Essay By: Marti
Health and fitness

Hospital pharmaceutical sales in the era of healthcare reform

Submitted:Oct 4, 2012    Reads: 34    Comments: 0    Likes: 0   

Quality, Pay for Performance, Guidelines, and the Role of a Hospital Representative

Prepared by Marty Bischoff, Associate Director, Hospital Sales

The recent evolution of healthcare in the United States can aptly be described as "tectonic." Major changes in delivery, cost containment, electronics and government oversight have left little that resembles the environment of only two decades ago. Hospitals, healthcare providers, insurers and patients themselves have been subject to rapid developments that have left many confused and unsure of the ultimate outcome. Clearly, pharmaceutical companies are faced with the same daunting road, yet at the same time must remain profitable and able to develop the next generation of life saving medications. Nowhere is this role more evident than on the frontlines of healthcare reform and industry: major medical centers.

Healthcare reform, though ostensibly initiated by the Obama Administration has actually been in major evolution since the passing of the Deficit Reduction Act (DRA) of 2005. Depending on which study, healthcare in the United States barely breaks the top 20 worldwide in measures such as overall cost per capita, morbidity and mortality, infant mortality and overall patient satisfaction. This legislation set new requirements for Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) and instituted a Centers for Medicare & Medicaid Services (CMS) reimbursement incentive that mandated an annual percent increase amount will be reduced by 2.0% for any hospital that does not submit quality data. Furthermore, the DRA requires CMS to expand quality measures that would attempt to drive uniform standards of care across the nation that would ultimately drive down costs and increase overall performance.

The recent announcement of the withdrawal of all US troops from Iraq by the end of the year made many reflect on the cost of the war in human lives and dollars: 4,478 and estimates of around 1.3 trillion. Yet these already harrowing numbers pale in comparison to the efforts of the CMS which provides health benefits for over 90 million Americans and spends over $650 billion annually for health care services in their programs. Reimbursement for physicians and hospitals will be based on number of services, complexity and performance against evidence based measures and guidelines.

Currently there are 5 established Core Measures through 2011 and have during this introductory period been graded on a solely on a "pay for reporting" basis. Hospitals would be reimbursed for simply gathering and reporting their data to CMS. The year 2012 will begin actual "Pay for Performance" e.g, grading and reimbursement based on attainment of the Core Measures. Furthermore, these measures will expanded from 5 to 12 and add roughly 10 each year to 2015.

Core Measures set for FY 2007 - 2011:

Myocardial Infraction AMI-Heart Attack: Aspirin at arrival, Aspirin at discharge, Beta-Blocker at arrival, Beta-Blocker at discharge, ACE Inhibitor or (ARB) for left ventricular systolic dysfunction, Smoking cessation counseling, Thrombolytic agent received within 30 minutes of hospital arrival, PCI received within 120 minutes of hospital arrival. (add statin >2012)

Heart Failure: Evaluation of left ventricular systolic (LVS) function
ACE Inhibitor or (ARB) for left ventricular systolic dysfunction, Comprehensive discharge instructions, Smoking cessation counseling (add statin >2012)

Pneumonia: Initial antibiotic received within 4 hours of hospital arrival,
Oxygenation assessment, Pneumococcal vaccination status, Blood cultures performed prior before 1st antibiotic received in hospital, Smoking cessation counseling,
Appropriate initial antibiotic selection, Influenza vaccination status

Surgical Care Improvement Project.

Mortality Measures: Acute Myocardial Infarction 30-day mortality and

Heart Failure 30-day mortality

Patient's Experience of Care (Patient Satisfaction) HCAHPS Patient Survey derived from Press-Ganey.

CMS Implementation of the Core Measures has dramatically changed the manner in which institutions, particularly those that desire leadership roles, conduct business. Establishment of Quality Departments, Performance Improvement or Performance Excellence Offices, often led by a Vice President with direct access to the CEO have become the de rigueur. Historically the adage, "If you've seen one hospital, you've seen one hospital" rang true; however, with the implementation of the Core Measures, standardization, guidelines and evidenced based medicine will drive healthcare delivery moving forward. This has resulted in changes as dramatic as the implementation of Managed Care in the late 1980s.

Hospitals are apoplectic in their drive toward Quality. But what is it? To further confound this quest read The Art and Zen of Motorcycle Maintenance where the author was driven mad in his drive to define quality. Steve Shortell, PhD, and colleagues at the University of California at Berkeley are performing case studies to determine why some physician organizations excel at implementing evidence-based chronic disease management processes. CMS looks to close this gap with the uniformly applied standards and guidelines. Many institutions aggressively compete for the Malcolm Baldridge National Quality Award. It is an award and a methodology for demonstrating quality and performance excellence. Some 2010 winners include the following: Nestle Purina Pet Care, St Louis, MO, Montgomery County Public Schools, Rockville, MD and Advocate Good Samaritan Hospital, Dovers Grove IL

Hospital readmissions are a major quality and cost problem in the United States. Among Medicare beneficiaries, the chances of being readmitted to a hospital within 30 days of discharge are about 18 percent. The wide variation in hospital readmission rates among states, and the successful efforts of some institutions to reduce readmissions, suggest that it is possible to significantly reduce readmission rates nationally. The Commonwealth Fund is launching a multi-state, five-year demonstration project aimed at reducing avoidable hospital readmissions. Ahish K. Jha, MD, of the Harvard School of Public Health and colleagues found that hospitals which implemented patient safety practices endorsed by the Leapfrog Group-a coalition of 65 employers and agencies that purchase health care for approximately 34 million Americans-reported better quality of care and lower mortality rates.

As reported in the New England Journal of Medicine:

Public Reporting and Pay for Performance in Hospital Quality Improvement
Lindenauer PK NEJM 2007

Consequently, the role of the Hospital Representative now aligns with that of the institution. Both now are united on goals that will increase performance, ensure proper medication utilization, and finally and most importantly, improve patient satisfaction and outcomes.

Hospital "selling" is not necessarily replaced but rather is augmented by the additional role of or meeting Core Measures with appropriate medical intervention and the provision of resources that will improve patient satisfaction and compliance on discharge (or transition). This is truly the next level of "selling" and most importantly a real "partnering" with the institution. It is now painfully evident that those hospitals that cannot adjust will simply close; witness the number of closures (17) in the last decade in the state of New Jersey. Moreover, those pharma companies that cannot provide real value added programs and services will also fall victim to the growing number of institutions that are limiting access to industry. For example:

1. All actively promoted products are Class IA or IIA recommendations. In the implementation of almost any protocol, standing order or guideline, our products by definition should be included.

2. Our company brings numerous sales teams representing these products and covering almost all of the core measures by which institutions are measured: CHF, AMI, CAP, SSI, Pregnancy.

3. Field representatives have a deep insight to the HCPs that support quality initiatives, evidenced based medicine, and protocol implementation. We can provide a "bridge" between QA and the HCP. Similarly, we can provide insight as to what other institutions are doing and share best practices.

4. A plethora of unbranded patient education and programs such as "Journey for Control" & "Cornerstone" that greatly add to the patient's understanding of disease management.

5. "Strive for Five" Patient satisfaction score improvement program. Upon discharge patients are often given nothing more than a pile of papers and help into their wheelchair. Unfortunately, most customers only complete surveys when they are dissatisfied. By merely interacting with and providing patient education, patients often have a lasting, positive impression of their care. This has been demonstrated to dramatically change an institution's scores.

6. "Industry Insight" Many departments (including QA) have little insight to how pharma works. The cost of product development, clinical trials and consequent marketing is foreign to not only most patients but to many HCPs as well. Discussion on these topics and the interaction and business of representatives is often a mystery unraveled.

7. Suggestions eg "Blackboards" Knowledge of Press-Ganey metrics, and the ability to Talk about patient rooms can be facilitated if patient rooms are equipped with this inexpensive tool. How much wasted nursing time can be reduced by keeping a written log on the board as to when the next meds will arrive, lunch, linen change or check-up?

8. MedRec - ensuring that patients are receiving the same meds going out as they did coming in. Does this cause confusion for patients? How much time does a nurse have to educate a patient on his or her new meds upon discharge.

Remember: Length of Stay (LOS) is everything; reducing overall LOS by only one day is dramatic. The faster a bed can be cleared the better.

9. Case Management, where do they rank in overall institution function? Do they see the problems with patients confused over their meds or not receiving meds not covered by their insurance plan? Are they being switched to a med that they had previously been on but could not tolerate?

10. Text book program

11. Diabetes Management - work with counterparts at diabetes centers. LDL goals for diabetic patients. Tight in hospital management of FPGs results in shorter LOS and faster substernal suregery recovery. Despite recent data ( ACCORD ) few question the importance of lower FPG levels.

12. Cost savings; Contracts, LOPs etc, - how much savings has the institution realized? Inappropriate use of other products? Does QA know this?

13. MAE team customized programs for the institution.

14. Medical Directors Field Visits

15. Stretch Goal - visit HQs, speak with senior management, business development, accounting, MMD - we certainly can't dictate better hospital care but certainly have insight on how to better conduct business.

16. Feedback loop - share with QA issues and concerns that you have discovered during your day to day business, we spend more time in the trenches than many in the executive offices. Our input, provided judiciously, can be extremely valuable.

Accountable Care Organizations is a concept that has been promoted as a means of using financial incentives to create a new type of health care entity dedicated to quality, efficiency and coordination of care. This model of care delivery is based on the recognition that physicians tied to this network, usually anchored by a hospital or system, operate within the rules, protocols and guidelines already utilized. Unfortunately, they are much like Unicorns in the sense that everyone has heard of them but no one has seen one. CMS guidelines for ACOs are also now delayed past 2012.

Nonetheless, local market adjustment to models that mimic this are now gaining significant momentum and acceptance. Major hospital systems are extending their influence with the purchase of community hospitals and outlying private practices. This not only drives economies of scale but also uniform treatment, formularies and standards of care. Furthermore, once a patient is discharged or more appropriately "transitioned" into the community, complete tracking and treatment of the patient will be almost guaranteed. Readmissions, lack of compliance and failure to meet treatment goals will be greatly reduced by this new model. North Shore/LIJ based in Manhasset, NY is an example of an incredibly successful model that has now become one of the top 5 hospital systems in the nation. The impact of the flagship medical center on the community based provider, particularly as they acquire more of them, is undeniable. Winthrop Medical Center in Mineola is a similarly successful albeit smaller example.

The hallmark of success and viability for any organization in this century is the ability to adapt rapidly to changing business challenges. Witness the dramatic impact of the recent global slowdown. Organizations that can flex and adapt accordingly will have the advantage; a ponderous and bureaucratic response will certainly falter. The advent of Managed Care was often downplayed if not outright ignored by both HCPs and industry; now there it is no other vehicle for which healthcare is delivered. Quality and Pay for Performance will have a similar if not greater impact on the healthcare environment. A great proportion of this radical development is and will continue to be in the hospital arena. Concomitantly, the role and responsibilities of a dedicated hospital representative will be of similar significance.


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