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3 min read

A Tale of Two Businesses: Hospice and PBMs

A Tale of Two Businesses: Hospice and PBMs

Pharmacy Benefit Managers (PBMs) are barely over the hill as a 51-year-old business but have undergone a dramatic transformation since their conception in Scottsdale, Arizona. To many, PBMs are a four-letter word because of their Scroogelike reputation—especially among pharmacists.

The Beginning of Hospice

The first modern U.S. hospice was established in 1974 following Dame Cicely Saunders’ landmark presentation on the hospice movement's U.K. success to American healthcare professionals. When hospice qualified as a Medicare service in the 1980s, palliative drug therapy became a covered benefit. Newly eligible hospices partnered with PBMs for claims adjudication. Being new to healthcare meant limited partnering options for both businesses.

The Birth of PBM

In the 2000s, a hybrid contender emerged: The hospice pharmacy-PBM, which controlled both the medication ordering/fulfillment and claims aspects of pharmacy benefit. They enticed hospices by passing on significant savings in the form of billions of dollars received in rebates from large and influential parent companies. Hospices benefited, but savings failed to reach patients, who like others experienced a 169% increase in out-of-pocket drug expenses between 1994 and 2015. No doubt this percentage has since increased. Atropine exemplifies drug price inflation in hospice. Commonly used for pupil dilation during eye exams, atropine produces the unusual side effect of quieting death rasps. A $10 medication is now worth $50 despite unchanged ingredients and production costs.

Hybrid Healthcare Issues

Like healthcare-based PBM and pharmacy acquisitions, these hybrids raise conflict of interest concerns. The protective barrier gatekeeping provides against preferential treatment ceases to exist once the two services merge beneath one company. Protecting patient interests loses priority. When a power imbalance persists, accountability is forced upon the client paying the bill and no one else. After staffing, pharmacy and PBM services account for a hospice’s second-biggest expense, and therein lies its crippling potential.

EMR integration resulted in mail-order pharmacy becoming the default medication ordering and fulfillment system for healthcare and hospice organizations. While beneficial for pharmacy-PBMs, mail-order doesn't equally benefit time-sensitive hospice patients whose comfort depends on prompt symptom relief. Only one hospice pharmacy-PBM delivers the same day, and the rest deliver the next day at best. For a newly admitted hospice patient requiring morphine, next day delivery is incompatible with exceptional patient care.

Hospice pharmacy-PBMs discourage closed-door pharmacy partnerships by offering unattractive reimbursement rates so they can boost internal revenue. Unfortunately, many hospice pharmacy-PBMs do not own enough closed-door pharmacies nationwide to compensate for sluggish mail-ordering when the need is immediate. Before mail-ordering became commonplace, hospices relied upon local, closed-door pharmacies to fulfill their needs. These pharmacies remain a hospice’s best resource because of their community ties to patients and ready availability for last-minute pick-up and delivery.

Changes in Hospice Care

Between 2012-2014, the Centers for Medicare and Medicaid Services (CMS) clarified admission criteria for hospices so now most patients are admitted anywhere between two weeks and two months before death. These clarifications took place after an external audit uncovered inappropriate hospice admissions of dementia patients. Some dementia patients spent as many as 6 years in hospice before death and cost CMS a lot of money. Hospice differentiates itself from long-term care by focusing solely on the care surrounding an imminent death. Dementia is not immediately life-threatening and does not warrant hospice admission by itself. Inappropriate referrals decreased after these clarifications, but unexpectedly backfired on dying patients, who sometimes struggled to obtain timely hospice admission. Hospices subsequently witnessed an increase in the number of patients who died within 72 hours of admission. Palliative care is time-sensitive and patients do not fully benefit from its use when unnecessarily delayed. Patients and families lose out on a healing opportunity and hospices lose money as a result of these brief admissions. Recent participation guidelines require that hospices achieve and maintain patient care excellence for continued CMS eligibility. Excellence is frequently measured through patient survey feedback evaluating the quality of care received. Punctual admission is a crucial component of patient satisfaction and necessary for hospice success.

BetterRX Solutions to Hospice & PBM

BetterRX technological innovation transforms the medication ordering process so it is more accessible and time-effective. Our industry-leading ePrescribe technology takes users 30 seconds or less to complete and sends almost instantaneous text notification of approval or denial for medications. Hospices save an average of 10 hours per week, per nurse, because BetterRX virtually eliminates the need for back-and-forth phone calls between clinical staff and pharmacists. Well-managed symptom relief means hospice patients focus better on what is most important to them and less busywork allows staff to help patients reach their goals.

BetterRX is so dissimilar to current hospice PBMs it feels disingenuous lumping them together, which is we proudly embrace the un-PBM nickname. Claim adjudication is a vital service that when done properly protects patient interests and speeds up healthcare. We shed the emotional baggage associated with current PBMs to rebuild trust within the hospice community and deliver first-rate patient comfort.

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About BetterRX

betterRX_logo_web_1BetterRX's mission is to radically change patient care by ending medication delays that cause needless suffering. BetterRX offers efficient ordering technology, medication tracking, real-time PPD & cost alerts, and committed local pharmacies. Learn more about BetterRX, our CRX PlatformBetter ePrescribe, and Pharmacy tools.

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