In late 1996 and early 1997, increasing drug costs and consequent higher premiums and copayments led faculty from the University of Colorado (CU) School of Pharmacy to meet with Uni-versity Physicians, Inc., and the CU Benefits Office to examine the CU Health Plan drug benefit. School of Pharmacy faculty subsequently reviewed gross-level prescribing data and proposed a more formal relationship with the CU Health Plan through which faculty could help manage the prescription drug benefit. In late 1997, the CU Benefits Office contracted with the CU School of Pharmacy (school) for these management services.
The University of Colorado is a state-assisted school system with four campuses —Boulder, Colorado Springs, Denver, and the Health Sciences Center, also in Denver. Faculty and staff of the university have the option to join the self-funded CU Health Plan or other local health plans offered. In 1998, approximately 16,500 faculty, staff, and their dependents enrolled in the CU Health Plan.
Within the Health Plan, participants choose from four different products: CU Gold, CU Silver, CU SelectCare, and CU Catastrophic. The differences in these plans are outlined in Table 1. Medical care within the CU Health Plan is relatively self-contained, as preferred pro-viders are University Physicians, Inc., and University Hospital.
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Table 1: CU Health Plan Description
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| Plan (% Enrollment) |
Description |
| CU Silver (<2%) |
Preferred Provider Organization (PPO) plan. Benefit level depends upon the provider option accessed. |
| CU Gold (47%) |
Point of Service (POS) plan. Cost sharing and deductibles apply if the provider is out-of-network. |
| CU SelectCare (51%) |
HMO managed care plan with no out-of-network option except for emergency care. |
| CU Catastrophic (<2%) |
Indemnity plan covering basic financial protection from catastrophic loss due to an accident or illness. |
Pharmacy Benefit
PCS Health Systems, Inc., provides prescription drug benefits for CU Gold, CU Silver, and CU SelectCare. The PCS Performance Network defines the contracted pharmacies.
The member’s pharmacy copayment is based upon a percentage of the actual cost of the medication. Generic and formulary medications are paid at a high-er percentage than brand name nonformulary medications. The CU Health Plan utilizes the PCS Performance Drug List as its formulary. Before 1998, the pharmacy benefit was not based on a formulary. Members paid the same percentage of the drug cost for any medication.
The school hired a coordinator of the CU Drug Benefit Plan in December of 1997. This position holds a faculty ap-pointment, and reports to the chairman of the Department of Pharmacy Practice and the director of Benefits/Policy for the CU Health Plan. The responsibilities of the position include:
The faculty functions as consultants for the plan and for the coordinator. For example, faculty from the Drug Infor-mation Center provides literature searches and drug information services to support management activities using an evidence-based approach. The faculty and staff of the Program in Pharmacoecono-mics and Drug Therapy Outcomes contribute expertise in developing profile systems, measurement of benchmarks, and outcome success. Specialized clinical pharmacy faculty (psychiatry, neurology, GI, etc.) evaluates specific patients or specific therapies. The school has also partnered with two large university group practices to provide clinical pharmacy services in two ambulatory clinics that provide medical care for approximately 30% of the CU Health Plan membership. Thus, school faculty practicing at these clinics are expected to have a large impact on drug therapy for these patients, which will substantially impact the CU Health Plan.
Pharmacist Incentives for Cognitive Services
The CU Health Plan currently takes part in the PCS Performance Drug Pro-gram, which reimburses community pharmacists for consulting time when a prescription is changed to a preferred medication. The PCS Performance Drug Program is paid for by the CU Health Plan, but administered through PCS.
The PCS program has had one limitation: only dispensing pharmacists can take part in the program, because reimbursement is linked directly to the drug product and the pharmacy-PCS online computer link. To correct this problem, the school and the CU Health Plan de-veloped a program through which clinical pharmacy specialists working in am-bulatory care clinics receive a consulting fee for interventions in which cost-effective medications are prescribed.
Currently, fees are paid only for formulary management interventions. In the future, the school will work directly with University Physicians, Inc., and the health plan to develop reimbursement for direct patient care (e.g., management of diabetes, asthmatics, or those taking warfarin) and other patient management programs.
Evaluation of the Partnership
Drug prices are rising rapidly, and new high-cost drugs are constantly enter-ing the market. Thus, it is unrealistic to use overall cost of drugs as the marker of success for this program. More narrowly defined and measurable targets will be evaluated, such as specific drug entities, disease states, or physician profiling. Cost savings will be determined by establishing baseline costs within a given drug/disease area and then remeasuring costs at various periods after the intervention. Quality assurance programs also will be tracked and evaluated. While economic evaluations are considered key to the measurement and success of the program, noneconomic issues, such as increased communication and establishing a point of contact for physicians and members, also are important.
Student Opportunities
One of the most exciting opportunities created by the partnership is the ability to facilitate education in managed care principles.
Schools of pharmacy have traditionally hired experts in various specialties. Hiring a managed care practitioner will allow the students to explore a specialty area that is not usually directly operated by a school of pharmacy.
An elective rotation in managed care for Pharm.D. students started in August 1998. This elective will provide a tangible example of faculty actually practicing managed care principles. Students will have the opportunity to learn the clinical and business skills associated with managed care pharmacy by being involved with the day-to-day operations of the plan, such as the formulary process, contracting, disease state management, and quality assurance. Students will be responsible for developing profiles, analyzing prescribing data, and generating reports and newsletters. Because other studies have found that students can provide substantial increases in productivity, we expect that this will occur with our program.1-3 In addition, students will have the opportunity to spend time with industry representatives and pharmacists working for managed care companies in the community.
This new elective rotation opportunity expands upon the managed care principles currently taught in the Pharmacy and Health Care didactic course. The course provides an overview of the health care delivery systems and pharmaceutical services in the United States. Material is presented on the organization and financing of health care, health policy making, the concepts of the drug use process, patient compliance, medication errors, quality assurance, and pharmaceutical care. Medicaid, Medicare, Pharm-acy Benefit Management, and managed care concepts also are reviewed. The new elective also expands upon other managed care clerkship opportunities at the school.
Summary
Through this partnership the CU Health Plan gains expertise in drug management, pharmacoeconomics, and management of the plan’s resources. The CU School of Pharmacy gains the ability to develop unique relationships with other providers in the system, as well as an excellent opportunity for faculty and students to experience managed care pharmacy practice.
Donna Grier, Pharm.D. Barry L. Carter, Pharm.D., Daniel Malone, Ph.D. Department of Pharmacy Practice University of Colorado School of Pharmacy, Denver, CO
Bruce Badger Director of Benefits Policy/Programs
Coordinator/CU Drug Benefit, Instructor
F.C.C.P. Professor and Chairman
Assistant Professor
University of Colorado Boulder, CO
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