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'Build for Change' technology for healthcare payers, providers and PBMs

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  By Keith Dayton,  October 30, 2012

Unprecedented disruptions are driving the industry toward more agile technologies and business practices in order to maintain a competitive advantage.

My colleagues and I attended the annual AHIP Institute’s conference in June this year in Salt Lake City and participated in several workshops and presentations. While there, we couldn’t help but notice that practically all the sessions opened with some variation of the theme “Healthcare is in turmoil and must transform,” followed closely by, “Healthcare costs are unsustainable and new business models are critical.” One presenter summed it up as, “We must change course before we hit the iceberg!”

I can’t say I’m surprised.

U.S. healthcare costs continue to skyrocket and now exceed 17 percent of the nation’s gross domestic product (about twice that of most industrialized nations). Quality of care is not what it could, or should, be (especially as it relates to the spending), patient/physician satisfaction is underwhelming and the uncertainty associated with the rapidly changing Affordability of Care Act requirements is driving most people in the industry wacky. So, what are we to do?

Welcome to the final part of our three-part series. Part one (written by my colleagues Elizabeth Hart and Bill Marshall) titled “2012: The year to Build for Change” discussed how healthcare payer visionaries are implementing nimble and powerful technology platforms to reshape their business models. Part two (“Next-gen healthcare drives more customer-centric approaches for providers,” also by Hart and Marshall) focused on healthcare providers and how technology strategies can improve the communication and collaboration of care to improve quality of care.

In part three, we highlight pharmacy benefit management companies (PBMs) and focus on how leveraging information and technology is helping them improve clinical, financial and operational outcomes. Largely the result of our nation’s poor fitness, lifestyle and nutritional choices (“Would you like fries with that?”), the average American fills 12 prescriptions each year.

The proper use of medications can significantly improve the quality of life and even save it. On the other hand, the misuse of prescription drugs can cause serious adverse events. Proper prescribing, availability, distribution and patient compliance all contribute to the ability of medications to deliver successful outcomes, clinical and financial. Unfortunately, prescription drugs are too often missed or misused.

In the United States, we often rely on PBMs as a third-party administrator of prescription drug programs. They are responsible for processing and paying the prescription drug claims. They are also responsible for maintaining the formulary, contracting with pharmacies and negotiating discounts and rebates with drug manufacturers. Today, more than 220 million Americans receive drug benefits administered through PBMs.

The mission of most PBMs revolves around making the use of prescription drugs safer and more affordable for their members. They try to distinguish themselves through lower costs, value-added services and exceptional customer experiences. But in a world of ever-increasing demand for medicines driven by consumer awareness, illness burden, an aging population and a rapidly changing business and regulatory environment, delivering those distinguishing characteristics is no easy task. Enter technology.

The story that best makes the point of how advanced technology, applied correctly, can significantly improve business performance is this one: Pegasystems works with a PBM that not too long ago was a small boutique PBM. Today, it has flourished into one of the largest, most successful PBMs, in part by using Pega technology to bring innovative ideas to life. This company was having a serious challenge managing growth until technology was implemented to transform manual prior-authorization processes into highly automated and efficient BPM-based processes. BPM is an acronym for business process management, which is the discipline of analyzing and improving business processes through streamlining workflow and automating activities and tasks.

Another PBM is applying clinical software aimed at improving the quality of care by leveraging information to reduce inappropriate prescribing by physicians, cutting down medication errors and improving consumer compliance. The organization is using a unified, fully integrated, agile platform to aggregate critical patient information and organize the information to identify omissions and commissions of care using evidence-based best practices; when variations from best practices are identified through the system, they intervene (i.e. through multi-channel and mobile communications) with members and physicians to improve the treatment strategy for better health outcomes.

As we wrap up our three-part series, we hope you have enjoyed hearing the successes that payers, providers and PBMs are seeing by applying the right technology to optimize their business processes. No doubt, there are even more examples that can inspire your organization to see similar results from your clinical, financial and administrative operations, making you an even stronger competitor in this disruptive market.

About the author

Keith Dayton is senior director, Healthcare Solutions, for Pegasystems. He works closely with Elizabeth Hart and Bill Marshall, who have authored the first two bylines of this three-part series. Pega’s Build for Change technology is driving transformation at three of the largest pharmacy benefit managers (PBMs), 13 of the 15 largest health payers and more than 65 percent of the Blues network. PBM clients handle more than 55 percent of the nation’s prescription volume; payer clients write more than 50 percent of all direct premiums. Learn more about Pegasystems solutions at www.pega.com.


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