Managed Care Pharmacy Practice Book

Contributors

Foreword

Preface

Acknowledgments

Part I Fundamentals of Managed Care Pharmacy Benefit Management Judith A. Cahill, Part Editor 1

Chapter 1 The U.S. Health Care System and the Development of Managed Care Robert P. Navarro Navarro, Robert P. Judith A. Cahill Cahill, Judith A. 3

Introduction to U.S. Health Insurance Industry 4

Evolution of the Health Insurance Industry 6

Economic Basis for the Development of Managed Care 7

Early Development of Managed Care 8

HMO Act of 1973 11

Federal and State Growth in Managed Care: Medicare and Medicaid 13

MCOs: More than HMOs 14

Physician Reimbursement Mechanisms 19

Gatekeeper Physicians 22

Risk Sharing of Pharmacy Cost 22

Carve-Out and Ancillary Health Care Benefits 22

Quest for Quality 23

Impact of Managed Care on Physicians and Pharmacists 24

Member Involvement in Managed Care 26

Conclusion 27

Chapter 2 Pharmacy Benefit Management Principles and Practices Robert P. Navarro Navarro, Robert P. 29

Basis for Pharmacy Benefit Management 29

Principles of Pharmacy Benefit Management 32

Growth of PBMs 33

Pharmacy Benefit Management Program Components 36

Advanced Pharmacy Benefit Management Components 43

Measuring Pharmacy Benefit Management Program Performance 43

Conclusion 45

Chapter 3 Pharmacy Benefit Design, Contracting, and Marketing John D. Jones Jones, John D. 47

Business Basis for Pharmacy Benefit Management 47

Corporate and Government Impetus for Pharmacy Benefit Management 49

Legal Basis of Pharmacy Benefit Management 50

Benefit Design, State Requirements 52

Principles of Marketing Pharmacy Benefits 53

Payer and Patient Expectations and Decision Points55

Role of Members in Pharmacy Benefit Provider Selection 57

Pharmacy Performance Measurements Important in Marketing 59

Marketing Campaign Advertisement Examples 60

Marketing Process 60

Pharmacy Benefit Contracting Components 62

Pharmacy Benefit Management Contracting Trends 64

Risk Contracting 65

Overview of Impact of Medicare and Medicaid 65

Risk-Contracting Elements and Executions 68

Payer Expectations 70

Performance Measurement 72

Future Trends in Pharmacy Benefit Design and Contracting 73

Conclusion 76

Appendix 3-A 77

Appendix 3-B 83

Chapter 4 Pharmacy Distribution Systems and Network Management Lowell T. Sterler Sterler, Lowell T. Douglas Stephens Stephens, Douglas 89

Pharmacy Program Distribution Options 90

Community Pharmacy Provider Networks 90

Pharmacy Provider Network Development 92

Pharmacy Provider Network Contracting 93

Participating Pharmacy Provider Agreement 94

Participating Pharmacy Provider Manual 95

Participating Pharmacy Network Management Issues 95

Measuring Performance 97

Audits 98

Reports 100

Member Satisfaction 100

In-House Pharmacies 101

Mail Service Pharmacy 107

Developing an Integrated Distribution System 108

Pharmacist's Role 111

Impact of Managed Care on the Profession of Pharmacy 114

Conclusion 114

Appendix 4-A 116

Chapter 5 Pharmacy Data and Information Systems John H. Romaza Romaza, John H. Garth E. Black Black, Garth E. 125

Scope of Pharmacy Information Management 125

Pharmacy Information Management