For managed care, Diplomat offers broader focus

Any specialty pharmacy provider that wants to succeed in today's healthcare arena has to align its capabilities with patients, prescribing physicians, hospitals and pharmaceutical manufacturers. But success also depends on delivering cost savings and high-touch patient care services to managed care and health plan payers that depend on it.

Diplomat does so holistically. The company now provides specialty medications as an exclusive or preferred provider for some 12 million members of health plans, and it does present itself to insurers and managed care operators as a source of competitive pricing and data-driven, highly efficient delivery on high-ticket specialty drugs. But Diplomat also works to engage payers and plans at a higher level, with a focus on bigger-picture cost savings that accrue to patients and their health plans over the long term.

The managed care industry's obsession with the costs involved with covering patients who require specialty drug therapy is easy to understand. Said Atheer Kaddis, Diplomat's SVP sales and business development, "their main focus right now is controlled utilization of product, and ensuring they're getting competitive pricing from specialty pharmacies."

"It's becoming the norm to see drugs that are $100,000 or $150,000 per patient per year in the specialty arena," Kaddis added. "So it's a big area of focus for payers and managed care."

Nevertheless, managed care organizations should look at costs in a larger context to generate real long-term patient care savings, said VP clinical services Gary Rice. "Even though managed care may initially focus only on [dollar savings], when we start talking about the high-touch programs we offer and the way we can assist patients in their therapy so the investment in those products is optimized, a lot of managed care payers start to see the value equation," Rice said.

For instance, he noted, "in the worst-case scenario, you spend $8,000 a month on an oncolytic, and the patient takes it only half the time. So the disease progresses, and now the patient has to go on a different therapy. That's more of a cost impact for that managed care organization than getting a 10% discount. So we're trying to demonstrate responsible fiscal management through our high-touch programs."

Among those high-touch offerings: "We call every patient every month, not only to see how they're doing, but to see how much product they have left," Rice explained. "And if they have more product than what they should, ... we move that delivery to when they really need the product. Those are all cost savings for managed care."

In addition, Rice said, Diplomat's technology and clinical support teams have been working over the past year "to create more clinical decision trees in our eNAV information technology platform that will allow us not only to manage the patient more efficiently, but also be better able to report those activities to managed care and pharmaceutical companies."

For example, he added, "every time we adjust an inventory for a patient we're saving managed care costs. Today, I have to figure that out manually. Our goal in the future is to be able to run a report."

For one very small health plan, Rice added, "we were able to save that company more than $300,000 in costs in one year, just by adjusting [dispensing practices] to reduce excess inventory. And they were amazed."

A major focus for Rice's clinical care team is improving quality and educating both its own clinical support team and those of its provider partners, including retail pharmacists that use Diplomat as their back-end specialty service provider. To that end, Diplomat's senior director of education and quality, Jennifer Hagerman, drew on her experience as an educator and pharmacy school professor to launch Diplomat University as a fully staffed training tool and educational resource for employees.

"The goal was to implement a comprehensive, robust new-employee orientation program. And once we did that, we evolved into clinical, operational, systems and leadership training," Hagerman explained. "Our next initiative was taking it to our external partners."

Under her leadership, Diplomat also supports a full-year post-graduate pharmacy residency program, which is currently undergoing accreditation from the American Society of Health-System Pharmacists.

"We've been very successful ... keeping them with our organization after completion of the program," she said.

CEO Phil Hagerman summed it up, saying, "Diplomat will continue to grow dramatically, both in terms of high dollar volume and core distribution, but also in terms of services." That includes both "services to pharmaceutical companies around data aggregation and outcomes information," as well as "services to health systems and health plans as they expand into the [accountable care organizations] and insurance exchanges that are coming with health reform." It also includes "services to our patients in terms of being able to offer them more than just distribution," he said.

"It might be hospital readmission management," Hagerman said, "or some other form of ancillary patient care service like disease management that helps keep patients with complex therapy out of the hospital."