Evaluation of financial outcomes under a value-based payment program for community pharmacies

BACKGROUND: Value-based payment models have been shown to limit health care spending and waste while improving quality of care. Evidence from value-based pharmacy programs (VBPPs) is needed to guide the use of these mechanisms in health care. OBJECTIVE: To evaluate financial outcomes of a VBPP implemented in 73 community pharmacies for about 40,000 commercial beneficiaries of Wellmark, Inc. METHODS: Beneficiaries were attributed to pharmacies based on the number of prescriptions dispensed. The VBPP paid community pharmacies a per capita payment based on their performance on a set of metrics to deliver care the pharmacists believed was necessary to optimize the beneficiaries' medication therapy and associated outcomes. Financial outcome variables were analyzed for the calendar year of 2018, including total cost of care, hospital admissions, and emergency department (ED) visits. Hospital admissions and ED visits were identified through claims data. Generalized linear models were used to test the effect of the VBPP on each of the outcome variables by comparing outcomes for beneficiaries attributed to the pharmacies participating in the VBPP (73 pharmacies) to Wellmark's beneficiaries attributed to nonparticipating pharmacies (847 pharmacies). Independent variables used in the models to control for possible confounding included beneficiary demographics and complexity scores, region code, accountable care organization (ACO) attribution, beneficiary product type (health maintenance organization (HMO), preferred provider organization (PPO), and several disease indicator variables. RESULTS: Analyses showed in 2018 that the per beneficiary per month total costs of care for the beneficiaries going to the VBPP pharmacies (N = 15,463) was $30.48 (4.5%; 95% CI = -6.2% to -2.7%) lower than that of the non-VBPP group (N = 140,717). The hospital admission rate for the VBPP group was 5.1% lower but was not statistically significant (95% CI = -12.9% to 3.3%). Similarly, the ED visit rate for the VBPP group was 2.1% lower than the non-VBPP group but did not reach statistical significance (95% CI = -8.6% to 3.3%). CONCLUSIONS: With the growing need for solutions to improve quality of care while reducing health care costs and waste, a value-based payment program using performance-determined capitated payments to community pharmacies offering enhanced clinical services significantly reduced total costs of care in a commercial population with one or more chronic conditions. Future work with this promising model is encouraged. DISCLOSURES: No external funding was obtained to support this study. Devolder and Heggen are employed by Wellmark, Inc. Doucette is supported by the Deborah K. Veale Professorship in Healthcare Policy at the University of Iowa. The authors have no other potential conflicts of interest to disclose.