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Evaluating and Optimizing Health System Specialty Pharmacy Operating Models with Fairview Pharmacy Solutions | NASP Specialty Pharmacy Podca · Pharmacy Podcast Network

• 0:05
  Speaker 1: You are listening to the Global Network of Podcasters dedicated
• 0:09
  Speaker 1: to the pharmacy profession.
• 0:10
  Speaker 2: Welcome to the Pharmacy Podcast Network.
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  Speaker 3: You're listening to the NASP Specialty Pharmacy Podcast, a collaboration
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  Speaker 3: between the National Association of Specialty Pharmacy and the Pharmacy
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  Speaker 3: Podcast Network. Each episode dives deep into trends, challenges, innovations,
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  Speaker 3: and patient-centric practices shaping the future of this dynamic and
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  Speaker 3: rapidly evolving industry. Whether you're a pharmacist or healthcare provider,
• 0:49
  Speaker 3: patient advocate or industry leader, you're listening to the NASP
• 0:51
  Speaker 3: Specialty Pharmacy Podcast. You'll hear expert insights, real-world evidence, and
• 0:55
  Speaker 3: thought-provoking discussion that highlights all that makes specialty pharmacy special.
• 1:00
  Speaker 4: In support of NASP's mission to empower specialty pharmacy stakeholders
• 1:04
  Speaker 4: to advance the standard of patient care, NASP supports a
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  Speaker 4: free market healthcare system in which all specialty pharmacies compete
• 1:12
  Speaker 4: on the same fair and level playing field because that
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  Speaker 4: is in the best interest of the patients we collectively serve.
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  Speaker 4: NASP is committed to working with all stakeholders and policymakers
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  Speaker 4: to ensure that all patients have access to the life-saving
• 1:24
  Speaker 4: medications they need and the high-touch patient care and support
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  Speaker 4: services they deserve from the pharmacy of their choosing.
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  Speaker 5: Hello, my name is Sheila Arquette, and I am the
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  Speaker 5: president and CEO of the National Association of Specialty Pharmacy.
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  Speaker 5: I am delighted to welcome my special guest, Mel Nelson,
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  Speaker 5: PharmD CSP, to this episode of the NASP podcast. Mel
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  Speaker 5: Nelson leads Fairview Pharmacy Solutions specialty pharmacy consulting practice, partnering
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  Speaker 5: with health systems nationwide to develop, launch, and optimize specialty
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  Speaker 5: pharmacy programs that improve patient access, operational performance, and financial sustainability.
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  Speaker 5: She brings more than 20 years of pharmacy experience, including
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  Speaker 5: the past 12 years dedicated to specialty pharmacy leadership and strategy.
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  Speaker 5: Mel has been with Fairview Pharmacy Services for more than
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  Speaker 5: 18 years, and most recently served as director of specialty
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  Speaker 5: pharmacy before assuming her current consulting leadership role. She advises
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  Speaker 5: health systems on specialty pharmacy program development, payer and limited
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  Speaker 5: distribution drug strategy, accreditation, medication access services, technology optimization, and
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  Speaker 5: specialty pharmacy revenue capture. Through this work, she helps organizations
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  Speaker 5: build scalable programs that support long-term growth. Mel earned her
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  Speaker 5: doctor of pharmacy degree from the University of Minnesota College
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  Speaker 5: of Pharmacy in 2011. She's a certified specialty pharmacist, serves
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  Speaker 5: on the National Association of Specialty Pharmacy Education Committee, and
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  Speaker 5: is an active member of the health system-owned specialty pharmacy community. Mel,
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  Speaker 5: thanks so much for joining me today.
• 3:00
  Speaker 2: And thanks for having me, Sheila.
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  Speaker 5: So over the last decade, we've seen tremendous growth in
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  Speaker 5: health system specialty pharmacy, and accelerator organizations have certainly played
• 3:09
  Speaker 5: an important role in that journey. From your perspective, how
• 3:13
  Speaker 5: has the specialty pharmacy landscape evolved?
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  Speaker 2: Yeah, you know, it's really pretty remarkable how much it
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  Speaker 2: has changed over the past 10, 15 years. I came
• 3:21
  Speaker 2: into the space about 14 years ago, 12, 13 years ago. And,
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  Speaker 2: you know, back then it was really kind of relatively
• 3:29
  Speaker 2: early in its development. And we've really seen extraordinary growth since.
• 3:33
  Speaker 2: I was looking at some ASHP studies and they reported
• 3:37
  Speaker 2: in 2015 only about 8% of health systems reported having
• 3:41
  Speaker 2: specialty pharmacy patients. By 2019, that had grown to just
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  Speaker 2: over 25%, so more than a threefold increase in just
• 3:48
  Speaker 2: those four years. And I think that accelerators really played
• 3:51
  Speaker 2: a huge role in that growth. They helped many of
• 3:54
  Speaker 2: those health systems establish their programs. And some of those
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  Speaker 2: programs may have never gotten off the ground otherwise. So,
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  Speaker 2: I mean, as you know, it's not simple to get
• 4:03
  Speaker 2: a specialty pharmacy started. There's a lot of expertise required
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  Speaker 2: around accreditation and clinical workflows, you know, technology, market access,
• 4:10
  Speaker 2: you know, all the staffing and analytics and accelerators really
• 4:14
  Speaker 2: helped package those capabilities and allowed organizations to move much
• 4:19
  Speaker 2: faster than they could have independently. So since that time,
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  Speaker 2: I think the specialty pharmacy landscape has evolved significantly. Today,
• 4:27
  Speaker 2: we're looking at much more mature health systems, specialty pharmacies
• 4:31
  Speaker 2: in the market. So in its most recent survey, ASHP
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  Speaker 2: identified just shy of 300 health system SPs in its sampling.
• 4:40
  Speaker 2: And among those respondents, 71% had been operating for more
• 4:44
  Speaker 2: than seven years. And these aren't just simple dispensing operations, right?
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  Speaker 2: They're increasingly integrating in their greater health system model. They're
• 4:54
  Speaker 2: supporting patient access services, medication management, adherence programs, outcomes monitoring,
• 5:01
  Speaker 2: and a lot of care coordination across the patient journey.
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  Speaker 2: So really seeing not only are we seeing more health systems,
• 5:08
  Speaker 2: especially pharmacies in this space, but more mature programs as well.
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  Speaker 2: And then concurrently, the underlying specialty market has expanded dramatically.
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  Speaker 2: So I think most people are familiar with the fact
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  Speaker 2: that specialty meds are now accounting for more than half
• 5:22
  Speaker 2: of the U.S. pharmaceutical spend. IQVIA reported that specialty meds
• 5:28
  Speaker 2: now represent about $ 262 billion in net sales. That was
• 5:33
  Speaker 2: in 2024, which is more than $ 100 billion higher than
• 5:36
  Speaker 2: in 2020. So in addition to seeing more specialty drugs
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  Speaker 2: in this space, we're also seeing more complex therapies and
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  Speaker 2: more disease states that are falling into the specialty category.
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  Speaker 2: And then our pipeline is also reinforcing that trend. So,
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  Speaker 2: you know, looking in 2025 of the 46 novel drugs
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  Speaker 2: that the FDA approved, half of those received orphan drug
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  Speaker 2: designation and So that's really reflecting kind of the continued
• 6:00
  Speaker 2: development of therapies in that kind of rare disease and
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  Speaker 2: highly specialized condition space. So, you know, in summary, I
• 6:07
  Speaker 2: think the landscape has really evolved in three ways. You know, first,
• 6:10
  Speaker 2: the clinical scope has expanded dramatically. We're managing more disease states,
• 6:14
  Speaker 2: more complex therapies than ever before. And we're increasingly being
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  Speaker 2: asked in the specialty pharmacy to really coordinate care across
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  Speaker 2: multiple service lines. Now tapping into the infusion space, MTM space, compounding, etc., Secondly,
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  Speaker 2: I think specialty pharmacy has really moved from being an
• 6:31
  Speaker 2: emerging service line to a really strategic component of the
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  Speaker 2: health system enterprise. It's become a really important financial contributor
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  Speaker 2: in addition to being an important patient care component of
• 6:43
  Speaker 2: the health system. And third, we're really seeing this shift
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  Speaker 2: now from not just building the specialty pharmacy, but how
• 6:50
  Speaker 2: do you optimize what you've built? So that's probably one
• 6:52
  Speaker 2: of the biggest changes and really The reason for the
• 6:55
  Speaker 2: topic I chose today is that health systems have invested
• 6:59
  Speaker 2: in their infrastructure, and now they're really asking the more
• 7:01
  Speaker 2: sophisticated questions. How much of their own specialty pharmacy volume
• 7:06
  Speaker 2: or their own specialty prescription volume are they capturing? Where
• 7:09
  Speaker 2: are they seeing leakage with payer restrictions and LDD access?
• 7:13
  Speaker 3: Are they.
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  Speaker 2: integrating their specialty pharmacy with infusion services and kind of
• 7:18
  Speaker 2: the broader ambulatory pharmacy strategy? And are they demonstrating clinical
• 7:23
  Speaker 2: and financial value? And there's still a lot of opportunity
• 7:27
  Speaker 2: left in this space. Looking back to that ASHP survey again,
• 7:31
  Speaker 2: they also found that you know, 61% of their respondents
• 7:34
  Speaker 2: were only able to fill like less than half of
• 7:37
  Speaker 2: the prescriptions that were originating from their health system. Most commonly,
• 7:41
  Speaker 2: this was due to payer lockout, but I think there's
• 7:43
  Speaker 2: also a lot of opportunity in chasing down LDDs and
• 7:45
  Speaker 2: just ensuring that you're filling all the prescriptions that you
• 7:49
  Speaker 2: could be filling that you're not locked out of. So yeah,
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  Speaker 2: I think the first chapter is really about building specialty pharmacy.
• 7:55
  Speaker 2: Now we're kind of in this next chapter of how
• 7:56
  Speaker 2: do you maximize the value through greater capture, better access,
• 8:01
  Speaker 2: you know, deeper clinical integration, stronger outcomes, and really a
• 8:05
  Speaker 2: much more strategic approach to incorporating specialty pharmacy into the
• 8:09
  Speaker 2: larger organizational strategy.
• 8:11
  Speaker 1: So if accelerators have been so successful, why is this
• 8:16
  Speaker 1: an important conversation for health systems today?
• 8:19
  Speaker 2: Yeah, you know, I think it's because specialty pharmacy has
• 8:22
  Speaker 2: matured and the questions that health systems are asking have
• 8:25
  Speaker 2: matured along with it. So, you know, again, 10 years ago,
• 8:28
  Speaker 2: the question was, how do we build a specialty pharmacy?
• 8:30
  Speaker 2: And today, it's a very different question. It's, okay, our
• 8:33
  Speaker 2: specialty pharmacy has grown significantly. Is the operating model that
• 8:37
  Speaker 2: got us here still the model that will get us
• 8:40
  Speaker 2: to where we want to go next? And I think
• 8:42
  Speaker 2: that's an important distinction. It's certainly not a criticism of
• 8:45
  Speaker 2: accelerator partnerships by any means. As I noted previously, I
• 8:48
  Speaker 2: think they have played an incredibly important role in just
• 8:51
  Speaker 2: helping health systems get into this space and really establish
• 8:53
  Speaker 2: that infrastructure, navigate all the accreditation, payer requirements, all those things,
• 8:59
  Speaker 2: and really establish a viable operation. But organizations evolve, and
• 9:03
  Speaker 2: the market has evolved, and the needs of the health
• 9:05
  Speaker 2: system also evolve alongside that. Maybe a health system started
• 9:10
  Speaker 2: with a relatively small specialty pharmacy, handful of disease states.
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  Speaker 2: Now we're five, 10 years later, they may be managing
• 9:17
  Speaker 2: tens of thousands of prescriptions and supporting a much broader
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  Speaker 2: clinical footprint, dealing with increasingly complex therapies and thinking more
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  Speaker 2: strategically about peer access, LDD access, patient capture outcomes, and
• 9:30
  Speaker 2: just how they integrate their specialty in with other infusion
• 9:34
  Speaker 2: ambulatory services. And so at that point, You know, I
• 9:37
  Speaker 2: think it's completely reasonable to step back and ask whether
• 9:40
  Speaker 2: the operating model is still optimized for the organization you
• 9:43
  Speaker 2: are today and where you want to go next. And
• 9:45
  Speaker 2: so with that, it's important to evaluate, you know, what
• 9:48
  Speaker 2: would it take to bring certain capabilities in-house and the
• 9:51
  Speaker 2: value in that, as well as where, you know, strategic
• 9:54
  Speaker 2: partnerships should remain in place. So just making sure that
• 9:58
  Speaker 2: the model is intentional, you know, It's no different to
• 10:00
  Speaker 2: how we reassess our technology platforms that we use. We
• 10:04
  Speaker 2: look at our rev cycle strategies. We look at supply
• 10:07
  Speaker 2: chain models and all the other tools and partners we
• 10:10
  Speaker 2: evaluate on a regular basis. I think specialty pharmacy vendors
• 10:15
  Speaker 2: and accelerators that should be included in those routine assessments
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  Speaker 2: and Again, knowing that there's still a lot of opportunity
• 10:22
  Speaker 2: for health systems to capture more of their own patients,
• 10:24
  Speaker 2: I think that's a great reason to start that conversation
• 10:27
  Speaker 2: and start looking at what would additional ownership of your
• 10:30
  Speaker 2: services do to some of those strategic opportunities. So it's not,
• 10:35
  Speaker 2: you know, it's not about who operates the pharmacy, but again,
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  Speaker 2: it's does the model give your health system the capabilities
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  Speaker 2: and the integrations and the, you know, quite frankly, the
• 10:44
  Speaker 2: autonomy it needs for the next phase of its growth.
• 10:47
  Speaker 2: So it's really not, do we still need the accelerator?
• 10:48
  Speaker 2: It is our operating model aligned with our strategy.
• 10:51
  Speaker 1: And what kinds of things should health system leaders evaluate
• 10:55
  Speaker 1: during that strategic review?
• 10:58
  Speaker 2: Yeah, so there's kind of five areas that I think about.
• 11:01
  Speaker 2: First is just going back to the strategy. You know, again,
• 11:04
  Speaker 2: does your current model support where you're trying to go?
• 11:08
  Speaker 2: What role is your specialty pharmacy playing in the broader,
• 11:11
  Speaker 2: you know, pharmacy and health system strategy? Are you trying
• 11:14
  Speaker 2: to integrate more closely with your infusion and ambulatory services?
• 11:18
  Speaker 2: Are you trying to expand it to new therapeutic areas?
• 11:20
  Speaker 2: Or use your pharmacy service line to support broader population
• 11:24
  Speaker 2: health strategies? And are you able to kind of advance
• 11:29
  Speaker 2: those initiatives forward? The second is the capabilities. So what capabilities...
• 11:39
  Speaker 2: meaningful internal expertise? Or maybe where haven't you developed expertise
• 11:44
  Speaker 2: because there are certain aspects of your program being managed
• 11:46
  Speaker 2: by a vendor and are those areas that you want
• 11:48
  Speaker 2: to bring more knowledge in-house? But also where might you
• 11:53
  Speaker 2: still benefit from external scale and technology and expertise or
• 11:57
  Speaker 2: relationships versus how it might benefit you to bring that
• 12:00
  Speaker 2: expertise in-house? Third is kind of access and market position,
• 12:06
  Speaker 2: which is a really important one today. So how much
• 12:09
  Speaker 2: of your internally generated specialty volume are you capturing? What
• 12:13
  Speaker 2: are the payer manufacturer restrictions? How are they limiting access?
• 12:17
  Speaker 2: How effective is your vendor with navigating market access? And,
• 12:20
  Speaker 2: you know, are you positioned to respond to payer network
• 12:24
  Speaker 2: or payer manufacturer networks? Or how would you get those
• 12:29
  Speaker 2: capabilities if you don't have them and those types of things?
• 12:34
  Speaker 2: And then financial performance is a big one. And it's
• 12:38
  Speaker 2: more than just what does the partnership cost? I think
• 12:40
  Speaker 2: the better question is, what value are you receiving for
• 12:44
  Speaker 2: that investment? So revenue and margin, of course, but also
• 12:47
  Speaker 2: patient retention, again, access, technology, analytics, those types of things.
• 12:53
  Speaker 2: And additionally, systems should be comparing the cost of bringing
• 12:58
  Speaker 2: those capabilities in-house, which typically comes down to SMB for
• 13:02
  Speaker 2: the staffing required, as well as whatever technology platforms might
• 13:05
  Speaker 2: need to be rolled out internally, and comparing that cost
• 13:10
  Speaker 2: to what they're spending on the accelerator or third party.
• 13:13
  Speaker 2: So the ROI to bring services in-house can be quite significant,
• 13:17
  Speaker 2: especially for more mature systems. And then the last bucket
• 13:22
  Speaker 2: is really, and probably the most important, is just patient
• 13:24
  Speaker 2: care and experience. So if you are planning a transition,
• 13:27
  Speaker 2: You know, how would that change the patient experience, either
• 13:31
  Speaker 2: positively or negatively? How is that going to affect access
• 13:34
  Speaker 2: and continuity, patient satisfaction, care coordination, and those kind of things?
• 13:38
  Speaker 2: So it's more than a financial exercise or kind of
• 13:42
  Speaker 2: a build versus buy analysis. It's really a strategy discussion.
• 13:46
  Speaker 2: You know, what capabilities do you feel your health system
• 13:48
  Speaker 2: needs to own? What capabilities should it partner for? And
• 13:52
  Speaker 2: what operating model is going to best support your organization's
• 13:55
  Speaker 2: next phase of growth? And there's a few kind of
• 13:58
  Speaker 2: key questions that I would just drop here as things
• 14:01
  Speaker 2: to think about bringing back to the organization. And they're
• 14:05
  Speaker 2: meant to be objective and not necessarily steer in one
• 14:08
  Speaker 2: direction or another. But the first one just being, you know,
• 14:13
  Speaker 2: why did we originally choose this model? And are those
• 14:16
  Speaker 2: reasons still true today? And then, you know, what has
• 14:19
  Speaker 2: changed since that decision was made? Has volumes changed? Have
• 14:23
  Speaker 2: therapeutic areas expanded? Has you know, pair mix changed, have your,
• 14:27
  Speaker 2: you know, internal capabilities matured, you know, what's happening with
• 14:31
  Speaker 2: the technology landscape, just all the things that might have
• 14:34
  Speaker 2: changed since that decision was made. How does that impact
• 14:37
  Speaker 2: what is the best path forward? And then thinking through,
• 14:40
  Speaker 2: you know, what capabilities are going to, you know, be
• 14:43
  Speaker 2: strategic differentiators for your organization? Where do you really want
• 14:47
  Speaker 2: to be best in class or need to be best
• 14:49
  Speaker 2: in class and have direct control versus where does it
• 14:52
  Speaker 2: make sense to leverage an external partner that can bring
• 14:55
  Speaker 2: some scale and expertise? And then, you know, are you
• 14:59
  Speaker 2: getting the level of access and capture you should be
• 15:01
  Speaker 2: getting as we talked about? you know, and what would
• 15:05
  Speaker 2: you have to build internally to replicate some of those capabilities,
• 15:08
  Speaker 2: really thinking through, you know, the people, the technology, the infrastructure,
• 15:13
  Speaker 2: the data and analytics, and just really trying to parse
• 15:15
  Speaker 2: out what that might look like. And then, you know, finally,
• 15:19
  Speaker 2: how is that, how is this change going to affect
• 15:22
  Speaker 2: the key stakeholders, your patients, your providers, your employers, employees,
• 15:26
  Speaker 2: and the kind of broader health system? So again, just more,
• 15:29
  Speaker 2: you kind of a framework of questions to really help
• 15:34
  Speaker 2: the organization determine what's the best next step.
• 15:38
  Speaker 1: Well, some organizations may decide to continue working with an
• 15:41
  Speaker 1: accelerator indefinitely. What are some reasons that that might still
• 15:45
  Speaker 1: be the best decision?
• 15:47
  Speaker 2: Yeah, I mean, I think first off, it's important to
• 15:50
  Speaker 2: note that a strategic review doesn't have to result in
• 15:52
  Speaker 2: a change, right? Sometimes you do this analysis, and for
• 15:55
  Speaker 2: many health systems, continuing with your accelerator might be the
• 15:58
  Speaker 2: best decision. For example, an organization might have significant growth ahead,
• 16:04
  Speaker 2: but just have not yet reached that level of scale
• 16:06
  Speaker 2: or leadership infrastructure to build the capabilities internally. And an
• 16:12
  Speaker 2: accelerator may continue to provide specialized expertise that would be
• 16:15
  Speaker 2: very difficult or expensive to recruit and retain. So particularly
• 16:19
  Speaker 2: areas like payer strategy and LDD access and accreditation and
• 16:24
  Speaker 2: analytics tend to be areas that, you know, finding the
• 16:27
  Speaker 2: right talent to bring that in-house can be a little
• 16:29
  Speaker 2: bit more difficult. And accelerators also bring, you know, tremendous
• 16:35
  Speaker 2: value in scale. So they can kind of spread their
• 16:38
  Speaker 2: technology investments and expertise and operational resources across multiple organizations. And,
• 16:44
  Speaker 2: you know, that might be more difficult for a single
• 16:46
  Speaker 2: health system to replicate economically if, again, they're not yet
• 16:50
  Speaker 2: to the right scale. And then the specialty environment changes rapidly.
• 16:55
  Speaker 2: You know, payer landscape changes, manufacturer requirements change. always new
• 16:59
  Speaker 2: therapies entering the market. And so there is a lot
• 17:03
  Speaker 2: of value in having a partner whose core business is
• 17:05
  Speaker 2: really to stay on top of those changes and keep
• 17:07
  Speaker 2: your health system informed on those things. And then the
• 17:11
  Speaker 2: other consideration is leadership focus. So sometimes the best decision
• 17:15
  Speaker 2: is to just let a highly specialized partner manage certain
• 17:18
  Speaker 2: operational capabilities so that your internal leaders can focus their
• 17:21
  Speaker 2: time on broader pharmacy and health system strategies. So There
• 17:25
  Speaker 2: are definitely reasons to stay with an accelerator. However, I
• 17:28
  Speaker 2: do hesitate to use the word indefinitely as I do, again,
• 17:31
  Speaker 2: think it's very important to reassess and complete that strategic
• 17:35
  Speaker 2: review at a regular cadence. Because again, as your health
• 17:38
  Speaker 2: system matures, the answers to all those questions I had
• 17:40
  Speaker 2: posed previously, they'll change and that might change your decision.
• 17:44
  Speaker 2: And so I think it is important to evaluate this
• 17:47
  Speaker 2: regularly because ultimately, you really want to be confident in
• 17:50
  Speaker 2: your rationale for your operating model and just be able
• 17:54
  Speaker 2: to continuously you know, demonstrate that it's still delivering the
• 17:58
  Speaker 2: capabilities and the value and the strategic flexibility that your
• 18:02
  Speaker 2: organization needs.
• 18:04
  Speaker 1: So in keeping that with that, you know, theme, like
• 18:07
  Speaker 1: what does the organization need? What circumstances might prompt a
• 18:10
  Speaker 1: health system to explore bringing more of those capabilities in-house?
• 18:15
  Speaker 2: Yeah, you know, I mean, usually it's less about dissatisfaction
• 18:18
  Speaker 2: with the accelerator and more about you know, again, the
• 18:21
  Speaker 2: organizational maturity and strategic priorities. So there are several things
• 18:25
  Speaker 2: that might prompt a health system to explore this. And,
• 18:29
  Speaker 2: you know, for one, the pharmacy may have reached a
• 18:31
  Speaker 2: significant scale, as we noticed. Sometimes leadership may have developed
• 18:36
  Speaker 2: significant specialty pharmacy expertise, or maybe there's a new leader
• 18:40
  Speaker 2: entering the organization that has prior experience and they want
• 18:43
  Speaker 2: to bring that expertise in-house. Sometimes it could be technology
• 18:47
  Speaker 2: and infrastructure has now become a bit more established and
• 18:51
  Speaker 2: you're more ready to build out your own tools and
• 18:54
  Speaker 2: data and analytics. Or the organization just has developed more
• 18:59
  Speaker 2: capabilities that it now considers strategically important to own directly.
• 19:04
  Speaker 2: So those are all reasons that a health system might
• 19:09
  Speaker 2: evaluate it. I do think one of the most important
• 19:12
  Speaker 2: considerations is the economics as well. That can change dramatically
• 19:16
  Speaker 2: as a specialty pharmacy scale. So when an organization is
• 19:19
  Speaker 2: starting up, paying a partner a percentage of margin can
• 19:22
  Speaker 2: make a lot of sense. You're essentially buying speed and expertise.
• 19:26
  Speaker 2: and all that infrastructure and technology, and it's a proven
• 19:28
  Speaker 2: operating model. And as a new starting specialty pharmacy, you
• 19:34
  Speaker 2: can now make that investment in the vendor and not
• 19:36
  Speaker 2: have to take the time to build that all out yourself.
• 19:40
  Speaker 2: But that economic model can look very different once you're
• 19:42
  Speaker 2: operating kind of a large, mature specialty pharmacy. So if
• 19:46
  Speaker 2: the pharmacy is now generating hundreds of millions of dollars
• 19:49
  Speaker 2: in annual revenue, even a relatively modest percentage-based fee can
• 19:54
  Speaker 2: translate into a really significant annual expense. And at that point,
• 19:58
  Speaker 2: leadership should be asking, are we still receiving enough incremental
• 20:03
  Speaker 2: value from the partnership to justify what we're paying for it?
• 20:06
  Speaker 2: And that's where that ROI analysis becomes very important because
• 20:10
  Speaker 2: You know, you have to compare the ongoing cost of
• 20:12
  Speaker 2: that partnership against the fully loaded cost to bring those
• 20:15
  Speaker 2: capabilities in-house, which, you know, yes, there are a lot
• 20:17
  Speaker 2: of pieces there like your people, your technology, you know,
• 20:20
  Speaker 2: the accreditation components, analytics, and those types of things. But
• 20:26
  Speaker 2: the other side of that too is, you know, it's
• 20:28
  Speaker 2: not just the margin you'll be bringing it back in,
• 20:31
  Speaker 2: but also the opportunity side of things. So if your
• 20:33
  Speaker 2: brain capability is in-house, are you gaining additional control over
• 20:37
  Speaker 2: your operations that allows you to pursue strategic initiatives that
• 20:41
  Speaker 2: you maybe couldn't before? How can you dig in further
• 20:44
  Speaker 2: to your prescription capture? Are there additional payer contracts or
• 20:48
  Speaker 2: LDD opportunities that you could be going after? Can you
• 20:51
  Speaker 2: integrate your services more effectively with your more broad ambulatory
• 20:55
  Speaker 2: pharmacy services and infusion services? And then, you know, again,
• 20:59
  Speaker 2: can you reinvest some of that value back into the
• 21:02
  Speaker 2: pharmacy and the health system as well? And, you know,
• 21:07
  Speaker 2: there is, ASHP also has a nice paper out there.
• 21:10
  Speaker 2: They recommend this type of long-term analysis as well and
• 21:13
  Speaker 2: just evaluating the point at which which your organization has
• 21:16
  Speaker 2: grown enough that it should reconsider those economics and reconsider
• 21:21
  Speaker 2: building those capabilities internally versus outsourcing. Because again, like, you know,
• 21:26
  Speaker 2: a partnership when you're at 20 million in revenue will
• 21:29
  Speaker 2: be very different than when you hit 100, 200, 500 million.
• 21:33
  Speaker 2: So it's, you know, again, it's both the strategic and
• 21:35
  Speaker 2: the financial dimensions. Does your organization want greater control? Have
• 21:39
  Speaker 2: you developed the internal expertise? Do you have the infrastructure?
• 21:42
  Speaker 2: Do you want more flexibility to innovate? And then financially,
• 21:46
  Speaker 2: you know, what is the net present value of continuing
• 21:49
  Speaker 2: that partnership versus investing the capabilities internally? And again, it
• 21:54
  Speaker 2: doesn't necessarily mean insourcing is automatically the right answer, but
• 21:57
  Speaker 2: you know, a partner may continue to create enough value
• 22:00
  Speaker 2: to justify it. But if you've reached that significant or
• 22:03
  Speaker 2: that sufficient scale, there can be really significant ROI opportunity
• 22:07
  Speaker 2: in bringing those in-house. And it doesn't have to be
• 22:09
  Speaker 2: all or nothing either. A health system might want to
• 22:12
  Speaker 2: own certain capabilities that are more strategic and financially important,
• 22:17
  Speaker 2: but continue to partner in areas where, again, the external
• 22:20
  Speaker 2: expertise can create more value. Most often, it's kind of
• 22:23
  Speaker 2: the payer access, market access, and different like technology tools
• 22:27
  Speaker 2: and things like that. But bringing your staff in-house, bringing
• 22:29
  Speaker 2: your people in-house, owning kind of that leadership of the program,
• 22:34
  Speaker 2: I think is really important.
• 22:38
  Speaker 1: So some concerns that leaders have about changing operating models
• 22:43
  Speaker 1: is could this disrupt patient care and introduce financial risk?
• 22:47
  Speaker 1: How should organizations think about that?
• 22:50
  Speaker 2: Yeah, very legitimate concerns. And I think, you know, they
• 22:53
  Speaker 2: should definitely be part of the evaluation from the beginning. Obviously,
• 22:57
  Speaker 2: as a pharmacist, by training and, you know, first principle
• 23:00
  Speaker 2: is always patient care continuity. It's our bread and butter
• 23:02
  Speaker 2: in specialty pharmacy. And, you know, a health system should
• 23:06
  Speaker 2: never change their operating model simply because it's better financially, right?
• 23:09
  Speaker 2: We have to understand what that transition would mean for
• 23:12
  Speaker 2: our patients as well as our providers, right? How does,
• 23:17
  Speaker 2: you know, how does that change the clinical program structure,
• 23:20
  Speaker 2: their experience, you know, our adherence services, the clinical outcomes,
• 23:23
  Speaker 2: all of that? To me, that means that you should
• 23:25
  Speaker 2: just really make sure you have a very deliberate transition
• 23:28
  Speaker 2: plan in place. Make sure there's solid governance. You understand
• 23:31
  Speaker 2: the staffing needs. you understand what that technology transition needs
• 23:34
  Speaker 2: to look like, you understand any payer manufacturer dynamics that
• 23:39
  Speaker 2: need to be taken into account, that you are, you know,
• 23:42
  Speaker 2: making sure you have a solid workflow design, that you're
• 23:44
  Speaker 2: testing that workflow, and that you have strong communication to
• 23:48
  Speaker 2: both patients and across your team, and that you're monitoring performance.
• 23:51
  Speaker 2: So just being very intentional about the transition to ensure
• 23:54
  Speaker 2: that there's no gaps. And that will also ensure that
• 23:58
  Speaker 2: you don't lose patients. And so from a financial perspective,
• 24:01
  Speaker 2: as long as you Make sure the patients are being
• 24:03
  Speaker 2: managed appropriately. There's really no reason you would lose those patients.
• 24:08
  Speaker 2: And if anything, hopefully you increase that ability to capture
• 24:11
  Speaker 2: more patients. So it would be more of the opposite impact.
• 24:15
  Speaker 2: I think it's also important to call out that, you know,
• 24:17
  Speaker 2: the difference between the risk of change versus the risk
• 24:21
  Speaker 2: of staying the same. I think we sometimes think of
• 24:23
  Speaker 2: the status quo as a low risk option, but if
• 24:27
  Speaker 2: the health system is growing rapidly and leaving significant margin
• 24:30
  Speaker 2: with a third party, they're missing opportunities for capture, or
• 24:34
  Speaker 2: they're operating with capabilities that maybe don't align with the
• 24:36
  Speaker 2: broader strategy, there can be substantial risk in not changing
• 24:40
  Speaker 2: as well. So I would recommend leaders kind of model
• 24:43
  Speaker 2: both sides. What are the risks and costs of transitioning?
• 24:46
  Speaker 2: And what are the risks and costs of keeping things
• 24:49
  Speaker 2: as they are? And again, it doesn't have to be
• 24:52
  Speaker 2: all or nothing. So you can start to look at
• 24:54
  Speaker 2: that and say, well, where do we have concerns? And
• 24:57
  Speaker 2: is there kind of a hybrid model that might make
• 25:00
  Speaker 2: sense here? So it's not like we're trying to make
• 25:02
  Speaker 2: the biggest change possible. We want to make the right
• 25:04
  Speaker 2: change at the right time with the right controls in place.
• 25:09
  Speaker 1: So how do organizations know when it's time to begin
• 25:12
  Speaker 1: this evaluation?
• 25:14
  Speaker 2: Yeah, it's a great question. I don't think there's a
• 25:17
  Speaker 2: magic prescription volume or revenue number that kind of tells
• 25:21
  Speaker 2: you it's time. But I just think having a periodic
• 25:24
  Speaker 2: review in your governance process, whether that's an annual review
• 25:27
  Speaker 2: or maybe more comprehensively every few years as you're refreshing
• 25:31
  Speaker 2: your larger strategic plans. At minimum, I think leadership should
• 25:37
  Speaker 2: be asking, again, is our operating model still aligned with
• 25:39
  Speaker 2: our strategy? How has the organization changed? How have capabilities matured?
• 25:44
  Speaker 2: How has the market and environment changed? And are you
• 25:48
  Speaker 2: capturing the opportunity you should be? I think there's a
• 25:51
  Speaker 2: few kind of specific triggers that could often prompt a
• 25:53
  Speaker 2: deeper review. So it could be like all of a
• 25:55
  Speaker 2: sudden your volumes shoot up and you've got a huge
• 25:57
  Speaker 2: increase in volume. It could be that you're expanding into
• 26:00
  Speaker 2: new therapeutic areas. It could be that your health system
• 26:04
  Speaker 2: is acquiring another organization. We've seen a bit of that happening.
• 26:08
  Speaker 2: Or it could be, again, new leadership coming in. Maybe
• 26:11
  Speaker 2: you're building or acquiring infusion capabilities, and now you want
• 26:14
  Speaker 2: to evaluate how that can complement your specialty capabilities. That
• 26:19
  Speaker 2: could be a change in payer mix, or maybe you're
• 26:22
  Speaker 2: changing your technology platform and you want to maybe look
• 26:25
  Speaker 2: at owning more of that in-house. And then kind of
• 26:28
  Speaker 2: the obvious one is, is your agreement approaching renewal? I
• 26:31
  Speaker 2: think if you're getting within two years or so of renewal,
• 26:35
  Speaker 2: it's probably a good time to start looking at this
• 26:37
  Speaker 2: very seriously because you want to give yourself a good
• 26:40
  Speaker 2: amount of time for that transition phase. So those are
• 26:44
  Speaker 2: all good moments to just kind of step back and reassess. And,
• 26:48
  Speaker 2: you know, again, it doesn't have to always be a change.
• 26:50
  Speaker 2: Sometimes you do the analysis and conclude, you know, I
• 26:52
  Speaker 2: think we're exactly where we should be. But it is
• 26:55
  Speaker 2: important to, I think, stop and pause and make sure
• 26:57
  Speaker 2: that that's the right model.
• 27:01
  Speaker 1: And for organizations that decide it's time to evaluate their
• 27:04
  Speaker 1: operating model, how can organizations like Fairview Pharmacy Solutions help?
• 27:09
  Speaker 2: Okay. So there's really two ways that we can help.
• 27:12
  Speaker 2: We can certainly help an organization evaluate its options as
• 27:16
  Speaker 2: we kind of talked through today. But I think for
• 27:18
  Speaker 2: many organizations, the bigger need comes with actually executing the transition.
• 27:22
  Speaker 2: And that's where I think having a partner with hands-on
• 27:25
  Speaker 2: health system specialty pharmacy experience can be incredibly valuable. A
• 27:30
  Speaker 2: transition from an accelerator or another operating model isn't simply
• 27:34
  Speaker 2: moving prescriptions from one pharmacy to another type of activity.
• 27:38
  Speaker 2: It's essentially building and operationalizing a specialty pharmacy business while
• 27:43
  Speaker 2: continuing to serve patients through the transition. And oftentimes in
• 27:47
  Speaker 2: these situations, the day-to-day operations are being managed by the accelerator.
• 27:52
  Speaker 2: And so that infrastructure and that knowledge base and all
• 27:54
  Speaker 2: of those standard operating procedures, those all need to now
• 27:58
  Speaker 2: be established by the health system. And the leader that's
• 28:01
  Speaker 2: running this may or may not have the capacity to
• 28:03
  Speaker 2: manage it all. And there might be knowledge gaps there
• 28:05
  Speaker 2: just depending on their past experience. So My role with
• 28:09
  Speaker 2: solutions and my goal is to really just approach this
• 28:12
  Speaker 2: very comprehensively. I want to start by understanding the current state.
• 28:16
  Speaker 2: How does the existing operation work? Where are the vendor dependencies?
• 28:20
  Speaker 2: What are the peer and therapeutic mix look like? Where
• 28:24
  Speaker 2: are the opportunities and the risks and kind of what?
• 28:26
  Speaker 2: is the future state model that we want to accomplish.
• 28:29
  Speaker 2: And then from there, we can help design the infrastructure
• 28:31
  Speaker 2: that's required to operate successfully. And that can include, you know,
• 28:35
  Speaker 2: staffing models, org charts, technology requirements, workflows, policies, financial modeling,
• 28:42
  Speaker 2: and many systems are also looking into building kind of
• 28:44
  Speaker 2: a centralized specialty pharmacy service center. We can also facilitate
• 28:48
  Speaker 2: that type of build. And then we, you know, we
• 28:52
  Speaker 2: also want to help provide very detailed kind of operational
• 28:55
  Speaker 2: pieces that can really make or break the transition. So
• 28:58
  Speaker 2: those clinical workflows, design and configuration, a lot of times
• 29:01
  Speaker 2: accelerators own the clinical platform. So that's something that needs
• 29:04
  Speaker 2: to be developed in-house. All the medication access workflows like
• 29:08
  Speaker 2: prior auth and financial assistance, the call center operation, fulfillment, etc.
• 29:14
  Speaker 2: data and reporting, and of course, all the communication that
• 29:17
  Speaker 2: needs to go alongside that to both patients and providers
• 29:20
  Speaker 2: and the staff internally. And then there's the payer manufacturer access.
• 29:23
  Speaker 2: We can help assess existing relationships, identify opportunities for expansion,
• 29:27
  Speaker 2: and really support strategies around expanding payer and LDD access.
• 29:32
  Speaker 2: And then there's just the readiness. We help organizations work
• 29:34
  Speaker 2: through any, you know, if there's any licensing or regulatory requirements,
• 29:38
  Speaker 2: if there's accreditation requirements, needs, a lot of times accreditation
• 29:42
  Speaker 2: has also happened or owned by the accelerators. How do
• 29:45
  Speaker 2: we help make sure your internal team understands all of
• 29:48
  Speaker 2: the requirements there? If there's recruiting and training that needs
• 29:51
  Speaker 2: to happen, job descriptions, anything of that nature, we can
• 29:56
  Speaker 2: kind of help with making sure that we have templates
• 29:58
  Speaker 2: and things for those pieces. And then when it comes
• 30:01
  Speaker 2: to actual transition to patients, you know, we help with
• 30:03
  Speaker 2: a structured implementation approach, kind of a phased patient onboarding, again,
• 30:07
  Speaker 2: with strong communications across providers and clinic team members, making
• 30:10
  Speaker 2: sure we're monitoring for any issues and delays, and just
• 30:13
  Speaker 2: kind of establishing this command center for that initial transition
• 30:17
  Speaker 2: to make sure that everything goes smoothly and any issues
• 30:20
  Speaker 2: that are identified can be addressed quickly. The goal is
• 30:23
  Speaker 2: really to make sure the pharmacy is not just operational
• 30:26
  Speaker 2: on day one, but that, you know, they're stable, they're performing,
• 30:29
  Speaker 2: they're delivering a good patient experience, a good provider experience. And,
• 30:33
  Speaker 2: and we don't just, you know, walk away at go live.
• 30:36
  Speaker 2: We want to stay on board for several months, make
• 30:38
  Speaker 2: sure that again, that transition period goes smoothly. If there's
• 30:42
  Speaker 2: dashboards and KPIs that need to be developed or monitored,
• 30:45
  Speaker 2: we can, we can assist there. Um, as well as
• 30:48
  Speaker 2: some of the additional opportunities with payer and LDD access
• 30:51
  Speaker 2: and improving capture and things of that nature. We can
• 30:54
  Speaker 2: really tailor to the client in terms of how much
• 30:58
  Speaker 2: they need or how little they need. But we do
• 31:00
  Speaker 2: bring our own SMEs from Fairview. We've been doing this
• 31:05
  Speaker 2: for 25 plus years. And so we bring our frontline
• 31:09
  Speaker 2: SMEs who are very close to this work to make
• 31:12
  Speaker 2: sure that we're providing the most up-to-date information as possible. And, um,
• 31:16
  Speaker 2: I think it's really important to have people who understand,
• 31:19
  Speaker 2: especially pharmacy operations and all those components to make sure things,
• 31:22
  Speaker 2: this transition goes successfully. So, um, the other thing I
• 31:26
  Speaker 2: think is important to call it as we, we want
• 31:27
  Speaker 2: to ensure there's knowledge transfer occurring throughout the engagement as well,
• 31:31
  Speaker 2: because ultimately, you know, our goal is to help the
• 31:33
  Speaker 2: health system really build a sustainable internal capability rather than
• 31:37
  Speaker 2: create another dependency. So we want to make sure that
• 31:40
  Speaker 2: as we are, um, going through the project plan that
• 31:44
  Speaker 2: we are sharing documentation and sharing knowledge so that the
• 31:48
  Speaker 2: whole system feels comfortable and confident with everything. So yeah,
• 31:52
  Speaker 2: so whether the organization is just kind of in the
• 31:55
  Speaker 2: process of validating their current model or transitioning away or
• 31:58
  Speaker 2: moving to a hybrid model, or maybe it's just completely
• 32:01
  Speaker 2: building a new kind of centralized operation, we can really
• 32:03
  Speaker 2: help lead any of those processes and hopefully help the
• 32:07
  Speaker 2: organization continue to grow and optimize.
• 32:11
  Speaker 1: Well, thank you, Mel, for chatting with me and sharing
• 32:13
  Speaker 1: all of this valuable information.
• 32:15
  Speaker 2: Yeah, I appreciate the time, Sheila.
• 32:18
  Speaker 5: And as a reminder, NASP corporate members are invited to
• 32:21
  Speaker 5: be my guest on one complimentary podcast per year. For
• 32:24
  Speaker 5: more information about this or other NASP membership benefits and events,
• 32:27
  Speaker 5: please feel free to reach out to membership at naspnet.org
• 32:33
  Speaker 5: or visit our website at www.naspnet.org.
• 32:39
  Speaker 1: Until next time, have a great day.