Pharmaceuticals Play Key Role in Achieving ACO Quality, Cost Goals

Contacts: Andrea Hofelich, NPC, 202-827-2078,
Tom Flatt, AMGA, 703-838-0033, ext. 328,
Alven Weil, Premier healthcare alliance, 704-816-5797,

WASHINGTON, DC, July 18, 2012–As health care providers set up accountable care organizations (ACOs) and other value-based care programs, pharmaceuticals offer one avenue to help minimize overall costs and meet recognized standards for quality patient care.

To support the delivery of value-based care, the National Pharmaceutical Council (NPC), the American Medical Group Association (AMGA) and the Premier health care alliance teamed with seven provider organizations to form the Working Group on Optimizing Medication Therapy in Value-Based Healthcare. The group developed a framework for considering the role of pharmaceuticals in achieving value-based success. The article was published as a web exclusive in the July 2012 issue of the American Journal of Managed Care.

Providers are shifting to value-based care models to provide better care for individuals, improve population health and slow cost growth. Many of these models, such as the Centers for Medicare & Medicaid Services’ Medicare Shared Savings Program, include quality benchmarks and incentives for reducing costs. As providers evaluate optimal care for their patient populations in these new models, prescription medications should be thoughtfully integrated into the process, said NPC Chief Science Officer Robert Dubois, MD, PhD, who is one of the article’s authors.

“It is crucial for ACOs to view prescription drugs as a tool, not simply an expense,” Dubois said. “When medications are appropriately used, they can contribute significantly to improving patient outcomes and reducing overall costs.”

Congestive heart failure medications, for example, make up a small portion of overall treatment costs for the condition. Yet these medications reduce the risk of hospitalization for patients, which is an important criteria for ACOs in meeting quality standards and reducing costs.

“Value-based care programs need to leverage every available strategy to address the greatest challenges facing our health care system – the unsustainable escalation of costs and the fragmented nature of care,” said Marv Feldman, RPh, MS, managing principal, Pharmacy Consulting Program, Premier, who was one of the authors of the article. “Medications are important assets in helping providers achieve these objectives.”

The value-based framework developed by the Working Group includes the following elements:

  • Success in a value-based environment will depend on understanding the unique contribution of medications and utilizing them optimally across conditions and populations.
  • Medications cannot be viewed as a siloed expense item in a value-based environment. They need to be integrated so that the cost offsets and quality benefits resulting from optimized pharmaceutical use can be recognized and calculated.
  • Services meant to optimize patient outcomes cannot be undertaken as a one-size-fits-all approach; the role, impact and characteristics of these services will vary by a patient’s condition.
  • Overall risk factors can be used to identify patients who are candidates for medication therapy management strategies to watch for drug-drug, drug-disease, or polypharmacy concerns.
  • In each circumstance where there are condition-specific incentives to achieve cost savings, there should also be a quality metric to detect under-use of pharmaceuticals.

“This framework provides guidance for providers who are working to implement value-based programs that achieve broader quality and cost reduction goals,” said Donald W. Fisher, PhD, CAE, AMGA president and CEO.

“As providers navigate this new landscape, they can rely on this road map to optimize medication therapy and ensure patients have access to, and support in using, the medications they need,” he said. 

About the National Pharmaceutical Council

The National Pharmaceutical Council is a health policy research organization dedicated to the advancement of good evidence and science, and to fostering an environment in the United States that supports medical innovation. Founded in 1953 and supported by the nation’s major research-based pharmaceutical companies, NPC focuses on research development, information dissemination, and education on the critical issues of evidence, innovation and the value of medicines for patients. For more information, visit and follow NPC on Twitter @npcnow.

About the American Medical Group Association

The American Medical Group Association represents medical groups, including some of the nation's largest, most prestigious medical practices, independent practice associations, and integrated healthcare delivery systems. AMGA's mission is to improve health care for patients by supporting multispecialty medical groups and other organized systems of care. The members of AMGA deliver health care to approximately 130 million patients in 49 states, more than one in three Americans. Headquartered in Alexandria, Virginia, AMGA is the strategic partner for medical groups, providing a comprehensive package of benefits, including political advocacy, educational and networking programs and publications, benchmarking data services, and financial and operations assistance.

About the Premier health care alliance, Malcolm Baldrige National Quality Award recipient

Premier is a performance improvement alliance of more than 2,600 U.S. hospitals and 84,000-plus other healthcare sites using the power of collaboration to lead the transformation to high-quality, cost-effective care. Owned by hospitals, health systems and other providers, Premier maintains the nation's most comprehensive repository of clinical, financial and outcomes information and operates a leading healthcare purchasing network. A world leader in helping deliver measurable improvements in care, Premier has worked with the Centers for Medicare & Medicaid Services and the United Kingdom's National Health Service North West to improve hospital performance. Headquartered in Charlotte, N.C., Premier also has an office in Washington. Stay connected with Premier on Facebook, Twitter and YouTube.

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