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With Help, Patient Assistance Programs Can Save You Millions on Outpatient Drugs

Karen Minich-Pourshadi, for HealthLeaders Media, April 5, 2010

Hospitals nationwide spend billions to treat patients who are too poor to afford care or medicines. They spend even more trying to find ways to recoup some of the financial losses they sustain from this treatment, including drug expenses—often working diligently to enroll these patients in a variety of programs that will help pay for their care.

Healthcare reform legislation should help many of the folks who can't afford care, however the Medicare pharmaceutical reimbursement levels may still not adequately help. Regardless, hospital financial leaders charged with the task of finding ways to save money now, and not later when the law takes affect, need to take action to find savings for every line item in the budget.

Hospitals spend thousands to put databases into place and train staff for their patient assistance programs to try to recoup some of the uncompensated care losses, so wouldn't it be helpful if you didn't have to spend a dime to address this problem but got a return on your non-investment?

That's right; like the patients, hospitals can also get something for nothing.

Your pharmacy and patient advocates can work with your patients to potentially save you millions—that's money that stays on your bottom line—through bulk purchasing and better patient assistance. It's not a new idea, though it is free. I'll explain. The non-profit group NeedyMeds, based in Gloucester, MA, is a free service that works with hospitals and patients to assist them in finding the applicable healthcare programs to help with the cost of prescriptions and disease-related expenses through bulk purchasing.

Based in Richmond, VA, 779-bed Virginia Commonwealth University Health System (VCUHS) spends nearly $28 million for outpatient drugs annually, and they are always interested in ways to save in this area. Donald Price, business manager of pharmacy services at VCUHS, explains that his predecessor started the savings search when he connected the facility with a specific drug manufacturer and later Needy Meds. Through the use of both programs, they have saved nearly $2.5 million annually. Hardly a paltry sum when you consider that they didn't need to invest any money to reap the benefits.

Price explains that in 2000, the former pharmacy director began working with the biopharmaceutical company AstraZeneca to get a bulk replacement program. The negotiations included an agreement that the drug manufacturer would accept the hospital's screening process for eligible patients. The hospital and manufacturer collaborated with the University of Virginia to create guidelines for indigent patient services at the hospital.

"When a patient comes in and requests financial aid for one of the state programs, they sign a form that authorizes us to use their information to get bulk drug replacement services," says Price. "But for a successful patient assistance program you have to have financial consulting people on board, and IT and financial technology to verify Medicaid coverage."

While the arrangement with AstraZeneca was paying off in savings, VCUHS needed more than one good bulk program to garner larger savings. That's when they began working with Rich Sagall, MD, and president of NeedyMeds.

"Through NeedyMeds we deal with 11 manufacturers for bulk replacements," explains Price. "We dispense drugs for $4 through the program and [the manufacturers] replace them one-for-one."

The NeedyMeds Web site can be used as a connection point for both the Patient Assistance Programs at the hospital, but hospitals can also encourage their patients to use the database to search for reduced- or no-cost prescriptions. The database tracks 2,200 pharmaceutical programs and 11,000 low-cost, sliding scale clinics.

"Hospitals can enter the demographics, the medication, and the physician and then print an application for the medication which is submitted to the pharmaceutical manufacturer," says Sagall. "The hospitals patient assistance program helps the patient apply to get the replacement drug and that can save millions of dollars for the hospital. The program can also help determine which drugs are covered and which aren't."

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