Problem Identification

In 2003, the Upper Peninsula Health Plan (UPHP) and the Upper Peninsula Health Care Network (UPHCN) recognized that health care entities in Michigan’s Upper Peninsula were using fragmented pharmacy formulary systems. The region’s hospitals used different formularies, thereby missing opportunities for consistent care and cooperative purchasing power. In addition, UPHP’s per-member-per-month (PMPM) pharmaceutical costs were among the highest for Michigan Medicaid managed care plans.

Objectives

The goal of this initiative was to promote rational, clinically appropriate, safe, and cost-effective pharmaceutical care to Upper Peninsula residents. To achieve this goal, the partners sought to:

• Implement a cooperative formulary-management system,
• Implement evidence-based clinical guidelines with pharmaceutical recommendations for targeted disease states associated with major drug classes, and
• Reduce UPHP’s pharmaceutical costs to below the state average.

Target Audience

Administrative leadership, pharmacists and physicians of the health plan, health care network and 15 network hospitals were target audiences for this community-based initiative. For funding purposes, the U.S. Department of Health and Human Resources also was a target audience.

Solution

UPHP and UPHCN partnered to develop a regional project for managing prescribing cost and quality. The project team created an Upper Peninsula Pharmacy and Therapeutics Committee comprised of one pharmacist and one doctor from each of the 15 UPHP network hospitals, the pharmacy director and medical director from UPHP, and the executive director and project coordinator from UPHCN. The committee, whose work is ongoing, conducts evidence-based reviews of drug classes, focusing on tolerability, efficacy, price, and simplicity. Most reviewed medications are prescribed in both outpatient and inpatient settings. The regional P&T committee also develops guidelines for targeted disease states. Most research is performed individually or in small groups. The entire committee meets monthly via teleconference.

UPHP developed a Web site (http://www.upformulary.org/) for the regional P&T committee to store its reviews and reports. Project partners from the geographically diverse Upper Peninsula use this site to reference drug reviews and protocols. As the project’s accomplishments increase in number, easy access to this single repository of information is important for accuracy and efficiency.

As UPHP has revised its formulary to achieve project goals, the health plan has shared pertinent information with members and providers through newsletters and correspondence.

Recently, the project’s work and success were documented in a brochure for project participants to share with regional health care providers and community leaders. Public acceptance and support of the project’s goals is important to underpin continued success.

A Rural Health Network Development Grant from the U.S. Department of Health and Human Services has funded a share of project expenses. Both UPHP and UPHCN provide staff and office resources.

To date, the regional P&T committee has reviewed 25 drug classes, completed 24 comprehensive new drug reviews, and implemented two treatment protocols. The committee’s drug reviews provide detailed analysis for which most hospitals do not have the resources. The information enables practitioners to make informed decisions without relying solely on information from pharmaceutical companies.

UPHP’s PMPM cost decreased 21% from 2003 to 2006. During the same period, the average PMPM cost for Michigan Medicaid plans increased by 2%. At last report, the difference between the state’s average cost and UPHP’s cost is 11%.

For the participating UPHCN-network hospitals, the following drug classes have shown significant cost savings since each hospital agreed to formulary and prescribing adjustments:

• Fluoroquinolone Antibiotics $ 17,600
• Proton Pump Inhibitors $ 36,058
• Hematopoietics $310,504

The project savings for the hospitals in 2007 was $381,000.