A look into health system strategic planning: implications for manufacturers

By Elizabeth Cobb, PharmD, Mosaic

Health systems are constantly tasked with adapting their operations to navigate regulatory changes, reimbursement shifts and unexpected challenges in the treatment landscape, all while remaining financially solvent. Many pharmacy leaders utilize the strategic planning process to help map out their approach to staying ahead of a rapidly evolving landscape.

At the ASHP 2023 Midyear Clinical Meeting & Exhibition held in December, one key session focused on a strategic planning tool that many health system leaders consider crucial with the ASHP Pharmacy Forecast.

The focus of the Pharmacy Forecast is to capture forward-looking trends that will influence health-system pharmacy management over the next few years. The 2024 Pharmacy Forecast Advisory Committee identified the domains to include in the survey by scanning the landscape and brainstorming topics. Each section of the report provides a summary of the survey findings, assessments and perspectives of the chapter authors, and strategic recommendations. The 2024 Pharmacy Forecast provides insights that can be used to inform health system leaders’ own proactive strategic planning processes and help them look beyond immediate operational challenges.
 

Forecast 2024 domains

• Achieving care equity
• Disease and treatment innovations
• Public health priorities 
• Workforce
• Responding to the mental health crisis
• Artificial intelligence and data integration 
   

Below are two of the domains that will be covered, along with ways they might impact manufacturers working with health system customers.

Achieving care equity
 

As health systems continue to incorporate equity as a foundational element of delivering quality care, it is critical that they continue to build out data infrastructure to support these initiatives. Payment and regulatory reform can be additional drivers for health systems to further invest in developing evidence-based solutions for inequity. One facet stakeholders are gearing up for is the addition of care equity into value-based care. Of the more than 250 pharmacy leaders who responded to the survey, 76% indicated that it was somewhat or highly likely that value-based payer contracts will include incentives when health systems demonstrate care equity, with 61% being prepared to respond to the inclusion of care equity (e.g., similar outcomes of care regardless of race, gender, location).
 

While 76% answered likely, only 61% of respondents are prepared to respond.

^{*Survey questions based on preparedness: "If the following occurs by the year 2028, how prepared is your health system, pharmacy department, or staff to respond?"}

Implications for manufacturers: Stakeholders continue to look for more value from manufacturers. When looking for partnership opportunities with health systems, consider ways you can support their ongoing health equity initiatives. Consider identifying appropriate data elements that can be measured in support of your partnerships, both branded and above brand. 
 

Disease and treatment innovations
 

In a post-pandemic climate, financial pressures continue to mount for health systems. Coupled with these pressures, the rising costs of new drug treatments continues to scale new heights. Fifteen years ago, biologics landed in the $200,000/year range, and now innovations in new gene and cellular therapies can cost millions of dollars per patient. This turning point in medicine often comes with uncertain and evolving reimbursement, pushing health systems to adjust their decision-making processes beyond traditional P&T reviews. Additionally, operational complexity and the need for highly specialized care can also influence these critical decisions.

Some 78% of respondents believe that formulary and policy decisions for ultra-high-cost therapies—such as rare and orphan drugs, gene therapy, and chimeric antigen receptor T-cell therapy—will be decided by payer or service-line stakeholders, weakening the scope of authority of health-system P&T committees, with only 56% being prepared for such a change. More than two thirds also indicated that it is somewhat to very likely that the cost and complexity of new treatments such as these will result in the termination of the related service lines within some health systems, with 28% of respondents saying this is very likely. The inability to provide these novel treatments on-site could result in an incomplete therapeutic program, impacting the decision to keep offering the related service line.

“The evolution of novel therapies is expected to disrupt established service lines, as some institutions may lack economies of scale to continue to meet the breadth of requirements to continue economies of scale to continue to meet the breadth of requirements to continue offering a viable service line, while others may lean into opportunities by adding to their service line portfolio. The inability to provide novel treatments on-site could result in an incomplete therapeutic program, ultimately leading to the decision to cease offering a service line.” — Report Authors

How likely is it that the following will occur, by the year 2028, in the geographic region where you work?

Formulary and policy decisions for ultra-high-cost drugs will be decided by payer or service line stakeholders, and as a result, will weaken the scope of authority of the health-system Pharmacy and Therapeutics Committee.
 

Considerations of the cost and complexity of ultra-high-cost drugs will result in organizations inititating or terminating some service lines.
 

Implications for manufacturers: As health-system pharmacy leaders evolve their process for ultra-high-cost medication reviews, manufacturers should be prepared to engage additional stakeholders who historically may have only had cursory involvement, including health system finance experts, data and analytics specialists and other C-suite administrators. Evidence provided to stakeholders will need to address budget impacts and financial risk, when possible, to support conversations around service-line program feasibility and sustainability centering around the specific ultra-high-cost treatment.