U.S. Physician and Payer Forum

August 2013

Payer Strategies and Access: Narrow Networks and Practice Ownership’s Impact on Prescribing Decisions for Cardiologists – Acute Coronary Syndrome and Atrial Fibrillation

Introduction:

The cardiology industry is undergoing rapid change as control over cardiology practices shifts from independent practices to ownership by hospitals. According to a September 2012 report by the American College of Cardiology, the percentage of cardiology practices owned by hospitals has tripled in five years, from 8% to 24%, while the percentage of cardiologists employed by hospitals increased from 11% to 35%. MCOs similarly have begun to buy physician groups but to a much lesser extent. The result from MCOs’ standpoint is higher costs because services rendered at hospital-owned outpatient facilities have higher fee-for-service payments. In addition, this trend may influence which formulary is followed by cardiologists and likely will affect patient shares of specific brands used to treat acute coronary syndrome (ACS) and atrial fibrillation (AF). Similarly, MCOs are increasingly adopting narrow networks—subnetworks that offers beneficiaries lower premiums or cost-shares—a move that would likely give MCOs greater control over prescribing.

This report explores how the fundamental reshaping of the cardiology ownership model as well as other major trends under way are affecting brand prescribing in high-profile cardiology indications. Specific therapies examined in this report include the following:

- Boehringer-Ingelheim’s Pradaxa.

- Bristol-Myers Squibb/Pfizer’s Eliquis.

- Johnson & Johnson’s Xarelto.

- Eisai’s warfarin.

- Sanofi-Aventis’s Multaq.

- Eli Lilly’s Effient.

- AstraZeneca’s Brillinta.

In this report, we analyze survey findings from 102 non-interventional cardiologists as well as 40 MCO pharmacy or medical directors. By understanding recent trends in ownership structure of cardiology practices, drug marketers can anticipate the long-term impact of provider consolidation on prescribing and develop effective responsive strategies.

Questions Answered in This Report:

  *   What percentage of surveyed non-interventional cardiologists is currently employed by a physician-owned group, a hospital, insurer, or other entity? How will that change in the next year? What is driving that change? For what percentage of their patients do these physicians prescribe to the patient’s insurance formulary versus a hospital formulary or other? How will that change in the next year?

  *   For which specific therapies used to treat ACS or AF have physicians seen increased or decreased use because they changed from an independent group to hospital ownership? What do they anticipate will be the change over the next year? Have they found the hospital formulary to be more or less restrictive than the ones they encountered as an independent physician? How has ownership by a hospital affected their prescribing of newer ACS or AF therapies? How are these therapies’ uses encouraged as part of the practices’ new ownership? Do they view this change as  positive or negative?

  *   Have MCOs seen consolidation among their cardiology network? What has been the impact on prescribing, drug trends, and overall cost trends for cardiology? What are they doing in response? Have MCOs purchased or plan to purchase any cardiology practices themselves? What is driving this desire to own physician practices? What has been the impact on their prescribing and drug cost trends versus non-MCO-owned practices? What brands have seen increased or reduced prescribing within surveyed MCOs’ plans? How does this trend influence their formulary decisions?

  *   Do MCOs operate a narrow network? If so, why and when did they adopt them? How narrow is this network? What inducements are there for a beneficiary to join such a plan (lower premiums or lower copays)? What has been the impact of these networks on prescribing and the overall drug cost trend? Are cardiologists participating in a narrow network? If so, why did they join? If not, why not? What has been the impact on their prescribing of specific brands or therapies? Do they view narrow networks as a positive or a negative?

Scope:

Markets covered: United States.

Primary research: 102 non-interventional cardiologists (47 in hospital-owned practices and 55 in independent practices), 40 MCOs (19 pharmacy and 21medical directors).

Disease focus: ACS and AF, acute and post-hospital.


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