PHRMA, foundations establish 'medical homes' in New Jersey

Pharmaceutical CommercePharmaceutical Commerce - September 2009

Program seeks to improve the economics of care for low-income families; more sites to come

The establishment of ‘medical homes’ — designated local physician practices that are underwritten to provide both comprehensive medical services and access to low-cost or no-cost prescriptions to low-income, uninsured and underinsured patients — is one progressive care model that is being considered under the rubric of healthcare reform. This approach aims to create direct savings and a bona fide ROI by curtailing such participants’ reliance on more costly, episodic, unreimbursed hospital emergency rooms for their basic, primary medical care. Additional long-term efficiencies are expected to come from the inherent savings that result from greater emphasis on preventive care, patient education and improved drug adherence. In the state of New Jersey alone, the cost of uncompensated care in emergency room settings runs more than $1 billion/yr, notes Kevin Rigby, VP of public affairs at Novartis (East Hanover, NJ).

In mid-September, the city of Newark, NJ, launched NewarkHealthPlus and NewarkRx, a pair of grassroots programs that establish such a medical home for participating patients. The group hopes these new programs will become a model to be replicated elsewhere.

In the first year of these programs, an initial cohort of 400 Newark residents will gain access to physicians in private practice who will provide and manage regular, preventive and chronic care services, and participants will get their prescription medications at low or no cost. Additional physicians and patients will be added as further funding is secured.

The coalition was spearheaded by Newark mayor Cory Booker with funding from The Heinz Family Philanthropies, PhRMA, the American Heart Assn., seven pharmaceutical companies (Abbott, AstraZeneca, Johnson & Johnson, Merck, Novartis, Pfizer and Sanofi Aventis), and other local and national partners.

Savings of $1.4 million are expected in the first year, just by reducing unnecessary emergency room visits and hospitalizations. Similarly, lab-testing services donated by LabCorp are expected to save another $250,000-500,000/year. Meanwhile, the seven participating drug companies are expected to donate $1.6 million in medications, including those required to manage chronic conditions such as diabetes, high cholesterol and hypertension, which, if properly managed, can help to avoid more costly, crisis-related interventions.

The Heinz Foundation, PhRMA, and Abbott have also been working to create similar initiatives across the US, in Clarksdale, MS, Chicago, Baltimore, New York City and Detroit.

“I get very impatient in the national debate when I hear the pharmaceutical industry being vilified,” says Mayor Booker. “The pharmaceutical industry is helping to find real solutions and is strident in its philanthropy every single day.”

PhRMA members “have a long tradition of providing assistance programs to help patients obtain life-sustaining treatments they need to prevent or manage a wide range of diseases,” adds Jan Faiks, VP for government affairs and law for PhRMA. PhRMA operates the Partnership for Prescription Assistance (PPA), which provides healthcare providers with a single point of access to more than 475 patient assistance programs (PAPs) that provide free or nearly free medicines to uninsured patients and those who are struggling financially. According to PhRMA, nearly six million US residents have been helped by PPA since the centralized program was established four years ago, although individual company- and state-specific PAPs have, in some cases, been around for decades.

“What’s important here is that we will be measuring and quantifying the savings and results,” says Jeffrey Lewis, president of the Heinz Family Philanthropies. “For the 400 patients enrolled in Newark Health Plus, we will know how many times they used a hospital emergency room during the past 24 months, and how that has been reduced with the implementation of these two programs. This will help us quantify the ultimate ROI — an approach that is rarely used but desperately needed to underscore the long-terms savings associated with these types of outreach programs.”

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