1. Defense Health Agency Pharmacy Operations Overview
Pharmacy Shared Services
October 31, 2013

2. Agenda Agenda Item Speaker Overview of the Defense Health Agency (DHA)
Lt Gen Douglas Robb
Overview of DHA Pharmacy
RADM Thomas McGinnis
What is the DHA’s Part?
How DHA Pharmacy Will Support You
Business Process Reengineering Initiatives
Col George Jones
Long-Term Pharmacy BPR Initiatives
Key Metrics for Success
Key Milestones
Home Delivery Growth
TRICARE for Life Prescription Pilot
What is Your Part?

3. Why the DHA? The MHS has a bill to pay:
MHS will meet $17 – 22 billion savings by FY19
DHA shared services will meet $2.3 billion savings by FY19
Pharmacy must deliver $1.3 billion of that savings
The way we do business matters
Lt Gen Robb:
The MHS is required to deliver $17 – $22 billion in savings to the government through FY19.
Of this, DHA shared services are responsible for delivering $2.3 billion in savings by FY19, with the pharmacy shared service responsible for over 56% of these dollars.
To achieve these savings, we are all responsible for improving the way we do business and deliver care.

4. Healthcare Operations Pharmacy Operations Division
Structure and Vision of the DHA
The DHA will enable the medical Services to provide a medically ready force and a ready medical force in both peace time and wartime
CJCS
Secretary of Defense
USD(P&R)
Combat Support Agency Responsibilities
Defense Health Agency
Army SG
Sec Army
Service
MTFs
Policy
NCR Directorate MTFs
Navy SG
Air Force SG
Army MEDCOM
Navy BUMED
Air Force
MAJCOMS
Sec Navy
Sec
ASD(HA)
Pharmacy Shared Service Support to the Services
USUHS
Execution
Healthcare Operations
Pharmacy Operations Division
Lt Gen Robb: (Discuss your vision of the DHA and its interaction with the rest of the MHS)
DHA and Services working together to better integrate how we deliver care.
The Pharmacy Operations Division (the POD) will operate as part of the Healthcare Operations Directorate.

5. Structure of the DHA: Pharmacy Operations Division
Pharmacy Operations Division Chief
CIV, 1 FTE
Service SGs
FTEs
At IOC 76
By 30 September 2014 79
Service Consultants/
Board of Advisors
Deputy Chief
MIL, 1 FTE
Chief of Staff / Personnel Operations
CIV, 1 FTE
Informatics & Operations
Branch Chief
CIV, 1 FTE
TPharm Operations Branch Chief
CIV, 1 FTE
Integrated Utilization
Branch Chief
CIV,1 FTE
Pharmacoeconomic Branch Chief
MIL, 1 FTE
Informatics & Operations
Deputy Chief
MIL, 1 FTE
TPharm Operations
Deputy Chief
MIL, 1 FTE
Integrated Utilization
Deputy Chief
MIL, 1 FTE
Overview of Roles and Responsibilities: To manage and support execution of ongoing and future enterprise-wide pharmacy activities
RADM McGinnis:
The POD aims to increase cooperation and enable business partnerships among Army Medicine, Navy Medicine, the Air Force Medical Service and the DHA to facilitate efficient delivery of outpatient pharmacy services.
We will facilitate agile, responsive, data-driven decision-making regarding the delivery and accessibility of pharmacy services by establishing uniform standards and business rules.
We will implement a collaborative governance process to coordinate and advocate for DoD-wide pharmacy programs and initiatives in order to promote joint interoperability, efficiency, effectiveness and responsiveness in support of Health Readiness.
We’re looking to onboard three new positions to support the POD in further integrating pharmacy operations across all components.
Your Service Pharmacy Consultants will continue to be your points of contact for communications regarding pharmacy programs.
DHA POD Staff
MIL, CIV, & CTR, 69 FTEs
Army
Navy
Air Force
New position to be filled by a nominated Service billet 5
Two-way communication between DHA and Services

6. DHA’s Part: DHA Pharmacy Operations
Mission: To direct the DoD Pharmacy benefit in support of the MHS’ mission through effective planning, programming, budgeting, and execution of DoD pharmacy operations
Goals:
Advise DoD Health Affairs (HA) on policy development and priorities related to Pharmacy
Create and implement a unified set of business rules to guide and execute DoD policies for Pharmacy, with consideration for:
Beneficiary satisfaction
Cost-effectiveness
Evidence-based best practices
Retail recapture to Home Delivery and MTF
Data-driven performance measures
Align efforts across the enterprise to support pharmacists to provide medication management
Transfer maintenance prescriptions to home delivery to allow pharmacists to spend less time filling prescriptions and more time delivering medication therapy management
Develop authorized clinical pharmacist positions to participate in direct medical care (i.e., Patient Centered Medical Home (PCMH))
RADM McGinnis:
What we are trying to achieve: The POD aims to improve pharmacy operations, resource allocation and deliver significant savings through a series of standardization initiatives, accountability for performance measures, and policy and legislative changes.
We will advise DoD Health Affairs (HA) on policy development and priorities related to Pharmacy.
We will create and implement a unified set of business rules to guide and execute DoD policies for Pharmacy, with consideration for:
Beneficiary satisfaction
Cost-effectiveness
Evidence-based best practices
Retail recapture to Home Delivery and MTF
Data-driven performance measures
Ultimately, our goal is to be an integral part of patient care delivery.

7. How DHA Pharmacy Operations Will Support You
With the TRICARE for Life (TFL) pilot beginning soon, the DHA Pharmacy Operations Division (POD) will provide uniform guidance and central resource support to efficiently move prescriptions from retail to home delivery and MTFs
Initiative
Benefit to Pharmacy Community 1
Business Process Reengineering
Results will standardize select pharmacy processes across MTFs in order to improve operational efficiency and to enhance the pharmacy experience for beneficiaries 2
Centralized Pharmacy Checkbook
The DHA POD will centrally manage funds for outpatient pharmaceutical purchases and support requirements associated with workload growth
RADM McGinnis:
What’s changing?
You’ll receive unified guidance on how to simplify or enhance your operations, developed in concert with your Services and subject matter experts. Guidance will cover a variety of topics, such as handling prescription transfers, optimizing the formulary, and efficient drug purchasing practices.
In future years, we will ensure funding is available to support your operational needs. The POD will exercise decision authority, as appropriate, to augment or redeploy funds for the purpose of supporting you in delivering effective pharmacy services to beneficiaries.
We will support workload growth by providing required staff resources and coverage for outpatient pharmaceutical purchases. 3
Staff Augmentation Contract to Meet Workload Requirements
The DHA POD will guide contract staffing augmentation process to support increased workloads resulting from retail recapture

8. Current BPR 1: Prescription Transfer Process
DHA Pharmacy Ops worked with MTF-level Service SMEs to develop policy and guidance designed to make the transfer process into the MTF easier and more efficient:
HA policy with DHA procedural guidance to support prescriptions that are transferred into the MTF should a beneficiary request it
MTF pharmacies will transfer prescriptions that are on the DoD Uniform Formulary into their MTF should a beneficiary ask
DHA standard tool to help facilitate transfers with less manual effort from MTF pharmacists
Interim tool will include a standard transfer authorization with common data fields necessary for transfer
Final tool will be an online transfer database to eliminate time spent trying to call other MTFs to validate and complete transfers
DHA Pharmacy Ops expects the policy and operational guidance to be published in the near future
Col Jones

9. Current BPR 2: Centralized Pharmacy Checkbook
DHA Pharmacy Ops will control the Pharmacy “checkbook” for outpatient pharmaceutical purchases to ensure MTFs are able to make consistent and cost-effective enterprise based purchasing decisions:
Consistent implementation of Uniform Formulary product selection
Central funding will allow the DHA to provide flexible staffing and resources to support recapture
DHA will be able to plus-up drug supply, augment staffing based on workload increases, centrally support automation contracts and services, and support expanded MTF formularies
Col Jones

10. Current BPR 3: Staff Augmentation Contract
DHA Pharmacy Ops is committed to supporting MTF pharmacies, should prescription workload increase, by supplying flexible staffing consistent with changing workloads:
Provide MTF outpatient pharmacies with the opportunity to acquire pharmacy manpower through one or more DHA-established staff augmentation contracts
The DHA Pharmacy Ops manpower standard will be used to assess changes in MTF workload and identify the need for additional staff
Manpower model is based on the validated AF staffing model
FY13 data is the baseline for prescription workloads
Col Jones

11. Future Pharmacy BPR Initiatives
Process
2013
Sep
Oct
Nov
Dec
Jan
Develop Structure and Process to Manage Central Pharmacy Funding
Prioritize & Organize
Develop Enterprise-Wide Strategic Communications Approach
Identify/Baseline Workload-Based Staffing Model; Identify and Redeploy Staff
Manage Refill Transfer Process
Monitor Recapture and Adjust Resources Levels (Supplies and Manpower)
Identify Opportunities to Deploy Clinical Pharmacists in Appropriate Care Settings
Enhance Communication of Business Rules to Providers and Ordering Staff--Develop provider Report Card; Develop Educational Materials; Manage Compliance Metrics and Feedback
Enhance Reporting (Automated); Develop and Utilize Dashboard to Monitor Compliance and Implementation
Conduct Analysis Reports and Market Scans
PRIORITY 1
Ongoing
Ongoing
Ongoing
Ongoing
Col Jones
Ongoing
Ongoing
Minor procedural/logistical change
Reengineering (significant change)
Engineering (new process)
Kick-Off Meeting
Current State Assessment
Design and Pilot Future State
Pilot Implementation
Initiative Implementation
Implementation

12. Key Metrics for Success: Near Term#
Metric
Management Question
Development Status 1
Maintenance medication refills filled at all points of service drilled down by catchment area and distribution of enrollment status
Are our MTF pharmacy workloads increasing as a result of pharmacy benefit change? 2
MTF, retail, and mail order market share by catchment area and distribution of enrollment status
Are we reducing retail pharmacy use? 3
Net pharmacy cost to government per member per year by catchment area and distribution of enrollment status
Are pharmacy benefit costs decreasing as a result of changes to the benefit? 4
% of prescriptions filled as generic when generic is identified as a preferred agent
Are our MTFs purchasing drugs in alignment with enterprise's formulary decisions? 5
% compliance with purchasing from national contracts (Prime Vendor); augment with PDTS data for product match
Are our MTFs purchasing drugs in alignment with enterprise's purchasing strategy?
Col Jones
In development
Developed, but no baseline
Baseline & targets exist

13. Pharmacy Key Metrics* - Mid/Long Term#
Metric
Management Question
Development Status 6
Net total healthcare cost to the government per member per year by catchment area and distribution of enrollment status
Are we managing total cost of care for a person over time? 7
Staffing variance with the adopted universal MTF outpatient staffing standard
How much additional manpower do we need to support retail recapture? 8
% of civilian provider prescriptions e-prescribed and filled at MTFs
Are our MTF pharmacy workloads increasing as a result of private sector providers' e-prescribing? 9
Annual projected cost-avoidance estimate for a formulary course of action selected compared to a baseline formulary status for each class review completed
How much are we saving by monitoring the market and updating the formulary with equally effective, lower cost drugs? 10
Cumulative annual cost-avoidance estimate of all classes reviewed at each quarterly P&T meeting
Col Jones
In development
Developed, but no baseline
Baseline & targets exist
*Based on CONOPs, BPR, and Reports to Congress

14. Pharmacy Key Metrics* - Mid/Long Term#
Metric
Management Question
Development Status 11
Execution of the process for limiting coverage of newly approved FDA innovator drugs not yet reviewed by the P&T Committee
N/A 12
% adherence to purchasing maintenance contracts for automation products via centralized contracts
Are our MTFs purchasing pharmacy automation in products/services in alignment with enterprise's purchasing strategy? 13
% adherence to purchasing automation products and services via centralized contracts 14
Ratio of pharmacists embedded in PCMH to patients
Are our medical home patients achieving better clinical outcomes due to pharmacists’ inclusion in care management teams? 15
Percentage of MTFs that have pharmacists embedded or supporting MTF PCMH Teams
Col Jones
In development
Developed, but no baseline
Baseline & targets exist
*Based on CONOPs, BPR, and Reports to Congress

15. Pharmacy Key Metrics* - Mid/Long Term#
Metric
Management Question
Development Status 16
Medication adherence rates in PCMH (for selected medications)
Are our medical home patients achieving better clinical outcomes due to pharmacists’ inclusion in care management teams? 17
Clinical pharmacy penetration into geriatric population
Do clinical pharmacy services at MTF outpatient pharmacy/clinics improve patient outcomes? 18
Percent of newly identified high risk patients receiving medication therapy management review by a clinical pharmacist
Are we taking care of patients with chronic illness or complex medical/social problems? 19
MTF outpatient pharmacy patient wait time for initial contact with the concierge
Are our patients satisfied with MTF outpatient pharmacy? 20
MTF outpatient pharmacy patient wait time for service
Col Jones
In development
Developed, but no baseline
Baseline & targets exist
*Based on CONOPs, BPR, and Reports to Congress

16. Pharmacy Shared Services: Key Milestones in FY14
Progress
Publish the TRICARE For Life pilot interim final rule
% Complete: 75%
Tasks completed: Sent to OMB
Tasks remaining: OMB to publish the interim final rule
Improve MTF prescription transfer process
Tasks completed: Performed current state analysis, identified process improvement opportunities, drafted future state policy and guidance
Tasks remaining: Disseminate the draft prescription transfer policy and guidance and solicit comments, finalize the policy and guidance
Develop POD strategic communication plan
% Complete: 25%
Tasks completed: Developed the project charter, drafted the project plan
Tasks remaining: Develop project plan, conduct working session
Improve Home Delivery Prescription Transfer Process
% Complete: 50%
Tasks completed: Developed beneficiary communications plan, identified customer service improvements
Tasks remaining: Define current state, identify improvement opportunities, execute contract modifications
Define process for the management of centralized pharmacy funding
% Complete: ~10%
Tasks completed: Developed the project charter
Tasks remaining: Develop project plan, conduct current state assessment, identify change requirements, develop the future state, pilot, implement
Establish centralized staffing contract
% Complete: 10%
Tasks remaining: Develop project plan, establish DHA contract(s)
Col Jones

17. Volume Growth From Prior Year Retail Maintenance Volume:
Can We Deliver? – Yes!
Home Delivery Growth
Col Jones
Volume Growth From Prior Year
2011
2012
2013 YTD
Home Delivery
9.9%
31.2%
10.0%
Retail
-0.2%
-10.0%
-6.8%
Retail Maintenance Volume:
Down 2.5% in 2011;
Down 14.6% in 2012;
Down 13.1% in 2013 YTD
Source: Express Scripts Home Delivery Growth Dashboard

18. TRICARE For Life Prescription Pilot – Coming Soon
TRICARE beneficiaries who are Medicare eligible (using TRICARE for Life) must refill their brand-name maintenance prescriptions using either Home Delivery or MTF Pharmacy
Implementation dependent on Office of Management and Budget (OMB) approval and publication of interim final rule (expected mid-November 2013)
Communications planning underway
Letters to affected beneficiaries
Explanation Of Benefit (EOB) messages
Express Scripts education and marketing
Civilian and MTF provider education
Materials will be shared with MTFs
Col Jones

19. MTF’s Part – Your Responsibility to Meet Our Goals
During this transition, the Service’s network of pharmacies will play vital roles in the success of each initiative:
Execute standardized pharmacy operations – eliminate variance
Support patients in transferring prescriptions to and from other pharmacy locations
Evidence-based best practices
Beneficiary satisfaction
Execute optimization of the pharmacy benefit
Retail recapture to Home Delivery and MTF
Share your expertise, experience and knowledge base with DHA Pharmacy operations
Participate in BPR working groups
At the end of the day, we must provide a high-quality, affordable and sustainable pharmacy benefit
Col Jones

20. Questions?