When Prescribing Decisions Come Under New Management
Understand who’s really in charge and what you can do about it
Physicians write prescriptions, right? Well, yes.
But not exactly.
Tectonic shifts in healthcare are keeping pharmaceutical marketers on their toes. One of these shifts—the coming together of healthcare providers into organized provider groups or OPGs—is changing the way prescribing decisions are made.
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Horizontal integration led this transformation as individual physicians came together in groups and individual hospitals came together in hospital systems.
Then physician groups joined with other groups, and hospital systems joined with other hospital systems.
When these players then integrate vertically to form coherent interconnected health systems, they formed integrated delivery networks, or IDNs. IDNs, a type of OPG, are groups of physicians connected with 1 or more hospitals, sometimes with long-term care, other services or an insurance component.
Physician Group 1
Hospital System 2
Physician Group 1
Hospital System 2
Integrated Delivery Network (IDN)
Today over half of all medical practices and two thirds of all community hospitals are part of an OPG.
Just over a decade ago, there were
60+ IDNs
(though estimates vary based on definitions and data sources).
Their numbers grew rapidly in the ensuing five or six years.
By 2022 AHRQ identified
600 IDNs
All of this change means that prescribing decisions are increasingly under new management. It’s a complex and dynamic landscape. But with the right analytics comes insight, and with insight comes the capacity to make better marketing decisions.
Here we examine 2 dimensions of OPGs particularly worthy of pharmaceutical marketers’ attention: organizational size and influence.
2010
In 2010, fewer than one-third of U.S.-based physicians practiced as part of an OPG, and a majority were in private practice.
Today, 7 in 10 physicians practice under a larger organizational umbrella, over half in an IDN.
2016
Equally impressive is the widening girth of a growing number of OPGs as the market becomes ever more concentrated.
For example, as of 2016, the largest IDN had just over 20,000 physicians.
2021
By 2021, there were at least 8 such IDNs, 5 of which had over 30,000 physicians in their networks.
HCA Healthcare, the largest IDN, has swallowed up over 64,000 physicians —more than triple the largest player just 5 years prior.
All signs are that the consolidation is continuing.
One such example is the recent high-profile announcement that Kaiser Permanente—with its 37,000 physicians and 44 hospitals—recently acquired Geisinger Health as part of its nascent Risant Health community health system initiative.
Another example, and a distinct trend to watch, is the purchasing of medical practices by health insurers. In fact, United Health Group -- through its PBM subsidiary Optum -- now owns the largest group of physicians in the country... 90,000 or approximately 10% of all U.S. physicians!
These increasingly expansive organizations have the potential to move large swaths of business by virtue of their sheer size and scale. But potential influence is different from actual influence, and pharmaceutical marketers need to know the difference.
OPGs exert influence over their healthcare providers when they use policies, protocols, and incentives to produce desired outcomes like improved quality of care, increased revenue, and lower costs. More specifically, they may use their influence to shape physician prescribing behavior.
How do we know if a given OPG is influencing the prescribers in its network? We look for uniform patterns of behavior within a network. Such uniformity strongly suggests the OPG is using tools effectively to control prescribing.
Here we can see how physicians in two different OPGs are prescribing drugs used to treat a heart condition.
In OPG A, prescriptions are varied across prescribers, some prescribing Drug A, others Drug B, and others, Drug C.
OPG A
Treatments for a Specific Heart Condition
When it comes to driving brand market share among the physicians in OPG A, it may be most effective to direct pharmaceutical resources toward each individual prescriber.
OPG A
In OPG B, prescriptions are more uniform across prescribers, with the majority writing prescriptions for Drug A.
OPG B
Treatments for a Specific Heart Condition
For OPG B, it’s the organizational decision-makers at the top who need to be swayed.
OPG B
Will OPG A and OPG B always show the same levels of influence we saw with the heart drug?
Maybe, maybe not. It all depends on what kinds of incentives are in place at any given OPG for different patient populations, diseases, and drugs.
We cannot know if influence is occurring without doing the analytics to see how prescribers are behaving in each of these situations.
Due to these differences, marketers must analyze and examine the IDN and OPG landscape not just in general, but specifically for their own therapeutic area, brand, and patient population.
To be successful today, pharmaceutical market access teams must wrestle with these customer dynamics and understand what they mean for their brands.
They must find answers to questions like...
Which organized customers are most worthy of attention? For which therapeutic areas and which populations?
How should resources be distributed across geographies as a function of organization size and influence?
When should resources be aimed at individual prescribers vs a small group of centralized decision-makers?
What kinds of messages and communication channels can best reach and affect these entities?
How does the influence of an organized customer interact with the influence of payers?
The good news is that there are ways of decoding the complexity of IDNs and other organized customers to understand how they are affecting care decisions for different groups of patients. To make the best decisions for their brands, pharmaceutical marketers must acquire and skillfully apply these insights.
PayerSciences is here to help.
References
  1. Avalere Health. Covid-19’s impact on acquisition of physician practices and physician employment 2019-2021. Prepared for Physicians Advocacy Institute. http://www.physiciansadvocacyinstitute.org/Portals/0/assets/docs/PAI-Research/PAI%20Avalere%20Physician%20Employment%20Trends%20Study%202019-21%20Final.pdf. Published April 2022. Accessed March 7, 2023.
  2. Compendium of U.S. Health Systems. Agency for Healthcare Research and Quality, Rockville, MD. https://www.ahrq.gov/chsp/data-resources/compendium.html
  3. Enthoven, AC. Integrated delivery systems: the cure for fragmentation. AJMC. 2009 Dec; 15 (10): S284-S290.
  4. Furukawa MF, Machta RM, Barrett KA, et al. Landscape of health systems in the United States. Med Care Res Rev. 2020 August; 77(4): 357-366. Doi: 10.1177/1077558718823130.
  5. https://data.cms.gov/medicare-shared-savings-program/accountable-care-organizations. Accessed July 27, 2023.
  6. IQVIA. 25 top integrated delivery networks. https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/top-25-integrated-delivery-networks.pdf. Published September 2021. Accessed March 7, 2023.
  7. Kane CK. Policy research perspectives - American medical association. Policy Research Perspectives. https://www.ama-assn.org/system/files/2021-05/2020-prp-physician-practice-arrangements.pdf. Published May 5, 2021. Accessed March 7, 2023.