Pharmaceutical Control is Shifting Again—Now it’s Health Systems in Charge!

My medical career has moved in line with the shift in prescription control. As a PCP in the early ’90s, I controlled what treatment my patients would receive. As a result I was—or at least felt like—the center of the universe for pharmaceutical manufacturers. At the end of that decade I became CMO for a MCO, which wrestled prescription control from PCPs through UM controls like formularies with PA, ST, tiering and QLs. Today, I am planted as a Medical Director in a health system, one that because of growing financial risk in the form of ACOs, bundled payments as well as our own provider plan, along with employed physicians bound by an EMR have both the need and ability to control treatment selection.1

This brave new world is perhaps best illustrated in a recent advertisement by Mount Sinai, a major New York health system, which carried the tagline, “If Our Beds Are Filled, It Means We’ve Failed.”2 This demonstrates the shift from hospitals’ focus on bed volume and decreasing lengths of stay to the broader perspective of managing population health.

As a result of this shift, a new relationship between health systems and pharmaceutical manufacturers is required. As health systems expand and take on increased financial risk, they find themselves benefiting from the right type of relationship with pharmaceutical manufacturers to achieve improved health for the population for which they are held responsible. This means that pharmaceutical manufacturers have the opportunity to reach a new treatment decision-maker with information and resources to improve their population health goals.

New Territory for Health Systems

For health systems, this is new territory as they acquire increasing responsibility for and control over medical and pharmaceutical costs, as well as control over prescribers. Some of the controls available to optimize treatment decisions come from the health systems’ ability to increase financial incentives for providers, implementation of alerts and controls through electronic medical records (EMR), and of course, application of effective clinical guidelines and pathways. Health systems that optimize their relationships with pharmaceutical manufacturers will be in a far better position to improve the health of their covered lives and the experience of care while lowering costs, thus meeting all parts of the Triple Aim.

Now is an opportunity for pharmaceutical manufacturers to articulate their value to health system treatment decision-makers in terms that they are being held accountable. There is also an opportunity to deliver value beyond the pill. This includes resources for both patients and providers to assure appropriate care is being rendered. In the end, just as pharmaceutical manufacturers had been able to reach HCPs and MCO with strategy and tactics, now is an opportunity to develop a plan for success to assure appropriate access and utilization through the new treatment controller—health systems.


1. Stefanacci RG, Guerin S. “Clinical Pathways: Population Health Delivery Through Health Systems and Pharma.” Journal of Clinical Pathways. September 2016.

2. Mount Sinai. “If Our Beds Are Filled, It Means We’ve Failed.” Advertisement. Accessed August 11, 2016.

  • Dr. Richard Stefanacci

    Richard G. Stefanacci, DO, MGH, MBA, AGSF, CMD is Chief Medical Officer at The Access Group. Dr. Stefanacci is a recognized thought-leader in healthcare reform. In addition, he leads the Government Policy Systems team, which ensures pharmaceutical products and diagnostic devices gain appropriate access and utilization.


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