October 27, 2006

elevate: Answering the Tough Questions

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Medical Center leadership answers the tough questions about what the elevate program is and what it means for the people who work at VUMC.

Question: Vanderbilt doctors have a financial incentive to prescribe generic drugs over newer branded drugs. Shouldn't I be concerned that my doctor's medical judgment might be inappropriately swayed by this incentive?

Answer: The incentive from Blue Cross is in the form of small boosts to the Vanderbilt Medical Group fee schedule in 2007, payable if VMG rates of generics prescribing to their beneficiaries increase this year.

We would like all clinicians to appreciate the considerable savings that generic drugs afford to patients and to the health care system in general. Unless there is reason to believe that a branded drug will be safer or more effective for the patient, generic drugs are the preferred alternative. This has always been the position of Vanderbilt's Pharmacy and Therapeutics Committee and indeed, automatic generic substitution for inpatients has been in place for more than 10 years. What is new is the cooperation we are receiving from BC/BS in accomplishing these cost savings in the outpatient arena.

Blue Cross has told us that, based on national claims data, 60 percent reliance on generics appears to be the optimum rate. At a referral center like Vanderbilt, patient problems are often out of the ordinary and call for the newest therapies, so we don't expect to match community rates. Last year, however, only 47 percent of prescriptions written for Blue Cross beneficiaries by VMG clinicians were for generics. We can do better than that. Our incentive begins paying when our rate of generics prescribing to Blue Cross beneficiaries reaches 53.5 percent, and it tops out when prescribing reaches 55.5 percent.

While details of the agreement are not public, I'll say this: the very modest size of this incentive renders it more of a reminder to do the right thing than an actual inducement. It isn't about to cloud anyone's medical judgment. We welcome this agreement and believe it sends the right message about generics prescribing to our clinicians and their patients.

— Gordon Bernard, M.D., chair, Pharmacy and Therapeutics Committee