News and Media
SITE OF CARE (SOC) OPTIMIZATION IS ONE OF THE TOP STRATEGIES FOR REDUCING THE COST OF SPECIALTY BIOLOGIC MEDICATIONS
There are an estimated 280+ specialty infusion drugs in Phase I/II development and the cost of an infused drug could vary by more than 100%, depending on where patients go to receive their infusions.
Managing infusion drug therapies requires specialized expertise, clinical and supportive services, and specialized facilities. Having the right vendor in place could help lower your specialty costs by up to 50%
On May 2nd, 2019, the National Infusion Association put out an article on Site of Care Optimization stating that “If we want to quickly and drastically reduce the burden of these specialty medications to the healthcare system and the patients who share these higher costs, then we must optimize the site of care.” You can read the article here.
“During a time of change and uncertainty that is often synonymous with the healthcare industry, strategies that cut costs without compromising quality of care are highly sought after by all third-party payers. Site of Care (SOC) Optimization is one of the top proven strategies for reducing the cost of specialty biologic medications. A SOC optimization strategy encourages patients to move from higher-cost settings, like big hospitals and institutions, to lower-cost settings, such as physician’s in-office infusion suites or stand-alone Infusion Centers.”
“SOC Optimization is now one of the top strategies being used by payers nationwide to improve access to, and lower the cost of, care. The reason for this adoption is that SOC strategies are effective and are supported by good data.
Hospital-based inpatient and outpatient Infusion Centers are exponentially more expensive than the physician-based and stand-alone Infusion Centers.” Magellan’s annual Medical Pharmacy Trend Report consistently highlights this data.
“Commercial medical benefit drug costs in the hospital outpatient setting were often double that of the physician office. Compared to the commercial population…Oftentimes, administrative code reimbursement is four times more expensive in the hospital than physician office setting for commercial members; for Medicare, it is frequently twice as costly in the hospital. ”
Looking at one of the most commonly prescribed biologics, Remicade (infliximab) from Johnson & Johnson, there is an apparent cost disparity between the hospital and physician office setting. The exact same medication, administered with the same method, is more than two times more expensive in the hospital setting . Other specialty medications can be three to four times more expensive in the same scenario.
Several insurers have validated the effectiveness of a SOC Strategy. In the last two years, Medicare has been considering SOC parity policies (site neutral reimbursement), and United Healthcare’s (UHC) landmark national policy change in 2017 requires many expensive specialty biologics to be administered in a non-hospital setting.
All the data points to a very simple economic solution. If we want to quickly and drastically reduce the burden of these specialty medications to the healthcare system and the patients who share these higher costs, then we must optimize the site of care.
Moving patients from the hospital to the physician-office or stand-alone infusion center setting is a proven win-win strategy that decreases both the medication cost and procedure cost of treatment and reduces the profit incentives of hospitals and institutions. (Including misused 340B programs).
National Infusion Center Association: https://infusioncenter.org/infusion-center-news/site-of-care-optimization/
 Magellan Health Insights. The Trends and Complexities of Provider-Administered Drugs. https://magellanhealthinsights.com/2016/11/03/the-trends-and-complexities-of-provider-administered-drugs/. Published 2016. Accessed November 28, 2018.
 Magellan Rx Management. 2017 Magellan Rx Management medical pharmacy trend report. https://www1.magellanrx.com/magellan-rx/publications/medical-pharmacy-trend report.aspx. Published 2018. Accessed November 28, 2018
For more information on the cost-savings associated with Site of Care Optimization, please contact Alecia Greilich Payne, VP Specialty Business Development & Payor Relations at FountainRx Specialty Pharmacy and BrookWell Health Outpatient Infusion Therapy Treatment Center.