CoverMyMeds: 2016 Leading Edge in Clinician Workflow

March 11, 2016
Healthcare Informatics announces the winners of the second annual Leading Edge Awards, honoring vendors whose combination of expertise and innovation are shaping the future of healthcare systems. One of two 2016 winners in the category of Clinical Workflow is CoverMyMeds.

Over the past decade, Healthcare Informatics has recognized healthcare leadership teams who have gone above and beyond in their use of information technology solutions with the Innovator Awards.  But those innovators could not have achieved such success without dedicated vendor partners. To that end, Healthcare Informatics announces the winners of the second annual Leading Edge Awards, honoring vendors whose combination of expertise and innovation are shaping the future of healthcare systems.  One of two 2016 winners in the category of Clinical Workflow is CoverMyMeds, a Columbus, Ohio-based company leading in electronic prior authorization solutions.  Matt Scantland, co-founder and Principal at CoverMyMeds, talks to Healthcare Informatics about the important of prior authorization to controlling healthcare costs.

Healthcare Informatics: Tell me about CoverMyMeds’ vision for clinician workflow in healthcare. 

Matt Scantland:  What we do at CoverMyMeds is help patients get the drugs they need to live healthy lives.  It’s an important mission.  We found the best way to do that is to make the prior authorization process easier.  Because problems with prior authorization is something that you see day-in and day-out in the pharmacy and in the doctor’s office.  It frequently results in something we call prescription abandonment, meaning the doctor wrote a prescription but once the patient encounters the prior authorization process, they don’t make it through that process and don’t end up getting their prescription.

We see prescription abandonment, outside of the CoverMyMeds ecosystem, up to 40-50 percent of the time when a prescription requires prior authorization.  It’s a very common and significant problem.  The result of prescription abandonment is that patients aren’t getting the important drugs their doctors have prescribed.  They aren’t getting any alternative treatments either.  And it’s a big problem—because many of these drugs treat chronic illnesses.  So the patient’s disease progresses, they end up getting sicker, and they become a more expensive patient to care for.

This is one of the main reasons why we spend so much in avoidable healthcare costs.  This prescription abandonment, a type of non-adherence to care and patients taking the drugs they need, is one thing that drives somewhere around $350 billion a year in avoidable medical spending. 

Healthcare Informatics: There is a lot of discussion around streamlining the prescription process.  But how does such a niche solution optimize adherence and reduce costs?

Matt Scantland:  A lot of people think of prior authorization as niche, but it is not.  This is something that is needed about 250 million times per year.  So if you look at it on that basis, out of 70,000 pharmacies or so, you need prior authorization 250 million times a year.  That shows you how important it is to daily life in the doctor’s office and in the pharmacy.  It is really common and one of the top complaints of doctors and pharmacists.  So, in a lot of ways, prior authorization was one of the missing value propositions in electronic prescribing.  In fact, if you go back to the early e-prescription pilots from 15 years ago or so, prior authorization was viewed as synonymous with e-prescribing.  But back then, no one was able to make it actually work.  So it was dropped from these systems.  But, we see now that this is really important to doctors and pharmacists.  It’s the thing that they have been missing.

Healthcare Informatics: How do you see the competitive marketplace moving in this clinician workflow area?

Matt Scantland:  It took us 15 years to solve this problem when all this technology came about.  The reason for that is that this is really a marketplace, right?  If you’re an insurance company, before you invest in electronic workflow, you want something that’s used by doctors.  If you’re a doctor, you want something that works with all the insurance companies.  That way, it’s not just yet another exception for one particular insurance company.

CoverMyMeds was the first company to solve this chicken-and-egg marketplace problem.  That allowed us to focus on adoption—on the left side of the network, or the doctor’s offices and pharmacies.  We were able to show a value proposition to the insurance companies so that they would go and build these electronic processes that were required to take this process to the next level.  We’re still the only company that has solved this chicken-and-egg problem.  The result of that is that, in the prescription drug space, our customers tell us we’re the only source of these transactions on a large scale.

That said, there are a lot of related technologies.  We work as a partner to electronic health records that have great electronic prescribing systems.  We also partner with pharmacy management systems to handle the process inside the pharmacy.  That way, we can power the prior authorization process inside any one of those systems.

Healthcare Informatics:  To what do you attribute CoverMyMeds’ success?

Matt Scantland:  We were the first to solve that chicken-and-egg problem in a market where a solution could come into place that didn’t take a dollar out of someone’s pocket.  This is a way that the industry can save money.  We do that by keeping patients healthier by getting them the drugs they need—but we can do it without taking a dollar from anyone.

We have different types of customers:  pharmacies, doctor’s offices, and insurance plans.  If you think about it, pharmacies actually fill more prescriptions.  The doctor’s offices save time.  And while the insurance companies may spend a little bit more on a prescription drug that would have been abandoned, they save more on overall cost of care when the patient adheres to treatment.  We solved a problem in such a way where everyone can win.

That’s kind of rare in healthcare and results in what we call a network effect.  So if I’m a customer of CoverMyMeds, I want it to grow to other organizations because then it becomes more valuable.  We have almost 50,000 pharmacies that use our software.  If I’m a pharmacy, I want all the doctors in my neighborhood to use CoverMyMeds, too.  That way, when I start a prior authorization, they can finish the process.  So pharmacies are actually inviting more practices to become CoverMyMeds users.  It’s the same with insurance companies.  Once CoverMyMeds is integrated, I’ve taken the processing cost of a prior authorization from around $40 to zero.  No marginal costs because it’s in real time and it’s completely automated.  Now that I have this real-time, zero-cost channel, that company is going to want all prior authorizations to come through CoverMyMeds.  I’m encouraging everyone in my network to use the service and that is driving rapid growth.  Every day, about 800 new physician offices sign up for an account.  That’s a level of adoption we couldn’t drive ourselves.  It all comes from our customers.

Healthcare Informatics: How do you see the future—both in terms of challenges and opportunities—in the clinician workflow space?

Matt Scantland:  Prior authorization really is an exception process.  It’s a hoop to jump through after a doctor has already made a treatment decision.  Now that we’ve laid these electronic tracks between the pharmacy, the doctor’s office, and the health plan—and we have aligned business interests between them—we can now pivot the process to be something that happens at the point of prescribing.  The doctor can do a better job of writing that prescription in the first place.  He can understand the coverage criteria right then and there and write a prescription that stays within that criteria.  So then, by the time the patient gets to the pharmacy, they are, by definition, picking up a medication that can be dispensed and will be covered by the insurance plan.

If we can do that in a way where we manage the trade-offs between the efficacy of the drug and its cost, we’re doing a better job to solve why prior authorization exists in the first place.  But we’re doing it in a way that adds value to the practice of medicine.  We have built our business on the basis of making the practice of medicine and the clinical workflow a little bit easier.  And that’s what we’ll continue doing.