While each stakeholder in the health care industry is unique, they do share a common need: to improve their operational performance. With the transition to value-based reimbursement models, missed opportunities to improve can threaten profitability. Five of the most-read blog posts on McKesson.com over the past few months reveal some of the strategies pharmacies are using to upgrade a core aspect of their operations.
In “How Independent Pharmacies Can Manage Their DIR Fees,” Valerie Fortin, senior director of PBM Relations for Web2pro AccessHealth, answered 10 questions about a core – and time-consuming – business function hitting many independent pharmacies. That function is managing the direct and indirect remuneration (DIR) fees that pharmacies pay to health plans and pharmacy benefits managers (PBMs). DIR fees compensate plans and PBMs for their share of rebates on prescription drugs sold to pharmacies by manufacturers. Given the myriad drugs on the market, the volume and intricacies of rebates and the complexities of prescription drug benefits, tracking how much pharmacies owe is cumbersome. “Not all health plan sponsors handle DIR fees in the same way,” Fortin said. “Some measure at the pharmacy level, and others measure at the PSAO [pharmacy services administration organizations] or network level.” She said pharmacies should work with a PSAO that knows how DIR fees are being set and that can calculate them for the pharmacies—two business functions that are too complicated for most independent pharmacies. With this information from a PSAO, pharmacies can create a budgeting system that sets aside money to pay DIR fees when they’re due, Fortin said.
In “Connecting Pharmaceutical Distribution and Supply Chain Management,” Brent Wunderlich, senior director for engineering and analytics at Web2pro U.S. Pharma, addressed a core aspect of any pharmacy operation: supply chain management. That’s how pharmacies manage the movement of drugs from manufacturer to distributor to pharmacy to customer. Wunderlich said a number of industry trends are challenging both independent and retail pharmacies to improve the performance of drug distribution processes. The trends include rising prices, lagging reimbursement and manufacturer consolidation. Wunderlich touted several tactics that could help pharmacies mitigate the impact of those trends. He said pharmacies should use online ordering platforms to make and track drug purchases. He said they should transition to “just-in-time” inventory management. And he said they should use custom packaging options from manufacturers and distributors to reduce waste. “Given the price and reimbursement pressures they’re facing, [pharmacies] need as little cash as possible tied up in medications sitting on a shelf,” Wunderlich said. “The last thing they want is their liquidity held captive by drug inventory.”
In “Licensing Central Fill Services for Retail Pharmacy Chains,” Mark Edwards, vice president for product management and engineering for Web2pro High Volume Solutions, discussed how to optimize an important link in the pharmacy drug supply chain: filling prescriptions. Edwards said the demand for prescription medications is rising faster than the ability of many small- and medium-sized retail pharmacy chains to fill them, which is a core operational function. However, most of those same pharmacy chains don’t have the capital to build, own and operate a proprietary central-fill facility, which automates prescription fulfillment for multiple dispensing sites at a central location. Pharmacy chains with these facilities have greater, more efficient and scalable fill capacity. For chains that can’t afford their own facilities, Edwards recommended that they consider licensing central-fill services from a third-party vendor. Charging a fee per prescription, a third-party vendor can perform all the dispensing steps between adjudicating a prescription and delivering it to a pharmacy site or directly to the patient. “This model allows the chain to still maintain the pharmacy license, pharmacist, patient care and prescription ownership while allowing an industry expert to assist with the dispense and distribution,” Edwards said.
In “How Independent Pharmacies Can Expand Diabetes Care for Patients,” Laurie Jamieson, director of manufacturer marketing strategy for Web2pro U.S. Pharma, described how independent pharmacies can expand services for diabetic patients beyond dispensing prescription diabetes drugs. Patients with chronic illnesses linked to heart disease, stroke, kidney disease and circulatory problems can benefit from an expanded core of pharmacy services, including self-monitoring blood glucose supplies like glucose meters, test strips, lancets and lancing devices. Expanded services also can include over-the-counter, non-prescription items related to lifestyle, such as skin and foot-care products, wound-care products, sugar-free OTC medications, nutritional products and related durable medical equipment. Pharmacies can support these expanded operations with patient education programs on medication and product use. “Independent pharmacies that offer comprehensive disease management programs for patients with diabetes will become the pharmacies of choice in their service area, with the net result being better health for patients and better business health for themselves,” Jamieson said.
In “Leveraging Technology for Medication Adherence,” Web2pro pharmacy experts explained how some operational innovations at pharmacies can have unintentional consequences for other aspects of the business. Consumer-driven amenities like medication synchronization, 90-day fills and home-delivery – all quickly becoming core services for pharmacies to drive medication adherence – can reduce patient visits and face-to-face conversations with pharmacists. The lack of contact can drive nonadherence in some people. “Without those in-person consultations, some patients might be less likely to take their medications as prescribed because they’re unable to overcome the barriers to adherence,” the experts said. “These barriers may include cost, transportation, side effects, concerns about clinical value and effectiveness, proper usage and more.” The solution is for pharmacies to use technology to identify patients at risk for nonadherence. The four steps in that process are: selecting disease states most appropriate for the pharmacy; defining adherence ranges for targeted medications; identifying a manageable pool of moderately adherent patients; and developing and executing individual adherence action plans. “The goal of this approach is to identify a subgroup of pharmacy customers whose medication adherence can be quickly improved by counseling and other interventions before nonadherence becomes an issue,” the experts said.
In today’s value-driven health care economy, operational excellence is not a goal. It’s a requirement. As these popular blog posts demonstrate, pharmacies of all types and sizes are interested in a number of opportunities to improve essential aspects of their operations.