Pharmacy and pharmacists are navigating uncharted waters. The reason is the many the recent and significant changes in healthcare. Two very different factions emerging within the profession:
- Medications as a commodity and
- Pharmacists as providers of care
The competition between these factions will shape pharmacy and healthcare for years to come. Will one faction win over the other, or will the profession move in two different directions?
Medications as a Commodity
The mechanics of this faction are complicated, and there are many different parties actively involved. The net effect for pharmacy is a severe reduction in reimbursement for the drug product. Historically, pharmacies and pharmacists have earned their living providing both medication and care, but being paid only for the medication component. The downward pressure on reimbursement has resulted in what we have previously named “the stripped down model of pharmacy.”
The ramifications for the commoditization of pharmaceuticals are significant. Only by ramping up volume can a pharmacy continue to meet overhead costs. Increasing efficiency can take a pharmacy only so far down this path before the bottom line becomes negative. The largest single overhead expense in a pharmacy is wages, and one person can only fill or check a finite number of prescriptions in an hour.
Mail order pharmacy has pushed efficiency to the logical end, where one pharmacist (which is legally required in most states) is “checking” thousands of medications a day. Robotics and automation run the “pharmacy” in these operations. These large prescription mills can deliver an almost limitless number of prescriptions every year without any human intervention. Medications show up in the mail box, and the patient has to contact an unknown pharmacists over the phone if they have any questions or concerns.
Even with a highly efficient operation, retail pharmacies across the country are struggling to maintain profitability given the ever decreasing reimbursement this model provides. Smaller pharmacies across the country are closing at an alarming rate. Many of these pharmacies service more rural areas of the country, creating in interesting dilemma for patients. This Darwinian process of survival of the biggest could have severe repercussions as healthcare evolves. In this faction, efficiency has come at the expense of patient care.
Pharmacists as Providers of Care
On the other side of the battle are the pharmacists working with patients to ensure therapeutic outcomes. In direct contrast to the high efficiency, robotic or automated systems required in the above model, a care oriented practice may have several pharmacists working at any given time. The difference is what is being provided. While the patient ultimately receives a medication (product), they are also receiving service and care. The pharmacists review the patient’s medications, look for and address real and potential problems with the patient and their doctor(s), and work with the patient to ensure that they are obtaining the optimal outcomes. Pharmacists ensure medications are used safely and effectively.
At the present time, pharmacies are still being paid primarily for product, and it is likely that no matter which direction the profession of pharmacy ultimately follows, reimbursement for the drug product will forever be limited. Future support for the pharmacist as a provider of care will have to come from a fee for service model. Medicare and other are starting now recognizing the importance of pharmacists providing care to enhance patient outcomes. Even a single pharmacy has the potential to save a payor millions of dollars yearly by providing quality care (this will be the focus of a future post here).
A fee for service or pay for performance system will eventually need to become reality. Until reimbursement for service catches up to the importance of pharmacists providing care, pharmacies that have embraced the service model are struggling to stay in business. It may not be until Medicare recognizes pharmacists as providers, allowing them to bill for clinical services to the patient’s medical benefit, that the pharmacy as a service model gains widespread traction in our healthcare system.
Winners and Losers
In case it isn’t clear, there are no clear cut winners. Pharmacies and pharmacists will continue to struggle on both sides. What is becoming forgotten is the patient, who has the most to lose.
It is likely inevitable in the current health care system, that medications will become a commodity. Reimbursement for the product in the future will probably only be sufficient to cover basic overhead. It is with the emergence of reimbursement to pharmacists for care that the fate of pharmacy as a profession rests.
If I had to pick a faction to win, however, it would be the pharmacy as a service model. In this regard, the profession of pharmacy has a lot in common with the professional airline pilot. Consider that today’s airplanes can take-off, fly and land without a pilot, much like a prescriptions filled by an automated pharmacy. Now ask, would you want to fly in a plane without a pilot? Who will be there if something doesn’t go as planned, and the automated system cannot land the plane? Similarly, how safe would you feel if there were no one looking over your medications to ensure that there were no potential or real problems? Who will answer questions about the medications and how to best take them, and will they know you? Pharmacists providing care are an important part of the health care system. Until the time when pharmacists are recognized as providers, pharmacists will need play on both sides of the equation: making their practice as efficient as possible while at the same time going the extra mile to make every encounter with their patients count!