My Operations Management (OM) Professor in B-school had one question for our final exam.
Explain if this course will or will not be relevant in your chosen profession or career path?
I revisited my short summary a few days ago and considered the role of the Pharmacist in relation to the current healthcare model. How can Pharmacists help create efficiency when we see inefficiency? How can individual Pharmacists help bring order to a process and fill in the gaps when we see an opportunity to help?
I believe the Pharmacist can fill in the “gaps” and find an opportunity to serve in new ways. This will further our value to the healthcare team. Dispensing medications correctly should always be the foundation of our Profession, yet there are more bricks to be put in place to create the final framework in our bid to be seen as “healthcare providers”. With the broad knowledge base that Pharmacists have in their toolbox, there is an opportunity to be more than “retail or clinical.”
December 4th 2015 at 9:53PM I submitted the following.
Sam Blakemore, PharmD
Personal Operations Management
I have been a practicing Pharmacist for three years. In that time period, Walgreens purchased Alliance Boots, CVS Caremark purchased Target’s in store pharmacies, and most recently Walgreens made another large investment in agreeing to purchase Rite Aid Pharmacies.
The number of patients that the healthcare system takes care of will continue to rise due to more people having access to healthcare with the implementation of the Affordable Care Act. Yet, the reimbursements for these services has become more competitive due to increased demand for better pricing by federal and state funded programs.
The Affordable Care Act has made mergers the new norm. Hospitals, Pharmacies, and Home Health Care Agencies have decided that the key to survival is to become as “lean” as possible. In becoming “lean”, the merged companies streamline operations by initiating new workflow processes, retire outdated facilities, and layoff under-performing workers in the hopes of increasing productivity and profits.
Mergers within the pharmaceutical industry are creating shifts in the supply chain. This will impact the drug companies, wholesalers, and retail pharmacies both independent and chain. In the article Drug Partnership Could Trigger Major Supply-Chain Changes, the author states the following:
For now, drug manufacturers mostly use wholesalers like AmerisourceBergen to ship their product to pharmacies. But if manufacturers are squeezed too much by the arrangement, some could opt to bypass wholesalers altogether and peddle their drugs straight to the drug stores…1
Pharmacy mergers have increased for the purpose of survival in a market with a reimbursement structure that changes by the day. In the article, Reassessing the pharmacy supply chain for a healthier bottom line, the author states the following:
The unpredictable and shrinking reimbursement landscape requires these organizations to reassess expenses and processes –especially within the supply chain—across all facilities and departments to determine cost-effective operational strategies.2
Forecasting reimbursement and cost of drugs in pharmacy is key to success. As an example, Rite Aid Pharmacies earnings per share decreased due to a cut in Medicare reimbursement rates.
Rising generic drug prices are hurting drug store operators as insurers and pharmacy benefit managers have been slow in raising reimbursement rates for those drugs…reimbursement rates for Medicare Part D drug plans, which cover prescription drugs for senior citizens and the disabled, are falling due to growing competition to win these contracts.3
Appropriately forecasting revenues and expenses, using lean/six sigma principles to eliminate drug errors, and having a firm grasp of inventory management are the big three principles I will remember from this course. Having a firm grip on these concepts can be the difference between thriving and failure in this market. It is imperative that a pharmacist have a firm grasp of operations management to thrive in this market and differentiate one’s self against other pharmacists they’re competing against for a job.
I want my patients to have a good experience. I want them to receive the right drug, at the right dose, at the right time, and for the right price. With that in mind, this quote grabbed my attention when I first read it.
“With the country focused on controlling the escalating costs of healthcare, every entity in the healthcare system is under increased pressure to lower costs—while at the same time not jeopardizing the quality of care that patients receive.”4
It is my opinion that schools of medicine, nursing, pharmacy, public health and so forth should require or offer as an elective an operations management course. This course has challenged me to reconsider how I manage employees and myself. This operations management course offered me the information, vocabulary, and resources that I’ll be able to draw from in a healthcare environment that is rapidly undergoing change due both to increased competition and decreased net margins.
1.) Martin, Timothy W. Drug Partnership Could Trigger Major Supply-Chain Changes. 22 March 2013. http://www.wsj.com/articles/SB10001424127887324373204578374801163395308. Accessed 23 Nov. 2015.
2.) Piotrowski, Cary. Reassessing the pharmacy supply chain for a healthier bottom line. 17 July 2015. http://www.beckershospitalreview.com/finance/reassessing-the-pharmacy-supply-chain-for-a-healthier-bottom-line.html, Accessed 18 Nov.
3.) Ramakrishnan, Sruthi. Rite Aid cuts full year forecasts citing reimbursements. 17 Sept. 2015. http://www.reuters.com/article/2015/09/17/us-rite-aid-results-idUSKCN0RH1I920150917#BMoHOwRPdPZFJMVo.97. Accessed 18 Nov. 2015.
4.) Pharmacy Inventory Project: Improving Inventory Management at Genesis Healthcare System Pharmacies. 19 Nov. 2014. http://fisher.osu.edu/supplements/10/14252/white_paper_genesis_2014_2.pdf. Assessed 18 Nov. 2015.
Prior Authorizations (PAs) are forms that are completed by the prescriber or prescriber’s agent (person that completes the form for the prescriber’s signature) for the patient to receive his or her medication. Reason’s for prior authorizations include: cost of the medication, the quantity of medication prescribed, early refills, off label use of a medication, or simply because the medication is not on the patient’s drug formulary.
Out of the many questions and answers regarding prior authorizations, the key information that the pharmacy will need to provide the prescriber with are as follows:
- National Provider Identification (NPI) of the Pharmacy
- Street Address, Fax Number, & Phone Number of the Pharmacy
- National Drug Code (NDC) of the medication in format 00000-0000-00 (first five digits are drug manufacturer, second four digits are drug identifier, last two digits are drug package size)
- Inform the prescriber of the package sizes that are available; some drug products only come as kits, unit dosed packages, or need to be reconstituted.
- The patient’s pharmacy benefits Identification number
The prescriber or prescriber’s agent can complete the process by adding the following information to the PA:
- Prescriber’s NPI, if unknown this can be searched via: NPI Lookup
- ICD-10 code that matches the diagnosis of the patient
- Street Address, Fax Number, & Phone Number of the Prescriber
- Last, but certainly not least..Get the Prescriber Signature!
Lastly, a good resource for prescribers and pharmacies is the website covermymeds. The site can be linked into your pharmacy’s software and faxes can be automatically sent to the prescriber with some rejection codes. For prescribers this is a great resource to complete PA’s electronically, and it gives you electronic access to the correct PA forms that correlate with the patient’s pharmacy benefit plan.
“Medication adherence” has become a big topic of discussion. A quick Google search of medication adherence as it relates to rising healthcare costs will lead readers to thousands of news articles.
In this article I will discuss some tips on how to help your child adhere to his/her medication regimen.
1. Pen and paper – If you don’t write it down it never happened. Write down the time and day the medicine was given.
2. Set the alarm– Set an alarm on your phone so that you can remember to give your child their medication.
3. Phone apps– There are some phone apps that can be easily downloaded on your smart phone to help track when medications should be administered.
4. Pill box organizers– Using weekly or monthly pill box organizers can be very helpful for some parents. Discuss with your child’s pediatrician to find out if this is a suitable option for you and your child. First, pill box organizers can’t be used if your child is on liquid medications. Second, the pediatrician will need to discuss with his or her staff to ensure that this can be done safely and effectively by the parent. Lastly, the use of pill box organizers is not suitable for parent’s that can not keep both children and adults out of reach from inappropriate use of the medicine. Appropriate education of families needs to be done by both prescriber, pharmacist, and nurse to ensure everyone is on the same page.
5. Print off a calendar month– Work with your child’s healthcare team on using a printed calendar month that denotes time, day, and dose to administer to the child. This visual cue will ensure that your child gets the right medicine on the right days. I typically see this method used with kids that are being tapered up, down, or off medicine.
6. Bottle for school use– If the medication is being administered both at home and at school then you can discuss with your pediatrician about having a prescription written in a manner to have the pharmacy dispense a bottle for both home and school use. For example, a child is to take the medicine at 8am, noon, and as needed at 4pm. The prescriber requests for the pharmacist to dispense a quantity of 90 tablets. The prescriber can write on the prescription to dispense 60 tablets in a bottle for home use and 30 tablets in a bottle for school use.
Remember to do what works. Use one of the methods or a combination of the methods that I’ve outlined. At the end of the day, the only thing that matters is that your child receives the medicine the way it’s been prescribed.
“Ya’ll charged me $45, and the pharmacy up the street said they were gonna charge me $400!”
When searching for a pharmacy that compounds; ask the pharmacist if they’re able to file a claim for the prescription under the patient’s pharmacy benefits policy.
If a member of the staff states that the pharmacy can not file the claim under the pharmacy benefits ask the following questions:
- Did you attempt to file the claim under the benefits policy?
- If an attempt was made to file the claim on the policy; why was the claim rejected? What were the rejection codes?
- When the claim was filed under the benefits plan did the rejection message include a phone number?
A typical rejection for a compound claim is ingredient(s) non covered/ product service non covered. The phone number listed on the rejected claim can be used by the prescriber or pharmacist to call on your behalf and gain additional information as to why the claim rejected and if additional paperwork can be submitted on the patient’s behalf to get the compound covered under the patient’s benefits policy.
In regards to pricing — the things that a pharmacy takes into consideration when setting a price are as follows:
- Cost of Drug
- Cost of Suspending Agents/Flavorings/Preservatives
- Compounding Dispensing Fees — this factors in the overhead of producing the final product (labels, tech time, gloves, equipment, etc.)
From there, the pharmacy calculates pricing based on the following principles:
- The “Breakeven Price”— this is the price that can be set where the business loses no money.
- The price markup factors — Imagine if the cost of producing the product is $5. The business can then say their markup factor is 2. A markup factor of 2 means the selling price is $10. Gross profit margin can then be calculated as (Revenue-Cost)/Revenue. Thus, profit margin in the above scenario is 50%.
- Supply and demand — The greater the supply the less the demand and the less supply garners greater demand. Price therefore can shift up and down based on conditions in the market.
- Drug shortages in the market can induce price increases.
Be an informed customer at your community pharmacy. Asking questions about compounding can lead some of your pharmacist friends to talk your ear off.
Questioning your pharmacist on this topic will provide that pharmacist with an opportunity to teach, learn, and build trust with a member of their community.
As a pharmacy student I was fortunate to have the opportunity to be a Pharmacy intern in Eutaw, AL. The Pharmacist that served as my preceptor played a major role in serving that community.
First, he owned one of the two local independent pharmacies in the community. Thus, he filled folks prescriptions and provided jobs for people in the town.
Second, he served as the pharmacist for the local hospital that was licensed for 20 beds. You can’t have a functioning hospital without a pharmacist to dispense and order the medicine.
Third, he served as a consultant for the local nursing home which by law has to have medication chart reviews.
Fourth, my preceptor at various points in time owned multiple businesses in the community. One of his technicians told me that at one point he owned the “bait shop” in town. I mean you have to have good bait if you want to catch some fish!
Fifth, and just as important as anything aforementioned; he gave back to his community in the form of time, service, and money.
I remember a man in his early 50’s walking into the pharmacy and asking to speak with my preceptor. My preceptor walks down the steps of his pharmacy; his pharmacy was “old school” and the counters and shelving for dispensing the medication sat at an elevation in the back of the store. He and the gentleman discussed the need for the high school football team to have good uniforms that fall. The team had to be presentable for it’s Jamboree game which was coming up in a few weeks. Without hesitation my preceptor verbally committed a donation. The football team after all was a representation of the community.
On another occasion he helped folks by making sure people got their medications even when they couldn’t afford them due to lack of insurance. He frequently allowed customers to have charge accounts; allowing the customers to come up with the money and pay the pharmacy back in installments.
My preceptor that month had a lasting impression on me. It made me understand what a Pharmacist can accomplish in a day. One month with him helped me to define the level of impact that a Pharmacist can have on their community.
As a student I sat in class and listened to plenty of lectures regarding pharmaceutical science and pharmaceutical practice. In Eutaw I was forced to consider the social sciences (socio-economics, history, politics). These factors are just as important to consider when educating folks about medication and lifestyle modifications. I learned there was a reason why they call it “pharmacy practice”. Pharmacy like life isn’t always black and white — but rather shades of gray.
I’m blessed to have had the experience. It helped me to identify opportunities in the community that I serve presently. Imitation they say can be a form of flattery. I don’t plan on fully imitating the role my preceptor played in Eutaw, AL. However, I write this because at times Pharmacists can undervalue the role we play in the community and in the lives of the folks we serve and manage.
I do believe that each Pharmacist, including myself can identify their God given talents to play a greater role in the communities that we serve. Our main objective in the pharmacy is to dispense medications correctly. But outside of the pharmacy what can we do to show folks who we are and what we represent!? Hopefully by trying to figure this out, we can be more like my preceptor from Eutaw, AL and increase the value of the things we can accomplish in a day of work. This type of thinking I believe will uplift our profession and the communities that we serve.