R&D MedTech - In-House Pharmacies

In-House Pharmacies

We all know the hassles of getting prescriptions filled: long lines, rude service, driving time, and incorrect information, which leads to patients having to return to the pharmacy. Now there is a solution. Across the nation, healthcare providers are embracing point-of-care dispensing, not only for the increased revenue, but also to provide better care for their patients. EHR software is an important ingredient in the formula for a successful point-of-care or in-house pharmacy at a physician’s office.

Throughout most of our history, physicians dispensed the medications they prescribed. However, at the turn of the 20th century, physicians began to offload this task to a chemist, or pharmacist, who were specialists in the creation and compounding of medicines. In the early 1980s, this practice began to reverse with the advent of prepackaged drugs. Today, most drugs come prepackaged from the pharmaceutical manufacturer, making physician dispensing a logical step for practitioners.

Physicians may believe that office dispensing presents a potential conflict of interest or even an ethical dilemma. American Medical Association (AMA) guidelines do not preclude office dispensing as long as state and federal regulatory requirements are fulfilled, the doctor prescribes only to his/her patients and allows them to fill prescriptions where they want. (Many practices want to dispense free samples but often fail to realize that regulations governing dispensing also apply to free medications.) Recent AMA and Food and Drug Administration (FDA) recommendations discourage free sample distribution.

Practitioner Benefits
Point-of-care dispensing has many inherent benefits to a physician's practice, such as providing better care for their patients and increasing the revenue and profitability of their practice.

• Improving Care: By filling prescriptions on-site, patient compliance will increase dramatically. The physician will no longer wonder "Did the patient get his prescription filled?" Patients will actually receive their medication and therefore adhere to the physician's instructions. National studies have estimated that 30-40% of prescribed medications go unfilled. This behavior increases the likelihood that the patient will encounter relapses, complications and hospitalization. The most common excuses of not filling a prescription are removed through a point-of-care dispensing solution because it provides patients with privacy and convenience.

In traditional pharmacies, potentially fatal error rates (wrong drug, wrong strength or wrong dosage) are approaching 5% nationally, with cross-contamination of antibiotics occurring frequently. Incorporating prepackaged products into your medical practice greatly reduces the likelihood of these serious pharmacy-related errors.

• Increasing Physician Practice Profitability: Physicians are blind to the hidden costs of prescription writing. Phoning or faxing prescriptions to the pharmacist, call-backs for non-formulary drugs, inquiries because of illegible handwriting and mandated prior authorization for refills are great time wasters. The average physician spends up to 60 minutes a day dealing with pharmaceutical issues for no revenue.5 For every three physicians, there is usually one employee dealing exclusively with pharmaceutical issues. This employee is often a nurse whose salary and benefits may reach $100,000 annually. While electronic prescribing may ease legibility and calls to the pharmacy regarding non-formulary prescriptions, the physician does all the work and receives none of the revenue — while often paying for the e-prescribing system.

Point-of-care dispensing is a logical and easy way to increase your profitability. For a practice utilizing a dispensing system and promoting it to its patients, the profit can be substantial. Success in physician dispensing rises when doctors write as many generic medications as possible. Because the majority of generics sell for less than the patient’s deductible, dispensing becomes a cash-and- carry business. Patients are often willing to pay a premium over their deductible to avoid going to the drugstore. Success also depends on volume, rather than high-margin drugs ordered infrequently. A typical physician can expect to net $6 to $8 per script from office dispensing. Forty patients a day and 1,000 scripts per month works out to $70,000 to $100,000 in additional annual income.

Patient Benefits
In addition to the improved medical care through medication compliance and the reduced risk of medication errors discussed above, patients love the convenience and cost savings afforded them through our dispensing program.

• Convenience: Patients do not fill their prescribed medications a significant amount of the time—whether it's because of transportation issues, a reluctance to wait in pharmacy lines while ill or with a restless child, or simply because they are wanting to avoid an embarrassing incident at the pharmacy. • Cost Savings for Patients: Many general practices are choosing to open their own pharmacies, cutting the cost of prescriptions for their patients. The in-house pharmacy model also saves time by having direct communication with the doctor, on site, rather than communicating with a distant pharmacy.

Making dispensing physicians aware of drug costs creates an incentive to reduce them with generic substitution. Remember: Only physicians possess the ability to substitute therapeutically equivalent generic or brand-name medications. As a consequence, their generic use rates reach levels not attainable by any industry strategy. In 2004, the average generic prescription cost was $28.84; the national average brand-name retail prescription cost was $63.59. GLCMS’ vendor achieved a 75 percent generic substitution rate in 2004.

Insurers have long recognized that generic medications save money. Promotional activities have increased generic substitution nationally to 53 percent, yet no program has attempted to align physician cooperation. Without direct physician involvement, increasing generic prescription rates is problematic, since current rates almost equal available generic substitutes. With physician- dispensing prescription costs 50 percent below the national average and generic substitution 50 percent higher than the national average, the potential cost savings for payers and consumers is staggering.

How does it work
Involve information technology staff for fax access and placement of computer connections, router lines and firewalls. Each office is supplied with a space efficient, DEA approved steel dispensing cabinet which has been designed to make the dispensing process fast and simple. Medications arrive at your office in prepackaged, tamper proof, child-resistant bottles that will slide into the top to the appropriate slots in the dispensing cabinet. When it is time to dispense, the bottle is pulled from the bottom of the slot to insure first in - first out inventory controls.

Our HIPAA compliant pharmacy software system utilizes bar-code technology to ensure that the prescribed medication is accurately dispensed. The software produces all required State and Federal reporting, as well as standard and custom reports. The software features Drug Utilization Review (DUR), measuring correct dosing, interactions, and duplicative therapy. A complete patient utilization and history is also easily accessible. The process of dispensing is easy and quick—in most cases, the dispensing takes less than a minute. Simply select the patient in the software, select the medication prescribed, remove the bottle from the medication cabinet, scan the bar code, and place the printed label on the bottle. Along with the label, the software prints out a complete patient education sheet on the medication dispensed, as well as a receipt.

Our in-office pharmacy software programs are easily integrated into your practice or clinic, and provides patients with an insurance payment process identical to that found in a pharmacy. Physicians my dispense to self-insured (cash) patients, as well as dispense and bill claims for patients covered by Worker's Compensation, Medicare, and most private insurance plans.

Your vendor will suggest a provisional formulary. While most practices have a good idea of the medications they prescribe, they may not track the number of scripts written or unit sizes. To help define your preliminary formulary, designate an employee to register all scripts written in a two- to four- week period. Limit the initial inventory in number of medications and unit doses. Most vendors can supply reorders within 24 hours, so a lean inventory improves your profitability and lowers start-up costs. You can adjust your formulary based on the volume and type of prescriptions written.

For more information, contact R&D MedTech at 918-682-2285.