Delivering Care Beyond Prescriptions: A Marketplace Opportunity for Independent Pharmacies

By Brian Nightengale |

As chain pharmacies continue expanding their footprint, independent pharmacies are leaning into what they do best—providing high-touch, high-quality, personalized service. 

More than a differentiator, the fundamental differences in how independent pharmacies operate should be increasingly valued within the healthcare ecosystem since more chronically ill patients need readily available access to high-touch care, and payers are placing greater focus on improved patient outcomes, higher quality and lower overall healthcare costs. 

Consider that, according to the 2018 NCPA Digest, 79 percent of independent pharmacies offered medication therapy management to their patients in 2017, and 60 percent provided customized compounding services. Another 71 percent of independents offer delivery services that are increasingly more than handing off medication; these visits provide the opportunity to check on a patient’s well-being. Additionally, 70 percent of independents offered immunizations; 57 percent offered blood pressure monitoring; 35 percent, diabetes training; 24 percent, smoking cessation; and 16 percent, asthma management. 

Pair these patient care services with pharmacy accessibility. According to Medicaid claims data released by Community Care of North Carolina, high-risk patients see their pharmacist 35 times a year on average while visiting their primary care physician only four times. This positions independent pharmacies as the most valuable resource to deliver cost-effective care for the highest-risk patients in the local community. 

The gap? It is rare—and inconsistent—that pharmacies are paid for providing patient care services beyond activity associated directly with filling and dispensing medications. With declining reimbursement rates for those medications, the financial viability for pharmacies providing these services is diminishing. It is becoming more and more difficult for independent community pharmacies to provide individualized patient services while solely funded by gross margin from diminishing prescription drug reimbursement. A look at today’s environment will demonstrate why correcting this disconnect is so important. 

PRIORITIZING THE CARE PATIENTS WANT AND NEED 

Given the challenges facing our healthcare system, the marketplace reality is that downward pressure on prescription reimbursement will likely continue. With more than 90 percent of their revenue and gross profit coming from the prescription side of the business, independents rely heavily on patient loyalty as a key part of their business model, rather than the large “front of store” sales that drive substantial profitability for larger chain, grocery and big box pharmacies. As chain pharmacies have found alternative sources of revenue, independent pharmacies also need to diversify their revenue. The vision of Good Neighbor Pharmacy is to see new reimbursement models for the services pharmacies are providing –in other words, a future where reimbursement is tied to services provided and value delivered as a whole to a healthier patient. We believe that the market is in the early stages of connecting the dots between the impact enhanced pharmacy care has on patients and the subsequent reduction in medical expenses. 

The value patients place on this service and quality of care is validated by the recognition Good Neighbor Pharmacy has received for the highest in customer satisfaction with chain drug store pharmacies and “Best in Customer Service” in a recent survey from Newsweek

Individuals have very different reasons for choosing an independent pharmacy versus a chain pharmacy. More complex patients tend to seek out the personalized care and close relationships provided by independents. This creates an opportunity for plan sponsors to engage these high-cost patients with independent pharmacies as the avenue to improve outcomes and lower overall costs. Data from AmerisourceBergen’s PSAO, Elevate Provider Network, reinforces our belief—that these more complex patients pick their pharmacy first and their health plan second—much like many do with their primary care physicians. Across 4,500+ Elevate member pharmacies, average prescription volume grew by 2.2 percent year-over-year, compared to a -0.4 percent decline for the overall pharmacy market according to a rolling 12-month Rx count (September 2018) conducted by data-analysis firm IQVIA. 

While drug costs continue to rise, effective drug therapy and management remains one of the most cost-effective treatment modalities available to physicians today, saving substantial costs related to ER visits, hospitalizations and diminished quality of life.  Fortunately, most, if not all health plan sponsors are taking a more holistic purview as they design and offer benefit plans focused on overall quality, health outcomes, and value-based contracts. According to a recent report from the Health Care Payment Learning and Action Network, one-third of all U.S. healthcare payments were associated with alternative payment models. The high-touch, personalized and efficient care provided by independent community pharmacies is uniquely positioned to excel within these new value-based contracts. 

Evidence shows that independents are already improving outcomes and embracing performance-based incentives through CMS’s Five-Star Quality Rating System. More than 1,000 Elevate member pharmacies have achieved 5-Star performance, exceeding 85 percent scores across cholesterol and diabetes adherence measures. As of June 2018, 75 percent of Elevate pharmacies reached or surpassed 3-Star performance across those measures.

Pharmacies, particularly independents, are best suited to fill the significant, growing gap in primary care, especially in underserved areas. One glimmer of hope for seeing this vision of a new financial model with fair compensation for enhanced clinical services come to fruition is with the recent alignments of medical insurers owning PBMs. The result is that medical benefits and pharmacy benefits are now connected and there is financial incentive to take advantage of this: better pharmacy care reduces medical expenses. 

HOW DO WE GET THERE?

In one of the most promising developments for community pharmacies, thousands of pharmacies are joining together to create Community Pharmacy Enhanced Services Networks (CPESNs) all across the United States.  The primary purpose of these networks is to create an integrated clinical network of community pharmacies committed to providing the high-touch enhanced services that truly move the needle in improving the outcomes of complex patients who live in the communities that they serve. CPESN USA is the national organization that is facilitating the development of service standards, alternative payment models, and supporting network outreach to the payer community.  

An early pilot project sponsored by the Centers for Medicare and Medicaid Services demonstrated the significant positive impact that such models can deliver.  This initial pilot, organized through Community Care of North Carolina (CCNC), offered local pharmacies an opportunity to share in savings by coordinating patient care and completing medication-optimization activities and enhanced services for high-risk patients. As of the second stage of the CCNC pilot, 123 pharmacies had been recruited and had received training to provide a comprehensive initial pharmacy assessment (CIPA) of patients prescribed chronic disease medications. According to data compiled by CCNC, over 58,000 CIPAs have been completed and paid to date with 119,000 drug therapy problems found, an average of 3.55 per patient.

This pilot was one of the first of many that continue to demonstrate the value of community-based pharmaceutical care and what can happen when payers and community pharmacies partner at the patient level to provide enhanced services for these complex patients.  

In conjunction with NCPA, CPESN USA and other partners, AmerisourceBergen and Good Neighbor Pharmacy are supporting the development of standards and pharmacist e-care plans to enable pharmacies to document services and the results. This information could then be electronically submitted to a physician, health system or payer, creating a common data record for each patient. This activates mechanisms for independent pharmacies to share their value proposition to the industry with real versus anecdotal data. And that is a critical part of the puzzle.  Pharmacies cannot expect to be paid for services or outcomes that they are not able to document. 

As more community pharmacies document and communicate the care they provide, I am both confident and excited about the outcome, one where pharmacies are fairly compensated for not only the prescriptions they dispense, but also the vital care they provide in their community.

PRACTICAL GUIDANCE

My advice to community pharmacy stakeholders, aside from joining collaborative efforts such as those promoted by CPESN USA and others, is to get out and engage directly with payer decision-makers within the communities they serve. Find those employer and health plan offices in your area. Set up meetings with the medical, quality and pharmacy directors and share data and stories about the impact that your pharmacy has made for their members. Using documented data and highlighting activities that improve patient outcomes, pharmacies can support the case for reimbursable services outside of filling prescriptions.

Independent community pharmacies have created an important niche over the years by providing a distinctly different experience for patients, and they can be an incredible resource to those with complex diseases who are vulnerable. However, the changes needed will not happen overnight or without effort. As an industry, we need to capitalize on, and consistently document, the ability that community pharmacies have to deliver improved outcomes and cost savings for patients and providers.  

Learn more about opportunities for pharmacies by downloading our white paper, “Independence Can’t Be Stopped: How Retail Trends Are Changing the Pharmacy Game.”
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About the Author

Brian Nightengale

Brian Nightengale

Senior Vice President, Community and Specialty Pharmacy, AmerisourceBergen
President, Good Neighbor Pharmacy
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