Tuesday, November 23, 2010

A change in thinking

Sometimes I feel that I am alone in my thinking about what the future of pharmacy holds. Having been a pharmacy manager at each of the companies that I have worked for, I have had access to the financial reports. Over the years, I have seen a steady decline in the gross profits on each prescription.

And when I speak of gross profits, I’m not talking in terms of a percentage. I’m talking about actual dollars.

At my current pharmacy, about sixty percent of our prescriptions have a total pharmacy reimbursement of under ten dollars. Due to the effects of $4 generic pricing and how insurers adjust their MACs, WACs, and GEAPs based on the usual and customary prices that are submitted to them, a good portion of the prescriptions bring in less than five dollars.

When we look at the percentages, the pharmacy is making a profit of 30, 40, or even 80 percent. But an eighty percent profit on a four-dollar prescription is $3.20.

How long can you stay in business filling scripts for a $3.20 profit? Not too long unless you are cranking out 30 scripts per hour, per pharmacist. And that’s just to break even.

What is the profession going to do in order to continue to generate a revenue stream?

Medication therapy management is one possible avenue. But why would somebody want to pay for a service when there a pharmacists and pharmacies that are giving the service away?

Right there is the major problem to pharmacists getting reimbursed for their services.

Too many pharmacists and pharmacies are giving away the one product that we have that is all our own….information about medications.

Over the years, pharmacists have embraced the idea of being the most trusted profession. Over the last few years some other professions have taken over the top spot, but pharmacists still rate pretty high. I don’t know if holding the top spot messed up our brains, but for whatever reason it has become taboo for a pharmacist to think about (gasp) charging patients for the information that we possess.

We are the only “professional” profession that doesn’t charge for our specific knowledge. Granted, we are required by law to provide certain information when we are counseling a patient on their prescription. But where in the law does it state that we can’t charge for information that doesn’t directly relate to a prescription that we are dispensing?

If I have a question about a contract that I am about to sign and run it by my attorney, I can expect a bill in about a week for his time. If I send an email to an accountant with a question about the tax consequences of a financial decision, I can expect a bill. Heck, if I ask an interior decorator their opinion on what color would look good in my foyer, I would expect to receive a bill.

So why do we, as pharmacists, answer the questions from lawyers, accountants, interior designers, or anybody else without charging for the information? I think that my time has value. Why shouldn’t I charge for my time when I am using it to answer a question that can only be answered by somebody who has a pharmacist license?

It is my opinion that we, as a profession, need to wake up and realize that we have valuable information. We need to stop giving it away to every Tom, Dick, and Harry that walks into the pharmacy. If we want to be valued as the medication experts, we need to assign a value to what we provide. The only way to do so is by charging for our specific, professional knowledge.

Pharmacists need to step back and take a good hard look at where the profession currently stands. We also need to visualize where we want it to go. If you are satisfied making two or three bucks per prescription, don’t do a thing.

But if you want to see the profession grow into something more than pill-slinging, we need to look at ways to advance the non-dispensing aspects of the profession. It’s going to require thinking outside of the box. I have some ideas that I will be sharing in the future. I urge you to share your ideas as well.

6 comments:

The Redheaded Pharmacist said...

The first thing the profession of pharmacy needs is a big strong unified voice to represent the interests of pharmacists. Until we get that it is next to impossible to get any kind of meaningful change. But I don't know where that voice will come from because in my opinion the current organizations that should represent us have not risen to the challenge.

CPhT said...

Sell your solution. A patient comes to you for counseling/information on his heartburn. And after talking with him for 5 minutes you decide to recommend prilosec OTC, a nice big box of 42 pills. You paid about $23 to buy it and can sell it for $30+. Profit. You won't gain repeat business by charging to talk to someone in a vulnerable state looking for advice. You can do your honest duty to help people while using that vulnerability and trust to make the money for your time spent.

pharmacy chick said...

I wish I had some say as to how our money is made. I am a peon, and a mionion to the one who pays my salary. I hate to see the direction we are taking. In fact we just got a notice that we are now taking some new Plan that gives 2 dollar rx's... TWO FRIGGIN DOLLAR prescriptions.
May our profession rest in peace.

Eric, RPh said...

The title of this post says it all. We need to change our way of thinking.

The practice of pharmacy needs to evolve from being a product-based profession. If we continue to look for our payments to come strictly from the products we sell, we are at the mercy of any company who decides to undercut the competition's price.


We are medical professionals, not retailers.

Change the way you view yourself. It starts with YOU.

WrongAid said...

We are the Blockbuster of medical professions. The game ended years ago yet we continue to play. I just hope the ruse lasts until I retire. I almost hope the end comes soon just so I have no excuse to remain in this field. That's a bitter pill I know but I guarantee a significant percentage of RPh's feel the way I do but continue to disguise their disgust in the profession with positive thoughts and hopeful wishing. I wish you well in your quest to charge the public something they will never pay for. A single payer system could potentially solve our problem but Walmart letting the cat out of the bag on the true cost of medications probably sealed the deal for us. Video counseling from India is the future of retail.

Anonymous said...

Are medical doctors paid by the hour or a salary? Are lawyers paid by the hour or job done or on salary? Are interior decorators paid by the hour or paid for knowledge widgets?

I don't like CPhT suggestion that we hawk OTCs. A lot of my best advice goes into NOT purchasing anything at all from the drugstore.