|The Chain Market Report 2008||| Print ||
New pharmacy systems continue to be installed by the chains. Specifically, we found that one-third of the chains upgraded their systems or started the process in the past year. In only one case did it involve going to a new vendor. There is no fixed timetable for upgrading systems. Some bring in new systems every two to four years, others wait longer, and others just upgrade when they feel a new system is warranted.
With these new installations, only five chains decided to put in a workflow management system, with two of these chains installing these systems in all stores. Another just started the rollout of a workflow system, and with one chain there are plans to test workflow. Workflow systems are viewed as time savers, reducing staff stress, and providing more accuracy in the filling process - reasons why these systems appeal to busy pharmacies.
There is a trend toward proprietary systems with the large chains, since they have the resources to build and maintain the systems. The small chains do not share this luxury. One large chain in particular just completed the installation of its proprietary system in all stores. Another chain converted stores recently acquired to its proprietary system. More and more, the market for vendor-developed systems is with the smaller chains.
Looking ahead we found that 30% of the chains have new systems on the agenda for the 12 months moving forward.
The Patient Safety Factor
The use of technology to reduce prescription errors is a high priority. To this end, barcode scanning is viewed as one way to safeguard against dispensing the wrong drug. We found that 90% of the chains are either using scanners or planning to use this technology. Several chains have barcode scanners in every pharmacy, and where it is less than 100%, these chains are moving to deploy scanners chain-wide.
Patients are benefiting from other quality control measures as well. Almost half of the chains provide pharmacists with access to a visual on the computer screen of the pill being dispensed. Augmenting this is a scanned image of the written prescription. But use of document scanners at intake is occurring in less than 30% of the chains.
As a security measure, four chains are using biometrics for logging onto the system. In each case the biometric is a fingerprint. Biometrics isn't something that has caught on in pharmacy; we have found little interest in it over the past few years.
Generally, automated counting systems and robotics are being used in the high-volume stores where the pharmacy staff can benefit from these systems. Once again we found that counting systems have a lower prescription threshold than robotics in justifying the investment.
This year's survey found that 50% of the chains are using automated counting systems, and about the same percentage are using robotics. However, when looked at in terms of the actual pharmacies where automation is being used, it was a little under 10% for automated counting systems and 15% for robotics. In several chains both systems are being used, depending on a pharmacy's prescription volume - the robot going into the very high-volume stores, and counting systems in the lower-volume stores. As in past surveys, we found that prescription volume above 300 a day is justification for robotics.
We also found that more chains plan to add robotic systems than counting systems. Much progress has been made in the design of robotics to bring down the volume level needed to justify these systems. This is giving chains more incentive to install a robot that will not only fill the vial but also label it, plus a lot more, depending on the system selected.
The deciding factors for which robotic system to install vary. One person said that footprint was a factor, but that there was no one deciding factor. System reliability, price, the service reputation of the vendor, and a pharmacy system interface are important considerations. However, the common interface is one-way. Only three chains stated that the interface was bi-directional.
Even where a chain is using automated counting or robotics, there is still the likelihood that countertop counters will be part of the mix. Indeed, two-thirds of the chains use these counters in one or more stores - put another way, countertop counters can be found in more than 60% of the pharmacies.
Interactive voice response (IVR) continues to be a widely embraced technology. What's impressive is that two-thirds of the chains have IVR systems in every store, and 85% use IVR in at least one or more stores. On average, 95% of the stores represented in the survey use IVR.
While one chain is planning to install IVR, three do not have this on their to-do list. Two reasons given were that the prescription volume wasn't high enough or it did not fit their business model.
Only three chains outsource the IVR service, with one respondent stating that this is to avoid having customers experience busy signals when calling. But the majority purchased the system, with each store having its own system, rather than being centrally controlled.
IVR offers customer convenience when calling in a refill. But we now see these systems taking on a new role - outbound calls to remind customers of prescriptions waiting in will-call. While five chains are using IVR for this purpose, 60% said they are planning to do so.
While chains are big users of point-of-sale (POS) systems, only about a third have the pharmacy management system integrated with the POS system. Integration is something that is in the works or scheduled for next year at five chains. One reason given for lack of a higher level of integration is that the pharmacy system is "not compatible" with the POS system, but this should change as new systems are installed in the pharmacy.
POS systems take on added importance with the IRS ruling regarding use of flexible spending account (FSA) and health reimbursement arrangement (HRA) debit cards. In order to accept these cards come Jan. 1, 2009, the POS system must include the inventory information approval system (IIAS) product file, which is available only through the Special Interest Group for IIAS Standards (SIGIS). More than half of the chains had their POS systems populated with this product file at the time of the survey, and 70% of those that did not expect to have the SIGIS file in place by the first of the year. What's interesting is that not all chains represented in the survey will be ready on January 1. FSA and HRA customers range from less than 1% to a high of 30% of the customer base.
Double-drawer laser printers are by far the printer of choice. This is not to say that duplex lasers and thermal printers are not used. Four chains mentioned duplex and one uses a mix of duplex, double drawer, and thermal. A triple-drawer printer is being used by one chain in all stores.
Where thermal printers were mentioned, their use is specifically for labels or for a special area such as long-term care. One chain uses thermal printers in every store. The benefits given were faster printing, less paper to move, and clearer printing - all reasons supporting the interest in pursuing thermal printers at a few chains.
How often are chains replacing printers? Some simply replace the printers as needed. With those offering a time period, most were in the two- to five-year range. A lot depends on the prescription volume of the pharmacy.
Capturing signatures electronically at the pharmacy checkout ranks up there with IVR in terms of market acceptance. Currently, close to 80% of the chains use e-signature terminals that are integrated with the pharmacy system. And of those not yet using this technology, 80% have plans to implement it.
Part D MTM
The medication therapy management (MTM) requirement of Medicare Part D was expected to jump-start this pharmacy service. However, the number of patients being referred to pharmacies for MTM by Part D plans is far less than expected - this has been the experience with 75% of the chains. The highest reported was 20 to 30 per pharmacy, but most were far less than this. Nevertheless, the majority of chains are participating in MTM programs.
The popular way of documenting these encounters is through a Web portal. This is convenient since only one chain does not provide Web access for its pharmacists. Where Web site access is allowed, the majority control the sites that can be accessed.
Aside from MTM, the start-up problems experienced with the Part D program, particularly with dual-eligible beneficiaries, are largely behind us. Only four chains had complaints when asked if any problems continue to exist. As one respondent said, "Part D has gone smoothly in 2008." Complaints centered on formulary issues and fair reimbursement - in other words, the same complaints that persist with other third-party plans.
What's surprising is that the perennial problems with third-party claims in general continue to persist. Coordination of benefits that involves split billing is still a hassle, even with the sophistication of the systems in place these days. Lack of physician access to formularies is another continuing problem for pharmacy staff. Prior authorizations and prescriptions refilled too soon, as well as days' supply issues, are still with us. However, one respondent said the biggest problem was "pharmacists." Another said "fat fingers."
E-prescribing is definitely on the upswing. That's the word from 75% of the chains. The percentage of qualified prescriptions electronically transmitted from physicians' offices is up a little, but is still in the low single digits. The same holds true for renewal authorizations originating at the pharmacy. Several chains are still not seeing any e-prescribing activity.
One would think that by now all chains would have their systems ready to handle electronic prescriptions. This is not the case, as is evident by the priorities reported by a few chains. One respondent mentioned that the current system doesn't have the capability, but the new system being installed will. Moreover, there are still chains that are using a fax for electronic communication with physicians.
Electronic prescriptions require another level of prescription management by pharmacy systems. If a physician decides to continue a therapy after the patient just had the prescription refilled and transmits it electronically, it will be rejected as refilled too soon. This is not a case where the patient can hold onto the prescription and take it to the pharmacy at the appropriate time. Consequently, we found that in such cases the usual procedure is to place these prescriptions in a queue for refilling when eligible for reimbursement. The patient either is notified by phone or email, or can check on the prescription's status through the pharmacy's Web site, where access to the patient's profile is made available.
What's been the recent experience with the national provider identifier, now that the CMS contingency plan period for using legacy numbers is over? Are chains experiencing rejected claims because the NPI given to them is the entity's rather than the prescriber's? A third of the respondents stated that this is a cause for rejects, but the majority have found that the transition to the NPI from legacy identifiers has gone smoothly.
Unlike consumer medication information, which is supplied by the drug database publishers for the monographs that are printed in the pharmacy, medication guides, or MedGuides, are the FDA-approved documents that the drug companies are responsible for getting into the hands of pharmacists.
The question posed was, were there problems getting MedGuides? We found that 30% are still having problems. Where there weren't problems it was reported that MedGuides are coming from third-party sources, and in some cases being printed on demand in the pharmacy, even though the FDA has yet to issue official guidance on computer-generated MedGuides and electronic distribution.
The DEA-approved electronic system for ordering controlled substances has not reached total industry usage, but it looks like it is trending in this direction. Close to half of the chains are using CSOS. For those not using CSOS, half of these chains are planning to go electronic. When this is factored in, CSOS will be used in 75% of the chains.
The benefits are too hard to ignore. Once again we heard "faster delivery and easier check-in," "lower inventories, less out-of-stock, better records," and "ease of ordering."
This is another winner. Ever since this service was introduced, users have found that it increases reimbursement on third-party claims, although as in past surveys we always find someone who doesn't agree.
A little under 90% of the chains use a preedit service and, with the one exception, find it is generating higher reimbursement. Even so, for the few chains not using preedits, only one is considering it.
Return on Investment
We took a look again at the rate of return on the investment for automated counting systems, IVR, e-signature capture, robotics, and workflow. The chains were asked to rate the ROI on a scale from 1 to 5, with 5 the highest. IVR came in first for another year running. The average ROI rating for IVR was 4.25.
Workflow systems and robotics showed a respectable ROI, falling between 3 and 4, as did e-signature capture, which placed second to IVR. Automated counting systems again recorded the lowest rating, but still respectable, coming in at the midpoint of the range. What's worth noting is how closely the ratings this year paralleled last year's.
A Lot of Options
As we've found over the years, chains pick and choose the systems and services that best fit their business model and store volumes. There is no herd instinct at play here. IVR is a good example, as are preedits and CSOS. IVR tops the list year after year, in terms of the best return on investment, but there are still chains not using this technology nor planning to use it. Chains taking advantage of preedit services are realizing increased reimbursement, and CSOS saves time and reduces inventory of controlled substances because of faster delivery time. But not all the chains are using preedits and CSOS or plan to do so.
What's important to recognize is that pharmacy has a number of options to increase prescription-filling efficiency, reduce errors, and provide a positive consumer experience. All are using some form of technology to address these areas. As long as pharmacy's technology partners continue to innovate and offer improved solutions, chains will respond and benefit as well. CT
Bill Lockwood is the publisher of ComputerTalk. He can be reached at firstname.lastname@example.org.
A Look at the Priorities
Here's a sampling of what's on the genda for technology at a number of chains.
"First low-tech: replace all batteries in backup units. Then upgrade half of our stores with new printers. Then replace hardware in two or three stores."
"Install a host system."
"Install new computer system, thermal printers, integrate POS, develop new Web site portal integrated with pharmacy system, electronic remittance, and new auto-order system."
"Test workflow system, review remote dispensing and pickup."
"Review new POS and IVR systems."
"Install a centralized host for pricing. Electronic signature capture for deliveries and drive-through. Looking to upgrade to a Windows-based true workflow system."
"Electronic prescribing, pill imaging, will-call bin management."
"MTM and enhancements to our extended-care module."
"New pharmacy system."
"E-prescribing, Mobile Manager DUR queue for pharmacy review, POS integration, Linux migration from SCO UNIX."
"To get the majority of the FSA cards to run as well as the debit loyalty cards. Been a real struggle."
"Pilot new operating system."
"Change pharmacy system."
"Scanning capability for all pharmacies."
"Move to thermal printing."
"Continue rollout of workflow system to replace current pharmacy system."
"Central patient record and new Rx system pilot."
"IVR call-backs/refill reminders."