COVER STORY: May/June 2013
Harnessing the Power of Pharmacy Data
Pharmacy stands in the middle of a stream of data. It can be a steady stream or a torrent, but clinical, billing, wholesaler, and retail transaction data, and more, is constantly flowing into and out of a variety of technology systems. Channeled, stored, and used correctly, all this data can be a powerful way to improve operational and clinical performance, boosting not only the level of care, but a pharmacy’s appeal as both a clinical and retail destination. Read on to find out how five pharmacies are harnessing data in different ways to meet a wide range of objectives.
Step One: Data In
The first and most basic role that technology is playing in managing pharmacy data is as a repository and access point. This is easy to understand when you look at retail transactions. Item sales data is one result of every single transaction in a pharmacy. Run this through a simple cash register, and you get a lot of paper to manage. Move to a point-of-sale (POS) system, and you immediately have a tool that not only collects the data, but also makes it readily accessible and open to analytics. Adam Breeze understands these basic facts very well. Before installing POS from Retail Management Solutions, he had someone going through paper cash register receipts five days a week, adding up totals, and counting money to make sure everything worked out. POS has helped him to get this task down to six hours a week, and helped him manage the retirement of the trusted employee who’d been in charge of the old process. The strong data collection and management aspects of POS also mean no more lost transactions or customer charge account records. “Time spent looking for these went to zero with POS,” he says, “and we get so much more transactional information out of POS, including easy access to signatures, transaction date and time, the staff member who rung up the purchase, and more.”
Adam Breeze, Owner
Mount Vernon, Ill.
Community pharmacy with two locations that serve a town of 15,000, within a county of 40,000. One of nine pharmacies in Mount Vernon, with competition from the big chains, grocery store pharmacies, another independent, and a retail pharmacy at the hospital.
The management benefits of good data collection go even further, of course, as is made clear by a story Breeze tells about making the decision to change the mix of products in Byrd-Watson’s front end. A year after installing POS to meet IIAS requirements, as so many other pharmacies did, Breeze decided to put the technology’s reporting tools to work on his plan to reduce the OTC section and expand the space allotted to medical equipment at Byrd-Watson so that people could more easily browse the inventory.
Downsizing OTC to focus on DME made sense, because local competition means that Byrd-Watson isn’t necessarily the quick shop or the cheapest one for general retail. “We have two major chains in town that fill those roles for consumers,” says Breeze. Still, the front end is an important part of Byrd-Watson’s business, and Breeze wanted to use sales metrics shown in his POS reports to make a data-driven decision about what OTCs he could afford to stop carrying to make more room for DME. “We looked at reports to find items that fell below certain sales thresholds,” Breeze explains. “That let us consolidate our OTCs and make almost half our store available to display our medical equipment.”
Breeze is frank in admitting that he wouldn’t have felt comfortable making the decision about what OTCs to get rid of without the data. “When I came back to run the business I wasn’t working the floor, so in the end, it has turned out to be much better to use data than intuition,” he says. Putting the DME on display has increased business and made for a better shopping experience for customers, Breeze reports. “We’ve spread out the equipment, and as a result the customer doesn’t need us to pull out a wheelchair or pull down a walker for them to try it out,” he says. “Most DME items are there on the floor, and customers can look for themselves, with help from our staff as needed.”
Community pharmacy with four locations in Western Pennsylvania, two larger and two smaller. Offers pharmacy counseling and immunizations, as well as diabetic shoe and compression stocking fittings. Also offers film developing, dry cleaning, groceries, and bill pay, with the goal of being a one-stop shopping destination.
Sales data is important for Thompson Pharmacy as well, according to Mindy Baker. It’s used regularly for a range of purposes, and Baker is also looking at building out the ability to use item sales data to find out what products typically sell together to understand how to better merchandise inventory. “Our next step is to implement this feature so that when we build end caps, for example,” says Baker, “we are stocking them with products that people will pick up together. Or for the most common prescriptions, we want to know what complementary products we should display prominently.” Baker anticipates that this use of the POS data is going to be very powerful for making sure that Thompson is using its stores’ most valuable shelf space most effectively.
But one of the most important data flows at Thompson Pharmacy, according to Baker, comes from the customer loyalty program the company has put into use through Epicor’s Eagle POS. “We need to know who is coming into our store, how often they are coming in, how much they are purchasing, and what they are buying,” she says. Getting this customer data in has to be easy and fast so that customers are happy and willing to participate, notes Baker. Thompson’s loyalty program is just this, since rewards totals are kept up to date in the POS and are visible each time a customer checks out, eliminating the need for Thompson to print and mail vouchers or coupons, as well as the need for customers to remember them in order to redeem their rewards. And customers don’t even have to remember to bring in their loyalty card, Baker reports, because sales clerks can simply look them up by name at the POS.
This simplicity is important because there’s a great deal of valuable information that comes from a well-liked customer loyalty program. For example, Baker says, “We want to know who our most loyal customer is, and who our best-paying customers are for house charges. And we also really need to know when someone stops coming into the store, so we can see if there’s something we can do to win them back.” The program also allows Baker to see just where customers are spending their money, not just by department but by item as well. “We can see if customers are shopping only some departments or if they are really using us as a one-stop shop,” says Baker. Thompson Pharmacy is collecting email addresses too, which are currently used to send out offers and sale notices to the entire customer loyalty program database. “Eventually we’ll begin to use the ability to target specific customer groups with these emails,” says Baker. For example, in the fourth quarter Thompson may decide to send out special offers to customers who are frequent shoppers in the gift department.
Deploying Analytics Once you have the data coming in, the next step is clearly to apply analytics and reporting. Adam Breeze has already offered one example in the reporting he has used to support his decision process around Byrd-Watson’s OTCs. And he’s got another good example, too, in the weekly report he runs looking for items sold below cost. According to Breeze, this works as a way to catch any items added incorrectly into the system. “This helps with bringing new employees on and catching errors before they become problems,” he says.
At Thompson Pharmacy, Baker reports using a feature called Performance Manager within the Eagle POS reporting that delivers specified management metrics to easily browsed dashboards every day. For example, according to Baker, management may want to see what times the store was busy the previous day or review the top customers for the month without the need to build and run a report. “We can set up the data to flow into the dashboards the way our managers want to see it,” says Baker. “Then when they visit their dashboards, they get the analytics they want at the click of a button.” Thompson Pharmacy has also added another tool from Epicor that streamlines access to data: a phone app for management called Mobile Manager. “Getting to data just at the time and place that you need it is what’s best about this app,” says Baker. “If we have decision-makers who are on a buying trip or who are price-shopping a competitor, they can simply scan an item to see sales history, how many we have in stock, what we are charging, and what we paid. They don’t have to call in and take up staff time to find out. As another example, we don’t have to be in the store to check sales to make sure we are staffed correctly for the day.”
Accessing Your Data
Good reporting and ready access to analytics are clearly mission critical, and the greater your ability to combine data without restrictions, both within a system and from disparate data sources, the better. While this sounds logical, it isn’t always that easy.
Brad Hopkins, R.Ph.
Director of Pharmacy Services
Closed-door LTC pharmacy that serves Tennessee Health Management nursing homes, including 30 skilled-nursing facilities and four behavioral hospitals. This represents about 3,500 patients. Recently opened a satellite pharmacy about an hour away to provide first fills for a large subacute facility for rehab patients that also just opened.
For an example, full access to your data for reporting and analysis within even a single system requires the right database structure, according to Brad Hopkins. He has found major benefits in the open database structure he gained from a move four years ago to SoftWriters’ FrameworkLTC system. “Before, I could write reports, but I couldn’t combine dispensing data and billing data,” he says by way of example. “Now, with an open database I can create comprehensive reports that give me the information I need in real time.” Building new reports is as simple as specifying the data points to the database manager. Hopkins reports that he can usually have the new report back within an hour. “I get a much better sense of where our business is and where there are issues and inefficiencies,” he says.
Director of Technology
Pharmacy with a niche in providing service to patients with difficult-to-manage conditions, with a long history of serving the HIV community. Serves specialty, specialty infusion, skilled-nursing, and assisted-living patients across California and 20 other states.
Bryan Samuels offers a take on a second set of circumstances that require specific arrangements to gain the necessary access to your data: when you have data stored in disparate systems and coming from different sources. “We’re a company that deals in multiple specialties, so we have multiple pharmacy information systems. We use both PrimeCare and RxCare Plus from QS/1, as well as specialty pharmacy software from a second vendor, CPR+,” says Samuels. “Then we have inventory and purchase information from our wholesaler, and labor and workflow statistics from our HR information system.” The result is a definite need to consolidate information drawn from across business functions and units. According to Samuels, what you need in such a situation is a data warehouse so that all of your data is available and can be incorporated into data-driven decision making. “Being able to consolidate all of our data into a single data warehouse really adds multiple dimensions of ways to slice and dice our operations,” he explains. Once collected together, this great variety of data can have the visualization tools and analytics that are so important more easily applied to it. “We can centralize the management process,” he says. “We can also provide visualization and dashboards for executives who don’t have time to run reports themselves or do extensive analysis before they make decisions.”
Complex Pharmacy, Complex Data
Open databases and data warehousing are central in AmPharm and ModernHEALTH’s efforts to gain meaningful and actionable information from complex operations. Both pharmacies are using data not only in-house; they are also delivering it to business partners and clients to demonstrate the efforts the pharmacies are making.
For an example of the impact of open data access on internal operations, Brad Hopkins points to AmPharm’s need to submit claims with LTC-specific coding in order to be reimbursed correctly. With all the indicators that have to go on a claims submission these days, Hopkins needs to be sure AmPharm is getting them right. “We don’t want to be expecting a $4 dispensing fee, for example, and instead only get $1,” he explains. “Our payer sources are varied and the rules complex.” Using the open database architecture in FrameworkLTC to capture any data field necessary from any claims submission and the associated insurance response, Hopkins runs a report at least twice a day to look at the claim codes, the contracted pay rate, the actual dispensing fee paid, and AmPharm’s cost. Virtually in real time, Hopkins gets what he calls a true picture of where AmPharm’s profits are and where it’s at a risk of loss. “If we see an issue, we have a team that reviews the claim,” he says. “Did we put the wrong days’ supply in? Did we enter the wrong clarification code?” The team can then fix these issues right away, which helps avoid any major accounting issues later on.
Hopkins gets what he calls a true picture of where AmPharm’s profits are and where it’s at a risk of loss, virtually in real time.
The ability to build reports as needed has also helped an outward-facing part of AmPharm’s business — the consulting pharmacy practice — in two ways, according to Hopkins. First, he points to reports that take a picture of a patient’s profile and that include the real-time data AmPharm’s consultants need without investing in consulting-specific software to complement FrameworkLTC. Second, the reporting capabilities have helped AmPharm adjust to having three consultants retire recently. “Solid, detailed reports help our remaining consultant pharmacists handle their duties more efficiently,” says Hopkins, “including taking care of certain tasks at the pharmacy itself without having to drive to the facility.”
Finally, Hopkins also mentions a developing initiative at AmPharm that offers a good demonstration of how creative thinking and open access to data can help a pharmacy address emerging business challenges. “The biggest thing we’ve had on the burner for a while is the result of all the drugs that have gone generic over the past few years,” Hopkins explains. “Pharmacies are dispensing 80% to 85% generics these days, which means that your revenues are going down.” In this environment, Hopkins points out, it becomes ever more critical to keep a close eye on your margins by looking at cost of goods. This in turn means he’s very concerned to make sure that he’s buying the right generics. “What we need to know is what the insurance companies are paying for different generic NDCs,” he says. “We’ve got to develop reports that show us, for a specific drug, the available NDCs and which insurance companies pay the best for which NDCs. Then we’ll stock those that give us the most cost-efficient mix of product.”
Of great importance to Bryan Samuels is the fact that data warehousing helps the pharmacy successfully participate in limited-distribution drug networks for specialty drugs.
This very idea was the result of the robust reporting Hopkins gets from his pharmacy system. He came to understand the problem very clearly because he was seeing pharmacists fill with different NDCs of a generic to the same insurance, and noting how significantly different the reimbursements were. “It became pretty apparent really quickly that this was something we needed to manage without putting 20 NDCs of the same drug on the shelf,” he says. He’s currently contemplating a pilot of this program, looking at a limited set of drugs within one therapeutic class and using the data and reporting tools available from within his FrameworkLTC software to drive the effort.
ModernHEALTH looks to sophisticated data management to help it provide top-level service to patients with complex health needs, and to the physicians and facilities that refer them to the pharmacy, according to Bryan Samuels. Of great importance is the fact that data warehousing helps the pharmacy successfully participate in limited-distribution drug networks for specialty drugs. “Manufacturers are looking to partner with pharmacies that can maintain accurate records and submit regular reports to ensure that these specialty drugs, when prescribed, are being refilled consistently and used appropriately,” explains Samuels. Strong and flexible reporting tools are needed to comply, since each manufacturer has different requirements. It’s incumbent upon pharmacies that want to be part of these networks to report accurately and consistently according to the terms of the contract. “Sometimes you need to report on information that it’s hard to extract from any pharmacy information system,” says Samuels. “So we need to have custom applications built that have the right reporting engines and tracking mechanisms that let us be competitive in limited networks where the main players may otherwise be large national players.”
Ready access to adherence data is in fact critical for all of ModernHEALTH’s patients, notes Samuels. “Patient adherence speaks to our ability to serve patients and increase the marketability of our services,” he says. “If we can capture adherence data, then we can report this to our referral sources, whether physicians, payer groups, the patients themselves, or manufacturers of drugs in limited-distribution networks. Having this data really elevates our status in their eyes, and that creates more referrals.” Here Samuels reports using data export tools in the pharmacy’s QS/1 systems to move data into internally developed Web portals that prescribers and other authorized parties can then log into securely. This allows these parties to track metrics that demonstrate patient care, including dispensing history, adherence indicators, and contacts with patients and payers about benefit issues. “For example, our referral sources can see that we are tracking authorization expiration dates and being proactive to ensure that authorizations are renewed,” says Samuels.
Your Patients, Your Data
It is also very important to know not just what your data says about your patients, but about your own performance, as well. The mantra of “know your data” has become central to Tripp Logan’s practice in two ways. First, he’s developed and implemented an innovative adherence program at L&S Pharmacy. Second, and even more significantly, he’s started a consulting practice called MedHere Today with the goal of helping other pharmacies either build on an existing program or implement MedHere Today’s program in order to get them on the path to really driving their adherence performance. And while Logan is a strong believer that adherence is best improved by the interaction between a clinician and a patient, rather than by any data-driven predictive algorithms, he’s well aware that the data that results from adherence programs is a critical asset for pharmacy.
Tripp Logan, Pharm.D.
Creator and Co-owner
Community Practice Clinical Pharmacist
Consulting practice based around the MedHere Today Adherence System, which is a pharmacist-driven system that uses a systematic approach in promoting medication adherence from the pharmacy level. Also maintains a clinically focused pharmacy practice in a community-based pharmacy.
As a result, Logan has been ramping up MedHere Today’s efforts to collect and aggregate non-patient-specific data, based on the metrics that drive Medicare Part D star ratings for adherence, from a group of pharmacies. This, in Logan’s view, is where community pharmacies currently have the biggest opportunity to help plans improve their reimbursements. “So we are looking specifically at claims data to certain third parties for certain medications in certain therapeutic categories,” says Logan. The idea is that, if a pharmacy group can show that it can move the needle on a particular part of a plan’s star ratings, then there’s the opportunity to actually negotiate for a contract based on the data. “Then all of a sudden we’ll have leverage as pharmacy owners that we’d never had before, in the form of measured performance with a baseline and an end result that shows the benefit participating pharmacies are bringing to third parties,” says Logan. “And when we can demonstrate that we are helping improve plans’ star ratings, which earns them quality bonus payments from the federal government, then we can make the case that we should in turn share in these bonuses, for helping them move the needle.”
Logan has partnered with Rx30 and his own system vendor, Computer-Rx, to build the group of pharmacies that are aggregating their adherence metrics, and to develop and beta-test the process for extracting and warehousing the data.
The premise for this is as simple as it is also perhaps surprising: “What many pharmacists don’t realize,” says Logan, “is that for every claim submitted, Medicare is already collecting information and using it to create measures that contribute to Part D star rating quality measures.” This means that Medicare and the Part D plans, which get monthly reports on the subject, already know which pharmacies are positive or negative outliers on adherence. But these reports aren’t shared with the pharmacies, and the plans have no incentive to pay those pharmacies doing a good job. “So it’s really in a pharmacy’s best interest to know exactly what its own data says about it in order to be able to understand its performance and make an evidence-based case for sharing in improved reimbursements,” says Logan.
Data a Means, Not an End
Getting to grips with your data and getting the most out of it is clearly mission critical today. But even with everything strong data capabilities can offer, it’s good to remember that data is not an end unto itself. “You need accurate and reliable data to make decisions,” says Bryan Samuels, “but even then data is only your guide. You need a sound decision-making process to act on what the data can tell you.” He also points out that good strategic planning is of utmost importance to ensure that whatever you are looking to do with your data has relevance not only today, but going forward as well. Finally, Samuels suggests that it can help to have some development expertise in house, particularly if you find you need to work with different applications to access the data you need. “These are all considerations when developing a business management platform that takes into account the challenges of big data in pharmacy,” he says.
The idea that process is just as important as data is echoed by Tripp Logan. “As a pharmacist, I am convinced that the problems of adherence need to be addressed by clinicians and not by a data analyst,” he says. “While claims data is what drives Part D star ratings for adherence measures and the resulting payment incentives, there are so many variables that go into why a patient doesn’t take medications that you really need a person involved.” Data is then just the reflection of what you are accomplishing. It can’t do the job for you, but it will help you understand whether you are getting the job done right. “If a pharmacy is doing things really well — for example, getting good claims and fill data that reflects things like strong patient adherence and reduced readmission rates — then your data is useful because it shows your success,” say Logan. You can probably take Logan’s point and apply it to all aspects of pharmacy operations. Find ways to collect meaningful data, analyze it, and use it in decision making, as we’ve seen in the examples here, and you’ll have something that’s very valuable indeed. CT
Will Lockwood is VP and senior editor at ComputerTalk. He can be reached at firstname.lastname@example.org.