COVER STORY: July/August 2013

Chain Market Report

The 2013 edition of our chain report is based on responses from 18 chains, representing close to 10,500 locations. Both large national and regional operations are represented. Based on the results, we’ll take a quick look at where these chains are in their software and hardware deployment and then move on to assess the current state of clinical services; mobile and social technology for connecting with patients; approaches to adherence; and thoughts on current regulatory and operational challenges. Finally, we’ll take a look at this year’s list of top technologies across several different categories, and the most valuable technologies in use.

As in previous years, we found that chain pharmacies make a regular practice of upgrading their pharmacy management software. Among the chains responding this year, almost half have upgraded the existing system or installed a system from a new vendor in the last year. A quarter reported that they have plans for upgrades or a new install in the next 12 months. Workflow features continue to be a priority. These are being added in two ways, either as a key feature of a complete system upgrade or as an add-on to existing software that does not offer workflow features already. Four chains upgraded or changed pharmacy systems at all locations, while the remaining are taking a stepwise approach.

While system review should be a standard part of a technology strategy, the reasons for making a change can also come from what a chain needs from its technology, compared to what it’s getting. While almost 60% of the chains report being very satisfied with their pharmacy system vendors, another 25% say they are only somewhat satisfied, and there were a notable few that are not at all satisfied. When asked what the reasons for dissatisfaction were, the answers included: Installation and training challenges; inadequate support; and slow response times in correcting known issues or developing requested changes. One chain reported significant issues in getting the features delivered that were promised out of a new system that’s now almost two years old. Another reported significant data accuracy issues with a system intended to pull together data chain-wide. And another reported inventory accuracy problems that its vendor has not been able to trace back to a root cause.

While the software required to operate a pharmacy, much less a chain of pharmacies, is clearly complex, and challenges similar to those reported are likely to occur in a variety of enterprise systems, it is still clear that simply keeping this core piece of technology functioning adequately is an ongoing challenge.

POS and Automation

We checked in again this year for an update on two other key areas of pharmacy technology: point of sale (POS) and dispensing automation. POS is in widespread use in the chain market, and this year’s results showed that chains are using a wide array of features within POS. The top features, in use in at least half the cases, were price updates; PSE sales logging and reporting; customer loyalty cards; and perpetual inventory. Next in popularity, in use in 25% to 50% of cases, were moving inventory between locations; multivendor EDI ordering; and pricing based on sales rankings. A handful of chains use multiple features within these systems, while another group keyed on just one or two.

When it comes to dispensing automation, robotics and countertop counting are most common, with each in use by approximately 70% of respondents. Only 30% reported using automated counting cabinets, but many pharmacies use some combination of these three technologies. Only one chain reported a large number of robots installed, with others topping out at 30 and most reporting 10 or less. Countertop counting is more widely in use, with one chain reporting 300 units deployed, while most reported between 20 and 70 units in use.

What are the most challenging regulatory and market issues the chains are facing?
Among the answers were:
  • The impact of Affordable Care Act implementation.
  • Preferred pharmacy contracts that reduce patient choice. 
  • A lack of standardization for MTM.
  • Continuing margin pressures.
  • Increased pharmacy audits.

Another aspect of dispensing automation is central fill, which has been on the radar recently but has not been reported as widely in use. Keeping with this trend, only one chain responding has central fill deployed. This chain has found that central fill offers it great “bang for the buck,” giving it the ability to offload up to 50% of prescriptions from its retail pharmacy locations. This chain may be particularly well suited to using central fill, since it reported that locations that are busy enough to justify central fill are mostly within the service area of one of its central-fill facilities. With these comments in mind, it’s not surprising then that seven other chains reported plans to implement central fill. There are barriers to overcome, however. Primary among them is the issue of volume. As one chain noted, it has calculated that it needs 1,500 maintenance scripts per day to cost-justify central fill. Other chains noted that the time needed to develop and implement the process and integrate it with the workflow and software systems is substantial. Finally, one respondent also pointed to the fact that it has found that the model does not work well for its practice setting, which is primarily serving clinic patients. As the respondent noted, when dispensing is driven by a patient’s clinic visit, instead of a large and steady volume of maintenance drug fills, the typical daily delivery structure of central fill isn’t as practical or appealing for patients.

Connecting with Patients

IVR continues to be the primary technology for outbound messaging to patients, in use at almost 75% of chains. Text was the next most popular, in use at over 50% of chains. And push messaging via mobile app was in use by only a third, but should grow, considering that the survey also found a great deal of activity among chains aimed at bringing new apps online. What’s most interesting, though, is the fact that 90% of chains have plans to expand their outbound messaging overall, with a heavy emphasis on rolling out apps. One respondent captured the trend, commenting that messaging in general, and mobile apps in particular, are hot items on the development list. 

The standard messaging types now center around refill reminders, ready notifications when prescriptions are first placed in will-call, and pickup reminders when prescriptions are still in will-call after a specified period of time.

These are most in use via IVR, but are also being sent out via text and, increasingly, mobile apps. A number of respondents indicate that they are making other messaging a top priority, including in support of adherence programs.

The messaging opportunity in apps comes from the ability to push notifications out on a variety of clinical and marketing topics to users who opt in to receive the information. But this is just one aspect of what chains are getting out of their mobile app platforms. In fact, this year’s results showed that the top customer uses for apps that chains are seeing are the two basic tasks of ordering refills and checking pharmacy specifics such as phone number, address, and store hours.

The chains are sourcing these apps in several different ways. The most popular source, though by a narrow margin, are companies specializing in mobile apps. Close behind, and evenly split, are developing the app in-house and buying it from an existing vendor, such as their IVR or pharmacy management system provider.

Social media is one other patient communication channel that is getting attention at most chains. A slight majority of around 60% ranked this channel’s importance for connecting with existing patients and maintaining the pharmacy brand and reputation as a 4 or 5 on a five-point scale, with 5 the top score. Closer to 50% chose 4 or 5 when asked about social media’s role in gaining new patients. Notably, there are those who don’t see social media having a big impact, with several marking it off as not at all important.

What technology would chains add tomorrow if they could?
Among the answers were:
  • Load balancing.
  • Central fill.
  • Remote QA. 
  • A common pharmacy system platform.
  • Inventory tracking for loss prevention.
  • Consistent and streamlined access to EHRs.

An EvolvingService Model

While it’s worth keeping an eye on the state of the hardware and software that keeps pharmacies humming and connected to patients, evolving pharmacy practice models have introduced a range of clinical services that merit close tracking as well. For example, more than 80% of chains responding to this year’s survey are offering medication therapy management (MTM) services.

Technology comes into play here when identifying MTM opportunities and then documenting and billing for them. Over 60% of respondents reported being satisfied with the patient information pharmacists are currently capturing during the interactions. When asked about information not yet captured, respondents pointed to a need for data such as blood pressure and lab results, and a general medical history. Also mentioned was a need for space for progress notes and a detailed description of MTM interactions.

The chains are also offering an array of clinical services beyond MTM. Immunizations are most popular, with 90% of the chains offering them. Next came blood pressure monitoring, offered by over 50%; blood glucose monitoring, offered by over 40%; and in-store clinics, offered by 30%. When it comes to billing for these services, there are a variety of methods in use. But almost 85% report billing through the pharmacy system. Slightly less than half have patients paying cash, just under a third are using a Web portal for billing, and paper claims are even in use in a few cases.

Focus on Adherence

There’s currently a great deal of interest in activities that focus on driving clinical goals through patient medication adherence initiatives. The priority placed on adherence is reflected in the fact that half of the chains acknowledged already offering programs to improve patient medication adherence, and the other half reported that such programs are currently in development.

There’s a clear role for technology to play in supporting adherence programs, and we asked about just what’s in demand. Several responses offered excellent details. For example, one chain reported needing a better ability to identify patients in need of adherence support, such as medication possession ratios. Another pointed to a need for tools to better document and manage adherence processes, such as medication synchronization. Then there were the communication needs, such as adherence-focused outbound messaging for patient reminders and easily accessible educational materials. And as one respondent noted, there’s a need for standardization and integration of all these adherence tools into pharmacy systems. Finally, one reply pointed to a need for better integration between pharmacy management systems and packaging systems, which will tie all the exceptions and special processes involved in adherence packaging to logic in the pharmacy management software.

Overall, this strong interest in clinical services is summed up by the fact that almost 75% of the respondents stated that their chains are focused on making significant changes to the community pharmacy practice model. These respondents ranked their operations as scoring a 4 or 5 on a five-point scale when asked whether they are very focused on repositioning community pharmacy in a more clinical role. When asked about how pharmacy perceives this push being accepted by the broader healthcare community, the most common score was a 3 out of 5. Still, while that may show guarded optimism at best, the 2013 survey results indicated that chain pharmacy is clearly not waiting on anyone in its efforts to move to a more clinical practice.

Top Technology for aFast Return on Investment
  • IVR. 
  • Text and mobile messaging. 
  • Adherence tools. 
  • Central fill. 
  • Inventory and revenue cycle management.

E-Prescribing Update

This year’s results indicate that chains are receiving approximately 40% of new noncontrolled-substance prescriptions electronically. While e-prescribing has become well established, chains continue to have issues with these prescriptions. Mostly, it boils down to problems prescribers themselves are having using e-prescribing functionality successfully. Among the examples offered were keystroking errors by physician staff and errors made on the prescriber end in a wide array of areas, such as truncated data; incomplete dosages; incorrect package sizes; wrong drug selection; wrong quantity; and directions sent in the notes field. And despite the relatively strong average usage reported, responses still pointed to lack of prescriber use of e-prescribing as a continuing challenge.

Only two chains reported having systems audited and approved for controlled-substance prescriptions, with both reporting only 1% of these prescriptions now coming in electronically. Clearly, there’s been little uptake of this process. The likely cause is the complexity and cost of the auditing process. There are bound to be barriers on the prescriber side as well, whether it’s the lack of an audited system or an overall lack of use of e-prescribing. One respondent wasn’t even confident that some prescribers understand the requirements, noting that they may not even know if their electronic health record software is certified for handling controlled-substance prescriptions.

The Regulatory Environment

This year we asked for feedback on USP’s recently finalized standards for prescription label standards that provide recommendations addressing the format, appearance, content, and language of instructions. These standards are on the radar for 60% of the chains responding. However, only 40% report having to take steps to adjust to new label requirements at the state level, which is where any changes in prescription label rules ultimately have to be made.

It’s not clear whether new label standards will pose a problem. A third of the respondents felt there would be a negative impact on operations, a third felt that there wouldn’t, and a third replied that they did not know what the impact would be. The breakdown was the same when participants were asked if new label standards would have a major impact on robotic dispensing. And are vial label changes needed for patient safety? Half said no, 30% said yes, and the remainder weren’t sure.

Another patient-centered regulatory initiative in play is translation requirements for patients with limited English proficiency. A little over a third of respondents report using technology to meet these requirements. 

There’s also the topic of prescription-monitoring programs, which are now operational in the majority of states. There’s been a push to increase the frequency with which pharmacists and prescribers make use of the data collected, and the importance of this is recognized in the survey results. Ninety-five percent of the chains reported that access to PMP data is somewhat-to-very important for their pharmacists. And in states where access by pharmacists is permitted, there is occasional use of the PMP to check on a person of interest by the majority of chains responding. Still, it’s notable that a small number reported that pharmacists never access PMP data, where pharmacists are allowed access.

Finally, we like to find out each year what the top technology is for a fast return on investment (ROI). The list this year included IVR; text and mobile messaging; adherence tools such as prescription synchronization; central fill; and inventory and revenue cycle management. This year we also asked about the most important technologies for pharmacy practice — that is, those that pharmacies need to have in place, whether they promise a quick ROI or not. The answers included workflow; system integration and centralized management; and robotics.

Overall, it’s clear that the chains are looking to technology that helps them to continue improving operating efficiency; implement programs that will increase the refill rates to bring in more revenue while helping patients adhere to their medications; and support clinical services that are at the core of the new pharmacy model of care, such as medication therapy management.


CT

Will Lockwood is senior editor at ComputerTalk. He can be reached at will@computertalk.com.


As a condition of participation, the identities of those responding and their respective chains are not disclosed.


Top Priorities

Considering the broad range of operational and business objectives that any given pharmacy chain has, a survey will never provide a truly comprehensive look at what’s on the agenda. So it’s always profitable to ask a few questions that let the chains tell us what their plans are. When asked what the technology priorities are for the balance of this year, here’s what a number of chains had to say: 
  • Electronic prescriptions for controlled substances and mobile apps. Longer term: EHR/ACO participation. 
  • Central fill and medication synchronization program. Complete pharmacy system upgrade, mobile installation/launch, and outbound messaging upgrades. 
  • Barcode on the prescription receipt, capturing expected third-party sales as part of our daily sales reporting, and continuing to review IVR and texting options. 
  • RxSync, central fill, MTM, central IVR, and remote QA. 
  • Establishing more secure, more reliable, and faster connectivity to support load balance between stores. 
  • Business intelligence and reporting. 
  • Outbound IVR for medication adherence and enhanced customer loyalty program through POS. 
  • Pilot a new pharmacy management system and invest in revenue cycle management tools. 
  • Blister compliance packaging, outbound calling, and possible increase in robotics. 
  • Refill reminder notifications and loyalty-card and prescription-rewards program. 
  • Blister compliance packaging at closed-door LTC operation; central fill/processing and load balancing; outbound text/email/phone patient communications; and a mobile app. 
  • Upgrading to a Windows-based pharmacy management system.

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