COVER STORY: November/December 2013

Outlook 2014: The Road Ahead

by Will Lockwood

With 2013 coming to an end, you have most likely already been strategizing for the challenges and opportunities that 2014 will bring. This is also the time of year that ComputerTalk checks in with the technology vendors via our annual survey. This year we not only find out what new products and services are coming to market, but we’ll also hear about how the vendors prioritize their development efforts. We’ll find out what’s being done to address current major trends such as the push to improve adherence and the rise of specialty pharmacy. And we’ll gather the vendors’ thoughts on the technology pharmacists should be using more often, the impact of the Affordable Care Act, and more.

What to Look for in 2014

The technology companies have offerings in the works across a range of clinical and business functions within the pharmacy.
Among the highlights from several vendors of pharmacy management andworkflow systems are the ability to more effectively prioritize pharmacy tasks;sophisticated software-driven business process automation; improvements in reporting that focus on productivity dashboards, data mining, forecasting, and full-featured business intelligence tools; new multistore features; more adherence tools; and advances in clinical service support modules. There will also be new services built for pricing and profitability management and managing prescriber data, with real-time information on prescriber authority levels and status. Pharmacy software vendors have also focused on audits for compliance with the DEA regulations for electronic prescriptions of controlled substances. Seventy-five percent of those responding have already completed this process. Of those not yet audited, all but one have this scheduled for 2014.

Adherence is a major focus for the coming year. Look for new and improved tools to support refill synchronization, chronic disease management, and automated MTM follow-up; transitional care and care collaboration support and analytics; and products designed to help pharmacy quantify contributions to STAR ratings.

Top Functions in Patient/Customer-Oriented Mobile Apps:
1. RxRefills
2. Store location and details
3. Pushing messaging and alerts
Also mentioned: Loyalty program details, coupons, e-commerce

Dispensing automation is another area where there should be a lot of activity. Survey responses indicate improvements to tracking and sorting completed prescriptions; improved single- and multidose filling processes; building in of will-call management and perpetual inventory features; self-calibration; new options in adherence packaging, with solutions for retail dispensing, as well as for high-volume/central-fill and outpatient settings; imaging to support telepharmacy and remote site work; and new safety features to prevent tampering with cassettes. There’s action in the point-of-sale sector as well, with new customer loyalty features, such as email-delivered e-couponing and awards points and social-media-driven rewards. Mobile is another hot area, with new apps on deck for both Apple and Android for home and bedside delivery with credit- and debit-card payments and further developments in the burgeoning product area of the full-featured mobile POS terminal. Among consumer-oriented apps, look for new features to leverage loyalty programs and in-app translation services.

Also of interest among the replies this year are advances in label formatting for improved legibility and drug information delivery.

Listening Carefully

How do vendors decide where to direct their development efforts? Almost to a one they say that new products are developed in response to what you, the users, are asking for. There are a still a number of different directions vendors can go when developing products and services, and so we looked at how they prioritize. At Integra Kevin Welch reports that the primary supplement to customer input are the company’s own observations of industry trends, technological innovation, and regulatory changes. The importance of this mix is reinforced by several of the other responses, with industry trends a focus for QS/1’s Michael Ziegler, who notes that the company does extensive market research to support product development. Regulatory requirements are a top priority at Epicor, according to Keith Lam. Micro Merchant’s Ketan Mehta looks for what will help reduce pharmacy liabilities in audits and improve the bottom line.

At TCGRx, product improvements or even entirely new products are prioritized according to what will save users money or make them more money. Similarly, Manchac looks to product development efforts that will deliver the most impact to pharmacy operations by targeting the most painful parts of the operations. There’s also attention paid to solutions that can be brought to market rapidly. Rx-Net-Inc.’s Chuck Cannata puts the emphasis on rapid development when he lists time to market as one of the three variables that he looks at, along with perceived necessity and project scope. Cannata looks to have a delivery window of less than 120 days for a high-demand project.

SoftWriters’ Heather Martin reports looking at development projects where being first to market provides SoftWriters’ customers an advantage.

And Steve Wubker of Rx30 employs an innovative spirit as part of the company’s process of prioritizing a customer-driven development list that brings market-leading products to reality.

Use What You Have

While it is exciting to learn about what’s new, it’s also very important to make sure you are using what you already have to your best advantage. We asked the vendors again this year what products or features they think pharmacists are underusing, and the range of answers shows just how much opportunity there is to leverage the technology you may already have in your pharmacy.
One of the areas most commonly mentioned here was pharmacy data and the tools that can help put it to work. For example, Micro Merchant’s Ketan Mehta cites the wide range of solutions that pharmacies have to segregate their data and use reports to gather intelligence and forecast growth. This data and the analytics out there are critical, according to Ateb’s Frank Sheppard, since they give pharmacists the roadmap to manage and grow their pharmacy.

A couple of interesting areas of opportunity for improved data-driven operations came up. ScriptPro’s Mike Coughlin pointed to patient traffic management and queuing systems that can direct patients to the pharmacies best suited for them and to the time of day when they can best be served. Inventory control came up, too. For example, MatchRx’s John Kello says pharmacists can do a better job of managing the cost of inventory by buying and selling overstocked noncontrolled, non-expired prescription drugs. CarePoint’s Jim Whitney sees a need to educate pharmacists on the use of the reporting and analytics that can have significant positive impact on inventory and lead to a substantially improved bottom line. Better inventory management creates a simple equation, notes LPS’s Clarence Lea: Increasing turns provides a solid ROI. And this is something that’s well within the reach of pharmacies with the right tools to implement a true FIFO inventory program.

Rx-Net’s Chuck Cannata sees too many pharmacies overlooking the importance of their cash business and the contribution this business makes to their bottom line. Although cash prescriptions represent less than 10% of the typical pharmacy’s overall business, Cannata notes that it is not only more profitable than third-party paid claims — potentially making up a double-digit percentage of net profit — but can also be a powerful tool for pharmacies to attract new patients and develop relationships to keep them coming back.
Pharmacies are recognizing the power of their data, according to Retail Management Solutions’ Mike Gross, who noted an uptrend in stores wanting ways to track and understand their business better so that they can determine areas of the store where they need to invest and areas they need to limit.

Communications technologies that could be better used range from text messages and email reaching out to patients’ mobile technology for refills, notifications, and patient interactions to one-to-one personalized communication that increases engagement and can help improve adherence. Another tool mentioned was digital faxing, mentioned specifically in the context of managing reorders in the long-term care pharmacy. As Manchac’s Monroe Milton sees it, there should be no human interaction needed for typical LTC refills.

There’s also untapped potential in automation for filling, verification of compliance packaging, and inventory management. According to Kirby Lester’s Christopher Thomsen, automation drives safety but pharmacy ownership needs to be willing to enforce the protocols and safeguards that automation offers to prevent errors.

Growing Specialty Pharmacy

Specialty pharmacy has been a hot topic recently, with pharmaceutical R&D and prescribing trends driving this demanding area of pharmacy. Our survey found that the vast majority of vendors see specialty pharmacy as a growth area. And they are bringing products to market to support the particular needs of this market segment. Cited were specialized reporting, e.g., for meeting third-party and manufacturer requirements and for maintaining URAC accreditation. For example, Computer-Rx’s Russell Murrow points to the importance of the ability to track and report on patient interventions and compare the initial reporting to the last update posted in the system. Then there are features to streamline business and clinical processes typical in specialty, such as prescription mail-out with payment via secured, stored credit card; prior authorization management; and product-specific inventory-management needs. TCGRx provides an interesting example of this last item when Matt Noffsinger notes that specialty pharmacies tend to have a need for highly controlled, temperature-monitored refrigeration solutions, which TCGRx partners with Panasonic to provide.

Since specialty pharmacy is a developing market, there are a number of different needs that the vendors report hearing about from pharmacists, and for which they are pushing to offer solutions. First, pharmacists are asking for integration of existing pharmacy management systems with specialty specific systems, e.g., for recording data on websites in order to demonstrate program compliance and maintain accreditation. And there’s also the demand for systems designed just for specialty pharmacy, according to Integra’s Kevin Welch. Welch sees this as based on the need for features such as automation of repetitive tasks and the standardized treatment of common decision processes. Innovation’s Doyle Jensen offers some interesting detail here when he points to demand for patient management software that allows tracking of patient therapies, progress, and adherence without being cost prohibitive or needing a high level of customization. Finally, there’s demand to automate the fulfillment process so that pharmacists have more time to focus on the care needs of specialty patients.

Rising Tide or Tidal Wave?

The Affordable Care Act (ACA) is a reality, though we’re in such early days that there remains a high level of uncertainty about the impact on pharmacy. This year’s survey reinforces the commonly accepted idea that broader coverage will lead to higher prescription volumes. PDX’s Jeff Farris sees the broader picture of the ACA this way: It places a renewed focus on outcomes and pharmacoeconomics and will drive home the importance of such concepts as cost-minimization, cost-benefit, cost-effectiveness, and cost-utility. Ateb’s Frank Sheppard states the case for the importance of pharmacy’s role in the ACA, noting that only pharmacy has the scale, skills, and ready access to patients to fundamentally change and fix healthcare. But as DataScan’s Kevin Minassian puts it: The real question is, will pharmacies want these clients — or will they be giving medications away? Of course, even if the new volume proves profitable, the ACA will increase the overall complexity of practicing pharmacy. CarePoint’s Jim Whitney sees the new volume creating extra overhead for managing coverage changeovers and makes the case that pharmacy technology vendors will need to provide expanded assistance to their users to address workflow and processing efficiencies. Heather Martin of SoftWriters outlines how, in the new world of the ACA, it will be important for pharmacies to demonstrate improved patient compliance and outcomes in order to participate in accountable-care organizations, and also to seize the opportunity to proactively demonstrate the ability to have a positive impact on STAR ratings. Emdeon’s Todd Evans notes a need to focus on data that can be predictive in outcomes and allow for smart interventions.

Amid all this complexity there will be real opportunities for pharmacies that take the right approach. What technology should pharmacists look at to really ride the ACA wave? Some examples from this year’s survey include tools to address adherence and reduce readmission rates, such as using mobile POS at discharge to ensure that patients have their medications, as well as compliance packaging and reminder services that can be deployed in both retail and independent-living environments to help drive adherence at home. Then there’s automation to help handle increases in volume safely and efficiently, while keeping costs under control, and that is offered in a range of sizes that will allow the pharmacist to select the best fit for the pharmacy. Finally, there are tools that can help mitigate the risk posed to pharmacy financials, including pricing that takes into account the federal upper limit (FUL) for multisource drugs and prescriber validation that confirms state licensure to reduce audit risk.

The Year of Adherence?

2014 may well turn out to be a watershed year for adherence initiatives. Certainly this is a consistent theme in this year’s survey. And while we’ve already covered many aspects of how technology can support adherence efforts, there were a few more interesting comments on the topic. Computer-Rx’s Russell Murrow suggests that pharmacies should look to simple existing tools, such as adherence gauges and color coding of profiles, to easily identify patients for an adherence program. His point is that there’s no need for pharmacies to feel that they must completely overhaul how they do business before starting an adherence program. Kirby Lester’s Christopher Thomsen reinforces the idea that pharmacists can begin to make a difference in adherence without making things too complicated with his comment that patient adherence stems from a strong connection between the patient and the pharmacy staff, a one-on-one approach that’s at the core of community pharmacy practice and is increasingly supported by technology that frees up pharmacists from mundane tasks. And if there was any doubt, the time to get started with adherence initiatives is now for pharmacies that expect to survive over the next five years, says PioneerRx’s Jeff Key.

In What Ways Is Technology Facilitating Adherence Programs? Here’s what tops the vendors’ lists:
Counseling
Patient calls
Patient text messaging
Compliance packaging
Synchronized refills
Performance Drivers

With all the interest in adherence, it’s not at all surprising that tools for managing these programs came out as the clear winner for the technology that vendors see driving pharmacy performance in the coming year. Among the other technologies cited were workflow, pricing and claims management tools, business intelligence and reporting tools, POS, and dispensing automation. Integrated system technology was another item that came up, with ECRS’s Ashlee Weatherman commenting that true efficiency is created when a pharmacy implements a system that unites all major store operations, such as point of sale, back office, reporting and analytics, inventory management, the pharmacy system, and loyalty programs. SoftWriters’ Heather Martin adds to this by noting that connectivity and the improved patient outcomes that result are the wave of the future for pharmacy.

Looking Farther Down the Road

While this story focuses primarily on the prospects for the year ahead, we also decided to find out where the vendors see technology and pharmacy headed three years out and beyond. Synergy Medical’s Tom Davy, for one, sees pharmacy being more automated in all facets of the business, with less manual fill, in particular, and a move to compliance packaging for retail for patients on multiple medications. ScriptPro’s Mike Coughlin foresees more advanced workflow systems and tools for specialty pharmacy and clinical services. Analytics will only be more important in the future, say both Datarithm’s David Belinski and Rx-Net’s Chuck Cannata. Belinski sees increased cloud delivery of services, with a heavy emphasis on the analytics that centralized data can permit. DataScan’s Kevin Minassian notes that the changing market will require pharmacies to continue shifting focus beyond just filling prescriptions to areas such as buying at the best pricing from wholesalers and identifying opportunities to add revenue. Retail Management Solutions’ Mike Gross sees an accelerating shift away from pharmacies as a prescription-only destination and believes that point of sale will continue to be necessary — though in a smaller and more mobile footprint, with the data that’s collected becoming ever more valuable in understanding the pharmacy’s business.

Are Vendors Seeing Growth in Refill Synchronization?
84% say yes.

Pharmacy will be even more connected, both to patients and to the broader healthcare system. Rx30’s Steve Wubker envisions that, slowly but surely, the market will evolve toward an accessible, coordinated electronic health record that all pertinent entities will access and contribute to. And Emdeon’s Todd Evans sees pharmacy continuing the evolution into a delivery point for clinical care that includes labs, adherence counseling, more immunizations, and specialty pharmacy.

Pharmacy Front and Center

Everything points to 2014 as a time of great change and opportunity, with major new forces coming into play in the healthcare market, and significant new tools on offer to help pharmacy take a leading role in caring for patients. It is a year that Al Babbington of Prescribe Wellness sees as the most important year for retail pharmacy since Part D. One key to surviving and thriving comes from Epicor’s Keith Lam, who sees a big year for those pharmacies that can attract new patients and keep them coming back with great customer service and loyalty program incentives.

More Online at computertalk.com
New products for 2014
Technology you should be using
Adherence drivers
Cloud computing
More thoughts on what’s next in pharmacy

The technology vendors recognize how important it is to keep pace in such a dynamic environment. Datascan’s Kevin Minassian views it as the software vendor’s role to find ways to help pharmacies bring customers back by continuing to improve on applications for adherence and mobile-based interactions, as well as by building more utilities into the system that help pharmacies to focus more on their business and less on filling scripts. The pharmacy system will continue to be the control center, but it will increasingly need to extend well beyond the basics of quickly printing labels, adjudicating claims, and generating reports, notes SoftWriters’ Heather Martin. Instead, Martin emphasizes that the pharmacy system will be central to every capability the pharmacy has to differentiate services and to enhance operational efficiencies and the health outcomes of the patient population. And a variety of other systems that support pharmacy operations will start being distilled down, according to ScriptPro’s Mike Coughlin. The outcome will be to create a more integrated approach to support pharmacy operations in a very dynamic and multifaceted environment. Whatever 2014 brings, Hamacher’s Dave Wendland offers a note to conclude on for its optimism: The future is bright for pharmacies with a laser focus on patient outcomes powered by technology. CT

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


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