It has been a long time since pharmacies have been able to rely on prescription dispensing as their main revenue source. There are just too many headwinds. But successful pharmacies have been finding ways to build and diversify revenue streams, both in prescription dispensing and a wide range of services. We’ll take a look at three different pharmacies and hear how each is succeeding.
Prescription dispensing, as noted, is no easy business these days. Even still there’s low-hanging fruit here. For example, 340B is the number-one area recommended by Josh Stanton, Pharm.D., director of pharmacy operations at Shrivers Pharmacy, an independent pharmacy operating multiple locations in southeastern Ohio, offering retail, long-term care, hospice, durable medical equipment, and 340B.
340B not only brings new revenue to the pharmacy, according to Stanton, but it brings much-needed services into the community, too. “The 340B program increases the financial resources available to the covered entity,” says Stanton, “and this then brings more services to the community. It is also an additional dispensing opportunity for the pharmacy.”
How to get started? The first thing you will want to do, explains Stanton, is to take a look at your pharmacy technology to ensure it is capable of managing 340B inventory and supporting program compliance. “There are multiple ways for a pharmacy to handle 340B inventory,” explains Stanton. “The way we do it is to maintain a virtual inventory within our Rx30 pharmacy management software from TDS Clinical and a physically separate inventory. This ensures that we are in compliance tracking 340B dispensing.”
“The 340B program increases the financial resources available to the covered entity, and this then brings more services to the community. It is also an additional dispensing opportunity for the pharmacy.” – Josh Stanton, Pharm.D.
Then you need to identify a 340B covered-entity partner within your community. “This could be a FQHC [Federally Qualified Health Center] that’s able to do 340B,” says Stanton. The pharmacy contracts with the covered entity to fill prescriptions on its behalf. “I’m really passionate about this program because the purpose is to bring financial resources to underserved populations,” Stanton says.
“There’s a positive impact for the pharmacy, but the bigger impact is from the services that the covered entity brings to the community through the resources made available from 340B. One of our big partners, for example, has added dental and women’s health, among other services. It’s just one of those rare opportunities where it’s a win-win. The pharmacy does well, and the covered entity can bring services, so they do well. And then, as intended, the community is the real beneficiary of 340B because it gets additional healthcare services.”
Compounding is another area to consider, and this is something that all three pharmacies featured here offer. It is in fact a specialty at ReNue Pharmacy, a full-service retail pharmacy chain with 10 locations in Texas. Principal managing partner Raj Chhadua, Pharm.D., has found an integration that replaces time-consuming and inefficient phone calls to patients with text messages to be a key element for making the compounding workflows as efficient as possible.
Chhadua reports that ReNue Pharmacy was able to select the best texting platform for its needs because of a critical feature of the pharmacy’s Liberty Software pharmacy management system: an open application programming interface (API).
“Instead of spending two to three FTEs [full-time equivalents] calling patients and waiting for a call back to get credit card information, for example” says Chhadua, “integrating texting software through the open API means we are able to shift that work to a payment request text that’s triggered right from within our Liberty Software workflow. Patients are also able to confirm their delivery via that text, and the Liberty system automatically then tags that medication as paid and ready to go.”
“We are interacting with the patient. Whether they are right in front of us or we are texting them, as pharmacists we are right there to ask smart questions and then, for instance, we can provide the data back to manufacturers in support of requirements around specific products.” – Raj Chhadua, Pharm.D.
Non-sterile compounding is an area of dispensing that Stanton likes as well, since it serves as both a competitive differentiator for a pharmacy and a new revenue stream. “We were looking for opportunities to help combat the opioid epidemic,” says Stanton.
“We find that offering compounding of non-controlled and non-opioid options for pain has been good for our patients and a good business decision.” This has grown at Shrivers to serve a significant number of patients. “The Rx30 system does a great job of supporting building formulas for compounds and billing for them accurately,” notes Stanton.
Clinical services aren’t new, notes Andrea Kowalski, Pharm.D., Shrivers director of clinical services. In fact, they are likely what many people would think of when considering new revenue sources, and forward-thinking pharmacies have been strategizing for some time about the best models for providing and billing for them.
“Clinical services can be really important for diversifying revenue streams,” says Kowalski. “But many pharmacies are still in a phase where they are providing clinical services without being able to generate revenue from them. It’s been a slow road.”
Shrivers, though, has had success. “We’ve got provider status in Ohio,” says Kowalski, “so we are in fact billing payers for clinical services in some cases.” Shrivers is part of several different pilot programs that are reimbursing for services, and this has allowed Kowalski and her colleagues to work out effective systems of developing, implementing, and managing clinical services.
“It’s only for specific payers at this time,” says Kowalski, “but we’re laying the foundation now with the idea that we can expand easily and kick our clinical programs into high gear as we find new opportunities.”
There are different clinical platforms that you can use to manage programs, according to Kowalski. These can range from common clinical services such as medication therapy management (MTM), med sync, and vaccinations, to new opportunities such as those that arose during the COVID-19 pandemic. “We were able to implement COVID testing and vaccine programs quickly using Rx30,” says Kowalski.
“We were also an early provider of monoclonal antibody treatment. We had the experience and the tools to quickly roll out critical programs like these and meet the needs of our community, and to generate new revenues for the pharmacy as well.”
“The eCare Plan has made documentation a natural part of our workflow. It provides the infrastructure for collecting and reporting data on clinical services. It’s another part of the foundation that allows us to prove the value of our clinical services and be ready as new opportunities emerge.” – Andrea Kowalski, Pharm.D.
There are a couple of key tools within the Rx30 software platform that contribute to Shrivers’ success. One is a component called TDS Clinical 360, according to Kowalski. Shrivers uses this to run MTM and med sync, and it can also access new revenue opportunities through it from payer-funded clinical interventions.
Another is the Pharmacist eCare Plan, which is available within Rx30. “The eCare Plan has made documentation a natural part of our workflow,” says Kowalski. “It provides the infrastructure for collecting and reporting data on clinical services. It’s another part of the foundation that allows us to prove the value of our clinical services and be ready as new opportunities emerge.”
Returning to prescription dispensing for a moment, there’s another element that serves not just as a critical building block for providing services, but should be a revenue driver in itself, according to Shrivers VP and Chief Operating Officer Greg Paisley. This is med sync. “You are going to want your pharmacy to have a very strong med sync program,” says Paisley.
“Your pharmacy staff better have the right tools in your technology to do med sync easily, because once you become efficient with med sync that opens up the opportunities to do all the things that Josh and Andrea talked about.” Med sync also boosts adherence, with a positive impact on both outcomes and revenue.
The long-term care (LTC) market is another area that pharmacies have looked to over the years to diversify revenues away from retail dispensing. Getting into LTC often involves serving facilities out of an existing retail pharmacy, which is known as a combo shop. Some pharmacies take the additional step of creating an LTC-only business, known as a closed-door LTC pharmacy.
Saad Dinno, R.Ph., reports that Dinno Health, an independent family-owned business in the metro west area of Boston, has gone the combo shop route at two of its four pharmacy locations: Acton Pharmacy in Acton, Mass., and Keyes Drug in Newton, Mass. The long-term care operations rely on adherence packaging from Medicine-On-Time to provide the highest level of service for assisted-living facilities and home health. This has been a boost to business, alongside other revenue sources such as compounding, durable medical equipment (DME), and vaccination programs.
“Our motto is that we manage the patient’s prescriptions from A to Z. We are able to present patients and caregivers with easy-to-use packaging, and we are able to be highly responsive to medication changes.” – Saad Dinno, R.Ph.
“We’ve been serving LTC patients since the early 2000s,” says Dinno. “We started with assisted-living facilities and, particularly since the start of the COVID pandemic, we have been expanding our services more and more to serve people who are living independently at home.”
Acton Pharmacy’s new LTC business comes in large part from word of mouth, including referrals from local prescribers and staff at transitional care units at local hospitals. “Practitioners know about the service level we offer,” explains Dinno, “and they feel their patients can benefit from having Acton Pharmacy fill their prescriptions.”
Medicine-On-Time provides all the tools Acton Pharmacy needs to keep this service level at its highest. And it provides tight integration with Acton Pharmacy’s Liberty Software pharmacy management system, notes Dinno. “Our motto is that we manage the patient’s prescriptions from A to Z,” he says.
“This all goes back to our excellence in packaging medications with Medicine-On-Time. We are able to present patients and caregivers with easy-to-use packaging, and we are able to be highly responsive to medication changes. Usually we can package and deliver a new or changed prescription in 24 to 48 hours.”
Dinno is also proud of Acton Pharmacy’s robust warfarin, or anticoagulation, program, which uses the Medicine-On-Time adherence packaging system and responsive service to help prescribers manage changes while finding the correct dose of this critical medication, and to support patients and caregivers with clearly labeled packaging that makes administration safer and easier.
A strong adherence packaging program is critical for Acton Pharmacy’s revenue for several reasons. First, the service brings in new patients and leads patients to fill all their prescriptions with Acton Pharmacy, to benefit from the Medicine-On-Time packaging. Second, patients using packaging are more adherent, which leads to maximizing refills. That’s good for patient care — since better adherence means better health,
as Dinno says.
DATA DRIVING CHANGE
Strong revenue increasingly relies on strong data, according to Paisley. “We are focusing a lot of effort on collecting data,” he says. He is looking forward to rolling out a fairly new tool from TDS Clinical, called RxInsights, which should bring significantly improved data mining and reporting capabilities.
“This is a robust platform with automated reports,” says Paisley. “What I am looking forward to is a better tool to be able to easily get at the data about all the good work we are doing here at Shrivers and package it into presentations that show the value we provide. When I can prove to an insurance company that I can impact their bottom line, that’s when clinical services start getting paid.”
THINKING LIKE A TECHNOLOGIST
Raj Chhadua has found that thinking more like a technologist has been important at ReNue Pharmacy. “We have given a lot of thought to how we use technology to make our work more efficient,” says Chhadua. “We’ve found that this entails building out patient-facing tools that allow for frictionless communication. This ensures that we’re providing patients with a full range of healthcare services tailored to their needs.”
This has, at times, required Chhadua to get out of his comfort zone, he notes. “We’ve had to really look at how to do things in ways that aren’t very familiar,” he says. “The pharmacy team isn’t trained to look at how we can work like a technologist does.”
Technology-oriented thinking has been an important revenue driver. Chhadua breaks down the efforts into pre- and post-COVID periods. “Prior to COVID,” he says, “we were looking to use our technology to build revenue based on services such as medication therapy management, compounding, and wraparound services such as smoking cessation or weight loss management.
That had to change when COVID hit, because the patient interaction dynamics changed. We weren’t seeing people face to face. And then we had to manage the complexity of COVID testing and vaccination.”
Here’s where Chhadua really dives into the importance of the open API in ReNue’s Liberty Software pharmacy management system, which he introduced earlier when discussing patient texting in the compounding workflow. “We had a lot more traffic that was hitting our website and our app. What people were looking for were vaccination and testing appointments,” explains Chhadua. “We needed to ensure that we were capturing that patient in a way that was frictionless for them to book an appointment and complete the necessary forms and questionnaires.”
This meant deploying a robust, patient-facing appointment tool as rapidly as possible. That tool then needed to integrate with the pharmacy management system so that data flowed seamlessly into workflow. Liberty Software’s open API allowed ReNue to quickly and securely integrate a scheduling tool once it had identified its preferred scheduling software partner. This meant that ReNue was quick to market in efficiently providing care for patients and capturing the accompanying revenue.
In Chhadua’s opinion, an open API is an essential element of a modern pharmacy management platform. ”When you look at software, there are certain rubrics that you can follow,” he explains. “You can ask, is the software running on Windows or another operating system? And then you can ask, does it use an open or a closed API?” This second question will define how easy it is for your software to evolve and adapt.
GETTING THE WHEELS TURNING
Chhadua’s success in responding to shifts in pharmacy practice and patient needs has set the wheels turning, as he puts it. “We’re looking for the next new services to integrate,” he says. “For example, we’re working with a provider on remote patient monitoring. We would connect to a cellular-enabled blood pressure or diabetes monitoring device and route the data into our normal workflow to manage the patient’s care and keep their other providers up to date.”
As Chhadua sees it, pharmacy doesn’t think often enough in terms of how it can leverage technology to meet market needs within the dispensing and care workflows. “We are interacting with the patient,” he says. “Whether they are right in front of us or we are texting them, as pharmacists we are right there to ask smart questions and then, for instance, we can provide the data back to manufacturers in support of requirements around specific products. At ReNue we have the tools to algorithmically identify patients for specific products, engage the patients with a smart questionnaire, and then report deidentified data back to a manufacturer.”
OPPORTUNITY IS OUT THERE
Raj Chhadua stresses one thing in particular about independent pharmacy and technology utilization: Consumers don’t just want technology. They still want real live people. But with the right technology platform that makes integrating new tools as easy as possible, pharmacies can not only find new revenue opportunities, but can also maintain the personal connections that lead to high levels of patient satisfaction.
“We find that high customer satisfaction scores are definitely improved by technology investment,” says Chhadua. “The more innovative you can be at your pharmacy in creating a frictionless, technology-driven patient experience, the better. Independents can solidify revenue streams and build new ones by adopting a mindset in which they are asking themselves how they can get out of their technology comfort zone and maximize the patient service level.”
Saad Dinno firmly believes independent pharmacies benefit from remembering the old adage that you don’t want all your eggs in one basket. “We’ve found that offering retail prescriptions and services, adherence-focused LTC services, and compounding is a successful model for us,” he says. “We are always on the lookout for ways to diversify and keep up with current market needs.”
On Acton Pharmacy’s radar, notes Dinno, is integrating with electronic medical records (EMRs). This is the wave of the future, according to Dinno, for communicating directly with physicians’ offices, along with the opportunities for new revenue that closer collaboration can bring.
“You are going to want your pharmacy to have a very strong med sync program. Your pharmacy staff better have the right tools in your technology to do med sync easily, because once you become efficient with med sync that opens up the opportunities.” – Greg Paisley
Greg Paisley similarly emphasizes a need to invest in and build on efficient processes. “You need to get your operations working as efficiently as possible,” he says. “That’s when your staff are freed up to provide the services that pharmacy has shown it’s so capable of. If you’re still filling scripts like you did 20 years ago, there’s just not enough time in the day.”
You want to deploy the right technology, of course, and Paisley also recommends hiring certified pharmacy technicians. “In Ohio, there are a lot of things pharmacy technicians can do when they’re certified,” he explains. When you have the right staffing and the right technology, you will be able to engage in the clinical future of pharmacy and build new revenue streams based on services, expanded dispensing, and working with data so that you can make the case for reimbursements appropriate to pharmacy’s significant contributions to public health. CT