The Truth Behind Three Health Systems Myths: Part Three

By Alex Minkoff |

Controlling costs while maintaining quality care can feel like walking a tightrope sans the safety net. The good news? Health system pharmacists are in a unique position to help the organization overcome challenges related to both cost and care through ambulatory pharmacy models. But first they’ll have to overcome a common myth surrounding just what it really takes to build, operate and evolve the health system’s ambulatory care model.

Myth #3: Building an ambulatory pharmacy is just like building a retail pharmacy.

Truth: Too often, hospital administrators buy off on the idea of an ambulatory pharmacy based solely on its looks — the shiny new revenue stream, curbed readmissions and enhanced patient experience — only to divorce it when they realize the level of work it demands. Overcoming the myth that ambulatory pharmacies are built and maintained just like retail pharmacies can be a critical step for successful implementation. While the two do share some similarities, ambulatory pharmacies are unique — and uniquely challenging — in several areas:
  • Logistics: While retail pharmacies enjoy traditional hours of operation unencumbered by surroundings that might make them difficult to find, hospital pharmacies need to create a more unique strategy, planning hours of operation, location and layout based on the hospital’s bulk discharge times, peak traffic areas and volume of patients with varying levels of acuity. Convenient access also bodes well for gaining employees as consumers.
  • Finances: While retail pharmacies are built using templates designed to be time- and cost-efficient, hospitals are starting from scratch. Having the right expert oversee the complex process of managing dozens of vendors and controlling costs is critical. In addition to startup costs, ambulatory pharmacies face drastically different medication margins. This is because of the high-volume and labor-intensive pain medications prescribed at discharge. Based on analysis of discharge data, inpatient specialties and patient volume from other hospital-based clinics, the hospital should develop a plan for seeking higher margin prescriptions, such as marketing its services to diabetic or cardiac patients.
  • Customer needs: While retail pharmacies can count on refill business, the hospital pharmacy will see mostly new patients one time. This makes entering new patient profiles a prevalent part of the job, which makes the right software selection paramount. If the hospital selects a system that makes entering new patient profiles difficult, it will create an inefficient and wasteful process. In addition, to avoid lost revenue, the pharmacy staff should have access to patient benefit information to work around patients that don’t have insurance information on hand.
  • Marketing: Unlike retail pharmacies, hospital pharmacies have more restrictions on how it can be marketed to patients, including in-house signage. But there are opportunities to promote the hospital pharmacy in ways retail pharmacies could never realize. For elective surgery patients, consider promoting during pre-admission and if applicable, the convenience of bedside medication delivery. On the inpatient side, take advantage of platforms within patient rooms such as TVs and handouts in patient information packets.

And while there is a level of sensitivity that should be maintained when promoting the pharmacy, taking into account the many things families may have on their minds, the pharmacy can be there to ensure patients are discharged from the hospital with the correct medications. Also important are internal communications efforts as they relate to benefits to employees.

  • Networking: While networking for hospital pharmacies is very different from retail pharmacies, its advantages are tenfold as there are so many viable players the pharmacy director comes into contact with on a daily basis. Everyone from the C-suite to the maintenance team can contribute to the success of the hospital pharmacy — most notably, the nursing staff. After all, the nurses give patients their prescriptions. Who better to tout the benefits of the on-site pharmacy?
  • Requirements and regulations: The outpatient pharmacy has the added opportunity (and burden) of protecting the best interest of all parties in complex pharmacy contract negotiations. If the legal department within the hospital isn’t familiar with the intricacies of the various outpatient pharmacy contracts, it will need to seek outside council. In addition, resources may need to be brought in to address Stark Law, which states hospitals can’t direct patients to services for which it will earn a profit, and HIPAA Privacy Rules, which protect employees’ rights to privacy as it relates to an employer knowing the medications they might be taking.
  • Staffing: Understanding the nuances of the hospital’s size, patient mix, number of employees and prescription flow are key factors in determining the right size and experience level of staff. As the hospital determines the budget for hiring new staff and the right mix of inpatient and outpatient experience, it might also explore investing in recruiting and training resources experienced at building out in-house pharmacies. After all, hiring the right people to fill the right roles is one of the most important building blocks of launching a successful pharmacy, to say nothing of planning for how it gets staffed as it grows. And as the pharmacy director becomes more and more engaged in growing the pharmacy’s business and promoting the value it brings to patients, the hospital will also want to identify who will run daily operations.

While building an ambulatory pharmacy is certainly no small task, overcoming the challenges can bring the hospital substantial benefits. And navigating the misconceptions about the demands and benefits of the outpatient offering can ensure that success is more than a myth.

About the Author

Alex Minkoff

Senior Director, Health Systems Strategy 
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