Fast-growing Aurora Pharmacy draws on potent healthcare arsenal

Drug Store News, July 20, 1998 by James Frederick

Behind that long-term strategy are the forces of market competition, new disease-management and patient-care efforts among drug chains, new communications technology to link doctors and pharmacists, and a managed care system that pushes patients out of hospitals and into the outpatient care arena "quicker and sicker." Also driving the integration effort is a simple but powerful premise: that chain pharmacists, working in close coordination with local physicians, hospitals, health clinics and nurses, will lead to healthier patients and lower treatment costs.

Given that premise, one fast-growing pharmacy operator in eastern Wisconsin enjoys a clear strategic advantage over traditional, standalone drug chains. That operator is Aurora Pharmacy, which sprang almost overnight from a single prescription outlet in downtown Milwaukee five years ago to become a 63-unit network of clinical, stand-alone and supermarket-combo pharmacies closely linked with the state's largest nonprofit healthcare network, Aurora Health Care.

Aurora Health Care is not only the largest nonprofit health provider in Wisconsin, said Aurora spokesman Stephen Gardner, it is also the state's largest employer, with more than 17,000 healthcare workers and support people serving patients in more than 180 locations. "Aurora Pharmacy is owned by Aurora Health Care Ventures, the for-profit arm of Aurora Health Care," Gardner said.

"Probably our strongest philosophy is that the pharmacist is an absolute key link between the patient and all their health care," he added. "We focus on making sure people get the right care at the right time and the right place from the right provider, and a pharmacist plays a very important role in that."

Gardner likened Aurora's operation to "the old-fashioned apothecary-type of pharmacy, where everybody knew the pharmacist, the pharmacist knew everybody, and everybody felt comfortable talking with him."

A recent report on Aurora's operations detailed the organization's multifaceted market strengths. "Spanning all of eastern Wisconsin, Aurora en compasses Aurora Medical Group, with more than 500 physicians in clinics and health centers, and 12 hospitals, with an additional 3,100 private practice physicians on staff," the report noted. "Aurora also operates 60 [now 631 community pharmacies, the state's most comprehensive home health and family service agencies, and several long-term care facilities and retirement communities."

Given that kind of comprehensive care network and geographic penetration, it was perhaps only natural that a powerful integrated pharmacy operation would emerge. "We're part of a fully integrated healthcare delivery system," said Dennis Rakowsky, president of Aurora Health Care Ventures, and the man responsible for spearheading Aurora's drive into the pharmacy arena in the early 1990s.

"We're looking to the day of capitation, whereby our healthcare system will be able to take 'X' number of dollars per member per month from an insurance company, and be able to provide for all their healthcare needs, including pharmacy, for a capitated fee," Rakowsky explained. "And we feel that if we can have the coordination of pharmacists and physicians, we can put out a quality product that will be more cost-effective than the traditional fee-for-service model."

'We've got to do it'

Aurora's approach to pharmacy operations derives from its unique position as an outgrowth of a large-scale, comprehensive health delivery system. Aurora Health Care was born out of the merger of Milwaukee's two largest hospital systems in 1984.

"A little over five years ago we rented more than 40,000 square feet of space to house one of our clinics, and we were interested in having a pharmacy there," said Rakowsky.

Aurora approached a local drug store operator to run the clinic pharmacy, Rakowsky said, hut "they felt we didn't have enough doctors there to warrant putting in their pharmacy. So we finally said if they don't want to do it, we've got to do it. So we hired our first pharmacist. We started with four scripts a day, then eight a day-drawing strictly on the clinic activity Monday through Friday."

That script count continued to grow, however, and Aurora soon laid plans to expand pharmacies into more of its outpatient care centers in eastern Wisconsin. "Our original idea was to put pharmacies only in our clinics, and we thought we'd end up with about 12 or 14 of them in total," Rakowsky explained. "But then a local food store franchiser, Pick 'n Save, approached us. Their research showed them their customers wanted to have a pharmacy, a bank and a dry cleaner in each of the Pick 'n Save stores for customer convenience.

"They looked at the different [pharmacy] systems in Wisconsin and felt we had the most synergy as far as the marketplace goes, and that they would prefer to have one lease for their different franchisees."

Thus was born a business partnership. Aurora now operates pharmacies in 18 Pick 'n Save stores in the eastern part of the state, and will soon add two more in-store centers. The pharmacies operate in about 400 square feet of space leased from Pick 'n Save.