Rx conference is a hopeful start

Drug Store News, Sept 8, 1997 by James Fredericak

BOSTON - Welcome to the future of community pharmacy. It may look more familiar than we once believed.

I'm writing from the site of the NACDS' newly enlarged and restyled Pharmacy Conference and Managed Care Forum. Given the scope and objective of this year's conference -- a four-day attempt to assert retail pharmacy's future role and determine the source of its future profitability in a still-evolving healthcare marketplace -- it's a fascinating locale for a reporter covering chain pharmacy.

The reality is that even as its surviving chains enjoy an era of unprecedented growth and dominance, retail pharmacy is struggling to free itself of its long dependence on prescription volumes as its only source of revenue and profitability. Despite the dramatic decline in pharmacy margins over the past decade -- a decline that has slowed but not stopped as managed care payers wring the last cost-saving concessions out of pharmacy providers -- many chains remain locked in a cycle of diminishing returns, chasing ever-higher script volumes at ever-lower profit levels.

It's understandable. Chain pharmacy managers, after all, have for years dealt with the unwillingness of most third party payers to consider paying pharmacists for anything but dispensing scripts.

"We've already proven that doesn't work," said one retail pharmacy executive.

What does work? No one at the conference pretended to have all the answers, but there was no shortage of ideas or dialogue. For a few days in late August, this gathering of 2,200 retail pharmacy executives, pharmaceutical suppliers, distributors, managed care brokers and technology gurus served as a vast petri dish for the rapid incubation of new ideas about drug therapy, health delivery networks, patient compliance, reimbursement strategies, pharmacist intervention and profitability.

Underlying the exhibit-hall meetings, general business sessions and workshops was the recognition by virtually all sides that chain pharmacy's future depends on their willingness to talk to each other -- and to shift the focus of contract negotiations and alliance-building from cost of prescriptions dispensed to healthier patients.

Shifting that focus will lead inevitably to a leap in the evolution of community pharmacy and a restoration of the pharmacist's role as a full member of a community healthcare system. But, big hurdles remain. Chief among them is the continuing need for recognition and payment by managed care payers for the vital services that committed pharmacists can provide.

To leap that hurdle, drug chains have to practice what they preach about the value of pharmacist care. There was much talk here of shifting paradigms and the need by managed care payers to broaden their cost-saving focus to include the patient-care capabilities chain pharmacists can provide. But, it won't happen in a vacuum; drug chains will themselves have to push the change in perception by broadening their own definition of the value of their pharmacists' time. As one conference participant said, "If all we're doing is dispensing prescriptions, we might as well close up now."

Assuring healthier patients, most participants seemed to agree, will yield far greater savings -- and pharmacists are in a powerful position to make it happen.

"Over the last decade, community pharmacy has [already] taken enormous cost out of the healthcare system," said Tom Ryan, NACDS chairman. In one study, he said, increased pharmacist intervention yielded savings of $200 to $300 a month per patient.

"I am confident the value of community pharmacy ... will be self-evident," Ryan added.

For that reason, he said, "It is essential we put our parochial interests aside" to forge a new, fully integrated healthcare structure.

The NACDS conference was an encouraging start.