When last did you see your own physician or specialist?

How much of your time was involved in getting your prescription filled, the last time you got one from your doctor?

A recent national survey reveals that 3 out of 4 patients in the US would prefer the convenience of having their medication prescriptions filled in their own doctors office. And an argument can be made that, since one of the reasons for non-adherence to medication prescriptions is not getting a prescription filled, patient "compliance" would increase as well.

One solution that has worked well for many physicians for many years is to dispense medications in the office using prepackaged medications, typically generics, of the medications most commonly prescribed for acute conditions. Good examples might be antibiotic courses, analgesics, topical creams and ointments, oral corticosteroid courses, antiinflammatories, injectables etc.

So how does this all work?

Today, I asked Andy Shea, Marketing Communications Director Manager for Purkinje, to share some facts about their Medication Dispensing programs:

PK: What are some of the benefits of prescribing "in house"?

AS: Improved medication compliance, affordable medications for those patients who lack insurance coverage, patient convenience, reduced pharmacy call backs, and additional practice income with no extra physician effort.

PK: What does this cost a physician to institute?

AS: Nothing other than the actual cost of inventory and, if the order volume is below a certain amount, a modest shipping fee. 

PK: Can you explain further please?

AS: The place to begin is to spend a month or so tracking your most common prescribing habits to determine what you want in your "formulary".

Alternatively, we have developed our own formularies based on past experiences of our customers. These formularies are specific to the type of medical or dental practice looking to dispense. A family physician, for example, who isn’t sure which medications s/he should order, could use the experiences of thousands of other family physicians to determine the “best” medications to include in the first order.   

Once you sign up with a "basic plan" medication dispensing program like ours, you place an order for the medications you want to stock and we ship them to you, pretty much overnight. You will also receive all the materials for any reporting that might be required by your state.

PK: Talking of states and state law, can you do this in all states?

AS: Currently, in-office medication dispensing is allowed in all states except Utah.  There are special restrictions in New York, Texas, Arkansas and New Jersey … we’d always let potential clients know about these restrictions before signing up for our services. We do all the research for you about your state requirements, and you follow up, according to your state. Some states require you to pay an annual dispensing fee which is again modest -- in the order of $75.

PK: What does this all cost and what kind of profit can a practice expect to generate? 

AS: The average cost for a generic prescription to the physician is $4.50 and the typical profit is $6.50, meaning you would sell it for $11. Now the profit margin can be as high as the physician chooses, and can range from $5 to $15 or even higher. So, for example, if you are dispensing 2 prescriptions per patient to 20 patients a day, your practice can bring in an extra $5000 a month.

There are no equipment costs for the more basic programs -- you merely need a lockable cabinet. Even one of our premium program that uses software to track your dispensing is free if you maintain an average monthly order minimum. We send you a laptop computer loaded with the easy-to-use software, a barcode scanner, a thermal label printer, and a laser printer for printing receipts and patient literature.

PK: What about insurance coverage?

AS: In our model, there is no insurance coverage for these medications, but consider two things:

• If you consider pricing your medications at the level of the patient's medication co-pay, you are offering them convenience at no extra expense, and
• How valuable is a patient's time? Wouldn't they rather pay you $10 or $15 for a prescription medication than drive to and then wait in line at the pharmacy?

There are many other companies supporting medication dispensing programs as well - amongst them, Allscripts, Industrial Pharmacy Management (IPM) and Physicians' Pharmaceutical Corporation (this latter company appears to offer a way to work with patients' insurance programs if preferred).

One little item I came across piqued my interest:

"A 1999 study by the Institute of Medicine estimated that every pharmacy call-back cost physicians practices $5–$7 to pull and review the chart and return the call. With the average physician writing 30 prescriptions a day and handling nearly another 30 requests for refills, the dollars add up quickly. (Tipping the Balance of Power with Digital Patient Information, Pharmaceutical Executive, March 2002, Mary Johnston Turner)"

And that was in 1999!

What appeals to me about this kind of program is it meets many of my criteria for a sound entrepreneurial practice activity:

• it provides real value to patients
• it is easy to institute
• it focuses on generating higher revenues for a practice, instead of the pain of cost-cutting!

What do you think?

(Thanks to Reed Tinsley of Reed Tinsley CPA Blog for drawing my attention to this topic!)