BrownSound

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This is going to be long. But it may be worth it. I don't post on this forum frequently, so spare me the leniency.

Opening an independent pharmacy:
1) in the middle of a recession (1.5 years ago)
2) in the worst hit Canadian city of Windsor, Ontario (close to Detroit; heavily dependent on automobile manufacturing)
3) with 11 established pharmacies within a 1.5 mile radius (many of them big chain pharmacies)
4) with little financing
5) with no business background
6) with kids and family as responsibility
7) with business hours of 9-5 on weekdays, 9 to 4 on saturdays, not open on sundays
8) without waiving any fees or co-pays
9) new to the city, where he knew no one
10) with the surrounding MDs telling him directly that they won't be able to help

This is the story of Peter Dumo, independent pharmacist owner of Novacare Pharmacy. He wanted to show his peers, professional associations, pharmacy faculties and other pharmacists, that if he can not only survive, but thrive in the condition described above...then maybe we all have a reason to be hopeful.

Not only we have a reason to be hopeful, but now, more than ever, we need to be innovative, show some clinical entrepreneurship, and show some cojones to change the core business model of pharmacy. His message is: innovation is the only way we will survive as a profession. A year and a half later, he has a thriving business, he is on his way to hiring a second pharmacist besides himself.

I am writing about him, because this man came to the "pharmacy school" and gave the faculty and students lectures on some of the fundamental flaws in the business model of pharmacy right now, and what we need to do to change it.

His idea?

He created a specialty pharmacy that focuses on clinical services to draw in patients: anticoagulation, diabetes management, HF, Mental health etc etc. He has effectively captured various niche markets that no other pharmacy in that area can reach. He does things that MDs don't want to spend a lot of time doing, but don't mind having someone credible do it for them and the patients. His main focus right now is warfarin dosing with point of care INR testing. He bills the government for these clinical services under Ontario's Medscheck program. The program has been available in various forms since 2006, but no one has really utilized the money available, because they haven't figured out a way to do it.

So this man really had a lot of balls to pull this off. He made a lot of mistakes initially, and I know he is not the only one doing these kinds of things in North America, but he has left us all inspired. His point:

"Economic reality will always trump professional obligation and eduation"

Unless we find a way to make money off of clinical services - we will always complain about our working conditions and all the ways we are underutilized as a profession.

A lot of us have a negative outlook regarding this profession. Mainly because, in the retail setting, we get paid for distributive functions only. We buy drugs in bulk, put them in smaller packages and sell them at a higher price. Add on front shop items with high margin and you have your quintessential pharmacy. So no matter how we put it (we prevent/resolve drug therapy problems, we provide pharmaceutical care, TDM, MTM etc), at the end of the day, we get paid for the volume of scripts that are churned out. So the profession in his opinion has been dependent on this core function for the last few decades with no real innovation.

On the other hand, pharmacy schools, professional associations and a lot of industry leaders for years have been trying to move the profession away from distributive functions towards pharmaceutical care. But there is a huge disconnect between what students are being asked to do through training, and what they end up doing in the retail setting out in practice.

I am putting up the lecture he made available for students:
http://rapidshare.com/files/428588479/Lec008_Innovation_Handouts.pdf

My question to you is, what other unique specialty practice settings have you heard of (other than compounding/TPN pharmacies)? What other ways can you think of charging for "clinical services"?
 

IndpdtPharm

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Sep 12, 2010
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Wow what an awesome story. Really gives hope to people interested in maybe going the independent pharmacy route.

His approach would be a great way to use some of the clinical skills that go to waste when you go to work for the retail chains. Also, you're providing a service that no one else does, and it will help a person develop a niche for their business.

I don't have any ideas as to what type of clinical specialties independents can use, but I'll keep an eye on this thread. Good find!
 

Its Z

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May 15, 2010
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On the other hand, pharmacy schools, professional associations and a lot of industry leaders for years have been trying to move the profession away from distributive functions towards pharmaceutical care. But there is a huge disconnect between what students are being asked to do through training, and what they end up doing in the retail setting out in practice.
Hammer, meet nail on the head.



Pharmacy is a product driven profession. Only in combination of distribution & cognitive services, will pharmacy survive the future.
 
Nov 1, 2010
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Agreed with all of the above. Here in the middle of nowhere, a friend of mine has a little independent pharmacy with compounding. He does mostly hormonal therapies, but also a lot of animal compounds also. Needless to say, he does quite well!
 

TemSirolimus

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Apr 28, 2010
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Pharmacist
Hammer, meet nail on the head.



Pharmacy is a product driven profession. Only in combination of distribution & cognitive services, will pharmacy survive the future.

This.

I have been trying to say that for the longest, but I always end up coming off as a pharmacy hater.
 
OP
BrownSound

BrownSound

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Found another example where the pharmacist is a certified menopause educator.

"A Lucrative Business Model
In the early days Hogan charged patients $60 an hour. Today her fee is $120 an hour and she sees 30 patients a week. Do the math and you’ll see that’s $3,600 a week in consultation fees alone—and there’s plenty of added revenue in the compounded prescriptions, vitamins, supplements and natural products that many of these patients purchase from the pharmacy. Rexall pays Hogan a good salary—$110,000 a year—but perhaps the best reward is that she has discovered a whole new way to practice. “I run this practice within the pharmacy as an independent practitioner and I think there are plenty of opportunities for other pharmacists to be doing the same,” says Hogan. “The payment model being used in most pharmacies is wrong. Pharmacists are too apologetic about charging their patients. Patients are willing to pay when they see the difference you can make."



Here's the article, but you need to sign up with your email (free):
http://www.canadianhealthcarenetwork.ca/pharmacists/management/manage-your-drugstore/womens-best-friend-irene-hogan-is-a-pharmacist-who-understands-4352
 

IrishHammer

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Mar 9, 2009
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Found another example where the pharmacist is a certified menopause educator.

"A Lucrative Business Model
In the early days Hogan charged patients $60 an hour. Today her fee is $120 an hour and she sees 30 patients a week. Do the math and you’ll see that’s $3,600 a week in consultation fees alone—and there’s plenty of added revenue in the compounded prescriptions, vitamins, supplements and natural products that many of these patients purchase from the pharmacy. Rexall pays Hogan a good salary—$110,000 a year—but perhaps the best reward is that she has discovered a whole new way to practice. “I run this practice within the pharmacy as an independent practitioner and I think there are plenty of opportunities for other pharmacists to be doing the same,” says Hogan. “The payment model being used in most pharmacies is wrong. Pharmacists are too apologetic about charging their patients. Patients are willing to pay when they see the difference you can make."



Here's the article, but you need to sign up with your email (free):
http://www.canadianhealthcarenetwork.ca/pharmacists/management/manage-your-drugstore/womens-best-friend-irene-hogan-is-a-pharmacist-who-understands-4352
Sounds like business is runnin' wild...brother.
 
OP
BrownSound

BrownSound

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No one knows of any specialty pharmacies?
 

SomeGuy

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He bills the government for these clinical services under Ontario's Medscheck program.
The problem here is that the MedsCheck program is a $50 once a year medication reconciliation program, so he better still be doing that and documenting appropriately, though there's nothing wrong with tacking on other services on top of that, he just can't bill for them.

At least with the Menopausal practitioner, her pharmacy can sell compounded meds, supplements, etc, at whatever prices they like, because the prices of these aren't regulated since they're not on the provincial formulary.

If your niche is more like anticoag, HF or diabetes, it's a harder game to play, since the government effectively gutted indirectly funding your programs with the meds that you would be dispensing to the same patients.

It's tougher slogging in Ontario nowadays for the niche players in my opinion, because you're often competing with free and can't indirectly fund your programs with the meds you would otherwise be dispensing (at least it killed a program I was working on :mad: ). The pittance of new funding set aside for direct pharmacist-provided patient care initiatives still hasn't been formalized.

That's not to say that I don't have my own ideas for things that can still work, it's just painful to have to rejig everything because the projects you were working on before are now far less viable.

We can't all become $120/hour niche pharmacists, but certainly the more motivated amongst us can!
 
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BrownSound

BrownSound

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What was the project you were working on that is no longer viable?

These questions came up during the lecture.

1) Medscheck is an annual service worth $50 first time and four $25 follow-ups under the current laws. However, his warfarin patients on average need INR resting every 17 days. So what Peter Dumo did is that he told his patients that if you want my service more frequently and not pay for it, get your doctor onboard and get them to sign this form. The form essentially is a medical directive that allows him to prick under the skin and adjust doses. It also allows him to do UNLIMITED medschecks because under the law, you can do unlimited number of physician-directed medschecks (that is if physician requires you to do so).

2) He also got most of his patients to transfer ALL their scripts over to his pharmacy because then patients wouldn't have to pay $10 for each INR test (for the strips). So on top of clinical revenue, he also has a nice revenue stream from dispensing. He let's his young inexperienced technician take care of all the dispensing and inventory control (because the technician is inexperienced, he is more eager to learn/try new things). So Peter Dumo can focus more on clinical activities.

Yea it's all "tricky" but he did it under the worst economic conditions. No excuses.
 
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BrownSound

BrownSound

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Also, he addresses the conflict of interest by telling the patient that they do not have to fill their scripts here and gets them to sign a form saying that they are aware of this.

He also says that Cardiologists perform ECGs, Gastroenterologists recommend and perform endoscopy all the time and bill for it. There are 'conflict of interest' in all health professions.
 

SomeGuy

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Well, it was no longer viable. It might be now with MedsCheck Diabetes (6 months too late!).

Basically, the Diabetes Education Centres can often have multi-month waits, which is ridiculous for people that need to be started on insulin.

Get the docs to send new insulin start patients to you for training (just for the Type 2 patients, it's seriously not hard to do these starts), transfer their scripts over, and get a Medscheck done. They can still go to the DEC later on for all of their extra programs.

If you're really smart, you'll make friends with your NovoNordisk and Sanofi reps, get THEM to market the program for you to the docs (they want people started on insulin sooner too). They already have the relationship developed, and it makes the reps look good too to their head office. You might even be able to get funding out of them too for it.

The smart move would be to get the Ministry of Health to start paying him directly for these as a special trial program. It's been done before, and I'm sure it's cheaper for clients to go to him rather than a lab, and far more convenient for their INRs (get your INR and new warfarin RX all in one stop). And he protects himself from audits.