5 certainties for pharmacies in uncertain times
Leverage certain trends into profitable opportunities for your pharmacy
- The world has never been more uncertain.
- Yet amid uncertainties there are still CERTAINTIES about the future of healthcare and pharmacy.
- These certainties include: the population will continue to age, cost pressures will remain, more payment will be based on value and quality, the site of care delivery will change, and there will be an increased focus on prevention.
- Each of these major, certain trends presents a significant opportunity.
If there is any doubt that the times we live in are uncertain, just read a newspaper or look at any media website, as use of the word “uncertainty” is soaring and has reached record highs.1
There is uncertainty everywhere: uncertainty about tax rates, immigration policies, the stock market, the Affordable Care Act and healthcare policy. No one knows what the future holds. And with uncertainty comes worry and anxiety. “What does it mean for my customers? My business? My family? My retirement?”
However, even during this time of unprecedented uncertainty there are underlying trends in healthcare and pharmacy that are certain and that provide opportunities. (Famed investor Warren Buffet often sees opportunity amid uncertainty.2)
Here are five certainties in healthcare and pharmacy that provide both challenges and opportunities for independent pharmacy.
- The population will continue to age. Today there are about 46 million Americans over age 65. And every day 10,000 baby boomers turn 65. In a little more than a decade more than 20% of the population will be over 65, and down the road there will be more than 100 million Americans age 65 or over.3,4,5
It is certain that the population will continue to age and older consumers will use more drugs.
Target this large and growing aging population. Cater to them. Provide products and services that appeal to this demographic. Help them navigate Medicare Part D enrollment. Build relationships and loyalty. Offer med sync, MTM, delivery and other services that make life easier. Provide profitable front-end products that meet the needs of seniors.
- Intense cost pressures will persist. Total spending on healthcare and pharmaceuticals will continue to rise. As healthcare spending rises, payers — including the government and insurers — will continue to exert pressure to control costs.
It is certain that cost pressures will continue and will intensify.
Work even harder to streamline processes to improve operational efficiency and minimize your cost to dispense. Adopt and expand medication synchronization and better leverage technology. At the same time, constantly explore new revenue opportunities. Cost pressures aren’t going away; the key is adapting.
- Reimbursement will shift to value-based. Historically, healthcare reimbursement has been “fee for service,” where payment has been based on volume. This has changed rapidly, with more payment linked to “value,” which includes measures of quality. CMS has stated a goal of tying 50% of Medicare payments to value or alternative payment models by 2018.6
An example of value and quality is Star Ratings for prescription drug plans. Plans want to work with pharmacies that help them achieve good Star Ratings. This makes it essential for pharmacies to perform well on quality measures in order to remain part of Medicare Part D preferred networks and maximize reimbursements tied to performance. (In 2016, 75% of seniors were in Medicare Part D preferred pharmacy networks.7)
One trend that is certain: more and more payments within healthcare will be based on value.
Independent pharmacies have the opportunity to maximize their reimbursements tied to performance and strengthen their position for participating in preferred networks by demonstrating strong performance on key Star Ratings measures.
- More healthcare will be delivered in community settings. A trend is underway to decrease the care delivered in costly places like hospitals and shift the delivery of more care to lower-cost sites in communities. This can be seen through more walk-in clinics and use of services such as telemedicine and telepharmacy.
A certain trend is that more types of care will be delivered in a lower-cost community setting.
The shift in the site of care delivery to lower-cost, more accessible locations is a tremendous opportunity for community pharmacies. Opportunities include offering more vaccinations and screenings, partnering with hospitals to provide medications post discharge, and partnering with providers to expanded pharmacy-provided services.
In many states, legislative activities are helping pharmacists gain provider status. Currently, there are roughly 50 bills across states related to any willing pharmacists gaining status as a provider to provide clinical services (such as vaccinations), drug therapy management and medication synchronization. Additional bills address collaborative practice agreements and statewide protocols for dispensing/prescribing naloxone and contraception.
- Emphasis will increase on prevention and health. The most effective, cost-efficient healthcare is remaining healthy — and not needing to access the healthcare system. This fits with a societal trend where more people are monitoring their health with personal devices like Fitbit, and many patients are interested in healthier lifestyles.It is certain that payers, providers and patients are all increasingly prioritizing prevention, both by maintaining good health and by adhering to treatment to keep conditions from worsening.
Pharmacies can play a key role in helping people live healthier lives. This can include education sessions, regular screenings, providing coaching on changing behaviors to be healthier, and offering various over-the-counter products like vitamins and supplements.
For people with a disease, remaining adherent to their medications and treatments is a key part of staying as healthy as possible. For pharmacies, services like med sync and behavioral coaching help ensure that the purpose of medications is understood, that prescriptions are refilled regularly and that patients are fully compliant.
The world is filled with uncertainty. Yet several prevailing demographic and economic trends are certain. These trends all emphasize community pharmacists playing an increasing role as a provider of valuable healthcare services. By understanding these certainties, pharmacies can develop strategies and plans to capitalize on them — and turn certainties into profitable opportunities.
1 “Five Charts That Say All Is Not Well in the Markets,” Bloomberg, February 6, 2017. LINK
2 “Buffet Sees Opportunity in Uncertainty,” Financial Times. LINK
3 Aging Statistics, Administration on Aging, Administration for Community Living, U.S. Department of Health and Human Services. LINK
4 “Do 10,000 Baby Boomers Retire Every Day?” The Washington Post, July 24, 2014. LINK
5 “By the Numbers: Aging in America,” Everyday Health. LINK
6 “Better Care. Smarter Spending. Healthier People: Improving Quality and Paying for What Works.” Centers for Medicare & Medicaid Services, March 3, 2016. LINK
7 “Medicare Part D 2016: 75% of Seniors in a Preferred Pharmacy Network,” Drug Channels, January 20, 2016. LINK