icn-calculator-150x150As we wrap up the year and look ahead, we reflect on three key trends impacting our customers today — legislative changes, generics shifts and healthcare transformation — and share thoughts for success in 2014 and beyond.

Patients and payers are demanding more options for care, and there is a heightened focus on treating patients in a variety of non-acute care settings. As the Baby Boom generation continues to age and move through the healthcare system, there are approximately 10,000 people entering Medicare every day.1 Additionally, some estimate that the number of people over 65 will increase by 50% by 2020. Yet this does not translate into a direct increase in the number of traditional nursing home beds.

Moreover, alternate site pharmacies aren’t just in the business of serving the elderly. An increased number of patients dealing with chronic conditions, combined with a growing pipeline of more complex therapeutic agents that are often administered via infusion or injectable at earlier phases, presents new opportunities for alternate site pharmacies to expand their patient profile. The result? We see our customers being asked to do more — serve more patients, in different settings, with new therapeutics — but to do so with less, and in the face of major industry changes. The year 2013 has certainly teed up its share of challenges for the alternate site pharmacy segment.

Trend #1: Legislative Changes

For starters, legislative and regulatory changes continue to simmer. While most long-term care pharmacies have implemented the necessary workflow and technology updates to adapt to the short-cycle fill mandate, prorated daily dispensing fees are met with objection, and definitions of brand-name drugs remain unclear. Organizations like NCPA and ASCP, which McKesson is proud to partner with and support, seek to represent these issues on the Hill and work toward resolution for the industry. Additional restrictions and questions come in the form of diabetic testing supplies, as pharmacies and DME providers prepare for new requirements and limitations the future may bring, while changing rules around the disposal of controlled substances could prohibit current drug-disposal methods used at facilities today. Our customers also face heavy scrutiny and operational burdens from increased auditing practices and deal with reimbursement challenges as a result of limited MAC transparency. All of these issues force the question of how alternate site pharmacies can reduce expenses and increase efficiency in light of these pressures to maintain profits and growth.

Trend #2: Generics Shifts

This past year has also been an interesting year on the generics front. A smaller pipeline of generics conversions has led manufacturers to look for new ways to increase revenue. This, combined with increased mergers and consolidations, resulted in several manufacturers turning to portfolio optimization for continued growth — meaning increased prices on key products. In addition, an increased number of FDA plant inspections led to warning letters, fines and import bans and contributed to increased prices.

Trend #3: Healthcare Transformation

Healthcare transformation also continues to be a topic of conversation, though many are still speculating as to the role of the alternate site pharmacy. The prevalence of ACOs is increasing, while the Affordable Care Act aims to reduce avoidable hospital readmissions. Industry leaders are left wondering what the expectations will be for post-acute care providers and the institutional pharmacies serving them. How can pharmacies elevate their role and assist facilities in not only providing the right drug at the right time, but also keeping patients out of the hospital? Much remains to be seen, but we’ve learned that the earlier pharmacies can begin having these conversations and raising these questions with the facilities they serve, the better. Together, facility and pharmacy can work to address issues as they arise and seek to partner in developing solutions for the good of all across the healthcare continuum.

Planning for 2014

So where do we go from here? How do alternate site pharmacies continue to thrive in light of the challenges presented and new demands placed upon them? We asked leading alternate site pharmacies for their input, and common themes surfaced. As Brian Beach of Kelley Ross Pharmacy summarized, it comes down to improving operational efficiency and forecasting where your business needs to be in the future to survive. “Our goal is making sure the right people are doing the right jobs at the right time. We’re looking at our processes in general from start to finish and trying to evaluate where people fit in best. This involves not only our internal staff, but also our business partners — from suppliers to where we buy our delivery cars and cell phones. All the different pieces of the puzzle represent an opportunity for us to optimize our business. For alternate site pharmacies looking at the future of healthcare and planning how to succeed, they need to start by thinking about where they need to be — what they need to be offering in the future, and who they need to be partnering with.”

For alternate site pharmacies looking at the future of healthcare and planning how to succeed, they need to start by thinking about where they need to be — what they need to be offering in the future, and who they need to be partnering with.Brian Beach of Kelley Ross Pharmacy

While there are no easy answers to the challenges presented this year, and we don’t know exactly what new hurdles 2014 will present, we believe the most successful pharmacies will be those that drive greater efficiency, greater cost savings and greater operational efficiency, while continually seeking opportunities for growth. This may come in the form of better data analysis and smarter purchasing and decision-making; adopting new technologies to increase connectivity or outsourcing to package more scripts, more efficiently; leveraging evidence-based methodologies like Six Sigma to improve workflow; and utilizing tools to identify new revenue streams and develop sound marketing strategies for continued growth.

I encourage you to consider these key questions as you develop your plan for the new year:

  • How will you drive increased results, with less?
  • How will you further penetrate your markets and diversify your referral streams through the addition of new services and populations served?
  • Will you look to infusion, specialty or 340B?
  • Will you adopt new technologies to help you fill more scripts, faster, and to further penetrate the markets you serve?
  • How will your pharmacy stay relevant and contribute to the future mandates of health reform?

With a focus on patient outcomes across healthcare, the role of pharmacists is evolving to be more integral to successful patient management, and the alternate site pharmacy is well-poised to play an integral role across the care continuum.

We want to hear from you. Email us at alternatesite@mckesson.com and let us know how we can help. Together, let’s identify ways for long-term care, infusion and specialty pharmacies to overcome the challenges faced, seize the opportunities presented, and continue to succeed in 2014 and beyond.

1. Kaiser Family Foundation, “Health Spending: Trends and Impact,” 2012, http://kff.org/slideshow/health-spending-trends-and-impact/

Note: The information provided here is for reference only and does not constitute legal or other professional advice. McKesson is not responsible for, nor will it bear any liability for, the accuracy, efficacy or reliability of the content provided herein. Readers should consult appropriate professionals for advice and assistance prior to making important decisions regarding their business.