"Starting a Retail Pharmacy Business from Scratch - PDF - PDF"
Feature McKesson and IPC Independent Pharmacy Trusting relationship beneﬁts independent pharmacies Cooperative by Nicole M. Martin IPC started 25 years ago as a coopera- tive of seventy independent pharmacies in Dane County, Wisconsin. Initially fo- cused on Dane County, IPC expanded to include pharmacies across Wisconsin. The program has expanded over the years, and IPC now serves pharmacies or more than 20 years, two projects with Six Sigma. The phar- in all ﬁfty states. McKesson and the In- macy expertise of IPC and the data of dependent Pharmacy Co- McKesson will deliver better buying deci- IPC is a member-owned organiza- tion; all proﬁts and beneﬁts go back operative, Inc (IPC) have sions to the customer,” states Bill Hamik, to the respective members based on been working together to senior vice president of McKesson. “The patronage. beneﬁt independent commu- work couldn’t have been done indepen- nity pharmacies. Ten years ago, McKesson dently, but by working together, we can To assist independent pharmacies and IPC began the Community Pharmacy help the stores. We both worked together in managing the business end of Commitment Program, providing fund- and we both shared our expertise and data pharmacy, IPC has taken some of the ing to state pharmacy organizations in to bring value to the stores that indepen- responsibility in-house to a staff of professionals to utilize economies of support of activities and lobbying eﬀorts dent pharmacies would not have the time, scale. Pharmacists can focus on the that in turn, beneﬁt community pharma- expertise, or data to do.” professional side of practice and depend cies. Both IPC and McKesson have an upon IPC and McKesson to take care IPC began nearly 25 years ago in Wis- ongoing relationship with PSW as well. of the business end. One of the main consin. As a member-owned company, Through the Community Pharmacy functions of IPC is making business all proﬁts and beneﬁts go back to the Commitment Program (CPC), PSW is decisions regarding generics. With a members based on patronage. Initially, granted money to use on behalf of IPC/ staff of four pharmacists and supporting IPC was composed of approximately 70 McKesson customers. PSW uses the funds technology, IPC can assist pharmacists pharmacies around Dane County. It ex- for lobbying eﬀorts, educational confer- by making decisions on their behalf with panded statewide, then across the nation. ences, and other programs of interest to product pricing and availability. IPC has member pharmacies in all 50 IPC members. WWW.IPCRX.COM states. McKesson has been the wholesaler The collaboration among the three for IPC since the cooperative’s inception. organizations is successful because “we’ve Nearly 85% of McKesson’s independent developed a dialog and relationship, a customers are IPC members. Three years meaningful one, between the members of McKesson ago, IPC signed a ten-year exclusive sup- the organizations,” states Chris Decker. “It McKesson Corporation is a multifaceted ply agreement with McKesson. “We have allows issues and opportunities to be ad- business, providing services to pharma- a high level of conﬁdence in the relation- dressed that otherwise would be diﬃcult cies, health care providers, and health ship with McKesson,” states Steve Nie- to address.” Niebauer adds, “The invest- care payors. Pharmacy services include bauer, president of IPC. ment we have made in PSW has been pharmaceutical distribution, repackag- In addition to supplying member phar- returned to us many times over. That’s ing of bulk pharmaceuticals, electronic order-entry systems, pharmacy admin- macies, IPC and McKesson are looking through their [PSW’s] eﬀorts on behalf istration systems, automated robotics, to expand the services they oﬀer. “We’re of IPC members and all pharmacists in and automated cabinets for storing, trying to evolve other characteristics that Wisconsin.” dispensing, and tracking commonly member pharmacies don’t have yet, or Hamik states, “Large companies like used medications. provide services that members cannot pro- McKesson have to be in sync when issues vide for themselves,” states Niebauer. “We arise that aﬀect the distributor, the buying McKesson customers include more than feel that there is a tremendous amount of group or the independent and small chain 25,000 retail and 5,000 health systems pharmacies nationwide. Customers in- data that we can facilitate managing that owners. The relationships help foster an clude large national chains, community stores cannot do for themselves. We can environment that keeps everyone up on pharmacies, and hospital pharmacies, help members make better business deci- what is going on in the pharmacy arena in as well as outpatient clinics. sions when it comes to purchasing. Our Wisconsin.” 3,500 individual members could not do The CPC began in 1996 to provide as- WWW.MCKESSON.COM this alone. But systems-wise, we could do sistance to pharmacy organizations that this on behalf of 3,500 stores.” worked on behalf of community pharma- “McKesson and IPC have partnered in cies. Small pharmacies seldom have the 26 JPSW March/April 2005 time or resources that larger organizations about relationships. At the end of the day, for our customers and PSW provides it, have. The leaders of IPC and McKesson if you ask a customer why they work with from a professional standpoint, for all of felt it was important to support groups their particular wholesaler, it’s probably Wisconsin’s pharmacies.” ● that already had programs established, the relationship with the sales rep or the such as PSW. “It’s better strategically and company. But when you get to the bot- Nicole Martin is a 3rd-year PharmD student at likely more successful to support the or- tom line of the IPC/McKesson scenario, the UW School of Pharmacy. She is completing ganizations that are currently designed to you have pharmacists looking out for an independent study project exploring phar- do that, instead of starting from scratch,” pharmacists. IPC provides that service macy journalism. states Decker. The programs and services that PSW is enabled to provide are as diverse as the members served. The funding provided through the CPC program enables PSW to dedicate and employ staﬀ to work on Medication management: A unique the areas vital to the IPC member and perspective of pharmacy practice McKesson customer. Those activities ben- by David A. Ehlert, PharmD eﬁt other pharmacists as well, but that’s OK with the group. The organizational leaders follow the theory, “a rising tide am pleased to have been invited to share with the readers of JPSW my somewhat ﬂoats all boats.” PSW receives ﬁnancial unusual pharmacy practice. Before I explain what I do, I thought it would be support from other pharmacy wholesalers helpful to describe the path that led to my current position. as well, but not nearly to the same de- I graduated from UW-Madison with my post-baccalaureate Doctor of Pharmacy gree as McKesson and IPC. That’s partly degree in May of 1999. Upon graduation, I completed a pharmacy practice residency at because these companies are the market St. Luke’s Medical Center (Aurora Health Care) in Milwaukee. At the ASHP Midyear leaders in Wisconsin, but Decker quickly Clinical Meeting in December of 1999, I learned of a relatively new specialty residency adds that PSW would welcome and uti- program in pharmacy management. After many discussions with the program co-direc- lize similar support from others. “As an tors and after careful consideration of my options, I decided to pursue this specialty association, PSW’s activities are only lim- residency. The ﬁrst six months of my training were on-site at the UW Hospital and ited by the resources available. The more Clinics, while the second half of the year was devoted to working on McKesson Medi- resources, the more we can do.” PSW has cation Management (MMM) projects at the corporate taken an active role in government af- McKesson and ﬁeld level. The program provided an opportunity to fairs that impact pharmacy. The current develop both drug use policy and medication use process focus is on the Governor’s proposed state Medication management skills within an integrated health system as budget, which would dramatically reduce Management well as a corporate pharmacy practice setting. reimbursement for state-funded programs provides Upon completion of my residency, I decided to stay on with McKesson Medication Management in a leadership and have a negative impact on pharmacy practice across the state. And, although services that development program. This program was structured such critically important, the state budget is range from that I would gain exposure to the diﬀerent facets of the just one of many legislative issues being business unit. I spent nine months with our new business addressed by the organization. consulting and due diligence team as a new business transition spe- PSW has also been a continuing pres- to full cialist, and another nine months with our implementation ence in the patient safety improvement arena, working with many other profes- implementation specialist. In January outsourcing of team as an the role of director of clinical services. of 2003, I accepted In June sional and patient advocacy groups to de- the pharmacy of 2004, I was promoted to vice president of clinical ser- sign practices that would reduce medical department. vices within McKesson Medication Management. errors. Quality improvement, practice de- velopment, and payment for performance WHAT IS MCKESSON MEDICATION MANAGEMENT? are each priority areas of activity for PSW McKesson Medication Management (MMM) is a relatively small business unit within that also relate to the patient safety initia- the McKesson Corporation. The McKesson Corporation has annual revenues that ex- tive. Improving medication use is the bot- ceed $69 billion making it the 16th largest industrial company in the United States. tom line objective. The McKesson Corporation is best known for its role as a drug wholesaler, but is also “Without the support of IPC/ well known for many of its pharmacy automation products (e.g., ROBOT-Rx™, Acu- McKesson, we would not be able to do Dose™, Baker Cells®) and information systems (e.g., Horizon Meds Manager™, Phar- what we do as an organization,” said maserv®). MMM provides pharmacy management services that range from consulting Decker, “and Wisconsin pharmacies are to full outsourcing of the pharmacy department. The majority of these services target the better for the collaboration.” acute care, but the company also has services geared toward retail pharmacy as well as Hamik states, “This business is really pharmacy services in outpatient and alternate care settings such as prisons and mental March/April 2005 JPSW 27 health facilities. McKesson Medication near misses that precipitate medication ment, 2) clinical program implementation Management manages pharmacy facili- safety concerns and cause the hospital to and operationalization, and 3) drug spend ties throughout the United States as well seek the expertise of a pharmacy manage- (and related data) tracking and trending. as in Canada and Puerto Rico. Although ment provider to design a medication use While I have been in this role, I have MMM’s corporate headquarters are in a strategy that improves medication safety. helped to expand the company’s focus and suburb of Minneapolis, the majority of In other cases, hospitals may utilize a investment in program development and employees live and work throughout the pharmacy management company to assist data tracking and trending. United States. with an impending visit from the Joint Our approach with clinical program Commission on Accreditation of Health- development is to create standardized WHY WOULD A HOSPITAL care Organizations (JCAHO) or the state programs and toolkits that help the sites OUTSOURCE ITS PHARMACY? board of health. we manage deliver safe and eﬀective medi- Approximately 10-12% of the estimated cation use. We have two broad categories 6,000 acute care hospitals in the United COMMON MYTHS OF PHARMACY of programs and toolkits: 1) pharmacy States outsource their pharmacy services. OUTSOURCING practice standards and 2) medication uti- In the past few years, there has been One of the common myths of pharmacy lization and safety toolkits. The pharmacy a trend toward larger hospital systems outsourcing is that McKesson Medica- practice standards are designed to ensure exploring full or partial outsourcing of tion Management (or Cardinal Pharmacy a mandatory level of practice across the their pharmacy services. Other pharmacy Management) only uses McKesson (or sites that we manage. The pharmacy prac- management providers include Cardinal Cardinal) technology in the hospitals that tice standards are focused on two broad Pharmacy Management (formerly Owen they manage. In reality, MMM and other domains: 1) high-risk patients (e.g., pe- Healthcare), CompleteRx, Comprehen- pharmacy management diatrics, geriatrics) and sive Pharmacy Services, and Pharmacy companies have to be ad- Approximately high-risk medications Systems, Inc. ept at optimizing a wide (e.g., parenteral nutri- The speciﬁc reasons for outsourcing a variety of pharmacy auto- 10-12% of the tion, chemotherapy). pharmacy department vary by hospital mation products and phar- estimated 6,000 The medication utiliza- (or other practice setting), but often stem macy information systems. acute care tion and safety toolkits from concerns in one or more of the fol- Often, a hospital’s decision include policies and lowing areas: 1) pharmacy leadership, to outsource all or part of hospitals in the procedures, drug use 2) escalating drug costs, 3) labor short- the pharmacy management United States guidelines, medication ages, 4) inadequate clinical programs, 5) services is completely inde- use evaluation crite- medication safety, and 6) regulatory or pendent from the decisions outsource ria, literature reviews, accreditation issues. Hospital executives related to pharmacy auto- their pharmacy order forms and other information designed may perceive that the pharmacy has in- suﬃcient leadership to ensure a safe and mation and technology. Another myth is that services. to ensure appropriate eﬃcient medication use process within the pharmacy management medication use by ther- health system. Escalating drug costs and companies bring in all new staﬀ to run apeutic category as well as disease state. pharmacy labor costs are another reason the pharmacy. In some cases, I have en- The operations of MMM are organized why hospital executives may consider countered the perception that pharmacy by regions. The regions are organized outsourcing their pharmacy department. management companies are like a ﬁre based on multiple factors including geog- Pharmacy management companies are department with a team of ﬁre ﬁghters raphy, bed size, type of practice setting, often viewed as a means to mitigate drug (or pharmacy staﬀ) waiting at the ﬁre etc. Each region is supported by a regional inﬂation, achieve predictability in cost house for the alarm to sound. Although vice president, a regional clinical coordi- structure, and minimize ﬁnancial risk. we do have interim staﬀ and other project nator, a regional director of ﬁnance, and a Outsourcing the pharmacy department is managers who are dispatched to respond regional human resources manager. Each a strategy that can be employed by hospi- to various “ﬁre alarms,” we do not have of the regional clinical coordinators re- tals faced with labor shortages and staﬃng entire pharmacy departments that can ports to me. The regional clinical coordi- crises. The ability to recruit on a national be sent in to a new account. Instead the nators work with each of the sites in their level may be an advantage to hospitals lo- pharmacy employees (pharmacists, tech- region to establish a clinical action plan cated in rural areas and other hard to staﬀ nicians, and pharmacy management) at for implementing and operationalizing locations. Inadequate clinical programs the site frequently become employees of a variety of clinical and drug utilization are another reason why a hospital may McKesson Medication Management. initiatives. choose to outsource. Pharmacy manage- Just as it is throughout pharmacy prac- ment companies can provide clinical MY ROLE tice, it is essential for MMM to be able programs and drug utilization initiatives As the vice president of clinical services, to document and quantify the impact of that a smaller hospital may otherwise be I oversee the corporate clinical services pharmacists. MMM is in the process of unable to provide. In other cases, hospi- team. My team is responsible for three implementing a system that will allow tals will have had sentinel events and/or main areas: 1) clinical program develop- standardized intervention and medica- 28 JPSW March/April 2005 tion occurrence tracking across all of the sites that MMM manages. This system will allow us to generate reports and track Hospital Medication Safety and trend these metrics across each of our Self Assessment Reports sites. It is also critical to be able to have data systems in place that help identify Improved in Virtually Every Category drug spend trends and to be able to es- America’s hospitals are making important improvements in the crucial area of medica- tablish the etiology of various drug spend tion safety practices according to recently released data from a survey developed by the trends. MMM has also invested in vari- Institute for Safe Medication Practices (ISMP). Results from the ISMP’s 2004 Medication ous data sets to help us better categorize Safety Self Assessment® show signiﬁcant advances in many safety practices, when and identify adverse drug spend trends by compared to the initial assessment, which was completed in 2000. therapeutic category. The self assessments, conducted by ISMP in partnership with the Health Research Because I have a national role, I spend and Educational Trust (HRET) and the American Hospital Association (AHA) through a great deal of time traveling across the a grant by the Commonwealth Fund, allow U.S. hospitals to gauge their use of nearly country. Although I am a preferred travel- 200 practices that most signiﬁcantly inﬂuence safe medication use and compare their er with a number of airlines, hotel chains, current systems and practices to similar hospitals nationwide. More than 1,600 hospitals and rental car agencies, the frequent ﬂier participated in the 2004 assessment, many of which were able to chart their progress miles and other traveler perks are no sub- over the last four years by comparing results with their responses to the 2000 survey. stitute for being home and spending time The largest changes in medication safety have occurred in the areas of quality pro- with family and friends. Despite the trials cesses and risk management, drug order communication, staff education, and patient and tribulations of being a “frequent ﬂier,” education. I do ﬁnd that my job is very professionally satisfying. The ability to meet pharmacy Quality Processes and Risk Management practice advocates and other profession- Comparison of 2000 and 2004 data reveals a 43% increase in non-punitive, system-based als from around the country, Canada, approaches to error reduction, including providing positive incentives for error reporting and incorporating speciﬁc medication safety objectives in strategic plans. Preliminary and Puerto Rico has proven to be very data in this area also shows a 29% increase from 2000 scores in practitioners’ ability rewarding. I have also been very fortunate to detect, report, and analyze errors, and in the use of redundancies and independent to have multiple individuals serve as men- double-checks to detect and correct serious errors before they reach patients. tors. The active role that they have taken in my professional and personal growth Methods of Communicating Drug Orders has inﬂuenced me greatly. The part of my Methods of communicating drug orders is another area of signiﬁcant improvement when job that I enjoy the most is the ability to compared to the 2000 self assessment. The 2004 self assessment results show a 30% impact the profession of pharmacy on a increase in implementation of standardized automated methods of communication, including linking computer systems with pharmacies, establishing lists of error-prone broad scale. I believe that companies like drug abbreviations, and following speciﬁc policies for verbal or telephone medication McKesson Medication Management are orders. uniquely poised to aﬀect the practice of pharmacy by implementing the vision ad- Patient Education vocated by various pharmacy leaders and There was a 23% increase over the last ﬁve years in the category of patient educa- professional organizations (e.g., American tion—patients being involved as active partners in their hospital care by being provided Society of Health-System Pharmacists, with information about their medications and ways to prevent errors. Hospitals indicated that more patients are being encouraged to ask questions about their medications and American Pharmaceutical Association). ● are being provided with written, up-to-date information about critical drugs prescribed at discharge. Other Data Highlights In addition, the self assessment revealed a 29% improvement from 2000 in efforts to minimize problems with look/sound-alike drugs. Survey items queried to what extent hospitals were regularly reviewing current medical literature to identify potential problems, implementing computer alerts for problematic drug names and using auxiliary warnings or other label enhancements. Preliminary comparative national data for the 2004 self assessment is now available to participating hospitals. Organizations that submitted data can access preliminary reports online through www.ismp.org with the same secure password they used during the submission process. An article with complete survey ﬁndings will be submitted for publication in 2005. Released February 1, 2005 by the Institute for Safe Medication Practices. March/April 2005 JPSW 29