Continuing effects of Medicare Part D on rural independent pharmacies who are the sole retail provider in their community

Evaluation of a poverty-focused educational program and simulation for pharmacists

BACKGROUND AND PURPOSE

Limited literature explores the impact that poverty-focused educational simulations can have on practicing clinicians. This study used a poverty simulation, specifically created to resemble the lives of Medicare patients, to sensitize practicing pharmacists to the situations faced by people living in poverty. The study evaluated how a poverty-focused educational program impacted practicing pharmacists' actual knowledge gain, intention to assist patients with limited income, and satisfaction with the educational program.

EDUCATIONAL ACTIVITY AND SETTING

A quasi-experimental one-group pre-/posttest design of practicing pharmacists was utilized. The intervention was a live continuing educational (CE) program at a pharmacy alumni event and a pharmacy convention. The CE program was delivered in person and included a Medicare poverty simulation and a 75-min didactic lecture. Pre- and posttests were used to assess outcomes. The primary outcome was change in knowledge as measured by test scores. Secondary outcomes included intention to assist future low-income patients and participant satisfaction with the educational program.

FINDINGS

Eighty-nine pharmacists participated in the educational program. Participants' mean knowledge increased from 2.76 (SD = 0.97) to 3.61 (SD = 1.21) (P < .001) out of 5. The majority (88.3%) agreed they were interested in assisting patients with limited income in the future. Most participants strongly agreed that the program was satisfactory and contributed to their learning.

SUMMARY

This is the first identifiable study that incorporated a poverty simulation into an educational program for practicing pharmacists. The study may help inform the development of future educational programs for practicing pharmacists.

Rural-Urban Disparities in Access to Medicaid-Contracted Pharmacies in Washington State, 2017

INTRODUCTION

Community retail pharmacies offer multiple public health services to meet the health care needs of medically underserved rural communities. Many rural residents are enrolled in Medicaid insurance, and it is important that pharmacies contract with Medicaid to meet the health care needs of these people. The objective of this study was to evaluate disparities in access to Medicaid-contracted pharmacies across the rural-urban continuum in Washington State.

METHODS

We linked data on licensed community retail pharmacies in Washington State in 2017 to lists of state Medicaid-contracted pharmacies. We classified pharmacies as being located in small rural, large rural, suburban, and urban areas by using rural-urban commuting area (RUCA) codes. We evaluated the likelihood of zip code-level access to at least 1 pharmacy that was contracted with a Medicaid insurance plan across the rural-urban continuum by using descriptive statistics and modified Poisson regression models, adjusted for zip code-level community characteristics.

RESULTS

Of 1,145 pharmacies in our study sample, 8.4% (n = 96) were not contracted with a Medicaid plan. Compared with urban core zip codes, small rural zip codes (adjusted relative risk [ARR] = 0.64; 95% CI, 0.46-0.91) and large rural zip codes (ARR = 0.68; 95% CI, 0.49-0.95) were significantly less likely to have access to a Medicaid-contracted pharmacy. Suburban zip codes did not differ significantly from urban core areas in their access to Medicaid-contracted pharmacies.

CONCLUSION

In Washington State, the likelihood of access to a Medicaid-contracted pharmacy decreased significantly as rurality increased. Policy efforts should aim to improve access for Medicaid enrollees, especially those outside urban centers.

A pharmacy-based referral program to assist low-income Medicare beneficiaries

OBJECTIVES

The Certified Aging Resource Educated Specialist (C.A.R.E.S.) Program was developed to increase pharmacist awareness of available programs for Medicare patients with limited income and to integrate an efficient referral process into the pharmacy workflow. The objective is to describe the program in terms of pharmacy personnel satisfaction, pharmacy personnel knowledge, and network outcomes including enrollment and referrals.

SETTING

Alabama community pharmacies.

PRACTICE DESCRIPTION

The C.A.R.E.S. Program, a partnership between the School of Pharmacy and the Alabama Department of Senior Services, has recruited pharmacists, pharmacy technicians, and pharmacy students to participate on a voluntary basis since its launch in 2015.

PRACTICE INNOVATION

Pharmacies with at least one pharmacist who completed the comprehensive training program can enroll in the pharmacy network. Enrolled pharmacies receive a referral kit containing referral cards and prestamped envelopes. Pharmacy personnel identify patients who appear to have limited income or fall into the Medicare coverage gap and refer these patients to local Aging and Disability Resource Centers (ADRCs). ADRC counselors contact and screen referred patients for all available benefits, including the Medicare Savings Program and the Low-Income Subsidy.

EVALUATION

One hundred seventy-nine pharmacy personnel have completed the 1-hour introductory continuing pharmacy education, with 99 completing the full 3-hour training. Knowledge was assessed before and immediately after training with an online survey and compared using a paired samples t test.

RESULTS

Mean knowledge scores increased significantly (P < 0.001). Twenty-nine pharmacies have enrolled in the pharmacy network. As a result of this pharmacy referral system, 130 patients have been screened for subsidy programs by ADRC counselors.

CONCLUSION

To our knowledge, this is the first identifiable program connecting local pharmacies and ADRCs, equipping pharmacists with the knowledge and means to provide long-term solutions for patients. Other states might consider replicating this partnership to develop similar programs to benefit Medicare beneficiaries with limited income.

Regional Variation in Pharmacist Perception of the Financial Impact of Medicare Part D

The objective of this study was to perform a nationwide investigation of the financial performance of community pharmacies in the United States since the inception of Medicare Part D. A nationwide, cross-sectional survey of pharmacists was conducted in 2013. The 43-item online survey collected information about demographics, financial implications of Part D on community pharmacy and patients, provision of Medication Therapy Management (MTM) services and opinions about Medicare Part D 2010 updates. The adjusted response rate was 22.3% (419/1885). A majority of respondents (75.6%) reported a stable or increased prescription volume since 2006 but only 40.4% indicated that the financial performance of their pharmacy as either excellent or good during the same period. Owners and part-owners of rural independent pharmacies were more likely to report a below average or poor financial performance (75.0%). The provision of MTM services was not related to the financial performance of the pharmacy. Nearly half (44.7%) of pharmacy owners or part-owners indicated that they were considering selling their pharmacy, with most (94.1%) reporting that their decision to sell was due to the Part D financial pressures. However, the decision to sell was not related to the change in financial performance since 2006 or the volume of prescriptions dispensed.

How Do Pharmacists Assist Medicare Beneficiaries with Limited Income? A Cross-Sectional Study of Community Pharmacies in Alabama

BACKGROUND

Many Medicare beneficiaries have limited income and report problems paying for their medications. Programs are available to assist these low-income individuals. However, these programs are underused because of lack of general awareness and perceived complexity of program applications.

OBJECTIVES

To (a) determine the frequency of encounters by pharmacists with Medicare beneficiaries who cannot afford prescription drugs; (b) identify strategies that pharmacists use to assist Medicare beneficiaries who cannot afford prescription drugs; and (c) explore what pharmacists know about programs for Medicare beneficiaries with limited income.

METHODS

This study used a mixed-mode survey of 350 randomly sampled community pharmacies located in 32 counties in Alabama with a high proportion of Medicare beneficiaries who were potentially eligible for low-income subsidy programs. Measures included frequency of encounters by pharmacists with Medicare beneficiaries who could not afford their medications, strategies used to assist Medicare beneficiaries, and pharmacists' knowledge of programs for Medicare beneficiaries with limited income.

RESULTS

Of 350 surveys sent, 12 were nondeliverable, and 151 were completed (response rate=44.6%). About 50% of respondents reported encountering Medicare beneficiaries who could not afford their medications at least weekly. Various strategies were reported, including refiling claims that were previously denied every day (40.7%), contacting insurance companies at least once per week (43.2%), and loaning medications at least 2-3 times per month (29.1%). Only 12.6% reported referring beneficiaries to the Aging and Disability Resource Centers (ADRCs) to assess eligibility for limited-income programs. When asked about programs for beneficiaries with limited income, the answers were predominantly "don't know for sure."

CONCLUSIONS

Several strategies were used by pharmacists in an attempt to help limited-income Medicare beneficiaries obtain their medications. Lack of knowledge about financial assistance programs for limited-income individuals and the role of ADRCs in helping to screen individuals for benefits and complete applications warrants immediate attention. Improving pharmacists' knowledge on this topic may be an effective mechanism for providing a long-term solution for their patients.

DISCLOSURES

This study was funded by the Alabama Department of Senior Services. The sponsor played no active role in the design, methods, data collection, analysis, or preparation of this manuscript. The authors have nothing to disclose. This paper was presented at the American Pharmacists Association meeting in Baltimore, Maryland, in 2016. Study concept and design were contributed by Westrick. Hastings and McFarland were responsible for data collection, along with Westrick. Data interpretation was performed by Westrick, L. Hohmann, and Hastings, with assistance from McFarland. All authors were involved with manuscript preparation.

What can pharmacists' do about the Medicare Part D Donut hole and reimbursement? A six-state survey

BACKGROUND

While Medicare Part D was signed into law in 2003 and initiated in 2006, there is a scarcity of information related to the implications of Part D on community pharmacies and subsequent effects.

OBJECTIVE

To determine the financial implications of Part D on community pharmacy, to identify pharmacists' and beneficiaries concerns from the pharmacists' perspective and to determine the pharmacists' responses to these impactions and concerns.

METHODS

A cross-sectional survey of pharmacists practicing in six states (Maine, New Jersey, New York, Maryland, Massachusetts and Pennsylvania) was conducted online between June and December 2011. The 37-question online survey collected demographic data, data about implications of Part D on community pharmacy and patients, and pharmacists' beliefs about ideal pharmacy practice and Part D plans.

RESULTS

Of the 4,888 online surveys, only 1,108 were assumed to have reached the intended recipients (response rate 25 %). Fifty-six percent reported that reimbursement was the most significant concern, and 34.5 % of the owners or part-owners were planning to close their pharmacy due to financial pressures exerted by Part D. A significant relationship was observed between dispensing of 90 days' supply of medications and better financial performance (χ (2) = 6.95, p = 0.0084). The most significant patient concerns were formulary and copayment (52.8 %) and Donut hole (52.4 %). Fifty-four percent respondents stated that his/her pharmacy helped patients obtain financial assistance while patients were in the Donut hole.

CONCLUSION

Respondents were most concerned about the poor reimbursement rates, but pharmacists who dispensed 90 day supply of medications reported acceptable financial performance. Pharmacists also reported helping patients obtain financial assistance while in the Donut hole.

Assessing changes in third-party gross margin for a single community pharmacy

OBJECTIVES To assess changes in prescription gross margin from 2008 to 2011 using a random sample of prescriptions, analyze changes in prescription gross margin from 2008 to 2011 using a market basket of prescription drugs, and investigate impact of changes in prescription mix from 2008 to 2011 on prescription gross margins. DESIGN Longitudinal, retrospective, descriptive case study. SETTING Single independent pharmacy in Iowa City, IA, from March and April of 2008-11. PARTICIPANTS Prescription dispensing records for the pharmacy's largest private and Part D payers by prescription volume, as well as Medicaid and cash payers. INTERVENTION Random sampling and market basket approaches were used for gross margin calculation. MAIN OUTCOME MEASURES Prescription gross margins and generic dispensing rate. RESULTS Data were collected for 2,400 prescription records for the random sample and 4,860 prescriptions for the market basket sample. The median random sample and market basket gross margin dollars (GMDs) from 2008 to 2011 decreased from $9.55 to $7.22 and from $9.60 to $8.50, respectively. The percent of dispensed prescriptions that was generic increased from 62.65% in 2008 to 73.64% in 2011, and GMDs were significantly lower for generic products. CONCLUSION Third-party prescription drug gross margins in the study pharmacy varied substantially by payer and decreased over time. Pharmacies must continue to monitor changes in prescription margins and investigate ways to enhance alternative revenue sources to maintain profitability.

Urban and Suburban Community Pharmacists' Experiences with Part D—A Focus Group Study

Background:

With the enactment of Medicare Part D, the provision of drug coverage for senior citizens in the US has changed permanently. Not much is currently known about the impact of Part D on urban and suburban pharmacies.

Objective:

To explore community pharmacists' experiences with Medicare Part D in urban and suburban areas of New York City and adjacent Long Island.

Methods:

Seven focus groups were held between January 2010 and December 2010, 6 of which were held on St. John's University campus. A convenience sample of pharmacists practicing in chain and independent settings participated in the study. Participation was voluntary and anonymous.

Results:

Thirty pharmacists participated in the study. They reported that patients are facing challenges in reference to Part D, even 4 years after implementation of the program. Patients are often limited by their lack of computer skills, language skills, or level of education. Pharmacists also reported facing financial challenges because of “slow and low” reimbursement. Pharmacists were also dispensing more prescriptions, dealing with multiple plans, a variety of formularies, different copayments, and various prior authorization procedures.

Conclusions:

With regard to Medicare Part D, the challenges faced by pharmacists practicing in some of the urban and suburban areas of New York State are somewhat comparable to those faced by pharmacists practicing in rural areas. Although the financial impact has been more detrimental to independently owned pharmacies, pharmacists practicing in chain settings expressed concerns.

An analysis of security price risk and return among publicly traded pharmacy corporations

BACKGROUND

Community pharmacies have been subject to intense and increasing competition in the past several decades.

OBJECTIVE

To determine the security price risk and rate of return of publicly traded pharmacy corporations present on the major U.S. stock exchanges from 1930 to 2009.

METHODS

The Center of Research in Security Prices (CRSP) database was used to examine monthly security-level stock market prices in this observational retrospective study. The primary outcome of interest was the equity risk premium, with analyses focusing upon financial metrics associated with risk and return based upon modern portfolio theory (MPT) including: abnormal returns (i.e., alpha), volatility (i.e., beta), and percentage of returns explained (i.e., adjusted R(2)). Three equilibrium models were estimated using random-effects generalized least squares (GLS): 1) the Capital Asset Pricing Model (CAPM); 2) Fama-French Three-Factor Model; and 3) Carhart Four-Factor Model.

RESULTS

Seventy-five companies were examined from 1930 to 2009, with overall adjusted R(2) values ranging from 0.13 with the CAPM to 0.16 with the Four-Factor model. Alpha was not significant within any of the equilibrium models across the entire 80-year time period, though was found from 1999 to 2009 in the Three- and Four-Factor models to be associated with a large, significant, and negative risk-adjusted abnormal returns of -33.84%. Volatility varied across specific time periods based upon the financial model employed.

CONCLUSION

This investigation of risk and return within publicly listed pharmacy corporations from 1930 to 2009 found that substantial losses were incurred particularly from 1999 to 2009, with risk-adjusted security valuations decreasing by one-third.

Three-year financial analysis of pharmacy services at an independent community pharmacy

OBJECTIVE

To assess the financial performance of pharmacy services including vaccinations, cholesterol screenings, medication therapy management (MTM), adherence management services, employee health fairs, and compounding services provided by an independent community pharmacy.

METHODS

Three years (2008-10) of pharmacy records were examined to determine the total revenue and costs of each service. Costs included products, materials, labor, marketing, overhead, equipment, reference materials, and fax/phone usage. Costs were allocated to each service using accepted principles (e.g., time for labor). Depending on the service, the total revenue was calculated by multiplying the frequency of the service by the revenue per patient or by adding the total revenue received. A sensitivity analysis was conducted for the adherence management services to account for average dispensing net profit.

RESULTS

7 of 11 pharmacy services showed a net profit each year. Those services include influenza and herpes zoster immunization services, MTM, two adherence management services, employee health fairs, and prescription compounding services. The services that realized a net loss included the pneumococcal immunization service, cholesterol screenings, and two adherence management services. The sensitivity analysis showed that all adherence services had a net gain when average dispensing net profit was included.

CONCLUSION

Most of the pharmacist services had an annual positive net gain. It seems likely that these services can be sustained. Further cost management, such as reducing labor costs, could improve the viability of services with net losses. However, even with greater efficiency, external factors such as competition and reimbursement challenge the sustainability of these services.

The relationship between the financial status of sole community independent pharmacies and their broader involvement with other rural providers

PURPOSE

To document sole community pharmacists' involvement with other local health care organizations, these pharmacies' current financial status, and to determine whether financial position was associated with the provision of pharmacy services to other local health care providers.

METHODS

We conducted semistructured interviews with pharmacist-owners of 401 sole community pharmacies randomly selected using data from the National Council for Prescription Drug Programs, Inc. Bivariate and multivariate analyses of responses were conducted to examine associations between pharmacy characteristics, financial position, and involvement with other local health care providers.

FINDINGS

About 4 in 5 pharmacies provided services to at least 1 local health care organization. Most respondents (70%) described their store's overall financial position as good or very good, but about one-third reported that their financial conditions had deteriorated since the previous year. Providing services to other organizations was associated with higher prescription sales volume. After controlling for prescription volume, there was no association between providing services to other organizations and pharmacist-owners' self-assessed financial position.

CONCLUSION

Sole community pharmacists provide important pharmaceutical support services to other health care organizations. Other than increased volume of business, this support often does not translate directly to an improved financial position for the pharmacy. The survival of sole community pharmacies not only ensures retail access to pharmaceuticals and patient counseling, but it also, in many cases, plays a key role in supporting other local health care providers, helping to preserve access to important services that are particularly needed in communities with limited health care options.

Trends in community pharmacy counts and closures before and after the implementation of Medicare part D

PURPOSE

Medicare Part D provided 3.4 million American seniors with prescription drug insurance. It may also have had an unintended effect on pharmacy viability. This study compares trends in the number of pharmacies and rate of pharmacy closures before and after the implementation of Medicare Part D.

METHODS

This retrospective observational study used data from National Council for Prescription Drug Programs (NCPDP) to track retail pharmacy closures and counts between January 2004 and January 2009. Pharmacies were classified by ownership (chain or independent), location (urban or rural), and whether they were the only pharmacy in a community. Autoregressive Integrated Moving Average (ARIMA) models were used to examine trends in pharmacy counts and closures.

FINDINGS

The number of independent and rural pharmacies decreased significantly after the implementation of Medicare Part D. The number of communities that saw their only pharmacy close also increased.

CONCLUSIONS

Unintended consequences of Medicare Part D may serve to reduce patient access to pharmacy services in opposition to the stated goals of the program.

Retail pharmacy market structure and insurer-independent pharmacy bargaining in the Medicare Part D era

OBJECTIVE

To examine whether local area pharmacy market structure influences contract terms between prescription drug plans (PDPs) and pharmacies under Part D.

DATA

Data were collected and compiled from four sources: a national mail survey to independent pharmacies, National Councilfor Prescription Drug Programs (NCPDP) Pharmacy database, 2000 U.S. Census data, and 2006 Economic Census data.

RESULTS

Reimbursements varied substantially across pharmacies. Reimbursement for 20mg Lipitor (30 tablets) ranged from $62.40 to $154.80, and for 10mg Lisinopril (30 tablets), it ranged from $1.05 to $18. For brand-name drug Lipitor, local area pharmacy ownership concentration had a consistent positive effect on pharmacy bargaining power across model specifications (estimates between 0.084 and 0.097), while local area per capita income had a consistent negative effect on pharmacy bargaining power across specifications(-0.149 to -0.153). Few statistically significant relationships were found for generic drug Lisinopril.

CONCLUSION

Significant variation exists in PDP reimbursement and pharmacy bargaining power with PDPs. Pharmacy bargaining power is negatively related to the competition level and the income level in the area. These relationships are stronger for brand name than for generics. As contract offers tend to be non-negotiable, variation in reimbursements and pharmacy bargaining power reflect differences in initial insurer contract offerings. Such observations fit Rubinstein's subgame perfect equilibrium model.

IMPLICATION

Our results suggest pharmacies at the most risk of closing due to low reimbursements are in areas with many competing pharmacies. This implies that closures related to Part D changes will have limited effect on Medicare beneficiaries' access to pharmacies.

Future economic outlook of Nebraska rural community pharmacies based on break-even analysis of community operational costs and county population

BACKGROUND

There is growing concern over increasingly limited access to local health care, including pharmacies, for rural citizens of the United States. Although geographically distant from most competitors, rural pharmacies may still struggle to generate an acceptable profit to remain economically viable. Therefore, a method for calculating the economic viability for a community pharmacy to recruit a potential new owner to assume the entrepreneurial risk is an important issue to consider when evaluating rural pharmacy access.

OBJECTIVES

The primary objective of this study was to use a modified break-even analysis to predict the future financial potential of the current pharmacy business to attract a new owner. The secondary objective was to forecast a risk level for a Nebraska county to sustain the number of pharmacies in the country beyond current ownership.

METHODS

This research used data provided by pharmacies that responded to a Nebraska Medicaid cost of dispensing (COD) survey in addition to data from the US Census Bureau, US Office of Management and Budget, and the Nebraska State Board of Pharmacy. Break-even analysis was used to determine the point where the prescription volume of the pharmacy not only covered the variable and fixed costs but also maintained a reasonable profit to attract new ownership. Counties were classified into 3 risk levels based on the projected available prescription volume and the number of pharmacies in each county. Sensitivity analysis was performed on the risk levels to determine the impact of variance in projected available prescription volume on the projected future outlook for the pharmacies in each county.

RESULTS

Regression analysis of responses to the COD survey indicated that the annual break-even prescription volume ranged from 44,790 to 49,246 prescriptions per pharmacy per annum. The number of rural Nebraska pharmacies was projected to decline from 126 to 78. The number of counties in Nebraska without a single pharmacy was projected to increase from 19 to 26, and the number of counties with just one pharmacy was projected to increase from 17 to 31. Thus, the number of counties with 1 or no pharmacy was projected to increase to 57 out of the total 93 Nebraska counties.

CONCLUSIONS

The forecasted closure of pharmacies in rural areas will cause significant portions of the state to be without a pharmacy. Low county populations will be unable to sustain a local prescription volume large enough to remove them from the high risk of pharmacy closure.