John King, OmniSYS president
I had the pleasure of attending the NACDS Regional Conference in Florida earlier this week, my first in-person pharmacy tradeshow in over two years. While Zoom was certainly a valuable resource during the pandemic, nothing can replace face-to-face interactions. It was great to be back.
During both the conference sessions and in my individual conversations with pharmacy leaders, I noticed a few key themes that I wanted to share.
No money, no mission
Prescription revenues remain under intense pressure. This has been true for a while, but with pharmacy costs increasing, profitability is reaching a breaking point.
The future of pharmacy is clinical services, but if pharmacies are not able to solve revenue and cost challenges, that future is in trouble. If paths do not open for new means of reimbursement, pharmacies will have to say no to providing additional services. This outcome would fly in the face of every healthcare trend, as the demand for care continues to grow, outpacing the supply of traditional healthcare providers.
The next big pandemic is just around the corner
Colleen Lindholz, president of Kroger Health and NACDS Chair, gave an excellent keynote presentation where she talked about how America is sick, and this problem isn’t going away. And she’s correct, America is aging and unhealthy. Diabetes is the next pandemic, and it’s coming soon.
In less than ten years over 10+ million new seniors will enroll in Medicare. That’s about 1.5 million new beneficiaries per year between now and 2029. And guess what, 27% of seniors have diabetes! It’s a huge issue, and our next health crisis. Pharmacists proved their ability as essential providers during the COVID-19 pandemic. Now we must look towards the future and ensure that community pharmacies are prepared to address it.
The payer mix is changing
The payer mix has changed a lot over the past three years. IQVIA shared market data that provided helpful context on the reimbursement challenges that pharmacies are facing. here are some of their high-level observations:
- Discount cards and Medicaid have shown YoY share gains for past three years at the expense of cash and third party
- Market growth for prescriptions is largely driven by Medicare Part D, Medicaid and discount cards
Discount cards are increasingly becoming an issue for pharmacies, as their fee structure cuts into profits, making tight margins even tighter. At the same time, discount card companies are investing record profits into new solutions that begin to encroach on the pharmacies’ relationships with their patients, setting them up as potential competitors in the future.
Value-based care is the future
By 2030, CMS wants 100% of their beneficiaries covered by some form of value-based care arrangement. Due to the accessibility of pharmacies, and the expanding role of the pharmacist as a provider of care, retail drug stores will be essential to meeting this goal.
To thrive under value-based care arrangements, pharmacies must find ways to become a connected part of the healthcare ecosystem. This means that issues surrounding data, interoperability and workflow will be critical in the years ahead. OmniSYS is well positioned to help our customers succeed.
Clinical enablement is critical to the future of pharamcy. Pharmacists are ready to practice at the top of their licenses, but the right tools and processes have to be in place for this to be successful.
All of the themes above tie back to one thing: reimbursement. Pharmacies must be able to successfully monetize the value of the clinical services opportunities in front of them. The ability for pharmacies to positively impact patient outcomes is clear, but in order to keep expanding the role of the pharmacist as a provider, the reimbursement must follow.