Healthcare Reform is causing doctors in private practice to seriously consider alternative options to generate more revenue for their practice. Cash flow is a major issue with most practices and ancillary services, such as physician dispensing, make sense. Doctors have sacrificed years of their lives to the profession of medicine, and it’s a shame how some have to struggle to make ends meet for the practice.
Cash and Carry Dispensing is the easiest and likely most popular form of dispensing today. In a cash and carry dispensing program, the practice will purchase medication wholesale and sell the medications to patients at a retail price. What price? That’s up to you! Typically, most practices sell the medications at an equivalent price to the patient’s copay. Most commercial copays range between $15 – $20 and the practice generally purchases the medication for less.
No insurance processing is involved, and patients pay at the point-of-care! No waiting for insurance reimbursements, submitting claims, dealing with rejects, or any other issues!
What About $4.00 Medication Programs at National Pharmacies?
We often have practices ask how they can compete with national drug stores offering $4.00 generic prescriptions. From our experience, it has never been an issue for our customers. Often times practices believe patients would not pay more to get their medication from the practice when they could get it down the street for less. This is a false perception. Some pharmacies do have $4.00 generic drugs, but the program only covers a very limited number of medications. The pharmacies use the program as a loss leader to get people into the stores, and purchase other items in the store they did not intend to buy. When the practice offers to fill the prescription at the practice, the patient could save both time and money by not having to make an unnecessary trip to the pharmacy. They will not be tempted to buy unnecessary items while waiting for the prescription to be filled. You are offering the patient convenience. Patients do not mind paying a little more for convenience. If getting the prescription from the practice is going to allow them to get home or to work sooner, the patient often times does not mind what the price is, as long as it is within reason. Patients are willing to pay extra for convenience.
Reduced Prior Authorizations Too Good to be True? Not Anymore.
Prior authorizations are a major source of frustration for providers and their staff. More payers require prior authorizations for drugs and procedures then ever before. Consequently, the added burden on the staff is adding labor costs to physicians. According to a 2010 survey by The American Medical Association, physicians are spending an average of 20 hours per week on prior authorization activities. A 2011 study by Health Affairs estimates prior authorizations cost each physician an estimated $83,000 per year on average.
When a practice offers a cash and carry program, they will greatly reduce the need to call insurance companies for prior authorizations and give the physicians more time with their patients! Cash and carry models do not transmit pharmacy benefits to insurance companies, therefore the need for prior authorizations is eliminated.
Why Cash and Carry Might Not Make Sense For Your Practice
Cash and carry pharmaceutical programs are better suited for practices that prescribe generic medications because of the high cost of branded medication. If your practice mostly writes prescriptions for branded medication, then a commercial claims processing program is likely a better option. Dispensing to workers compensation patients is also a good option if you are treating workers compensation patients.
What About Narcotics?
Narcotics are not required to be in your formulary, and it’s up to you to stock them or not.
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