Monday, March 13, 2006

Rural pharmacies torn between tradition, technology

By MICHAEL JAMISON
Missoulian

KALISPELL -- Perched on the second floor of Harlowton's hospital is a big beige and blue vending machine.

It doesn't wear a starched smock, doesn't pace a raised dais, doesn't ask about your kids or remind you to stay out of the sun while you're on certain meds.

But it is, nevertheless, a pharmacist. Of sorts.

"The pharmacist of tomorrow is going to be unrecognizable to most of us," said Jim Ammen, pharmacy director at Missoula's Partnership Health Center and owner of Mission Drug in St. Ignatius. "He might not be a vending machine, but he's not going to be that quiet old white-haired guy up behind the counter, either."

Harlowton's vending machine arrived in 2004, not long after the town's last retail pharmacy was shuttered. Nowadays, a pharmacist 100 miles away in Billings punches a few buttons and that brown box in Wheatland County delivers your meds.

Patients step into a nearby phone booth undoubtedly the only of its kind in Harlowton for a quick video-chat with the pharmacist in Billings.

There are 60 meds in the big machine, half that in one slightly smaller, everything from antibiotics to inhalers to creams and salves.

"Telepharmacy," Ammen said, isn't nearly as good as the real thing, "but for some of these places, it's better than nothing."

Nothing is precisely what many small towns can expect if trends continue, pharmacists warn, as a new breed of drug plan "managers" whittle away profit margins.

It's a bit counterintuitive. More folks are using drugs. More drugs are available. More money is being spent and the drugs themselves are more expensive than ever. But pharmacists are facing tight margins, with not a few squeezed right out of the business.

The problem, according to pharmacists such as Ammen, is a thing called a PBM. That's shorthand for "pharmacy benefits manager," the company your insurer hires to control escalating health care costs.

Used to be, most folk paid for their prescription with cash. Nowadays, most prescriptions are covered, at least in part, by insurance.

Of course, those insurers and the people who pay the premiums want the best deal possible. So they get together and hire a pharmacy benefits manager, which then negotiates with both drug companies and pharmacies.

With the drug companies, PBMs try to get the best deal on a certain kind of medicine. If different companies make similar drugs, the lowest bidder becomes the "preferred" drug of choice for patients covered by that pharmacy benefits manager.

Often, drug companies give PBMs "rebates" pharmacists call them "kickbacks" if the PBM can assure that granting a company's drug "preferred" status will capture a certain percentage of the market share.

Pharmacy benefits managers also negotiate with pharmacists, using the combined weight of all their clients to leverage cheaper retail prices. Often, Ammen said, independent pharmacists have no footing from which to negotiate, and so are offered take-it-or-leave-it deals.

Accept it, and you make less money but retain more customers. Reject it, and your losses are less, but so is your volume.

"An independent pharmacist can't win," Ammen said. "At these prices, they can't stay in business."

When a pharmacist in a rural state like Montana can't stay in business, Paul Brand said, it can change everything for patients. Just remember that big beige box up in Harlowton.

"The PBMs are getting to the point where something has to break," Brand said.

Brand owns Florence Pharmacy south of Missoula, and also serves as president of the Montana Pharmacy Association. He predicts that "in five years, you're not going to see any pharmacy that's going to make it on prescriptions. Everything we think of when we think of a pharmacist is going to have to change."

His office is a good example, what with its newly opened medical equipment business.

Up at Ammen's office, there's a "clinical pharmacist" on staff,essentially a cross-breed between a physician and a pharmacist, a "pharmician," if you will.

The pharmician, Brand said, does some lab work, adjusts some doses, even crafts custom-made meds for individual patients.

For some patients, Brand said, he makes appointments, sees them in an office setting, helps to balance their medications, helps to measure meds' efficacy, helps to make sure they're not on too much or too little.

"This is a people business, not a money business," he said. "You have to know people, talk to them. It's become more and more of a price-driven marketplace, and that never is a good thing for health care, not when you're dealing with a system as complex as the human body."

Nevertheless, Brand touts the pharmician on the business of money, not just the business of people.

The hope is that pharmicians will actually save people money by reducing doctor visits and by catching drug problems that might otherwise result in a hospital or nursing home stay. If those savings can be proved, Brand said, then insurers will be more likely to pay for the pharmician's service.

"That's the bottleneck," Ammen agreed. "How do we convince people to pay?"

First, all agree, they will have to change people's very definition of pharmacist.

Such a definition shift isn't likely to come from the bottom up, because people's impression of what a pharmacist looks like is pretty firmly established. And it's not likely to come from the top down, because insurers and government aren't known for their progressive embrace of new and costly paradigms.

And so it will have to come from the middle out from the employers and others who provide coverage for millions of Americans. They are the ones, Ammen said, who must be convinced pharmicians will save them money in the long run.

The process, he said, recently received a boost from Medicare, which included as part of its latest prescription drug benefit overhaul a provision allowing for payments to pharmicians.

If the effort to shift from pharmacist to pharmician fails, he said, PBMs and competition from chain stores will push many more independents out of business.

"It's a horrible situation we're in right now," he said. "The time has come to evolve or go extinct..

"Right now, the only way it makes sense to run a rural pharmacy is in terms of job satisfaction," Brand said. "From a fiscal standpoint, it makes no sense at all."

That's one big reason small towns are finding it harder and harder to replace retiring pharmacists.

Start with a national pharmacist shortage. Add in competition from mail-order drug retailers. Complicate matters with reduced reimbursements, shrinking profit margins, increasing liability insurance costs. Coat it all with long hours, no vacation and you have a prescription for trouble in rural states such as Montana.

It's particularly worrisome, said Tim Stratton, because the connection between access to medication and quality of life is both strong and direct.

Stratton spent about a decade working on Missoula's university campus, studying and teaching the intricacies of medicine's socio-economic element.

"There's a big gap between urban and rural," he said.

In rural towns, the pharmacist is almost certainly an independent, as chains don't generally set up shop in small markets. And so they have no vacation time, no sick leave and, you guessed it, no prescription drug coverage.

But they do have debt, as do new pharmacy grads. Faced with a choice between living in rural Montana on a shoestring or making $100,000 working for a chain, the decision for most is a no-brainer.

It's also one reason Minnesota has a brand-new law offering a $12,000-per-year reimbursement for student loan debt to freshly minted pharmacists who are willing to take on a rural practice.

"There is little optimism," Stratton wrote back in 2001, "that these harsh realities will soon ease."

And the dilemma for independents, he wrote, "should create concern among policymakers for the economic viability of rural pharmacies."

Policymakers might take special note in Montana, a state predicted to soon rank third nationally in the number of people over age 65 per capita, from 13 percent in 2000 to nearly 25 percent in 2025.

"That's a lot of elderly people," Stratton said, "and they'll need a lot of pharmacy access. It's getting worse rather than better."



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