Case Study
As you are aware our in-house open pharmacy has been showing losses in spite of our ability to purchase medications through the 340B Drug Pricing Program. We do this both through a contract model with regional pharmacies and through our in-house pharmacy.
The in-house pharmacy bills most insurances through a clearing house; however, we are increasingly seeing individual contracts (especially Medicare Managed Care Plans) who are sending us contracts directly, asking if we participate in the 340B Drug Pricing Program. Of course, we answer yes. We are not sure why we are asked this when anyone can look at the Office of Pharmacy Affairs () and see that we participate.
The insurance company then sends us a 340B participating Pharmacy contract. When they do this, they pay us at a rate that eliminates the savings, which is intended allow us (RIT-CHC) to offer uncompensated care to the community and, instead, funnels the savings to their shareholders.
This is not the case for our contract pharmacy model as we have a contract with the pharmacy who already has contracts with insurance plans. Hence, we get the full value of the 340B savings that we then reinvest into our service lines, which is consistent with our mission as a FQHC.
As such, our inhouse pharmacy expenses are exceeding our revenues and we are considering closing our in-house pharmacy. Although this is a prudent financial decision it will result in the displacement of three pharmacists and two pharmacy technicians as well as potentially upset patients who have come to appreciate getting their medications from our health center.
As I recently learned in my role as Trustee of our local Critical Access Hospital, there is interest growing in a meds-to-beds program so patients may leave the hospital with their medications. This would be done with a retail pharmacy within the hospital. This will benefit our patients who are discharged from the hospital.
The question is what do we do, given the circumstance? How do we present this to our Board Finance Committee, and then to the Board to get a resolution to move forward with whatever plan we design? What is the communication to staff, patients, the broader community? How does what we do along with what CAH does, impact each organization, our respective staff and patients, and the broader community?
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