Rethinking Dispensing Fees in Pharmacy
Tiered Dispensing Fees
The economics of community pharmacy look straightforward, but in reality, it’s quite obscure. From the outside looking in, most people would rightfully assume that pharmacies operate like any other retailer, they provide a product (your prescription medicine) and charge a fee for it (also known as the dispensing fee).
However, for pharmacies, it can be hard to differentiate between the “product” and “service.” You can walk into any pharmacy with a prescription in hand and you’ll get the same medicine or “product.” Paying a higher dispensing fee will never get you a better medicine.
But, what if paying a higher dispensing fee or changing how we structured dispensing fees, could get you better clinical services or outcomes? Let’s unpack.
How Much Is Your Dispensing Fee?
Nobody really knows how dispensing fees are calculated. The dispensing fee can range anywhere between $7 to $13, depending on the province and many other factors.
Each retailer sets different fees, and it depends on where you are and the surrounding competition. Big box pharmacies like Costco have some advantages, since they can consolidate their operations, they can offer insanely cheap fees, only $4.49!
What’s Included In The Dispensing Fee?
Dispensing a prescription includes “technical” and “cognitive” components, performed by the technicians and pharmacists.
The technician performs the “technical” component of filling a prescription. They enter your order, create a patient profile, select the appropriate medicine, count the pills, check the expiry date and meticulously prepare the prescription.
Patients POV: Grab the medicine, that’s literally behind you. Slap a label on it.
The pharmacist performs the “cognitive” components of filling a prescription. They assess the appropriateness of the medication, identify and solve drug therapy problems, educate the patient on their medications, and answer all of your questions.
Patients POV: Should I take my medicine with or without food?
From the patients’ point of view, $4 to $12 is a reasonable “fee for service.” However, the pharmacist who owns and operates the pharmacy? The fee is their lifeline. They have to fill enough scripts to pay their staff, cover overhead, and turn a profit.
When you create a business model that incentivizes quantity over quality, the results are inevitable. Not to blame pharmacists for the current, horrific state of affairs of our healthcare system, but we cannot deny that we are part of the problem.
“Show me the incentive. I’ll show you the outcome.”
— Charlie Munger
The sad reality of the profession of pharmacy is that the business model will always be tied to the dispensary. And when you incentivize and focus solely on dispensing, it takes away from real clinical services we could offer our patients.
Imagine, if we were reimbursed or paid for using our clinical skills, to benefit patients and improve patient outcomes.
Imagine if we could incentivize preventive care, deprescribing, and help our patients improve their health, and rely less on the medicines we dispense.
Imagine if patients paid out of pocket for these services, or better yet have these services reimbursed and paid for by government funding or insurance providers.
One can dream, right?
Changing The Game
When my colleagues who own pharmacies gloat about their “entrepreneurial journey,” I sometimes can’t help but chuckle. Entrepreneurs own businesses, yes. But the real ones are innovators — they solve problems, break models and revolutionize their industry.
In my opinion, owning and operating a pharmacy is more akin to being a farmer. Patients are like cattle, and the only way you can operate a successful pharmacy is to milk your patients for everything they’re worth.
From this perspective, there aren’t many incentives for pharmacies to invest in the health and wellness of their patients. In the end, a patient cured can feel like a customer lost. The sad reality is that the most profitable patients tend to be the sickest. They have a significant pill burden and are on a laundry list of medications.
In the end, it’s all in the game.
That’s not a slight at my colleagues, it’s just the reality of the system we’ve created. There are plenty of pharmacists that are successful in business and provide, real value to their patients. They go above and beyond, implement clinical programs, and strive to impact patient care and outcomes. I salute them. To the rest, here’s a proposal.
Has anyone ever tried different pricing models, something like a tiered dispensing model? Perhaps this could be a method to incentivize the clinical aspects of our profession while maintaining our dispensing duties.
Could it work? Is it feasible? I’m not sure. But, maybe we can imagine a pharmacy where patients get to select a dispensing fee, based on the clinical services included. Almost like, picking a cell phone plan, or your Netflix subscription, different packages get you different services and perks.
Maybe it could look something like this:
Standard Dispensing Fee: $9.99 | The Status Quo.
The Standard Fee offers the foundational services provided by most pharmacies, ensuring that patients receive the necessary information and support.
Patient Counseling: Standard counseling services, including information leaflets and verbal guidance on medication usage. Don’t worry, they’ll answer your burning question of whether or not to take your medicine with or without food!
Technical Components: All standard technical services the amazing pharmacy technicians have perfected, including beautifully displaying your medication label.
Medication Safety: Basic checks for drug interactions and allergy alerts to ensure patient safety.
Essential Dispensing Fee: $19.99 | More Than the Basics
The Essential Fee offers a step up from the standard fee. This tier focuses on enhanced patient engagement and more personalized care.
Patient Counseling: In-depth consultation sessions, including personalized care plans and one-on-one discussions about potential interactions and lifestyle adjustments. Pharmacists will provide tailored advice on managing chronic conditions and preventative care.
Health Monitoring: Quarterly appointments to screen and review markers for chronic disease, such as blood pressure and self-monitored blood glucose readings. Pharmacists can offer immediate feedback and recommend adjustments to medication or lifestyle to improve and enhance patient outcomes.
Premium Dispensing Fee: $29.99 | Comprehensive Care and Beyond
The Premium Fee is designed for patients seeking an all-inclusive, holistic approach to their health management.
Advanced Patient Counseling: Extended consultation sessions that delve into mental health, nutrition, and lifestyle changes. Pharmacists work closely with patients to create a comprehensive, personalized care plan, including deprescribing strategies where appropriate.
Exclusive Perks: Access to personalized health coaching, mental health support groups, and priority scheduling for all consultations and services. Includes a quarterly review of all medications and health status with detailed reports and recommendations.
Bottom Line
Maybe by offering tiered dispensing services, we could encourage patients to take a more active role in their health management. Worse case, they hate the idea. Best case, at least we get to distinguish our services and capabilities.
This could be our chance to deliver enhanced clinical services, improve patient outcomes, and elevate our role from pill pushers to essential healthcare providers. After all, the main obstacle pharmacists face in flexing their clinical muscles is lack of remuneration and reimbursement, a tiered dispensing model might be the solution.
I get it—this idea might sound a bit out there, maybe even impractical. But isn't it time we faced the truth? Maybe it’s time to start thinking outside the pill bottle and stop missing opportunities to truly impact our patients' health and wellness.
It's time to challenge ourselves and our profession. We have the expertise to manage chronic diseases, support mental health, and make a difference in the health of the communities we serve. It’s time to stop hiding behind the counter and start making a real difference.
Thanks for reading. Much love.
SG.
Build. Understand. Discipline. Stillness. “B.U.D.S” is written by me, Dr. Shawn Gill - I’m a pharmacist and Father of two boys. During the day, I work as a deprescribing pharmacist, helping patients get off drugs, safely and effectively. At night, I write this newsletter. B.U.D.S is a community that's focused on inspiring individuals to take account of their health and wellness, as well as reverse mental health and chronic disease. If you’d like to support this mission, please subscribe below. Much love. SG
If you’d like to learn more about deprescribing, you can visit my website here.