A New Reimbursement Model for Pharmacy?

We are experiencing the latestin a series of attacks on reimbursementrates: the shift toan Average Manufacturer Price basis forMedicaid prescriptions. The Coalition forCommunity Pharmacy Action has arguedthat under the proposed scheme wepharmacists will receive less than the trueacquisition cost of generic drugs. By losingmoney on every prescription, we wouldessentially be subsidizing the system.

Even the federal watchdog, the GovernmentAccountability Office, agreedwith this cost analysis in a recent report.Yet, many pharmacy advocates doubtwhether the acknowledgment of potentialproblems will result in enoughchanges to the proposed scheme toassuage our concerns.

This finding should lead us to considerbroader questions. Why is our messagenot being heard, despite considerableefforts on our behalf? Are we being outgunnedby more powerful lobbying interests?Could the shift in power inCongress lead to a more favorable hearingfor our concerns?

Clearly there is unlikely to be a lesseningof the pressure on reimbursementand dispensing fees. The governmentand the public see drug pricing asa major contributor to soaring healthcare costs, and we will be expected tomake sacrifices. Perhaps it is time toconsider how we can move to a reimbursementmodel that focuses on thecognitive aspects of our work, wheredrugs would be treated as commodities,and our reimbursement would nolonger be tightly bound to the cost ofspecific products. In fact, paymentwould primarily be for services whosevalue is independent of drug cost.

Many may see this approach as veryrisky, because pharmacists are notwidely reimbursed for these cognitiveservices today. Sometimes, however,we need to take risks in order to makereal progress. This model would takepharmacists out of the business of tryingto survive on wafer-thin marginsbased on the difference between drugacquisition cost and prescription reimbursement.It could help achieve thegoals that we all want: better outcomesand, as a result, lower health care costs,while rewarding pharmacists for theirexpertise.

This is not a pipe dream. Already thePQA, a pharmacy quality alliance, isworking on ways to measure the qualityand effectiveness of these services.Once we have measures in place, reimbursementbecomes practical. Widespreadadoption of such a model may beyears away, but it may represent a futurethat is both desirable and necessary forthe survival of our profession.

Mr. Eckel is professor and director ofthe Office of Practice Developmentand Education at the School ofPharmacy, University of NorthCarolina at Chapel Hill.