Should Business Training Be a Significant Element of Pharmacy Training?

DISCUSSION

What options are there to increase the use of pharmacists’ clinical skills efficiently and effectively in an economic environment of oversupply and high need but in which demand is lower than expected because of poor third-party reimbursement? The options are dictated by the current system of reimbursement and cost. Pharmacists must make simple, clear financial arguments to senior administration decision-makers about the organizational costs they can avoid, or they must generate financially creative practice models of reimbursement for their clinical services. The best way to make these arguments is to speak the same financial language as administration decision-makers via business training.

In hospitals, pharmacists’ labor costs are already calculated into diagnosis-related group (DRG) payments. Thus, ambulatory clinical pharmacists cannot roll their labor costs into the sale of product as community pharmacists can. Yet, because commercial payers often follow Medicare’s lead in paying for services, pharmacists also cannot adequately bill third-party payers because of absent or inadequate Medicare or commercial payments. Even with passage of the PMUEA legislation, expansion may take many years before services for the general population are adequately paid for by third-party payers. This leaves one viable option of a practice model that requires some amount of marketing and business acumen: self-pay models.

Pharmacists and those who would hire them must convince the public through savvy marketing that they should self-pay for clinical services. Through careful income and cost analysis, pharmacists should charge enough for these services to cover the cost of the labor and the overhead to provide the services, just as dentists, chiropractors, and other health care professionals have done in the past. Hence, pharmacists need more business training. ^8-13 The business training most applicable to pharmacists would be an overall introduction to business course with heavy emphasis on cost accounting and financial accounting concepts. Cost accounting covers the cost avoidance argument for clinical services, and financial accounting concepts would be useful with regard to the four primary financial statements. ^{14, 15} These courses could be structured as electives or longitudinal projects in the third or fourth year of training without having to abbreviate clinical training or limit clinical rotations.

Without more business training on either how to explain the financial benefit of expanding ambulatory clinical services or how to actually implement such an expansion in a financially responsible way, pharmacists in the ever-expanding ambulatory space must compete with other health care professions who can already bill adequately for services. ¹² This puts the profession at a dire disadvantage because midlevel providers such as physician assistants and advanced nurse practitioners may act as market substitutes for pharmacists, even though they have a lower level of pharmacology and therapeutic training. Without the ability to bill for services effectively and adequately or enough understanding of business principles to effectively explain to decision-makers the benefit of pharmacist ambulatory services from a cost avoidance perspective, pharmacists will remain an expensive labor overhead cost that can only be afforded by some large, select health care employers. Worse, they will be forced to compete with others who have less relevant training but who can adequately bill for their patient care services. ¹²

The logical answer in the short term is to offer formal, pharmacy school–relevant business training. Formal training offers multiple benefits during a time of high demand or need when a valuable clinical resource is financially restricted. This training will teach pharmacists the marketing skills they will need to sell their services’ economic benefits via cost avoidance to health systems. Collaborative models of practice would be better taught from a financial viewpoint, as pharmacists practicing collaboratively with provider offices would increase the delivery of medical services by saving providers the time that is currently allotted for medication management. Business training could demonstrate how pharmacists may form independent practices, either solo or group practices, to provide services but bill institutions for the provision of these services without having to bill patients directly for the services that are not covered by insurance or other third-party payers. Training would also help pharmacists create self-pay or fee-for-service (FFS) practices, where they may bill patients directly for clinical services. Business training would also enable community pharmacists to better manage pharmacies in competitive, low-margin retail environments that may offer some clinical activities such as immunizations, point-of-care testing, or adherence services. Chain store executives have often anecdotally mentioned that pharmacy school students do not have enough business training. ¹⁶

As mentioned earlier, other professions have been at this payment crossroad in the past and have made great progress. Pharmacist ambulatory services are at this crossroad now. ^8-12 Some Medicare Part D and state platforms may pay for medication therapy management (MTM), but payments may not be enough to cover total labor and overhead costs of the minimum estimated $2 to $3 per minute needed. ^17-18