By Karen O’Hara
George Pappas, D.O., was a trendsetter when he introduced a point-of-care medication dispensing system at Tyler Medical Services, his occupational medicine practice in the northwest Chicago suburbs, about 15 years ago.
The Tyler team has since stayed ahead of the curve by implementing online applications to streamline the process.
Office-based dispensing systems allow clinicians to provide pre-packaged medications directly to patients. Physicians who dispense in their office typically partner with a vendor to stock a limited number of commonly prescribed over-the-counter and generic prescription medications.
In-office dispensing is allowed in all states, although some have restrictions in place. Physicians who dispense medication to workers’ compensation patients typically are reimbursed based on fee schedules and the average wholesale price of the drug. California, Florida and Illinois reportedly have the greatest market penetration in workers’ compensation pharmacy, with a number of other states following suit.
Dr. Pappas believes in-office dispensing elevates the level of care occupational medicine physicians provide to patients. Studies show that point-of-care dispensing systems using pre-counted, prepackaged pharmaceuticals and bar-code scanning technology help reduce the risk of prescription errors.
In-office dispensing also provides significant customer service advantages for occupational health clinics. Patients appreciate the convenience of receiving their medication at the clinic rather than having to go to the drug store, which in turn increases compliance, and employers like the way the service expedites return to work.
“When we first started in-office dispensing, we did it to enhance quality of care and improve customer service through one-stop shopping and consolidated billing, not as a revenue-producer,” said Dr. Pappas, Tyler’s CEO and medical director. “Over time, we have moved it from break-even to a slight profit. It’s not a major profit center, but it can generate enough revenue to justify expenditures.”
Dr. Pappas estimates an average of 50 dispensed medications a week per delivery location as the “tipping point” for making a profit. “On average, you are looking at one script per new visit, because some may get none and some may get two or three if it’s a fracture or a more extensive injury, plus one script for every two follow-up visits,” he said.
Web-Based Applications
A few years ago, Tyler Medical Services transitioned to a web-based product offered by DRx Pharmaceutical Consultants, Inc., a member of the NAOHP Vendor Program and a licensed FDA medication re-packager.
The DRx system makes it possible to rapidly dispense medications, manage inventory, track doctor prescribing habits, maintain patient records and check for drug interactions. According to DRx, the medications are competitively priced, and because the web-based system is cost-effective to operate, the practice can realize a greater return on its investment.
The system provides a direct link to Tyler’s practice management system, eliminating a need for duplicate data entry. The practice uses a telephone triage capability for re-fill requests; patients can pick up refills at the clinic or a local drug store, whichever is more convenient for them. Participation by specialty referral physicians with whom Tyler Medical Services has established relationships helps sustain the dispensing system’s financial viability.
“When they see our patients, they will phone in the script and send the patient back to us,” Dr. Pappas said. “It’s completely ethical and appropriate follow-up for the patient. Before the specialists became involved, we had basic medications in our formulary. Now we have branched out into other prescriptions such as pain patches and advanced medications for chronic pain management. This aspect of our business has grown significantly because of our specialty providers.”
At Tyler Medical Services, which serves employers onsite and through clinics in Aurora and St. Charles, Ill., non-steroidal anti-inflammatories are the most commonly dispensed medications. The formulary also includes three muscle relaxants, three or four closely monitored narcotics and seven or eight types of antibiotics. The practice has seen the greatest benefit in the management of work-related eye injuries.
“We can manage 90 percent of eye injury cases in-house because we can use ophthalmologic medications, particularly antibiotics. We can avoid referring patients out and immediately administer medication,” Dr. Pappas said. “When we do lunch-and-learn seminars for employers on the value of in-clinic pharmacy, we use the treatment of eye injuries as an example.”
Potential Barriers
While physician dispensing is relatively common in medical practices nationally, hospital-affiliated occupational health programs often do not provide this service for a number of reasons.
Dr. Pappas, whose independent practice formerly was hospital-affiliated, attributes the situation, at least in part, to cumbersome health system governance and reluctance on the part of senior leaders to “embrace alternative revenue streams for occupational medicine.”
Other potential barriers include stringent hospital formulary rules and not enough patient volume to justify the investment. A commitment of staff time and resources is needed, and there is a certain degree of financial risk associated with introducing and maintaining the dispensing service, he said. In terms of staffing, a practice has to account for the time needed to dispense medications and maintain inventory.
“You have to weave those activities in with existing staff because you rarely have enough volume to justify full-time dispensing,” Dr. Pappas explained. “Our practice isn’t big enough to have a designated pharmacy technician, but bigger clinics with onsite pharmacies would have enough volume.”
At Tyler Medical Services’ clinics, pharmacy medical assistants, registered nurses, physicians and physician assistants are all trained to assist with the dispensing process. One staff member is specifically trained to handle updates on the status of the formulary. “One of the challenges is that you have to be diligent with policies and procedures to avoid errors,” Dr. Pappas said. “Policies and procedures help limit the liabilities you accept when you implement this service. We have never had any serious adverse effects from prescription errors, but you have to be diligent with training. You can’t just go talk to the pharmacist; the doctor has to be approachable so the staff and/or patients can ask questions.”
Another potential barrier is the ongoing controversy surrounding the concept of point-of-care dispensing, in general. Pharmacy associations, insurers, and retail drug chains are among detractors who often cite a need for pharmacist checks and balances and perceived conflicts of interest when prescribing physician profits from dispensing medications. In response, Dr. Pappas notes that most employers choose their occupational health provider on the basis of quality of care, outcomes, and cost-effectiveness.
“We only have four or five clients that have told us not to dispense through the clinic, and they are retailers with their own pharmacy operations,” he said. “Employer-directed health care providers are even more sensitive to cost mark-ups than retail pharmacies. If we indiscriminately marked up prescription costs, our clients would quickly pick up on this pattern and they would soon become ex-clients.”
Overcoming Objections
Unlike group health coverage, a worker injured on the job does not have any out-of-pocket expenditure for medications. However, some patients remain recalcitrant. For example, they may not find time to go to the drug store, they may be under pressure from their employer to avoid becoming an OSHA-recordable case or they may be opposed to taking medicine for personal reasons Dr. Pappas and his colleagues take all of these factors into account.
“Our model of health care involves patients in their own care,” he said. “Unless it’s a life-threatening situation, we have to have buy-in from the patient. We will recommend medication but not require it and give them time to think about it. Since we are dispensing at the clinic, we can bring it up again at follow-up, or we can give them a small supply to get them to try it out for at least a couple of days.”
He acknowledges that occupational health providers are under “intense scrutiny and pressure” from some clients to avoid medications that make an injury or illness recordable, a particularly common employer complaint when patients with relatively minor injuries are seen in a hospital Emergency Department.
“We follow algorithms and pathways to keep things non-recordable to the extent possible, and we use a step-wise approach when dispensing over-the-counter medications, which are reimbursable in Illinois,” Dr. Pappas said. “But we are not a first aid station. We are a medical clinic, and often the nature of the injury is what makes it recordable or non-recordable, not the prescribing physician.
“By avoiding the appropriate prescription medicine at the outset, someone with a musculoskeletal complaint can end up coming back months later with a chronic condition. We can keep things from becoming sub-acute or chronic with the appropriate medications.”
