introduction to long term care pharmacy – profitable ... objectives program: introduction to long...
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Introduction to Long Term Care Pharmacy – Profitable
Opportunities for Independents
Presented by:
Patty Crawford, President, LTCPCMS Rodney Burton, Senior Vice President, LTCPCMS
Glenn Eldridge, RPh, Grandview Pharmacies Michele Belcher, RPh, Grant Pass Pharmacy
7:45 a.m. - 9:15 a.m., Sunday, October 14, 2007 Anaheim, California
Evaluation # 07-150-P
This program is approved by NCPA for 0.15 CEUs (1.5 contact hours) of continuing education credit. NCPA is approved by the Accreditation Council for Pharmacy Education as a provider of continuing pharmacy education.
Educational Objectives
Program: Introduction to Long Term Care Pharmacy – Profitable Opportunities for Independents Presenter: Patty Crawford, President, LTCPCMS Rodney Burton, Senior Vice President, LTCPCMS Glenn Eldridge, RPh, Grandview Pharmacy Michele Belcher, RPh, Grant Pass Pharmacy Objectives:
1. Discuss marketing tips to advance LTC pharmacy services in their communities. 2. Identify key business tasks and how they affect profitability. 3. Describe what tools are available to help nursing home operators contain resident drug
expenditures. 4. Describe transitional pharmacy services and how to become a transitional provider. 5. Identify trends and niche areas in which to grow their pharmacy product in senior care
segment.
Glenn Eldridge Mr. Eldridge currently serves as President of Grandview Pharmacy, an independent, family-owned, long-term care pharmacy located in Brownsburg Indiana. One of four pharmacies owned and operated by the Eldridge family, the Long Term Care pharmacy employs over 70 people and services the state of Indiana and portions of Ohio. Mr. Eldridge is a graduate of the Purdue University School of Pharmacy and is a preceptor for both pharmacy schools in the state of Indiana. In addition, he serves on the Community Pharmacy of Indiana board and is a member of the NCPA’s Long Term Care Steering Committee.
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Introduction to Long Term Care Pharmacy Profitable Opportunities for Independents
Speaker: Patty Crawford, President LTCPCMS(formerly Long Term Care Solutions, Inc.)
Panelist: Glenn Eldridge, Grandview PharmaciesMichele Belcher, Grant Pass Pharmacy
Expanding the LTC Definition
• There are 18.3 million Americans over the age of 65.• Of those 12.7 million are over the age of 75• By the year 2010 ten percent of the population will be
greater than age 65• Of those individuals 10.2% live in supportive
housing; 2.5% CCRC, 1.9% Assisted Living, 5.9% Skilled Nursing
Source: The Senior Care Source; Facts Figures and Forecasts 2007
Expanding the LTC Definition
The Long Term Continuum of Care includes:
o Alternative housing and care sites such as independent living, congregate care, assisted living, respite, home health and long term acute care (new)
o Fortunately, the range of senior care options continues to expand to better meet the financial needs of individuals
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Expanding the LTC Definition
Aging Services in America
• There are 16,000 licensed skilled nursing facilities (SNFs) in the United States
• There are 36,451 licensed assisted living facilities in the United States
• There are 2,240 licensed continuing care retirement communities in the United States
Source: AAHSA
Expanding the LTC Definition Break Down of SNF in US
Expanding the LTC Definition
Aging Services in America
• There are 21,203 senior housing residences in the United States
• There are 6,000 affordable senior housing sponsors in the United States
• There are 3,500 adult day centers in the United States
• There are 7,530 home health agencies in the United States
Source: AAHSA
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Expanding the LTC Definition
Demographic Profile: Consumers of AgingServices• Among those aged 85 and older, the
proportion of people who are impaired and require long-term care is about 55 percent
• More than a million Americans live in assisted living residences
• There are approximately 598,000 residents living in Community Care Retirement Communities (CCRCs)
Source: AAHSA
Expanding the Definition
Demographic Profile: Consumers ofAging Services
• Adult day centers provide care for 150,000 older Americans each day
• There are 2.6 million beneficiaries using Home Health Agencies
• By the year 2020, 12 million older Americans will need long-term care
• People age 65 face at least a 40 percent lifetime risk of entering a nursing home
Source: AAHSA
Expanding the Definition
Finances : Average cost for aging-services • The average daily cost of a private room in a nursing
home in the United States is $203 per day or $74,095 annually
• The national average monthly base rate for an individual residing in an assisted living facility is $4,000, or $48,000 annually
• The monthly expenses per resident for a non-profit CCRC is $2,672 or $32,064 annually
• The average cost of adult day services is $56 per day
Source: AAHSA
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Expanding the LTC Definition
DefiningCare Levels
Expanding the LTC Definition
Congregate Careo Features a community environment, with
one or more meals per day prepared and served in a community dining room
o Many other services and amenities may be provided such as transportation, pools, a convenience store, bank, barber/beauty shop, resident laundry, housekeeping, and security
Expanding the LTC Definition
Continuing Care Retirement Communities (CCRCs)
o Continuing Care Retirement Communities (CCRCs) are designed to offer active seniors an independent lifestyle from the privacy of their own home
o The community offers them access to coordinated social activities, dining services and health care when and if the course of aging raises the need
o It is sometimes referred to as Lifecare
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Expanding the LTC Definition
Hospice
o Hospice/palliative care is provided to enhance the life of the dying person
o Often provided in the home by health professionals
o Today there are many nursing facilities and acute care settings that also offer hospice services
Expanding the LTC DefinitionNursing Home
o A nursing home is an entity that provides skilled nursing care and rehabilitation services to people with illnesses, injuries or functional disabilities
o Most facilities serve the elderly o Nursing homes are generally stand alone
facilities, but some are operated within a hospital or retirement community
Expanding the LTC Definition
Intermediate Care (AKA “Nursing Facility”)
• Nursing home care for residents needing assistance with activities of daily living (ADL), but without significant nursing requirements
• ADL may be defined as activities we perform for self-care on a daily basis such as bathing, toileting, dressing or grooming
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Expanding the LTC Definition
Assisted Living
o Apartment-style accommodations where services focus on providing assistance with ADL
o These facilities are designed to bridge the gap between independent living and nursing home care, and provide a higher level of services for their residents including meals, housekeeping, medication assistance, laundry, and regular checks-ins
Expanding the LTC Definition
Adult Day Serviceso Adult day services are community-based group
programs designed to meet the needs of functionally and/or cognitively impaired adults through an individual plan of care
o These structured, comprehensive programs provide a variety of health, social, and related support services in a protective setting during any part of a day, but less than 24-hour care
Expanding the LTC Definition
Adult Day Services
o Adult day centers generally operate programs during normal business hours five days a week
o Some programs offer services in the evenings and on weekends
o Adult day centers provide respite or temporary relief for families and caregivers
Source: NADSA
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Expanding the Definition
Future Trends in Care
Long Term Care FacilitiesNiche Services
• Long Term Acute Care (LTAC) growing trend (hospital like care)
• LTAC Diagnosis Related Group (DRG) Payments are better than Prospective Payment System (PPS)
• Acute Services• Average size 20 to 25 bed• Looks like skilled outside, operates like hospital
on inside• Average 30 to 45 days length of stay
Transitional Care
• Providing medications to residents who are making the transition from hospital to skilled nursing facility (SNF), or SNF to assisted living is defined as transitional care
• This newly defined market is underserved and fast growing
• In expensive way to get started in senior care pharmacy
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Long Term Care FacilitiesNiche Services
Specialty Care
Alzheimer's treatment Neurological diseasesCancer Neuromuscular
diseases Cardiovascular disease Orthopedic rehabilitationDevelopmentally disabled Pain therapyDementia Pulmonary diseaseHead trauma Wound careHematological conditions Stroke recoveryMental disease Trauma Para/quadriplegic services
Enabling Legislation
New Freedom Initiative
o Part of Americans with Disabilities Act (ADA)o This legislation is intended to support community-
based alternatives to institutionalization for individuals
o The focus of this initiative has been on adults with disabilities but has now been expanded to include a “rebalancing” of LTC programs to increase the proportion of people receiving long-term care and long-term support services in the community rather than in institutions
Future Trends In Care
Continuum of Care
o Hospital stays are becoming shorter and nursing facilities are admitting these patients to complete their healthcare stays
o The traditional model of “long” term care is evolving to short term rehabilitation
o Residents are transitioning back into home care (some with respite support), assisted living, or intermediate care facilities (“transition medication marketing opportunity”)
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Introduction and Overview Future Trends In Care
I n t r o d u c t i o n a n d O v e r v i e w F u t u r e T r e n d s I n C a r e
I n t r o d u c t i o n a n d O v e r v i e w C a r e L e v e l s
Care Lev els
Quick Glance C harts
Introduction and Overview Care Levels
Care Lev els
Quick Glance C harts
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Introduction and Overview Care Levels
Source ALFA
Care LevelsQuick Glance Charts
Introduction and Overview Care Levels
Care LevelsQuick Glance Charts
Introduction and OverviewCare Levels - Snapshots
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Introduction and OverviewCare Levels - Snapshots
Introduction and OverviewCare Levels - Snapshots
Introduction and OverviewCare Levels - Snapshots
• FLOORPLANS• Retreat - Studio • Hideaway - Deluxe Studio • Cottage - 1 Bedroom • Homestead - 1 Bedroom
(handicap) • Haven - 2 Bedroom (light court) • Heritage - 2 Bedroom • Terrace - Deluxe 2 Bedroom • Plaza - Custom 2 Bedroom
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Introduction and OverviewCare Levels - Snapshots
Introduction and OverviewCare Levels - Snapshots
Introduction and OverviewCare Levels - Snapshots
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Introduction and OverviewCare Levels - Snapshots
Continuum of CareReimbursement Models
Reimbursement – Assisted Living and Congregate Living
o Approximately nine out of 10 residents in an assisted living facility are private pay; that is, they pay out of pocket for their own care (changing due to Part D and government waiver programs)
o For the rest, costs are paid by Medicaid (Medi-Cal in California) and supplemental security income (SSI), with Medicaid paying for the health care and SSI paying for room and board
o Drugs are billed to the resident, waiver or Part D or dual plan, whichever is appropriate
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Reimbursement – Adult Day Services
• Medicaid pays for a portion of adult day services in some states
• Some insurances pay for adult day services• Scholarships are available in some areas • Tax deductible as senior dependent care
credit• Drugs billed to resident or Medicare D plan,
whichever is appropriate
Reimbursement – Nursing Facility
Medicare Part A coverso Skilled nursing provided by participating long term
care facilities only for 100 lifetime dayso The facility is paid for all services with one per
diem payment. This is called the prospective payment system (PPS)
o In most LTC facilities 65% of residents are Medicaid, 25% Medicare A, with the remaining 10% private pay (Part D will change this equation)
Reimbursement – Nursing Facility
• Average facility loses $22/day on Medicaid residents
• Medicare A is the biggest opportunity for a margin in a nursing facility
• Admissions are sent via fax from the hospital discharge planners to the nursing facility
• The facility is given 15 minutes to respond
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Reimbursement – Nursing Facility
• Reimbursement is based on the level of care that resident receives while in the building
• This is calculated using instruments such as the minimum data set (MDS)
• Admitting a resident whose drug costs are excessive could significantly decrease margins
What Do Nursing Facilities Want?
o Due to the changes in the resource utilization groupers reimbursement system (RUGs) for 2006, nursing facilities are looking for more support and tools from their pharmacies
o Items like daily, weekly, and monthly reporting mechanisms, and formulary management tools
What Do Facilities Want?
o Website access to obtain their invoices electronically
o Accurate reporting o The ability to go online to cost out
medicationso Online access to Medicare Part D
formulary substitution information
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What Do Facilities Want?
• Pharmacy platforms do not provide the mechanism for real time daily reporting
• Using adjudication programs allow for real time reporting for facilities to manage their drug spend
• There are a four adjudicator’s in the industry• These adjudicators provide real time access
to all pharmacy data by utilizing a third party insurance billing mechanisms to capture the data
Efficient Pharmacy OperationsThe Key to Profitability
Purchasing Inventory Inventory Management Formulary ManagementFacility HardwareAutomation and Software
Distribution SystemsContractsConsultantsSub-contractingDelivery ServicePharmacy On Call Service
The Most Important First Step to Profitability• Build a Business Plan• While conventional wisdom dictates that cash flow
and revenue projections are the key to taking control of your business, sales will drive many of the other numbers. Sales forecasting is a key element of any business plan, which you must compose if you’re starting a venture or making significant changes within an existing business
Source:About.com
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Marketing Your Services
Marketing Your ServicesBecome Extraordinary
How is this done? By simply not being ordinary!Five tips to becoming extraordinary:1. Spend time in the field2. Have a willingness to learn3. Keep an idea wallet4. Apply ideas from one context to another5. Embrace the power of telling your story6. Give the resident dignity
Marketing Your Services Remarkable “Purple Cows”
o Maintaining an on-site pharmacy technician or have them make the morning run with your delivery driver
o Utilize the “eyes “ of your driver to detect problems
o Offer an employee drug discount programo Brown bag programso Specialty educational programso Specialized packaging
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Marketing Your ServicesWHAT IS YOUR STORY?
• Who are you?– Are you an independent pharmacist who is
entering the business with new ideas and concepts that will revolutionalize the way facilities manage medications?
– Or are you a seasoned independent LTC provider with a long standing reputation?
Marketing Your ServicesStory Examples
• Dave Lennox, “Hi I’m Dave!” always speaks in exclamation points and he is the face of a company in an industry that is faceless
• Or the tea that is packaged in a silk tea bag encased in a pyramid shaped box
• Or what about the top selling bottled water in America FIJI
• Or the Pizza Delivery guy in a super mobile and super suit (A St. Louis Exclusive!)
• Walk in their shoes
Marketing Your ServicesAbout Your Story
• First impressions are incredibly powerful. Overcoming a bad first impression is nearly impossible
• If you are passionate about who and what you are. If your story is believable. That impression is more likely to be the one they always remember
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Marketing Your ServicesAbout Your Story
• Your story must be unique and must be visible to all
• Why do stories fail? – It was not noticed (nothing unique or
interesting or did not speak the right language)
– It was noticed but there was no excitement around trying it or telling people about it
Marketing Your ServicesRelax and Have Fun
• Remember seniors are human beings not pieces of furniture
• Create fun ideas to promote your pharmacy while providing greater social interaction for the seniors in your communities
Summary
o “LTC” no longer pertains to skilled nursing care alone
o It is imperative for nursing facilities to contract with a pharmacy that will work in partnership with them to contain costs
o More residents will move into community care
o Tell your remarkable and marketable story
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Pharmacy OperationsQuality Assurance
Glenn Eldridge, RPh
Pharmacy Operations
• Pharmacy• Billing• Delivery
Pharmacy Operations
• Pharmacy– Faxes– Bar Coding
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Pharmacy OperationsLTC Manager 2007 Goal Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecGross Sales
Total LTC Beds SNF Beds Other BedsTotal Rx Filled SNF Rx Other RxAvg. Rx CostRx OutRx Out % 0.10 Rx ShortRx Short % 0.50 # Electronic Claims# Rejected Claims 0RPh HoursRPH Hours/Rx 0.0400RPh Wages 48.00/hrRPH (% of Sales) 3.00%Tech Total HoursTech OT Hours 0Tech Hrs/Rx 0.15Tech Wages
Tech Wages/Rx 1.60$ Tech (% of Sales) 3.50%Ancillary Total HoursAncillary OT Hours 0Ancillary Hours/Rx 0.067Ancillary WagesAncillary Wages/Rx
Ancillary (% of Sales) 2.00%Delivery WagesDelivery (% of Sales) 0.90%Total Admin. Costs (RE)Dept. Admin. Cost 40.00%Total Wages 10.00%TOTAL WAGES (% of Sales) Without 2.5% in Benefits 10.00%
Pharmacy Operations
• Billing– Gross Sales– Accts Receivable– Total AR as % of Gross Sales– Facility Accounts– Private Accounts– Employee Accounts– Bad Debt as % of Gross Sales– Days sales outstanding– Medicare Daily Rate
Pharmacy Operations
• Delivery– Total Miles– Fuel Cost– Maintenance– Driver Hours– Driver Wages– Overtime hours– Taxi Delivery Cost– Total Delivery Cost
• Delivery (continued)– Rx Total– Average Cost per Rx– Average Fuel Cost/Mile– Total Avg. Delivery Cost/Mile– Number of Stops– Average Cost/Stop– Total STAT Runs– Average Cost/Taxi Runs
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Quality Control
• Operations• Billing• Internal
Thank You
Learning Assessment Questions
Program: Introduction to Long Term Care Pharmacy – Profitable Opportunities for Independents Presenter: Patty Crawford, President, LTCPCMS Rodney Burton, Senior Vice President, LTCPCMS Glenn Eldridge, RPh, Grandview Pharmacy Michele Belcher, RPh, Grant Pass Pharmacy Questions:
1. What is the key to marketing pharmacy services in the “new” marketplace? 2. What is the most important 1st step prior to starting your LTC Pharmacy to insure
financial success? 3. True or False: Assessing your profit margin is important to the success of your pharmacy
however you also must assess the profitability of your customer. 4. True or False: A transitional pharmacy provides medication to seniors who are moving
between levels of care (i.e., hospital, SNF, home) 5. Name two types of niche services taking prominent places in the senior care
environment.
Learning Assessment Answers
Program: Introduction to Long Term Care Pharmacy – Profitable Opportunities for Independents Presenter: Patty Crawford, President, LTCPCMS Rodney Burton, Senior Vice President, LTCPCMS Glenn Eldridge, RPh, Grandview Pharmacy Michele Belcher, RPh, Grant Pass Pharmacy Answers:
1. Become remarkable 2. Build a business plan 3. True – A bankrupt customer is not a viable customer – help maintain costs. 4. True 5. Diabetes, Alzheimers, Brain Trauma, Rehab, etc.