DRUGSTORES: The New Place for Checkups

April 1, 2002

Build a health-screening practice and patients will come--and pay, too!

 

COVER STORY

DRUGSTORES:
THE NEW PLACE FOR CHECKUPS

Build a health-screening practice and patients will come—and pay, too!

Twenty body composition/weight management consultations, 28 cholesterol panels, 140 bone mineral density screenings, 563 immunizations (including flu and pneumonia), and five massages. These services all took place in one month at Princing's Pharmacy in Saginaw, Mich. And patients didn't complain about paying out of pocket for these screenings and services.

Princing's is not an isolated tale. These days, more and more pharmacies are offering routine tests and screenings. And the money is good. Some pharmacies have even discontinued dispensing Rx medications to concentrate solely on screenings and counseling. Is this folly? A look at the experience of several successful pharmacies provides clues to the financial and professional rewards of offering screenings.

No Rxs filled at this pharmacy

When co-owners Steve Cone, R.Ph., and Beverly Schaefer, R.Ph., of Katterman's Sand Point Pharmacy in Seattle, decided not to sign two major insurance contracts, they lost the prescription business of 300 families in their 5,000-sq. ft. store.

According to Schaefer, who along with Cone purchased the 50-year-old pharmacy in 1996, they don't have a single regret about their decision. They have a good reason not to look back.

"The whole impetus for looking at patient care services came when we decided to turn down two major prescription drug contracts," said Schaefer. "We sent hundreds of families out the door. We told patients that both of these contracts required us to manage a formulary. We were getting low reimbursement. We decided formulary management was time-consuming and we didn't get paid for it. We told patients that we focus on patient care and what's in the best interest of our patient, and we don't think formulary management does that. We began looking for other ways we could serve our neighborhood."

Acknowledging that their new strategy was a "pretty bold move on our part," Schaefer said the pharmacy's new philosophy became, "When you need health care, come here, and we'll take care of you." The first service the pair offered was immunizations. "This was an entirely new idea in 1996, and it was allowed in our state. We had no idea what we were doing other than that it would generate additional revenue and people in our store. We decided we would both become proficient in doing immunizations," she said.

"The first thing we did was get our framed certificates out and put them on the wall. Everyone said, 'You can't do immunizations until you get your Medicare number. You have to bill Medicare.' We didn't do Medicare billing. We had no clue how this was going to work out, but we knew we were going to start Oct. 1," recalled Schaefer.

The pharmacy's goal was to provide 10 immunizations a day or about 300 immunizations the first month. Noting that advertising was too costly, Schaefer said she placed a large handmade sign in the window and spread the word among customers that the pharmacy was going to give flu shots. "On the first of October, people were lined up waiting to come in," she said. "We were astounded and amazed. It was like someone flicked a switch, and people started streaming through the door. Patients were glad not to have to go downtown and pay to park. We ended up doing 1,000 flu shots in the first month, and we made $8,000 in profit that month. It was an eye-opener. All of a sudden, we could see our future."

When it comes to pricing immunizations, Schaefer said it is important to take into consideration how much the vaccination cost. "It cost us $2 for the vaccine and supplies, and we charged $10," she noted. The first year, the pharmacist duo learned that patients are receptive to receiving and paying for healthcare services in a pharmacy.

Schaefer advises pharmacists to be available seven days a week and during the evening and to be available to service "drop-in" patients. "Half the adults we saw did not have a family doctor, but they wanted to stay healthy and they wanted access to healthcare services," she said.

Another lesson Schaefer believes pharmacists should learn is to ask customers what their needs are. "They asked, 'What else do you do back there?' We asked, 'What else would you like us to do?' They said cholesterol and blood sugar testing. Once you ask, you'd be surprised how much information you get, and you get it from the people who are the most valuable to you."

Another word of advice Schaefer offered is to network with others in order to learn from the successes and shortcomings of pharmacists who are offering screenings and tests. A friend of hers was providing bone density screenings to seniors. He was offering the first test free and not having much luck charging $25 for subsequent tests. After being tested herself and learning that she had low bone density, Schaefer realized women in their 40s and 50s would be a good target market for this screening, and she surmised they would pay more than $25 for the first test as well as subsequent ones. Her hunch paid off.

Schaefer said it is imperative to take into account the cost of equipment when pricing services. She paid $20,000 in 1997 for X-ray equipment for bone density screening. "I figured out how long it would take me to recoup this," she said. "I decided $25 was not enough. It was a way more valuable service than that, particularly when there was an expensive piece of equipment involved. I came up with $35. It wasn't scientific. It seemed to be a palatable number—about the price of a haircut, a month's worth of birth control pills, or a pair of shoes."

Schaefer said it is crucial to know state regulations concerning the owning and operating of X-ray machines because some states require a certificate, while others charge a licensing fee, and still others won't allow X-ray machines but will allow ultrasound units.

Katterman's Sand Point Pharmacy also does cholesterol screenings. The fee is $40, and the pharmacy makes $25 on each test. Emergency contraception and counseling and PSA testing are also available. The latter produces a modest revenue but helps attract business to the pharmacy's other services.

While the pharmacy is considering offering a weight management/nutrition counseling program as well as strep throat testing, she told Drug Topics, "my idea is to do one thing at a time and do it well until it's profitable, and then move on to the next thing. We don't take on too many products at once."

Schaefer offered yet another formula for success: Collaborate with fitness clubs. She performs tests at these clubs and gives discount coupons to club customers toward the price of the tests. She also pays the club $5 for every customer booked.

Finally, Schaefer said it's important to know if you are located in an area where people will pay for these services. "We have a well-educated population, and we're located close to a university," she said. "We're in an area where people can afford the services we provide. People who are healthy and want to stay healthy don't feel they need to be in a doctor's office, but they want some measure of their health status and are willing to pay for it. It's an important group of people who are overlooked in the healthcare system."

R.Ph.s and nurses working together

When Dakota Pharmacy and Wellness in Bismarck, N.D., moved from a clinic to a 3,300-sq. ft. space in a mini-mall six years ago, owner Tony Welder, who has been a pharmacist for 41 years, began offering osteoporosis screenings. He used an ultrasound unit, which he purchased for $30,000. Today he employs four nurses and rents a suite of offices to offer a full range of screenings and services, including diabetes care, osteoporosis, PSA, cholesterol, body fat, blood pressure screenings, and massages.

"Although the ultrasound machine was a tremendous investment, we knew that was something that would draw attention to our whole wellness program, and it's worked very well," said Welder. "It was a big investment, but there weren't any machines in the community or in the whole state. Now two hospitals in Bismarck have purchased machines and do it for free. We're disappointed that those things happen, but we helped create awareness of the importance of doing osteoporosis screenings, and osteoporosis is a serious disease."

Boasting that Dakota Pharmacy is regarded as the most progressive pharmacy in the area, Welder said, "Our goal is to help patients stay healthy—not only to treat the sick ones."

Unlike Katterman's, Dakota Pharmacy's main business is still prescriptions. Yet, when queried about whether the screening, testing, and consultations are profitable sources of revenue, Welder responded quickly, "Yes, if you look at the whole picture of pharmacy practice and the contracts—which sometimes you can't make money from—we are doing fine. Even if it's an image of our pharmacy being very progressive and if each individual test didn't make us money, it still gives us a good patient base."

Consultations do not come cheaply here. For example, Welder charges $60 to $90 for an initial consult for bio-identical (hormones that are identical to what the body produces) hormone replacement therapy. "People don't hesitate to pay for it if they see value in it. People really like the ability to come in and have a body fat analysis, and our diabetes nurse is very knowledgeable about dietary things. Our nurse—who specializes in complementary medicine, minerals, nutritionals, and homeopathic items—gets paid even if we don't sell anything. Those consults run from $30 to $60," he revealed.

Does Welder face consternation from area physicians? "We don't get flak from doctors because we're actually creating business for them. About 15% to 20% of the people we screen for osteoporosis are referred by us to physicians, and those people probably wouldn't have been screened by their own physician. Before ultrasound portable devices came along, the only option was to go in to have a full bone mineral density test, which was very expensive," he said.

Participating in pilot programs to introduce patients to new services and screenings offers Dakota Pharmacy the ability to use its expertise. The store is one of six pharmacies that recently was involved in the testing of the Men's Health Risk Assessment Tool (MHRAT), which was designed for use in the National Community Pharmacists Association Men's Health Care Initiative. The MHRAT identifies men who are at risk for hypertension, cardiovascular disease, high cholesterol, diabetes, prostate enlargement, prostate cancer, erection difficulties, and other conditions.

"A lot of men don't want to go to the doctor. We make it easy for them. Here they don't have an hour's wait as they do in the doctor's office. We asked some of our patients to participate. It didn't cost them anything. We asked questions that have to do with lifestyle and nutrition and diseases they've experienced. We refer them to physicians if they have high risk factors."

Working with nurses is one of the strategies that have really helped Dakota Pharmacy expand its offerings. "Nurses and pharmacists make a great combination," said Welder. Boasting that the nurse who provides diabetes education can spend more time with patients than a pharmacist who is filling prescriptions, he said, "There's such a shortage of pharmacists. We couldn't bring three or four additional pharmacists on board to do this because you couldn't find them."

What else can pharmacies learn from Dakota Pharmacy? Accommodating patients with ample consul-tation rooms is another secret for success. Welder has four separate consultation rooms in his pharmacy, and he rents suite offices located across the parking lot from the pharmacy.

While Welder would not reveal the revenue from screenings, he said, "Our business has gone up two and a half times in total dollar volume since we moved here. I attribute it to a lot of things—we're doing more nutritional business in the retail area and a fair number of screenings. Each entity feeds the other. If patients come in for a blood pressure medication, we ask them how they're doing. We do blood pressure screenings on them. The same with cholesterol and body fat composition."

Welder emphasized that pharmacists shouldn't be bashful about charging for their time. "Be up front with the patient. If he or she asks you a question and it's going to take half an hour to answer, suggest that the patient make an appointment. They don't mind paying. Traditionally we spend five minutes filling a prescription and then each patient has 20 minutes worth of questions and they say, 'Thanks for your time, what do I owe you?' Usually, we say, 'Nothing, that's all right.' It's hard for pharmacists to say, 'This looks like it will take more than five or 10 minutes. I'd like to suggest we make an appointment and sit down and talk about this seriously. It may take an hour, and the charge is $60 or $90.' I don't think we've had 1% of the patients say, 'No, I won't pay for it.' A fee establishes a value of what you know," he said.

Welder insists that in order to be successful, pharmacists have to advertise their offerings. He relies heavily on TV advertising and advises pharmacists to star in their own commercials. Currently, five 30-second commercials with the tag line, "Our goal is not only to treat you when you are sick, but also to help keep you healthy," are airing.

Marketing services outside of the pharmacy is yet another strategy Welder has discovered. "One thing we are working on is to go out to corporations with the portable equipment and offer all of these screenings and charge for them." He also brings his screening devices to health fairs and conferences that are largely attended by women.

Where wellness is key

Princing's Pharmacy in Saginaw, Mich., may be 70 years old, but second-generation owners Dennis Princing, R.Ph., and Nancy Princing are by no means outdated. The fact that they launched a wellness center two years ago and hired Kimberly Stork, M.P.H., as its coordinator is proof of their progressive views regarding the importance of providing screenings on site.

The pharmacy purchased nine pieces of screening equipment from US Wellness, formerly Medica. Every month, Stork offers a special service based on health celebrations of that month. Some of the screenings on the menu here are stroke risk assessment, diabetes, weight management, skin damage, and a screening to determine the capacity of one's lungs.

Most screenings are priced at $20, except for hemoglobin A1C ($35) and cholesterol ($35). Princing's also brings in visiting nurses to do pneumonia and flu immunizations.

While some pharmacists may assume that it is costly to redesign pharmacies to accommodate screenings, Princing's story demonstrates the opposite. "We built a separate work space that's 15 feet by 15 feet to hold all the equipment. We converted one of the Rx storage closets. We didn't add on—we just moved walls around and added counter space and some additional outlets and cabinetry," said Stork, who received training on the equipment from US Wellness. She is also certified in cardiovascular disease risk training and is working on obtaining a nutrition specialty certificate to enhance her counseling and consultation abilities for the weight management program.

Like Welder, Stork has found physicians don't mind her services one bit. In fact, she goes to doctor's offices to perform osteoporosis screenings for patients.

Princing's has also found that it doesn't hurt business to participate in health fairs. Stork recently screened 40 people for osteoporosis at a fair for Saginaw city employees. The pharmacy also hosts a lunch-and-learn series at the Y and holds classes at local schools on topics including skin care and sun damage, osteoporosis, hormone balancing, and weight management. "We offer just enough to pique people's interest to get them to think they might want to do a little bit more about their health. I charge just for supplies. It promotes good community relations," she said.

Princing's faced a large obstacle in its decision to open a wellness center. "We're a General Motors-employed city. General Motors' insurance pays for everything. I have to find that pocket in the community that doesn't have General Motors' insurance yet would rather pay me $25 to check their cholesterol than make an appointment with the doctor, pay for a doctor's visit, and have a doctor send them to a larger lab," said Stork.

Still the pharmacy's programs are popular. One of the most successful programs Stork implemented is the weight management program; she has had success in signing up eight people who believe it is worth $99 to take her eight-week program.

From brown bags to women's health

When Debra Singer, R.Ph., CDE, purchased her pharmacy, The Wellness Store & Natural Pharmacy, in Kalamazoo, Mich., in 1987, she helped diabetes patients monitor their blood sugar with blood glucose monitors. Her practice, which specializes in compounding, has evolved into taking care of patients who have health challenges or are seeking disease prevention.

"The opportunity I had with diabetes opened all kinds of doors in the community, because not only did I have my own patients coming in for prescriptions whom I would expose to these services and health screenings, I also had the ability to work with their physicians. That ability garnered more referrals from patients and also from their physicians. Physicians appreciate that I have taken a problem off their hands. These patients may have gone to community diabetes education programs that hospitals in this community offer. That's not an individual approach. Most people will respond when you can work with them as individuals," said Singer.

Singer echoed Welder's sentiments about the need to inform patients that there is a fee for consultations. "I've been charging fees since 1987, and I'll admit at the beginning I wasn't that comfortable. I charged $10. I had techniques to show them. As the year went by and they wanted to talk for an hour or two, I had to learn how to limit that time," she said.

"The rule of thumb many of us have followed is still $2 a minute. What I don't want to have happen is they start telling you their story and 45 minutes have gone by and I haven't written anything down. They are the customers. They wouldn't be there if they didn't have a reason to be there. They want a professional service. People know it doesn't come for free, but give a little extra and let them feel good. They are there to gain from your knowledge and go back and put it into practice." In addition to posting a fee list, Singer recommended providing physicians with a copy of the fees.

While advertising is expensive, Singer, who resisted taking the plunge, has launched a TV campaign that will run two weeks every month for six months. "I felt it was time, even though it's a big commitment for a small business. I am biting the bullet to do this; it's expensive," she said.

Another innovative way to succeed is to offer free programs and encourage the media to promote them. She offers two programs twice a month on Saturdays. One program is a brown bag day. She provides a complete analysis of patients' Rx medications, vitamins, and herbs and gives them information on drug/nutrient interactions, drug/drug interactions, drug depletions, and drug/lifestyle interactions. The second program is a women's health menopause seminar.

Singer suggested pharmacists offer the same programs every month so patients can recommend them to other patients.

Finally, Singer advises pharmacists to "start on a small scale. See what works. Don't expect miracles. When you hit on something you are comfortable doing, you may organize a diabetes day or a cholesterol day, but start small."

Is the time right to take the plunge into health screenings and consultations? As Singer put it, "The temperature of the water has changed. People are aware that their insurance isn't paying for a lot of things—not just our services. Patients are paying huge co-pays, and they are resenting it. People know their insurance company isn't taking that good care of them. They are voting with their pocketbooks. If they choose to come here and pay me for my services, it's because it was worth it to them."

Sandra Levy

 



Sandra Levy. DRUGSTORES: The New Place for Checkups.

Drug Topics

Apr. 1, 2002;146:46.