Building a pharmacy system supported by hospital

For pharmacy to grow and compete in today's healthcare environment, the business culture of accounting and finance must be understood and embraced. For a service to be successful, the support of those who control the monetary resources is of primary importance, with support from physicians a distant second. That's the view of two pharmacy school professors who believe some, but not all, pharmacists must take the steps necessary to be able to bill for their services.

Writing an opinion piece in the American Journal of Health-System Pharmacy, Ernest Dole, PharmD., pharmaceutical care coordinator for internal medicine at Albuquerque's Gibson, Lovelace Medical Group, and clinical associate professor in the University of New Mexico Health Sciences Center College of Pharmacy and School of Medicine, and Matthew Murawski, PhD, associate professor of pharmacy administration at Purdue University, say that healthcare is no longer provided within a healthcare system, per se, but is instead a healthcare ecology.1 They see healthcare provided within what they describe as a "dynamic network of alternative business models and institutions that are constantly created and modified and either thrive or die out. It is an evolutionary system that every day seems a little less likely to benefit from intelligent design. As with its biological counterpart, survival in the intensely competitive ecology of modern healthcare depends on fitness. And fitness, in what is ultimately a financial contest, is the ability to generate revenue."

The authors say that despite a sustained effort within the profession, pharmacists have been largely unsuccessful in securing the ability to bill for clinical services. Clinical services, they say, are subsidized to enhance patient outcomes, and cost avoidance of complex or costly therapeutic sequelae is assumed to justify the expense of sustaining those services. Ultimately, they say, clinical pharmacists do not typically bill for the services they provide. More than being simply an interesting historical artifact of the profession's development path, they fear that without substantial development of revenue-generating mechanisms, the profession's survival may be threatened. "If we are doing a purely clinical function and can't bill, we can't survive," Dole tells Drug Formulary Review. "The purely clinical function is in danger of going away."

Rethinking the 'bean counter' view

For a clinical pharmacy program to succeed, the authors say, the primary institutional support needed is financial administration. While clinical pharmacy has traditionally relied on physicians for support, the only way a change can take place, they say, is through understanding the culture of those in power. They argue that in most healthcare institutions today, physicians have relatively little power compared with the financial and business administration. "The power to make change lies within the jurisdiction of the chief operating officer and chief financial officer," they say. "Unfortunately, most clinicians look at the COO and CFO as 'bean counters' who do not understand the value of clinical pharmacy."

The report also notes that most clinical pharmacists don't have the tools needed to build a business case for their services. "While few would argue that reimbursement for pharmacists is an important topic, how many can say that they were taught how to build a service in terms that a finance person can understand?" they ask. "Most in the academic world will admit that they do not teach the use of financial data as a clinical tool. In a recent article surveying pharmacy residency training in academic settings, financial or business training was not listed as a concern."

While acknowledging the importance of pharmacists being able to bill, Mr. Dole and Mr. Murawski are clear that not all pharmacists should bill. They say that while many pharmacists perform well enough to justify billing for their services, there still would be many who are unable to do so. And the historic mechanism of state licensure is inadequate to meet this challenge, they contend. They feel no credentialing system currently exists for clinical pharmacists qualified to bill for their services. And in the absence of some system for differentiating those who can from those who should not, practitioners may be assigned responsibilities that exceed their expertise.

"The worst case scenario for the progress of pharmacists billing is that under Medicare Part D medication therapy management, pharmacists get in over their heads and someone gets hurt," the authors caution. "Then the profession would be set back for the next 25-30 years. In the beginning, pharmacists billing for their services should be an exclusive and not inclusive activity. Many system and professional barriers exist that prevent pharmacists from obtaining billing privileges: placing our primary emphasis on clinical outcomes versus financial outcomes, the current inability to train clinicians to use financial data as a clinical tool, incomprehension of the culture of those in power, and lack of any profession-wide credentialing system to ensure a minimum level of clinical expertise. Until these flaws are addressed, clinical pharmacy will make little progress in obtaining billing privileges and remain where it is today — a profession of second lieutenants, whining that no one lets us play while we refuse to learn the tools that will make us successful in the game."

[Editor's note: Contact Mr. Dole at (505) 262-3292.]


  1. Dole E, Murawski, M. Reimbursement for clinical services provided by pharmacists: What are we doing wrong? Commentary Am Jrl Health-System Phar 2007; 64(1):104-106.