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April 2003


Office Dispensing Can Enhance Care Quality by Helping to Cut Drug Errors

Richard L. Reece, MD

Edited by: Deborah J. Neveleff


Medical errors are a serious problem that have received much media attention since the Institute of Medicine reported on medical errors and health care quality in two reports, To Err Is Human: Building a Safer Health System in 1999 and Crossing the Quality Chasm: A New Health System for the 21st Century in 2001. In the reports, the IOM cited the prevalence of drug reactions and deaths due to medical errors.

Although some experts have disputed the numbers used in these reports, there is agreement among many physicians that the increased workload required of pharmacists, a shortage of pharmacists, and the rising number of prescriptions have led to an increase in the number errors that pharmacists make when under pressure.

Rising Demands
In the current health care environment, consumers are demanding prescription drugs, over-worked physicians are writing more prescriptions, short-staffed pharmaceutical retailers are processing more prescriptions, and an increased number of drug reactions and medical errors are occurring. This environment has led physicians and others to seek innovative approaches to prescribing medications and to reducing errors.

One approach to physician prescribing features software systems that enable physicians to dispense prepackaged medications at the point of care, meaning while the patient is in the office. User-friendly and affordable software has been developed to make it practical for physicians to manage an inventory of medications, track their own prescribing habits, maintain patient medical records, and check for drug interactions.

The software that allows physicians to dispense medications in their offices efficiently actually revives an old tradition. In the 1880s, 80% of physicians dispensed prescribed drugs in their offices; but by the 1920s, only 20% of physicians were dispensing because pharmacists had begun to do much of that work.

Quality Benefits
Dispensing medications in a physician’s office provides benefits to physicians for several reasons, says Warren Moseley, chairman and president of Physicians Total Care Inc., in Tulsa, Okla. Physicians Total Care, a pharmaceutical repackager and wholesale distributor, offers drug-dispensing software that allows physicians to provide medications to patients in the office.

“The system is not a threat to pharmacists, in part because the market is enormous,” says Moseley. “There is currently a tremendous shortage of pharmacists, which is expected to reach 40% over the next five years. Since the existing system will be unable to meet the market demand for prescription drugs, something has to be done to address that problem.”
Furthermore, in-office dispensing offers several enhancements to quality of care. The first enhancement relates to fewer medication errors.

“By using a system that is bar code-driven, there is virtually no chance of error,” Moseley says. “For example, the drugs distributed by some of the best companies in this business are repackaged in a manufacturing environment where there is zero tolerance for error. The bar code is applied in that environment and the drugs are sealed in child-proof containers. There is virtually no chance of error due to incorrect drug identification or counts. In contrast, statistics reveal that medication dispensing errors occur in about 5% of all prescriptions coming out of a pharmacy.”

Second, patients who are unable to go to a pharmacy easily can get their medication directly from their physician, a factor that can help increase patients’ compliance with medication orders. About 21% of patients never get their prescriptions filled, according to AARP, in Washington, D.C., and 30% fail to get their medications refilled, according to The Internist.
Recognizing these statistics, proponents of office dispensing say that compliance soars when patients leave the office with their medications in hand. Also, getting a medication from the physician is more convenient for patients, since they don’t have to travel to a pharmacy and wait while a pharmacist fills the prescription.

“Compliance with drug therapy is 60% to 70% better when medications are delivered at the point of care than when patients are handed a written prescription,” Moseley says. “For each dollar invested in compliance, $200 to $800 worth of long-term health care costs are saved. Basically, that means people are taking their medicine and getting well. In contrast, one third of written prescriptions are not filled; therefore, patients are going to the doctor to get all of that fine advice and then they don’t apply it. Dispensing at the point of care overcomes a good portion of that noncompliance. Going to the pharmacy is inconvenient.”

Compliance also may be enhanced when a physician can offer a lower cost medication if a patient is unable or unwilling to pay for a more expensive prescription. A single mother with two young children and two prescriptions for an expensive medication might be inclined to forgo the medication if she is trying to save money, explains Moseley. “But if the physician knows she is not going to buy the drugs, he or she may offer lower cost alternative medications,” he adds.

Increased Awareness
Third, doctors who use an office dispensing system become more knowledgeable about the costs of medication and of therapeutic alternatives. As a result, these physicians become more selective about the medications they prescribe, Moseley says. “They can track the effect of various antibiotics, for example, to make sure they are getting the results they want to achieve,” he explains.

In addition, when doctors dispense medications, they begin to gain more knowledge about each drug, Moseley states. “When purchasing the medications for their inventory, physicians learn about what they are buying,” he points out. “In particular, they learn more about the therapeutic alternatives and the different costs of all prescription drugs. Consequently, they are better able to advise patients because they can select appropriate, cost-effective medications.”

Fourth, office dispensing ends the risk of errors that result from illegible handwriting or from mistakes that occur because the names of so many medications are similar. In most states, however, in-office dispensing does not obviate the need for a written prescription form.

Even so, medical errors can still be reduced through in-office dispensing, Moseley adds. “The office staff is familiar with the doctor’s handwriting, or can ask the doctor for clarification if necessary,” he explains. “The doctor always remains responsible for supervising such activities.”
In his experience with physicians using in-office dispensing systems, Moseley has found that these systems return to physicians control over the quality of care they deliver.

Cutting Costs
“ The business of insurance companies is to collect premiums and minimize claims, which is a legitimate purpose,” Moseley continues. “But the process of minimizing claims has resulted in an adversarial relationship among doctors, pharmacy benefit managers, and insurers. The companies that offer software for physician dispensing align the purposes of the insurer and the patient with those of the physician. In other words, doctors are encouraged to offer the best care in a cost-effective manner, while the patient gets higher quality, lower cost health care. Office dispensing helps everyone by making prescriptions more profitable at a lower cost.”

Office dispensing is an example of a growing trend called point-of-care medicine. Proponents of this type of care say that many available systems can help physicians while they are treating patients. For example, many systems can help physicians offer disease management or other educational information to patients, allow physicians to access clinical information via the Internet or other sources during an office visit, and document the care provided during an office visit.

“There is no doubt that point-of-care medicine is the new model for medical excellence and lower health care costs,” Moseley asserts. “Point-of-care medicine makes sense because the patient-physician relationship is the backbone of the health system. It always has been. But the importance of that relationship has been obscured by the fact that typically someone besides the patient is paying for the patient’s health care coverage and these third parties have made decisions on the patient’s behalf.”

Patient Data Needed
To implement these systems, software vendors have to gather insurance information about the physician’s patients, so the physician must be willing to make an investment in time and effort to provide the background information necessary to put the system in place, Moseley says.

“After that, the physician will need a two-week inventory of drugs,” Moseley explains. “That’s when physicians start to look seriously at therapeutic alternatives in terms of relative cost. Before this, they never looked at their prescribing habits in this way. Using such systems, virtually all physicians cut the total medication costs of their patients in half from what they were before the system was installed.”

In addition, office dispensing requires a moderate initial investment. “Our licensing fee is $4,000 (plus sales tax) per practice site,” Moseley explains. “Doctors generally make $4 to $6 per prescription, and write 40 to 60 prescriptions per day, so cost recovery is rapid.”

For physicians using these systems, the initial cost would be for a two-week supply of medications, which generally costs about $2,000 to $4,000 per physician. Other costs would be for a printer and a bar code reader, which together may cost several hundred dollars, Moseley explains. Of course, a physician and staff members will need to be trained to operate these systems, and the training requires a few hours for each user.
The best companies in the field of providing in-office dispensing systems will offer telephone and other support while the system is being set up in the physician’s office.

In addition to Physicians Total Care Inc., other companies in this field include Allscripts Healthcare Solutions and MedVantx.

One obstacle to the dispensing of drugs by physicians is that laws in some states prohibit it. Seven states—Massachusetts, Montana, New Hampshire, New Jersey, New York, Texas, and Utah—either ban or make it difficult to dispense drugs in the office. The Federal Trade Commission, however, has said that it regards laws against physician dispensing as an illegal restraint of trade.

Allocation Issues
“ The New Jersey law, for example, allows doctors to dispense a 72-hour supply of medications and to make no more than 10% profit from doing so,” Moseley explains. “Therefore, the issue in New Jersey is not whether doctors can dispense with competence, but rather where the profit from dispensing is going. In Texas, doctors cannot dispense if there is a pharmacy within 35 miles. Again, the issue is the allocation of profit. Allocation-of-profit laws are an illegal restraint of trade.” Those laws, if challenged, should fall, he adds.

Another obstacle is the charge that physician dispensing for a profit is unethical and leads to overutilization. But Moseley counters that physician dispensing is not unethical as long it as it does not exploit the patient for the doctor’s profit.

The issue of making a profit is true for all services provided by professionals, Moseley explains. Obviously, physicians need to make a profit from office visits and other services simply to stay in business, he adds. “A professional license gives a person the right to do for other people something those people want to have done for them for their own good and to charge them for having it done,” he explains. “Everything professionals do presents ethical dilemmas; the issue is how those dilemmas are resolved.”

— Edited by Deborah J. Neveleff, in North Potomac, Md.

Companies Offer Dispensing Systems
In addition to Physicians Total Care Inc., in Tulsa, Okla. (at www.physicianstotalcare.com), other companies offer dispensing systems for physicians, such as Allscripts Healthcare Solutions in Libertyville, Ill. (at www.allscripts.com), and MedVantx in San Diego (at www.medvantx.com).

Allscripts offers a program called FirstFill, which enables physicians to fill a patient’s first prescription for a commonly prescribed medication. Rather than give a patient a sample of a medication, a physician can provide patients with a complete prescription. This saves them a trip to the pharmacy, which can improve patient care and increase patient satisfaction. FirstFill helps to improve patient outcomes, increases compliance with prescriptions, and allows physicians to demonstrate how to use the medication directly to the patient, Allscripts says.

MedVantx offers the writeSTART dispensing system that makes medications available in the physician’s office. It integrates with existing practice information systems and helps physicians generate ancillary income, MedVantx says. The program helps to reduce patients’ out-of-pocket costs and provides data that physicians can use to negotiate with insurers for higher reimbursement and capitation rates, the company says.

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PracticeOptions - March 2002


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