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Learning Objectives

  1. Describe the misalignment of community pharmacy value expression and the concept of clinical integration.

  2. Compare and contrast current and emerging models for clinical services and their payment in the community pharmacy setting.

  3. Create a new clinical service implementation plan using community pharmacy practice transformation domains from the Flip the Pharmacy program.

Setting the Scene

The healthcare environment is changing dramatically. Pharmacy chains are expanding and non-pharmacy entities are entering the pharmacy space (e.g., Amazon purchasing Pillpack©). Reimbursement for medications have drastically decreased over the last decade. Alternative payment models for enhanced services at the pharmacy, separate from the product, are essential to the financial well-being of the pharmacy. Enhanced services increase the quality of care provided to patients and positively impact quality metrics for both physicians and insurance plans.

You are the pharmacy manager of an independent pharmacy located in a small town. Large chain pharmacies are moving in and trying to buy your pharmacy and others in the area. Your pharmacy owner wants to sell the pharmacy due to increasing direct and indirect remuneration (DIR) fees. This change has forced the pharmacy to sell many medications below cost. In the past 6 months, many patients have transferred to competitors because your pharmacy was not in their insurance’s preferred network. Because you are no longer in-network, their prescriptions were no longer covered at your pharmacy. You have recently graduated from pharmacy school and convinced the owner to offer value-based services as an alternative payment model to help the pharmacy stay local and in business.


In the past 5 years, several news headlines have reflected the drastic changes in the healthcare environment due to a reduction in reimbursements for the dispensing of medications. Rite Aid sold 2186 pharmacies to Walgreens in 2017,1 Walgreens laid off an undisclosed number of employees in an effort to save more than $1.8 billion in expenses in 2019,2 and CVS announced plans to close 22 stores in 2020. If large chain pharmacies are downsizing, this leaves little hope for smaller, independent pharmacy owners. Access, quality, and cost make up the components of current payment models. Improving 1 or 2 components will inevitably result in the expense of the third. It becomes evident that the fast, accurate, affordable business model of the big pharmacy chains is not sustainable, hence the urgency for payment reform in the community pharmacy setting.

Of the entire U.S. healthcare budget, pharmacy contributes 10% of spending while medical costs (e.g., emergency department [ED] visits, hospitalizations, diagnostics, and ambulance services) account for 90%.3 Pharmacists can impact these medical costs by identifying and resolving medication-related problems while providing disease state education. Thus, there arises a misalignment in the value expression of pharmacists in the current payment model. These services keep the patients healthy and out of the hospital, hence decreasing healthcare ...

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