Chapter 25. Value-Added Services as a Component of Enhancing Pharmacists' Roles in Public Health

Dr. Zgarrick is Professor and Chair of the Department of Pharmacy Practice in the School of Pharmacy at Northeastern University's Bouvé College of Health Sciences. Dr. Zgarrick received a B.S. degree in pharmacy from the University of Wisconsin and an M.S. and Ph.D. in pharmaceutical administration from The Ohio State University. He has practice experience in both independent and chain community pharmacy settings. Dr. Zgarrick teaches courses in pharmacy management, business planning for professional services, and drug literature evaluation. His research interests are in pharmacist workforce issues, professional service development, and the use of evidence-based medicine by pharmacists.

After completing this chapter, readers should be able to

1. Identify factors that should drive the development of value-added pharmacy services.

2. Describe ways that the development of value-added pharmacy services can enhance pharmacists' roles in public health.

3. Describe how the business planning process applies to value-added pharmacy services.

4. Evaluate the market for value-added pharmacy services:

   1. Consumer characteristics and needs

   2. Impact of the internal and external environments

   3. Services already available in the market

   4. Market potential

   5. Consumer willingness and ability to pay for services

5. Evaluate the ability of a pharmacy to provide services that meet consumer needs

By all accounts, Alan Brouchard, Pharm.D., is a great pharmacist. He graduated at the top of his class in pharmacy school and started a successful career with a pharmacy chain in suburban Chicago. While he enjoyed working with all his patients, he especially liked counseling children and their parents. He had a reputation for being good with kids and informative with their parents, which resulted in many referrals to the pharmacy where he worked.

Last year Dr. Brouchard's wife was offered a job opportunity in Phoenix. While he loved his job in Chicago, his wife's opportunity was too good to pass up, and he knew that there would be positions available in the Phoenix area with his pharmacy chain. He arranged a transfer to another pharmacy in his chain in Sun City (a suburb just northwest of Phoenix). When he arrived, he was anxious to further develop the pediatric services he had started in Chicago. He convinced his pharmacy manager to purchase special equipment to teach children how to monitor their asthma, to remodel the pharmacy to include a private counseling area, and to spend money promoting these services in the local community.

After 3 months, Dr. Brouchard was very disappointed in how his service had been received. On a good week, only one or two persons would come in for his services, and these often were older customers seeking advice for their grandchildren. The pharmacy manager began using the private counseling area to store diabetes supplies (which always seemed to sell as fast as the pharmacy could get them in). Dr. Brouchard did not understand why his services, which were so successful in Chicago, were not nearly as well received in Sun City. He often wondered what he could do to increase the appeal of his services to a larger number of the pharmacy's customers.

1. How does an organization's strategic plan affect the kinds of goods and services it offers?

2. How can value-added pharmacy services benefit the needs of populations, in addition to those of individual patients?

3. In what ways is business planning useful in the development of value-added pharmacy services?

4. In addition to patients, who else should be considered consumers of value-added pharmacy services?

5. What information should be gathered before making a decision to offer a value-added pharmacy service? Where and how can this information be gathered?

One of the most popular films of the 1980s was Field of Dreams, starring Kevin Costner. Costner's character, Roy Kinsella, had moved from a large city to rural Iowa to become a farmer. While working on his farm, he kept hearing a voice that said, “Build it and they will come.” At first Roy couldn't figure out what he should be building, or who would come if he did. As the plot progressed, Roy plowed under his cornfield, built a baseball field, and waited for a group of baseball players to come and play. Most of the people in his town thought he was crazy, plowing under valuable corn. Even his wife and family had doubts when they had trouble paying their bills. However, a group of deceased baseball players from the distant past (some Hall of Fame legends, others practically unknown) started coming out of the cornfield every night to play on the field. Roy and his family enjoyed watching these players, but the people in his town still doubted their existence. Eventually, Roy's deceased father showed up to play, and they had a father and son game of “catch” that they both regretted they had not had in the past. By the end of the movie, the players had begun using the field during the day, the people of the town came to see them play, and Roy started charging admission, saving the family farm. Talk about a “Hollywood ending”!

What could Field of Dreams possibly have to do with pharmacy in the twenty-first century? On the one hand, if you ask some pharmacists why they offer the goods and services they do, they might just give you an answer similar to if you had asked Roy Kinsella why he built a baseball field in an Iowa cornfield. Maybe it was a voice inside their heads that told them to offer a pediatric asthma consulting service. They may have figured that if they “built” a herbal medicine section in their pharmacy, people would naturally come and purchase these items. Many pharmacists develop goods and services based primarily on their own desires or the needs of their organizations. They may have a personal interest in a particular area or have learned how to provide a specialized service during pharmacy school, residency, or on the job. While offering a good or service based primarily on personal interests or skills may sound like a good thing to do, one very important principle of marketing is being overlooked.

In the real world, Hollywood endings are quite rare. Businesses that develop goods and services based primarily on their own interests, skills, or needs usually end up regretting their time, money, and other resources they had invested. Many of these businesses fail after a short period. This is so because one of the fundamental principles of marketing that is often overlooked by marketers is that the purchase of any good or service or the acceptance of any idea is driven by the needs of consumers, not those of the marketer (Kotler, 1997). Contrary to what some people may believe, marketers cannot force consumers to purchase or accept products they do not need. Consumer needs exist regardless of a marketer's products. Successful marketers start by identifying their consumers, evaluating their needs, and developing products (i.e., goods, services, and ideas) designed to meet consumer needs better than their competitors (see Chapters 21 and 22).

All pharmacists and pharmacy organizations are marketers of goods (e.g., prescription and over-the-counter medications, durable medical equipment, candy, greeting cards, and a wide variety of other items) and value-added services [e.g., dispensing prescriptions, delivery, drug utilization evaluation/review, disease-state management, and medication therapy management (MTM)]. A major challenge for any pharmacist or organization is to identify its consumers and evaluate their needs. Pharmacists and pharmacies then must develop products that meet consumer needs, as well as their own personal, professional, and organizational needs. This can be a daunting task, and there is no guarantee of success.

At Dr. Brouchard's annual performance review, his pharmacy manager let him know that he would not be allowed to continue to offer pediatric services at the pharmacy. While he was disappointed, he understood why, given the few people who had used the service and the amount of time and money his organization had invested for seemingly little in return. At the same time, he saw that the rest of the pharmacy continued to be successful. Prescription volume was up 10 percent over the past year, and sales of medications for arthritis, diabetes, and heart disease were increasing even faster. Several of the customers he had counseled about their grandchildren had told the pharmacy manager that they were very pleased with Dr. Brouchard's professional manner and advice. He was happy to hear this and thought to himself that if only there were some way, he could continue to offer this level of service to a larger group of patients.

The profession of pharmacy has long had a profound impact on health. While pharmacists certainly impact the health of individual patients who use drug therapy, they also have the ability to impact the health of the communities they serve. According to the Institute of Medicine (IOM), public health is simply “what we, as a society do collectively to assure the condition for people to be healthy (IOM, 2003a).” The primary public health role that many associate with pharmacists is assuring the safe and effective use of medications. For many years this was done primarily through safeguarding the preparation and distribution of drug products. But as pharmacists' roles in health care have evolved over the past generation, so have their opportunities to contribute to society's health and well-being (Capper et al., 2006; Nemire et al., 2010).

Unlike some physicians, nurses and other health professionals who specialize public health practice, the pharmacist's role in public health is not as clearly defined, but is increasingly understood by both health professionals and the public (APHA, 2011). Pharmacists are among the most accessible and available health care professionals. Given the number of pharmacists in the United States (over 280,000, third only to nursing and medicine) and their spread throughout the nation in both urban and rural settings, pharmacists are in an ideal position to both educate patients and advocate for their community's health needs (APhA, 2011c; ASHP 2008). Pharmacists provide health and medication information to both patients and health care professionals. Patients can seek the advice of pharmacists in over 60,000 community pharmacies and in many other practice settings, usually without making an appointment and often at little cost. Pharmacists commonly triage the medical problems of those who seek their advice, particularly in community settings. Pharmacists' ability to refer patients to other health care professionals, or to simply recommend treatment with an over-the-counter product, serve the needs of the public to obtain high quality care while making the most efficient use of health resources.

The IOM establishes three major functions of public health: (1) assessment, (2) policy development, and (3) assurance. Pharmacists have increasingly come forward to play crucial roles in each. In terms of assessment, pharmacists play a unique role in research evaluating the drug use process. Clinical pharmacists and other researchers commonly join forces to determine ideal treatment regimens given clinical, epidemiologic and economic data. Pharmacists and other researchers also work to identify adverse drug events and medications errors (Classen et al., 2005; Lazarou et al., 1998; IOM, 2003b). This and other medication-related research improves health outcomes for individual patients and for society at large. Pharmacists are leaders in their communities, putting them in an ideal position to develop and advocate for policies aimed to improve health. Pharmacists commonly advocate to influence the legislative and regulatory process (see Chapters 20 and 28), especially concerning issues that impact the health of their patients and communities (Matzke, 2011). Pharmacists help assure the health of their communities through activities at a macro level (e.g., administering medication use systems, designing drug benefit plans, educating other health professionals on medication use), as well as at the micro level (e.g., speaking to community groups, developing health education materials, conducting health screening programs) (Hobson et al., 2010). Given the essential roles that medications play in health, pharmacists have come to have a major role in public health preparedness, from serving on local public health boards to emergency preparedness programs designed to assure access to medications and health services after disasters (Woodard et al., 2010; McCrory, 2006).

While pharmacists have long played roles in advancing public health, the formal public health education of pharmacists is a relatively recent development. Curricular guidelines used by schools and colleges of pharmacy now emphasize preparation of pharmacy students to provide both patient-specific and population-based care (AACP, 2004). Accreditation standards for Doctor of Pharmacy programs also state that the graduates must possess a set of minimum skills and attributes to practice, including the ability to provide population-based care (ACPE, 2011). Schools and colleges of pharmacy have responded by integrating public health concepts into the curriculum. Many colleges have developed courses designed specifically to teach public health concepts to pharmacy students (Westrick, 2009; Smith et al., 2008, Sankaranarayanan et al., 2008). A small but growing number of universities have developed joint degree programs, allowing graduates to obtain both the Doctor of Pharmacy (PharmD) and Master of Public Health (MPH) degrees (AACP, 2005).

One particular area of public health where pharmacists have recently taken a major role is immunization delivery. Pharmacists had long educated their patients and the public regarding the risks and benefits of immunizations. Yet millions of Americans who should be receiving immunizations, particularly the influenza and pneumococcal vaccines, were not receiving them, resulting in large amounts of preventable morbidity and mortality (HHS, 2000). Given their accessibility, pharmacists began to promote their role as immunizers. Pharmacy organizations such as the American Pharmacists Association (APhA) developed certification programs to enhance pharmacists' skills as immunizers (APhA, 2011a), and state pharmacy associations advocated for legislative and regulatory changes necessary to give pharmacists the legal authority to immunize. Today pharmacists in all 50 states have the legal authority to immunize under protocols developed with physicians (NABP, 2011). Almost 150,000 pharmacists now provide influenza, pneumococcal, and a variety of other vaccinations to an estimated 20 million patients per year (APhA, 2011b). More importantly, pharmacists stepping forward to provide immunizations have increased the number of Americans receiving immunizations. This has served to improve the health of our society and decrease the complications from preventable diseases (Steyer et al., 2004).

Pharmacists are posed to offer a variety of additional public health services. Pharmacists play a role in increasing the health knowledge of people in their communities (Gazmararian et al., 2010). Given their accessibility, pharmacists can play a valuable role in enhancing the health literacy in underserved and ethnically diverse communities (Vargas et al., 2011; Gerber et al., 2010). Pharmacists can play an active role in disease prevention and health promotion, particularly through their efforts in health education, screening, and wellness programs (Eades et al., 2011). Pharmacists have taken the lead in substance abuse education and prevention and treatment, particularly among health care professionals (Cerulli et al., 2008). And pharmacists have recently stepped forward to take the lead in efforts to protect the environment by offering medication and syringe disposal services (Gray-Winnett et al., 2010).

Given the demographic characteristics of Sun City, Dr. Brouchard determined that offering immunization services at the pharmacy could serve the health needs of the community, as well as create a new stream of revenue and source of additional profits. Working with his local public health department, he was able to determine which types of immunizations are most needed by patients in his community (influenza, pneumococcal, herpes zoster (shingles)), and joined a local task force to educate the community about the benefits of being vaccinated. Dr. Brouchard and several staff pharmacists in his chain attended a pharmacy-based immunization delivery certificate program as the first step toward preparing themselves and their pharmacies to offer immunizations.

One way that many pharmacists identify consumer needs, develop new ideas for new goods and services, and manage the risks involved in any business venture is by using the business planning process (see Chapter 5). Business planning helps decision makers evaluate their markets and environments. It gives managers the freedom to explore new ideas without having to invest their resources in actually developing and offering the product. Using the business planning process does not guarantee that consumers will accept a product, or that the product will meet organizational goals. However, business planning does help managers identify risks and assess the likelihood that a new product will be successful.

Many administrators require their pharmacists to develop written business plans to justify offering a new good or service. This helps administrators decide whether to allocate scarce resources (especially money, time, and personnel) to the development of any new good, service, or idea. One important aspect to keep in mind about business planning is that administrators and pharmacists are under no obligation to implement a plan. If the research done in the planning process indicates that a product will not meet consumer or organizational needs, that it would not be feasible to offer, or that the risks involved are greater than the organization cares to take, a decision can be made simply not to move forward with the plan. While it takes an investment of time to develop a business plan, not implementing a plan that is likely to fail consumes far less time, money, and other resources than developing a new good or service that does in fact fail.

Applying the business planning process to the development of value-added pharmacy services is not that different from how the process is used to evaluate any other good, service, or idea. One of the first steps when starting the business planning process should be to identify the organization's strategic plan and mission statement. Since these documents represent the road map for what the organization wishes to become and how it plans to get there, it is important that the development of any new good or service bears these in mind. One question that almost all administrators will want to have answered is how the implementation of any new value-added service will help their organization achieve the goals set out in the strategic plan.

It is important to recognize that mission statements and strategic plans vary among types of organizations, especially within health care. The mission statement and strategic plan of a not-for-profit children's research hospital likely will be different from that of a for-profit pharmacy chain (Table 25-1). The aspects of a professional service that will need to be emphasized in a business plan will vary as well. The not-for-profit children's research hospital may want to see how a new professional service will result in enhanced clinical outcomes or benefit the greatest number of children at the lowest possible cost. On the other hand, a for-profit pharmacy chain may want to see how the service will expand its market share or enhance its shareholders' value of owning the company.

The next step of the business planning process is to explore the prospects for various types of value-added services. At this point, it is helpful to have several ideas for value-added services that could be implemented. One of the best ways to do this is to observe and speak with pharmacy department customers. This is essential to learn more about their needs and can help business planners learn more about their environments (which will be important later in the process). Other sources for ideas about value-added pharmacy services include colleagues, professional organizations, pharmacy magazines and journals, professional meetings and seminars, the Internet, consultants, books, and full-service wholesalers.

The next step in exploring the prospects for value-added pharmacy services is to learn more about the potential services that have been identified. Many pharmacists start this process by performing a literature review about potential services using electronic databases such as PubMed (National Library of Medicine, 2011) or International Pharmaceutical Abstracts (IPA) (Thomson Scientific, 2011). These databases can identify primary and secondary literature that provide additional information about services, descriptions of services implemented by others, and research studies that evaluate the outcomes of similar services. Nonmedical Internet search engines such as Google (www.google.com) also may be helpful, but users should be cautioned that finding valuable information can be difficult given the vast amount of information available on the Internet (see Chapter 7).

Professional pharmacy and medical organizations (e.g., the American Pharmacists Association [APhA], the American Society of Health-System Pharmacists [ASHP], the National Community Pharmacists Association [NCPA], and the American Medical Association [AMA]) and health care organizations (e.g., the American Diabetes Association [ADA] or the American Heart Association [AHA]) also provide valuable information about many health conditions and value-added services. This information is important not only in the development of a service but also in justifying the need for a service with consumers and administrators. These organizations also provide treatment guidelines and additional resources that can be used when developing an operations plan for a service (see Chapter 26).

While learning more about potential value-added pharmacy services, it is a good idea for business planners to speak with others about their ideas. Many pharmacists who have already developed value-added services will gladly share what they have learned. Visiting a setting where value-added pharmacy services are already in place not only provides evidence of how these services actually work but also will answer many questions pharmacists may have later in the planning process. Other pharmacists, technicians, and pharmacy employees may have experienced value-added services in their prior practice experiences and may provide insights into how they work. Other health care professionals can provide feedback about additional services that they or their patients may need. Payers [e.g., insurance companies, health maintenance organizations (HMOs), employers, and governments] may be willing to share ideas about value-added pharmacy services that may improve the health of their constituents while saving them money.

Most administrators and organizations do not like to be surprised to learn that their pharmacists are working on proposals for new value-added pharmacy services. It is important to work with administrators and organizations early in the business planning process, not only to keep them informed, but also to learn what they desire from an administrative standpoint. Taking the views of administrative and organizational personnel into account throughout the process increases the likelihood that administrators will support and provide the resources necessary to implement value-added pharmacy services in the future.

Dr. Brouchard began to think about what the chain he worked for might want in a professional service. The chain's mission statement said that it was dedicated to providing patients with high-quality customer service while using modern technology. The chain also was open to developing innovative ways to attract new customers and serve its existing customers. The chain's strategic plan stated that it had a rapid expansion plan and that it expected new services to contribute a 15 percent return on investment (ROI) after 3 years. After reading this, Dr. Brouchard knew that his chain was open to developing new services, but that he also would need to show that such services could contribute to profitability in a relatively short time.

With this in mind, Dr. Brouchard thought of some ideas for value-added pharmacy services that he could pursue. He was excited about the possibility of adding immunization services to his pharmacy, but realized that much of their service would occur only from September through December when patients obtained their annual influenza vaccinations. In addition to offering immunizations, he wanted to offer a service that had the potential to consistently serve patients and generate revenue throughout the year. While his pediatric asthma service was not successful, he thought about the possibility of offering the same service to an adult population. He had seen a report on the local news mentioning that the prevalence of asthma had increased greatly in their area over the last several years. Like many other pharmacies serving patients of the “baby boom” generation and older, his pharmacy dispensed many prescriptions for hypertension and hyperlipidemia. And while diabetes was not a specialization he had considered previously, it was difficult to ignore the number of prescriptions the pharmacy filled for diabetes medications, and the amount of diabetes supplies the pharmacy sold. Dr. Brouchard had even read in a pharmacy journal that insurance companies and government agencies were paying pharmacists to provide diabetes education services. He decided to research these ideas and then approach his pharmacy manager to get her thoughts.

In evaluating potential professional services, it is essential to consider the characteristics of the market where they will be offered. Since any service first must satisfy consumer needs before a pharmacist's personal, professional, or organizational goals can be met, evaluating potential consumers of a service should be the first aspect of the market that is considered.

When pharmacists think of potential consumers of their value-added services, the first (and often only) group they think about is patients. After all, pharmacists interact with patients on a daily basis. While patients are essential to the success of most value-added pharmacy services, pharmacists must remember that groups of consumers other than patients may benefit from pharmacy services as well.

When planning for value-added pharmacy services, pharmacists often classify consumers into one of the three Ps. These three groups are patients, physicians and other health care professionals, and payers (Table 25-2). Pharmacists should consider the characteristics and needs of each of these groups in the business planning process carefully.

While almost all patients that pharmacists interact with have some type of medication-related need (e.g., a drug product, advice about an adverse drug effect, etc.), not all patients may need the same level of service that pharmacists can provide to patients (Hepler and Strand, 1989). It is important for pharmacists to identify subgroups of patients who may benefit more directly from their services. For an asthma service, patients with asthma and other pulmonary conditions likely would have a much higher need for the service than others without these conditions. For a diabetes education service, there are different categories of patients with diabetes on which one may focus (e.g., type I versus type II). In addition to the patients themselves, caregivers (e.g., parents, adult children of the elderly, etc.) should be identified and their needs evaluated. The primary need of patients is health care, the purpose of which is to allow them to live a longer, healthier life. Pharmacists who can convince their patients and caregivers that their services will improve their quality of life will be on their way to developing a successful service.

Pharmacists desiring to implement new professional services must develop relationships with other health care professionals such as physicians, nurses, therapists, and other specialists. For these relationships to be successful, all parties much recognize the others' needs and be prepared to describe how each would benefit from their interactions (Doucette and McDonough, 2002). For example, a pharmacist starting an anticoagulation monitoring service needs patient referrals from cardiologists, internal medicine specialists, vascular surgeons, and other health professionals who prescribe anticoagulation therapy. The pharmacist also will need information about these patients and perhaps even support from the professionals in billing for their services. On the other hand, the health care professionals need information not only about their patients but also about drug therapy. Physicians also are faced with challenges in today's managed-care environment and often need to see many patients per day to maintain their financial viability. Physicians are seeking ways in which they can use other health care professionals to extend their services while maintaining high-quality patient care. Chapter 26 describes ways in which pharmacists can develop and enhance these relationships with other health care professionals.

One group of consumers whose needs often are overlooked by pharmacists is payers. Today, almost all pharmacy goods and services are paid for by someone other than the patient. These third-party payers include insurance companies, managed-care plans, employers, and local, state, and national government agencies. While pharmacists often do not enjoy interacting with third-party payers, most of them have needs that pharmacists are in a unique position to satisfy. Payers generally want to obtain high-quality goods and services at the lowest possible costs. Payers also recognize that they may not always be getting optimal benefits from their expenditures, especially those related to drug therapy. Pharmacists, given their expertise in drug therapy and proximity to their enrollees, are in an ideal position to help payers improve the quality of care while controlling costs, especially through their value-added services. Pharmacists who can demonstrate the value of their services to payers often find that payers are willing to encourage their enrollees to use pharmacy services (Cranor et al., 2003; Kepple, 1998).

Another aspect of the market for any value-added pharmacy services that must be considered is the competition. When identifying competitors, it is important to acknowledge exactly what services the pharmacy will pursue. When identifying competitors for value-added services, pharmacists often limit their search to other pharmacies and pharmacists. While this may be appropriate for traditional pharmacy goods and services (e.g., dispensing drug products), pharmacists considering new value-added services must cast a much broader net. Many value-added services offered by pharmacists are still at the introductory point of their product life cycles. Few, if any, other pharmacies may offer these services in a particular market. Other types of competitors may be very well established. For example, while diabetes education services currently are not offered in many community pharmacies, physicians and certified diabetes educators (CDEs; who can be physicians, nurses, pharmacists, and other health care professionals) have provided this service for a number of years (Zrebiec, 2001).

Recognizing and evaluating competitors is an important part of the business planning process (see Chapter 5). While competitors have an established clientele and represent a potential threat to the success of a new pharmacy service, much can be learned from observing how they provide their services. If a large number of competitors are present in a market, it may be daunting to think about how a new value-added pharmacy service can compete successfully for customers. Competitors represent a challenge, but with proper research and planning, many pharmacists find that these challenges can be overcome. One way is by positioning a value-added pharmacy service in the market such that consumers see it as different from the others. This is often referred to as niche marketing (Doucette and McDonough, 2002). A pharmacy that hopes to establish a smoking-cessation service may find that there are a number of established competitors in the market (e.g., physicians, psychologists, support groups, and over-the-counter medications). However, if the pharmacy can provide its service in such a way that consumers recognize that it is more convenient or has higher quality or a lower price than competitors, the pharmacy and its smoking-cessation service still can be successful in the market.

For any value-added pharmacy service to be viable, there must be a sufficiently large number of consumers in the market who may be willing to purchase the service. Investing too many resources into a service that benefits a small number of consumers ultimately will lead to the demise of any business venture. Several sources can be used to determine the size of a market for a professional service. The easiest place for a business planner to start is to review a pharmacy's patient profiles, purchasing and financial records, and other internal data. Knowing how many prescriptions are filled for different classes of medications will help the planner determine which conditions are the most prevalent among the pharmacy's patients. The only downfall of this method is that the information is limited to the pharmacy's current clientele. Many pharmacies would like to provide value-added pharmacy services that attract new patients.

Reviewing the literature to learn the potential size of a market can be helpful, especially epidemiologic studies that describe the incidence and prevalence of a condition. Unfortunately, most of these studies are done on a state, national, or even international level and may not provide information about the prevalence of a condition in a specific geographic location of interest. This disadvantage can be offset in part by combining a literature review with interviews of other health care professionals in the pharmacy's market area. They may be able to provide specific information about the number of patients they and other professionals treat. Another tool that can be used by pharmacists to learn more about the characteristics of a population is geographic information systems (GIS). GIS combines maps with demographic databases (e.g., US Census data) to provide an analysis of the characteristics of a city, a neighborhood, or even a series of blocks around a pharmacy, hospital or other health providers. GIS programs such as SimplyMap have been used by pharmacies and researchers to learn more about the health needs of their surrounding communities (Geographic Research, Inc., 2011).

Perhaps the most direct way to determine the size of a market for a value-added pharmacy service is to perform a market research study. Survey research methods can be used to gather information from potential customers. Not only can this information be used to determine the number of potential consumers in a specific area, but it also can provide additional information about consumers that can be useful in developing a value-added pharmacy service (e.g., if/where they currently obtain this service, their level of satisfaction with the service, and their willingness to obtain the service from a pharmacist). Some of the drawbacks of market research include the specialized knowledge and skills needed to carry out a study properly, the amount of time involved, the relatively high cost of performing this type of research, and the potential biases that are inherent in any type of survey research. Several studies have been published that used market research to determine the size and characteristics of potential consumers of value-added pharmacy services (Larson, 2000; MacKinnon and Mahrous, 2002; Zgarrick and Cohen, 2000).

Even if there are a large number of consumers who might be interested in obtaining a value-added service from a pharmacist, the ultimate question that must be answered is whether these consumers are willing and able to make this purchase. Some consumers (especially patients) may be very interested in obtaining a health service from a pharmacist and actually may say on a survey that they would be willing to pay for this service. However, saying that one is willing to pay does not always result in an actual payment for the service. The consumer may not have the means to pay the price being charged by the pharmacist or may be able to obtain the service from another provider (e.g., a physician) for only a small insurance co-payment.

Other groups of consumers also may be interested in obtaining a value-added pharmacy service and often have the financial resources to do so (e.g., other health care professionals, insurance companies, employers, and government agencies). However, pharmacists often find that these groups may not be willing to pay for these services until the pharmacist can demonstrate the value of the services (Poirier et al., 1999). This has created a “chicken and egg” problem for many pharmacists. Pharmacists state that they cannot show the value of the service unless they are given the opportunity to provide it. At the same time, pharmacists state that they cannot afford to provide the service unless they are paid to do so. Several demonstration projects have been performed to show the value of professional services to various groups of consumers (Bluml et al., 2000; Singhal et al., 1999). Medicare now provides opportunities for pharmacists to receive payment for MTM services through the Part D program (see Chapters 20 and 26).

Several methods can be used to learn more about consumers' willingness and ability to pay for value-added pharmacy services. Getting to know consumers and observing their habits (e.g., what services they will pay for, how much they will pay, and what they expect to receive in return) can be done relatively quickly and easily in most practice settings. Market research and the pharmacy literature also can be used, but it is important to remember that what a consumer says he or she will pay for a value-added pharmacy service on a survey may not represent what he or she actually will pay when presented with the service in the pharmacy. The only way to truly determine what a consumer will pay for a value-added pharmacy service is to offer the service, charge a price, and observe whether the consumer actually makes the purchase. Unfortunately, this can occur only after the decision has been made to offer the service.

Dr. Brouchard's research into asthma and diabetes services provided him with a great deal of information. The initial data he gathered from Internet searches and the primary and secondary literature showed him that each service had a great deal of potential. He visited other pharmacies in the Phoenix area that offer these services and came away impressed with the level of service that was being provided and the pharmacists' willingness to share their ideas.

He started looking into the market for each of these services. After checking the pharmacy's dispensing records, he found that there were a large number of patients using asthma medications and even more on lipid-lowering and cardiac medications, but the largest proportion of patients was using oral hypoglycemic drugs. The local physicians he spoke with said that they were having a difficult time keeping up with all the new cases of diabetes they were seeing. Several of them stated that they employed nurses who were CDEs to educate their patients about their disease (especially since Medicare was now paying them to do so) but that it took more than 6 months from the time they made the initial diagnosis until they could get a patient into an education program. Dr. Brouchard imagined that at least some of these patients might be willing to pay out of their own pockets to get this service sooner than to wait more than 6 months to get this education from a nurse. Besides, how well could the nurse explain all the medications that are being used to control this disease?

Assuming that there is a consumer need and a market for a particular value-added pharmacy service, business planners must ask themselves a very serious question before moving forward. The question is whether they actually can meet the needs of consumers. The answer to this question is not always as easy as it might appear and requires a great deal of introspection on the part of the pharmacist and the organization.

One way that business planners can begin to answer this question is to perform a SWOT (i.e., strengths, weaknesses, opportunities, and threats) analysis, as described in Chapters 4 and 5. SWOT analysis has applications in both strategic and business planning. In strategic planning, managers perform this analysis on a broad level, looking at the entire organization. In business planning, strengths, weaknesses, opportunities, and threats are evaluated only at the level of the service being considered. Strengths and weaknesses are considered to be internal to an organization and are the easiest to initially evaluate. They are also within the control of the organization, such that aspects that initially may be considered a weakness can be addressed and perhaps even become strengths of the organization in the future. Opportunities and threats generally exist external to an organization. Given that they are part of the external environment, they often are more difficult to control. At the same time, they can exert just as much influence over the success or failure of a value-added pharmacy service as internal strengths and weaknesses.

The first internal factor that an organization planning to offer a value-added pharmacy service should evaluate is the resources necessary to provide the service. This starts with the abilities and interests of the staff to provide the service. Many value-added pharmacy services require knowledge and skills beyond those used in traditional dispensing functions. Staff members may need to attend educational or training programs to gain the appropriate knowledge and skills. Some value-added services require that pharmacists become certified to demonstrate their knowledge and skills in an area before the service may be offered. States that allow pharmacists to administer immunizations often require that they become certified before providing this service (APhA, 2011a). Medicare and many insurance companies require that pharmacists become CDEs before they will compensate them to provide diabetes education services. Becoming a CDE involves completing a series of exercises, gaining experience in providing diabetes education to patients, and passing an examination. This process generally takes about 2 years to complete (NCBDE, 2011).

It may go without saying that pharmacists should be interested in providing value-added services if they are to be successful. It is important to match the skills and interests of a pharmacy's personnel with the services the pharmacy intends to provide. If a pharmacist is not interested in providing a service, can he or she be provided with an incentive that may motivate him or her to do so? If not, can another pharmacist be hired who has the interest and skills needed to be successful?

Pharmacies need a number of physical resources to provide most value-added services. This usually begins with the layout of the pharmacy. Many value-added pharmacy services require at least some degree of privacy. Unfortunately, pharmacies that were designed to maximize the efficiency of the dispensing process often do not have a private office or classroom space necessary to provide patient care services. Other physical resources that may be needed to provide a professional service include computer hardware and software, testing devices, medical supplies, and office supplies.

Pharmacies must be willing to commit financial resources to the development of a new value-added service. Working capital is needed to support the purchase of equipment, supplies, and marketing before the service can be offered. Since most services do not bring in enough income initially to cover their costs, money also will be needed to pay employees and continue to purchase needed resources. Business planners must consider how much working capital they will need to start a service and how long they are willing to support the service before it is expected to cover its costs and contribute to organizational profitability.

Another internal resource that cannot be overlooked is support from administrators within the organization. Administrators who “buy in” to the concept of providing value-added services are much more likely to support their development and provide the resources needed to get them off the ground. Pharmacists hoping to gain this support generally work to convince administrators how implementation of value-added services will help the organization reach its overall goals.

Many external factors, such as patient demographic trends, can be viewed as both a threat and an opportunity for the development of a value-added service. The aging of the population and the increased reliance on drug therapy as a medical treatment have greatly increased the number of prescriptions filled in pharmacies (NACDS, 2011). This can be seen as a threat, in that pharmacy staff may not have as much time to provide other nondispensing services. On the other hand, these trends also present opportunities for pharmacists to implement new services that meet the increased patient needs for health information and drug therapy monitoring.

Other external factors that may influence the success or failure of a value-added service include laws and regulations affecting practice (both of pharmacists and of other health care professionals), reimbursement and compensation policies of third-party payers, competition from other pharmacies and health care providers, technology, and the ever-changing needs of health care consumers themselves. While these factors may be difficult for business planners to influence, they are manageable. Pharmacists willing to take a proactive stance regarding these issues (especially though involvement in professional organizations and other groups) are often able to have their voices heard and help to shape the policies that affect their futures.

After assessing the market for a diabetes education service, Dr. Brouchard took a closer look at his environment. Within his pharmacy and organization, the outlook appeared to be fairly positive. While he was not a diabetes expert, he spoke with another pharmacist in his chain who had become a CDE. The chain had supported his training and even helped to pay part of the certification fee. Dr. Brouchard always had been willing to learn more, so he decided that he would start the certification process on his own.

The pharmacy already had a private counseling area, and he figured that he could use some of the resources he had obtained for the pediatric asthma service for a diabetes service. When he told his pharmacy manager about his idea, she seemed excited, especially given the potential for the service to attract new customers to the pharmacy. She did stress that her budget to support this service was limited and that he would have to provide more financial projections that she could share with her district manager before she could commit to support the service.

There were threats that could have an impact on the service, but none that he felt could not be overcome. There always seemed to be more prescriptions to be filled, and reimbursements for dispensing were decreasing as a result of the Medicare Part D programs that so many of their patients participated in. However, he knew that his chain was developing new technologies that would speed the dispensing process and that his state had just changed its pharmacy practice act to allow pharmacy technicians to perform more functions. He figured that these changes should help to free up some time that would be needed to develop, market, implement, and ultimately provide a diabetes education service to patients.

Dr. Brouchard investigated first steps he could take in developing a diabetes education service. Through his contacts with the local public health department, he was able to identify senior centers and community groups that were interested in learning more about health-related matters. Dr. Brouchard created a couple of 20-minute health education presentations aimed at the general public, one of them focusing on preventing diabetes, another on living a healthy lifestyle with diabetes. He began to visit local senior and community centers to give these presentations. These presentations included a diabetes screening and risk assessment so that participants could gauge their need for additional health services. Finally, Dr. Brouchard began the process of becoming a CDE. This would allow him not only to bill for services he would provide for his patients, but to also visit local physicians, nurses, and other health care professionals to keep them up-to-date on the latest advances in diabetes therapies.

Pharmacies, like any other business or organization, cannot build new value-added services with the hope that consumers will adopt them. Pharmacy managers can use business planning as a tool to evaluate consumer needs, the market, and their own resources before deciding whether to offer value-added services and which services would be most likely to succeed. While using business planning does not guarantee that a new value-added pharmacy service will be successful, the process helps pharmacy managers manage the risks involved in this increasingly important area of their organizations.

1. What are the dangers of the “build it and they will come” approach to developing professional services?

2. Compare and contrast the types of value-added pharmacy services that most likely would be accepted at St. Jude's Children's Research Hospital and Walgreen's (see Table 25-1).

3. What obligations does a pharmacy have to provide goods and services that benefit their community, in addition to those that benefit individual patients?

4. How would have developing a business plan before he implemented the pediatric asthma service in Arizona helped Dr. Brouchard?

5. Given what you now know, what other professional services also may be viable for Dr. Brouchard to offer at his new pharmacy?