4 Advantages of Expanding Into LTC Pharmacy
Summary: This article discusses the growing demand for long-term care (LTC) and the strategic opportunities for pharmacies to expand into LTC services, focusing on benefits such as higher prescription volume, enhanced pharmacy services, increased revenue, and long-term partnerships with LTC facilities.
Table of Contents:
1. Higher Volume of Prescription Orders
2. Enhanced Pharmacy Services
3. Increased Revenue and Reimbursement
4. Long-Term Partnerships with Facilities
Intro:
As the median age of Americans nears 40, we stand at the edge of one of the most significant demographic shifts in history. The changing profile of the aging population has created a profound demand for long-term care (LTC) and a nuanced, strategic opportunity for pharmacies.
It’s projected that the number of Americans aged 65 and older will surpass more than 95 million by 2060. This presents new opportunities for retail pharmacies to expand into long-term care as baby boomers and their close generational cohorts progress to the next life stage in unprecedented numbers. Let’s explore the benefits that an LTC pharmacy can look forward to in this dynamic landscape of patient care.
1. Higher Volume of Presecription Orders
As LTC pharmacies typically fulfill larger prescription orders for multiple residents and facilities, they enjoy a distinct operational advantage. While serving a customer base in long-term care, pharmacies improve overall profitability and service delivery in multiple ways:
Economies of Scale
Consolidated order fulfillment reduces the cost per prescription, translating directly to improved profit margins, and setting the stage for sustainable growth.
Optimized Inventory
The constant flow of prescriptions leaving the pharmacy reduces the risk of stockouts with efficient inventory turnover.
Cost Efficiency
Streamlined operations reduce overhead and operational expenses for better resource management.
With the right LTC pharmacy management system, this model enables patients to receive comprehensive, reliable support without compromising quality of care.
2. Enhanced Pharmacy Services
LTC operations are more than a means to diversify. They meet specific and complex needs of a growing demographic. Retail pharmacies expanding into LTC operations can offer numerous enhanced services tailored to unique patient considerations, such as:
Medication Therapy Management
For patients with numerous co-occuring conditions, it’s essential to optimize therapeutic outcomes for improved safety and cost management. LTC pharmacies serve an essential role in comprehensive patient care, evaluating medication regimens to identify and resolve potential issues such as drug interactions or inappropriate dosage.
Adherence and Compliance Packaging
Hand in hand with medication management services, LTC pharmacies provide expert fulfillment of various regulations for adherence and compliance. This ensures patients receive medications as prescribed, packed as required or requested for facility needs. With LTC pharmacy software, automation eliminates the manual packaging process.
Medication Synchronization
Whether a patient is prescribed three medications or thirteen, their schedules are rarely aligned to neatly refill on the same date. LTC pharmacies are able to synchronize medication ordering for patients and facilities to simplify care.
Specializing in the medication needs of elderly and chronically ill patients allows pharmacies to offer valuable services that retail pharmacies cannot. The capability to offer customized care and expertise makes LTC pharmacies more attractive, and enhances their bottom line.
3. Increased Revenue and Reimbursement
When patients require several medications to manage chronic conditions, their well-being necessitates consistent access to prescription services. By diversifying into long-term care, pharmacies can expand to new markets and reduce their reliance on traditional retail sales. This leads to more stable and predictable revenue compared to the inherent volatility of retail settings.
In addition to the greater revenue that comes from a concentrated volume of services, Pharmacies in LTC also benefit from higher reimbursements. Often with more profit per prescription as there are no retroactive DIR fees on Medicare Part D claims.
Recent reforms from the Centers for Medicare and Medicaid Services (CMS) requires plan sponsors to include all DIR fees at the point of sale. This simplifies cost management for LTC pharmacies and delivers greater transparency for patients at the same time.
4. Long-Term Partnerships with Facilities
It’s a natural fit for LTC pharmacies to build relationships with LTC living facilities. The opportunity to align services offers another significant advantage through extended contracts. Developing these close partnerships can be mutually beneficial in a few ways:
Stability of Operations
LTC pharmacy services paired with long-term care facilities ensures continuity of care to patients, while reducing the need to regularly attract new customers.
Predictable Demand
Consistent demand allows for sustainable growth and expansion to more facilities with greater efficiency.
Greater Capacity
As pharmacies are enabled to scale operations, they can expand their services to include less traditional LTC customers that are underserved by retail. These can include behavioral health facilities, correctional facilities, and even meds-to-home patients.
Make the Transition to Long-Term Care
The transition to an LTC pharmacy model offers a suite of operational advantages beyond enhanced revenue, stability, and the opportunity to build lasting partnerships. The inevitable growth of this sector makes it a prudent choice for pharmacies seeking a competitive position.
Download Retail Pharmacy Software vs. LTC-Designed Software to learn more about the distinct platforms and what to look for in LTC pharmacy management systems.