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135 Cards in this Set

  • Front
  • Back
Patient Centered Care
Providing care that is respectful of and responsive to individual patient preferences, needs, and values and ensuring that patient values guide all clinical decisions
Care provided patients should preserve their dignity and autonomy.
1. maintain self-respect

2. feel valued as a person

3. acknowledge and encourage patient control of decision making regarding their health care.
Dignitity threatened by
Insensitivity of providers to the needs and feelings of patients.
Autonomy is threatened when
Patients do not fully understand their treatment or alternatives and are not actively involved in the decision-making process
Why is Patient center care important for Pharmacist?
1. Most medical treatments are for chronic conditions; patients and caregivers do more to manage therapy than any health care provider

2. Patients have questions about drug therapy that they do not ask

3. Patients make autonomous decisions about their use of medications

4.Patients often do not understand medication instructions

Health Belief Model:
A health behavior theory that describes the likelihood an individual will take action to change a behavior
Components of Health Belief Model
1. susceptibility and severity of disease

2. perceived benefits and barriers

3. cues to action

4. self-efficiency

5. demographic, sociopsycological, and structural variables
Components of Health Belief Model Flow Chart
For patients to change their behaviors:
They must perceive the benefit of the change to be greater than the barriers to overcome it or they must believe that they are very susceptible to that disease causing them fear and thus a change in behavior to prevent the disease. If the barriers are perceived to be greater than the benefit or the person does not think it likely to get the disease, than person will not change their behavior. The person must also believe in his/her ability to overcome the barriers in order to reach the goal.
Patient empowerment (4 parts)
1-3 suggested by JCAHO
1. Understand that more tests or medications may not always be better. Ask your doctor what a new lab test or medication is likely to achieve.

2. When your doctor writes you a prescription, make sure you can read it. If you can’t read your doctor’s handwriting, your pharmacist might not be able to either.
Patient empowerment (cont)
3. If you do not recognize a medication, verify that it is for you. Ask about oral medications before swallowing, and read the contents of bags of intravenous (IV) fluids.

4. Purpose is to encourage patients to get involved in their own healthcare and be aware of alternatives. This helps the patient avoid medical error.
Important communication skills of healthcare professional:
1. Empathetic listening and understanding (verbal and nonverbal)

2. Genuineness

3. Respect for the patient
Empathetic listening and understanding (verbal and nonverbal)
i) is perceived by patients as evidence of caring and concern

ii) contributes to a patient’s sense of worth and dignity

iii) encourages patients to share concerns or confusion

iv) facilitates patient’s own problem-solving
i) The patient must perceive you as honest in your communication.

ii) Saying a reflection of feeling statement but nonverbally showing distraction, impatience or annoyance will NOT be experienced as empathy.
Respect for the patient
i) One of the biggest barriers to effective communication is our tendency to judge the other person.

ii) Patients who feel they might be judged (non-compliant, unmotivated, drug-seeking) will not reveal the problems they have with therapy.
Convey empathy to a patient by:
1. Nonverbal behavior is as important as words spoken

2.You must genuinely want to listen to and help the patient

3. You must perceive empathic listening as helpful in itself
Appropriate listening behaviors:
a) Looking at the patient

b) Not crossing your arms

c) Leaning in towards the patient

d) Do not look at watch or seem impatient for conversation to end

e) Take patient away from distractions and to a private area where they feel free to talk
Empathetic Response
i) Reflection of feeling responses tend to be perceived by patients as understanding and nonjudgmental.

ii) Rephrases very briefly what you understand the patient is feeling based on what he/she has told you.

iii) Does not try to change the person’s feeling

iv) Does not try to stop the person from feeling a certain way

v) Does not judge or evaluate feeling

vi) Simply tries to convey understanding
Steps for an effective interview
1. Opening the interview
2. Assess current drug therapy
3. Asses each medication in order to assess purpose of drugs
4. Assess ACTUAL use of medications using open-ended questions
Steps for an effective interview (cont)
5. Assess effectiveness
6. Assess problems
7. Assess allergies
8. Ending interview
Opening the interview
1. Introduce yourself

2. Identify patient or caregiver by name

3. Explain purpose of interview

4. how it can help the patient
Assess current drug therapy
1. Establish complete listing -- Rx, OTC, alternative medicine

2. Begin information gathering by asking OPEN-ENDED QUESTIONS—get patients to describe their understanding rather than answer “yes/no” questions
Asses each medication in order to assess purpose of drugs
What did the doctor tell you this medication was for?
Assess ACTUAL use of medications using open-ended questions.
Also want to assess difficulties in taking prescribed medicines and do not be mad at patient for not taking medicine.
Assess effectiveness
1. “How well does the medicine seem to be working?”

2. What are the goals for treatment?

3. How is effectiveness being evaluated? By patient? By physician?
Assess problems
1. Begin with general question
“What problems have you experienced with your medication?”

2. Follow-up with specific questions on adverse effects
“Have you noticed any new symptoms since you started taking this medicine?”
Assess allergies
Note allergies to meds
Ending interview
1. Ask if patient has additional questions or concerns

2. Make yourself available if patient thinks of other information or has questions or concerns about any medication.
Important interview tips
1. Make sure interview is organized and you flow from one point to the next

2. Make sure you complete finish a point before you move on; don’t come back to the point later; it will confuse patient.

3. Give notice of topic that you will be addressing next

4. Summarize key points before moving on

5. Be flexible and respond to issues as patient raises them; don’t tell the patient to hold the question till later in the interview.
Challenges in communication (2)
1. Patient not feeling comfortable to discuss their medication problems surrounded by other people. Solution is to take them to a private room or corner away from everyone else and to talk in a quiet voice to insure privacy.
Challenges in comunication (cont)
Assuring patient understanding (that the patient actually heard and understood what you have said to them; that they can apply the information to their life): solution is the “Tech Back” Technique
"Tech Back” Technique
1. Ask patient to summarize information presented

2. Ask patients to demonstrate administration

3. Put “blame” for possible misunderstandings on yourself (“I want to make sure I did a good job of explaining about your new medications. Would you summarize the important points to remember about this medicine.”)

4. Allows you to verify understanding, fill in gaps, and correct misunderstandings
Low health literacy (reading and understanding the words used by healthcare providers-aka health jargon):
Solution is to use “living room: language that everyone understands to avoid making the patient feel stupid and out of place.
Element of chronic care
1. Health System
2. Delivery System Design
3. Decision Support
4. Clinical Information Systems
5. Self-Management Support
6. Community
7. Patient center because all of the health care providers are working and communicating together in order to have the best outcome for the patient.
Element of chronic care
#7 cont
i) Ensure regular follow-up by the care team

ii) Give care that patients understand and is consistent with their preferences and values
Multidisciplinary Care
i) many different professionals work for the good of the patient, although somewhat independently

ii) What happens to people who go to see their doctor, are given a prescription, go to a pharmacy to get it filled, but the pharmacist never talks with the doctor who wrote the prescription. Both people though are trying to help person.
Interdisciplinary Care
i) Many different professionals work for the good of the patient, COMMUNICATING EFFECTIVELY AMONG THEMSELVES AND WITH THE PATIENT

ii) How it is supposed to work in a hospital and the idea behind a medical home.
5 professions involved in a Medical home
a) Pharmacist
b) Physician
c) Nurse
d) Physical Therapist
e) Social Worker
Medical Home is defined as
an approach to providing comprehensive primary care... that facilitates partnerships between individual patients, and their personal Providers, and when appropriate, the patient’s family". The provision of medical homes may allow better access to health care, increase satisfaction with care, and improve health elements
Medical Home (cont)
a) Assessment
b) Self-management support
c) Care coordination
d) Health literacy
e) Practice coaching
f) Collaborative
g) Support for Medical Home: Patients reap the benefits of more eyes and ears, the insights of different bodies of knowledge, and a wider range of skills
Developments that will affect health care system
a) Health care reform

b) No “pre-existing conditions” clause for children

c) Children of family plan through age 26

d) Removal of lifetime caps (max coverage offered by insurance)

e) Preventive services with no co-payments
3 historical events that shaped our health care system
1. Congress passed the Hill-Burton Act and greatly increased the number of hospital beds by providing funds to build new hospitals. The only way to receive this money was to agree to take care of all people who came to the hospital even if they could not pay for the services.
3 historical events that shaped our health care system (cont)
2. Congress created financial incentives to encourage the education of more and more health care professionals.

3. Congress established Medicare (elderly) and Medicaid (poor) to improve access for the elderly and the poor in 1965.
What is an HMO?
Health Maintenance Org.

A type of managed care organization (MCO) that shares risk with a network of health care provider of requiring that the providers assume some rick, either directly or indirectly, and that generally does not provide coverage for medical care that is received outside the network.
Risk arrangement of HMO's
(1) Capitation-providers are paid a fixed amount each month for each enrolled patient, regardless of the amount of health care service actually provided.

(2) Risk pool-an arrangement in which an HMO places a portion of payments in a pool as a source for any subsequent claims that exceed projections, with the providers and the HMO sharing in the surplus (or loss) at the end of the year.
Gatekeeper & HMO's
Gatekeeper is a central component of most HMOs in which primary care physicians must coordinate and authorize all medical services, including labs, referrals, and hospitalizations. Must receive referral in order for service to be covered by HMO. Helps to limit unnecessary and often expensive referrals to specialists.
What is JCAHO?
Joint Commission of Accreditation of Healthcare Organizations

i) A nonprofit organization that sets standards of practice for, evaluates and accredits more than 15,000 health care organizations and programs in US.

ii) This accreditation is required to in order to receive reimbursement for Medicare and Medicaid programs.
What is DRG?
Diagnosis-Related Group

i) A categorization of diseases of conditions created initially by the federal government as a means to reimburse hospitals prospectively for services provided to patients.

ii) How hospitals and other care providers bill insurance companies.
Hospital classification
1. Federal Govt
2. Non-Federal Govt
3. Non-Govt
Federal Government Hospitals
aka public hospitals— serve veteran, military personnel, and Native Americans populations.
Non-Federal Govt Hospitals
aka public hospitals—hospitals owned and operated by city, county or state governments.
Non Government Hospitals
1. not-for-profit—reinvest finical surplus at the end of the year into the organization (new equipment, remodeling, or new buildings)
2. Investor owned for profit—reinvest financial surplus at end of the year into the organization plus gives some money to the investors in the form of dividends.
Type of Service Hospitals
i) General hospitals—provide a variety of services including general medical and surgical services

ii) Specialty hospitals—concentrate on one disease process or on one segment of the population.
Hospital length of stay
i) Acute care (or short term hospital)—have an average stay of fewer than 30 days

ii) Long-term hospitals—have an average stay of greater than 30 days.
What is Medicare?
Medicare is funded by the federal government and therefore the requirements and benefits are the same throughout the country. It is funded by Federal trust funds. Part D plan (PDP) began in 2006. For disabled and persons over age 65.

Type A
Type B
Type C
Part A hospitalizations

Part B Physician services

Part C MCO option
What is Medicad?
Medicaid is administered by each state and receives financial support from the federal and state governments. For persons of low income.
Federal portion of Medicad
iFederal portion > 50% but varies annually by state

(1) Based on average income relative to national average

(2) Historically in Florida, 55-60% Federal funds

(3) “Enhanced match” in Florida 2009 & 2010 to 66.7%
Medicad Eligibility
Eligibility: Department of Child and Families

Program Planning and Operations: Agency for HealthCare Administration (AHCA) Division of Medicaid Services
Definition difference of Medicare VS Medicad
Medicare is only federal government. Medicaid is run by each state but receives some funding from the federal government.
Who is eligible for Medicare benefits?
(1) Over AGE 65: citizen; employed 10yrs or spouse

(2) Permanent disability payments from Social Security

(3) End-stage renal disease (ESRD)

(4)ALS (“Lou Gehrig’s Disease”)
Medicare Part A Specifics
(1)Deductibles and co-payments

(2) Acute Care – 90 days medically-necessary per benefit period with 60 days lifetime reserve (190 days lifetime limit for inpatient psychiatric care)

(3) Skilled Nursing Facility – 100 days per benefit period, preceded by > 3 hospital days within last 30 days
Medicare Part B Specifics
(1)covers outpatient care (e.g., chemotherapy), preventive services (e.g., vaccinations), Durable Medical Equipment (DME)

(2) NOT Covered: dental care; hearing aids; vision care; routine annual physical exam

(3) 20% co-payment for covered services; otherwise 100%

(4) Assignment: physician agrees to accept Medicare payment

(5) Balanced billing allowed up to 115% approved charge
Medicare Part C Specifics
Managed Care Option –

Medicare Advantage Implications for Seniors based on history & negative experience
Medicare Coverage For Most Americans
Medicare covers about 45% of care on average; Most beneficiaries have additional coverage

(1) Employer sponsored benefit for retirees

(2) Medigap: private plan for charges not covered by Medicare

(3) 12 plan types allowed (Plans A-L)

(4) Standardized format, language and definitions

(5) Medicaid – Dual Eligibles
Medicad - Categorically Needy
(a) Families below income/asset threshold–state determines
(b) Child deprived of parental support
(c) Persons receiving Social Security Income (SSI)
(d) Pregnant women and children under 6 below income threshold
(e) Children < 18 below federal poverty level
(f) Qualified Medicare Beneficiaries below specified income and asset thresholds
Medicad Categorically needy optional (determined by each state)
a) Persons no meeting mandated requirement but sharing characteristics of mandated groups

(b) Must receive same benefits as categorically needy
Medicad Medically Needy
(a) Optional as determined by states
(b) Higher income threshold minors and pregnant women
(c) Persons with “extra-ordinary” medical expenses
(d) Prenatal and delivery care
(e) Ambulatory care for persons < 18 years old and those entitled to institutional care
(f) Home health services for nursing home qualified
Medicad Required Services
(a) Inpatient hospital
(b) Outpatient hospital
(c) Physician services
(d) Labs & X-rays
(e) Nursing facilities
(f) Home health
(g) Pre-natal care, family planning
(i) Rural clinics, etc.
Medicad Optional Services
(a) Outpatient prescription drugs
(b) Physical/rehabilitation therapy
(c) Optometrist and eyeglasses
(d) Prosthetic devices
(e) Home & community-based svcs
(f) Intermediate care for developmental disabilities
(g) Transportation
Children’s Health Insurance Program (CHIP)--Reauthorization Act 2009
(a) FACT: almost ¾ of uninsured children live in households below 200% of poverty with an adult working

(b) Allows for expansion of Medicaid-type services to low-income children with no health insurance

(c) (200% of poverty in Florida or $44,000)
Children’s Health Insurance Program (CHIP)--Reauthorization Act 2009 (CONT)
(d) State sets premiums and cost sharing on a sliding scale

(e) An estimated 5 million children eligible but not enrolled

(f) Recovery Act funds have extended programs and funds
Penalty for no Medicare Pt D Coverage
Part D: Don’t Sign Up - Face Penalty Later. If you sign up later, you pay 1% in premiums more each month you wait after being eligible for Medicare. You will pay this increased premium for the rest of your life. This stops people from only getting Part D when they have to buy expensive medications (adverse selection)
Medicare Pt D Open Enrollment Dates
Nov 15 to Dec 15
When NO Pt D penalty is given
Credible coverage is an acceptable alternative: E.g., coverage from VA or former employee benefits that meet or exceed the requirements of Medicare Part. If you have a credible coverage, you will not face penalty charge when you say up for Plan D when your supplement drug plan runs out.
Rules for Part D
a) Formulary
Some drugs not covered

b) Financial Incentives
copays and deductibles

Prior Authorization
meet certain criteria before prescribing
Rules for Part D
d) Step Care
Oldest cheapest before newest more expensive

e) Quantity limits
How much of a drug you can receive at one time.
Prerequisites of Insurance
a) Known peril with predictable frequency

b) Peril occurs at random among individuals

c) Losses are accidental

d)Losses are substantial

e) Losses are determinate

f) Policy holder has an insurable interest
Prepaid prescriptions are inconsistent with this principle
a) Substantial loss?
i) Consider administrative cost of plan relative to loss

b) Unpredictable?
i) “EVERYONE” uses prescription drugs
ii) Use can be predicted

c) Random? Accidental?
i) Consumer demand for non-essential services
ii) Consumers purchase more costly alternatives

d) Prescription therapies can be preventive
i) Reduce or delay need for more costly expenses
Problem: Catastrophic Hazards
Coverage limits- max amount that person can receive when they receive medical attention
Problem: Adverse Selection- only sick people join and not healthy people
Group policies- businesses that offer insurance and everyone has to join that insurance plan

Elimination Period- waiting period after joining insurance before you can receive benefits.
Problem: Moral Hazard- gain from apparent loss
Coordination of benefits- only 1 insurance will pay at a time if you have multiple insurances
Problem: Induced demand-used too much
Cost sharing-patient share the medical cost with the insurance company. Examples include copayments and co-insurance.
a) Fee-for-Service (FFS): reimbursement tin which a fee is paid to a provider for each service performed. FFS was the predominate reimbursement mechanism before managed care. Provide incentives to increase the quantity of services provided.

b) Capitation reimbursement: providers are paid a fixed amount each month for each enrolled patient, regardless of the amount of health care service actually provided.
Pharmacy Benefit Management (PBM)
a)Represent the third party payer

b)Assume responsibility for
i) Benefit design
ii) Controlling cost
iii) Computerized decision support tools
iv) Communication with providers and beneficiaries
v) Agreements with Participating Pharmacies
vi) Mail order options
vii) Utilization review/Auditing providers
Cost Containment
a) Formularies: The drugs approved for use in a hospital or for reimbursement. Prevents expensive and unnecessary drugs from being charged to the insurance.

b) Cost-Sharing: patient share the medical cost with the insurance company. Examples are co-payments, deductibles, out-of-pocket, co-insurance, and max benefits.

c) Tiered co-payments: a type of patient cost sharing that specifies multiple co-payment level that are designed to encourage the use of preferred drug products, such as generics and lower-cost brand name drugs. Patients pay a higher co-pay for more expensive drugs that are in the higher tier.
Cost Containment

d) Quantity limit: patient can only get a month supply of their medicine every month

e) Prior authorization: Patient must receive written documentation that that brand of medicine is medically necessary, submit it to the insurance and then insurance will choose whether to authorize or give a reason for refusal. If insurance authorizes the medicine, they will cover some of the cost.

f) Step Therapy: To treat a condition, patient starts at the most cost-effective and safest drug therapy/medicine and then, if the therapy/medication doesn’t work, moves up to a more expensive therapy/medicine.
Tiered Formulary:
Drugs on a formulary are usually grouped into tiers, and your co-payment is determined by the tier that your medication is on. A typical drug formulary includes three tiers. . .
Tier 1
lowest co-payment and usually includes generic medications.
Tier 2
higher co-payment than tier 1 and usually includes preferred brand name medications
Tier 3
has the highest co-payment and usually includes non-preferred brand name medications.
Preferred drug list
includes prescription drugs generally covered under the prescription drug benefit plan subject to applicable limits and conditions.
Generic Substitution
a pharmacist-initiated act by which a different brand or an unbranded drug product is dispensed instead of a drug brand that was prescribed by the physician. This means substituting the same chemical entity in the same dosage form for one marketed by a different company.
Therapeutic Substitution
a pharmacist-initiated act by which a pharmaceutical or therapeutic alternate for the physician-prescribed drug is dispensed without consulting the physician. This denotes replacement of the prescribed drug with a chemically different drug within the same therapeutic category (eg, hydrochlorothiazide for furosemide; ranitidine for cimetidine; chloramphenicol for erythromycin).
Drug Utilization Review (DUG)
The review of physician prescribing, pharmacist dispensing and patient use of drugs with the goal of ensuring that drugs are used appropriately, safely, and effectively. Cost containment mechanism as well.
Medication Therapy Management (MTM)
A broad range of activities within the scope of practice of pharmacists and other quality health care providers intended to insure that patients with multiple diseases and on many medications get the greatest benefit possible from their medication regimen.
Pharmacy Benefit Manager (PBM)
a specialized company that adjudicates prescription drug claims and manages the prescription drug coverage for a third-party payer by containing costs and influencing the quality of services provided.
Major Responsibility of PBM
(1)Communication between providers and beneficiaries

(2)Agreements with participation pharmacies

(3)Monitoring of doctor prescription writing
Fiscal Intermediary (FI)
an organization that facilities exchanges between health care payers and health care providers by underwriting and/or administering health care benefit programs. Most often are private insurance companies that serve as the federal government's agents in the administration of the Medicare program, including the payment of claims.
Third Party Administration (TPA)
an organization that processes insurance claims or certain aspects of employee benefit plans for a separate entity.[1] This can be viewed as "outsourcing" the administration of the claims processing, since the TPA is performing a task traditionally handled by the company providing the insurance or the company itself. Often, in the case of insurance claims, a TPA handles the claims processing for an employer that self-insures its employees. Thus, the employer is acting as an insurance company and underwrites the risk. The risk of loss remains with the employer, and not with the TPA.
Activities carried out by the PBM
a)Benefit design
b)Controlling cost (aka negotiating lower prices with the manufacturer)
c)Computerizing decision support tool
d)Communication with providers and beneficiaries
e)Agreements with participating pharmacies
f)Mail order options
g)Utilization of review/auditing providers
Usual and customary charge. Refers to customers that are paying cash for their prescription. Cost to cash patient (pharmacy retail price) = cost of drug product + dispensing fee (service charge)
Average Wholesale Price. AWP is what the pharmacy pays for the drug.
Average Manufacturers Price. AMP is what wholesalers and large hospitals or chain pharmacies will pay for the drug. AMP<AWP
Wholesale Acquisition Cost. WAC is the price sold to wholesalers (is based on survey of wholesale pricing data rather than manufacturers’ list prices).
Actual Acquisition Cost. AAC is the actual selling price of the drug to customers
Estimates Acquisition Cost. Third party payers recognize that a pharmacy’s AAC is less than AWP and therefore don’t want to repay AWP. EAC is the standard set in palce instead of AWP = AWP – x% or WAC + x%.. EAC could also = MAC.
Maximum Allowable Cost. MAC is the amount paid by PBM for the drug ingredient cost for a multiple-source drug. MAC is usually set at the price of a low-cost generic product without regard as to whether a brand-name or generic product is actually dispensed.
Federal Upper Limit. FUL is same thing as MAC but just what the government uses.
Determination of value

b)Comparative effectiveness
Cost-effectivness Pros
(1)Greater efficiency

(2)Improved quality

(3)Better patient outcomes

(4)Less variability in provision of care
Cost-effectivness Cons
(1)Lack of knowledge—incmplete models

(2)Inherent uncertainty—requires analytical assumptions

(3)Lack of transparency due to complexity

(4)Whose interests/perspective are represented? (patient, payer, health system, society, etc…)

(5)Economic analysis leads to rationing—death panels
Comparative effectiveness Purpose
to inform patients, providers, and decision-makers responding to their expressed needs, which interventions are most effective for which patients under (which) specific circumstances.
Interventions os Comparative effectiveness may include
(a)Medications, procedures, medical and assistive devices and technologies

(b)Behavioral change strategies

(c)Delivery system interventions
American Recover and Reinvestment Act of 2009
gave $1.1 Billion for comparative effectiveness research.
Results not to be used to. . .
(1)Mandate coverage

(2)Establish reimbursement

(3)Set policies for public or private payers
Cons of Comparative effectiveness
(1)Afraid that research may be used by insurers to deny coverage for more expensive treatments or to ration care

(2)Time and money required for all the research

(3)Timeliness of results

(4)Availabilty of knowledge personnel (without conflict of interest) to conduct research
Pharmaceutical Purchasers
a) Large volume purchasers

b) Small volume purchasers
Large volume purchasers
pharmacy chains, mass merchandisers
government programs: VA, DoD, HIS, Medicaid
Small volume purchasers
form, aggregations, buying groups or purchasing cooperatives
Buying groups/Purchasing Co-ops
aggregations of small volume purchasers that come together to buy in bulk making it possible to set own price.
Independent Pharmacy Cooperative. 4000 stores that purchase together and agree what brand/generic they will buy.
Patient Empowerment Initiatives
JCAHO- "Speak Up: Help Prevent Errors in your Care

AHQR: "20 Tips to Help Prevent Medical Errors"

Institute for Safe Medication Practice- "Safe Medicine- Protect yourself from medication error"
NIH Study
provider-patient communication related to pain management in cancer care.
Delivery System Design
define rolls, distribute tasks, plan interactions to support evidenced based care, case management services for complex patients, ensure follow-up, give care that is understood by patient and consistent with prefrences and value
Unique rolls of professions involved in a medical home.
(Dr. Jeff)
Pharmacist-alert to drug-drug interactions

Physician- discuss ejection fractions and unloading of heart

Dietician- control salt intake
Unique rolls of professions involved in a medical home.
(Dr. Jeff)
PT- Cardiac rehabilitation

Social Worker- discuss impact of limited exercise intolerance on social interactions and self image.
Retail pricing for prescriptions
Cost of Product + Dispensing Fee = Total Rx Charge
Community Pharmacy Expenses
Products – Inventory



Support staff

Expenses Directly Related to Pharmacy Dept

Expenses Shared across all departments within the retail unit
Price Makers
Free to set price

Constrained by competitors

Manufacturers; Wholesalers;

Insurance Firms
Price Takers
Accept price offered

Manufacturers in countries with price controls

Dispensing Pharmacies
Large Volume Purchasers
Pharmacy Chains; Mass Merchandisers

Government Programs: VA, DoD, HIS, Medicaid
Large Volume Negotiators
Aggregations of Small Volume Purchasers
Purchasing Cooperatives;

Buying Groups

Revenue captured by institution
Fee for Service System:

Revenue increases as number of products and services increases.
Pharmacy Department as revenue generator

Fixed Payment Systems
Revenue fixed; costs increase as products and services increase.
Pharmacy Department as cost center