Some long-term care facilities have access to any drug needed, 24/7. Tablets, IV bags, inhalers—all of it. No waste, no leftovers to destroy, and no need to hope the “emergency tackle box” is stocked adequately for the long holiday weekend. And, no punch cards. Interested?
The relationship between long-term care and pharmacy has evolved modestly over the years, but that’s changing as quickly as the burgeoning business models and emerging service lines in both industries. As long-term and post-acute care (LTPAC) organizations expand into therapy, rehabilitation, memory care and other services, the earlier model of the stand-alone skilled nursing facility (SNF) with its own proprietary pharmacy are fading away. “The business model is moving away from the long-term, custodial care environment to a high-acuity, post-acute care environment,” says Robert R. Warnock, DPh, CGP, senior vice president of pharmacy services for Golden Living.
Unwilling or unable to maintain enterprise pharmacies onsite, many LTPAC organizations have turned to third-party outsourcing for their pharmacy services—choosing to focus on resident care and let the pharmacy delivery expertise fall to someone else.
But the third-party delivery model has its problems, too. Most pharmacy suppliers make deliveries once or twice a day, leaving LTPAC facilities vulnerable to shortages on weekends or late at night. The pharmacy service may deliver the medications to the door, but nursing staff still has to unpack the drug cartons, sort punch cards and select the medications to be administered.
Taking a cue from acute care, some LTPAC organizations are now finding a solution in a new use of a mature technology: automated dispensing units (ADUs), which eliminate stock waste and time spent on handling punch cards and drug distribution and tracking, especially when combined with electronic medical record technology.
The new pharma market
The field is ripe for whoever holds the most market share, so competition is fierce. In December, PharMerica acquired Amerita, a specialty home-infusion services company with operations in five states. In February 2012, Omnicare made a pitch to acquire PharMerica, but let the offer expire once the Federal Trade Commission vowed to block the merger.
In October, the market rumbled again when AlixaRx launched at the 2012 American Health Care Association conference. AlixaRx’s business model is based on automated dispensing units, a proven technology in acute care but still a relatively new idea in LTPAC. Fathered by senior care giant Golden Living, AlixaRx has inherited a load of ready-made clients. Golden Living executives say the AlixaRx system will be operating in about 90 facilities by the end of first quarter 2013, with more rollouts expected throughout the year.
But the biggest advantage of an ADU-based system is in delivering better, faster care for a resident population with increasingly acute conditions, explains Michael Yao, MD, senior vice president of clinical affairs and national medical director, Golden Living. “For antibiotics, timing is a big deal,” he says. “If you don’t have the right medications on hand, you may have to consider sending that patient to acute care.”
SHORTENING THE SHORT-CYCLE
The Centers for Medicare & Medicaid Services (CMS) reworked its short-cycle dispensing requirements, changing the Medicare Part D supplies from 30 days to 14 days or less to curb waste, effective January 1, 2013. The estimated savings could be $6 billion over 10 years, notes the Long Term Care Pharmacy Alliance.
After three years of pilot projects, Golden Living discovered it could save thousands per facility by using the ADUs instead of a third-party supplier. The dispensing machine eliminates waste: no stock excess, no wasted time in reordering, no unused tablets to destroy because of a script change. “CMS has already challenged facilities to have shorter day supplies, but we said, ‘What about a one-day supply?’,” Warnock says. “We literally cut the amount of drugs we had to destroy by two-thirds when we implemented this technology.”
ADUs also brought the nursing staff back to nursing—eliminating the need to fuss with punch cards, fill distribution cups and update the medication administration system software.
With proof of concept in hand, Golden Living’s parent company forged a new subsidiary to provide the ADU-based services—AlixaRx—announcing its formal launch at the 2012 American Health Care Association conference. Golden Living plans to have the AlixaRx system in 90 of its 300+ facilities by the end of first quarter 2013. AlixaRx is open to any client, much like its sister-company, Aegis Therapies.
“We finally made the decision that if we were going to solve our problem, we needed to do it ourselves,” Warnock explains. “We may be out ahead of the regulations right now, but CMS is going to drive this process.”