On-site pharmacy offers easy access, lower costs
October 1, 2002
Facility seen as natural adjunct to wellness program
When you’ve already got an extensive health-and-wellness program in place for your employees, what can you do to take your health-related services to the next level? One option would be to follow the lead of StorageTek, a Louisville, CO-based company that delivers a broad range of storage solutions for digitized data. This past May, StorageTek marked the opening of an on-site pharmacy for its employees.
StorageTek management anticipates that the new facility will save employees money on their prescriptions, provide much easier access to prescription and pharmaceutical advisory services, and ultimately contribute to improved employee health. "As you know, pharmaceutical costs are increasing at double-digit rates annually," notes P.J. Hollister, MSHA, manager of wellness services. "We saw this as an opportunity to enhance employee benefits and reduce costs."
The pharmacy is operated for StorageTek by CHD Meridian Healthcare, a Nashville, TN-based health care management company that designs, implements, and manages employer-sponsored medical centers, pharmacies, and occupational health programs at the workplace. It is open five days a week and is staffed by a fully licensed pharmacist and support staff.
StorageTek employees who use the pharmacy receive a 10% discount on their copayment or coinsurance, as well as additional personalized care, both clinically and from a cost perspective. "We have a mail-order plan as well as retail sales, and the on-site pharmacist will work with employees to show them which will be better in a given case," Hollister explains.
The next logical step
The pharmacy seemed like the next logical step for a company that already provided its 2,000 employees with a wide range of health and wellness services. "We started to think about it about two years ago, when we were approached by CHD Meridian," Hollister recalls. "We already had a wellness center that included on-site child care, an extensive fitness facility with free weights, Nautilus equipment, a lap pool, basketball, a three-mile outside track, volleyball, softball fields, lots of leagues, and stress-management and nutrition classes, and wellness coordinators who conduct personal profiles."
In addition, she notes, StorageTek has an on-site medical clinic, four full-time family medicine providers, chiropractors, an optometrist, physical therapy services, a dental hygienist, and a mental health counselor. "The core clinic staff are employees — the PAs, nurse practitioners, and support staff — while the rest are independent contractors," Hollister explains.
StorageTek is self-insured for its medical plan. "At the time we built our facility in 1992, we had a more manufacturing-oriented operation and we were more geared toward workers’ comp, with the motivation being controlling costs," Hollister explains. "Now, 10 years later, workers’ comp is less than 5% of the business, and we’ve grown the practice as a family practice for internal medicine to enhance the well-being of employees and to create savings on our medical plan. We have a PCP [primary care provider] in our point-of-service [POS] network, so 40% of the employees have chosen us."
With an extensive occupational health program and facility already in place, the pharmacy had a ready-made home. This makes the StorageTek operation even more unique. "For most of their clients, CHD Meridian runs an occupational health and/or family practice plus a pharmacy. We are one of the few where only a pharmacy needed to be carved out," Hollister says.
Reduced costs anticipated
Hollister says her company is expecting the pharmacy to help reduce costs based on the pro formas presented by CHD Meridian. "The essence is the lower ingredient cost," she says. "We’re a closed-door pharmacy model — the pharmacy can only sell to us. In terms of what we pay pharmaceutical companies for the drugs, it [price schedule] is one of the lowest you can find." The result, she says, "should be pretty good savings, even though we’re incurring additional operational expenses."
The CHD Meridian pro forma shows that at different thresholds of utilization StorageTek will save different amounts of money. "After one year, we are projected to see a return on investment," says Hollister. "One of the reasons is we already had a facility; we just had to do a little remodeling."
The new pharmacy will offer the opportunity for a number of health benefits, says Hollister. "Hopefully, there will be increased compliance, as well as people taking their meds correctly and an increased awareness of potential drug interactions. There will be a more personalized opportunity to check on things like that," she says. "Also, the pharmacist is able to work directly with our providers for the medical visits that we do here. It’s a kind of unique arrangement that could translate into an additional health benefit."
Hollister says she and her colleagues have had numerous discussions about whether having the on-site pharmacy will actually improve compliance. "We’d like to think that’s the case," she says. "We’ve only been open since May 15, and our pharmacy manager says that so far the amount of prescriptions not picked up is about same as at a normal pharmacy. However, the pharmacist does more follow-up calling than usual, and we will be measuring how many employees use their prescriptions."
An added advantage in terms of communication with employees is the fact that StorageTek is a high-tech company, says Hollister. "We have some great access to web sites for additional information. Our pharmacist can use them to further educate our employees, which is an added service."
So far, employee participation has been good. "It’s what we had hoped for — for the first year, we estimated 50%," says Hollister. "The number of prescriptions filled in a day is moving in the right direction, and we have a lot of happy customers. The convenience and cost savings have translated into an enhanced benefit — something the company has done for its employees. Our whole wellness center conveys that message to the employees as well. To see a company investing in employee wellness at a time when the economy is not doing so well sent a nice message."
[For more information, contact: P.J. Hollister, MSHA, Manager of Wellness Services, StorageTek, One StorageTek Drive, Louisville, CO 80028-0030. Telephone: (303) 673-3506.]
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