Offering discounted medications is a very common service of the direct primary care practice model as it can provide both affordability and convenience to the patient. The benefits for the practitioner are equally noteworthy: Offering medications on site can also potentially give the doctor more insight into his patients while opening a new potential revenue stream for the practice. While practitioners will find their ability to dispense medications varies from state to state, in this article we hope to give a primer on what a doctor should know before deciding whether or not to offer this service.
Regulated On A State Level
Physician dispensing regulations are governed at the state level typically by either the state’s pharmacy or medical board(s). Thus, depending on the location of a DPC practice, dispensing medications can be as simple as finding a medical supplier and as difficult as negotiating special exemptions, provider availability, and other restrictions. In this latter category, Massachusetts, Texas, and Utah restrict providers dispensing medicines to extremely limited circumstances. Montana and New Jersey permit limited dispensing related to pharmacy availability, and Louisiana and Virginia have specific licensure requirements for dispensing physicians (Source: HeliosComp).
On the other end of the spectrum, Iowa, Maine, Maryland, Missouri, Nebraska, Nevada, New Hampshire, North Dakota, South Dakota, Vermont, Washington, DC., and Wyoming have no restrictions in place to limit dispensing or reimbursement to physician dispensers in workers’ compensation.
There are dozens of states that fall somewhere in between. Getting legal counsel to navigate these regulations is highly advisable, says Dr. Lisa Davidson, a direct primary care practitioner out of Colorado. Some states have, or are in the process of, taking action to restrict the practice by limiting the medications allowed and/or capping reimbursement rates for workers’ compensation. HeliosComp has a thorough and up-to-date list of the different state restrictions. “As DPC becomes more common, I think they're going to start looking at physicians dispensing out of their offices more closely, and they're going to start making rules,” explains Dr. Davidson. “Until then, we're just doing the best we can, and keeping everything above board and legal, and safe for the patients.”
Why DPC Practitioners Dispense Medications
There are many reasons for a DPC practitioner to offer prescriptions as part of the practice’s services. The first, obviously, is convenience for the patient and doctor. Why bother writing a prescription, having the pharmacist translate your handwriting, and make your patient wait in line at a pharmacy? Dr. Lisa Davidson has found offering prescriptions “Totally fits in with the DPC model of efficiency and convenience. We have a lot of kids at our practice, too, and the last thing a parent wants to do is drive to the pharmacy and wait forever for the antibiotics for their kid's ear infection, with the crying kid in the car. The convenience is huge, that's why we wanted to do it.” Patients don’t have to bother going to a second location to get their medications, and often find that getting things like refills or extra pills to be a simple matter. If a patient needs more pills because they’ll be out of town, for example, a practitioner can dispense these extra pills without the hassle of a second visit or renewing the prescription with the pharmacy.
Affordability For The Patient
The biggest incentive to dispensing medications is the savings it offers patients. Dr. Davidson is emphatic about how much money dispensing medications saves patients. “We try to give the patient the best deal we can. One of the drugs that we use a lot went down by $15 a month— so we wanted to pass that savings along to the patient. That's why we don't have a fixed-rate membership for the meds, because it changes a lot.”
But that doesn’t mean membership plans and subscription-based business are incompatible with dispensing medications. Dr. Ciampi, a DPC practitioner out of Maine, offers both subscription and fee-for-services plans. He has switched over to dispensing prescriptions this past year and found his patients have raved about the money it saved them. “Some of these pills cost about 1 or 2 cents apiece,” Dr. Ciampi explains. “A 90-day supply the cost of it is $1.80 and Walmart is charging people $10 for it and Rite-Aide like $30 or so. A lot of times people see the value immediately when they realize that some of the medications even on the $4 list have a 400% markup. It's amazing. I've had azithromycin or Z-pack, we get it for $2.50 and some pharmacies charge $40 for it.”
Dr. Julie Gunther of Boise, Idaho, feels that dispensing medications for the uninsured “Is really a no brainer. I can get them most medicines cheaper than at the pharmacy, no problem.” If they have insurance and understand their benefits, meanwhile, she can provide them with a list of the medicines they have and how the prices compare. “Many find just getting the medications there is more convenient.”
Growing Your Business
Dr. Ciampi also sees these savings as a major incentive for new subscribers to join his practice. “I had a patient today that said that the money he's saving on the prescriptions is paying for his subscription two or three-fold.” Similarly, Dr. Ryan Neu out of Lawrence, Kansas, has found that dispensing medications to be critical for growing his business. “I won’t say it’s absolutely essential to grow your practice. But I will say it is one of the most valuable things to provide to your members. I’ve had patients join just for the medications.”
Since practitioners are buying the medications wholesale, they have the ability to pass along savings to their customers. But what about profits? “If you wanted to make a profit you could,” explains Dr. Davidson. “But we're not really doing it for the profit. You can mark up some of the chronic meds a little bit if you want to.” She cites an example of prescribing lisinopril, a tablet that she can get for 100 tablets $2.16. But no patient can get access to such a price for 100 tablets, so Davidson marks it up to $8 “So we make this tiny profit; but the patient is still getting a crazy good deal.”
Of course, if a practitioner wanted to mark it up more, in order to generate higher profits, they certainly could. But Dr. Davidson warns the harm that might cause the relationship— patients can always go elsewhere. Davidson believes there needs to be a balance. “Some doctors who dispense from their offices don't mark it up at all, but I think it would be wise to mark it up a few bucks, because you're spending time getting the prescriptions ready, and ordering them, and [preparing] them for the patient.”
More Hands-On Medicine
One of the more under-the-radar benefits of dispensing medicine on-site is that a practitioner gets a more intimate knowledge of their patient and the medications they prescribe. “You really learn a lot about what you prescribe all the time. You learn what you don’t prescribe all the time,” explains Dr. Gunther of sparkMD. She admits to gaining a much better appreciation for what the medications look like, whether the size or quantity is actually fitting for her patients. At her practice, patients can walk out with the prescriptions the same day they visit the doctor and then text the doctor if they have a question or are experiencing complications. “It just makes everything more efficient,” she concedes.
When patients come in for medication, it’s also a great opportunity to check in. Dr. Neu shares a pet peeve of his. “People think of their doctor as their rubber stamper on medications,” he explains. “I’m not just a guy who refills your medicine, I want to see how you’re doing.” In this way, doctors have more of an opportunity to actually diagnose how a patient is responding to a medication, instead of a pharmacist whose interaction is mostly one-sided.
Starting the Process
After sorting through the restrictions in your state, the next step that every practitioner advises is to find a medical supplier. Most practitioners rely on word of mouth, but doing research online for pricing, availability, and efficiency also helps. Both Dr. Ciampi and Dr. Davidson use a company called AndaMEDS based out of Florida. Others use McKesson which handles other medical supplies as well. An electronic database is also essential, as Dr. Neu will attest. He found label-making to be a pain, and opted for a solution that tracked his practice’s medication data. “I wished I had done it sooner,” he admits.
The Direct Primary Care model seems especially suited to dispensing prescriptions. Dr. Ciampi puts it simply: “DPC doctors work directly for their patients and cut out the middleman… so it's a natural evolution to whenever possible cut out pharmacy costs to save their patients money.” Dispensing medications strengthens the patient-doctor relationship, which is why so many practitioners are making inquiries if it’s right for their practice.