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ACCP W HITE P APER Developing a Business-Practice Model for Pharmacy Services in Ambulatory Settings American College of Clinical Pharmacy Ila M. Harris, Pharm.D., FCCP, Ed Baker, Pharm.D., Tricia M. Berry, Pharm.D., Mary Ann Halloran, Pharm.D., Kathleen Lindauer, Pharm.D., Kelly R. Ragucci Pharm.D., FCCP, Melissa Somma McGivney, Pharm.D., A. Thomas Taylor, Pharm.D., and Stuart T. Haines, Pharm.D., FCCP A business-practice model is a guide, or toolkit, to assist managers and clinical pharmacy practitioners in the exploration, proposal, development and implementation of new clinical pharmacy services and/or the enhancement of existing services. This document was developed by the American College of Clinical Pharmacy Task Force on Ambulatory Practice to assist clinical pharmacy practitioners and administrators in the development of business- practice models for new and existing clinical pharmacy services in ambulatory settings. This document provides detailed instructions, examples, and resources on conducting a market assessment and a needs assessment, types of clinical services, operations, legal and regulatory issues, marketing and promotion, service development and exit plan, evaluation of service outcomes, and financial considerations in the development of a clinical pharmacy service in the ambulatory environment. Available literature is summarized, and an appendix provides valuable citations and resources. As ambulatory care practices continue to evolve, there will be increased knowledge of how to initiate and expand the services. This document is intended to serve as an essential resource to assist in the growth and development of clinical pharmacy services in the ambulatory environment. Key Words: pharmacy practice, business-practice model, ambulatory care, primary care. (Pharmacotherapy 2008;28(2):7e–34e) Section 1: Introduction This document was developed by the American College of Clinical Pharmacy (ACCP) Task Force on Ambulatory Practice to assist clinical pharmacy practitioners and administrators to develop business-practice models for new and existing clinical pharmacy services in the outpatient and ambulatory setting. Translating the evidence supporting clinical pharmacy services into practice in the ambulatory setting has been hampered by the lack of a clear business-practice model. A business-practice model is a guide, or toolkit, to assist managers and clinical pharmacy practitioners in the exploration, proposal, development, and implementation of new clinical pharmacy services and the enhancement of existing services. The goal of this publication is to provide pharmacists with a framework to build a clinical practice in an ambulatory setting within This document was written by the 2005 ACCP Task Force on Ambulatory Practice: Ila M. Harris, Pharm.D., FCCP, BCPS, Chair; Ed Baker, Pharm.D.; Tricia M. B e r r y, Pharm.D., BCPS; Mary Ann Halloran, Pharm.D., BCPS; Kathleen Lindauer, Pharm.D.; Kelly R. Ragucci, Pharm.D., FCCP, BCPS; Melissa A. Somma, Pharm.D.; A. Thomas Taylor, Pharm.D.; Stuart T. Haines, Pharm.D., FCCP, BCPS. Approved by the ACCP Board of Regents on October 24, 2006; final revisions received on February 27, 2007. Address reprint requests to the American College of Clinical Pharmacy, 13000 W. 87th Street Parkway, Lenexa, KS 66215-4530; e-mail: [email protected]; or download from http://www.accp.com.

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A C C P W H I T E P A P E R

Developing a Business-Practice Model for Pharmacy Services in Ambulatory Settings

American College of Clinical Pharmacy Ila M. Harris, Pharm.D., FCCP, Ed Baker, Pharm.D., Tricia M. Berry, Pharm.D.,

Mary Ann Halloran, Pharm.D., Kathleen Lindauer, Pharm.D., Kelly R. Ragucci Pharm.D., FCCP, Melissa Somma McGivney, Pharm.D., A. Thomas Taylor, Pharm.D., and Stuart T. Haines, Pharm.D., FCCP

A business-practice model is a guide, or toolkit, to assist managers andclinical pharmacy practitioners in the exploration, proposal, development andimplementation of new clinical pharmacy services and/or the enhancement ofexisting services. This document was developed by the American College ofClinical Pharmacy Task Force on Ambulatory Practice to assist clinicalpharmacy practitioners and administrators in the development of business-practice models for new and existing clinical pharmacy services in ambulatorysettings. This document provides detailed instructions, examples, andresources on conducting a market assessment and a needs assessment, typesof clinical services, operations, legal and regulatory issues, marketing andpromotion, service development and exit plan, evaluation of serviceoutcomes, and financial considerations in the development of a clinicalpharmacy service in the ambulatory environment. Available literature issummarized, and an appendix provides valuable citations and resources. Asambulatory care practices continue to evolve, there will be increasedknowledge of how to initiate and expand the services. This document isintended to serve as an essential resource to assist in the growth anddevelopment of clinical pharmacy services in the ambulatory environment.Key Words: pharmacy practice, business-practice model, ambulatory care,primary care.(Pharmacotherapy 2008;28(2):7e–34e)

Section 1: Introduction

This document was developed by the AmericanCollege of Clinical Pharmacy (ACCP) Task Forceon Ambulatory Practice to assist clinical

pharmacy practitioners and administrators todevelop business-practice models for new andexisting clinical pharmacy services in theoutpatient and ambulatory setting. Translatingthe evidence supporting clinical pharmacyservices into practice in the ambulatory settinghas been hampered by the lack of a clearbusiness-practice model. A business-practicemodel is a guide, or toolkit, to assist managersand clinical pharmacy practitioners in theexploration, proposal, development, andimplementation of new clinical pharmacyservices and the enhancement of existingservices. The goal of this publication is toprovide pharmacists with a framework to build aclinical practice in an ambulatory setting within

This document was written by the 2005 ACCP Task Forceon Ambulatory Practice: Ila M. Harris, Pharm.D., FCCP,BCPS, Chair; Ed Baker, Pharm.D.; Tricia M. Berry,Pharm.D., BCPS; Mary Ann Halloran, Pharm.D., BCPS;Kathleen Lindauer, Pharm.D.; Kelly R. Ragucci, Pharm.D.,FCCP, BCPS; Melissa A. Somma, Pharm.D.; A. ThomasTaylor, Pharm.D.; Stuart T. Haines, Pharm.D., FCCP, BCPS.Approved by the ACCP Board of Regents on October 24,2006; final revisions received on February 27, 2007.

Address reprint requests to the American College ofClinical Pharmacy, 13000 W. 87th Street Parkway, Lenexa,KS 66215-4530; e-mail: [email protected]; or download fromhttp://www.accp.com.

PHARMACOTHERAPY Volume 28, Number 2, 2008

the premise of a business model.

Definition of Ambulatory Practice

Clinical pharmacy has been defined by theACCP as “that area of pharmacy concerned withthe science and practice of rational medicationuse.”1 Clinical pharmacy services in theambulatory environment can be broadly definedas pharmaceutical care services for patients whowalk in to seek care.2 Ambulatory environmentsmay include, but are not limited to, pharmacistspracticing in physician’s offices, physicianresidency programs, community pharmacies, andinstitutional ambulatory environments.Institutional ambulatory environments caninclude clinics in hospitals, specialty clinics (e.g.,transplant, cardiology), emergency departments,urgent care centers, outpatient treatment centers(e.g., cancer chemotherapy, dialysis), correctionalinstitutions, managed care clinics, andgovernment programs (e.g., Indian HealthServices, federally qualified health centers,Veterans Affairs hospitals).2, 3 In addition,pharmacists may have independent practicesproviding medication therapy management.

The scope of this business-practice model is forpharmacists practicing in ambulatory careenvironments providing clinical services.Clinical services include those where apharmacist works directly with individualpatients to evaluate their drug regimen and toidentify, prevent, and resolve drug-relatedproblems. In a community pharmacy setting,these services may be an adjunct to dispensing orconsultative services, but are provided as adistinct service. Services such as immunizationand screening programs are generally notconsidered to be comprehensive clinical services.Clinical services may include disease-orientedservices or phone-based services (e.g.,anticoagulation services) only when individualpatient evaluations are performed.2

In most ambulatory practices, the pharmacistworks collaboratively with other health careproviders. This may occur within the samephysical location, as with an institutionalambulatory clinic or physician’s office practice, orat a distance, as with community pharmacypractice. Distant collaboration is oftenaccomplished through collaborative practiceagreements. Pharmacists in ambulatory clinicalpractice can be independent providers or work aspart of an interprofessional team.2

Section 2: Market Assessment

The key to building a successful ambulatorypharmacy practice is matching personal interest,professional knowledge, and the specific needs ofpotential customers. A market assessment allowsthe pharmacist to determine the customers’ needsin the context of the business environment. Suchan evaluation is the foundation on which thebusiness will be built. Everything from startingthe business to future growth is based on anaccurate market assessment.4 Many resources areavailable to help conduct a market assessment.Helpful literature and web sites for starting a newbusiness and identifying customers are includedin Appendix 1, and a list of all pharmacyorganizations, with a description of theassociation and its Web site address, is providedin Appendix 2.

Steps to Successful Market Assessment

The first step in a successful market assessmentis to look at the industry and assess trends. Thefollowing three questions should be answered:What is the current state of the proposed service?What is the current standard of care? Whatcurrent and future developments may affect theservice?

What is the Current State of the Proposed Service?

Is the provided service new and growing, or isit on the downswing? Is it affected by managedcare? Is there proposed legislation pending?Will it be affected by government regulation?Pharmacy associations that may specialize in thespecific area of pharmacy practice can help inanswering these questions. Attendance atnational pharmacy meetings and networkingwith other pharmacists who may be involved insimilar clinical services are also helpful. Themedical and pharmacy literature is anotherexcellent source to determine the current state ofa specific practice.5

What Is the Current Standard of Care?

There should be a standard of care at which apractitioner is expected to provide a certain levelof quality to a patient. It has also been defined as“the set of behaviors of a practitioner that issubject to evaluation by peers, regulators, and thepublic.”6 The first definition focuses on actualpatient care whereas the second leans towardlegal liability. Legal requirements for thebusiness need to be determined. Legal

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requirements for equipment, Clinical LaboratoryImprovement Amendments requirements forblood monitoring, and professional licenses, ifany, will need to be obtained.

What Current and Future Developments May Affectthe Service?

The answer to this query is very important tothe longevity of the business. In order for thebusiness to grow and prosper, it must providedrug therapy management for years to come.Consideration may also be given to drugs that arein the pipeline. A state law requiring apharmacist to have a certain credential for theservice would create an instant demand forpharmacists with that credential.

The location of the new service should beconvenient and accessible to most patients.Consideration should be given to patients whodo not have their own transportation and whomay rely on public transportation. The parkinglot should be big enough to accommodateincreased patient load for the new service.Patients may appreciate the quality of serviceprovided but if they cannot get in and out of thebuilding or parking lot, the quality of service maybe overshadowed by problems with accessibility.7

It should also be determined whether theservice will be local or regional. This willprovide an estimate of the total number of peoplewithin the target market area. Once all thisinformation has been collected, the pharmacistwill be able to better estimate the number ofcustomers and growth potential for the business.

Factors to Be Considered

Before implementing the service, several thingsmust be considered: factors in customerdecision-making, customer needs to beaddressed, and the timing of the service.

Identify Factors in Customer Decision-Making

To survive, the service must meet the needs ofthe customers. Table 1 provides examples ofcustomers to target in planning for a new service.Understanding the audience that will approve thebusiness plan will help the pharmacist make astronger case regarding the need and financialviability of the proposed service(s). Thecustomers will base their decision to use theservice on their perception of the quality, value,and convenience of the service.4 In a time whenthere is a shortage of qualified clinical pharmacy

practitioners, will there be enough pharmacists toprovide such service? Other factors that need tobe considered are the value and quality of theservice, and the convenience of referral.

The price of the service is important and maybe the determining factor for some customers.8

The pharmacist’s wage, benefits, and overheadcosts must all be factored in the costconsiderations. Only after the cost of the servicehas been determined can the price to thecustomer be derived. The customer’s previousexperience with similar services should also beconsidered.

Customer Needs to Be Addressed

Customer needs must be addressed whenbeginning the service. Customers will often lookoutside of their own organization for solutions totheir problems. Contracting the service to apharmacist may be less costly than initiatingtheir own services internally.

Improving quality of care and clinicaloutcomes are two customer needs that the servicewill address. Pharmacists should be prepared toshow customers that the service will helpincrease quality of care and improve clinicaloutcomes. Financial outcomes will also be ofimportance, and the effect may be more on costsavings. Examples can be obtained from theliterature (Appendix 1).

Timing of the Service

Is the timing right for beginning a newbusiness offering clinical pharmacy services?Any current changes taking place in the proposedbusiness area should be evaluated, including newlaws or regulations; shortage of pharmacists andother health care providers; and patient safetyinitiatives. A need for an outside service can bebrought about by a change in a regulation or bylegislative action. Pharmacists that have keptabreast of new laws and regulations will bepoised to take advantage of changing situationsand fill the void created by regulations.

Operational Advantages Over Competitors

As an ambulatory care clinical pharmacyservice is planned, pharmacists should projectthe advantages and distinctive attributes of theirservice over the services currently provided byother practitioners. It will also be necessary toidentify what clinical pharmacy services arealready being provided in close proximity. The

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advantages and strengths of the proposed newservices should be determined.5

Within the Organization

Pharmacists should evaluate the services ofother practitioners within the organization.

Specifically, pharmacists should consider thedrug-related services already offered by otherdepartments, particularly those of physicians,physician assistants, and nurse practitioners.Whenever possible, pharmacists should developservices that draw on their distinctive

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Table 1. Targeted Customers and Interest Areas

Practice Environment Customer Key Areas of Interest and Driving ForcesPhysician or provider, Physician or provider Improved patient care outcomes, consultation on complicatedoffice-based practice staff drug-related problems, assistance with financially viable options

to obtain drugs, direct patient care for drug-related needs.Administrators Financial impact of improved patient care outcomes, improved

formulary adherence, reduction in hospitalizations andemergency room visits, increased physician or providerproductivity, and potential new revenue stream.

Managed care Physician or provider Improved patient care outcomes, consultation on complicatedstaff drug-related problems, assistance with financially viable options

to obtain drugs, direct patient care for drug-related needs.Administrators Financial impact of improved patient care outcomes, improved

formulary adherence, reduction in hospitalizations andemergency room visits, and cost-benefit of a pharmacistproviding the care versus another health care provider.

Physician residency Physician educators and Enhanced education of physician residents leading to improvedprogram program director patient outcomes, consultation on complicated drug-related

problems, assistance with financially viable options to obtain drugs.Administrators Financial impact of improved patient care outcomes, improved

formulary adherence, reduction in hospitalizations and emergency room visits, increased physician or providerproductivity, and potential new revenue stream.

Institutional ambulatory Physician or provider Improved patient care outcomes, consultation on complicatedclinic staff drug-related problems, assistance with financially viable options

to obtain drugs, direct patient care for drug-related needs.Administrators Financial impact of improved patient care outcomes, improved

formulary adherence, reduction in hospitalizations andemergency room visits, increased physician or providerproductivity, and potential new revenue stream.

Community pharmacy Pharmacy staff Improved job satisfaction, increased career opportunities, andimpact on current services provided.

Pharmacy administrators Potential new revenue stream, increased prescription, over-the-counter, and store sales, improved employee satisfaction andretention, enhanced public perception of pharmacy and company.

Community physicians Improved patient care outcomes, consultation on complicated.drug-related problems, assistance with financially viable optionsto obtain drugs, direct patient care for drug-related needs.

Community organizations Access to reliable health information, enhancement of servicesprovided to the community.

Health plans and insurer Financial impact of improved patient care outcomes, improvedgroups formulary adherence, reduction in hospitalizations and

emergency room visits, and cost-benefit of a pharmacistproviding the care versus another health care provider.

Employers Financial impact of improved patient care outcomes, improvedformulary adherence, reduction in hospitalizations andemergency room visits, cost-benefit of a pharmacist providingthe care versus another health care provider, a decrease inlost days from work, and improved employee satisfactionwith their health care and employer.

Patients Improved patient care, comprehensive educational services,drug therapy management.

Academia College of pharmacy High-quality advanced practice experiences.experiential director

AMBULATORY CARE BUSINESS-PRACTICE MODEL ACCP

qualifications and are complementary rather thanduplicative. Practitioners from other disciplineswill often embrace the clinical activities ofpharmacists when they are viewed ascontributing to the overall care of patients.Perhaps one of the best ways to achieveacceptance from other disciplines is forpharmacists to focus on drugs and drug-relatedissues, particularly in areas in which pharmacistshave specialized education, training, andexperience. In the event that a pharmacist wouldlike to offer a service similar to one alreadyoffered by another practitioner, the pharmacistshould carefully coordinate his/her mission,objectives, and specific activities with those ofthe established practitioner in order to identifythe unique attributes of the new service. To theextent that complementary roles can beidentified, the pharmacist may have more or lesssuccess with offering a new service. However, ifthe new service is viewed by patients and/orpractitioners as duplicative, the new service mayfail, often simply because of the allegiance to theestablished service. In this situation, thepharmacist should identify other potentiallysuccessful roles and move toward establishing aservice that will be more favorably received. Insome circumstances, the pharmacist maycollaborate with other health care providers.

Outside the Organization

Pharmacists should also evaluate the servicesprovided by pharmacy, medical, or other groupsoutside the organization in planning their newservice. As above, practitioners may easily acceptnew services that are not currently available topatients, even outside the organization byreferral. In such situations, pharmacists maychoose to associate with an outside group ratherthan independently develop a new service.Pharmacists should plan services with theexpectation of having as few disadvantages aspossible. These disadvantages should beidentified and minimized early in the planningprocess.

Section 3: Needs Assessment

Establishing an ambulatory clinical pharmacypractice begins first with an understanding of theneeds of the patients that will be served by thepractice and the potential revenue streams thatcan financially support the service. The medicalliterature describes numerous examples regardingthe drug-related needs of patients and the

benefits of including a pharmacist both in theclinical decision-making process and inproviding care directly to patients. The conceptof pharmaceutical care has been explored formore than two decades, but there are still fewpublished examples of financially sustainableambulatory clinical pharmacy practices inexistence.9

The “business” behind the practice beingdeveloped should begin when the service isplanned. The goal of caring for unmet needs ofpatients should be combined with the goal ofbeing a financially viable service. Understandingthe financial drivers within the organizationalstructure of the pharmacist practice will allowthe provision of care to a wider patient base andwill help sustain the service over time. The long-term and short-term goals for proposed clinicalservices should be described.

The type of patient care service a pharmacistdesigns is based on two primary factors: thepractice environment and the needs of thepatient population to be served. Table 2describes several practice environments and thebusiness models that exist. Understanding thebusiness model will assist in proposing aparticular type of practice. For example, if thepractice will be in a physician’s office where thephysicians are provided incentives for “bestpractices,” and they are not meeting the goals oftheir patients with diabetes, a proposal might bewritten to begin a service directed toward thepatient population with diabetes. Understandingthe business model where the clinical service willbe established aids in directing the proposed planto the appropriate audience, including those whohave the authority to approve the plan.Collaboration with other health care providersshould be described, and the overall goals shouldbe clarified.

The mission for all ambulatory clinicalpharmacy services is to improve patient care.Numerous studies clearly demonstrate that manypatients are not achieving optimal results fromtheir drugs. In 2003, only 56% of patients in theUnited States with chronic medical illnessesreceived the recommended treatment.10

Furthermore, patients continue to experiencedrug-related adverse effects at increasing rates.In the ambulatory environment, the mostcommon problems in the drug use process thatresult in preventable adverse effects occur duringthe prescribing and monitoring stages.11 Drugsafety is highlighted in many recent studies incommunity-dwelling populations12–15 and in

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home health care patients.16 Adverse drug eventsoften can result in hospital and emergency roomvisits.17–19 The Institute of Medicine report in theQuality Chasm series, titled “PreventingMedication Errors” outlines changes needed in

the health care system to reduce medicationerrors.20

Because there is a clear societal need toimprove the drug use process, it is important todemonstrate how pharmacists can meet this

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Table 2. Existing Business Models in Ambulatory Clinical Pharmacy Practice Environments

Practice Environment Business Model Pharmacy Business OpportunitiesPhysician or provider, Fee-for-service Direct billing for services under physician with a level 1office-based practice (99211) office code; direct billing using medication therapy

management Current Procedural Terminology reimbursementcodes, when available.

Per-member-per-month Risk-sharing model where a physician or provider agrees to(health maintenance pay the pharmacist a certain amount per-member-per-monthorganization) to avoid unnecessary emergency room or hospital utilization;

anticoagulation services is a common example.

Incentives for “best practices,” Similar to above, physicians or providers agree to pay a certainmeeting predetermined amount to have pharmacist assist practice to achieve besttreatment goals practices; physicians or providers choosing this method are

likely to have incentives from insurance carriers to achievedisease-state goals; this savings may be passed on to thepharmacist.

Managed care Office-based practice See options 2 and 3 in office-based practice examples above.

Physician residency Education and training model Unique to this practice, funding may be available directly forprogram (Federal funding for training) residency training of physicians; in this role, pharmacists may

consider seeing patients collaboratively with physicians toprovide education and training in advanced patient care.

Office-based practice See all three office-based practice examples.

Institutional ambulatory Clinic code When an ambulatory clinic is a part of a health care system, aclinic basic “facility fee” may be charged per patient visit with the

pharmacist.

Office-based practice See all three office-based practice examples.

Community pharmacy Prescription and over-the- More prescription and over-the-counter product sales cancounter product sales serve to pay for clinical services; amount of services provided

limited by product sales.

Partnership with office-based Can participate in per-member-per-month or incentives for bestpractices practice (options 2 and 3 in office-based practice examples).

Partnership with self-insured Self-insured employers often seek means to decrease drug costs,employer group improve patient quality of life, and increase healthy days

working. Since the Asheville Project, self-employers aremore willing to establish paid partnerships with pharmaciststo improve employee health; payment methods may bemodeled after any of the office-based practice examples.

Consulting services As an adjunct to the business model, pharmacists are often paidfor speaking engagements, community events, screenings, andconsultation to nursing homes and physician practices; thesefunds can support clinical services including expansion andserve as a mechanism to advertise pharmacist services.

Fee-for-service A pharmacist in a community pharmacy may provide a servicefor a fee to patients; the patient may be directly billed.

Academia Practice in a college Clinics may be set up within a college of pharmacy; often thisof pharmacy is done as a fee-for-service, or as a free service due to the

educational nature of the clinic for students.

All practice Medication therapy With the initiation of Medicare Part D in January 2006, manyenvironments management services health plans are developing payment mechanisms for

(per pharmacy benefit pharmacists to provide advanced care to patients; this care canmanager) be provided in all areas of ambulatory practice listed above;

some states may have payment for medication therapymanagement for Medicaid patients.

AMBULATORY CARE BUSINESS-PRACTICE MODEL ACCP

need. Numerous studies demonstrate how apharmacist can positively affect a patient’s care.The American Pharmacists Association21 providesan extensive overview of studies demonstrating apharmacist’s impact on patient care, includingpatient safety, asthma, diabetes, drug therapycompliance, dyslipidemia, immunization, painmanagement, and vaccinations. Furthermore,studies demonstrating the economic benefit ofclinical pharmacy services have beensummarized.9 In addition, the Lewin Report is auseful resource.22 The reference list included inthis paper provides studies in practiceenvironments specific to community practice,institutional ambulatory care, managed care, andfamily medicine (Appendix 1).

The pharmacist must also recognize thefinancial driving forces in a particular practiceenvironment. A practice can be financially viablethrough a number of mechanisms such as costavoidance (e.g., reduction in hospitalizations)and direct payment of services.

Section 4: Description of Services

Essential Components of a Service

In the medical model, the patient care processis the same whether the physician is a generalistor specialist. The same is true for other healthcare providers.6 The identical concept needs tobe applied to ambulatory clinical pharmacyservices. The work of the American PharmacistsAssociation and National Association of ChainDrug Stores Foundation points to a clearframework of the design of a pharmacistmedication therapy management (MTM) servicein the community pharmacy setting,23 which canserve as a model for all areas of pharmacypractice. One model of ambulatory clinicalpharmacy practice is important to set thestandard for patients and health care providers tounderstand the value they will receive when apharmacist meets with a patient.

Patient Enrollment or Referral

There are multiple sources for patientenrollment or referrals to a clinical pharmacyservice. A physician or other health careprofessional may refer the patient for MTM,disease state management, monitoring oradjustment (e.g., anticoagulation service), and/oreducation (e.g., diabetes or asthma). Apharmacist at the point of dispensing in acommunity pharmacy may enroll a patient after

detecting nonadherence or a drug-relatedproblem that could not be easily addressed at thetime of dispensing. Alternatively, a patient orcaregiver may self-refer after learning of thepharmacist’s service. If the pharmacist is a partof an interprofessional practice, the service orreferral may be an integrated component of thepatient care process. In some cases, a referralmay not be necessary. In an interprofessionalpractice, it may be a standing policy that anypatient taking more than a certain number ofdrugs or with certain conditions sees thepharmacist before seeing other practitioners.Once a referral to the pharmacist is made, anindividual appointment or consultation with thepatient should be set up.

The Patient Encounter

Patient encounters ideally should occur in aprivate area where the pharmacist, patient and/orcaregiver can comfortably discuss the patient’sdrug-related needs. The encounter should beginwith a simple introduction of the pharmacist tothe type of service and follow-up the patient canexpect. The second step is gathering from thepatient the reason for the visit and drugexperience.6 The medical record or other patientdocumentation, if available, can provideimportant details of the patient’s medical historyand laboratory and test results, and may aid infurther identifying the patient’s needs. In mostcases, the pharmacist would also complete athorough medication therapy review.23 Thecomponents of this review are described in Table 3.

Documentation

Documentation of the patient encounter isabsolutely necessary not only to record thenature of the encounter, the patient problemsidentified, and the follow-up plans, but also toserve as evidence of the service(s) provided. Theformat of the documentation can take differentforms depending on the practice environmentand the resources available. Patient records canbe stored in either paper or electronic medium.Documentation should minimally include patientdemographics, reason for visit, subjective andobjective information obtained, the pharmacist’sassessment and plan, any interventions orrecommendations made, and planned follow-up.

National organizations offer standards forcommunity practice23 and for documentation inmedical records.24, 25 Standardization of thepharmacist’s documentation for each patient

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encounter is essential. Within existing medicalrecords, pharmacists may elect to use a standard“SOAP” note (i.e., subjective data, objective data,assessment, and plan) to be consistent with otherproviders or may use a separate pharmacy noteusing a standardized documentation template. Ifthe pharmacist practices independently, thedocumentation (written or electronic) should bestored in an easily retrievable location. Aconsultation letter should be sent to the patient’shealth care provider(s), and a copy should bemaintained in the medical record. Theconsultation letter may be sent to the prescriberby standard mail, fax, or secured electronicmethod.

Communication with the Patient’s Other HealthCare Providers

Collaborating with a number of individualswithin the health care team is essential to buildand sustain a patient care practice. Thecollaborations, both formal and informal, depend

on the practice environment and may includephysicians and physician assistants; nurses andnurse practitioners; dieticians; other pharmacists;pharmacy technicians; and other supportpersonnel. Communication with the patient’shealth care provider(s) is essential to ensureoptimal use of drugs. The type ofcommunication is determined by the urgency ofthe patient’s need. An acute need should becommunicated verbally followed by writtencommunication. A chronic care need shouldalways be communicated in written format. Inaddition, patient-focused communication withother health care providers helps to buildworking relationships and encourage continuedreferrals from providers for future consultationsregarding patient drug therapy needs.26 In orderto document the pharmacist’s findings andrecommendations in the patient’s medicalrecords, some institutions require pharmacists toobtain privileges and provider numbers.27

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Table 3. Components of a Medication Therapy Review6, 23

Component DescriptionPerform medication regimen Inquiry and comprehensive review of all prescription and nonprescription medicationsreview the patient is taking as well as any herbal or vitamin products

Gather patient’s medical history Medication-related medical history, including physical examination findings, historyof diagnoses, hospitalizations, and surgeries

Gather social history, cultural, and Relevant social history; cultural and patient preferences toward drug therapy as it maylifestyle preferences relate to adherence and drug choice; lifestyle management

Review laboratory and physical Review of laboratory data and test results, and the performance of any physicalexamination data (as available) examination or laboratory procedures as appropriate based on the patient’s

medication therapy needs and as allowable by state law

Assess overall medication therapy Review of the patient’s medication regimen for appropriate indication, efficacy, andand identify medication therapy safety for the individual patient, as well as the patient’s adherence patterns; evaluateneeds and problems; evaluate the patient’s response to medication therapy, and identify potential adverse eventsand monitor response to and drug-drug interactions; financial and cultural considerations must be consideredmedication therapy in addition to appropriate monitoring suggestions and dosage regimens

Create a medication therapy plan A plan to address and resolve medication therapy problems identified during the visit;the plan should be developed collaboratively with the patient and other health careproviders as appropriate; the plan may include a lifestyle change by the patient, a callor collaboration with the physician or other health care provider, or the pharmacistresolving a financial or therapy concern

Provide education, patient At the conclusion of the visit, patients should be given appropriate medication- andrecommendations, and follow-up disease-related education as well as therapy and lifestyle recommendations as

considered appropriate with their other health care providers; patients should beprovided with a personal medication record (comprehensive medication list) and amedication action plan detailing how they should take their drugs as well as lifestylerecommendations

Communicate results to other Results of the visit and medication therapy recommendations should always behealth care providers documented and provided to the patient’s other health care provider(s) if necessary;

in an interdisciplinary setting, documenting in the medical record in written, verbal,or combination form is usually sufficient; in addition, patients should be referred toother health care providers as needed to support their medication therapy regimen(e.g., dietician referral)

AMBULATORY CARE BUSINESS-PRACTICE MODEL ACCP

Section 5: Operations

Organization

An organizational structure that represents thearray of ambulatory care services provided bypharmacists is extremely important. Job titlesand descriptions for pharmacists and pharmacytechnicians providing ambulatory care pharmacyservices should be positioned within theorganizational structure in a manner denoting ahigh level of commitment. All services must beincluded in the overall mission statement as wellas in the goals and objectives of the organizationand must be represented accordingly in thestructure of the pharmacy department and theinstitution or the overall organization. Anythingless than full representation at these levels mayresult in a diminished outcome.

Reporting Structure

In a hospital setting in which the ambulatorycare pharmacy services are provided through a

department of pharmacy, the coordinator of theseservices should report directly to the director ofpharmacy to ensure a commitment to theseservices equal to that acknowledged for other keyservices of the department. In the case offreestanding ambulatory clinics or communitypharmacies, pharmacists should either providedirect leadership for ambulatory services orreport to an appropriate administrator.Additional reporting lines to physicians andother health care providers may be appropriate,based on day-to-day clinical activities.28

Operational Processes and Facility andEquipment Needs

In starting a new clinical pharmacy practice inan ambulatory setting, several operationalprocesses, and facility and equipment needs, arenecessary. These are discussed in detail in Table4.28–30

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Table 4. Operational Processes and Facility and Equipment Needs for a New Clinical Service28, 30

Requirements RecommendationsOperational processes

Information services Adequate information systems are required and should be online and computerized,if possible; examples include Micromedex, Lexi-Comp, DynaMed, Up To Date,and Cochrane Library; access to MEDLINE is required; when possible, PDAs shouldbe available for access to drug information; access to full-text pharmacy and medicaljournals is desirable

Record systems Should be user friendly and designed with pharmacist’s input to allow full pharmacistdocumentation; electronic medical record (EMR) should integrate with pharmacysystems, if possible; if EMR is available, pharmacist should seek full access; if nomedical record (e.g., at a community pharmacy), patient care notes should interfacewith available record keeping methods, and a method of providing documentation toother health care providers should be determined; also, if no medical record, patientscan sign release statements so that records from physicians’ offices can be obtained

Materials and supplies Patient education materials, personal drug records, preprinted materials often availablefrom government organizations, drug manufacturers and national associations(e.g., American Diabetes Assocation, National Kidney Foundation); demonstrationdevices and kits for product and device education (e.g., placebo inhalers, insulin pens,topical patches); general office and computer supplies

Data analysis and reporting Director or coordinator is responsible for compilation, analysis, and reporting of allpertinent data (general or specific); data may be collected in an ongoing fashion orretrospectively; data that should be collected include patient demographics, medicalconditions, drug therapy, drug-related problems, action taken during visit, andquality indicators and goals achieved

Facility and EquipmentSpace for clinical services At least one examination or consultation room, fully equipped with necessary items

(e.g., blood pressure cuff, examination table or chair, work area for basic laboratorysupplies, scales, sharps container)

Space for pharmacists Office space or work area; office furniture, file cabinet, computer, printer, photocopy-faxmachine, bookshelves

Computer services Types and level of service may vary; ideally located in both examination room and officearea, especially for EMR

Special equipment May become apparent as services are developed; depends on type of service(e.g., glucometer, point-of-care testing)

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Personnel Requirements

Adequate attention for determining the overallpersonnel requirements for each ambulatory carepharmacy service is critical. There should be anadequate mix and number of personnel toprovide appropriate backup and coverage.Failure to provide adequate personnel for eachservice will lead to frustration of physicians andothers who refer patients, of patients themselves,as well as of the pharmacy personnel involved inproviding the specific service.28

Areas of Practice

Determining the specific areas of practice forambulatory care pharmacy services will dependon a number of factors, including availability ofpharmacists and support personnel to provideeach specific service as well as the time, space,equipment, and funding available to devote toeach service. Each of these variables should beconsidered in advance of actually beginning aservice, allowing more opportunity for successand continuation. The service may be generalMTM or specific disease-state management.Factors outside the control of the pharmacydepartment or the pharmacist that may affect anypharmacy service may include the participationof physicians and other health care practitionerswho also have an interest in such services.Physicians may be involved in determining theoverall direction and success of clinical services,particularly if their referral of patients is criticalfor receiving patients.

Number of Full-Time Equivalents Needed

The number of full-time pharmacists andpharmacy technicians needed for any specificservice will vary depending on the number ofpatients to be served and the depth and breadthof the service. The director or coordinator forthe service should cautiously predict the need forpersonnel, employing additional personnel foranticipated growth and unexpected details.Administrators should attempt to calculate themaximum number of patients who canappropriately receive the service in a given daybased on review of medical records for theoccurrence of specific diseases or medicalproblems; pharmacy profiles for the occurrenceof specific drugs or drug categories; discussionswith physicians who may be associated with theservice, and any other means of understandingthe demand for each service. In addition,administrative time for pharmacists must be

included in their total time. As a general rule,the length of time allotted for a patient visit maybe as much as 1 hour for an initial session andmay range from 10–30 minutes in the case of anestablished patient session or encounter,depending on the required levels of assessmentand intervention. When needed, administratorsshould seek new positions for the department sothat the service can be successful.

Qualifications of Pharmacists Participating in theService

Each pharmacist who participates in theservice must be appropriately educated andtrained. Strong consideration should be given torequire residency training and board certification(e.g., Board Certified PharmacotherapySpecialist). If appropriately trained andexperienced pharmacists are not available toprovide a new service at the time it is desired, thedirector or coordinator should seek trainingprograms or other methods to assist thepharmacist(s) to acquire the necessary skills andexperience. Continuing education andcertification programs are often available to assistpharmacists in developing new skills and practiceexpertise while remaining in their positions.Pharmacy residents and fellows may be involvedin provision of services when appropriate, butnever in the absence of qualified personnel tosupervise their activities. A resident or fellowshould not be the sole provider of the service,unless he/she has already demonstrated expertisein this service through previous training orexperience.

Areas of Support

Pharmacy technicians and clerical andfinancial personnel can play important roles inestablishing and maintaining ambulatory carepharmacy services. Pharmacy technicians canassist in the preparation of drugs, record-keepingactivities, and supervised patient interactions.Clerical personnel can place phone calls and sende-mail or letters to patients regardingappointment scheduling and follow-upinformation. Financial personnel may beresponsible for billing and keeping ledgersnecessary to track the flow of money through thesystem.

Desired Areas of Expansion

Desired areas of expansion may becomeapparent after a service has been offered for a

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period of time based on requests from patients,physicians, administrators, or others. Theseexpansion areas should be considered carefullyusing all the variables used initially to determineneed and capability. Qualifications for personnelneeded for expansion of services may be differentfrom those initially in developing the service.Specifically, pharmacists with more specializedtraining may be required as the depth andbreadth of the overall services become moredefined and detailed. For example, anambulatory care pharmacy service may beginwith activities for general medicine patients anddevelop over time to include more complexpatients who may need specific services incardiology, pulmonology, infectious disease,nephrology, and/or other specialties in a similarmanner to the services offered by physicians. Asmore specialized services are desired, the demandfor specialized practitioners will follow.

Subcontracting and Outsourcing

Subcontracting and outsourcing for specificservices associated with an ambulatory carepharmacy service may be desirable when theneeded personnel or services are not available onsite, particularly in the early stages of a newprogram when full-time staff or services cannotbe financially justified. However, a commitmentof full-time personnel to each area will providethe continuity of care that is often needed.Examples where this may be helpful are in theareas of information technology and dispensing.

Evaluating the Need for Training

The director or coordinator should assess theneed for additional training when new personnelare recruited or new programs are established. Ineach case, training should be based on the needto provide updated policies and methodsrequired for excellence in specific clinicalpractice areas. The director or coordinatorshould provide adequate material and time tobecome established in the performance ofexpected activities before these personnel takefull responsibility for the service.

Operational Impact of Services

The impact of ambulatory care pharmacyservices should be anticipated prior to initiatingthe service. Pharmacists should identify gaps inthe types and levels of service already beingprovided in an area and begin services that are

projected to have the greatest positive impact,while not duplicating the services of otherpractitioners. Pharmacists should identify areasof practice in which their education, training,and experience will allow their optimal level ofpractice, and they should evaluate their practicesas often as possible to determine their impact onoverall patient care.

Within the Department Organization

The primary impact of ambulatory carepharmacy services within the department ororganization may be on personnel and staffing.Administrators should make every effort toensure that changes in professional rank orappointment levels, staffing patterns, salaries,professional advancement, and other importantpersonnel issues are understood by all personnel.Any new arrangements brought about by theimplementation of a new service or the hiring ofnew personnel should not negatively affect theoverall department. The primary clinical impactof ambulatory services may be most realizedwithin the department or organization by thebenefits observed from patient care, such asimproved surrogate markers, actual outcomes, orpositive financial impact.

Other Departments and Practitioners

When pharmacists initiate clinical services,there may be either a positive or a negativeimpact on other departments or practitioners.Depending on the methods in which patients areidentified for ambulatory care clinical pharmacyservices and the outcomes associated with theservice, the impact on other departments andpractitioners, particularly physicians and nurses,may vary. However, the impact of eachambulatory care pharmacy service should beanticipated before initiation of the service. Byanticipating such impact, other practitioners andadministrators can be consulted in the earlyplanning stages so that the primary impact willbe positive and the service will be viewed for itsstrengths rather than as a source of competition.

Section 6: Legal and Regulatory Issues

Compliance with Practice Standards

Several factors must be evaluated andconsidered when implementing ambulatorypharmacy services, including organizationalstructure, opportunities for collaboration, accessto patients and patient information, employment

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requirements, affiliation needs and agreements,and policies and procedures for the service.2, 31

When establishing a collaborative practiceagreement, the following steps should beconsidered and outlined during the planning andearly implementation process: define scope ofpractice, apply for privileges at the practice site,identify evidence-based practice standards,establish policies and procedures, determinequalifications for participants, create acontinuous quality improvement process,measure outcomes (economic, clinical andhumanistic), document activities, and investigatecompensation processes.31

Collaborative Drug Therapy Management

Pharmacy and medical organizations havepublished position statements supporting thepharmacists’ role in collaborative drug therapymanagement (CDTM).31, 32 As of November2005, 43 states have enacted legislation thatgrants pharmacists the authority to engage insome form of CDTM.33 Several resources providean overview of CDTM and summarize state-specific regulations.31, 34, 35 A survey ofambulatory care pharmacy practices identifiedcollaborative practice agreements as a significantenabling factor for the integration of pharmacistsin the ambulatory care setting.36 To facilitatefurther expansion of the pharmacist’s role in theambulatory setting, states should review andmake necessary changes in the pharmacy practicelaws and regulations to allow pharmacists toparticipate in CDTM. Examples and descriptionsof collaborative practice agreements may befound in the literature (Appendix 1).

Medication Therapy Management Services

The Medicare Prescription Drug, Improvementand Modernization Act of 2003 was intended toincrease access to prescription drugs byproviding drug coverage for beneficiaries.37

Furthermore, specified patients enrolled in theprescription drug benefit are entitled to receiveMTM services. Although pharmacists were notgranted “provider status” and are ineligible toreceive compensation for services underMedicare Part B, the legislation requiresprescription drug plans to pay for MTM servicesas a Part D benefit. Other providers are notexcluded from providing MTM services;pharmacists are the only health care practitionersspecified in the regulation. The prescriptiondrug plans create and implement MTM programs

for their members. Because the legislation doesnot stipulate details related to these plans, thereis significant variability in the design of MTMservices. The Lewin Group was enlisted to createa resource to assist with designing andimplementing MTM services.22 To specificallyassist the community pharmacist, the AmericanPharmacists Association and NationalAssociation of Chain Drug Stores jointlyidentified the core elements and a framework todeliver MTM services within this setting.23 Somestates are now reimbursing pharmacists forproviding MTM to Medicaid patients.38, 39

Health Insurance Portability and Accountability ActCompliance

All health care practitioners and medicalpractices must understand and comply with theHealth Insurance Portability and AccountabilityAct (HIPAA). Compliance with the HIPAAlegislation requires careful evaluation of policiesand procedures related to patient informationand implementation of measures to ensure theprivacy and security of patient information. Atthe first office visit, patients should receive aNotice of Privacy Practices, and a writtenacknowledgement of receipt must be obtained.Although patient authorization is not requiredfor routine disclosures related to treatment,payment, or health care operations, it is requiredwhen protected health information is disclosed toa third party; for marketing of products orservices (except if marketed in a face-to-faceencounter); for raising of funds for otherorganizations; and for conducting research,unless a waiver was approved by the institutionalreview board.40 To facilitate the implementationof HIPAA policies and procedures, adequatetraining of all staff should be conducted anddocumented. Appendix 1 includes resources forHIPAA compliance.

Miscellaneous Regulations

The Occupational Safety and HealthAdministration (OSHA) has establishedstandards that apply to all employees who may beexposed to blood or other potentially infectiousmaterials.41 These regulations describerequirements that employers must fulfill toprotect individuals who have a risk ofoccupational exposure. Pharmacists inambulatory care settings, including communitypharmacies, who perform point-of-care testingmay be exposed to bloodborne pathogens and

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other potentially infectious materials. These siteswould need to comply with OSHA standards(Appendix 1).

The Clinical Laboratory ImprovementAmendments were initially passed in 1988. TheCenters for Disease Control and Prevention andthe Centers for Medicare and Medicaid Servicespublished final regulations that have beeneffective since 2003.42 The purpose of thelaboratory amendments is to create standardsthat will ensure quality laboratory testing andprocedures. A laboratory is defined as anyfacility that performs laboratory testing,including ambulatory and communitypharmacies performing point-of-care testing.Many resources summarize the procedures andregulations associated with laboratory testing.Appendix 1 includes a list of Web-basedresources.

Certification and Credentialing

Credentialing and privileging for pharmacistsare important and complex issues intended toprotect patients from incompetent providers, tosafeguard organizations from malpracticeallegations, and to meet regulatory agency andthird-party payer requirements. Whenestablishing ambulatory care services, developingCDTM protocols or providing MTM services, thepublic and other members of the health careteam need to have an agreement on and commonunderstanding of the education and training ofpharmacists and their contribution to patientcare. Thirteen national pharmacy organizationsfounded the Council on Credentialing inPharmacy to provide leadership, standards,information, and coordination for professionalcredentialing programs in pharmacy. Pharmacistcredentials may be divided into threefundamental categories: college or universitydegree; licensure; and certificates, awards orpostgraduate work.43 Privileging is the processused by a health care organization, afterevaluating a practitioner’s credentials andperformance, to grant an individual permissionto provide certain patient care services.43 Apharmacist may be recognized by theorganization to be credentialed and obtain aprovider number.27 Some states, such asMinnesota, may require the pharmacist to becredentialed through the state government,especially if providing services for Medicaid.38

Credentialing may also be necessary for billingpurposes.

Pharmacists are pursuing postgraduatetraining, becoming more specialized, andattaining certification in a specific domain ofpractice (e.g., certification through the Board ofPharmaceutical Specialties, Commission onCertification in Geriatric Pharmacy), specificdisease states (e.g., certified diabetes educator,certified asthma educator), or specific therapy(e.g., certified anticoagulation care provider).Other than the requirements for pharmacylicensure, no credential is required by law toprovide specific clinical pharmacy services in anambulatory care setting. However, eachinstitution, health care system, or organizationcan establish its own criteria for pharmacistpractice descriptions and credentialing and/orprivileging processes.27 The Lewin Groupconcluded that MTM services can be provided atmultiple levels of complexity, with licensedpharmacists providing first-line drugmanagement and more highly trained orcredentialed pharmacists delivering morecomplex services.22 Appendix 1 includes a list ofresources on this topic.

Liability Insurance

Professional liability insurance is needed andshould provide coverage for any activity thatpharmacists can do legally in the state in whichthey practice, including CDTM if permissible bystate law.44 Generally, the institution is liable foran employee’s acts of professional negligence thatoccur within the practitioner’s typical scope ofpractice. Therefore, most employers andinstitutions carry a professional liability policy ontheir employees. An employed pharmacist whois covered by his/her employer’s policy mayobtain an additional, secondary policy. Althoughnot required, an individual pharmacist maychoose to obtain additional coverage for severalreasons. An employer may disclaim itsresponsibility if the situation is proven to beoutside the scope of normal practice orprotocol.45 In some cases, the claim may exceedthe employer’s policy and the individual’spersonal, secondary policy would apply. Finally,an employer’s policy covers the pharmacist’sactivity occurring at work whereas an individualpolicy would include coverage for work and non-work related advice and activities. Primaryliability policies are also available forindependent contractors and consultants.

Risk Management

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Site-specific policies and procedures, clinicprotocols, and collaborative practice agreementsbased on evidence-based medicine principlesshould be established to optimize patientoutcomes and minimize risks. An attorneyshould write or review any agreement or contractfor services before securing signatures. The basicelements to be addressed in a contract have beendescribed.46 Although the exposure for liabilityincreases as pharmacists’ practice activities andresponsibilities expand, many techniques can beemployed to minimize that risk. The key steps tomanaging risk include identifying, assessing,eliminating, minimizing, and transferring risk.47, 48

A proactive approach should emphasize measuresto eliminate, minimize, and transfer risk, whichcan be accomplished in a variety of ways.Examples include ensuring adequatecredentialing, hiring qualified personnel,improving procedures and protocols, maintaininggood patient and staff relations, andcommunicating and documenting activitieswell.47, 48 Reasonable extrapolations toambulatory care pharmacy practice wouldinclude obtaining the medical staff’s endorsementof pharmacist involvement and clinical pharmacyprotocols, clearly documenting all pharmacistinterventions and communication in the patient’smedical record, maintaining professionalcompetence and achieving appropriatecredentials, and evaluating pharmacistintervention and patient outcomes as part of thecomprehensive quality improvement efforts. Aworksheet to assist with identifying, evaluating,and addressing various liability risks isavailable.46 The evolution of risk managementand quality improvement processes in recentyears has led to a logical interface between thetwo concepts. Integrating risk management andquality improvement is sensible and can enhancethe effectiveness of both.47, 48

Section 7: Marketing and Promotion

Marketing includes researching customerneeds and wants, developing strategies,maintaining customer records, deliveringproducts and services, financing, promotion,pricing, and monitoring customer satisfaction.49

Preparing to Advertise

Being able to define the service in a way that isappealing to all customer groups is key to themarketing process. Therefore, services should beevaluated to identify the health needs and

services currently available. It is important thatthe definition of the service includes how theservice will be different from any other serviceavailable in the community and why the patient,health care provider, or third party payer shouldselect the new service. The service has to meetthe expectations of the customer to be a success.7,

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Physicians and Other Health Care Providers

Once the benefits of the service have beendefined, the marketing design needs to bemolded around the groups to be marketed. Toevaluate the opinions of health careprofessionals, insurers, and patients regarding theperceived need for and anticipated use of theproposed service, a simple questionnaire can bedistributed to assess the best way to market theservice. Gathering these opinions beforeinvesting in a new service can be helpful andcost-effective. The questionnaire can alsoascertain whether a similar service existed in thepast and how successful it was.51 If the primaryperson making referrals to the service will be aphysician, it should be determined whichphysicians should be targeted for marketing byspecialty or subspecialty and special interests.Talking to other health care professionals mayprovide insight as to the demand for the service.For example, endocrinologists, internal medicinephysicians, and primary care physicians would bethe groups one would market to for a diabeteseducation service, as they are the ones who willrefer potential patients.

Physicians will be evaluating the service on amore professional level. They may inquire aboutthe educational background and specialtytraining of the pharmacist(s) providing theparticular service, the disease-state managementplans, and the outcomes that are expected.49

Establishing a relationship with other healthcare providers is essential in establishing orexpanding any service. Providing physicians andother practitioners with additional services mayenable them to better meet the needs of theirpatients. The ability of pharmacists to identifypotential problems, such as drug adherence, canresult in appropriate and timely interventionsand build confidence with the health careprovider, leading to requests for furtherpharmacist consultations.52

Patients

Research has demonstrated that patients are

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often unaware of the services pharmacists areable to provide and are unlikely to appreciate theroles and responsibilities of pharmacists.53

Therefore, the marketing plan for patients willneed to be different from the marketing plan forhealth care providers or payers. Patients will beevaluating the service for value, convenience, andquality of care. Patients will want a guaranteethat the service for which they are paying willmeet their needs and expectations as well asbeing price competitive; therefore, extensive,straightforward education about a new serviceneeds to be provided.54

Payers and Stakeholders

When promoting the service to payers, it isnecessary to clearly describe how the new servicewill improve both outcomes and cost-effectivecare. It will be necessary to document decreasedemergency department, hospital, or office visits;improved patient care or satisfaction; and/orreduced overall drug costs. Some managed careorganizations contract health care services if theproposed service meets the payer’s goals. Thepotential is there to have a steady flow of patientsthrough their health care plan.

Knowledge of the key stakeholders is critical.These individuals have a vested interest in thesuccess or failure of the proposed service andrepresent the real customers in the process. It iscritical to know how success is defined for themwith regard to both financial and nontangiblebenefits. From a financial perspective,understanding how they value cost-savings,enhanced revenues, and risk reduction is vital inplanning the approach. In assessing nontangiblebenefits, consideration should be given togrowth, new opportunities that may evolve fromthe service, and strategic positioning within thehealth care sector in which they operate.

Soliciting input from these key individuals is acritical step in the planning process. A newservice should seek to solve a previouslyidentified problem or improve an existingprocess, which can often be identified byconducting a needs assessment. This assessmentcan often identify areas of strength relative toareas of concern and can provide useful insightinto what the customers perceive as “valuable”versus the proposed needs of various parties whowill interact with the service. It can also assistwith identification of how the current needs of aparticular sector are addressed and how the newservice can address those needs in a better way.

It may also help with identifying legalrestrictions, which may limit the scope of theservice or the ability to provide the proposedservice.

Public Advertising

Products can be marketed or promoted inseveral ways, including internal and externalmarketing.

Internal Marketing

Internal marketing is dependent on the staff.The staff needs to be knowledgeable about thenew service so that when there are questionsregarding pharmacy services, they are able toanswer the questions and promote the benefits ofthe specialized service. It is also prudent forpatients to see promotional items around thewaiting areas. Another option is mailing outprogram information to current patients eitherwith a particular disease state or to all patients toreach family members who may have the specificdisease being targeted.7, 50

External Marketing

Because the intangible nature of pharmacyservices makes it difficult for consumers to graspwhat pharmacists do, patients who have used theservice will be instrumental in promotion outsideoffice walls.49 They will be describing the serviceto their family, neighbors, and friends, which willcertainly increase knowledge of the new servicewithin the community. Other methods ofpromoting a service include broadcast (radio ortelevision spots), print (newspaperadvertisements, yellow pages, leaflets, posters,newsletter), Web page information, andvolunteer screening for support groups (heartfailure, diabetes) to help monitor disease statesand educational programs for professional andconsumer groups.55, 56

Evaluation of Advertising

To justify the cost of a marketing campaign, itwill be necessary to evaluate the effect thecampaign has on the customers. Piloting anadvertising campaign using a sample of thetargeted population (health care providers andpatients) can provide positive or negativefeedback regarding the current plan.Adjustments may need to be made to the originaldesign to accommodate for focus areas that wereinadvertently missed or not fully explained.57

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Once the campaign is under way and the newservice is operating, it is important to considerhow to maintain the customer base (professionalsand patients) that currently uses the service andhow to expand to other potential customers. Aspart of a quality assurance follow-up, the numberof visits and what profit was gained should beevaluated. It would be valuable to determinewhat parts of the service customers like best andbuild on those focus points.50, 56 This can bedone through questionnaires or surveys. Fromthe responses, it can be determined what needsto be done to retain current customers andhopefully obtain ideas on how to reach otherpotential customers. Some ideas may includesending out newsletters regarding a new drug onthe market (drug information) or making phonecalls to follow-up on a patient visit in whichchanges were made to therapy. Anything that canpersonalize the service will separate it from othercommunity programs.57

Section 8: Service Development and Exit Plan

Milestones for Service Development

A well-constructed strategic plan is thecornerstone of success in the businessenvironment. The strategic plan describes theprojected direction of the patient care pharmacyservice within the scope of the overallorganization and the best approach for achievingdefined goals.58 It is the essential starting pointfor determining whether or not there is a need toestablish a new service.

Although marked in a variety of ways,milestones are broadly defined as indicators orevents placed at key points in the life of a projector service, intended to measure achievement inthe ongoing project or service.59 The indicatorsmust be measurable, realistic, and consistentwith the strategic plan to ensure progress.Milestones are measured at interim stages ratherthan at completion of the project, and they areabsolutely essential in the process of servicedevelopment. Milestones developed in advanceof the start of the service serve as points forreflection and evaluation while allowing forredirection and modification of the service ifnecessary. The milestones also serve as interimmarkers of progress to help ensure the success ofthe service both in the development process andas continuing measures of quality once theservice is established.

Planning for Service Development

Planning for service development involvesknowledge of the many factors that influence thepatient outcomes. At the center of all of thesefactors lies an understanding of the process bywhich individuals60 and systems61 implementchange. Change, whether viewed in a positive ornegative light, is one of the most difficult aspectsfor many people to accept and work withinitially.62 A strong sense of consensus amongcontributing parties can be valuable in reducingsome of the stresses associated withimplementing change in the workplace,particularly with service development.

During the planning stages of servicedevelopment, efforts to conduct backgroundresearch can be a productive use of time andeffort. The collective development of thebusiness plan proposal is often the mostproductive means of initial planning and ensuresthat the interests of those likely to be affected bythe plan are identified and addressed. Collectiveinput should also serve as the foundation foracceptance and ensures that inordinate amountsof time are not spent on small details at theexpense of momentum.

Group effort requires the selection of aqualified leader63 who understands the businessenvironment and who has sufficient backgroundand experience in establishing and conductingthe day-to-day activities of the proposed service.The leader should be able to establish clear goalsand appropriate timelines, assign responsibilities,coordinate efforts of the group, and select groupmembers who understand the goal to be achievedwith the initiative. The leader should have well-defined strategies for implementation and be ableto delegate when appropriate. The leader shouldbe credible among administrators in theorganization and should represent the interests ofmajor stakeholders who stand to benefit or losefrom the success or failure of a program orproject. Finally, a good leader should be able toaccept responsibility for successes and failures ofthe project at all points in development.

Planning Phases

The planning process involves multiple stages.A planning guide was recently published for theestablishment of palliative care programs.64

Although specific for palliative care, many of thecore elements of the program development areapplicable to other clinical services.

Assessment of the factors affecting project orservice development status should include those

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internal and external to the service. Internalfactors would include core strengths, as well asdeficiencies, as these drive priorities andprocesses for development. External factors aremore difficult to control but should be includedin the planning process. These factors includeMTM services,22 legal issues (which vary bylocale), payers (whose benefit coverage variessubstantially from one another), and similarservices within the institution or organizationthat are in direct competition with the proposedservice and from whom the service must bedistinguished.

Service Development

Service development requires a keenunderstanding of the business culture into whichthe clinical service is being introduced, the majorcompetitors in the marketplace, and the potentialimpact of the service in that system. Implicit inthis process is the knowledge of the key decision-makers. These individuals can assist or impedethe development of the service and itsimplementation. These decision-makers shouldhave a clear understanding of how the proposednew service will benefit the organization and howit will fit into the overall strategic plan.

For ambulatory clinical pharmacy practice,market analysis should be done to evaluatemodel practices and implement ideas to assist increating an excellent clinical practice. Otherclinical pharmacy practitioners are often willingto help share their materials. Resources areavailable to assist pharmacists in setting up theirown ambulatory clinical practices, includingprotocols and collaborative practice agreementsfrom other clinics and institutions.65

The financial implications of the proposedservice should be explored with the business unitof the institution where the service will operate.A proposed business plan should be developed tocompare current and future costs because thesecan be used to determine the financial feasibilityof the project and how the new service affects theorganization financially. A well-constructedbusiness plan can also increase the credibility ofthe project with regard to the proposed financialbenefit. The business plan should identify notonly current and future sources of funding, butalso contingency plans for covering unexpectedoperating expenses.

Lines of authority within the system should bewell established. The scope and impact of theproposed clinical service are vital to relating the

interaction of the service to existing clinicalprograms. In addition, lines of responsibilitywithin the larger system should also be clearlydefined to ensure integration and completion ofthe interrelated aspects of the service within theinstitution.

Finally, criteria defining the success of theservice should be established to systematicallymonitor progress. Key customers and decision-makers should be present to assure that allconcerns regarding the proposed service areadequately addressed through an objectiveprocess.

Launching a Service

Once approval of the proposed plan andfinancial arrangements has been secured, theservice can be launched. Personnel to assist withthe implementation process should now beidentified and a training plan should bedeveloped to ensure a smooth transition andcontinuity of patient care. A new patient careservice will have numerous new record-keepingprocesses and operating procedures. Strongadministrative and clinical support will beessential in these early days as the risk for errors,omissions, and harm to a patient will likely behigher than usual due to the unfamiliarity ofpersonnel with new processes.

Operation of the new service will need to becoordinated with other services in the health careorganization that are involved with or affected bythe service, such as laboratory or pharmacydispensing services, and equipment needed torun the service, such as computer systems andcommunications networks. Integration of thesesystems will ensure a smooth transition periodand reduce the likelihood of compromising carebecause of inefficient or ineffective systemprocesses.

Providing the Service

Policies and procedures approved by thedirector or coordinator of the service anddescriptions of how the service will operateshould be in place from the start. These helpensure that guidance exists for consistentoperation across most aspects of the service andshould reflect the current business environment.Key information should be provided in sufficientdetail to give an outside observer a relativelyclear understanding of the structure, function,and basic operation of the service.

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Assessing the Impact on Existing Services

During the early stages of operation, periodicmonitoring of the new service’s impact onexisting services should be performed. Atpredefined intervals, careful evaluation ofwhether the service is performing at theprojected levels should be considered.

Unplanned events and other influences thathave an impact on the success of the programshould be reviewed, and modifications should bemade as necessary. The evaluation shouldconsider system and process changes that haveoccurred as a result of the service as well aschanges in predefined outcomes as quantifiablemeasures of success. Continuous qualityimprovement activities are often used tocomplete the evaluative process and should beconducted by individuals without a substantialstake in the service to improve objectivity.

Establishing a Timeline for Implementation

Timelines include dates by which particularmilestones or objectives are expected to beaccomplished. Timelines are often establishedconcurrently with the milestones to provideconsistency in expectations and improveaccountability for the various elements beingmanaged by different individuals. The timelineshould establish a priority ranking for aspects ofthe project that require completion of specifictasks that are required for project or servicedevelopment.

Many successful implementation plans useGantt charts to structure a timeline for complexprojects. A Gantt chart, developed in the 1910sby Henry Gantt, is a diagram that shows tasksand deadlines necessary for completing a project,and graphically represents how long a projectshould take, identifies necessary resources, andassists with planning for elements that must becompleted in sequence to be positioned amongthose which can be completed at any time in theprocess.66 Although proprietary programs suchas Microsoft Project (Microsoft Corp., Redmond,WA) make the development of Gantt chartsrelatively easy, several free software computerprograms are also available for download(Appendix 1).

The timeline may be modified as necessaryafter an interim analysis of progress to date andas unexpected obstacles are encountered in theprocess. The findings of the analysis maynecessitate minor changes in focus or majorredirection of the project to address issues and

keep the project moving forward.Reasonable expectations should also be

established to ensure that the success of the newservice is not undermined by too aggressive anapproach. They should take into account bothinternal and external factors, which willmarkedly influence progress and direction of thenew service. Periodic assessment should beperformed to evaluate progress in meetingestablished objectives.

Expansion of Services

Clinical services that are well established andsuccessfully managed should continue to growover time. At some time in the process,consideration may be given to expansion ofservices, whether to cover additional therapeuticareas, or to meet the needs of a larger number ofpatients and customers within the sametherapeutic area. Ideally, the need for expandedservices should be quantified and documentedbecause the simple desire to expand services maybe insufficient for expansion. The expandedservice must also be consistent with the strategicplan for the health care system.

Plans for Modification of the Business-PracticeModel

The initial model developed for the serviceshould include a fair degree of flexibility toaddress change, whether anticipated orunexpected. Change can appear in a variety ofways, including, but not limited to, customerneeds, the regulatory environment, budgetaryissues, administrative changes, and leadershipchanges. To address the potential impact of anyof these changes, outcome assessments should beused to measure the relative success of theservice and to guide modifications. Thepossibility of redirection of the service shouldalways remain an option if undesired outcomesor previously unanticipated outcomes occur. Theservice should solicit input from customers witha vested interest in the service. Efforts should bedirected to determining whether or not they aresatisfied with the outcomes.

Exit Plan

The successful business model for a newpatient care service must always consider thepossibility of the need to cease provision of theservice at some point in time. This decision maycome in the middle of glowing success, overt

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failure of the service, or a change in the overalldirection of the organization where the service isbeing provided. The need to exit can be drivenby a variety of factors, which are quite similar tothose that drive modification of the service.Before an exit strategy is seriously considered,care must be taken to ensure that all initialprocesses related to the identified need for exithave been adequately tested. Exit strategiesshould be considered when recommendedmodifications do not address problems ordeficiencies that have been identified or becauseof the potential effect of impendingadministrative changes. Although theseproblems may serve as initial indicators that theservice may need to be discontinued, a separateset of clearly defined criteria must be developedas part of the self-assessment process to guide inthe decision toward modification of the service orimplementation of an exit strategy. Although it isdifficult to entirely separate the financial aspectsof the service from the personal investment oftime and energy, financial viability is probablyone of the most critical features of the evaluativeprocess.

The professional staff of the service must alsorealize that the exit does not equate with failureof the service itself. Facility needs and prioritiesmay simply change over time. In addition,administrative changes can alter priorities despitethe apparent success of the service.

Communication is a key component of the exitstrategy. Data justifying the proposed need todiscontinue the service should be presented tothe key administrative figures, key stakeholders,and all others with an implied or direct influenceon the service. In addition, the exit plan mustinclude a strategy for caring for the patients whoreceive their care through the service if the exitstrategy ultimately becomes necessary. Thisstrategy may include training for the providerswithin the facility who will assume the care ofthese displaced patients, as well as otherresources made necessary by the shift in thedelivery of patient care.

Section 9: Evaluation of Service Outcomes

The evaluation of service outcomes is anintegral part of the overall business plan forclinical pharmacy services in the ambulatory caresetting. In the current health care environment,clinical pharmacists need to continue todemonstrate the value of their services to ensurecontinued growth. In general, it is important to

evaluate clinical outcomes, humanistic outcomes,and economic outcomes in an appropriate andorganized manner. The timeline for outcomesassessment will depend on the service providedand the disease or problem addressed.

Clinical Outcomes

A number of clinical outcomes can bemeasured and assessed using generic and disease-specific tools. Examples of such outcomes mightinclude monitoring specific laboratoryparameters related to disease or problem (e.g.,glycosylated hemoglobin level reduction inpatients with diabetes mellitus or low-densitylipoprotein cholesterol level reduction in patientswith dyslipidemia) or physical assessmentparameters (e.g., blood pressure in patients withhypertension). These measures may becompared to baseline, a group not exposed to theservice, internal standards (specific health caresystem standards), and/or external standards(guidelines or benchmarking data). Ideally, datashould be compared at specified time points(quality improvement) as well as to both internaland external standards.

In addition, the Institute for Clinical SystemsImprovement has developed and validated 51outcome instruments that can be used to evaluatepatient outcomes after interventions by healthcare providers, including pharmacists.67

Examples of these patient outcomemeasurements have been published previously.2

Other clinical performance measures forambulatory care services are available from theAQA Alliance (formerly called the ambulatorycare alliance).68 The AQA Alliance is a jointeffort between the American Academy of FamilyPhysicians, the American College of Physicians,America’s Health Insurance Plans, and theAgency for Healthcare Research and Quality. Themission of the AQA Alliance is to “improvehealth care quality and patient safety through acollaborative process in which key stakeholdersagree on a strategy for measuring performance atthe physician or group level...” Outcomemeasurements are valuable in assessing anambulatory care clinical pharmacy service andinclude disease-related outcomes, as well asmany drug-specific outcomes, such as thepercentage of patients with persistent asthmawho are prescribed inhaled corticosteroids andthe percentage of patients with coronary arterydisease who are prescribed a lipid-loweringagent. The AQA Alliance also provides

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information on how to develop additionaloutcome measures. These outcome measuresmay be used to assess a population with aspecific disease or as a research method toexamine how process changes affect outcomes.69

For example, in the case of the patient withdiabetes, an external standard would be theAmerican Diabetes Association (ADA) standardsof care and the ADA–National Committee forQuality Assurance benchmarking data. It isimperative that clinical pharmacists have aworking knowledge of the health-related qualityof life instruments that are relevant to theirservices and are able to determine theappropriate methods to assess theirinterventions.

The Pharmacy Quality Alliance, a newcollaborative initiative, has also beenestablished.70 It recently endorsed pharmacyquality measures, which can be used in a clinicalpharmacy practice. Its mission is as follows:

To improve health care quality and patient safetythrough a collaborative process in which keystakeholders agree on a strategy for measuringperformance at the pharmacy and pharmacist-levels; collecting data in the least burdensome way;and reporting meaningful information to consumers,pharmacists, employers, health insurance plans,and other healthcare decision-makers to help makeinformed choices, improve outcomes and stimulatethe development of new payment models.70

Additional methods to determine effectivenessof clinical pharmacy interventions includeexamining whether a particular service resultedin a reduction of clinic visits, emergencydepartment visits, or overall hospitalizations.These patient-oriented outcomes would bepreferable to disease-oriented outcomes such asblood pressure reduction in a patient withhypertension or peak flow meter readings in apatient with asthma. Although these outcomesare important, they can be time intensive andcostly to measure in the most objective manner.

Humanistic Outcomes

Perhaps the best method of assessing theimpact of a service on a specific disease state orproblem is health-related quality of life outcomemeasures,2 which actually measure the impact oftherapy on the disease process. Payers are nowusing these data in reimbursement policies. TheNational Quality Measures Clearinghouse(NQMC), sponsored by the Agency forHealthcare Research and Quality and the United

States Department of Health and HumanServices, is a database and Web site forinformation on specific evidence-based healthcare quality measures and measure sets.71 Themission of NQMC is to provide practitioners,health care providers, health plans, integrateddelivery systems, purchasers, and others anaccessible mechanism for obtaining detailedinformation on quality measures and to furthertheir dissemination, implementation, and use inorder to inform health care decision makers.Measures are submitted to the NQMC by avariety of national, state and local organizations,including health care systems, accreditationorganizations, professional associations, researchinstitutions and licensing boards.

Humanistic outcomes are as important asclinical outcomes and can add additionalinformation to the decision process. It is helpfulto determine whether patients are satisfied withtheir care and/or feel as though their quality oflife has improved as a result of the serviceprovided. Patient surveys and questionnaires,involving Likert scales and open-endedquestions, can provide this information to theclinical pharmacist and may include bothfunctioning and well-being surveys andsatisfaction surveys. Satisfaction surveys, whichtend to employ both ratings and objectiveinformation, are used primarily to inform orguide administrative decisions. Functioning andwell-being surveys are more likely to be used atan individual patient level. More detailedinformation on measuring patient satisfactionand designing surveys can be found in theliterature.72

Patient surveys are often institution and/orsituation specific but may include statementssuch as “The pharmacist increased myknowledge of my problem/disease state”; “I amsatisfied with the care I received from mypharmacist.” Patients are then asked to ratethese statements (5 [strongly agree] to 1[strongly disagree]). To evaluate morethoroughly, it may be helpful to add open-endedquestions to the survey as well, such as “Whatare you most happy/frustrated with?”; “Whatchanges would you like to see?” It is importantto note that pharmacists should test any newlycreated questionnaires before use to determineflaws and make necessary adjustments. Thesepilot instruments can be completed internallyand/or externally in order to validate them.Development and validation of an instrument tomeasure patient satisfaction with pharmacy

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services has been described in the literature.73, 74

Clinical pharmacists involved in the AshevilleProject used these surveys in their ownhumanistic assessments.75

Primary care providers and other health careprofessionals can also be surveyed afterimplementation of the service. It can be usefulfor the clinical pharmacist to be aware ofindividual provider satisfaction with a particularservice, including ease of referral. As a result,clinical pharmacists can better prioritize theirinvolvement and make necessary adjustments tocurrent services.

Economic Outcomes

It has become increasingly necessary todemonstrate economic benefit to the institutionor overall health care system. Essentially, thereare four types of economic evaluations: costeffectiveness, cost benefit, cost minimization, andcost utility. A detailed review of each of theseevaluations is beyond the scope of this paper andhas already been described in the literature.76, 77

There have been reviews in the pharmacyliterature of the economic benefit of clinicalpharmacy services in the ambulatory caresetting.9, 78 In general, clinical pharmacistsshould be able to demonstrate that the overallcost savings to the health care system is greaterthan the initial and continued cost of the service.Examples of initial costs may include personnel,space, paperwork, laboratory costs, and devicespurchased. These costs will obviously varydepending on the setting and individual situationand must be carefully evaluated beforeimplementation. With regard to determiningcost savings, it is necessary to look at both directand indirect costs. Although emphasis is oftenplaced on direct drug costs (e.g., switching froma more expensive to a less expensive drug;discontinuing unnecessary therapies), indirectcosts may have long-term impact. For example,recommending a drug to prevent a future illnessor health consequence may increase drug costsbut may improve overall health outcomes(decreased clinic visits, emergency room visits,hospitalizations) and/or decrease adverse events,which will have economic benefits to the patientand health care system.

Documentation of clinical pharmacyinterventions and of the economic value of theseservices is absolutely vital. Assignment of aspecific dollar value to interventions is oftendifficult but may be achieved by using

information already documented in the literature(e.g., a 1% reduction in glycosylated hemoglobinlevel results in significant cost avoidance of$685–950/year of mean total health care costs forpatients with diabetes).79 Alternatively, this maybe achieved through use of software availablethrough a particular health care system.Rxpertise (www.rxpertise.com), Assurance(www.medsmanagement.com), and Outcomes(www.getoutcomes.com) are examples of systemsthat attempt to assign cost savings for eachindividual intervention and that are used byvarious institutions around the country. Otherdocumentation systems are available forcommunity pharmacy, which may have somecomponents of outcome documentation.80

Section 10: Financial Considerations forBusiness-Practice Model Development

A hallmark step in business modeldevelopment involves the definition of whatprecisely constitutes a “service.” Possibilitiesinclude a patient encounter, a consultation(written or otherwise), or perhaps even thedispensing of a prescription.81 This serviceshould be discrete, measurable, and“deliverable,” so as to ensure that it can be billedor at least counted in some fashion.

Essentially two cost estimates are to beconsidered: direct and indirect costs. Anexplanation of these costs is summarized in Table 5.

Revenue Generation

Generation of revenue is a cornerstone of anyviable service and the establishment of a revenueestimate is critical to business modeldevelopment.9, 82 Several factors should beevaluated continually to ensure a revenue streamthat allows the business to remain fiscally soundand solvent. The payer mix should be known inorder to analyze the source of the revenue.Different reimbursement structures include fee-for-service billing to private insurance, incident-to-billing under Medicare, payment for MTMservices under Medicare part D, and (in somestates) payment from state Medicaid programs.38, 39

Other potential reimbursement may come directlyfrom employers or self-paying patients. In someinstances, the clinical pharmacist’s salary maycome from the managed care organization orhealth care system where the primary financialincentive is to increase cost-effective prescribingand improve health outcomes, rather thangenerate revenue. Revenue is sometimes also

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generated from honoraria payments from acollege of pharmacy for precepting studentsduring advanced practice experiences. It isimportant to keep track of payments received forservices because billed charges may besubstantially more than the amount paid.

One specific situation for special considerationis the case where a pharmacist in an ambulatoryclinical practice is funded by a college ofpharmacy. If the clinic or organization is notcontributing to the pharmacist’s salary, revenuegenerated may be routed back to the college ofpharmacy, after administrative fees have beenremoved. If the college of pharmacy contributeshalf of the pharmacist’s salary, a portion may stillbe sent back to the college of pharmacy. Whathappens to this money will be up to thediscretion of the college of pharmacy and theclinical faculty member. It is important that adetailed practice plan be written that outlines theprocedure.

Some other considerations include theprediction of patient volume or service volume tobe delivered, establishment of a price per unit of

service delivered, and an estimate of totalrevenue.83

The computation of net revenue is alsoimportant. Net revenue is calculated bysubtracting the total cost of the operation (directand indirect) from total revenue. Whenconsidering net revenue, it should be pointed outthat both fixed costs (e.g., personnel salary,utilities) and variable costs (e.g., professionalservice fees, certain utilities) have a significantimpact on net revenue. Fixed costs cannot becontrolled per se, but financial restraint anddiscount purchasing can minimize variable costs.

Pro Forma Evaluation

Another significant measure in maintaining theviability of a service includes a pro formaevaluation.84, 85 This evaluation should include atimetable for analysis and how far into the futurethe service will be considered. Evaluative criteriashould include return on investment, the “break-even point,” and the time to “break even.” Inother words, it should be determined whetherthe service is generating revenue or losing money,and how long it would take to not lose money.

Some other considerations include thepotential for volume changes (increases anddecreases) and their impact on costs. Fixedexpenses should not change with small-to-moderate increases in volume. Variableexpenses, however, will potentially change asvolume changes. Certain expenses, termed“hybrid expenses,” may change in the event of asudden or dramatic change in volume (e.g., needto hire additional personnel).

Salary, fringe benefits, technology charges, andlegal charges are other specific costs of concern.9

Employees will expect periodic increases inwages, usually annually. Fringe benefits may beoffered depending on the success of the services.For example, if net revenue exceeds expectations,all employees could be paid a “dividend” to boostmorale and provide incentive for increasedproductivity. Technology, such as wirelessInternet, may increase or decrease costsdepending on its impact on productivity.

Cost Avoidance

Cost avoidance is an alternate financial model.This is especially true for a clinical pharmacistemployed by a managed care organization orhealth care system. For example, it may bedifficult to determine who financially benefitsfrom decreasing unnecessary drug use as

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Table 5. Direct and Indirect Costs to Be Considered

Costs ExamplesDirect costs

Labor Salary, fringe benefits, training,annual fees, certification fees,consultants (potential)

Minor equipment Telephones, pagers

Capital equipment Office equipment (copiers,chairs, desks, storage space),remodeling of existing space,fax machines, computers,software and online resources,laboratory equipment(e.g., point-of-care testingequipment)

Administrative Relocation expenses ofemployees, recruitment,contract negotiations,marketing, compliance(e.g., licenses), malpracticeinsurance, billing, collections,office manager and staff

Miscellaneous Travel for employees, continuingeducation reimbursement,interpreters, supplies andoperational expenses (recordkeeping, photocopying, printing, postage, laboratory,telecommunications)

Indirect costsOverheadPhysical space Rent or lease

AMBULATORY CARE BUSINESS-PRACTICE MODEL ACCP

pharmacy benefits are not always managed byhealth plans (e.g., pharmacy benefitsmanagers).81, 86 Health plans may not save moneyby a decrease in utilization. However, decreasesin emergency visits, clinic visits (to physicians),and hospitalizations should decrease overall coststo the health plan. However, few services willactually reduce costs in today’s health careenvironment. Rather, services generally decreasethe rate of increase. In other words, costs may goup, but increased utilization of the services mayblunt the rate of rise. Clearly, slowing theincrease in costs has value, but it requires anestimate of expected inflation, not just “what ifthis intervention hadn’t been made by thisservice” model to provide credibility.

Vigilance must be maintained by reviewing theoperating statements (balances), the generalledger (what is coming in vs going out), andfinancial performance analysis. This analysisshould be done at least quarterly with asemiannual and annual review. Because manypharmacists are not familiar with the financialaspect of service management, a consultant oraccountant be necessary.

Conclusion

This document provides the frameworknecessary for pharmacy practitioners andadministrators to develop a business-practicemodel for clinical pharmacy service developmentin the ambulatory setting. As ambulatory carepractices continue to evolve, there will beincreased knowledge of how to initiate andexpand the services. This document is intendedto serve as a basis to assist in the growth anddevelopment of clinical pharmacy services in theambulatory environment.

Acknowledgement

The authors would like to acknowledge DavidHughes, Pharm.D., BCPS, CDE for his helpfulassistance in writing the Financials section.

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Appendix 1. Resources for Development of a Business-Practice Model

Ambulatory care clinics and institutional ambulatory careACCP Task Force on Ambulatory Care Clinical Pharmacy Practice. ACCP white paper: establishing and evaluating clinicalpharmacy service in primary care. Pharmacotherapy 1994;14(6):743–58.

Blair MM, Blake EW, Harris IM, et al, eds. Ambulatory care new practitioner survival guide. Kansas City, MO: AmericanCollege of Clinical Pharmacy, 2004.

ASHP guideline: minimum standards for pharmaceutical services in ambulatory care. Am J Health Syst Pharm1999;56:1744–53.

Ables AZ, Baughman OL. The clinical pharmacist as a preceptor in a family practice residency training program. Fam Med2002;34:658–62.

Barner JC, Brown CM, Shepherd M, Chou J, Yang M. Provision of pharmacy services in community health centers andmigrant health centers. J Am Pharm Assoc 2002;42:713–22.

Bazaldua O, Ables AZ, Dickerson L, et al. Suggested guidelines for pharmacotherapy curricula in family medicine residencytraining: recommendations from the Society of Teachers of Family Medicine Group on Pharmacotherapy. Fam Med2005;37(2):99–104.

Borgsdorf LR, Miano JS, Knapp KK. Pharmacist-managed medication review in a managed care system. Am J Hosp Pharm1994;51:772–7.

Britton ML, Lurvey PL. Impact of medication profile review on prescribing in a general medicine clinic. Am J Hosp Pharm1991;48:265–70.

Carmichael JM, Alvarez A, Chaput R, DiMaggio J, Magallon H, Mambourg S. Establishment and outcomes of a model primary care pharmacy service system. Am J Health-Syst Pharm 2004;61:472–82.

Chen J, Britten N. “Strong Medicine”: An analysis of pharmacist consultations in primary care. Fam Pract 2000;17:480–3.Dickerson LM, Denham AM, Lynch T. The state of clinical pharmacy practice in family practice residency programs.Fam Med 2002;34:653–7.

Knapp KK, Okamoto MP, Black BL. ASHP survey of ambulatory care pharmacy practice in health systems—2004.Am J Health Syst Pharm 2005;62:274–84.

Kuo GM, Buckley TE, Fitzsimmons DS, et al. Collaborative drug therapy management services and reimbursement in afamily medicine clinic. Am J Health-Syst Pharm 2004;61:343–54.

Lee JK, Grace KA, Taylor AJ. Effect of a pharmacy care program on medication adherence and persistence, blood pressure, and low-density lipoprotein cholesterol: a randomized controlled trial. JAMA 2006;296:2563–71.

Taylor CT, Byrd DC, Krueger K. Improving primary care in rural Alabama with a pharmacy initiative. Am J Health-SystPharm 2003;60:1123–9.

Yanchick JK. Implementation of a drug therapy monitoring clinic in a primary-care setting. Am J Health Syst Pharm2000;57(suppl 4):S30–7.

Community practiceBernsten C, Bjorkman I, Caramona M, et al. Improving the well-being of elderly patients via community pharmacy-basedprovision of pharmaceutical care: a multicentre study in seven European countries. Drugs Aging 2001;18:63–77.

Carter BL, Chrischilles EA, Scholz, D, Hayase N, Bell N. Extent of services provided by pharmacists in the Iowa Medicaid pharmaceutical case management program. J Am Pharm Assoc 2003;43:24–33.

Chrischilles EA, Carter BL, Lund BC, et al. Evaluation of the Iowa Medicaid pharmaceutical care management program. J AmPharm Assoc 2004;44:337–49.

Cranor CW, Christensen DB. The Asheville project: factors associated with outcomes of a community pharmacy diabetes careprogram. J Am Pharm Assoc 2003;43:160–72.

Grainger-Rousseau TJ, Miralles MA, Hepler CD, Segal R, Doty RE, Ben-Joseph R. Therapeutic outcomes monitoring: application of pharmaceutical care to community pharmacy. J Am Pharm Assoc 1997;NS37:647–61.

Harris WE, Rivers PH, Goldstein R. The potential role of community pharmacists in care management. Health Soc CareCommunity 1998;6:196–203.

Linville C. Wyoming’s PharmAssist program is helping residents improve their health and cut medication costs. America’sPharmacist 2004;126:26–9.

Miller LG, Scott DM. Documenting indicators of pharmaceutical care in rural community pharmacies. J Managed CarePharm 1996;2:659–66.

Rupp MT, DeYoung M, Schondelmeyer SW. Prescribing problems and pharmacist interventions in community practice.Med Care 1992;30:926–40.

Sturgess IK, McElnay JC, Hughes CM, Crealey G. Community pharmacy based provision of pharmaceutical care to older patients. Pharm World Sci 2003;25(5):218–26.

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Appendix 1. Resources for Development of a Business-Practice Model (continued)

Description and development of servicesAmerican Pharmacists Association and National Association of Chain Drug Stores Foundation. Medication therapymanagement in community pharmacy practice: core elements of an MTM service (version 1.0). J Am Pharm Assoc2005;45:573–9.

ASHP guidelines for obtaining authorization for documenting pharmaceutical care in patient medical records. Am J HospPharm 1989;46:338–9.

ASHP guidelines on documenting pharmaceutical care in patient medical records. Am J Health Syst Pharm 2003;60:705–7.Brock KA, Doucette WR. Collaborative working relationships between pharmacists and physicians: an exploratory study.J Am Pharm Assoc 2004;44:358–65.

Ferro LA, Marcrom RE, Garrelts L, et al. Collaborative practice agreements between pharmacists and physicians. J Am PharmAssoc 1998;38:655–66.

Hammond RW, Schwartz AH, Campbell MJ, et al, for the American College of Clinical Pharmacy. Collaborative drug therapymanagement by pharmacists—2003. Pharmacotherapy 2003;23(9):1210–25.

Heitz RM, Van Dinter M. Developing collaborative practice agreements. J Pediatr Health Care 2000;14:200–3.Pharmacy Access Partnership. Collaborative practice agreements. Available from www.go2ec.org/CollabPracticeAgreements.htm. Accessed July 24, 2007.

Zillich AJ, McDonough RP, Carter BL, Doucette WR. Influential characteristics of physician/pharmacist collaborative relationships. Ann Pharmacother 2004;38:764–70.

Financial impactBenrimoj SI, Langford JH, Berry G, et al. Economic impact of increased clinical intervention rates in community pharmacy: a randomized trial of the effect of education and a professional allowance. Pharmacoeconomics 2000;18(5):459–68.

Cranor CW, Bunting BA, Christensen DB. The Asheville project: long-term clinical and economic outcomes of a communitypharmacy diabetes care program. J Am Pharm Assoc 2003;43:173–84.

Dobie RL, Rascati KL. Documenting the value of pharmacist interventions. Am Pharm 1994;NS34(5):50–4.Ellis SL, Carter BL, Malone DC, et al. Clinical and economic impact of ambulatory care clinical pharmacists in managementof dyslipidemia in older adults: the IMPROVE study. Pharmacotherapy 2000;20(12):1508–16.

Farris KB, Kumbera P, Halterman T, Fang G. Outcomes-based pharmacist reimbursement: reimbursing pharmacists for cognitive services, part 1. J Manag Care Pharm 2002;8(5):383–93.

Galt KA. Cost avoidance, acceptance, and outcomes associated with a pharmacotherapy consult clinic in a Veterans Affairsmedical center. Pharmacotherapy 1998;18(5):1103–11.

Hatoum HT, Witte KW, Hutchinson RA. Patient care contributions of clinical pharmacists in four ambulatory care clinics.Hosp Pharm 1992;27:203–6,208–9.

Jameson J, VanNoord G, Vanderwoud K. The impact of a pharmacotherapy consultation on the cost and outcome of medicaltherapy. J Fam Pract 1995;41:469–72.

Knapp KK, Katzman H, Hambright JS, Albrant DH. Community pharmacist interventions in a captivated pharmacy benefitcontract. Am J Health Syst Pharm 1998;55:1141–5.

The Lewin Group. Medication therapy management services: a critical review. J Am Pharm Assoc 2005;45:580–7.McMullin ST, Hennenfent JA, Ritchie DJ, et al. A prospective, randomized trial to assess cost impact of pharmacist-initiatedinterventions. Arch Intern Med 1999;159:2306–9.

Smith DH, Fassett WA, Christensen DB. Washington State CARE project: downstream cost changes associated with theprovision of cognitive services by pharmacists. J Am Pharm Assoc 1999;39:650–7.

Snella KA, Trewyn RR, Hansen LB, Bradberry JC. Pharmacist compensation for cognitive services: focus on the physicianoffice and community pharmacy. Pharmacotherapy 2004;24:372–88.

Helpful business-oriented Web sites for starting a new business and identifying customerswww.USChamber.com: Resources from both the national and local chambers for business developmentwww.TSNN.com: Searchable database of trade shows worldwidewww.SBA.gov/sbdc: Small business development centers offer low-cost helphttp://adage/americandemographics: American Demographics is a fee-for-service monthly magazine that offers information onconsumer trends and analysis

www.hoovers.com: Offers fee-for-service business and industry data, sales, marketing business development, and other information on public and private companies

www.Entrepreneur.com/FormNet: Offers forms to analyze a businesswww.fedstats.gov: Main portal for government statisticswww.census.gov: Free demographic information and access to all U.S. census datahttp://quickfacts.census.gov/qfd/: Information on the state or county level censuswww.census.gov/econ/census02: Economic census, compiled every 5 years; gathers business activity information by industryand subsectors of industry compiled down to a ZIP code

Medicare resourcesCMS: www.cms.hhs.gov/ACCP: www.accp.com/position.php#commentariesAPhA: www.aphanet.org/AM/Template.cfm?Section=APhA_Resources_MedicareASHP: www.ashp.org/

AMBULATORY CARE BUSINESS-PRACTICE MODEL ACCP 33e

Appendix 1. Resources for Development of a Business-Practice Model (continued)

Clinical Laboratories Improvement Act resourcesCDC: http://www.cdc.gov/clia/regs/toc.aspx CMS: www.cms.hhs.gov/clia/default.aspFDA: www.fda.gov/cdrh/CLIA/index.html

Occupational Safety and Health Administration resourcesOSHA Bloodborne Pathogens Facts Nos. 1–6: www.osha.gov/OshDoc/data_BloodborneFacts/Health Insurance Portabilty andAccountability Act resourcesDepartment of Health and Human Services: www.hhs.gov/ocr/hipaaAmerican Academy of Family Physicians: www.aafp.org/hipaa

Sample Forms: www.aafp.org/fpm/20030200/29theh.htmlManual: www.aafp.org/x20716.xml

American Medical Association: www.ama-assn.org/ama/pub/category/4234.htmlU.S. Department of Health and Human Services, National Institutes of Health, Privacy Rule:http://privacyruleandresearch.nih.gov/

Bush J. The HIPAA privacy rule: three key forms. Fam Pract Manag 2003;10(2):29–33.Kibbe DC. 10 steps to HIPAA security compliance. Fam Pract Manag 2005;12(4):43–9.

Credentialing and privileging for pharmacists resourcesCouncil on Credentialing in Pharmacy: www.pharmacycredentialing.orgBoard of Pharmaceutical Specialties: www.bpsweb.orgCommission on Certification in Geriatric Pharmacy: www.ccgp.org

Gantt charts for service implementation timelines: programs available for downloadhttp://associate.com/gantthttp://www.mindtools.com/pages/article/newPPM_03.htm

Appendix 2. Professional Pharmacy Organizations

Organization Web Site Purpose and GoalsAACP (American Association www.aacp.org Represents pharmaceutical educationof Colleges of Pharmacy)

AAPT (American Association www.pharmacytechnician.com Provides continuing education and services to pharmacyof Pharmacy Technicians) technicians, represents members’ interests to the public

and other health care organizationsACA (American College www.acainfo.org Research and education resource center that providesof Apothecaries) pharmacists with information regarding issues affecting

the pharmacy profession; ACA also provides a supportline, specialty practice education program, andpharmacy-related publications

ACCP (American College www.accp.com Supports and promotes clinical pharmacy practice,of Clinical Pharmacy) research, and education

AFPE (American Foundation www.afpenet.org Supports pharmacists to further their studies in advancedfor Pharmaceutical Education) pharmacy, in industry, association work, academia,

and other areas of professional practiceAMCP (Academy of www.amcp.org Professional society, dedicated to promoting theManaged Care Pharmacy) development and application of pharmaceutical care

and to ensure appropriate health care outcomes forall patient care

APhA (American Pharmacists www.aphanet.org Provides professional information and education forAssociation) pharmacists and advocates improvement of health care

through the provision of comprehensive pharmaceutical care

ASAP (American Society www.asapnet.org Aids members in applying computer technology intofor Automation in Pharmacy) pharmacies; ASAP includes independent pharmacies,

hospital pharmacies, colleges of pharmacy, state andnational associations, and government agencies

ASCP (American Society www.ascp.com Pharmacy association for consultant pharmacistsof Consultant Pharmacists) specializing in long-term care; the association provides

members with leadership, education and resources forthe practice of pharmacy in senior care

ASHP (American Society www.ashp.org Represents pharmacists who practice in healthof Health-System Pharmacists) maintenance organizations, long-term care facilities,

home care, and other community care systems

PHARMACOTHERAPY Volume 28, Number 2, 200834e

Appendix 2. Professional Pharmacy Organizations (continued)

Organization Web Site Purpose and GoalsASPEN (American Society for www.nutritioncare.org Involved in the provision of nutritional therapies; Parenteral and Enteral prepares standard guidelines for the use ofNutrition) nutrition support and professional practice

ASPL (American Society for www.aspl.org Furthers the legal knowledge of pharmacists, students ofPharmacy Law) law, attorneys, government, and other professions

interested in issues affecting pharmacy and drugsBPS (Board of Pharmaceutical www.bpsweb.org Trains and certifies pharmacists in a specialized fieldSpecialties)

CCGP (Commission for www.ccgp.org National certification program for pharmacists who wantCertification in Geriatric to specialize in geriatric pharmacy practicePharmacy)

CCP (Council of Credentialing www.tcpf.org Provides leadership, standards, and public informationin Pharmacy) as well as coordinating the profession’s voluntary

credentialing programsCPF (Community Pharmacy www.tcpf.org Assists community pharmacists in achieving targetedFoundation) therapeutic goals and fostering improvements in

patient careICPT (Institute for the www.advancepharmacy.org Supports educational initiatives, research projects, andAdvancement of Community programs to advance community pharmacy practicePharmacy) in the United States

NCPA (National Community www.ncpanet.org Represents pharmacy owners, managers, and employees Pharmacists Association) of independent community pharmacies across the

United StatesNCPDP (National Council for www.ncpdp.org Creates and promotes data interchange standards inPrescription Drug Programs) industry, provides information and resources to

education industry, and support its membersNIPCO (National Institute for www.nipco.org National accrediting organization for pharmacist carePharmacist Care Outcomes) education and training, leading to the pharmacist care

diplomate credentialNPhA (Nationalwww.npha.net Represents the interests and needs of minorities in allPharmaceutical Association) practice settings

NPTA (National Pharmacy www.pharmacytechnician.org An organization for pharmacy techniciansTechnician Association)