In previous posts, we have discussed the merits of both Buy&Bill and Specialty Pharmacy inventory strategies for your office Infusion Center. If you missed our previous writings, you should take a moment to read our previous posts for some context To Buy&Bill or not to Buy&Bill and Specialty Pharmacy is your friend. If you are brand new to infusion or have been providing infusions in your office for many years, the strategies you choose to manage your inventory will have a profound impact both on your office team and your bottom line.
In a previous post, we highlighted the opportunities in the Buy&Bill strategy that allows your office to capitalize on both increased profitability and the reduced staff overhead required to coordinate patient medications. However, Specialty Pharmacy stands in as a necessary and helpful substitute when that profitability opportunity is either non-existent, or the risk of administering a certain medication is too high for your comfort. Many offices will not take an “all-in” strategy for either one of these options, and will instead lean one way or the other in an effort to balance profitability, risk, and patient access. I believe the argument for a “Buy&Bill ONLY” strategy is easier to understand in terms of maximizing profitability and simplifying inventory management. So, for this post, we are going to discuss why and when an office might use a “Specialty Pharmacy ONLY” inventory strategy.
Over the years, I have spoken with many offices and Infusion Centers who, without question or exception, use specialty pharmacy as their ONLY inventory strategy. Since I am an entrepreneur and tend to be a bit focused on things like profitability, I used to take offense to this kind of position and viewed it as a “too scared to try” situation. I have learned over the years to dial back my quick judgment and see that a “SpecRx ONLY” strategy can be a winning strategy for the right situations and environments.
So why and when is a Specialty Pharmacy ONLY inventory strategy the right strategy for an Infusion Center?
Newly opened provider offices or ones with new Infusion Centers
Opening any new healthcare practice takes an enormous effort on behalf of the founders and providers. In addition to the facility, hiring, and marketing efforts there is also a lengthy credentialing and contracting process that may take months to get streamlined into the practice. When your cash flow stream and revenue cycle processes are not yet operating at a consistent and efficient level, that is not the time to inject a few hundred-thousand dollars of Buy&Bill medication expense into the fray. While your new office team acclimates to the new environment and systems, it is often a wise decision to use a Specialty Pharmacy Only strategy until the office revenue cycle machine and systems are ready to take on the additional challenge of Buy&Bill medications.
Existing offices, providing infusions for the first time
For practices who have been around for a while and who have a solid revenue cycle process and office team in place, adding an Infusion Center is a logical next step. Adding in-office infusion to your practice creates many new processes and workflows that are not common in traditional provider offices. Managing this new procedure-based schedule of chronic patients, a new and expensive infusion inventory, and a new infusion nursing staff is a significant challenge for new infusion providers. Taking the time to get these processes and systems down is a wise decision prior to purchasing your first Buy&Bill specialty medications. We see many new infusion providers take a Specialty Pharmacy Only strategy in the beginning, and we believe that this is a smart transitional strategy that helps reduce the stress on both the provider and their office teams as they get familiar with the new workflow.
Providers who want an Infusion Center for their patients, where there is NO financial opportunity for the operators or managers.
We see this situation more commonly in the academic, institutional, and tertiary care systems. In some environments, especially with clinical research centers, there will be a group of specialty physicians that want to have Infusion Center capability near them or on the campus of their facility in order to provide their patients access to the infusible or injectable medications they need. In these situations, the physicians may not have any financial responsibility to any part of the health system or institution they are operating in. In these cases, financial and/or budget considerations may prevent these providers from providing in-office infusion capabilities. By using a Specialty Pharmacy Only strategy, these providers can offer their patients infusion access without the financial exposure and oversight required with a Buy&Bill process. As with anything in business, if the operators have no risk or “skin in the game,” then it is best that the model operates in a reduced risk strategy to limit any consequences as a result of poor or distant decision making.
Our goal and purpose of these posts are to open a discussion and provide a framework to help both providers and office administrators think through their options when it comes to selecting the best inventory strategy for their practices. We have planned an ongoing series of posts with features, guest writings, and other helpful content to continue talking about ways to improve the Infusion Center experience for both the provider and the patient. Please stay tuned and in touch with our updates on our IV Insights blog page at http://weinfuse.wpengine.com/infusion-center-blog/.
Do you have a winning inventory strategy or tips you would like to share with other in-office infusion providers? Email us to share your story by clicking here.