Exploring the Membership Pharmacy Model: Initial impact and feasibility

Abstract

Background: There is a need to shift pharmacy payment models, given the expanding role of the community pharmacist in improving patient outcomes, misaligned incentives of the existing reimbursement model, and deleterious effects of a lack of transparency on prescription costs.

Objectives: The primary objective of this paper was to develop a payment strategy for a Membership Pharmacy Model within an independent community pharmacy setting. A secondary objective of this paper is to explore the early impact of a novel value-based pharmacy payment model on patients, pharmacies, and self-insured employers.

Practice description: Good Shepherd Pharmacy, a nonprofit Membership Pharmacy founded in Memphis, TN, in 2015.

Practice innovation: We discuss a novel, value-based payment model for community pharmacy, which involves a partnership between pharmacy and employer, without the use of a pharmacy benefit manager, using a recurring (i.e., membership pharmacy) business revenue model.

Evaluation methods: The pilot program was assessed using the RE-AIM framework.

Results: The pilot enrolled 34 patients for whom 1399 prescriptions were filled spanning 13 quarterly refill cycles from January 2019-March 2022. After the intervention, proportion of days covered for diabetes and cholesterol medications both increased: 96.7% and 100% (P < 0.05); 90.3% and 98.1% (P > 0.05). Financial savings for the employer group were realized across both fee charges and prescription medication costs. The net savings provided to the employer was $67,843, a 35% reduction in topline pharmacy spending. Revenue for the pharmacy was realized exclusively through synchronization fees of $30 per fill. Synchronization fees for the entire study totaled $41,970, and the average revenue per quarterly batch refill was $3228.

Conclusion: The Membership Pharmacy Model represents a potentially viable alternative to traditional fee-for-service, buy-and-bill pharmacy payment models through its use of medication pricing based on actual acquisition costs, lean pharmacy operations, and value-based reimbursement methods.