As analysts have time to peel through the Wal-mart PR machine and get to the substance of the $4 generic program, we find that there isn’t much there there. Some there, but nowhere near what they claim. The New York Times’ article (free registration required) this past Friday outlines some of the conclusions from analysts, including:1. Only 124 different drugs are covered – most of the list involved different dosages.
2 Claims of savings to public programs (which cover more than a few Wal-mart employees) include are exxagerated. Florida Medicaid recipients pay nothing for prescriptions. I live in South Carolina, where recipients pay $3.
3. Capturing some of the large profit margins enjoyed by various middlemen, including distributors and pharmacy benefit managers.
4. Introducing sutomated dispensing equipment that improves productivity in the store pharamacies. As Wal-mart EVP Bill Simons said, “It’s not glamorous. It’s pennies at a time.”
Wal-mart CEO H. Lee Scott, Jr. was quoted as saying that the company is "excited to take the lead in doing what we do best – driving costs out of the system – and passing those savings to our customers and associates."
True enough. This is the real lesson that Wal-mart can teach the business community, and physician practices in particular. Improving your efficiency – the ability to serve patients fully and at a profit – comes from the pennies. You want to maximize your time with the patient and doing directly productive work for your patients. The place to speed up work is in the places your patients don’t see. EMR will improve the efficient use of back office time – no more lost charts. Records accessible from wherever you are. Faster search functions. Many have the ability to summarize “Fast Facts” – what are the data points you always want to be able to see immediately when you see a patient (eg ongoing diagnoses, all meds, age, etc)? The point is to maximize the face to face visit time, and cut the timne spent looking at the chart, getting an assistant, getting a piece of equipment or test kit. And so on.
Think about the entire process of a patient visit. Map out every step – every interaction, every piece of paper, every phone call, every action – and look for places where activities could be eliminated, combined, or re-organized. That’s where savings occur, and that’s where profit increases.