Maine Medical Center, Waldo County General Hospital seek to open retail pharmacies

Maine Medical Center in Portland
Maine Medical Center in Portland
Posted Jan. 28, 2014, at 4:52 p.m.

MaineHealth is seeking to open retail pharmacies at Maine Medical Center in Portland and Waldo County General Hospital in Belfast.

The pharmacies would be on the grounds of each hospital, but would operate as retail businesses and be open to any consumers, not just hospital patients.

The health care system’s plans were revealed in two letters sent by Richard Linehan, MaineHealth’s director of planning, to the Maine Department of Health and Human Services during the last two months.

In the letters, Linehan asks the department for a determination of whether the system’s plans will require Certificate of Need review and approval. MaineHealth does not believe the retail pharmacies should trigger the CON process, but “wants to play by the book,” according to Matt Paul, a spokesman for Maine Medical Center.

Two major factors led to the proposed retail pharmacies: patient health and a search for new revenue streams, according to Paul.

Paul cited a statistic that one-third of patients being discharged from hospitals don’t fill the prescriptions they’ve been given. Making it convenient for patients to get the proper medication is one goal of having a retail pharmacy onsite.

“There’s some challenge preventing 33 percent of people from getting the necessary medication,” Paul said. “We think that giving access on site and allowing patients as they’re getting discharged to get their medications may stave off some of that.”

Paul also cited the convenience of having a pharmacy onsite for the 6,000 people who work at Maine Medical Center, which is a 637-bed hospital.

The business case for opening a retail pharmacy is certainly a factor, as well, Paul said.

“We’re not the first ones to the table on this,” he said. “Directionally, it’s where health care systems and facilities are going to improve convenience of care and possibly find other ways to enhance revenue.”

Steven Michaud, CEO of the Maine Hospital Association, said he knows anecdotally of a few other hospitals with retail pharmacies, but otherwise doesn’t have any comprehensive data on their existence.

“We are not entirely sure how common it is here,” Michaud wrote in an email to the BDN. “Our sense right now is that it isn’t widespread or all that common, but we know they exist. No indication it’s a trend.”

In a follow-up phone call, Michaud said hospitals are facing financial challenges — from falling patient volumes to shrinking government reimbursements — and are looking for ways to increase their revenue.

“They’re getting hammered financially right now at unprecedented levels,” Michaud said. “So their No. 1 priority is cutting costs, but I’m sure they’re also uncovering rocks for new revenue, so I’m sure that’s a strategy.”

Retail pharmacies at hospitals aren’t a new phenomenon. Eastern Maine Healthcare Systems has operated retail pharmacies since the late 1980s, according to Miles Theeman, a vice president and director of sales and marketing for EMHS.

Affiliated Pharmacy Services, a subsidiary of EMHS, opened its first pharmacy at Eastern Maine Medical Center in 1988. It subsequently opened another pharmacy in Bangor and one in Brewer. In 2010, Affiliated acquired Miller Drug in Bangor. Now all four locations operate under the Miller Drug name.

Theeman said that the convenience factor is what led EMHS into the retail pharmacy business.

“Our logic was that obviously it was right outside the door of Eastern Maine Medical Center and hundreds of patients and hundreds of employees every day walked by that door,” he said. “Whether you’re visiting someone, having a procedure done or are a patient, we thought — and we’ve been successful at it — that folks would see that as an opportunity to do whatever they needed to do to get their prescriptions before getting in their car. It was one less stop they had to make.”

Operating a pharmacy is not an inexpensive business venture, Theeman said. A pharmacy will succeed or fail based on the number of patients it has. A pharmacy on site with a hospital has a patient population built in.

“I’m sure MaineHealth did the math, looked at the volume potential and believes it could be profitable for them,” he said.

Waldo County General Hospital’s pharmacy would be on its first floor and be operated as a department of the hospital, according to Linehan’s letter. It’s not clear from the letter where Maine Medical Center’s pharmacy would be located.

Larry Carbonneau, manager of DHHS’s Health Care Oversight Program, told the BDN on Tuesday that the proposed pharmacies would not trigger the CON process. The threshold at which new services would trigger a CON review is $3 million, Carbonneau said, which neither of these proposed pharmacies are expected to meet.

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