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Published on March 26, 2014

Lawrence Memorial Hospital to build retail pharmacy for employee

by Giles Bruce, Lawrence Journal World reporter

March 26, 2014

In a move designed to reduce employee health care costs, the Lawrence Memorial Hospital board of trustees approved a plan Wednesday to build a retail pharmacy at the hospital to serve employees.

Bowl and pestle with pill bottles

Prescriptions accounted for 20 percent of the total costs of the hospital's health plan in 2013, or nearly $2 million, more than twice what it was six years earlier. LMH officials predict an estimated savings of $200,000 to $300,000 a year if 60 percent of covered employees elect to use the pharmacy, which will be voluntary. The pharmacy will initially only be available to employees on the hospital's health plan and their dependents, or an estimated 1,781 people.

Fourteen of the 18 hospitals in the region already have such a pharmacy plan for their employees, while, according to the Paquin group, 70 percent of hospitals across the country are implementing or have implemented such a program.

As of now, 54 percent of the hospital's health plan members use chain pharmacies like Walgreens, CVS and Walmart; 11 percent go to local, independent pharmacies; and the remainder use specialty or out-of-the-region pharmacies. LMH estimates that those local, independent pharmacies stand to lose about $130,000 a year in business.

The pharmacy will be housed in the former ambulance building at 225 Maine St. and open 40 hours a week, excluding nights and weekends. It will also provide over-the-counter drugs at close to cost. Startup costs for the pharmacy, which is expected to open around the first of the year, are estimated at $408,501.

The plan will also make pharmaceuticals available to patients as they are discharged from the hospital, to increase the chances that they will follow through on their medication plan. Under a provision of the Affordable Care Act, the federal government now penalizes hospitals for readmissions. LMH sees this "meds to beds" plan as a way to cut down on repeat visits, by providing discharged patients with a 30-day supply of medication and coordinating further refills with their primary care providers.

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