Rich McKeon
Rich McKeon

One of the most significant shifts in healthcare that has resulted from reform has been the movement of patients along the continuum of care, which links hospitals, skilled nursing facilities and other post-acute care settings, and pharmacies together to help reduce costs and improve quality care. This shift has created new opportunities, and challenges, for long-term care pharmacies. Understanding the trends in the continuum of care in addition to their present and future implications can help LTC pharmacies succeed in the marketplace.

Changes in the continuum of care

Today, hospitals are initiating earlier transfers of higher-acuity patients to SNFs, with increasing expectations to minimize readmissions back to the hospital. At the same time, there is a greater interest in moving patients from SNFs to in-home care with an emphasis on reducing costs and keeping patients healthy once they’re home.

These changes have a profound impact on hospitals, SNFs and the pharmacies serving these patients across the continuum, and require greater levels of care coordination. For example, some health systems have created transition intervention programs to increase medication reconciliation and ensure the continuity of care between the hospital and post-acute facility. LTC pharmacies are partnering with post-acute facilities to help reduce hospital readmissions, while also considering ways to provide enhanced services to patients post-discharge from the facility. Additionally, the increased focus on quality and compliance is driving retail pharmacies to alter their business models to include expanded clinical care services.

Going forward, expect to see not only an increase in partnerships among entities but also an increase in competition for patients and scripts. Moreover, pharmacies will likely continue to expand their roles and services to help hospitals and post-acute facilities achieve performance and quality-based goals.

What is driving this change?

There is a growing need for specialized services and more complex therapies, including injectables and infusions. In addition, patients are moving across the care continuum faster due to rising healthcare costs, new medications and personal choice.1 For LTC businesses, these changes could translate into serving more patients in different locations with new therapeutics.

In 2012, the Centers for Medicare & Medicaid Services started the Hospital Readmission Reduction Program, which penalizes hospitals that have above average rates of avoidable readmissions. As a result, hospitals are partnering with SNFs and pharmacies to develop high-quality programs and services such as intravenous therapy that help keep patients from returning to the hospital. There are also programs like Money Follows the Person  that incentivize states to transition Medicaid patients from LTC facilities back into home and community settings.  

What does this mean to LTC pharmacies?

The blending along the continuum of care offers LTC pharmacies a number of opportunities to grow their businesses and help providers meet readmission-reduction goals and higher medication-related STAR ratings. For starters, LTC pharmacies can position themselves as a strategic partner with hospitals, accountable care organizations and facilities. In addition to ensuring that medications are delivered to the right patients at the right time, LTC pharmacies can proactively make recommendations and offer solutions that help SNFs drive down costs, increase quality care, reduce preventable readmissions and become more competitive. In essence, the LTC pharmacy becomes an integral part of the facility’s competitive advantage.

LTC pharmacies may also be able to increase revenues by charging for clinical consulting services such as medication therapy management, care coordination and preventive care services for high-risk patients. In fact, some pharmacies have generated incremental profits by identifying patients eligible for medication therapy management, capturing the consultations and billing accordingly.  

Another growth opportunity exists in infusion therapy. LTC pharmacies can help post-acute facilities administer drugs on-site rather than sending the patient back to the hospital for treatment of dehydration, for example. Moreover, LTC pharmacies can look for ways to partner with infusion providers that offer drugs to patients transferring back home.

Potential opportunities to increase patients and scripts also exist for LTC pharmacies that want to expand into the retail segment, by continuing to provide medications to patients post-discharge from a facility. Continued service by LTC pharmacies may be particularly attractive to patients that have grown accustomed to their unique medication packaging, which may increase compliance. However, there are some uncertainties with this growth tactic that pharmacies must carefully explore — including class of trade and reimbursement issues. Moreover, there are implications that LTC pharmacies should consider to their business model:

  • Can they capture the costs of packaging in this segment?
  • How much will delivery expenses impact their bottom line?
  • How will their pharmacy manage reimbursements and additional inventory?

The blending continuum of care also presents other important considerations. For instance, the revenue potential associated with the growing patient population is driving retail pharmacies to seek contracts with post-acute facilities and find new ways to capture scripts for the communities they serve (including infusion and specialty medications). For LTC pharmacies, this means increased competition, and it can be helpful to consider the driving forces impacting retail pharmacies today.

The need for retail pharmacies to show how clinical activities deliver better patient care is becoming a reality. In fact, pharmacy benefit managers and payers are already assessing pharmacy performance on quality metrics, and will create performance-based retail networks that will determine access to lives and scripts in the future. In addition, low cost and high quality will continue to form the basis of differentiation.

LTC Pharmacies Must Extend Facility’s Competitive Advantage

The new continuum of care highlights opportunities for LTC pharmacies to expand their business and take advantage of incremental profit. By focusing on how they can help the facilities they service improve clinical outcomes and business performance, LTC pharmacies will serve as an extension of the facility’s competitive advantage and in turn, become more competitive themselves.

Rich McKeon is Vice President of the McKesson Alternate Site Pharmacy business. For more information about long-term care, infusion and specialty pharmacy solutions, email [email protected], or visit

1 Gebhart, Fred. (Nov. 15, 2011). LTC and alternate-site pharmacy. Drug Topics, Voice of the Pharmacist. Retrieved from