How Clinic-Based Specialty Pharmacy Services Strengthen Health Systems of Every Size


The significant jump in hospital-owned specialty pharmacies bolsters the belief that health system leaders increasingly understand how these services enable their organizations to enhance patient care and achieve market differentiation.

Do health system leaders appreciate the value of an in-house specialty pharmacy program? The answer is yes, if we accept the growth trend revealed in the latest American Society of Hospital Pharmacists (ASHP) national survey.1,2 The significant jump in hospital-owned specialty pharmacies bolsters the belief that health system leaders increasingly understand how these services enable their organizations to enhance patient care and achieve market differentiation.

Why, then, are many small- to medium-sized hospitals and health systems still facing challenges when it comes to offering on-site specialty pharmacy solutions? Analysis of the ASHP survey shows that fewer than half of small- to medium-sized hospitals operated a specialty pharmacy in 2018, compared with 76% of hospitals with 600 or more beds.3

The reason for this disparity may have more to do with misconceptions than with a lack of opportunity. Indeed, health systems of all sizes stand to benefit from a specialty pharmacy business model. I’ve encountered 3 common misperceptions about specialty pharmacy in conversations with health system leaders and have shared the following relevant trends and examples to clarify their concerns.

Misconception #1: My health system is too small or doesn’t have enough opportunity

Many health systems underestimate the potential impact of offering specialty medication services. Although large health systems first offered these programs, specialty pharmacy solutions are no longer just within the purview of sizeable academic medical centers. An in-depth opportunity assessment can uncover financial feasibility while also revealing broader patient and strategic benefits.

Such was the case at Southern Ohio Medical Center (SOMC), a 248-bed health system serving the rural community of Portsmouth, Ohio—a region that has high rates of hepatitis C virus (HCV). After an initial assessment, SOMC launched a clinic-based specialty pharmacy program in February 2018. In the fall of 2018, the health system conducted a study of the specialty pharmacy’s effect on medication access, affordability, and clinical outcomes for patients with HCV.

The study showed SOMC achieved 100% medication access and therapy completion rates for the 67 study participants. In addition, SVR12 rates were higher than in clinical trials.4 The operational systems and technology tools in place at SOMC have enabled a 5-member specialty pharmacy team to proactively identify patients and work as an integrated part of their care teams. Consequently, the program has attracted more patients to the health system and further elevated its brand reputation.

This example illustrates some of the patient-focused benefits that even small health systems can attain through a specialty pharmacy. Layered on top of these advantages, though, are potential financial returns. Continued margin pressure and reimbursement trends bolster the argument for in-house specialty pharmacy capabilities.

Population health initiatives and capitated or value-based contracts give every health system an incentive to remain in control of complex patients. On-site specialty pharmacy programs can help clinics manage both medication adherence and cost-effective therapeutic equivalents paralleling existing inpatient services in many cases.

Therefore, high-touch pharmacy programs support high-quality care and have the potential to reduce the total cost of care. Furthermore, integrating pharmacists into care teams have the potential to alleviate the waste, patient safety concerns, and confusing patient experiences created by recent trends toward “brown bagging” and “white bagging.”

By promoting greater stewardship of specialty medications, clinic-based specialty pharmacy services present hospitals and health systems with new ways not only to improve the revenue stream, but to deliver a better patient experience as well.

Misconception #2: Opening a specialty pharmacy is similar to opening a traditional pharmacy

In contrast to health systems that underestimate their specialty pharmacy opportunities are those that believe specialty pharmacy is “just another pharmacy.” These organizations are under the impression that they can easily get a program up and running in 1 to 2 years with their existing resources.

In reality, the specialty pharmacy business model is quite different than the traditional business model to which health systems are accustomed. It requires a different mindset that shifts primary emphasis away from cost control. For successful specialty pharmacy implementation, health systems must invest in the appropriate resources—including in-clinic staff and technology—to provide the personalized patient care needed to improve medication access and adherence.

The key is to ensure seamless connectivity among provider, pharmacist, and patient. Health systems that embrace this approach and develop their strategic plans accordingly can quickly align with trends toward more holistic, patient-centered care. Our health system partners that have done so, for instance, have lowered the average turnaround time for oral oncology medications compared with external specialty pharmacies.5

Such benefits help create a superior patient experience and generate provider satisfaction—both of which can be powerful market differentiators that aid in patient and staff retention. Providers at Akron, Ohio-based Summa Health, for instance, report that their clinic-based specialty pharmacy program not only enables a faster, better medication experience for patients, it allows providers to better fulfill their roles as doctors and nurses.

Misconception #3: Creating a specialty pharmacy program is exceedingly difficult

Running a specialty pharmacy program may not be the same as running a traditional pharmacy. However, with the right resources and experience, an in-house solution is feasible for health systems small, medium, and large. In most cases, the question simply is whether to develop a specialty pharmacy program internally or partner to obtain required personnel, operational systems, and expertise.

Either way, experienced specialty pharmacy partners can give health systems greater ownership of high-cost patient populations and facilitate stronger payer partnerships—especially important with risk-based contracts on the rise. They should enable health systems to collect, analyze, and offer data that prove cost reduction and quality improvement results beyond what a health plan could achieve on its own. A recent experience at Minneapolis-based North Memorial Health is an example.

During a period of expansion, the independent health system entered a performance-based partnership to build its existing in-house specialty pharmacy program. Within 6 months of launch, the health system had:

—Reduced average prescription time-to-fill from 2 weeks to 2.3 days.

—Decreased average patient out-of-pocket expenses 59%.

—Secured more than a half-million dollars in financial assistance for patients.

—Gained access to five additional limited distribution drugs.

—Earned a provider Net Promoter Score of +65 (up from a -62 baseline).

—Grown its specialty pharmacy revenue 80%.

The program’s strong performance equipped North Memorial Health to have successful conversations with a major regional payer. As a result, the payer recently added North Memorial Health’s specialty pharmacy to its specialty pharmacy network.

Accelerate in-house specialty pharmacy

The specialty pharmacy business model presents unique opportunities for hospitals and health systems of all sizes. Although many large health care organizations appear to have embraced the concept already, small- and mid-sized organizations can gain the same advantages. With the appropriate infrastructure and experience, a clinic-based specialty pharmacy service can help health systems enhance patient care, as well as achieve higher provider satisfaction and revenue.


  • Pedersen CA, Schneider PJ, Ganio MC, Scheckelhoff DJ. ASHP National Survey of Pharmacy Practice in Hospital Settings: Monitoring and Patient Education-2018. American Journal of Health-System Pharmacy. 2019 Jul 15;76(14):1038—1058.
  • Fein AJ. As Hospitals Pursue Specialty Pharmacy (and Walgreens Bets More on 340B), PBMs Become Their Best Frenemies. Drug Channels. 2019 Aug 14.
  • Ibid
  • Edwards K, Phillips R, Ferraro R, Newman B. Clinical Outcomes Report: Southern Ohio Medical Center. Trellis Rx blog. 2019 Apr 10.
  • Newman B, Hickman A. Health System Specialty Pharmacy Clinical Outcomes Report: Oral Oncology Medication Turnaround Times. Trellis Rx blog. 2019 Aug 13.

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