Cardinal CEO addresses pressing challenges

BOSTON

Cardinal Health chief executive officer of healthcare supply chain services Mark Parrish spoke of tremendous technological advancements at a time rocked by challenges—rising costs, drug re-importation, mail order, Medicare Part D, Medicaid reform, PDMA, HIPPA and any number of other acronyms that can keep a retail pharmacy operator awake at night.

But in the face of it all, two things have remained constant, Parrish told attendees of the company’s 18th annual Retail Business Conference, held July 25 to 28 at the Hynes Convention Center in Boston. “One is your unwavering dedication to your patients and the communities you serve,” he said. “The other is Cardinal Health’s ongoing commitment to run this marathon side by side with you.”

Certainly, one of the most immediate and pressing challenges is the new AMP system for determining pharmacy reimbursements under Medicaid. Parrish urged retailers to remain optimistic in the face of uncertainty and doubt.

“You’ve made it through other major changes,” Parrish said. “And I believe you will make it through this. Why do I know this? Because you deliver a valuable service and because of the service you deliver and the fact that it is valued, you will be appropriately compensated in the end.”

Parrish also drew comparisons between the AMP shift and the wholesaler industry’s shift to a pay-for-performance type business model. “We proved our value in the supply chain to manufacturers and led the industry in establishing a new, more effective business model,” he explained. “I believe the same can happen for you with AMP.”

Another major challenge Parrish addressed was the rapidly approaching implementation date of California’s requirement of an electronic, item-level pedigree on all pharmaceuticals sold in the state. Parrish promised the company was working hard with its vendors to ensure Cardinal member companies were in full compliance, not only with the new California law but also with any similar requirements likely to emerge in other states.

“One of the means to compliance, especially if electronic pedigrees become the accepted norm, may lie with an industry-wide track-and-trace technology system,” he noted. Parrish, who also serves as chairman of the Healthcare Distribution Management Association, recently called on that industry’s leadership to produce a realistic timeline for implementation of such a system that would work “across the entire supply chain,” he explained. The formal initiative, which is also supported by PhRMA, NACDS, NCPA and GPhA, dubbed “Rx SafeTrack,” is a collaboration of 12 top executives from within the member companies with “the authority to convert rhetoric into reality.”

The annual Retail Business Conference also served as the launching pad for several new offerings under Cardinal’s Leader Total Pharmacy Manager suite of tools and services, which are designed to help Cardinal’s independent pharmacies enhance revenue and drive productivity by improving front-end and back-end operations.

New additions to Margin Suite, which focuses on improving margin potential and driving operational efficiencies, include a new pre-adjudication editing function that automates financial, administrative and legal compliance reviews on prescriptions prior to sending them to processors, which helps prevent auditing errors and underpaid claims. Another new feature to Margin Suite is the introduction of a comprehensive medication therapy management program that provides network enrollment, training and online resources to help pharmacy retailers get reimbursed for delivering MTM to eligible patients. A special Audit Assistance that helps operators to minimize errors and losses when being audited by a third-party payer also has been added to Margin Suite.

New to Sales Suite, which focuses on driving sales at the front-end of the store, is a new general merchandise program—a vestige of Cardinal’s 2006 acquisition of F. Dohmen Co. The GM offering rolls out in 2008, and will provide Cardinal customers access to a broad array of front-end merchandise ranging from soaps and cleaning supplies to film, video, batteries and cosmetics—product areas Cardinal customers previously had to source from numerous different distributors. It also includes a new program, called The Value Store, which provides access to $1 general merchandise items.

The Cardinal Health Retail Business Conference also stood as the introduction of Scott Storrer who, as of the meeting, officially succeeded Parrish as group president of health care supply chain services for Cardinal’s pharmaceutical business segment. The former Cigna executive will bring important expertise in dealing with payers and government to Cardinal Health, which will be key to helping Cardinal customers respond successfully to constantly changing market forces, Parrish explained.

The Retail Business Conference drew 4,000 attendees and more than 300 product vendors and offered 29 CE courses. The next conference is scheduled to take place in Orlando July 23 to 26, 2008.