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Case study using descriptive analysis to estimate hidden costs in processing third party prescriptions.

R N Herrier1, J R Spencer, C D Davis

  • 1Department of Pharmacy Practice and Science, College of Pharmacy, University of Arizona, Tucson 85721-0207, USA. herrier@pharmacy.arizona.edu

Journal of the American Pharmaceutical Association (Washington, D.C. : 1996)
|October 13, 2000
PubMed
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Hidden costs in processing third party prescriptions are significant, averaging $0.44-$0.61 per prescription. Time and motion studies accurately measured these pharmacy dispensing expenses.

Area of Science:

  • Pharmacy Practice
  • Health Economics
  • Operations Research

Background:

  • Third party prescriptions represent a significant portion of pharmacy revenue.
  • Accurate cost assessment of prescription processing is crucial for financial sustainability.

Purpose of the Study:

  • To quantify the hidden costs associated with processing third party prescriptions.
  • To determine the financial impact of prescription rejections in community pharmacies.

Main Methods:

  • Employed time and motion techniques to measure rejection frequency and resolution time.
  • Calculated additional costs based on observed staff involvement in resolving rejected prescriptions.
  • Studied one supermarket chain pharmacy and one independent pharmacy.

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Main Results:

  • Prescription rejection rates were 18.7% (supermarket) and 22.3% (independent).
  • Hidden costs per rejected prescription averaged $1.10 (supermarket) and $1.54 (independent).
  • Average additional cost per third party prescription was $0.44 (supermarket) and $0.61 (independent).

Conclusions:

  • Time and motion studies provide accurate cost data for prescription processing.
  • Reducing time spent on third party issues can increase pharmacist availability for patient care.
  • Actual costs are substantial but lower than previous estimates.