Skip to content
  • About
  • Contact
  • Contribute
  • Book
  • Careers
  • Podcast
  • Recommended
  • Speaking
  • All
  • Physician
  • Practice
  • Policy
  • Finance
  • Conditions
  • .edu
  • Patient
  • Meds
  • Tech
  • Social
  • Video
    • All
    • Physician
    • Practice
    • Policy
    • Finance
    • Conditions
    • .edu
    • Patient
    • Meds
    • Tech
    • Social
    • Video
    • About
    • Contact
    • Contribute
    • Book
    • Careers
    • Podcast
    • Recommended
    • Speaking

Why doctors should profit from dispensing medications

Richard Reece, MD
Meds
January 15, 2011
Share
Tweet
Share

Hold onto your hats. I am about to enter dangerous territory. I am about to suggest maybe doctors should profit from dispensing medications from their office to offset declining reimbursements and rising expenses by using prescriptions as a source of ancillary revenues.

Why dangerous?  For a number of reasons.

One, physicians still grapple with the perception that it is improper for a physician to make money from the delivery of care from business ventures. Two, profit-making from prescription writing might induce physicians to write unnecessary prescriptions. Three, prescriptions for profit might lead to conflict with pharmacists. Four, Some states prohibit physician office dispensing, and more dispensing might lead to other states prohibiting the practice. Five, there is also a fear that such a physician business venture carry significant risk relative to government regulation.

Then, there’s the other side of the issue. Writing prescriptions and ordering their refills takes a lot of physicians’ time. It also takes knowledge. It carries some malpractice risk, should the patient suffer an adverse reaction. Dispensing from the office would be convenient for patients. Since 30% of patients never fill their prescriptions, office dispensing is more likely to assure compliance. And prescriptions dispensed at the office are generally significantly less expensive than those filled at the local pharmacy.

Besides, physician can work only a finite number of hours and see a finite number of patients. The rational way to increase revenues is to identify revenue streams that do not involve an inordinate amount of incremental time on the part of the physician. Ancillary services can assist the physician in his ultimate goal of providing quality medical care (often in his own office setting) while producing a profit for his efforts.

Add to this fact the reality that physicians across the country are already performing an increasing number of ancillary revenue-producing services – lab tests, x-rays, imaging services, osteoporosis screening, electrocardiograms, physical therapy units, alternative medicine and herbal drug sales, diabetes management programs, and weight management programs.

Are there other ways physicians can increase their compensation without sacrificing lifestyle or running afoul of government regulation?

Yes there are, and profits from prescribing is one of them. But again, consider the negative factors before setting up an office dispensing system.

• Hesitancy to change existing practice patterns
• Fear of being labeled sat “commercial”
• Lack of office space to store drug inventories
• Reluctance to buy inventories.
• Reservations about upsetting local pharmacists

Still, why shouldn’t a physician with an entrepreneurial orientation is allowed to design a plan for ancillary service delivery, execute it and make a profit?

Why not office dispensing? After all, a typical doctor sees 20 patients a day, writes one and half prescriptions and one a half refills per patient, or three for each patient. That amounts to 60 prescriptions per day. And that doesn’t count all those phone calls asking for refills. If these doctors were to have an average profit of $5 per prescription, that would be an extra $300 a day.

The linkage of e-prescribing with EHR systems, the ability of mobile iPads to send e-prescriptions, and concerns about the hazards of illegible doctor handwriting, and the push for more practice efficiencies, electronic prescribing is very much the rage these days.

So why not have the ability to e-prescribe inside the office using targeted software to write and refill prescriptions and to issue a bill?

ADVERTISEMENT

Richard Reece is the author of Obama, Doctors, and Health Reform and blogs at medinnovationblog.

Submit a guest post and be heard on social media’s leading physician voice.

Prev

What health reform compromise could look like

January 15, 2011 Kevin 4
…
Next

KevinMD posts of the week, ending January 16, 2011

January 16, 2011 Kevin 0
…

Tagged as: Medications

Post navigation

< Previous Post
What health reform compromise could look like
Next Post >
KevinMD posts of the week, ending January 16, 2011

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

More by Richard Reece, MD

  • What matters in an optimal consumer health care market

    Richard Reece, MD
  • a desk with keyboard and ipad with the kevinmd logo

    Medicaid is Obamacare’s sleeping giant

    Richard Reece, MD
  • a desk with keyboard and ipad with the kevinmd logo

    Ebola: We suffer from unrealistic expectations

    Richard Reece, MD

More in Meds

  • A world without antidepressants: What could possibly go wrong?

    Tomi Mitchell, MD
  • The truth about GLP-1 medications for weight loss: What every patient should know

    Nisha Kuruvadi, DO
  • The hidden bias in how we treat chronic pain

    Richard A. Lawhern, PhD
  • Biologics are not small molecules: the case for pre-allergy testing in an era of immune-based therapies

    Robert Trent
  • The anesthesia spectrum: Guiding patients through comfort options in oral surgery

    Dexter Mattox, MD, DMD
  • Functional precision oncology: a game changer in cancer therapy

    Chris Apfel, MD, PhD, MBA
  • Most Popular

  • Past Week

    • What’s driving medical students away from primary care?

      ​​Vineeth Amba, MPH, Archita Goyal, and Wayne Altman, MD | Education
    • A faster path to becoming a doctor is possible—here’s how

      Ankit Jain | Education
    • Make cognitive testing as routine as a blood pressure check

      Joshua Baker and James Jackson, PsyD | Conditions
    • The dreaded question: Do you have boys or girls?

      Pamela Adelstein, MD | Physician
    • A world without antidepressants: What could possibly go wrong?

      Tomi Mitchell, MD | Meds
    • Rethinking patient payments: Why billing is the new frontline of patient care [PODCAST]

      The Podcast by KevinMD | Podcast
  • Past 6 Months

    • What’s driving medical students away from primary care?

      ​​Vineeth Amba, MPH, Archita Goyal, and Wayne Altman, MD | Education
    • The silent crisis hurting pain patients and their doctors

      Kayvan Haddadan, MD | Physician
    • Internal Medicine 2025: inspiration at the annual meeting

      American College of Physicians | Physician
    • What happened to real care in health care?

      Christopher H. Foster, PhD, MPA | Policy
    • Are quotas a solution to physician shortages?

      Jacob Murphy | Education
    • The hidden bias in how we treat chronic pain

      Richard A. Lawhern, PhD | Meds
  • Recent Posts

    • AI in mental health: a new frontier for therapy and support

      Tim Rubin, PsyD | Conditions
    • What prostate cancer taught this physician about being a patient

      Francisco M. Torres, MD | Conditions
    • Why fearing AI is really about fearing ourselves

      Bhargav Raman, MD, MBA | Tech
    • The broken health care system doesn’t have to break you

      Jessie Mahoney, MD | Physician
    • Why great patient outcomes don’t protect female doctors from burnout [PODCAST]

      The Podcast by KevinMD | Podcast
    • Why ADHD in women is finally getting the attention it deserves

      Arti Lal, MD | Conditions

Subscribe to KevinMD and never miss a story!

Get free updates delivered free to your inbox.


Find jobs at
Careers by KevinMD.com

Search thousands of physician, PA, NP, and CRNA jobs now.

Learn more

View 62 Comments >

Founded in 2004 by Kevin Pho, MD, KevinMD.com is the web’s leading platform where physicians, advanced practitioners, nurses, medical students, and patients share their insight and tell their stories.

Social

  • Like on Facebook
  • Follow on Twitter
  • Connect on Linkedin
  • Subscribe on Youtube
  • Instagram

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

  • Most Popular

  • Past Week

    • What’s driving medical students away from primary care?

      ​​Vineeth Amba, MPH, Archita Goyal, and Wayne Altman, MD | Education
    • A faster path to becoming a doctor is possible—here’s how

      Ankit Jain | Education
    • Make cognitive testing as routine as a blood pressure check

      Joshua Baker and James Jackson, PsyD | Conditions
    • The dreaded question: Do you have boys or girls?

      Pamela Adelstein, MD | Physician
    • A world without antidepressants: What could possibly go wrong?

      Tomi Mitchell, MD | Meds
    • Rethinking patient payments: Why billing is the new frontline of patient care [PODCAST]

      The Podcast by KevinMD | Podcast
  • Past 6 Months

    • What’s driving medical students away from primary care?

      ​​Vineeth Amba, MPH, Archita Goyal, and Wayne Altman, MD | Education
    • The silent crisis hurting pain patients and their doctors

      Kayvan Haddadan, MD | Physician
    • Internal Medicine 2025: inspiration at the annual meeting

      American College of Physicians | Physician
    • What happened to real care in health care?

      Christopher H. Foster, PhD, MPA | Policy
    • Are quotas a solution to physician shortages?

      Jacob Murphy | Education
    • The hidden bias in how we treat chronic pain

      Richard A. Lawhern, PhD | Meds
  • Recent Posts

    • AI in mental health: a new frontier for therapy and support

      Tim Rubin, PsyD | Conditions
    • What prostate cancer taught this physician about being a patient

      Francisco M. Torres, MD | Conditions
    • Why fearing AI is really about fearing ourselves

      Bhargav Raman, MD, MBA | Tech
    • The broken health care system doesn’t have to break you

      Jessie Mahoney, MD | Physician
    • Why great patient outcomes don’t protect female doctors from burnout [PODCAST]

      The Podcast by KevinMD | Podcast
    • Why ADHD in women is finally getting the attention it deserves

      Arti Lal, MD | Conditions

MedPage Today Professional

An Everyday Health Property Medpage Today
  • Terms of Use | Disclaimer
  • Privacy Policy
  • DMCA Policy
All Content © KevinMD, LLC
Site by Outthink Group

Why doctors should profit from dispensing medications
62 comments

Comments are moderated before they are published. Please read the comment policy.

Loading Comments...