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So You Want To Build An Outpatient Pharmacy For Your Hospital? Here’s What’s Involved.

This article is a condensed version of a post ProxsysRx published on its own blog. Click Here to read the original post.

On June 12, ProxsysRx opened its pharmacy in Holyoke Medical Center — a 198-bed independent community hospital in Holyoke, Massachusetts. The pharmacy is currently offering full retail service, and some patient-discharge prescription support (Meds To Beds), but the Employee Prescription plan still has a few hurdles to overcome. It’s a still-unfinished process that began when we reached our agreement with HMC in March, 2022.

Below is an overview of the process we’ve undertaken since then — as well as a step-by-step primer on the challenges involved in building a hospital outpatient pharmacy from scratch.

Pharmacy site- and needs-analysis

From a purely practical perspective, we needed to map-out the pharmacy space to begin ordering shelving that would fit — not to mention countertops, carpeting, file cabinets and all the other physical equipment needed to create a retail pharmacy environment. 

Meds To Beds program planning

This involved assessing the facility, the number of people we’d need, the number of units we’d be serving, the hospital’s average number of inpatients and outpatients, and their discharging process.

Pharmacy staff recruitment

The first hire ProxsysRx makes for the pharmacies we build-and-own is a Pharmacist In Charge. Altogether, the process of hiring and onboarding a PIC typically takes four to six weeks.

An unexpected expansion of our pharmacy operations

While we’d signed on with the hospital to build and manage their outpatient pharmacy, our working relationship progressed so well that they asked if we would also manage their inpatient pharmacy. 

Pharmacy Licensing And Credentialing

        Entities involved:

Board of Pharmacy License (includes onsite inspection)




Third-Party Payers (private and government)

Getting all of the payors live and active is the most important part of a go-live, because if you don’t have payors, you don’t have the patient-volume necessary to ensure the prescription volume you need — from a retail, discharge delivery and employee perspective.

Regulatory hurdles and delays

One of the significant initial delays in meeting all the necessary legal requirements to open was with the Massachusetts pharmacy board — which took four months.

Our next regulatory challenge was gaining approval from Cardinal CSMP (Controlled Substance Monitoring Program) — which can’t even start until a Board of Pharmacy permit is received. That process involved their research into ProxsysRx’s processes and prescription-filling practices — as well as a lengthy interview with Phil.

Additional pharmacy recruiting and hiring

By now, it was late March, 2023 — thirteen months into our Holyoke odyssey, but still three months before the pharmacy would open. Nevertheless, we needed to hire additional staff — including two technicians and a front end coordinator. That process took close to four weeks, and was followed by onboarding and training.

Stocking the pharmacy with prescription medications & retail inventory

Once staff hiring and onboarding was completed (April), we had to order drugs. Which involved, for starters, determining what drugs we needed to buy — in order to best meet the medical needs of Holyoke’s patients and providers.

At the same time, the pharmacy’s front-end coordinator began working on a retail-product mix to meet the additional needs of the hospital’s patients, employees and families — products that typically include anything from toiletries, aspirin and bottled water to snacks, gifts and mobile-phone chargers.

Additional administrative hoops to jump

With everything aforementioned in place, we still had to do credentialing, and get Third Party Payer contracts signed. Third-party contracting is another process that’s grown more time-intensive. The payers have varying requirements, and one even requires us to be in business for 6 months before they’ll approve an application.

A soft opening for the pharmacy’s retail operations

In mid-June (again, 16 months into the process), Holyoke’s pharmacy initiated retail operations. To ensure as smooth an opening as possible for every every new pharmacy, ProxsysRx’s trainers rotate-through during the first two to three weeks — primarily to lend new teams support with the full range of “real life” situations.

340B Program implementation

A successful 340B program is the result a health system’s providers and contract pharmacies working cooperatively with its 340B Program managers. Which meant our 340B team also needed to train our new Holyoke Pharmacy team, and the hospital’s providers, in program processes and policies.

Unfinished pharmacy business

For Holyoke’s employee prescription plan, we’re still waiting on the third party — Express Scripts — to finish the plan design. We’ve set-up a “cost plus” plan to help Holyoke save money on insurance expenses for its employees, and we’re still waiting for Express Scripts to build-out the plan on their end — even though we gave them the information months ago.

Credentialing has been so complicated for Holyoke, it’s become something of an all hands-on deck process. For Holyoke’s pharmacy, the real delay has been with Medicaid — which represents a significant percentage of the health system’s prescriptions.

A broad overview of our investment in the Holyoke pharmacy

In addition to all our already-mentioned costs (full-time pharmacists on board since, respectively, October and April; the physical property; prescription drugs; retail goods and products, on-site time spent by our trainers and Facilities & Operations managers) there have been other investments — including construction. But our primary investment, not surprisingly, has been employee time.

Collectively, ProxsysRx’s corporate-office employees have invested more than 300 hours in preparing Holyoke’s pharmacy to be full-service for the health system’s patients & families, its 340B program and its employees.

Altogether, that’s an up-front investment of well over $500,000 — and yet, not a penny of that has been out-of-pocket for Holyoke. How many vendors claiming to be your “partner” have ever made that kind investment in serving your health system?

ProxsysRx is here to help, if you have questions.

There are so many ways ProxsysRx can help your health system unlock pharmacy’s potential — for better outcomes, and better incomes. To learn more, contact Howard Hall. C: 205.588.0946 |

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