Taking A Closer Look At In-Office Dispensing

By Robert Smith, Contributing Editor

In-office product dispensing adds yet another role podiatrists must play for their patients—not only must you be a physician and healer, you now must be a retailer as well. While an increasing number of podiatric practices make products available for sale in treatment rooms, reception areas or even their own retail shops, some still decry the practice as exploitative, greedy or unethical. However, DPMs who dispense products in the office emphatically deny such judgments. “We hear so much about why some podiatrists won’t dispense products,” says Hal Ornstein, DPM, a New Jersey-based practitioner and President of the American Academy of Podiatric Practice Management. “One of the biggest reasons is the ethics—the perception of the patient looking at the doctor or the practice as trying to be a retail store, like you’re just nickel-and-diming them. It is so untrue. Look at dentists, dermatologists and optometrists. For years, their offices have been filled with products they dispense. “When I bought my glasses for $250, they still charged me $3 for the cloth. And, as a patient, I’m OK with that.” Lowell Scott Weil, Sr., DPM, recalls a time when DPMs used to give products away but built those costs into the office visit fee. “So if we dispensed a product in the course of an office visit, instead of charging $25 for the visit, we’d charge $30,” notes Dr. Weil, a Fellow of the American College of Foot and Ankle Surgeons. “This is, of course, going back 10 or 15 years ago, before managed care.” Although initially skeptical about charging patients for products, Dr. Weil was convinced otherwise by a respected colleague and mentor. Approximately 25 years ago, Dr. Weil notes he spent a lot of time with a leading foot surgeon, Hampar Kelikian, MD. He says Dr. Kelikian had a magnificent office that was packed with patients, had a completely booked calendar and a very full surgical schedule. However, one day Dr. Kelikian did something that took Dr. Weil completely by surprise. He escorted a patient to the front desk, handed the nurse foot pads and a route slip and said, “Here’s for her office visit and it’ll be a $1.50 for the pads.” “I almost died. I couldn’t believe this elegant man was going to charge her for the office visit and another $1.50 for the pads,” remembers Dr. Weil. “Right then, I said, ‘If he’s doing it, I’m going to do it.’ That was 25 years ago and I’ve been dispensing that long. I came to the conclusion that it is ethical. It’s OK. As more time went on, everyone came to the same conclusion that it is acceptable.” Dr. Ornstein feels that some DPMs’ aversion to dispensing has to do with a much larger problem between doctors and patients. “Too many times in our profession, we try to get into the patient’s brain,” he suggests. “We start thinking for the patient. That’s why we don’t do more orthotics. We think patients can’t afford it. Let them make that decision.” Emphasizing Convenience And Comprehensive Treatment Indeed, those podiatrists who do dispense find their patients react positively to the convenience of being able to purchase products at the practice. “The idea that patients have this great problem with doctors dispensing products is simply not true,” explains Dr. Ornstein. “ … You’re not insisting they buy it here. You’re saying, ‘Because it is convenient for you, we offer this product here as well.’ Over 95 percent of patients would say, ‘That’s great. Let me get it.’ Right there, your ethics and credibility are fine.” John Guiliana, DPM, who is also based in New Jersey, concurs. “Patients feel, as we do, that it increases the comprehensiveness of their care,” he notes. “Not only are we providing them with the medical treatment, we’re also providing them with the products they need right here at the practice.” Comprehensive treatment is the ultimate plus of in-office dispensing, according to Dr. Ornstein. When patients are sent to the local store to get something, Dr. Ornstein says there’s the possibility that they may not get the right product as well as the highly likely possibility that patients won’t receive instructions on how to use it. “Was I giving comprehensive care before (dispensing products in the office)? I would argue no,” he concludes. “If a patient came in with heel pain and also had dry feet, and I only addressed the heel pain, was I giving comprehensive care? Of course not. It would be similar to a patient going to a doctor for the flu and hypertension, but the doctor ignores the hypertension and only treats the flu. We think way too small. We try to think for the patient and that’s a problem.” Besides, Dr. Ornstein notes, by the time patients need to see a podiatrist, they tend to want and need prescription medication. “Patients come to us because they’ve typically tried all the stuff that’s easily available, all the over-the-counter stuff or their doctor has,” he explains. “It’s a sin when the doctor says, ‘Oh, just take some Advil.’ Nine times out of ten, people have tried the Advil but they need something more, something they just can’t get without a prescription. I need to give them what they need. I need to provide comprehensive care.” Addressing Pricing Issues Ethics in dispensing products extend to pricing as well. Lacking an awareness of what retailers charge for certain products can be detrimental to patient loyalty. “I’ve heard some patients who bought something dispensed at another doctor’s for $15 and then they went to Wal-Mart and saw the same product for $8,” notes Dr. Ornstein. “They told me they’d never go back to that doctor again.” However, he notes there are medications that DPMs can provide for patients at their practice because they get them at a lower cost. For example, Dr. Ornstein says the common drug cephalexin may cost $30 for patients at a pharmacy but podiatrists get the drug at a lower rate and can accordingly pass on the savings to customers. “You’re doing a patient a great service by offering it at a lower rate,” notes Dr. Ornstein. Occasionally, the temptation of increasing profits may fuel the extraneous dispensing of products more than the actual needs of the patient. “I could probably sell triple what I do now by selling patients things that I tell them will work when I know they won’t,” concedes Dr. Ornstein, “but that’s not ethical.” Dealing With The Wrath Of Managed Care As more products are dispensed at more practices, hassles with insurance companies become a bigger problem, particularly in this era in which managed care is so prevalent. Prior to the arrival of managed care, when patients wanted to get a dispensed item covered through their insurance, Dr. Weil says his staff would put an HCPCS number on it, send it to the insurer and the patients would get some kind of partial benefit for the item. However, if the patient bought the pad at Walgreen’s, he or she wouldn’t get any coverage benefit from the insurer, according to Dr. Weil. Eventually, Dr. Weil notes, managed care changed everything as it discounts what practitioners can charge for items dispensed out of their practices. “We would have an item that cost us $10 and we sold it for $20,” posits Dr. Weil. “The insurance company would take the item and put their fee schedule on it. Their fee schedule said it was $12 so the insurer would pay for 80 percent of the item. They’d tell us, ‘We’ll pay you $9.60.’ That’s less than our cost. We paid $10 for it. “It was ridiculous and you couldn’t fight it because you were under contract. So we made a policy. Anything under $25 cannot be sent to insurance. Then we had patients who complained or sent the claim in on their own. Then the insurance companies would come back and read us the riot act.” Rethinking The Approach To Dispensing Products Times have certainly changed, though, and dispensing DPMs have had to adjust accordingly. Dr. Weil is in the midst of expanding and renovating his office to put in a retail store. He says the store will be a “completely separate entity from the practice” in that the store will charge tax on the items, etc., but it will operate from within the practice. “Patients will be given a prescription slip to pick up a particular item,” notes Dr. Weil. “We’ll show it to them in the treatment room and maybe even try it on them. Then we’ll send them to the store to pick it up. They’ll go to the store, pay retail for the item, pay tax, receive the item and they’re done and out the door. We don’t have to submit that to insurance then.” Indeed, many DPMs have had to rethink the physical layout of their practices in order to accommodate dispensing products. “Dispensing is too important to your business to not make room for it,” explains Dr. Ornstein. “The bottom line is we all probably have more stuff in our offices than we possibly need. If you were to really look at space objectively and look at the efficiency of your office layout, you could find room.” Dr. Guiliana has been dispensing products for two and a half years out of an area of his office he calls “Footcare Solutions.” “It’s a room that is adjoined to the waiting area, the reception room,” he explains. “We used to use this room for casting patients for orthotics. Since that space was really premium space, it really wasn’t cost-effective to keep it as a casting room, considering its location and visibility. Instead, we integrated that casting room into the back office, utilizing a little space we had back there.” Dr. Guiliana says it was imperative to keep the dispensing area simple. “This area is a 16- by 16-foot room,” he notes. “I broke through the wall between the reception room and this old casting space, creating a glass front to the room with a glass French door. We created entire walls of pegboards and shelves. Through other companies that have shoe products, we also have shoe displays and other displays as well. Patients can go in and out, purchase what they want and the transaction is made at the front desk.” Getting Your Staff On Board Another issue Dr. Weil keeps tabs on is training, making sure his staff knows the products and can handle selling them. He notes that his office is involved in a benefit shoe program through Langer and it required full training for his staff. He says it’s retail training with a little twist. “ … We want the items to sell themselves or (for) the doctors to recommend them, rather than have the staff push the products, other than letting the patients know they’re available as part of our services,” explains Dr. Weil. Dr. Ornstein is unapologetic about using his staff as a sales force. “Staff should be salespeople,” he declares. “We’re all salespeople. I’m a salesperson. Everything we do, we sell. … We sell orthotics or bunion surgery, but the way we sell it is how we present it—the benefits, the risks, the pros and the cons. Of course, we’re selling. That’s why I’m successful at what I do.” Dr. Ornstein says practices need to train their staffs on how you use these products, why you use them and how you use them. “Let (your staff) try them out,” he says of dispensed products. “Let them wear an arch support or use some BioFreeze or put some of this cream on their feet. You do this to let them experience the product so they can discuss the product knowledgeably with patients.” Dr. Ornstein also suggests giving staff a little extra reward for the extra inventory work, paperwork and marketing they need to do in order to sell products. “For every in-office dispensed item I sell,” he explains, “a quarter goes in a bucket and, at the end of the month, that money is divided among the staff,” notes Dr. Ornstein. In Conclusion Ultimately, what podiatrists are selling with in-office dispensed items is the same thing they’ve always sold—relief and healing. “There are differences today that weren’t there 38 years ago when I started my practice,” says Dr. Weil. “But I think podiatrists have been doing this kind of thing from the very beginning. We were taught to give patients what they need.” “We don’t just sell products,” concurs Dr. Ornstein. “We sell solutions.” Mr. Smith is a freelance writer who lives in Cleona, Pa. Editor’s Note: For more information on in-office dispensing, check out the Web site of the American Academy of Podiatric Practice Management at www.aappm.com.

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