How can innovations help pharmacies to survive in the Netherlands?

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Master Thesis

How can innovations help pharmacies

to survive in the Netherlands?

University of Amsterdam Amsterdam business school Faculty of economics and business Amsterdam,

Jil Arets

Student number: 10649190

Study: MSc Business Studies 2013/2014 Track: Strategy

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Preface

This Master thesis is the final research project for receiving the Master of Science degree in Business Studies, specialization strategy, at the University of Amsterdam. The research offers an in depth understanding of the processes that shape the market of pharmacies.

The subject of this thesis stems from my personal interest. I have chosen to write a thesis about the pharmacy sector because this sector is under pressure at the moment due to economic cuts. Solutions to deal with this situation have to be found by changing logistics and improving efficiency.

Without the help and support of several people it would not have been possible to realize this Master thesis. Therefore I would like to thank these people for their contributions.

I specially want to thank my supervisor. Finally I would like to direct my warmest thanks to my parents, family and friends for always supporting me in every possible way they could.

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Abstract

Many professionals work in healthcare and medicines and form an important part of the healthcare system. How do pharmacists deal with the changes that occur in their profession and the society as a whole? This thesis will attempt to clarify the role of the pharmacist in healthcare professionalism. By investigating this question, this thesis should contribute to the social and scientific discussion about the role of pharmacists.

More than ever, the patient is the pharmacist’s main concern. There is increasing emphasis on medication safety, medication adherence and accurate transfer of medication related information, as well as on the appropriate prescribing and dispensing of medicines. At the same time the population in the Netherlands is aging, which means that the need for high quality care will continue to increase. The fact that growing numbers of patients will be using several medicines simultaneously will make advising and supervising these vulnerable patients increasingly complex (Bouvy, Dessing & Duchateu, 2013).

This descriptive report has explored the way in which pharmacies are changing and in order to survive, increasing their efficiency by implementing innovative processes. Semi-structured interviews with pharmacists from chain pharmacies and individual pharmacies provided data that were coded to identify the processes that pharmacies develop to survive.

The findings confirm that currently integration of medication reviews into pharmacists’ tasks is taking place. The research also shows that the sector is becoming more efficient and focusing on providing better care to patients. Because of the changing function of the pharmacist to a provider of care, these improvements also result in better cooperation with other health professionals. However, the regulations and health insurers hamper these processes.

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List of abbreviations

AHOED: Pharmacy and General Practitioners Local Clinic

AIS: Pharmacy Information System

ASKA: Association of Pharmacy Chains

CBG: Association for the Advancement of Medicines

EMA: European Medicines Agency

EPD: Electronic Patient File

FTO: Pharmacoterapeutic Deliberation

HARM: Hospital Admissions Related to Medication

KNMP: Royal Dutch Association for the Advancement of Pharmacy

LSP: National Exchange Point

NHG: Dutch Doctor Society

NZa: Dutch Health Care Authority

OZIS: Open Care Information System

SFK: Foundation for Pharmaceutical Statistics

VWS: Ministry of Health Care, Welfare and Sports

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1. Introduction

Over the last few years the financial situation of pharmacies in the Netherlands has changed. Important changes are for example the increasing competition and the shift in the profession from medicine supplier to a care provider with an emphasis on providing information and providing service. Since these changes have an effect on pharmacies and exploring the market is necessary to respond to these changes it is of interest to study how pharmacies are innovating and try to reduce the costs in order to survive. Through logistic innovation it is possible to automate the process and give the pharmacy team the possibility to provide more and better service. Both these logistical and care-related innovations will be discussed and the processes behind them discovered.

Since the demand of pharmaceutical care is growing, but the number of pharmacies is declining, scale, cooperation with care partners and a business-oriented approach are increasingly important conditions for continuity.

This research will attempt to address the gaps that have been identified in the literature. As mentioned before, studying the processes that pharmacies undergo to survive and discovering how they deal with the current problems and challenges is of interest. Additionally, lack of information on this topic and the impact of the ongoing financial crisis in pharmacies, point to the need for further research in this area.

The research question that will be addressed in this study is as follows: How do innovations help pharmacies to survive in the Netherlands?

To answer this question special attention is given to pharmacotherapy, logistics and cooperation. These are all kinds of improvements that pharmacies implement in order to survive. The hypotheses will be tested via qualitative research on different pharmacies in the pharmacy sector: five of them belonging to a large chain, two to a small chain and the last five are individual pharmacists.

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Relevance of this thesis

This thesis is of theoretical and practical relevance. Concerning the theoretical relevance, there are several gaps in the current literature covered by this research. Besides that, the research addresses a discussion that is currently occurring. There is limited literature on the innovating processes in service industries and this research may provide new insights into this area. In addition, this research aims to demonstrate the potential for applying dynamic capabilities to changing environments (Eisenhardt & martin, 2000; Teece et al., 1997). This is an applicable theory to use here especially since the pharmacy sector is a dynamic environment. Evidence for the effectiveness of this approach is lacking in this sector and therefore the research attempts to strengthen the dynamic capabilities view. This thesis fulfills a contribution because it provides an illustration about a profession, which overall receives little attention (Edmunds & Calman, 2001). It is important to investigate to what degree technologies are used and what the impact of those technologies on the qualitative and economical part of the profession as well as what the implementation of these technologies mean in practice.

First, it is important to know how Dutch pharmacies work before starting the research. The role of pharmacists was made clear in 1994 by the WHO (World Health Organization) in a resolution for pharmacists, in which they stated “Governments should manage to make full use of the expertise of the pharmacist at all levels of the health care system and particularly in the development of national drug policies.” (WHO, 1994)

However, what is the current position of the pharmacy? The pharmacist profession has two sides: the care provider and the side of entrepreneur (Buurma et al., 2006; Edmunds & Calman, 2001; Van Mil, 1999). Technological innovations in pharmaceutical care cause changes in the role of the pharmacist profession, since the role of the patient is becoming more important and preparations in the pharmacy are becoming less so. In 2000, only 2% to 5 % of the sold medicines in a pharmacy where produced by that pharmacy (Buurma et al., 2006; Hepler & Strand, 1990; Van Mil, 1999). Recent changes in the health insurance system placed extra pressure on pharmacies in the Netherlands. The preference policy, the uncontrolled prices and the movement from expensive medicines to the hospital budget, also caused this pressure. The margins on the sales of medicines are shrinking and therefore, in the last decade, more pharmacies joined a chain (Buurma et al., 2006). There is much discussion

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concerning the professional status of the profession of pharmacists. The growing attention for measurability and control are key elements for professions in complex public domains. Healthcare is a prime example of this. In this thesis, the aim is to stay as close to Dutch pharmacy practice as possible.

Structure of this thesis

The research is organized as follows: first, a description of the research context will be given. Next, the theoretical framework and research methods will be discussed. Literature will form the basis of the research and will be used to develop a conceptual framework and the hypotheses that will be tested empirically by interviews. The hypotheses will be tested via qualitative research both on individual and chain pharmacies in the Netherlands. In the subsequent sections, these findings will be analyzed and discussed. The thesis will end with the conclusion section.

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2. Research context

In this chapter the research context will be described. This section will focus on the analysis of the pharmacy sector and the changes and developments that have occurred over the past few years.

2.1 Market

Dutch pharmacies play an important role in society because they act as intermediaries for health insurers, patients and doctors. The health care sector in the Netherlands is changing and this also affects pharmacies, since the role of pharmacists has changed over the last few years. Pharmacists shifted from medicine suppliers to suppliers of service and information (Croonen, 2006; Roberts et al., 2003; Tio, Lacaze & Cottrell, 2007; Xu, 2002). However, this is not the only aspect that has changed. The increasing competition, legal changes and the changing customers are also important. The changes in the entire sector have their influence on the environment of individual pharmacies. Due to the demographic developments and the increasing costs of health care, governments as well as insurers, searched for cost reduction mechanisms in the health care system. New legislation tried to introduce market mechanisms and monetary incentives in a highly regulated market. These efforts challenge and transform the profession of health care providers. New entrants and new technologies enable the emergence of new business models for the traditional pharmacies (Schellhammer, Klein & Kipp, 2008).

KNMP

The KNMP (Royal Dutch Pharmacists Association) was founded in 1842 as a professional organization of pharmacists. It addresses the interests of Dutch pharmacists and of pharmacy as a profession and has its own independent Pharmaceutical Weekly magazine (van de Bogin, 2013). The KNMP is concerned with the situation of the pharmacy sector, because of the reorganization of one of the large chains in February 2013. According to the KNMP the problems at one of the chain pharmacies called Benu show that both individual pharmacies and chain pharmacies are experiencing financial difficulties (PW, 2013).

Comparison with other countries

Compared with neighboring countries, the standard of service provided by Dutch pharmacies is high. The pharmacy sector in the Netherlands uses advanced automation systems that make

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it possible to conduct consistent medication surveillance (Bouvy, Dessing & Duchateu, 2013). Regarding support systems, logistic services and patient care services, Dutch pharmacies are among the best in Europe (IMS Health, November 2008). The Netherlands is relatively successful in this respect with low per-capita expenditure on medicines. Healthcare professionals in the Netherlands prescribe a relatively high percentage of generic (unbranded) drugs and pharmacies play an important role in substituting brand name medicines with generic equivalents. As a result, expenditure on medicines in the Netherlands is considerably lower than in neighboring countries.

Technology and automation can play an important role in improving the safety of patients and the quality of healthcare. Additionally, they can help to reduce the costs of and the need for better efficiency. The role of the pharmacy in this process is extremely important. Pharmacists provide a significant contribution to the effective, safe and appropriate use of medicines (WHO, 1994). As professionals in medicine use they grant reachable, accessible, safe and transparent care to patients, with a better patient health as a result.

2.2 Survival

Schumpeter (1942) and Baumol (2002) argued that innovation plays a key role in the survival of firms (Cefis & Marsili, 2004). Established organizations need innovation to maintain their competitive position in the face of new and emerging or disruptive technologies (Christensen, 1997). Therefore, innovation is important for survival, not only for new firms, but also for incumbent firms that need to continuously innovate to face the threat of disruption from new technologies (Christensen, 1997). Sorensen and Stuart (2000) argued the growth and survival of firms will depend on their ability to successfully adapt their strategies to changing environments. In such environments, innovation creates a variety of competitive positions and enhances a firm's potential to succeed in the market. The evolutionary approach of Nelson and Winter (1982), stressed that the conditions for survival differ across technologies and sectors (Nelson & Winter, 1982). Due to today’s competitive pressures, organizations must engage in activities that will generate high performance and a competitive advantage. However, in order to effectively compete over time, organizations have to perform well in both efﬁciency and innovation. The changing nature of a dynamic environment requires organizations not only to compete through innovation and adaptability, but also to maintain their productivity (Brown & Eisenhardt, 1997; Cefis & Marsili, 2005; Tushman and Anderson, 1986).

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2.3 Changing function

When pharmacies receive prescriptions, they check the medication, the dose, the dispense type and the time of treatment. The pharmacist also examines allergies, contraindications, interactions with other medicines the person uses and adjustments of doses due to liver or kidney problems in deliberation with the doctor (Perras et al., 2009). This pharmaceutical validation is highly important since the pharmacist can intervene after his analysis providing an extra guarantee of safety (Juillard-Condat et al., 2005).

To obtain a better overview of the research background, it is necessary to examine the developments that have occurred in the profession of the pharmacist. Which changes have there been in the last few years? This context of changes is important to gain a better understanding of the investigation. In the past, pharmacies were mostly seen as distributors of medicines (van Mil, 1999; Willems, 2003). In the last decade, the patient and therefore medication monitoring was becoming more important and the pharmacy was seen as an important link in the risk management of the medicine care (Buurma, 2006; Buurma et al., 2007).

By automating processes, the logistical tasks of the pharmacy can be reduced, while the efficiency of the distribution of medicines and the time for front office activities can be increased (Novek, 2002). Automation also secures a stricter control over the use of medicines to guarantee the safety of patients. Therefore, the greatest motives to automatize the distribution process are reducing mistakes and increasing the efficiency of the process. When a pharmacy makes a choice for a certain technology, several different factors have to be taken into account. The best choice depends on the logistics, the workforce, the existing technologies, the financial resources and the goal of automation (Sanborn, 2007). Implementation of new technologies in the distribution process of medicines requires large investments, so in order to survive, efficiency must increase because there will be fewer personnel combined with an aging population, whereby resources will become scarce (Coiera 2006).

2.4 Market analysis pharmacies: the changes and developments in business

models

Various international studies explained why the main work at a pharmacy is, or should be, care-related, as well as how that work can be completed, and what positive effects can be

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expected (Mark, 2008).

As previously seen, community pharmacy activities in the Netherlands have changed from product centered to patient centered. Community pharmacists are the health professionals most accessible to the public. They supply medicines in accordance with a prescription or, when legally permitted, sell them without a prescription. In addition to ensuring an accurate supply of appropriate products, their professional activities also cover counselling of patients at the time of dispensing of prescription and non-prescription drugs, drug information to health professionals, patients and the general public, and participation in health-promotion programs. They maintain links with other health professionals in primary health care (WHO, 1994).

Due to distribution technologies, the profession of pharmacists has been transformed from the provider of medicines to an advising and therapeutical role (Clifford et al., 2005; De Smet et al., 2006; Latif, 2000; Novek, 2002; Wiedenmayer et al., 2006). Therefore, community pharmacies are in the process of a shift from provider of medication to provider of care around medication. Much of this care involves supplying information to patients in order to maximize pharmacotherapy outcomes (Lamberts, 2013). The latter role emphasizes a shared responsibility among the patient, prescriber and pharmacist for optimal drug therapy outcomes (Lamberts, 2013; Latif, 2000; Wiedenmayer et al., 2006). Overall, the pharmacy sector is a sector undergoing a transformation, evolving from its traditional product supply orientation to that of a business capable of incorporating services. The pharmacy should be repositioned to ensure its viability and the introduction of services is seen as a strategy for pharmacies to support their future viability (Roberts et al., 2007). A change in management strategy is needed to support this evolution of community pharmacies from the traditional business model, based largely on product supply, to a product-service orientation (Bond, 2003; Cipolle et al., 2004; Hepler & Strand, 1990; Mobach et al., 1996; Noyce, 2007; Roberts, 2008; Rovers et al., 2003).

The emphasis of pharmacies used to be preparing drugs, now only about 5% of medications are prepared in community pharmacies (Van der Heide et al., 1999). Communication with patients has become much more important (Cancrinus-Matthijse, 1995; Van Mil et al., 1998). Tasks that have emerged are medication surveillance and drug therapy meetings. The need for increased patient-oriented activities is demonstrated in several studies. Medication surveillance can avoid drug-related morbidity and provide continuous monitoring of patients’ drug use with electronic pharmacy records (Van Mil et al., 1998). Drug therapy meetings

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support rational, effective and efficient prescribing of medication, thereby contributing to optimal pharmacotherapy for the individual patient, by providing structural contacts between pharmacists and physicians (De vries et al., 1998; Pronk et al., 2002). Virtually every pharmacy keeps electronic patient records, which is seen as an indicator for the implementation of medication surveillance (Pronk et al., 2002; Van Mil et al., 1998).

The government tries to stimulate the market forces with new and adjusted laws and regulations (Stoop et al., 2007). Since 1999, a pharmacist no longer has to be the owner of a pharmacy. This change in legislation led to many changes in the pharmacy sector. Wholesalers began to buy pharmacies, and this allowed the ownership of pharmacies by non-pharmacists groups. Nevertheless, article 61 of the Medicines Act states that per pharmacy, there must always be one pharmacist registered in the register (zorgatlas.nl). Additionally, since August 2013, doctors are legally obliged to communicate patient divergent kidney function parameters and other parameters to the pharmacists (De leeuw, 2014). Furthermore, a correct interpretation of the laboratory values is important. If pharmacists gain access to kidney function values, they can detect many medication mistakes, according to the research of Joosten et al., (2014).

Since the health care industry is highly regulated, regulatory change is often the prerequisite for changing market structures. The implications of the regulatory changes introduced in the Netherlands in 2008 and 2012 include new forms of governance and cooperation, new marketing and distribution channels, new products and new information requirements. As the government has lowered the commissions paid to wholesalers and pharmacies, they have created pressure to search for more efficient solutions (Schellhammer, Klein & Kipp, 2008). Since January 2012, the pharmacy sector has undergone some intense changes. A new system of treatment-related pricing and uncontrolled prices for services by pharmacies were introduced. The minister of VWS (Public Health Care, Welfare and Sports) wanted to create opportunities for innovation and improve the patient care with the introduction of this system. The prices for these services are no longer set centrally by the NZa (Dutch Healthcare Authority), but instead the health insurers and healthcare providers must agree on these prices themselves (Overgaag-van Hemert & van Zijl, 2011; SFK data and facts, 2012). In a contract, both parties determine which health care provision the health insurer buys at the pharmacy and at which price. The price of the health care provision is divided into eleven

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‘performances of pharmaceutical care’ (Cheung & Roepnarain, 2010; Pijpken & de Gier, 2012). Contracting had to be budgetarily neutral, which means, insurers have to correct volume growth by lowering the tariffs. However, a higher volume means a pharmacy obtains more work and, therefore, higher costs. This means that pharmacies are asked to provide more care at lower dispensing fees and a lower turnover, which results in less room for attention to individual patients. Health insurers correct the demand for increased pharmaceutical care by lower dispensing fees while the increased demand for care means higher costs for the pharmacy. The consequence of this increase is a higher work pressure and less attention for individual patients. Therefore, currently cost control and cost reduction have a high priority in pharmacies (PW, 22 may 2014; KNMP 2012).

The individual performances that are part of the services of the pharmacy, which before were invisible to patients on the invoice and which were processed into the price of the medicines, are now made explicit and transparent so it becomes clear for the patient what the health insurer invoice consists of. In addition to these introductions, other changes have been made in the market of pharmacies. The first issue of medicines, when that medicine is provided to a patient for the first time, is now visible on the invoice, while in the past this was part of the dispensing fee and not visible for the patient. The first issue of medicines is a very detailed explanation about the medicines a patients uses and the side effects the medicines can have. There are many questions from patients about the prices and compensations of medicines and the pharmaceutical care that comes with them since patients were not used see these extra costs for pharmacy services.

The KNMP showed in a research study that the compensation for care services is inadequate, that strategic procurement by health insurers via the preference policy leads to availability problems and that there are unequal advantages between the market parties in the negotiating process (KNMP 3, 2012; KNMP, 2013). Less time per patient means more risks per patient and could lead to mistakes, and then hospitalization, in some cases.

Figure 1 gives an overview of the law and regulation implementations over the last few years. Here the introduction of the preference policy in 2008 and the uncontrolled pricing system in 2012 are clearly visible.

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Figure 1

Figure 1 shows the price development of prescription medicine based on the SFK price index between 1996 and 2012 (Foundation for pharmaceutical statistics, 2013).

2.5 Five forces porter

The five competitive forces model of Porter (1947) is an instrument with which one can analyze and measure the attractiveness of a market. More specifically, one can determine the structural profitability of an industry and the intensity of the competition. The five forces include the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitutes and the rivalry among existing competitors (Porter, 1991). In the market of pharmacies these five forces will be explained in the following sub-sections. 2.5.1 Rivalry among companies: Pharmacies experience almost no competition caused by price differences. The patient is not aware of the prices, because health insurers pay most of the costs and therefore price competition between pharmacies is not possible. Pharmacies have to deliver the cheapest medicines to the patients on demand of the health insurance companies. The only competition that is possible is based on service, which means differentiation in location, waiting time, availability of medicines and extra monitoring via medication reviews. There are two types of pharmacies with which a community pharmacy could have competition. The first is the Internet pharmacy. However, because community pharmacies offer the same service as Internet pharmacies, they are not concerned with this competition. The second rival is the outpatient pharmacy, which is located at the entrance of a hospital. Patients who visited the hospital or hospital employees can obtain their medication from this pharmacy. Patients that are still in the hospital, get their medicines from another pharmacy, namely the hospital pharmacy. Community pharmacies experience competition from outpatient pharmacies, since community pharmacies receive fewer prescriptions caused

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by the entering of outpatient pharmacies to the market. The total number of pharmacies declined in 2013, which will be discussed in the next chapter. The reason for this is that the dispensing fees are not enough to survive anymore. Twenty-nine new pharmacies opened, but 36 closed their doors. Approximately one quarter, eight pharmacies, of the pharmacies that opened, is an outpatient pharmacy. This leads to an increase of these pharmacies from 66 to 74.

Patients do not often change to another pharmacy and therefore, the location is actually the distinctive factor. Additionally, the minister of VWS wanted to create more room for innovation, transparency and improve the care for patients with the introduction of a system of free pricing in 2012. The research of the KNMP (2012) showed that the new system did not yet led to the results of more competition and a better price-quality relationship, but that the opposite was happening (Stoop et al., 2007). In the current situation people determine which pharmacy they visit and therefore pharmacies are not competing on price.

2.5.2 Threat of substitution: Health insurers place a ceiling on the prices that can be charged for medicines and, in this way, limit the earnings potential of the sector. Health insurers have influence on the degree of substitution via the preference policy. They determine which medicines are preferred and, therefore, which medicines pharmacies should prescribe. Additionally, these preferred medicines are, most of the time, the less expensive medicines. The result of this policy is that there are availability problems in the pharmacy and patients complain, since they often receive a different brand of medicines.

2.5.3 Threat of new entrants: To undertake pharmacy activities in the Netherlands, a license is required and therefore, pharmacies must meet certain requirements. Due to changes in law and regulation and, therefore, the market forces, the healthcare market developed opportunities for suppliers to enter. For example, since 1999, a pharmacist does not have to be the owner of the pharmacy. For traditional health care providers, like pharmacies, the emergence of new entrants in the market and the implementation of new technologies means opportunities for innovative business models but, at the same time, increased competition in the market. These new competitors and organizational structures have emerged in the Dutch pharmacy market. Chains and new forms of pharmacies, like the Internet, baxter and outpatient pharmacies, have significantly changed the market and, therefore, the traditional business model of community pharmacies has changed (Schellhammer, Klein & Kipp, 2008). But since health insurers use the preference policy, they point out the cheapest medicines to

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be sold by all pharmacies. The idea of the free market, which was introduced by the minister of VWS, does not result in more competition, since health insurers only compensate for the cheapest price. Therefore the introduction of new entrants does not lead to price competition.

2.5.4 Bargaining power of suppliers: The power of the supplier determines, to a large extent, the price of a product sold. Different kinds of suppliers are active in the pharmaceutical market. The supply of care is traditionally offered by community pharmacies. In the last few years there has been a trend of specialization noticeable within preparation pharmacies, central filling pharmacies, baxtering pharmacies and online services. The pharmacy market is a local market and, therefore, there is insufficient competition. This can be clearly seen in the fact that there are only 1974 pharmacies in the Netherlands for the entire population.

Figure 2, This figure shows that in the Netherlands, the number of inhabitants is 8300 per pharmacy (KNMP zorgmonitor, 2013).

For a strong market to exist, the presence of sufficient suppliers and the condition that suppliers are free to enter in every local market is necessary. Since this market only has a few suppliers, health insurers cannot differentiate pharmacies based on prices and quality. Forty-five percent of insured people in the Netherlands have a choice between less than Forty-five pharmacies within a radius of five kilometers, so there is a relatively low number of pharmacies per head of the population (BCG-IMS health 2010). Due to chains and partial cooperation between some individual pharmacies in the same area, the number of independent

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pharmacies in the market is insufficient. Additionally, cooperative forms of pharmacies with large market shares are developing (Schellhammer, Klein & Kipp, 2008).

2.5.5 Bargaining power of buyers: The tariffs for medicines are no longer set, adjusted or determined by the NZa (Dutch Healthcare Authority). However, beginning in 2012, the health insurers and health providers must agree on this together in a contract. Health insurers have considerable power and therefore individual pharmacies experience no competition, because they have no bargaining power on their contract with the health insurer. Chain pharmacies on the other hand have this bargaining power, since they visualize the care for patients by using computer tools that show their performances and create a better negotiating position in this way. Additionally, the health insurer plays a larger role in the choice provision for the assortment of the pharmacy, whereby the pressure to sell under the cost price, increases (KNMP 3 2012). Therefore pharmacies try to distinguish themselves from others by offering services like longer operating hours. The preference policy provides the health insurer with volume power in a market with several competing suppliers. This allows the health insurer to determine which medicines will be paid for. If different producers offer the same medicine, the health insurer can choose to only compensate the costs of the most inexpensive supplier for a certain period of time. Because of this preference policy, it is possible that patients receive another brand of medicine than they are used to. The medicine package or the medicine itself can appear different, which can be confusing for patients. In the negotiation process between the pharmacy and the health insurer, the parties are not equal. Health insurers often have a dominant position in their own region. The introduction of free tariffs and the performance-related price system does not yet lead to the desired innovation, transparency and quality improvements for the care of patients. KNMP Research shows that care-performances/care services are compensated insufficiently and that strategic purchase by health insurers via the preference policy leads to availability problems of the preferred medicines.

2.6 Conclusion

By applying Porter’s, it is notable that there are changes occurring in the hitherto protected and shielded pharmacy market. The competition on the market has clearly increased. This is mostly caused by the changes in laws and regulations. The government offered opportunities for new business, which means that new forces entered the market. The goal is to organize health care in such a way that the quality improves and the costs decline. The patient wants

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expert care at a fair price and the government wants control over the costs. The expectation is that the power of the health insurers will increase even more in the next few years. On the other hand, the care sector is not a regular market, since the patient does not pay directly, but via the health insurer. The health sector is therefore not sufficiently transparent since health insurers are being careful with showing their activities to patients. There are four big health insurance companies in the Netherlands and their prices are almost equal. The health insurers arrange contracts with all health care providers. Competition is currently occurring between health insurers and care providers now, but actually competition has to occur at the level of care itself and not at the level of health insurers or suppliers. In the end, the focus is on the price-quality relationship of the product.

2.7 Facts and figures

Tariffs and workload

In 2013, a community pharmacy achieved on average 2% more tariff revenue than in 2012. This can be explained by the slightly higher tariffs that the health insurers paid in 2013 in combination with a light increase of medicine use. Against the development of the tariff incomes, are the practice costs. Mostly due to the increased work in the pharmacy and the labor cost development, the tariff incomes stay behind compared to the practice costs. In figure 2 the costs of medicines and the tariff income on average per pharmacy (x 1000 €), between 2009 and 2013 are shown.

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The difference in pressure of the workload compared to previous years is illustrated in figure 3 by the bronze areas in the columns. The steadily increasing processing rate since 2008 gives an indication of labor productivity in a pharmacy (Foundation for Pharmaceutical Statistics).

Figure 4

Figure 4 shows the number of prescriptions of a full-time pharmacist assistant a year; productivity in the pharmacy (Foundation for pharmaceutical statistics).

Systems – Care registration

Although all systems in the pharmacy aim at the registration of care, they use different perspectives. The results of these different visions on registration are that multiple systems in one pharmacy are often used at the same time. During the import of prescriptions in the computer, AIS, (the Pharmacy Information System) checks the compatibility, contraindications and the therapy adherence. Actually, it controls prescriptions via the medication history of the patient. The system indicates whether it is a first issue, second issue, a label change or if the patient does not use its medicine conform the prescription. AIS is a necessary system in every pharmacy and therefore the degree to which the additional systems communicate with the AIS is essential (Teichert et al., 2014).

In the pharmacy information system (AIS), the following items are used: • Care registration System (KNMP)

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• Epd-bos/mbj (Foundation Health Base)

The following are separate ict-structures in addition to or besides the pharmacy information system to monitor individual patients.

• N-control, subsidiary Mosadex and Service pharmacy • Integrated pharmaceutical care (GFZ) Mediq

• WeCare (Kring-pharmacy, Boots and Alphega pharmacies) • Benu Check (Benu)

• Nexus Medication Check (NMC) (Pluriplus) • My Brocacef

This overview shows that every group has its own monitoring systems.

OZIS and LSP

At the regional level, information regarding patients is shared via information systems and -networks. Foundation OZIS (Open Care Information System) is a partnership of different information system suppliers. These suppliers support the electronic exchange of information between healthcare providers. Foundation OZIS develops and determines standards, which the suppliers can apply in their systems (OZIS, 2010; Stoop et al., 2007). OZIS is a closed system in which a patient file can be opened in different pharmacies and in this way the exchange of data between healthcare providers is possible. The advantage is that if a patient visits a service pharmacy or outpatient pharmacy to obtain medicines on the weekend, in the night or in the hospital his of her data can be imported into his of her file (http://www.ozis.nl) The pharmacy information systems used in the Netherlands are among the most advanced medication monitoring systems in the world. The systems show that patients obtain more than 95% of their prescription medicines from the same pharmacies.

The National Link System (LSP), which will replace OZIS in the beginning of 2015, can exchange the same information as OZIS. However, the advantage is that the LSP also meets the legal requirements concerning the exchange of medical information. At the moment 83% of pharmacies and 75% of doctors are connected to the LSP. The number of hospitals is still stable at 19 (21%). The advantage of the LSP is that all intolerance, contraindications and allergy-information (ICA) are bundled per patient into one overview. In this way, the most up to date information is always available, which makes medication security more specific and increase the safety of medicine use. LSP signal sends a message when other healthcare providers import or change (new) information (PW January 2014; vzvz.nl).

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Number of pharmacies

The number of pharmacies was increasing until 2011, but then started to decline (Foundation for Pharmaceutical Statistics, 2011). By the end of 2013, there were 1,974 pharmacies in the Netherlands, which is seven less than the year before. This decline is in opposition to the growing demand for care. If the supply of community pharmacies matched the pace of the demand for care, the amount of pharmacies would not have declined. More than half of the pharmacies that closed were new pharmacies or pharmacies that belonged to a chain or formula. Of the 29 pharmacies that opened in 2013, one fourth were outpatient pharmacies. These are pharmacies in or on the property of a hospital and they seem to play an important role in the provision of more expensive medicines, which are paid via the hospital budget. In contrast to outpatient pharmacies, service pharmacies – which are only open outside the normal operating hours of pharmacies - are experiencing difficulty. In the past, community pharmacies were responsible for the exploitation of these service pharmacies, but due to their own deteriorated financial position they cannot take this responsibility anymore. Therefore the number of individual pharmacies is declining, which results in a rather negative market (Rabobank cijfers & trends, 2014 ; SFK, 2012 ; PW 2014).

Figure 5

Figure 5 shows the development of the number of community pharmacies, 2004-2013 (Foundation for pharmaceutical statistics)

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Distance

Kuenen and Van Osselaar (2011) concluded in their research that patients in the Netherlands do not often switch to another pharmacy. There is no price transparency and the price differences between pharmacies are small. Additionally, the patient does not experience the consequences of these differences in prices, unless he or she pays for the medicines. The most important reason to switch to another pharmacy is the distance, of which patients find five kilometers the maximum they are willing to travel. Other reasons to change were service, waiting hours and availability (consumer panel Motivaction in NZa market scan). Patients are free to choose their own pharmacy in the Netherlands (Stoop et al., 2007) and in practice, this results in the fact that patients always visit the same pharmacy, which means that a pharmacy has information about the medication of a fixed group of patients (PW 2013; SFK.nl, 2012). Almost 80% of the patients live close to a community pharmacy (Foundation for Pharmaceutical Statistics).

Expenses

In 2013, the expenses on packaged medicines declined for the second year in a row, as can be seen in figure 5, After a few years of growth till 2011, the expenses declined in 2012 by 12%. In 2013 the decline was approximately 5% compared to the year before. The transfer of expensive medicines to the hospital budget on 1 January 2012 caused half of this decline. Some special and expensive medicines are provided to patients via the hospital pharmacy and not via the community pharmacy anymore. Also the average lower medicine prices in general, the contracts with health insurers who seek the cheapest drug via the preference policy caused the decrease in medicine expenses. Since the costs for pharmacies stayed the same these lower expenses create great pressure for the financial situation of Dutch pharmacies (SFK, 2013; PW 2013; PW 2014).

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Figure 6: Total expenditure on pharmaceuticals: community pharmacies (1=1 million euros)

This figure shows expenses declining for the first time in 2012, a trend that continued in 2013 (Foundation for pharmaceutical statistics)

Preference policy

Since 2003, health insurers have been allowed to adopt a preference policy, which restricts the insured person’s entitlement to one medicine per active ingredient (SFK data and facts, 2012). Prior to 2003, insured people had a right to all medicine variants. For the designation of preferred medicines, insurance companies use two methods, partly based on the appointment of the lowest price on a public pricelist. Since June 2008, this method led to sharp declines of medicine prices of which generic variants are available. Other health insurers designate a preferred medicine by negotiated contracts and receive a discount from the manufacturer afterwards. This allows for possible that the preferred medicine to be a more expensive brand medicine. The methods that are used and the interplay between health insurers and the fabricant leads to a shortage of medicines in the pharmacy. The price has become the determinant, instead of quality, availability and reputation of the fabricant, which seems to be of lower importance.

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Figure 7: The number of preferred medicines that are not available because of delivery problems.

This figure shows that the preference policy causes high delivery problems for pharmacies (Foundation for pharmaceutical statistics).

If a medicine is offered by different fabricants, the health insurer can choose to only buy the medicine variant of the most inexpensive medicines provider for a certain period (Kuenen & Van Osselaer, 2011). After that period they can choose another provider who is even cheaper or who is the cheapest at that moment. They can extend this period till they find a better alternative.

The first round of the preference policy had an effect, since it allowed the prices to decline. After a certain time, the policy did not lead to further decline in prices but only to misery, unrest among patients and a shortage of medicines in the pharmacies.

The SFK (Foundation for pharmaceutical statistics) monitors the effects of the non-availability of medicines that health insurers include in the preference policy. For preferred medicines, that are not available, pharmacists must search for alternative suppliers or an alternative medicine according to the SFK (figure 6). This is the case in almost 3.2% of the provided medicines, which means that weekly in 2013 between 160 and 200 medicines that were assigned preferred by the health insurer were not deliverable. Therefore pharmacies were required to search for an alternative for 580,000 prescriptions per month (Foundation for pharmaceutical statistics). The administrative burden for pharmacists resulting from the preference policy is huge, especially when examining the low prices of generic medicines in the Netherlands. (€2 per month). The preference policy of health insurers leads to availability

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problems of medicines. Pharmacists signal large problems regarding the availability of preference medicines. Pharmacists are asked to provide more care at lower revenues.

According to van de Bogin, a solution could be to fix the price of medicines when a low price level is realized. Under that level, suppliers can compete with each other and the health insurer will compensate all the brands under this price. If a patient wants another brand, which is more expensive, then he or she has to pay the additional costs. This gives a guarantee on low prices and maximum freedom of choice for the patient (van de Bogin, 2013).

For patients it is not always clear what the consequences are of the health insurer’s preference policy. Pharmacy teams spend considerable time explaining about the regulation and the policy of the minister and health insurers. This is at the expense of the real health care, which they could otherwise use to provide services about the medication.

Figure 8: Health insurers concentrations per region. The four health insurance concerns with the largest market share per region on the Dutch market are Achmea, VGZ, CZ and Menzis. Achmea is the market leader with

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3. Theoretical framework

This chapter forms the theoretical basis of the research. The previous chapter showed that pharmacies are paid less and therefore have to search for solutions to work in more efficiently. Simultaneously, pharmacies have to distinguish themselves from other pharmacies by providing better care and service than their rivals. This means that pharmacies have to save on staff, but at the same time provide more and better care.

The first section of this chapter will focus on defining pharmaceutical care and is based on the research context, the approach towards medication reviews and baxtering (safety). The second section focuses on the logistics like robots, central filling, smart filling and lockers. Finally, the last section concerns cooperation and therefore also cost reduction.

3.1 Pharmaceutical care: a definition

The concept of pharmaceutical care is continuously discussed, and the question whether pharmacists should be the professionals to deliver pharmaceutical care has not yet been fully resolved. In 1990, Charles Hepler and Linda Strand defined pharmaceutical care as the responsible provision of drug therapy for the purpose of achieving definite outcomes which improve a patient’s quality of life (Hepler & Strand, 1990) However, Strand together with Cipolle and Morley, approached the topic from a more humanistic perspective when she stated in 1997 that pharmaceutical care is ‘A practice for which the practitioner takes responsibility for a patient’s drug therapy needs and is held accountable for this commitment’ (Cipolle et al., 1998). She stressed that pharmaceutical care is not only a theory of practice, but also a philosophical worldview. Most theories now clearly state that a shared responsibility among different actors concerning medicines is necessary and emphasize pharmaceutical care as a core responsibility of the pharmacist (Hepler & Angaran, 1996). Hepler has depicted the process of pharmaceutical care as a quality improvement cycle (Hepler, 1995; Hepler, Grainger-Rousseau, 1995; Van Mil et al., 2004).

Van Mil (1999) conducted research concerning pharmaceutical care in the Netherlands. In 1998, he defined it as the care of the pharmacy team for the individual patient in the field of pharmacotherapy, aimed at improving the quality of life. The pharmacist’s role was social as well as medical, and included a broad spectrum of patient care activities, including diagnostics (van Mil, 1999).

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RBV and dynamic capabilities

In this section the resource based view (RBV) and the dynamic capabilities view will be discussed. According to the resource-based view (RBV), the firm is a bundle of resources and capabilities (Barney, 1991). If the firm’s resources and capabilities have the four characteristics of value, rareness, imperfect imitability and imperfect sustainability, they lead to the competitive advantage of that firm (Barney, 1991; Peteraf, 1993). However, the limitations of this view also offer reason for criticism, especially the missing explanation for competitive advantages in situations of rapid and unpredictable change. The assumption that companies, at least in the short term, are limited to the resources they have, reduces the RBV to a rather static model (Eisenhardt & Martin, 2000; Teece, Pisano & Shuen 1997). Also the introspective focus on the firm itself was criticized. The RBV examines inside the firm for competitive advantage (Barney, 1995). Based on the RBV and capabilities literature, operational capabilities are associated with the static dimension of the RBV, while dynamic capabilities are illustrative of the dynamic dimension, since it discusses situations of change. (Ambrosini et al., 2009; Wang & Ahmed, 2007). As such, the dynamic capabilities view is extended from the RBV (Barreto, 2009).

Dynamic capabilities

According to Teece et al., (1997), dynamic capabilities are “the ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments” (Teece et al., 1997). With other words, the ability to constantly adapt to the changing environment and concern about organizational and managerial processes, thus, learning, paths and positions. Dynamic capabilities and competences can explain how firm-specific assets are developed in order for the firm to survive and then adapted as responses to changes in the external and internal competitive environment.

The foundations of dynamic capabilities, which are sensing, seizing, and reconfiguring capacities, are difficult to develop and deploy. Enterprises with strong dynamic capabilities are entrepreneurial and they not only adapt to business ecosystems, but also shape them through innovation and through collaboration with other enterprises, entities, and institutions (Teece, 2007). Within this framework the environmental context recognized is the business ecosystem. Routines help sustain continuity until there is a shift in the environment. A key to sustained profitable growth is the ability to recombine and to reconfigure assets and organizational structures as the enterprise grows and as markets and technologies change.

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Reconfiguration of capacities concerns combining and reconfiguring specialized and co-specialized assets to meet changing customer needs and to sustain and amplify evolutionary fitness, thereby building long-term value for investors. Success requires the creation of new processes and the implementation of new organizational forms and business models. Reconfiguration is needed to maintain evolutionary fitness and to attempt and escape from unfavorable path dependencies.

This all leaves open the origin of these capabilities. Zollo and Winter (2002) discussed deliberate learning and the evolution of dynamic capabilities as well as how dynamic capabilities are developed. They proposed the following: ‘A dynamic capability is a learned and stable pattern of collective activity through which the organization systematically generates and modifies its operating routines in pursuit of improved effectiveness (Zollo & Winter, 2002). In this thesis, the learning mechanism that influences operating routines directly and via dynamic capabilities is experience accumulation (Zollo & Winter, 2002).

Figure 9 Learning, dynamic capabilities and operating routines (Zollo & Winter, 2002).

Routines are stable patterns of behavior that characterize organizational reactions to stimuli. Systematic change efforts are needed to track environmental changes, which means that these learning approaches must be updated frequently. Routines reflect experiential wisdom in that they are the outcome of trial and error learning and the selection and retention of past behaviors (Zollo & Winter, 2002).

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According to Eisenhardt and Martin (2000) dynamic capabilities are the antecedent organizational and strategic routines by which managers alter their resource base, acquire and shed resources, integrate them together, and recombine them to generate new value creating strategies (Eisenhardt & Martin, 2000; Grant 1996; Pisano 1994). Their value for competitive advantage lies in the ability to alter the resource base. Long-term competitive advantage therefore lies in resource configurations, not dynamic capabilities. They are defined as: ‘The firm’s processes that use resources–specifically the processes to integrate, reconfigure, gain and release resources to match and even create market change. Dynamic capabilities thus are the organizational and strategic routines by which firms achieve new resource configurations. (Eisenhardt & Martin, 2000) In moderately dynamic markets effective dynamic capabilities rely heavily on complicated, detailed, analytic routines and existing knowledge to produce predictable outcomes (tacit knowledge and rules of thumb). In these markets, RBV is enhanced by blending its usual dependent strategic logic of leverage with a path-breaking strategic logic of change (Eisenhardt & Martin, 2000). This change occurs in the context of stable industry structures (Cyert & March, 1963; Nelson & Winter, 1982; Zollo & Winter, 1999). As mangers continue to gain experience with routines, they learn the processes more deeply, so that they become easily sustained and even inertial (Argote, 1999). These processes are the drivers behind the creation, evolution and recombination of other resources into new sources of competitive advantage (Henderson & Cockburn, 1994; Teece et al., 1997). Dynamic capabilities are often characterized as unique and idiosyncratic processes that emerge from path dependent histories of individual firms (Teece et al., 1997). Effective dynamic capabilities rely heavily on existing knowledge. In some situations, existing tacit knowledge is further codified into detailed routines that precisely specify steps and subdivide activities among different individuals (Argote, 1999; Nelson & Winter, 1982; Teece et al, 1997; Zollo & Winter, 1999). Learning mechanisms guide the evolution of dynamic capabilities. Repeated practice is an important learning mechanism for the development of these capabilities. While repeated practice per se can contribute to the evolution of dynamic capabilities, the codification of that experience into technology and formal procedures makes that experience easier to apply and accelerates the building of routines (Argote, 1999; Zander & Kogut, 1995).

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Efficiency

A system is considered to be efficient when the ratio between performance and costs is optimal. Specifically, the ratio of resources utilized against the results derived (Auh & Menguc, 2005; Chamberlain, 1968; Langley & Holcomb, 1992; Mentzer & Konrad, 1991; van der Meulen & Spiijkerman 1985). In a broader sense, it is the ability to manage resources wisely. There is clearly a need for a customer-focused strategy if companies are to survive in the long term (Brady & Cronin, 2001; Deshpandé et al., 1993; Drucker, 1954; Johnson, 1998; Tajeddini & Trueman, 2008). In order to sustain a competitive advantage, businesses need to combine existing resources in new ways to develop new processes and services, adopting an entrepreneurial orientation (Hitt et al., 2001; Lumpkin & Dess, 1996). Overall, improvement of organizational processes contributes to firm survival and performance (e.g., Barringer & Bluedorn, 1999; Dimitratos & Plakoyiannaki, 2003; Hitt, Ireland, Camp, & Sexton, 2001; Hult et al., 2003; McDougall & Oviatt, 2000; Miller, 1983).

Resources are essential if firms are to operate effectively within the emerging business model and to utilize the opportunities to innovate and gain market leadership. Services have become an extremely important variable for predicting a firm’s success in the marketplace. Technology enables service firms to improve their efficiency and effectiveness and to enhance their services (Moncrief & Cravens, 1999). Researchers argue that efficiency can include several kinds of improvements, which have become the primary factors in market competition in the service sector (Hauknes, 1999). Service innovation is fundamentally reliant on the three interrelated factors of technology, knowledge, and relationship networks (Chapman et al., 2002; Kandampully, 2002;).

Pharmacotherapeutic interventions

Pharmacotherapeutic interventions for elderly people can be divided into medication reviews, which are focused on optimizing the pharmacotherapy and assistance with medication management, which can be completed by individualized distribution forms, like medication rolls.

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3.2 Medication reviews

In this section, the logic of medication reviews will be combined with the insights from the research context and form the basis of the first hypothesis. First, it is important to explain what a medication review is.

One definition of medication review is “a structured, critical examination of a patient’s medicines with the objective of reaching an agreement with the patient about treatment, optimizing the impact of medicines, minimizing the number of medication related problems and reducing waste” (Room for Review, 2002; multidisciplinary guideline polypharmacy for elderly people; KNMP guideline medication review). In scientific research there are many definitions for medication reviews: the difference is in the extent to which the patient, the doctor and the pharmacist are involved in the process (Geurts, 2012). However, research showed that it is essential to involve the doctor as well as the patient in the process (CVZ 2007; De Leeuw, 2009; Kwint, 2012). In the KNMP guideline this multidisciplinary character and the central position of the patient are important.

Regular medication reviews can reduce the risk of medication-related problems and have been recommended for those over the age of 65 and those on multiple drug therapy that use more than five chronic drugs (Blenkiron, 1996; Booz & Co, 2012; Gallagher, 2008).

In 2001, Zermansky showed that a review of an individual patient’s medication by a doctor and a pharmacist together had a positive effect. Two other research studies showed that, with a medication review 27% and 29% (respectively) of all pharmacotherapy related problems are identified via a consult with the patient (Krska, 2001; Kwint, 2012). When selecting patients for medication reviews, it is important that patients are selected in consultation with the doctor. In the NZa-performance medication review, the mandatory activities must be completed before pharmacists can declare the reviews.

In the beginning of 2012, the Dutch Healthcare Association (NZa) determined that the medication review is an individual performance, which can be declared separately by the health insurer. Medication reviews can be defined as a systematic review of an individual patient’s medicine use by three parties; a doctor, a pharmacist and the patient. It has been shown that this performance will lead to less hospitalization, which will in turn lead to cost reduction for insurance companies (HARM report).

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In the case of a medication review, a pharmacist selects patients based on certain conditions. These are patients who use five or more medicines in a chronicle way and which are 65 years or older. The reviews are done in cooperation with the patients and a doctor. The patient will be interviewed about the medicines that are used. This is important since the pharmacist gets an overview on how patients take their medicine. Complaints or problems of patients will be involved in the interview as well. Also, the adherence will be analyzed. Afterwards, there will be deliberation with a doctor who creates a plan together with the pharmacist to improve the medication of patients. Therefore, all medication is screened to control for interactions and contraindications as well as if the medication is issued according to the guidelines (PW, February 2014; PW April 2014; Foundation for pharmaceutical statistics).

The SFK and the multidisciplinary guideline polypharmacy note that 82% of the patients for whom a medication review is performed, are patients with polypharmacy. This means that these patients use five or more medicines at ATC3-level on a chronic basis, i.e. 90 days or more (KNMP.nl). Research showed that 10% - 12% of the medication can be stopped safely. Also adherence and the use of medicines can improve by conducting medication reviews (KNMP zorgmonitor, 2013).

Without standardization or without a protocol, the height and the form of the compensation for reviews cannot be determined. A medication review is currently, outside of the normal work for a pharmacist, because it requires a specific study, amendments and periodic consultation with the doctor since the pharmacist has access to a thorough medication overview, has a broad and actual knowledge about medicines and has the medicines in his pharmacy.

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Figure 10

Figure 10 shows the different levels of medication reviews (room for review, 2002).

Computer

In some countries medication analysis or review is a standard part of pharmacy practice. In the Netherlands, pharmacies documented their activities as a result of prospective computerized medication review; 38% of all interventions resulting from computer generated alerts or other forms of professional assessments led to a change in the prescription or patient education activities. These interventions represented over 9% of all prescriptions dispensed (Buurma et al., 2001; van Mil et al., 2001). Buurma et al., (2001) found that 4.9% of prescriptions for prescription-only medicines (14.3 per pharmacy per day) were modified in the Netherlands to prevent or correct drug-related problems. Several studies in the Netherlands have indicated that community pharmacies already intervene frequently in order to avoid (future) drug-related problems (Buurma et al., 2001; van Mil et al., 2001). In the Netherlands, pharmacists provide prescribing advices to physicians (pharmacotherapeutic consultations, outreach visits and academic detailing) to influence prescribing, in order to prevent possible future pharmacotherapy problems (Corbett, 1995; Kocken, 1999; van Eijk, 2000; Van Mil et al., 2004; de Vries, 1998)

Reports

A research study of hospital admissions because of medication side effects in the Netherlands (IPCI research) showed in 2006 that 5,1% of the unplanned hospital admissions were the result of medication side effects (Van de Hooft et al., 2008). Published research regarding the frequency of medicine-related hospital admissions showed strongly fluctuating results (0,1% to 54%). This was the motive to begin a research via HARM (Hospital Admissions Related to

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Medication) regarding the extent of the problem in the Netherlands. Additionally, the research focused on the costs of potentially avoidable admissions and on the identification of the risk factors for these admissions.

In 2006 the HARM-report (Hospital Admissions Related to Medication) clarified that, in the Netherlands, much could be gained with medication reviews and safety and it advised the utilization of modern technologies (Leendertse et al., 2008; Van der Veen & Ka-Chun Cheung, 2014). The HARM-report showed that a better balance is possible between efficacy and safety of the individual medicine therapy in the daily practice. This research showed that 2,4% of the total number of hospital admissions were medication related, that 5,6% of all non-planned or acute hospital admissions were related to the use of medicines and that 46% were potentially avoidable (Buurma et al., 2007). This means 41,000 medications for related hospital admissions and 19,000 potentially avoidable admissions per year. The estimated costs is €85 million a year. Patients older than 65 years had a frequency that was twice as high as patients younger than 65 for medicines related admissions. It is recommended to approach these patients proactively for additional medication guidance.

One of the recommendations of the Expert Group that studied the results of the HARM reports is that patients who are being treated for more than one condition and who are using several medicines chronically, benefit if the pharmacist and the healthcare professional who prescribed the medicine(s) conduct a joint medication review (de Bie & Bouvy., 2010; Bouvy, Dessing & Duchateu., 2013; Harm-wrestling, 2009; de Leeuw, 2014).

According to the KNMP Care Monitor 2013, which was based on a survey of 400 pharmacists, 85% of the pharmacists conducted a medication review in the Netherlands. Seventeen percent conducted between one and ten reviews, while 13% conducted over 100 reviews. However, from these numbers one cannot conclude the form and the level of the medication reviews. The multidisciplinary guideline polypharmacy for elderly people states which patients are eligible for a medication review. However, it is not yet clear for which patients medication reviews are most effective, since there is insufficient research completed in this field. It is most likely that patients with risk factors for pharmacotherapy-related hospital admissions benefit most.

When conducting medication reviews, a pharmacy has to adjust their organization and therefore it takes some time to fully implement this performance into the pharmacy. Currently, the implementation of medication reviews is in progress. The KNMP Care Monitor

How can innovations help pharmacies to survive in the Netherlands?

Master Thesis