Wednesday, July 8, 2015

Thriving Austin Pharmacist eschews third-party payment!!!

"As each one has received a gift, minister it to one another, as good stewards of the manifold grace of God."
1 Peter 4:10

Fascinating economic microcosm in yesterday's Statesman:
An experiment birthed 10 years ago when Austin pharmacist Chris Johnson founded an indie drug store to sell discounted medicines to needy Central Texans was more than a crazy idea. It was a crazy idea that had legs.
MedSavers Pharmacy — a rare drug store that doesn’t take insurance — is still dispensing lower-cost generic drugs, still growing and still fun, Johnson, 44, said.
It’s a business, he told the Statesman a year after it was launched, that inspired him to take a drastic pay cut so he could offer cheaper options to brand-name drugs, forge deeper connections with his customers and spend more time with his wife and two children. It was a personal statement against obscenely high drug costs, he said.
“People told me to my face I was crazy, but I just signed another five-year lease,” Johnson said, looking like someone who’s having the last laugh. “When you see the pricing in the marketplace and see that I’m still making a profit, you see the true travesty of what is going on.”
In between greeting customers and answering questions from his pharmacy technicians on a recent morning, Johnson said he’s managed to stay in this unusual business because he doesn’t have the high overhead costs taking insurance would require. He even moved to a larger location five years ago, from a tiny space on Medical Parkway to 1800 W. 35th St., next to Things Celtic.
He supplied a list of 35 drugs that cost less at MedSavers than at three national chain stores. In some cases, MedSavers price was half of the next lowest price. In six instances, MedSavers was at least five times cheaper.
That’s a big deal to customers paying out of pocket.
Johnson said about 80 percent of his estimated 4,000 customers lack insurance, down from about 95 percent when he opened in 2005. The remaining 20 percent can try to use their insurance, but they’ll have to submit the bills themselves.
“When 80 percent of your phone time is taken up by insurance, it takes staff to do that,” said Johnson, a 1995 University of Texas graduate.
A decade ago, MedSavers had one pharmacy technician and one part-time pharmacist. Today, it has seven technicians — three of whom are full-time — and three part-time pharmacists. Johnson says his salary is comparable to what his peers make in Austin, where median pay was $115,631 last year, according to the Texas Workforce Commission. It took him about 3½ years to earn an annual salary comparable to what he made before MedSavers, he said.
Read the whole thing here.


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