Planning and Steps to Building the Ambulatory Practice Model


Chapter Objectives

1.   Discuss the four attributes of a successful pharmacy service.

2.   Determine the scope of the practice in your area.

3.   Identify and determine the resources necessary to support the service.

4.   Identify strategies to demonstrate financial value.

5.   Propose how you will identify and engage your stakeholders.

6.   Describe the key elements of a service proposal.





The goal of this chapter is to assist you in assembling the key data that will support the proposal for your new service and lead to the creation of a successful clinical practice. The process will require pulling together a diverse array of information that will help you refine your clinical and business structures.1 It is incumbent on the pharmacist to build high-quality clinical pharmacy services that are based on sound business principles. To ensure success, we suggest that you incorporate four key attributes into your service development: valuable, scalable, reproducible, and sustainable.

In the language of quality improvement, value is simply the product of the quality divided by the cost for a service or product (V = Q/C). Therefore, one can provide value by improving quality, decreasing cost, or both.2 Put another way, you want to provide a needed service while using the least amount of resources. The pharmacist is the health care provider best educated and trained to identify and resolve the myriad of medication-related problems that patients and providers encounter. It is therefore critical that these services are well aligned with the unique skills and knowledge of pharmacists, they are efficiently provided, and that their value is measurable.

Your service should also be scalable. After spending quality time researching the needs of your patients, planning your service, and setting it up for success, demand will likely grow significantly. You will need to design your model to allow for growth. It is important to prepare for expected change and design your practice for expansion.

Similarly, your services should be reproducible. Within your organization, a model for an anticoagulation clinic may be replicated as a diabetes service based on common design and functionality. A practice model that is easily reproducible can also allow for recreation of your “best practice” by another practice site. Solid planning, simplicity of design, and standardized roles and processes allow models to be reproduced or transferred with minimal manipulation and can result in similar outcomes.

Finally, it is most important that your model is sustainable. The survival of your service will be a reflection of your ability to maintain the value as needs shift and resources ebb and flow. The dynamic health care environment requires continuous quality improvement and responsible resource management to maintain your model.

With these four attributes in mind, let’s begin the process of developing a clinical service proposal. The key steps addressed here are determining how to provide your service, estimating your resource needs, demonstrating value, and building support. Once you have completed these steps, Chapter 3 will then make use of this information to help you finalize your business plan.

Determining How to Provide the Service

Chapter 1 helped you define the optimal ambulatory model for your service, discussed its standards, and considered the mission and vision of your organization. Once you have evaluated and prioritized your opportunities, your attention should be focused on the service that will provide the most value to your organization and patients. On the other hand, considerations such as resource limitations, political issues, and practical concerns may make the most valuable target less feasible. Therefore, selecting the opportunity that is within your reach and that ensures a positive outcome may be the wisest path. Regardless of your specific service choice, you will need to take the necessary steps to determine how to provide your service, including determining your scope of service, selecting the most appropriate care delivery model, estimating your resource requirements, performing the financial analysis, evaluating your current resource availability, and anticipating your growth.

Image Selecting the opportunity within your reach that ensures a positive outcome may be the wisest path.

To help you apply the concepts, we will be introducing and discussing a case example throughout the book to illustrate how to start and assemble the aspects of your new practice model.


Dr. Busybee, a local physician, heard information about the value of having a pharmacist assist in managing patients in ambulatory clinics. He has approached you about initiating this type of service at his office-based practice site. In your evaluation of his practice and creation of the needs assessment, you determine some areas where pharmacists could provide definite value. First, Dr. Busybee appears to be at risk for losing his contract with his largest insurer based on poor performance on key disease management indicators: achievement of goal hemoglobin A1C values in diabetes and appropriate management of patients with atrial fibrillation, including international normalized ratio (INR) values in the target range for patients on warfarin anticoagulation. Dr. Busybee’s patient load is also very high, which is causing delays in scheduling appointments and in attracting and retaining new patients. You are uncertain about the rules and regulations regarding pharmacist practice, particularly in physician offices, in your state (Maryland). For the necessary information you contact the Maryland Board of Pharmacy and also your state pharmacy organization to see if they can provide some practical information and perhaps connections to similar practice sites. One key item your research provides is information on a house bill in Maryland, HB781, Physicians and Pharmacists: Therapy Management Contracts, which passed in 2002 and was finalized in 2004. This law states that the protocol approved by both parties may authorize the pharmacist to modify, continue, and discontinue drug therapies included in disease state-specific protocols. Additionally, the patient must sign the protocol approving the pharmacist’s involvement as part of the team on a yearly basis. This law exempts institutional facilities from the collaborative practice restrictions, which means your new community practice will need to meet the HB781 requirements, and pharmacists will not be permitted to initiate drug therapy.

Performing a Needs Assessment

A first step in planning your clinic is understanding the needs of the recipients for your proposed service. In essence, this means knowing what is desired by your customers, who include the patients, the providers, your organization, and the payers your service will affect. Determining this is called a needs assessment or market analysis and is the process for collecting the information needed to understand the gaps between the current levels of care and the level of care that is desired. Obtaining this information will allow you to optimally address how your service will fill the identified needs or gaps. This is a critical step in your business and marketing plans, both of which will be discussed in detail in Chapters 3 and 4.

In a needs assessment, there are three basic questions to ask:3

1.   What are the needs or problems to be addressed?

2.   How large is this problem, and what are the trends?

3.   How well are the needs currently being addressed?


The problem with Dr. Busybee’s practice is the high patient volume does not allow his patients to receive optimal care or achieve optimal outcomes. It is a significant problem for him, as he is unable to sustain and grow his practice. There is a high need for primary care physicians such as Dr. Busybee in the community. An area in which you can fill Dr. Busybee’s needs is that of providing support in diabetes and atrial fibrillation management. By analyzing Dr. Busybee’s panel of patients, your initial estimate for your proposed service is that 2 clinic days a week will save him at least 1 hour a day, allowing him to see an additional four patients. In support of your proposal, you have collected several published citations noting improved outcomes in similar populations when pharmacists provide these services.

Determine Your Scope of Practice

As noted in the case, you need to be aware of your particular state’s regulations regarding scope of practice. Scope of practice is the terminology used by various professions’ state licensing boards that defines the procedures, actions, and processes that are permitted for the licensed individual. The scope of practice is limited to that which the law allows for specific levels of education, experience, and demonstrated competency.Image For the practice of pharmacy, each state has laws, licensing bodies, and regulations that describe requirements for education and training and thus define the scope of practice. The collaborative practice laws and the use of collaborative drug therapy management (CDTM) contracts mentioned in Chapter 1 describe the range of patient care functions you can perform at your practice site or organization.4 Your organization may also add more specific functions related to medical conditions (e.g., anticoagulation, diabetes) and populations (e.g., pediatrics). In any case, the specific allowances for managing patients’ drug therapy and related care are included in these agreements, and they must stay within the scope allowed by the state. It is important that you are aware of your state’s practice allowance and ensure that your service is within these legal bounds. Legal matters to consider will be discussed further in the chapters dealing with setting up your clinic, documentation, and billing (Chapters 5, 6, and 8); the related issues of credentialing and privileging will be discussed in Chapter 7.

Identify and Evaluate the Optimal Care Delivery Model

As noted in Chapter 1, the service types vary in complexity, and thus the training and experience necessary for the provider to be effective and efficient also varies. If you have not already done so, you may want to further review the published articles and trials regarding services or settings that are relevant to your initial service ideas.

Image Selection of the delivery model should be based on a careful alignment of the identified care opportunity with your practice setting, your clinical strengths and expertise, and your allowed scope of practice.

Lets focus on selecting your service delivery model. The delivery model is defined by where and how you provide the service. When considering a delivery model, examine the physical setting for the service. Will it be integrated, as when the pharmacist is placed directly into the clinic or physician’s office space and shares resources? Would the service location be independent or separate from the current provider service area? Will the new service be based out of the current pharmacy distribution location? Each of these models has strengths and weaknesses when applied to different settings and patient populations, as was noted in Chapter 1.


In evaluating potential service delivery models, you determine that a physician’s office model makes the most sense as it provides easy access to the documentation system without having to purchase or build your own, and the electronic health record (EHR) for the office also provides access to laboratory test results and medication-prescribing software. In addition, you will be located within the office with direct lines of communication to the providers for faster decision time, and working in the physician’s office will avoid any renovation costs necessary to prepare a new patient care area. Upon further discussion with the practice administrator at Dr. Busybee’s office, you note that the patient care staff is uncomfortable with caring for patients on insulin and warfarin therapies due to the complexity of the treatment. The physician’s office practice model will allow the pharmacists to both provide care to these patients and provide education to the staff regarding medication management.

In summary, when evaluating your care delivery model it is important to consider both current and potential needs and how you can provide value (i.e., high quality with the least amount of resources). Creativity is encouraged in matching your service to the needs of your patients, organization, and practice environment.

Evaluating the Resource Needs and Financial Impact

Once you have identified a specific service and delivery model, it is time to examine the resource and financial issues that will be a key component of your service proposal. In this section, we will discuss the essential resources for any business (i.e., people, equipment, supplies) and help you determine which you will need for your service. We will also discuss the costs related to these resource needs. Generating revenue or determining other measures of financial value will be explored as well. If finance is not one of your strengths, then we recommend that you seek a knowledgeable colleague, such as the pharmacy manager, consult your finance department, or engage an independent consultant. Additional resources on business and finance can be found through national professional organizations. We have also provided worksheets to guide you through a basic resource needs and financial assessment.Image

Estimating Resource Requirements

Determining Patient Volumes and Potential Demand for the Service

The most important consideration in estimating resource needs is determining the number of potential patients that may use your service. Your needs assessment should provide a rough estimate of this number. Depending on your practice setting, this type of information is often not accessible through pharmacy databases or records. A good place to locate this information is in your finance office or from someone responsible for billing at your practice site. Billing and other financial data tied to ambulatory visits will include information on the patient diagnoses (ICD coding), service provided (procedural or visit codes), insurance/payer codes, and basic demographic information. This is valuable information for determining not only patient and visit volumes but also for evaluating other aspects of your service (i.e., payer mix linked to reimbursement). Clinical data systems may also contain valuable information, such as number of persons with specific conditions or relevant laboratory data. Other persons able to assist you in finding the information related to identifying potential patients may be an administrator, clinic manager, or physician/medical director. In fact, you will likely need to collect data from various data sets and anecdotal information from physicians and other stakeholders to gain a good perspective on which patients you could help. Initiate discussions with these persons; explain your needs, and you should be able to gather the required data to create an estimate of potential patients for your service.

You will need to determine what portion of your potential patients you can capture. Consider whether your service will be a mandatory referral system (i.e., automatic transfer of care for anticoagulation services for all identified patients) or referral based on physician or patient discretion (i.e., diabetics determined to be in poor control). You are encouraged to proactively engage providers, patients, and others who are in positions that may influence the use of your service for information that will guide your workload estimates. (See the section on identifying and engagement of stakeholders later in the chapter.)

In addition, you should evaluate other factors that may impact your patient volume estimate, such as changes in the local health care market or organizational emphasis on areas of care and government policy shifts in insurance coverage or changes in your physician practice model. Another important consideration is your visit completion or “show” rate. This number can vary as widely as 40% to 75%, depending on the population served.5 Inquire at your practice site (or an external site caring for a similar population) to determine your expected visit completion rates. You may need to consider how to manage this nonproductive time for no-shows or consider appointment strategies, such as overbooking and pre-clinic reminder calls, aimed at maintaining capacity.

Your patient volumes will ultimately determine your total time providing direct patient care. To connect these pieces, you will need to determine the expected duration and frequency of visits. How long is a typical office visit? According to a 2001 publication, the average physician office visit ranged from 16 to 20 minutes in duration.6 Anecdotal reports from ambulatory pharmacist practices yield similar times, with visit encounters for established patients typically lasting 15–30 minutes and initial visits with new patients taking longer, perhaps 30–60 minutes. Duration will vary with practice setting, patient treatment severity and complexity, and the efficiency of the pharmacist provider. For example, visits for defined services such as an uncomplicated anticoagulation patient may take 15 minutes, whereas patients with more complex care needs (i.e., primary care with multiple chronic conditions) may take up to 45 minutes. You will need to estimate the visit time based on your service type and population served. It is important to point out that when implementing a new service, all your patients could potentially be defined as “new,” even if they have been cared for in the same facility. You may need to account for these longer visits in your initial visit estimates. Finally, while accuracy for this key resource driver is preferred, if your estimates are more “guesstimates,” consider using a minimum and maximum range for your patient volume estimates. You should classify your appointment types and their related duration for your service to allow for accuracy and good communication in scheduling patients and for billing purposes. We have included a basic example (below).

Example Template: Duration of Pharmacy Visits
Appointment Type Length of Visit
New referral 30 min
Initial visit 30 min
Regular office visit 20 min
Phone visit 15 min

To create an accurate estimate of your patient volume and the time involved in providing direct care, you will need to determine the number of potential candidates for your service, the frequency and duration of visits, and the visit completion rates.

Image Creating an accurate estimate of your patient volumes and appointments structure is critical in determining resource needs as well as the financial feasibility for your service.


Dr. Busybee produces a medication-use report from his prescription service to address the question of patient volume. The report indicated that Dr. Busybee currently has 15 patients on insulin therapy, 45 patients on other diabetic/hypoglycemic medications, and 35 patients on warfarin. Based on your discussions with other external pharmacy providers caring for similar patients, and with input from Dr. Busybee on the general complexity of his patients’ conditions, you determine that visit lengths will be 30 minutes for new patients and 20 minutes for established patients. At a minimum, you expect to see your established anticoagulation patients monthly and your established diabetic patients every 3 months. With Dr. Busybee’s input, you estimate 20% to 30% of patients will have more frequent visits. Additionally, Dr. Busybee notes that he has an overall 65% show rate for patients in his practice.

Once you have determined your patient volumes and translated those into the service visits and the time required to provide care, you can then address the major resources required to meet these needs, such as personnel/labor, equipment, supplies, information technology, and physical plant requirements.

Expenses Related to Personnel and Labor

Personnel represents one of the largest portions of your resource needs. Your personnel needs will depend on your practice model, setting, and the service you provide, but most typically the needs are represented by direct-care providers (i.e., pharmacists), support staff (i.e., pharmacy technicians, clerical staff), and administrative support. For staffing needs and expenditures, it is important to consider issues such as nonproductive time (i.e., educational and sick leave, vacations), benefits, and other factors. In this section and through the resource worksheet, we will examine these personnel needs and assist you in determining the associated costs.

When you state your personnel needs, you will want to use FTEs. The FTE, or “full-time equivalent,” is the basic unit of measure for labor, and it is most commonly defined as the maximum number of compensable hours an individual will work in a year, or 2,080 hours (40 hr/wk × 52 wk). Check your organizations’ payroll definition, but for this chapter and the related worksheet we will consider an FTE to be 40 hours of work in a 7-day period. Determine your total FTE needs for each personnel type (i.e., pharmacist, technician, clerical). Please refer to your worksheet to estimate the FTEs needed for direct patient care. (Resources and Reimbursement Worksheet)Image

Determining Staffing Needs for Pharmacists

Direct Patient Care. In the previous section you developed an estimate of your patient volume. We now want to determine more precisely your actual direct-care provider needs. First, let’s adjust your direct patient care time to include other necessary tasks. You will need to allow some time, perhaps 15–30 minutes per patient visit, for documentation. This number should include pre-clinic preparation, final documentation, and follow-up tasks. This time will vary significantly depending on the complexity of your patients’ care, the efficiency of your documentation system, and other factors. (Refer to your worksheet for assistance in adding documentation time to your patient care time estimates.)Image You will also need to account for nonproductive time, such as vacation and education leave, by adding a 10% to 20% correction time to your current staffing needs estimate. At this point, the calculated value should be a good approximation of one component of your staffing requirements—your total direct-care provider needs.


To determine the direct-care pharmacist staffing needs for your new service, you use a resource needs worksheet. Your earlier research indicated that 95 patients are expected to use this service. Because all the patients have been receiving care in the system, you set out to determine the maintenance level of staffing needed to care for the patients with no adjustments for new visits. You will use 20 minutes as the visit duration for each patient to determine minimum needs. You walk through these steps:

Determining number of monthly visits:

  • 60 patients with diabetes

    –  80% will have routine visits every 12 weeks = 48 patients every 12 weeks, or an average of 16 patient visits per 4-week intervals (roughly 17/mo).

    –  20% will need more frequent visits; we will use “every 4 weeks” for our estimate = 12 patient visits every 4 weeks (roughly 13/mo).

  • 35 patients on warfarin

    –  80% will have a routine visit every 4 weeks = 28 patient visits per 4 weeks (roughly 30/mo).

    –  20% will need more frequent visits. Using 1 visit every 2 weeks, our estimate = 14 visits per 4 weeks (roughly 16/mo).

  • Total percentages of visit frequency

    –  48 patients (50%) will visit every 12 weeks

    –  40 patients (42%) will visit every 4 weeks

    –  7 patients (8%) will visit every 2 weeks

  • Total monthly visits = 76 (30 for diabetes and 46 for anticoagulation)


Pharmacists’ Staffing Time Related to Direct-Patient Care

  • Nonadjusted staffing needs: 76 visits/mo × 20 min/visit × 1 hr/60 min = 25.3 hr/mo.
  • Scheduling must account for no-shows and rescheduling of patients. The visit completion rate is 65%.

    –  76 visits/mo × 1.35 no-show correction = 103 visit slots estimated to meet demand.

    –  103 visits × 20 min/visit × 1 hr/60 min = 34.2 hr staffing/mo.

  • Corrections need to be made to account for the following:

    – Documentation time, for which we will use a value of 20 minutes per completed visit

    § 76 completed visits/wk × 20 min × 1 hr/60 min = 25.3 hr

    § Total direct-care time = 34.2 + 25.3 = 59.5 hr every month

  • Direct-care pharmacist staffing needs are roughly 59.5 hr/mo or approximately 15 hr/wk (which equates to 0.375 FTE: FTE = 15 hr/wk × 1 FTE/40 hr).

Pharmacists Staffing Needs Not Related to Direct Patient Care. Of course, not every minute of the workday is accounted for in the life of a busy clinical pharmacist! There are some other very important considerations that may impact the staffing needs of the pharmacist care providers, such as activities and possible responsibilities related to performing prescription refill authorization, reviewing laboratory results, consulting with providers, addressing external inquiries, precepting students or residents, and performing research. These activities may vary considerably between practice locations and are also somewhat difficult to estimate. Finally, we need to consider nonproductive time, which includes educational leave, sick time, and vacations. This is usually estimated to be 10% to 20% of an employee’s time and salary.


Dr. Busybee’s nursing staff has agreed to continue performing prescription refill authorizations for the office, and the pharmacists need only address issues related to anticoagulation and diabetes medications for the occasional patient. Thus, this time is minimal. However, pharmacists will need time to review new and pertinent laboratory results related to the patients who are receiving anticoagulation and diabetes care. After talking to Dr. Busybee, you estimate that the time related to laboratory result reviews, patient inquiries, and the resulting necessary actions for your 95 patients would require about 45 minutes per day (25 minutes for laboratory result reviews and 20 minutes for patient inquiries), based on Monday through Friday service. At this time you will not be precepting students or be involved with research.

Pharmacists’ Staffing Time Related to Non-Direct Patient Care

  • Laboratory result reviews, patient inquiries, and related activities

    –  45 min/day × 1 hr/60 min × 3 days/wk = 9 hr/mo

  • Nonproductive time (i.e., sick time, vacation leave, education leave) adjustments 10% to 20% of staffing time

    –  Based on the current estimates, we have 59.5 hr/mo for direct patient care plus 9 hr/mo for non-direct patient care time = 68.5 hr/mo.

    –  Using a nonproductive time value of 10%, multiply 69.5 × 1.1 (10% correction) = 75 hr/mo for total staffing time requirements (or FTE = 0.47).

Therefore, total pharmacist staffing time is estimated to be 76 hr/mo.

Overall Pharmacists Staffing Needs—Putting It All Together. It is important that you go through the staffing needs considerations listed previously to generate a well-informed estimate of your labor cost. However, now you must determine how this estimate based on anticipated patient volumes and other activities fits into an actual clinic schedule. Also consider the other factors involved, such as patient scheduling and support staff schedules. It is wise to step back, take a practical look, and compare the detailed estimate of staffing needs to the estimated patient volumes to see if our numbers make sense. Discussions with pharmacists in actual practice indicate that, in a standard 8-hour day, they can generally accommodate 8–12 patients in disease management-style services and 15–30 patients in services with more focused care (i.e., anticoagulation). Keep this in mind as a reality check as you do the math for your direct-care provider staffing needs, and realize each practice site is different. These numbers reflect an estimate of the number of patients that may be seen in a given time span, but it may not fit all sites.


It has been determined that the total staffing needs for the pharmacists at Dr. Busybee’s office is 19 hours per week. You also know you have scheduled approximately 103 visit slots every month. Using the standard 8-hour day, this would indicate there are 9.5 days of staffing for 103 visits, or 10–11 visits per day. This figure seems to be in line with the other information you have reviewed, and you are comfortable moving ahead with scheduling. You share information with the office manager, and she determines that exam rooms are available for a full day every Wednesday and possibly when needed you can expand to partial days on Tuesday and Thursday (2–4 hours) if office scheduling allows. Working with the schedules, you create visit “blocks” that allow for up to 12 patients in a standard 8-hour day and 6 patients on 4-hour days.

Support Staffing Needs

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Jun 18, 2016 | Posted by in PHARMACY | Comments Off on Planning and Steps to Building the Ambulatory Practice Model

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