When Cincinnati-based UC Health pitches a new retail pharmacy to hospital leadership, Vice President of Pharmacy Services Jeff Akers, PharmD, does not frame it as a request for another pharmacy. He positions it as an investment in the health system’s ambulatory strategy.
“Financial sustainability is an important part of the equation, but the business case really goes well beyond just dispensing margin,” Dr. Akers said. “We look at the entire economic contribution of the pharmacy.”
That includes prescription volume, payer mix, reimbursement, acquisition costs, labor and operating expenses and ultimately contribution margin, he said. UC Health also evaluates downstream value, including medication adherence, clinical service and pharmacy referral opportunities, patient assistance programs and support for ambulatory clinic practices.
Dr. Akers said he works closely with his counterpart on the ambulatory team to establish expected volume, revenue, margin, operating costs and a break-even timeline for each proposed location, then pairs that with the clinical and strategic case for patients.
“Leadership needs to know that we’re not building locations simply to increase the number of pharmacies,” he said. “We’re building locations where the patient and clinical and financial business cases all make sense to provide a solid return to our patients and the organization.”
UC Health has opened six retail pharmacies, two of them within the past 13 months. Dr. Akers said the health system’s approach has shifted from proving the model could work to a deliberate, criteria-driven expansion strategy.
Retail pharmacy became a strategic priority after leadership began accurately tracking electronic prescription capture rates in the summer of 2023, showing how much prescription volume was leaving the health system, according to Dr. Akers.
Site selection now centers on where a pharmacy can have the greatest impact rather than available real estate, he said. That means mapping the system’s ambulatory provider footprint, identifying high-volume clinics and understanding where patients face medication access or adherence gaps before evaluating a location.
“I think the biggest mistake is thinking retail pharmacy is primarily a real estate decision,” Dr. Akers said. “It’s really a patient care, physician engagement and pharmacy economics decision.”
UC Health is evaluating at least four additional sites that meet its capital investment criteria, though Dr. Akers said the system is not fixed on a specific location count.
“I don’t want our success to be measured by whether we have seven, eight or 10 pharmacies,” he said. “I want it to be measured by whether each pharmacy is improving access for our patients, supporting our clinicians, improving medication outcomes and contributing overall value to our organization.”
