RESEARCH OF COMPUTERIZATION AND IMPLEMENTATION OF THE E-PRESCRIPTION FOR INDIVIDUAL PHARMACIES

ISSN 1691-5402 ISBN 978-9984-44-071-2 Environmen. Technology. Resources Proceedings of he 8h Inernaional Scienific and Pracical Conference. Volume I1 Rēzeknes Augsskola, Rēzekne, RA Izdevniecība, 2011 RESEARCH OF COMPUTERIZATION AND IMPLEMENTATION OF THE E-PRESCRIPTION FOR INDIVIDUAL PHARMACIES Elia Ardava 1, Oskars Onzevs 2, Ilmars Viksne 2, Ivars Namaevs 2 1- Riga Sradins Universiy 16 Dzirciema sr., Rīga, LV 1007, Lavia Ph: +(371) 29167338, e-mail: elia.ardava@inbox.lv 2- School of Business Adminisraion Turiba, Deparmen of Informaion Technology 68 Graudu S, Riga, LV 1058, Lavia Ph: +(371) 67616358, +(371) 67615520, +(371) 67619460; fax: +(371) 67619152; e-mail: Oskars.Onzevs@uriba.lv; Ilmars.Viksne@uriba.lv; ivars@uriba.lv Absrac. The paper deals wih esablishmen, implemenaion and developmen of elecronic prescripion or e-prescripion in conex wih e-healh soluions. I includes inroducion of a numerous innovaive soluions, which are o be commied for daa informaion flow, daa managemen and funcionaliy as well as of esablishmen of a new feasible communicaion forms beween docors, paiens and pharmaciss. The aim of he sudy is o describe some echnical aspecs and funcionaliy of implemenaion of e-prescripion sysem for medical insiuions, paiens and pharmacies; and, calculaion of he oal cos of implemenaion (TCI) for Lavian individual pharmacies. Several expecing financial aspecs, which have encompassed evaluaion of TCI, calculaing payback ime, ROI, NPV, and IRR are o be calculaed. On he bases of hese financial calculaions, he primary invesmen of implemenaion of e-prescripion for individual pharmacies and iniial coss are deermined. Impac on individual pars of TCI wih he scope o individual pharmacy size, locaion, exisence or absence of formal informaion sraegy has calculaed. According o colleced daa, research paper shows how proposed elecronic sysem is going o implemen among Lavian individual pharmacies. Keywords: elecronic prescripion, Lavian individual pharmacies, oal cos of implemenaion. Inroducion Wih he adven of informaion echnology pharmacy has been ouched wih a new paradigm, which is underpinned in 2006 by Inroducory Handbook. This handbook is devoed o and emphasized pharmacy pracice approach ha should be carried ou by docors, paiens, and pharmacies. Necessiy of new paradigm is poined ou on a Foreword of Inroducory Handbook and i can sound as following: Pharmaciss should move from behind he couner and sar serving he public by providing care insead of pills only. There is no fuure in mere ac of dispensing. Tha aciviy can and will be aken over by he inerne, machines, and/or hardly rained echnicians. The fac ha pharmaciss have an academic raining and ac as healh care professionals pus a burden upon hem o beer serve he communiy han hey currenly do. This new approach has named pharmaceuical care. On he bases of given definiion Inernaional Pharmaceuical Federaion (FIP) gives a key definiion of pharmaceuical care. Pharmaceuical care is he responsible provision of drug herapy for he purpose of achieving definie oucomes ha improve or mainain a paien s qualiy of life. Pharmaciss, being effecive healh care eam members, may need skills and aiudes enabling hem o assume many differen funcions. The concep of he seven-sar pharmacis was firs inroduced by World Healh Organizaion (WHO) and can be aken up by FIP on 2000 in is general policy saemen on Good Pharmacy Educaion Pracice, which should cover such roles: caregiver, decision-maker, communicaor, manager, life-long learner, eacher and leader. According o Inroducory Handbook, erm researcher is added in i as an eigh`s funcion. Wih he naked eye here can be able o see ha, in order o realize pharmacy paradigm, i 62

Ardava E., Onzevs O., Viksne I., Namaevs I. RESEARCH OF COMPUTERIZATION AND should be necessary o inroduce a numerous innovaions ino pracice, which should be enailed by Informaion and Communicaions Technologies (ICT). In addiion, pharmacis in his everyday work ough o be engage in managemen, a sysem, which is complicaed o manage. Concep of e-prescripion European Commissioner for Digial Agenda, Neelie Kroes saed [1]: e-healh is our key o more susainable healhcare - i's as simple as ha. There's lierally no oher way o pay for and manage he workload our sysems will experience in he coming years. And given ha e- Healh iniiaives like elemedicine are leading o a safer, longer and higher qualiy of life - he quesion isn' wheher o inves. The quesion is - where do I sign up? The clear answer would have consised of esablishing ineroperable e-healh services for all sakeholders; in which, one cerain and main par would be elecronic prescripion informaion sysem (IS), so called e-prescripion. e-prescripion means a medicinal prescripion, i.e. a se of daa like drug ID, drug name, srengh, form, dosage and/or indicaion(s), provided in elecronic forma. This is undersood as he prescripion of medicines using sofware, he elecronic ransmission of he prescripion from he Prescriber (he Healh Care Professional or Docor) o a dispenser (e.g., pharmacy or Pharmacis), where he prescripion is elecronically rerieved, and he medicine is given o he paien (e.g., e-dispensaion) and informaion abou he dispensed medicine(s) is repored elecronically. Decision on creaing e-healh soluions in Lavia was underaken ino an effec on 17h Augus, 2005 when e-healh guidelines and relaed documens having been acceped by he Cabine of Minisers, issuing an order Nr. 560 which documened e-healh Guidelines. While anoher imporan linked up documen named Archiecure of he Informaion Sysems of he Healh Secor describes high level archiecure for sysems, which have o be ensured he realizaion of e-healh Program [2]. e-prescripion informaion flow In order o improve he qualiy of paiens healh care, in which one imporan par should be pharmaceuical care, here are going o be unfolded and mainained Elecronic Healh Card (EHC) record. There where will be summarized and kep ogeher basic daa from all available sources picked up from paien`s differen medical records ino one common daa basing informaion sysem. Opening paien`s EHC medical personal, wherever i would be locaed will be able o access o paien`s daa, diseases, diagnoses, diseases ess, vaccines, paens used medicine and more oher necessary informaion for reamen and recovery of he paien healh. e-prescripion [3] means subsiuing exising documens` flow of he paper forma beween medical insiuions and pharmacis wih elecronically creaed documens; herefore, esablishing elecronic based services for docors, paiens and pharmaciss. Accessibiliy by all paries o he so call drug journal can o be depended from each group before-given prioriy level. e-prescripion will be inegraed ino e-delivery sysem [4] as a par of a common cenralized daa exchange uni, from where medical insiuions and pharmacies will be able o connec hrough heir local informaion sysem or, for insance, hrough using WEB poral. As an advanage of his inegraed based soluion i should righ o menion ha each paien would be able o ge access o his/her healh care informaion as well as o pharmaceuical care informaion, especially o prescribed drugs. There is behaviorally speaking evidence for creaing a new relaionships and communicaion among docors, paiens and pharmaciss, which are o be supposing on cooperaion and parnership. 63

Ardava E., Onzevs O., Viksne I., Namaevs I. RESEARCH OF COMPUTERIZATION AND Implemenaion of e-prescripion can be ouched wih clinical daa flow (reamen daa), financial informaion flow and adminisraive daa flow. These informaion flows [5] should be ensure accomplishmen of such a main funcions of e-prescripion: 1. Mainenance and disribuion of pharmacy goods classificaory for recipes` medicine, sold wihou prescripion medicines` and for he medical devices. 2. Recepion of he daa from Healh Paymen Cenre (HPC) on he righs for reimbursable drugs and he medicine device o be invoiced. 3. Opporuniies o modify and added e-prescripion righs from adminisraive inerface. 4. Opporuniy among pharmacies o receive informaion abou e-prescripion (based on paiens ID) and o be regisered e-prescripion ino he sysem for prescripions full or parial hand ou, using pharmacies IS or e-healh poral. 5. Opporuniy for docors o prescribe elecronic prescripions using medical insiuion IS or e-healh poral. 6. Paiens and physicians daa access righs o checked by EHC sysem. 7. Paymen informaion of processing of using e-booking sysems financial module. 8. Paiens work wih heir recipes (using e-healh poral) in order o see prescripion o be prescribed o paien and paiens medical supplies o be received. e-prescripion funcionaliy Inroducion of e-prescripion in Lavia and; herefore, is implemenaion coss, as from pharmacies wholesaler or pharmacies chains ill individual pharmacies poin of view are closely relaed of inroducion of naional e-healh sysem ino one inegraed uni. As menioned before, i provides creaing a concepual developmen of he e-healh and IS archiecure ino one unified single naional-wide level. Tha means, having been inegraed separae IS secors ogeher wih records of naional significance (CSDD, URL, VZD, PMLP ec.) ino one inegraed IS [2]. Thus, creaing a single e-environmen is relaed o have access o boh healh care and pharmaceuical care informaion. Organizaion which is responsible for inroducion of e-prescripion in Lavia is he Cenre of Healh Economics (CHE) aracing from ERAF budge (2007-2013) 7 408 000 EUR for he firs sage. There will in his firs sage be inended o be inroduced EHC (1 668 000 EUR); healh inegraion plaform (941 000 EUR); e-prescripion, e-appoinmen (appoinmen wih a docor), e-refer (refer o docor) (all oal 2 126 000 EUR) [6]. e-prescripion can be used for and geing access o: (1) prescripion of he convenional recipe; (2) prescripion of he special recipe; (3) informaion abou prescribed medicine wihin EHC IS; (4) o emergency medicine IS; (5) vigilance repors; as well as (6) business inelligence. All above menioned are inegraed hrough Elecronic Message Exchange (EME) o e- Prescripion elecronic service. The funcionaliy [6] of he e-prescripion is shown on Fig. 1. As can been seen from Fig.1. e-prescripion IS can basically has ensured prescripion circulaion beween docor, pharmacis and paien. 64

Elecronic Message Exchange Ardava E., Onzevs O., Viksne I., Namaevs I. RESEARCH OF COMPUTERIZATION AND e-prescripion service 1 2 3 4 Drawn e-prescripion Scanned Bar Code Informaion abou e-prescripion Issued medicine 1 Docor 2 3 4 Pharmacy 1 Issued medicine wih bar code (1s sage) e-prescripion badge (2nd sage) 1 4 Paien Drug 4 2 Fig.1. The funcionaliy of he e-prescripion Research objec and asks On April 30, 2010, he number of pharmacies are decreased reaching 846: among hem 124 pharmacies - pharmacis as one of he owners of he pharmacy; 87 pharmacies - pharmacis as an owner of he pharmacy; 216 pharmacies - pharmaciss, assisans of pharmacis, persons wih oher educaion or collecive body of pharmacy. There are 427 individual pharmacies, which mainly are locaed in region owns and region small rural areas. These pharmacies are he objec of he research, which means, approximaely a half from he oal number of all Lavian pharmacies. The res 418 pharmacies belong o he pharmaceuical chains, which are mainly locaed in 9 ciies Riga, Jūrmala, Jēkabpils, Jelgava, Daugavpils, Liepaja, Venspils, Valmiera un Rēzekne, as well as, in large regional ciies. Our ask was o be sizing up how Lavian regional owns` and regional small rural areas individual pharmacies realizes curren provision of law a pharmaceuical care, how he owners of he pharmacies look forward on inroducion of ICT for expeced inroducion of elecronic prescripion. Comparing o oher pharmacies individual pharmacies mainly are locaed a region small rural areas where he densiy of he populaion is low, bu he serving area broad. Problems will be risen for hese pharmacies, if small pharmacies should be o financed inroducion of pharmacy IS and is furher inegraion o e-prescripion by hemselves. Iniially, paper forma prescripion will be anicipaing ogeher wih elecronic prescripion. For long erm boh elecronic and paper forma migh o be economically unprofiable for governmen. Thus, small pharmacies should be ready o up-o-dae heir operaions. Having 65

Ardava E., Onzevs O., Viksne I., Namaevs I. RESEARCH OF COMPUTERIZATION AND unable o do ha, i can ake negaive impac on an availabiliy of he medicine and healh care a rural region areas. Due o ranspor problems, no all counryside populaion will be able o go o he neares regional ciy for necessary medicine, So, wo main research asks has been risen on issuing: 1. Performing quesionnaire survey, define pharmacies aiude and readiness owards pharmaceuical care. 2. Couning all primary coss, consis wih inroducion of elecronic prescripion and possible consequences. Coss express analysis for ICT sysems inroducion One of he key poins of inroducion of ICT sysem for Lavian individual pharmacies is capial budgeing. From he business poin of view, he inroducion of he new IS ough o have go an addiional profi or a leas cos decrease for individual pharmacies. Operaions around individual pharmacies we canno evaluae from he business perspecive. Calculaion on capial budgeing is based on projec managemen and we assumed ha ICT sysem inroducion is looking a projec. Once he poenial capial budgeing has been idenified is evaluaion is based on he following mehods. Firs mehod is o calculae ne presen value (NPV), which relies on discouned cash flow (DCF) echniques. To implemen his approach i should be proceed as follows. (i) Find he presen value of each cash flow, including boh inflows and ouflows, discouned a he ICT sysems cos. (ii) Sum hese discouned cash flows and his sum is defined as he ICT sysems NPV. (iii) If NPV is posiive, ICT sysem should be acceped, while, if he NPV is negaive, i should be rejeced. The equaion for he NPV is as follows: n CF NPV 0 (1 r) where, CF - is he expeced ne cash flow a period, Ls r - is he ICT sysem`s cos of capial or discoun coefficien - is is life (in years) Ne cash flow a period is as follows: CF NI Dep where, NI - is ne profi a period, Ls Dep - depreciaion a period, Ls Ne profi calculaion which is based on gradually able calculaion mehod can be ransformed in one common equaion where corporae income ax is o consider as a funcion: NI NOI Dep I T ( NOI ; Dep ; I ) where, NI - ne profi a period, Ls NOI operaing profi including depreciaion a period,, Ls Dep - depreciaion a period, Ls I ineres paymens a period, Ls T(NOI ; Dep ; I ) - corporae income ax a period as a funcion of operaing profi, depreciaion a period, and ineres paymen a period in Ls. Second mehod is o calculae he ICT sysem payback ime. Third, he reurn on invesmen (ROI) and, fourh, inernal rae of reurn (IRR). Primary invesmen ha anicipaes iniial coss for hardware and sofware has been esimaed in range from 1 500,- o 3 000,- Ls. Calculaions is based on he smalles monhly mainenance coss 35,- Ls and coefficien of discoun 0.05. Original calculaions show ha here are no expeced no subsanial coss decreases nor revenue increases. In fac, he inroducion of he ICT sysem will no be able o creae an 66

Ardava E., Onzevs O., Viksne I., Namaevs I. RESEARCH OF COMPUTERIZATION AND addiional cash flow for individual pharmacies. There are resricions in legislaion in Lavia on issuing he licenses for pharmacies operaions` depending from he number of local inhabians. Tha is he answer why in rural areas unlike large ciies here is only one pharmacy wih permanen number of is cliens. I is poenially impossible subsanially increase a number of is cliens. As a resul, individual pharmacies are no a uni of business in is normal sense. Thus, he public auhoriies` decisions in case of inroducion of ICT sysem are imporan for hem. Calculaing capial budgeing here is evaluaed individual pharmacies cash flow a en-year period saring from inroducion of he ICT sysem from ground. I is based on and o be depending from curren annual profi (profi before inroducion of he ICT sysem). If curren annual profi does no cover 50% from primary invesmen hen here is anicipaed o ake credi from bank a 5-year period wih an ineres rae from five o 10%. Calculaion shown on Table 1 illusraes necessary curren profi derived from foregone income for hree differen groups (for all groups NPV>0). (j) Foregone income is less han 20% from oal annual profi. Individual pharmacies belonging o his group, whaever is he primary invesmen, will no ouch wih problems of inroducion of he ICT sysem. (jj) Foregone income is more han 20%, bu less he 50%. Individual pharmacies belonging o his group are under discussion. (jjj) Foregone income is beween 50% and 100% from annual profi. Individual pharmacies belonging o his group are impossible o inroduce ICT sysem and e- prescripion, also. Table 1. Necessary curren profi, grouped, as foregone incomes, afer sysems inroducion Primary invesmen, Ls Curren profi, in Ls, if foregone income afer sysem`s inroducion (NPV>0) 50% <100% 20% <50% <20% 1500 >650 >1300 >3850 2000 >700 >1450 >4250 2500 >750 >1550 >4700 3000 >800 >1700 >5050 On he basis of his calculaions, here can be prediced ha he inroducion of he sysem is no possible a all, if curren profi is less han 650,- Ls. Moreover, financially weak individual pharmacies have currenly incomplee infrasrucure and inroducion of he sysem charges higher invesmens for hem. Tha means, afer 10 year period he new sysem will creae losses and will go bankrup hose pharmacies whose curren profi does no oday reach 800,- Ls. Pharmacies wih annual profi, which from 1 300,- Ls o 1 700,- Ls are also hreaened and inroducion of he new sysem is under consideraion. In general, his sysem could be inroduced a pharmacies, whose curren profi reaches beyond 3 850,- Ls. Capial budgeing research has been esablished a fac ha aking a credi from bank marginally influence he daa shown on Table 2. Because, in relaion o primary invesmen here are comparaively high operaing coss, which annually are 420,- Ls or 14% o 28% of curren invesmen. Figure 2 shows sample of 36 provincial owns` and counryside pharmacies urnover in Lavian las from he populaion of 427 pharmacies. 67

Ardava E., Onzevs O., Viksne I., Namaevs I. RESEARCH OF COMPUTERIZATION AND 50 000-100 000 32% ill 20 000 8% 100 000-200 000 16% 200 000-500 000 16% 20 000-50 000 28% Fig. 2. Provincial owns` and counryside pharmacies urnover in las In order o perform an express analysis he daa is proporionally aken based on he pharmacies annual urnover, see Figure 2. Having ino accoun express analysis and exper esimae, he poenial profi depending from he pharmacies urnover has calculaed. This is of course depended from differen addiional collaeral facors: space ren, salary ec. As a resul, here has a firs approximaion of esimaed profi depending from pharmacy urnover see Table 2. Table 2. Number of pharmacies and esimaed profi depending from pharmacies urnover Nr Turnover of pharmacy and percenage from oal number of pharmacies Number of pharmacies Esimaed profi 1. o 20 000 (8%) 34 No 2. 20 000 50 000 (28%) 120 No 3. 50 000 100 000 (32%) 137 o 3 000 4. 100 000 200 000 (16%) 68 3 000 5 000 5. 200 000 500 000 (16%) 68 5 000 10 000 Conclusions From he financial poin of view inroducion of he sysem is no possible for 36% (8% + 28%) from oal number of pharmacies. Moreover, financially weak pharmacies have incomplee infrasrucure and inroducion of he sysem charges higher invesmens o hem. These pharmacies canno increase heir siuaion simply borrowing money from bank, because in relaion o primary invesmen here are exised comparaively high operaing coss, which annually consiue 14 o 28% from primary invesmen. Planning sysem would be successfully inroduced by pharmacies whose profi reaches 3 850,- Ls. Problems will be risen for 34% all regisered pharmacies or 68% individual regisered pharmacies in Lavia. I is quie clear ha large half of individual pharmacies will no separaely be ready o inroduce necessary innovaions in heir pracice. The given research of pharmacies has also shown ha large half of pharmacies have only a weak sense on above menioned innovaions and necessiy of esablishmen of he sysem. Afer sudy of he problem, here would be several soluions: join venure of pharmacies, governmen suppor, aracion of EU srucural funds ec. 68

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