October 26, 2016

Pharmacists Can Provide the Right Prescription for a Projected Crisis in Health Care

Edward J. Timmons

Associate Professor of Economics, Saint Francis University

Conor Norris

Research Analyst, Knee Center for the Study of Occupational Licensing
Summary

In short, states may actually have a way to counteract our growing shortage in caregivers. Loosening restrictions on CLIA waivers and allowing for an expanded role for pharmacists could provide patients with the same quality (or perhaps better) health care without increasing costs.

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The demand for health care in the United States is growing as the average age of our population increases. Because of this change in demographics, the Department of Health and Human Services expects our shortage of primary care physicians to reach 20,000 by 2020. Mid-level health care professionals are starting to fill the void, but state-level regulation is stifling their considerable potential.

Pharmacists are a good example: Mid-level professionals who could do more to help patients but often cannot because of seemingly arbitrary barriers that appear to have little effect on health care quality or safety. Our new research for the Mercatus Center at George Mason University lays out a relatively simple fix.

Under the Clinical Laboratory Improvement Amendments(CLIA) of 1988, pharmacists can obtain a waiver allowing them to perform routine tests for patients on site, such as for blood glucose levels or strep throat. Patients are then able to save money and avoid visits to doctors or outpatient clinics.

Requirements to obtain CLIA waivers vary significantly at the state level. The general process requires pharmacies to meet certain standards and pay a certificate fee every two years. Washington state, for example, automatically grants CLIA waivers to all pharmacies who are licensed to perform medical testing. Other states such as Nevada and California make the process more difficult—requiring pharmacy lab personnel to obtain licenses or requiring that lab directors be physicians.

As recently as 1999, nine states had not granted any pharmacies CLIA waivers. Only Texas granted more than 50. By 2014, 33 states had approved more than 50 waivers and Hawaii was the lone state that did not have a pharmacy with a CLIA waiver. Texas now has over 1,000 pharmacies with waivers. This growth allows more individuals to take advantage of the lower costs and greater convenience of pharmacy testing.

Broadly speaking, recent research shows that reducing restrictions on health care professionals reduces the cost of health care without impacting the quality of care provided. In a study published in January by the Mercatus Center at George Mason University, one of us (Timmons) found that restricting the scope of practice for physician assistants increased Medicaid claims costs by 11 percent. If states made it easier for pharmacies to obtain CLIA waivers, effectively granting pharmacists a broader scope of practice, we might expect to see a similar decrease in their prices.

In our newest research, we estimate what effect the spread of CLIA pharmacy waivers has had on the labor market for pharmacists and lab technicians—and what that might mean for patients. Despite their authorization to perform more services, pharmacists and lab technicians are working about the same number of hours as before. Because they are able to absorb the added workload, there does not appear to be any added pressure on the prices of these services. This also shows up with respect to wages—we observe no difference in wages between states with large numbers of CLIA pharmacies versus states with relatively fewer CLIA pharmacies.

In short, states may actually have a way to counteract our growing shortage in caregivers. Loosening restrictions on CLIA waivers and allowing for an expanded role for pharmacists could provide patients with the same quality (or perhaps better) health care without increasing costs. A recent medical study, for example, found near 100% accuracy in diagnosing the presence of strep throat in patients using newer technology that pharmacists are able to utilize under Federal law (rapid-antigen detection)—a potential improvement over traditional testing. Pharmacists currently do not take full advantage of CLIA waivers, but are becoming more aware of the opportunity to perform some tests on their own. Giving them more freedom to serve patients seems like the right prescription to stall a future health care crisis.