Global healthcare expenditure is escalating at an unsustainable rate. The increased amount of medicines being consumed and the rising cost of newer pharmacotherapies have intensified the pressure on healthcare organizations to identify and implement cost-control measures. To combat this problem, SRX was founded in 2015 by a diverse group of industry professionals who saw an opportunity to introduce technology and automation into the management of pharmacy bills for skilled nursing and long-term care (LTC) operators. We interviewed Scott Taylor, the Founding Principal, and CEO at SRX, to know more about the company and its services. Here are a few excerpts of the interview:
Q. What is the history of the company? Tell us about the hiccups it faced initially.
SRX was founded by a diverse group of individuals with a range of expertise and backgrounds in post-acute care—pharmaceuticals, insurance, LTC, clinical expertise, and finance. This broad expertise really made it possible to think through all the areas impacting costs for operators. When we looked closely at opportunities in the LTC space, the complexity involved in pharmacy management was a recurring theme. We felt like an automated solution could make sense of it all. All tech solutions face challenges at the beginning related to refining and perfecting their software. We benefitted from having a partnership with our first customer that allowed us some grace in that process. Their patience and participation in collaborating with us to develop a truly innovative product was invaluable in launching our company publicly to the LTC industry.
Q. Now that the healthcare industry has begun to harvest big data, are you seeing places leveraging the data in meaningful ways?
LTC isn’t a subsector of healthcare where people immediately think ‘high-tech.’ That said, the availability of tech solutions in the industry over the past five, ten years has made significant strides, and we are now seeing data and automation play a major role in operations, patient care, efficiencies, and outcomes across the board. Our own solution, which allows for automated auditing of pharmacy bills, puts the owners and operators in control. The process of reviewing and reconciling claims is too complex to make much headway without technology.
Our dashboard and solutions provide real-time data that allows operators to immediately rectify errors and discrepancies and put automated controls in place that prevent errors from occurring in the first place. This results in significant cost savings for our customers. Another example of leveraging data in meaningful ways is our software integration and access to national pricing databases (AWP, WAC, etc.). This allows us to identify the accurate price of drugs for our customers daily, which provides actionable data and reporting to the pharmacy to hold them accountable to contract pricing.
Q. What is Synergy Summit? What is the benefit to the LTC Industry?
Synergy Summit is an executive-level conference for the LTC industry. Through education, networking, and recreation, the event allows leaders to connect, discuss the most relevant content in the industry, and relax in a five-star setting. Unlike larger conferences, Synergy Summit is different in that it provides an intimate space in which ideas, best practices, and new relationships can take shape. In 2021 we were proud to have Seema Verma, former CMS administrator, join us as our keynote speaker. Her presence at the Summit this year was an incredible addition to our lineup for education, including Mark Parkinson, President, and CEO of the American Health Care Association. This level of content is the norm and is coupled with five-star accommodations and access to the most prestigious networking opportunities in the industry.
Q. Talk about your automated solutions that examine monthly pharmacy bills.
SRXPro is our proprietary software that manifests in a user-friendly online portal that provides our LTC customers with real-time access to their pharmacy claims information. Our software is able to input customer pharmacy contracts and formulary rules and integrate that with national pricing databases, electronic health records (EHRs), and more. What results is a powerful tool that compares each line item against that information to identify pricing discrepancies, duplicate orders, split-bill opportunities, OTC usage, returns and credits, and rebate-eligible claims, which are then automatically submitted for reimbursement. With these tools, operators and facilities are able to maximize rebates and reduce costs.
Q. What are the top three things to look for in a pharmacy partner?
We do a lot of work with our customers, including developing a new contract evaluation tool to help them negotiate contracts with pharmacies that are more equitably aligned with the interests of LTC operators. There are a number of things that all operators should be looking for in their pharmacy contracts or with a pharmacy partner, including 1) transparent pricing terms, 2) rebate payments, 3) automated processes.
Pricing terms vary from pharmacy to pharmacy, and understanding the cost and pricing structure is key to understanding what ends up on a pharmacy bill. Good pharmacy partners create contracts that present fair and transparent terms for both parties. This should include setting pricing terms based on published drug pricing sources such as average wholesale pricing (AWP), wholesale acquisition cost (WAC), or similar. Typically, contracts that employ these pricing sources adhere to a “base plus dispensing fee,” which makes it possible to easily verify pricing and know-how costs are calculated.
Drug manufacturer rebates represent a substantial opportunity for LTC operators to offset pharmacy costs. Good pharmacy partners will offer not only transparent terms regarding rebates but also reporting for rebate-eligible orders. If a third-party or pharmacy is taking a portion or the entirety of those eligible rebates, operators should know they are the rightful eligible party and when they can expect to receive them.
A good pharmacy partner should be using automation and technology to increase transparency, introduce efficiencies, and improve reporting. One of the most critical processes for LTC operators to look for in a good pharmacy partner is whether or not the pharmacy can and will adjudicate claims. Adjudication is a process that allows rules to be automated into the claims process based on contract terms such as quantity restrictions, day supply, refills-too-soon, preferred/excluded drugs, etc. If this isn’t available, LTC customers should expect digital files and reports that can be exported and delivered on time.
Q. How does automation simplify the analysis of all complex data?
Technology is only beneficial if it improves or makes processes simpler. Data analysis is an area in technology where the benefits are obvious. In our world, the amount of data and line items that go into a pharmacy bill isn’t just overwhelming. It is impossible to do manually, depending on the size of the facility. Not only does automation simplify analysis and make actionable reporting possible, it creates transparency where there may not have been any before. This builds trust and integrity into processes where errors, ambiguous contract terms, and questionable business practices were subject to human error, intentional or not.
Meet the CEO
Scott Taylor is a Founding Principal and CEO at SRX. Scott is an investor and entrepreneur and has worked to build and grow a number of other healthcare-related businesses, including co-founding a portable diagnostic company serving the post-acute market and operating and investing in a pharmacy benefit management business. Prior to his involvement in the healthcare industry, Scott was an accomplished executive in the financial services industry. He holds an AB degree in economics from Harvard University.