Thursday, May 09, 2013

Pharmacist Salaries Hit $117K and Keep Climbing

The Bureau of Labor Statistics (BLS) just released the 2012 Occupational Employment and Wages data. Once again, pharmacist salaries grew faster than did overall wages.

The highlights:
  • In 2012, average gross salary for pharmacists at retail, mail, and specialty pharmacies was $117,000—up 2.7% from 2011.
  • Of the 1,089 occupations in the Occupational Employment Statistics (OES) survey, the “pharmacist” classification ranked 35th in compensation. (The top 10 most highly compensated U.S. occupations are all physician-related.)
  • Pharmacist salaries grew faster than did overall healthcare worker salaries and overall U.S. salaries.
Are pharmacists undervalued? Not if money equals appreciation. Read on for the details.

THE DATA

The OES survey is a collaboration between BLS and the State Workforce Agencies (SWAs). BLS funds the survey and dictates its structure, while the SWAs collect most of the data. The OES survey categorizes workers into detailed occupations based upon the Standard Occupational Classification (SOC) system. You can read more about the methodology in the Technical Notes for May 2012 OES Estimates.

The “pharmacist” occupation code is 29-1051. Using these data, I identified pharmacists working at retail, mail, and specialty pharmacies by analyzing the following NAICS (North American Industry Classification System) industries:
  • Chain and independent pharmacies: NAICS 446110
  • Supermarkets with pharmacies: NAICS 445100
  • Mass merchants with pharmacies: NAICS 452000
  • Mail pharmacies: NAICS 454100
You may recall that that I analyzed Census data on NAICS 446110 in Drugstore Sales Drop Along with Drug Trend: Implications for Retail Pharmacy.

Note that BLS computes the annual wage data by multiplying an hourly mean wage by the "year-round, full-time" figure of 2,080 hours. The data below show these full-time gross salary data.

SHOW ME THEIR MONEY

The table below summarizes my analysis of salaries and employment, by dispensing format.


Key facts:
  • In 2012, retail, mail, and specialty pharmacies accounted for about 64% of total U.S. pharmacist employment. Hospitals (not shown) account for a further 23% of pharmacist employment.
  • In 2012, pharmacists at retail, mail, and specialty pharmacies earned annual average salaries of almost $117,000, up 2.7% vs. 2011.
    • For the first time, pharmacists at mass merchants had the highest average pharmacist salaries. Pharmacists at mass merchants, who also saw the biggest pay jump, now earn a full-time average of $117,990 (+3.8%).
    • Average annual salaries at supermarkets and mail pharmacies are lower than those in other retail formats, at about $110,000.
    The National Community Pharmacists Association (NCPA) recently asserted: “Pharmacists are under-appreciated, judging by the design of many public and private sector prescription drug plans.” These salary data tell a very different story.

    13 comments:

    1. thats not much considering how much value they add to the system compared to say some specialist doctors raking in 500k+.

      ReplyDelete
    2. Physicians have "Health care provider status" and make on average $212,000 per year. Nearly two-times the amount of a PharmD.

      (Via Medscape 2012 Study)

      Pharmacists on average are at $117K and are not officially recognized as health care providers. However - studies show the drastic impact pharmacist have on patient therapy outcomes, lowering health care expenses, and preventing the patient from sliding back into their initial condition.

      http://www.pharmacist.com/obtaining-value-recognition-and-compensation-pharmacists-clinical-services

      What's $117,000 today compared to $212,000? That's huge.

      If pharmacists were properly compensated by the same system physicians via Medicare for their "services" and completely included in the total-patient-care-cycle the patient would be better off in many cases.

      Under the current Medicare system, pharmacists are only paid for providing patient care services that are "incident to" that of a physician's service. This means that pharmacists working in outpatient settings can only bill for a small number of services — limiting patient access to those services — and that care for high-risk patients is not covered.

      ReplyDelete
    3. There is a wealth of research demonstrating that pharmacists functioning in a provider or clinical role, as opposed to just dispensing, contribute value to the patient or system equal to 4-5 times their compensation. That's a bargain in any business.

      ReplyDelete
    4. Yes, perhaps pharmacists should be providers. But be careful with your numbers. Increasing average retail, mail, and specialty pharmacist salaries to $212K would add about $18 billion to health care costs. And if salaries continue to increase, expect a substitution effect (more pharmacy techs, more automation).

      ReplyDelete
    5. If the reimbursement situation was really as bad as some claim, then pharmacist salaries would be shrinking, not growing. Right?

      ReplyDelete
    6. Please, I think you are oversimplifying a little. Pharmacists salaries are not necessarily tied to how profitable a pharmacy is. It's based on the market like everything else, and stores with pharmacies get more customers and buy over the counter items as well. There are many stores, like Target, that use a profit-loss model for there pharmacies. The reimbursement statistics are there, and I know you have access to them just like I do. Clinically, pharmacist save hospitals millions of dollars, and if we really added up years of education along with the liability associated with being a pharmacist, it's among the lowest reimbursed in the medical profession.

      ReplyDelete
    7. Hmmm..I wonder what a healthcare economist makes?

      ReplyDelete
    8. According to the OES, about 15% less than a pharmacist. See the Economists listing (SOC 19-3011).

      Sorry to the bearer of ... good news?

      ReplyDelete
    9. Pharmacists only consult with patients about 15-20% of the time. This means that for 8 out of every 10 visits, a machine would be just fine.

      ReplyDelete
    10. Mark,

      Yes, I agree that pharmacists can be underutilized relative to their professional training. Certain activities can/should be delegated to less-highly trained and compensated employees, e.g., techs, automated filing machines. In reality, not every prescription requires the full suite of pharmacist capabilities. This is a challenge to today's pharmacy industry economics, per my comments in What Free Generic Lipitor Says about Pharmacy's Future.

      While pharmacists may not complain about salaries, they do complain about reimbursement. Since payroll expenses are 60%-70% of a pharmacy's gross profits, complaints about reimbursement are an indirect critique of salaries.

      Adam

      ReplyDelete
    11. Adam,


      Sounds like we have some agreement and common ground to build upon.


      As far as pharmacist complaints on reimbursement, the only one's I here about are when a drug is reimbursed $72 below acquisition cost. That is the amount I was told yesterday by a pharmacist. Regardless of the reimbursement on all of the other prescriptions dispensed, no business should have to pay to provide a service. I think if there were more transparency in MAC prices, and a better system to review acquisition cost in this circumstance, many of the complaints about reimbursement would subside.

      ReplyDelete
    12. Which is better, less pharmacists making making 200+k per year or more making 100+k per year. Oversimplifying?? yes, but that is what you would get. School teachers and marines deserve to paid more as well, I'm sure they would be happy with 100+k per year.

      ReplyDelete
    13. Mark -

      So, pharmacies lose money on every prescription? Yet, pharmacist salaries continue to rise and very few pharmacies go bankrupt? Something doesn't add up.


      A

      ReplyDelete

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