Challenged by some local residents who are skeptical of recent reports about the potential effect of a CVS pharmacy on Outer Cape Health Services, CEO Pat Nadle confirmed this week that half of the Provincetown health center’s revenue comes from its pharmacy operation. She declined a request to release the specific figures for the pharmacy, saying, “You never know how a competing business could use the numbers.”
Nadle has said that revenue from the OCHS Provincetown pharmacy is essential to support other services that operate at a loss, including the dental clinic, mammography and radiology, and that a CVS pharmacy in town would put those services at risk.
In a June 23 letter to the Banner, retired accountant Richard L. Campbell of Provincetown wrote that Nadle’s statements were “misleading at best.” He noted that OCHS’s fiscal 2015 tax return showed total revenue of $18.6 million, with about $14.3 million coming from patient services.
“The reader is led to believe OCHS’s Provincetown pharmacy operations generate $9 million in annual revenue, leaving only $5 million generated from office/doctor visits at their two other health centers and from their other pharmacy,” Campbell wrote. “While not impossible, this seems highly unlikely.” OCHS also operates clinics in Wellfleet and Harwich, and a second pharmacy in Wellfleet. Campbell also wrote that the issue was “emotionally charged” and that the potential effect on the health service was being used to support an anti-CVS petition.
“We stand by the numbers,” Nadle said Friday. “I went over them again this morning to make sure I had it right.”
At the same time, Nadle acknowledged that “the financial health of the organization is a worry” and that “last year was a particularly troubling year.”
OCHS’s fiscal 2016 tax return shows total revenue of $20.4 million and expenses of $21.2 million, for a net operating loss of $844,000, the largest in the organization’s history.
She said that OCHS had cut its operating losses in half in the fiscal year that just ended on June 30 and that she believed the organization would bounce back once its new expanded Harwich health center opens.
“The only way to improve the bottom line is growth in volume,” Nadle said. “We have pretty much tapped out the market from Eastham to Provincetown, so our best option for growth is in the Lower Cape towns. The expanded Harwich center will make the difference.”
The existing OCHS clinic in Harwich has only five rooms. The new facility will have 15,000 square feet and is expected to open in the late summer or early fall of 2018.
Competition from CVS, which is the seventh largest corporation in the U.S., “is the biggest issue for the Provincetown health center from a risk basis,” said Nadle. But she added that the state budget and the federal health care legislation now before Congress were also major worries. If the Senate’s version of the health care act passes, she said, “the number of uninsured will go sky high — especially working people who are at minimum wage.” The loss of funding would have a “huge impact,” she said, on addiction programs and mental health, pediatric and obstetrics services.
“I hold my breath hoping [those in Congress] come to their senses,” Nadle said.
As a federally qualified health center, OCHS is required to provide care for everyone who needs it, whether they are insured or not. Its pharmacies are also the only ones on the Outer Cape able to offer prescription drugs through the 340B Drug Pricing Program. This enables OCHS to purchase drugs at 30 to 70 percent discounts, which are passed along to patients in full.
To qualify for the discount program, patients must not have prescription insurance and must meet income eligibility requirements: no more than $27,720 for a single person, $37,340 for a two-person household, $56,580 for a four-person household.
Date:July 10, 2017