PharmacyThisWeek: Guest post from Ryan Schell, PharmD Re the Pharmacist Job Crisis (Update)

December 5, 2017

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Welcome to PharmacyThisWeek!

The following is an updated guest post by Ryan Schell, PharmD Re the Pharmacist Job Crisis. Dr. Schell is an Emergency Medicine Clinical Pharmacist, Mount Carmel West Hospital, Columbus, OH. You can see Dr. Schell’s previous guest post here.

Greetings again! The Bureau of Labor Statistics (BLS) updated their pharmacist job outlook page with new projections, so this post will follow up on my prior analysis to see what, if anything, changes based on these new numbers. Below is a table which compares the new pertinent data with the previous numbers:

Previous 2014-2024 numbers

Updated 2016-2026 numbers

Number of jobs

297,100

312,500

Job Outlook

3%

6%

Employment change 2016-2026

9,100 (910/year)

17,600 (1,760/year)

https://www.bls.gov/ooh/healthcare/pharmacists.htm

First thing you will probably notice is the projected growth almost doubled from the previous estimates, from 910 jobs a year to 1,760, an increase of 5.6% (6% rounding like the BLS did). The estimated number of jobs in the new projections is a full 15,400 more than the previous estimate as well, which may get some people wondering why, if the jobs increased by 7,700 a year in the two year period between these projections, is future growth predicted to be so much less.

All the BLS data is gathered from individual state occupational agencies by Projections Central, and can be found at www. Projectionscentral.com. Their projections are based on the current available data which can and will change when newer data becomes available. It’s also important to remember that since the BLS definition of pharmacy jobs is anybody receiving a paycheck for providing pharmaceutical care, this number likely represents full time, part time, PRN, and pharmacy practice residents (700 new residency positions created nationwide from 2014 to 2017). The best we can do is speculate about the source of this growth. It could be unforeseen job creation. It could be 5,000 full time jobs being split into 20,000 part time and PRN jobs. It could be a correction to previously inaccurate data. It could be (and probably is in my opinion) some of each and more. Regardless of the way it happened, it’s the newest data available.

You may or may not have seen my last post and analysis of the data from the BLS and pharmacy education and graduation data from the American Association of Colleges of Pharmacy (AACP). I won’t repeat it all for the sake of time so if you want to see how I came up with my estimates you will have to refer back to the full post, but here is a table recapping the major numbers:

Estimated Practicing Pharmacists in 2015

282,000

Total Estimated Pharmacy jobs in 2015

301,395

Estimated Surplus Jobs in 2015

19,350

Estimated Annual New Jobs Created 2016

3,425

Estimated Pharmacists Leaving Practice 2016

6,475

Estimated Average Annual Job Openings 2016

9,900

First time PharmD degrees awarded 2016

14,556

Estimated Pharmacy Graduate Surplus

4,656

Estimated Years to Pharmacist Surplus

4

The analysis of average annual pharmacy job openings and pharmacy graduation rates pointed to a completely saturated pharmacy job market in the United States and a resulting surplus of pharmacists around the year 2020. If I were to use the estimated growth rate from the past analysis (9900 average annual openings) with the new higher jobs estimate as a starting point, it would push the predicted tipping point out to 2023. Even in the best case scenario, the estimates we have still show that the pharmacist graduation rate still outpaces pharmacist job creation. If we actually are creating jobs at a rate of 7,700 a year, that would be enough growth to reverse this trend. Here’s hoping.

The Pharmacist Demand Indicator (PDI) has some new information for us too:

 

 

The latest numbers from the PDI seem to paint a rather bleak picture, with all non-manager pharmacist demand dipping back down below three again during quarter three of 2017, indicating a larger pharmacist supply than jobs available. If you follow the PDI, you will recall that the overall PDI for generalist/staff was below three for the first three quarters of 2016, but this is the first time I can remember seeing the specialized pharmacist demand indicator below three as well. Since this seems to be the source of a lot of discussion in the pharmacy forums, I think it would be beneficial to discuss the PDI in more detail to make sure we understand exactly what it is and what the appropriate way to interpret it is.

We can start from the description stated on the website www.pharmacymanpower.com where all the PDI data can be found:

“The Pharmacist Demand Indicator (PDI) reports perceptions of the demand for pharmacists among a panel of individuals that participate in the hiring of pharmacists on a direct and regular basis. The panel is intended to represent the major geographic and practice sectors of pharmacy practice in the United States. Panelists are surveyed quarterly and asked to rate on a scale from 1 to 5 whether they perceive difficulty in filling open positions or whether demand is less than supply. The PDI includes ratings from panelists on the demand for pharmacists that are considered a) staff or generalist pharmacists, b) managers or managerial pharmacists, and c) specialized (such as critical care, informatics, MTM, nuclear, etc.) pharmacists.”

The demand categories in the rating system are the same as one should use to interpret the results:

1. Demand is much less than the pharmacist supply available
2. Demand is less than the pharmacist supply available
3. Demand in balance with supply
4. Moderate demand; some difficulty filling open positions
5. High demand; difficult to fill open positions

The PDI score is based on the individual opinions of a group of volunteers who routinely hire pharmacists, and their perception of whether or not they perceive having difficulty filling their own positions. This certainly opens the door to some bias, and it can be argued that individuals responsible for filling positions are more likely to lean towards reporting it difficult to fill open positions, which may create a tendency to report higher numbers, skewing the results in favor of showing difficult to fill positions, which many may interpret as a surplus of jobs. If you were to instead gather the opinions of job seekers, one could expect these responses to be leaning in the direction of reporting job openings more difficult to find and therefore, skewing the PDI data towards lower numbers showing an excess supply of pharmacists. Notice also that this survey is not designed to collect data on a total demand for pharmacists, but rather it tracks how well the current supply of pharmacists meets the current demands of the positions available at that point in time. It does not directly show the total number of pharmacist job seekers vs. total number of openings, only how well the current applicant pool is meeting the employment demands of the respondents. It is also worth noting that the PDI does not attempt to forecast future demands because it is not designed to do so. All you can do when trying to project out is to look at the trend in the data and speculate as to whether or not it will continue.

There certainly is value and utility in the kind of data the PDI provides, the main advantage being it can be collected and interpreted quickly and easily. Data like this is very useful when generating questions and hypotheses, but it does not provide scientific proof of a hypothesis, so treat it accordingly. An appropriate response to the PDI data could be to say to ourselves “it looks like the survey participants are now seeing a larger supply of qualified candidates than they have need for, does this data mean there now a pharmacist surplus?” What it should not prompt us to say is “this is proof of a pharmacist surplus”.

There are also several acute reasons regarding the current market and environment as to why hiring and job creation within our industry may be down at this exact moment. Off the top of my head, the uncertain fate of the Affordable Care Act could certainly be effecting job creation and hiring as hospitals, clinics and community pharmacies may be waiting on expanding service lines and creating jobs until they can be more certain of the environment going forward. There is also the possibility that many community pharmacies including the 800 pound gorillas named CVS and Walgreens may be keeping their hiring in check while they keep an eye on the 1000 pound grizzly named Amazon who may be hungrily eyeing their prescription volume.

As I previously stressed, getting caught up in exact numbers and dates when looking at estimates and projections is not a good practice because they are never going to be exact and can change quickly. When looking at this kind of data, you will be better served to focus on the overall trends in the data, which have remained largely unchanged. Even though some of the newer estimates are more favorable, the bottom line remains the same. At this point in time, the BLS and AACP estimates still show that we are creating pharmacists faster than we are creating pharmacist jobs, and the PDI survey trends still support this.


We update the following employer’s openings each week so be sure and check out their latest available positions. Unless otherwise noted these employers have openings in multiple states so be sure and search on the state and/or job title you are most interested in. If you have any questions just let me know.

Accreditation Council for Medical Affairs (ACMA)
AIDS Healthcare Foundation
All Children’s Hospital
Apexus
Baptist Hospital of South Florida
Becton, Dickinson and Company (BD)
BizEx
Boston Medical Center
Cameron and Company, Inc.
CareerStaff Rx
Central Admixture Pharmacy Services
CardinalHealth
Commonwealth Health Corporation
Comprehensive Pharmacy Services (CPS)
Cox Health
CVS Health
Eastern Maine Healthcare Systems (EMHS)
Express Scripts
Froedtert Health
Genoa, A QoL Healthcare Company
GNYHA
Greenville Health System
HCA
Intermountain Healthcare (UT and SE ID)
Jackson Pharmacy Professionals
JFK Medical Center
Johns Hopkins Home Care Group
Johns Hopkins Medicine
Lahey Health
Lee Health
Mission Health
Navitus Health Solutions
OnePoint Patient Care
Pharmacy Systems, Inc.
Pharmapreneur Academy
PHI Pharmacy
Preferred Homecare
Premier, Inc.
Providence Health & Services
RPh Professional Search
Samaritan Health Services
Script N Go
Sentara (SE VA and NE NC)
Skagit Regional Health
Soleo Health
St Helena Hospital Napa Valley
Tahoe Forest Hospital District
The Queen’s Medical Center
UCLA Health
UHG/OptumRx
University of Utah
Veterans Administration
Vizient
Walgreens – Central Pharmacy Operations

I hope everyone has a great week! You can always reach me at my email or cell number below, thanks!!

Kevin Mero
President
kevin@pharmacyweek.com
cell: 210 872-6160

P.S. As of today we have 22,646 Pharmacy jobs on our website! We now have more pharmacy jobs than LinkedIn or Indeed!!

 

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3 Comments → “PharmacyThisWeek: Guest post from Ryan Schell, PharmD Re the Pharmacist Job Crisis (Update)”

  1. Paige Sheppard 1 week ago   Reply

    How do you feel the DIR fees are going to impact the job market? I see more independents going under and closing thereby decreasing the job creation and possibly shortening the saturation time. Your thoughts?

  2. Ryan Schell 1 week ago   Reply

    I work in a hospital so I can’t say I know all the ins and outs, but here is what I know about DIR fees. DIR stands for direct and indirect remuneration fees, which started out as a way for the Center for Medicare and Medicaid Services (CMS) to make sure any savings or rebates negotiated by pharmacy benefits managers (PBMs) with drug companies were passed on to CMS who was the ultimate payer.

    The term DIR has since become the moniker assigned to a multitude of fees imposed on community pharmacies by PBMs, many of which are confusing and costly, including fees for participation in PBM networks, reimbursement reconciliation, etc. Some of it is incentive based, similar to the value based purchasing system Medicare uses for hospitals. These fees can reduce pharmacy reimbursement and even make it difficult to know how much you will be paid in the end. It certainly seems to make life very difficult for independent community pharmacies.

    So the question is with these fees driving many independent community pharmacies out of business, how is this effecting the job market and pharmacist surplus? Short answer is probably to a certain degree, yes.

    To start, the most recent data I have is that in 2015, there was a decline from 22,478 to 22, 160 independent pharmacies in the United States, and from what I can tell that small decline is expected to remain steady, so a reasonable assumption may be that we have and will continue to lose 300 to 400 independent pharmacies a year. The prescription volume from these stores would not go away, but would be transferred to other pharmacies. In a perfect world, the increased volume would mean the need for increased pharmacist resources and additional pharmacist hours and positions at whatever pharmacy or pharmacies took on this volume, but it doesn’t likely work that way in our volume driven, central fill and mail order world.

    Since the trend I am seeing and hearing regarding the major pharmacy chains seems to be filling more prescriptions with less pharmacists and shifting to central fill and mail order operations, I would say the decline in the number of independent pharmacies certainly plays a role in the decline of retail and community staff pharmacist jobs because the additional volume is not likely to prompt a lot of additional hiring at large chains if that is where it is shifted to. Since reimbursement and fees like the DIR fees are frequently cited as a reason for independent pharmacies closing, you could make a reasonable conclusion that they are having an adverse effect on the job market. I would however argue retail consolidation, shifts to mail order, central fill, and online prescription ordering have been larger factors in the reduction of community staff pharmacist positions.

    • Ryan Schell 1 week ago   Reply

      “So the question is with these fees driving many independent community pharmacies out of business, how is this effecting the job market and pharmacist surplus? Short answer is probably to a certain degree, yes.”

      This should have read “is this adversely effecting the job market”, not “how is this”

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