Hoping to replicate the cost-saving success of its on-site health care clinic, Deschutes County has opened a full-service pharmacy to supply county employees and their families with low-cost prescriptions.

The county-run pharmacy opened in May with the goal of providing county health plan members low-cost prescriptions. Under the plan, employees can fill generic prescriptions at the pharmacy for free, while name-brand drugs will be provided at a deep discount.

Those discounts help employees who have seen medical plan payments rise in the past few years, but also come as a boon to the county.

“Even with that reduction in copay we still save money,” said Dave Inbody, assistant to the county administrator. “We currently get drugs at 20 to 25 percent less than what we would pay for (prescriptions outside) the pharmacy.”

Inbody said the county spends $2.4 million in prescription costs for health plan members annually. The goal is to cut that number by at least $400,000. Original estimates forecast the savings would be reached in three years. That’s because to just break even, the county needs to get 70 percent of health plan prescriptions filled at the on-site pharmacy.

It’s possible the savings could come sooner as response to the pharmacy has been better than anticipated.

“We estimate the pharmacy is seeing 49 percent (of health plan prescriptions being filled) right now,” Inbody said. “Our target is to reach 65 percent by next May, but I think we will be well over that in just the next few months.”

The pharmacy and the on-site health clinic that opened in February 2011 are unusual in how they alter a local government’s approach to employee health coverage. But the county is also in an unusual situation. The county is reliant on declining tax revenues and is among the region’s largest employers. Climbing health care costs bog down general fund revenues, while rising premiums can become sticking points in union negotiations.

The decision was made that to cut costs, the county essentially had to become more involved.

“It doesn’t make sense, right?” Inbody says, posing a common question in response to the program. “I mean, how long have we been dealing with health care? Decades? And why wouldn’t we have been doing this long ago if it worked?”

Inbody said when he first heard of the concept of a county-run clinic, he thought it was “just garbage.”

“I asked, ‘Where is the savings?’ ” he said.

Health care costs have been on a steady rise in the county over the past decade. Inbody said since 2006, the average annual increase in cost has been around 13.8 percent.

In the last fiscal year, which ended in June, the cost of all health care paid for by the county came in at just under $17 million. That still represents a rise in spending, but at the reduced rate of 9.2 percent.

Inbody said most of that savings came as a result of the on-site clinic, which he believes saved the county $487,913.

That number is based on the average cost per visit at the on-site clinic versus a typical trip to the doctor. Inbody said his numbers show employees also saved $248,283 thanks to the clinic.

The savings come largely from eliminating the per-visit cost of a visit to the doctor’s office.

“Usually when you go to the doctor you are charged a bill,” Inbody said. “Here, we pay (doctors, nurses and staff) a salary. As this has gone on, we have seen that it is the way to go. We broke even the first eight months (of operating the clinic) and after that it was all savings.”

County staffers hope the pharmacy turns into the next step in savings.

“If you go to the pharmacy, it saves the county money, it saves you money,” said interim County Administrator Erik Kropp. “If you choose to use generic, it saves the county money, it saves you money. And an important thing to point out is that any time we save money, the county saves money, we can provide more services to county residents.”

Cost of doing business

To run the on-site clinic the county pays Healthstat, a health care contractor, $662,000 per fiscal year in administrative fees and salaries.

To run the pharmacy the county estimates it will pay Take Care Health Services, a pharmacy contractor, $344,000 per fiscal year in administrative fees and salaries.

Cost of doing business

To run the on-site clinic the county pays Healthstat, a health care contractor, $662,000 per fiscal year in administrative fees and salaries.

To run the pharmacy the county estimates it will pay Take Care Health Services, a pharmacy contractor, $344,000 per fiscal year in administrative fees and salaries.

Cost of doing business

To run the onsite clinic the county pays Healthstat, a health care contractor, $662,000 per fiscal year in administrative fees and salaries.

To run the pharmacy the county estimates it will pay Take Care Health Services, a pharmacy contractor, $344,000 per fiscal year in administrative fees and salaries.