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Value of Pharmacist's Services
What is the current level of compensation for pharmacists in the United States?
The position taken on this paper is that the pharmacist in the U.S. is earning very close to what he/she should be earning based on patient needs and services provided. The compensation for a pharmacist, in other words, is basically fair, with only a slight adjustment needed (perhaps $10,000 more a year) in the foreseeable future to be considered a just salary.
Bureau of Labor Statistics shows that the annual "median pay" for a pharmacist in the U.S. is $116.670 -- or $56.09 per hour (bls.gov). Those figures are based on the year 2012, so two years later that could be a different number. The number of pharmacists in the U.S. In 2012, the last year figures are available for, was 286,400 (bls.gov).
The www.salary.com website claims that the median "expected salary" for a pharmacist in the U.S. is $120.171. The site bases its figures on a survey completed in March, 2014, so it is likely more accurate then that presented by the U.S. Bureau of Labor Statistics.
In the publication http://money.usnews.com the average annual salary for a pharmacist is listed at $116,670 (or $56.09 an hour) -- the same data as provided by the U.S. Bureau of Labor Statistics. The Money publication notes however that the "best-paid 10%" of pharmacists in the U.S. made $145,910 in the year 2012; the lowest paid pharmacists earned just $89,280, according to Money magazine.
To back up the reason for the higher pay mentioned in the paragraph above, those who earned upwards of $145,000 were working in the pharmaceutical and medicine manufacturing industry (http://money.usnews.com).
In the year 2004, ten years ago, the average salary for a pharmacist was just $80,000, and that went up to $90,000 in 2006, according to Money magazine. As to other health care positions, pharmacists make about $34,000 more than a physical therapist and $47,000 more than a registered nurse (http://money.usnews.com).
Defending the Position Using Microeconomic Principles
The long definition of microeconomics: it is the study of the behavior of individuals and individual businesses in terms of the allocation of services and goods, and how the behaviors and decisions within that particular business affect the supply and demand for the services and goods. As to pharmacists' compensation, in short, the question can be boiled down to this: what determines how much a pharmacist should receive in pay?
First, what are a pharmacist's duties to the public when it comes to healthcare and the public -- and how do those duties match up against other healthcare professionals? A pharmacist does more than just pass out prescriptions, albeit that is how the job is seen by many people. A pharmacist must be aware of how a given prescription will react to or interact with medicines that the customer / patient is already taking. The pharmacist must interact with the patient to fully explain how to take the medicines that are being prescribed, what potential side effects there may be, and how to take the medicine (bls.gov).
It is also the pharmacist's duty to give healthcare advice to consumers / patients, including how to deal with stress, the importance of a healthy diet, the need for exercise, and what equipment or technologies would be best suited to that patient. But those instructions are also part of the duties that a Nurse Practitioner is responsible for, and the typical NP earns $89,000 (money.usnews.com).
Several duties a pharmacist is responsible for are somewhat close to what physicians are asked to do (the average doctor's salary is $191,520) (money.usnews.com). But the pharmacist can receive a license after a four-year university degree and a graduate (PhD) degree; but a doctor has eight years of university study prior to residency, which can be three to eight more years. The price to hire a pharmacist for a position then can be justified as about $75,000 less than what a physician earns. Given that the doctor has spent an average of three to six years more in preparation for diagnosing and serving patient's healthcare needs than a pharmacist spends to receive a license, the roughly $75,000 difference between the two annualized salaries seems fair (with perhaps a small increase) in terms of the microeconomic implications.
Defending the Position Using Macroeconomic Principles
Macroeconomics deals with the behavior of the economy and how prices and wages impact the economy. The relationships between income on a national level, consumption, inflation and other factors are part of the considerations vis-a-vis macroeconomics in the United States. Hence, because (as reported in the subsequent paragraph) healthcare costs are skyrocketing to hitherto unheard of high rates, raising the salaries of pharmacists would not be in the best interests of the nation's economy; and so the position taken at the outset of this paper (that the compensation for pharmacists is about right) can be substantiated given the alarming rise in healthcare costs vis-a-vis the macroeconomic view.
In looking at the economy as a whole -- in the field of healthcare services in the U.S. -- the rate of growth, according to the U.S. Department of Health and Human Services (HHS), has "outpaced the growth rate in the gross domestic product (GDP)." Between the years 1940 and 1990, the rate of growth in "real health spending per capita" was 3.6% in the 1960s and increased to 6.5% per year in the 1990s (HHS). But the rate of growth in healthcare spending -- which of course takes into consideration the field of pharmacy and pharmaceuticals -- jumped to 16% of GDP in 2005, and is expected to be 20% of GDP by next year, 2015.
Does this rapid growth harm the economy? The HHS report explains that in terms of the economy as a whole, some experts say it may "hamper broad economic growth"; a macroeconomic look at the rapid rise in healthcare costs shows that the effects of healthcare costs on one sector "are likely to affect outcomes in other sectors." Increasing healthcare costs by beefing up the salaries of pharmacists could contribute to government's need to "…raise taxes, increase borrowing or reduce investments in other critical sectors such as education and infrastructure" (HHS).
Defending the position taken using Pharmacoeconomics
Meanwhile Stuart Schweitzer, Professor of Health Economics at the University of California, explains that modern pharmacies nationwide are "under increasing financial pressure" due to the growth of mail-order pharmacy services (Schweitzer, 2007). In 1985 the market share for pharmacies (in terms of drug sales) was 80%, but that had shrunk to 60% in 2003 (Schweitzer, 130). This is a classic example of macroeconomics providing evidence as to how the national economy is shifting in terms of healthcare costs. Moreover, there is a second pressure on pharmacies and hence pharmacists' positions; to wit, HMOs tend to exclude the small and independent pharmacies from the benefit management programs, Schweitzer writes (130). Given these pressures, it could create an incentive to raise the salaries of pharmacists, albeit as mentioned, that would only add more to the already rapidly rising cost of healthcare.
In addition to those two pressures on pharmacies and pharmacists, Schweitzer mentions the effects of "tiered pricing arrangements" -- which means that the mail-order pharmacies and the pharmacies that are linked to managed care groups do in fact receive "…substantial wholesale discounts from the prices paid by non-affiliated pharmacies and distributors" (Schweitzer, 130).
Given the rise in healthcare costs, and the fact that patients are impacted in profound ways by the high cost of medicines and healthcare services, there is a strong link between pharmacoeconomics and pharmaceutical care and operations, according to a peer-reviewed article in academia.edu. The direct medical costs passed along to the patient include: the pharmacist's salary; the purchase of prescription medicines (and over the country drugs as well); overhead costs; staff time; the administration of medicines; and laboratory costs of "monitoring for effectiveness and adverse drug reactions" (Ghadge, et al., 2012).
The indirect costs to the patient and society include: loss of productivity to society; unpaid care givers; lost wages; expenses of illness borne by patients, relatives, friends, employers and the government; and the loss of leisure time (Ghadge, 30). Because the methods of presenting pharmacoeconomics are divided into two categories (costs and quality of life), it is well to consider the tangible and intangible costs for patients when adding up price to pay for wellness because living with illness is not living the way humans were intended to exist.
The position taken at the beginning of this paper was that the pharmacist in the U.S. is earning close to what he/she should be earning, and that is based on patient needs, patients' ability to pay for the services provided, and it is also based on the economics of healthcare. The average salary for a pharmacist in the U.S. is around $116,000 a year, which is well above what a Nurse Practitioner earns ($89,000) and yet well below what a physician earns (around $191,000, albeit…[continue]
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