Insurance Free Pharmacy Opens Here

October 31, 2003
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GRAND RAPIDS — William Overkamp wants to make prescription prices for his customers a little easier to swallow.

So he opened Bill's Pills in the West Michigan Center for Family Health at 1425 Michigan St. NE last month as an insurance-free pharmacy, the only such drug retailer in the state and only the second one of its kind in all of the United States.

Being insurance-free means Overkamp doesn't negotiate drug prices with insurers and doesn't do third-party billing. Yet, Overkamp said Bill's Pills can give its customers brand name and generic prescription medication at a lower cost than other pharmacies and drug chains can.

"If you're running a regular pharmacy, the prices that you charge a cash customer have to reflect the same prices that you are getting from your third-party insurance. Many times for a lot of the medications, those are more expensive than what I typically would charge," said Overkamp.

That pricing structure is known in the industry as a usual-and-customary fee, and if a pharmacy doesn't meet that fee on an insured prescription then it has to pay the insurer the difference. So some pharmacies have to raise drug prices to fulfill their contracts.

But since he has opened Bill's Pills, Overkamp said his insurance-free prices have been lower than many of his rivals.

"To this point I have been very successful at staying under the cost pattern for any of the chains in the area," he said. "Those are the ones that have typically given me most of my competition: the Walgreens, the CVSes, the Rite Aids, the Meijers. I have been successful at saving every one of my patients money by going this route."

Overkamp said insurance contracts have become less and less lucrative for the pharmacy owner the past few years, and especially so for the small-business owner. In fact, he said the owner of the only other known insurance-free pharmacy in the country, located in Alabama, once had contracts and did third-party billing. But doing that got so costly for him that when he filled a prescription he often lost money on it.

"Fortunately for most of the pharmacies that take insurance, they have a pretty good out-front business that supports the pharmacy," said Overkamp.

"There really is no money in pharmacy whatsoever because of the third parties."

Because Overkamp isn't restricted by insurers, he is free to fill a prescription for a longer period than these firms usually allow. Most third-party insured prescriptions max out at a 90-day supply of a medication, while the law allows for up to a year's worth of the drug if the prescribing physician agrees.

Buying in larger quantities, of course, saves customers money and Overkamp is open to seeing if that can be done for everyone who walks into his store.

"It obviously depends on what the medication is and whether the doctor is comfortable with it or not. But then, I've got the time to give the physician a call and find out if there is a concern with the patient going this route," he said.

"With only one dispensing fee, I don't make as much as if I had 12 dispensing fees," he said of filling an annual order in contrast to a dozen monthly ones. "But I save that patient that much more money."

Bill's Pills does, however, provide customers with receipts that they can give to their insurers for any reimbursements that might be coming to them.

Overkamp, who has spent close to three decades in the pharmaceutical business, told the Business Journal that he opened Bill's Pills because he got tired of dealing with the third-party red tape that is tightly wound around serving customers and filling their prescriptions. He also missed the daily interaction that he once had with customers.

He was with Meijer Pharmacies for 25 years, the last 20 in supervisory roles in several markets. After retiring from Meijer and before starting Bill's Pills, Overkamp directed a pharmacy in Holland for Johnson Controls that only had a contract with a single insurer.

"I thought that was a great transition because I was dealing with only one third-party insurance and it gave me the opportunity to learn what was covered, what wasn't, the day's supply of which medications, how to get around the early refills and all that type of hassle that you sometimes get in a pharmacy," he said.

But then Johnson Controls sold Waverly Pharmacy and the new owner signed contracts with several insurance companies, which arrived with some pretty sticky rolls of red tape. At least stickier than Overkamp was interested in working with.

"I found that more and more of my time was being spent acting as a patient advocate with the insurance companies, attempting to get the medication the doctor was requesting for the patient," said Overkamp. "It took more and more of my time away from filling prescriptions or having an opportunity to talk to a patient."

Overkamp chairs the West Michigan Pharmacy Association and sits on the board of the Pharmacy Alumni Association at Ferris State University, where he earned his degree. The Holland resident is also active with the National Pharmaceutical Stockpile Task Force, a group that was formed after the terrorist and anthrax attacks.

Bill's Pills has its own Web site; orders can be made at www.billspillsonline.com. The pharmacy also has a toll-free number, 1-877-RX-BILLS, along with a local number, 233-9126. Bill's Pills, which is open weekdays from 9 until 5, ships medications and provides year-end tax statements.

And the business, as Overkamp is fully aware, has a unique name, too. It came about a few years ago when Kass, Bill's wife of 38 years, asked him what he wanted to be when he grew up.

"I said I think I'd really like to own my own pharmacy. She is just nifty with names anyway, and she said we'll just call it 'Bill's Pills,'" he said. "It just kind of stuck."

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