Debra Shade, leader of Neighborly Care Network, thinks seniors shouldn't have to choose between buying medicine or food. And she's doing something about it.
By BILL DURYEA
Published March 7, 2004
[Times photo: Lara Cerri]
Debra Shade, president and CEO of the nonprofit Neighborly Care Network, has opened a pharmacy to sell prescription drugs to seniors at wholesale prices. The Palm Harbor pharmacy is thought to be the first of its kind in the country.
[Times photo: Kathleen Flynn]
Pharmacist Gaston Bedard chats with a customer on the phone at the Neighborly Pharmacy in Palm Harbor. He and Debra Shade have worked together on various projects for years.
PALM HARBOR - The Neighborly Pharmacy, a small storefront on a side street of Palm Harbor's historic district, is a modest operation that looks nothing like a laboratory of radical innovation.
The front door opens almost immediately onto a plain, peach-colored counter, behind which are a few shelves containing an inventory of over-the-counter medicines so thin it looks as if the business is about to fold.
"It's not like Eckerd's," said Debra Shade, the CEO and president of Neighborly Care Network, which runs the pharmacy. "No lipstick, no eyeliner, no candy."
Most of the activity takes place behind the partition formed by the shelves. It is here that a pharmacist and a technician quietly go about the work of doing what many consider impossible, or at best financially untenable:
For the past six weeks they have filled as many as 100 prescriptions daily for 563 uninsured seniors, none of whom have paid more than wholesale for the medicine. The volume is about where the pharmacy expected to be after six months.
Word of this unique operation has spread quickly through the community of seniors along the Gulf Coast. The pharmacy takes 250 calls a day on its eight phone lines (four were added to meet the demand). On any afternoon, the small foyer handles a steady stream of men and women over 60 who are desperate to save as much as $100 on a fistful of costly prescriptions.
Granted, alternatives exist to paying full price for prescription drugs - payment assistance programs, which are few and difficult to access, and the new Medicare prescription drug bill, which will require an average outlay of $1,172 (in premiums, deductible and co-pay on drug costs up to $2,250) when it takes effect in 2006.
"There's nothing like this anywhere in the state, or the country," Shade said on a recent afternoon.
The story of Neighborly Pharmacy is the story of how a motivated CEO of a local nonprofit discovered a remarkably simple solution to a problem that has confounded governments at all levels.
In many ways it is proof of management expert Peter F. Drucker's prediction that "the 21st century will be the century of the social sector organization. The more economy, money and information become global, the more community will matter.
"And only the social sector nonprofit organization performs in the community, exploits its opportunities, mobilizes its local resources, solves its problems."
If one dissects how Shade accomplished this breakthrough in less than a year, it is possible to see one person's almost genetic predisposition for dramatic action. But there is a lesson, too, for how nonprofits can fulfill Drucker's mandate to "determine the values . . . and the performance of 21st century society" and do so without cumbersome regulation or onerous expense.
* * *
The history of Neighborly Care Network, once known as Neighborly Senior Services, is rife with firsts.
Thirty-seven years ago it was the first agency in the nation to provide "meals on wheels" to homebound seniors. Not long after, it opened an adult day care facility, another first nationally. But like many longstanding organizations that stick with what they know best, Neighborly had in recent years become rather conservative; the same person had headed the organization for 35 years.
That changed in December 2002 when Shade took over.
"Debra has brilliant ideas," said Rod Johnson, chairman of Neighborly's board of directors. "She thinks outside the box."
But in her interview for the top job she had given no indication of the bold stroke she was contemplating.
For some time, Shade had been hearing the same kind of chilling stories that have become almost commonplace in media reports about seniors who can't afford their medicines.
"I know they take a knife and cut the pills in half, or they take them every other day. I hear them when they tell me, "I don't use my A/C any more and I don't use my heat,' " Shade said. "We're not talking about antibiotics for a cold. It's insulin."
In these stories Shade heard a challenge to an organization whose mission is "health, wellness and nutrition for seniors."
"What does that mean?" Shade asks. "Keeping you in your home. Plain and simple."
It seemed self-evident to Shade that seniors who can't afford their medications are not healthy, and therefore more likely to be forced into a nursing home.
"Hospice gives you free drugs," Shade said ruefully, "but you have to be dying first. If you're not dying, you're going to pay. But if you can't pay, you're going to die. It's like (society) is helping them along."
In April, not quite four months after she took over, Shade asked herself this question:
"I've got 7,500 clients. Why don't we open our own pharmacy?"
Easy to say. But how did she expect her organization, with an annual budget of $15-million, to change the way a $162.4-billion industry operates?
* * *
Shade, who has an MBA and an accounting degree, describes herself as a "do-it person. I'm not a procrastinator."
She dresses in bold colors, reds often. Sometimes she wears a sweater adorned with an American flag. The back of her office chair is covered by a flag blanket. But when she talks about the prescription drug crisis, her admiration for this country sounds just the least little bit frayed.
"As a great nation, why are we forcing people to choose between food and medicine?" she asks.
But in the next breath she insists she neither expects nor wants the government to solve the problem with price controls. "This is a free society," she said. "That's called, "Welcome to America.' "
In fact, she believes the solution, while not profit-driven, is dependent on the free market.
This unusual marriage of for-profit discipline and nonprofit conscience is the embodiment of the "double-bottom line" goal of the social enterprise movement, said Gary J. Stern, president of Stern Consulting International, which specializes in marketing strategies for nonprofits.
For some time, some for-profit businesses have attempted to generate revenue without exploiting precious natural resources or workers. Think of Ben and Jerry's Ice Cream, or the Body Shop cosmetics company, which offers an "Our Values" link on its Web site.
"The intention is to make a little less money, do a little more good," Stern said.
But the nonprofit world has also embraced this double-bottom-line ethos, Stern said. Instead of return to shareholder, nonprofits' primary obligation is the social service they provide. The second bottom-line for those groups is their long-term financial health. What good is a social service if it must be canceled for lack of funds?
Who better then to implement a double-bottom line plan than someone who has been successful in both the for-profit and nonprofit worlds?
Before Debra Shade entered the nonprofit world she was the chief financial officer of a custom cabinet company in Daytona Beach. There she met Gaston Bedard, a French-Canadian licensed pharmacist who was working as a vendor of cultured marble until he could get his pharmaceutical license in the United States.
That connection proved fruitful when Shade found herself in 1985 unexpectedly heading a mental health care facility that was in need of its own dispensary. By this time, Bedard had become licensed, and she hired him to run the operation. Over the next nine years, Shade and Bedard opened two similar pharmacies in other mental health facilities in Orlando.
"The government provides the drugs at extremely reduced prices. Funding from the Baker Act paid for the pharmacist," Shade said.
But there would be no such government subsidies for any pharmacy that Neighborly might open.
Many of Neighborly's services are sustained by grants from the United Way, but the new pharmacy was not one of the specified programs and therefore would receive no funding. If Neighborly intended to sell drugs at cost (and there was no other reason to embark on this project, as far as Shade was concerned), it would have to finance the effort with its reserves, money donated or left in wills.
One of Shade's first calls, not surprisingly, was to Bedard, who had been working at a hospital in Boca Raton. Together they compiled a list of the 20 most popular drugs for seniors. They called retail pharmacies and compared those prices with quotes from wholesale distributors to determine how much they could save potential customers.
"Drugs are marked up 35 to more than 3,000 percent," she said. "What would happen if we did that with food?"
Then she and Bedard estimated the cost of buying a suitable inventory. They figured $58,000 would suffice to start. They added in the salaries and benefits for Bedard, an assistant and driver, which is about $200,000, and the cost of utilities and liability insurance, which is about $56,000 a year.
A major expense they did not have to budget for was the cost of bricks and mortar; Neighborly already owned a building that was sitting vacant after relocating one of its dining facilities to Dunedin.
The total cost of operating the pharmacy for one year was pegged at $350,000.
This was the figure that Shade took to her board of directors in August.
"There was no reason for us not to say, "Go ahead and explore it,' enthusiastically by the way," Tom Stepanovsky, vice chairman of the 12-member board, said. "Our question was: "How long will we be below the break-even point?' "
Shade's answer: "Three years."
The pharmacy charges an $8 filling fee per prescription, though delivery is free within Pinellas County.
"We don't want to lose money. We don't want to break even. We want to make some profit," she said. "The difference is, if I make a dollar it goes right back into the services for the community."
* * *
A decade ago, Stern said, "You very rarely heard nonprofits speak the words: "In three years we'll be self-sustaining and maybe even return a small profit.' "
Nowadays, directors of successful nonprofits are much more at ease with the notion of developing a long-term marketing plan, he said. Sustainability need not depend solely on sales, as it would in a for-profit enterprise. It can be achieved with grants and other philanthropy mixed in, he said.
"There has been this attitude among nonprofits that money is this dirty thing that they have to have to do good," Stern said. "I have very little patience for the "woe is me' mentality among American nonprofits."
Shade does not suffer this problem.
She plans to apply for United Way funding at the next opportunity, she said. She already has begun to channel new private donations toward the pharmacy's overhead. This week she is in Washington, D.C., to talk to Reps. C.W. Bill Young, R-Largo, and Mike Bilirakis, R-Tarpon Springs.
"I'm looking for federal support so I can open some more pharmacies," she said. "I want to replicate this with other nonprofits, create a network of pharmacies. Then let the network of pharmacies negotiate a price.
"The more drugs we buy, the lower our prices, the more money we can make and the more people we can serve," Shade said.
Neighborly already has its eye on a building near Mirror Lake in downtown St. Petersburg as a possible second building. Shade wants to expand north into Pasco County, too.
Given that one in six Americans, 44-million people, is 60 years or older, and that a third of noninstitutionalized Medicare recipients have no prescription drug coverage, the demand exists to justify Shade's ambition. All it would take is other nonprofits to defy what Stern calls their provincial tendency to say, "Oh, that wouldn't work here."
"People are reinventing the wheel that rolls perfectly well everywhere."
