Hospital to open rival pharmacy
St. Luke Hospital chief executive Jeremy Ensey has told hospital board members he plans to open a public pharmacy in Marion.
It would compete with Lanning Pharmacy.
Hospital board member Gene Winkler, who resigned from the board three weeks ago but has since decided to ask to rescind his resignation in hope of retaining voting power, said Ensey announced his plan at the hospital’s March board meeting.
“He wants to bring his sister-in-law down here,” Winkler said.
Laura Ensey is a pharmacist at Kay’s Pharmacy in Herington. She is married to Marion County attorney Joel Ensey, who is Jeremy Ensey’s brother.
Winkler said Marion could not support two pharmacies.
He said he did not know whether the second pharmacy would be opened inside the hospital or elsewhere.
“I’m not sure whether they plan to open in a different building,” Winkler said.
He did note that Ensey and his wife, Tammy Ensey, had viewed a building at 308 E. Main St. that was home to J.R. Hatters and is now up for sale.
Real estate agent Patty Putter, who listed the property, said the building was under contract for purchase by an out-of-state buyer.
If St. Luke does open its own public pharmacy, it would make more profit through a program it already participates in by eliminating its partnership with Lanning Pharmacy.
St. Luke, as a non-profit, critical access hospital, is part of a federal program that allows qualifying hospitals and clinics to purchase prescription drugs at prices reduced as much as 50%.
Called the 340b program, it is meant to enable covered hospitals and clinics to stretch federal resources as far as possible, reach more eligible patients, and provide more comprehensive services.
According to the Association of American Medical Colleges, 304b is intended to help qualifying hospitals reach vulnerable patients who are underinsured or uninsured.
Drug manufacturers that participate in Medicaid agree to provide outpatient drugs to covered hospitals and clinics at reduced prices.
When patients with medical insurance get a prescription filled, they pay a price set by their insurance company. Profit because of a wholesale discount is kept by the hospital if it owns the pharmacy or split between the hospital and a contracting pharmacy.
According to a Health Resources and Services Administration website, both Lanning Pharmacy and Hillsboro Hometown Pharmacy are contracted by St. Luke.
Lanning Pharmacy’s contract began Jan. 1, 2016, and was last renewed Jan. 1, 2020.
Extra money the hospital makes through the program is intended to buy medical equipment or other needed items.
The 340b program has been the target of controversy among drug manufacturers, physicians’ groups, and some hospitals, and has been challenged in court.
Becker’s Hospital Review reported in December that hospitals were not fulfilling the promise of the program, which is to treat a large proportion of underinsured and uninsured patients.
Many drug makers have restricted participation in the program. Hospital pharmacy leaders have said it is part of an unclear revenue cycle, and hospitals often shuffle the discounts to well-off locations not part of the program.
As uncertainty lingers over whether Lanning’s contract will be cut off, hospital board member Roger Hannaford said.
He said he was advised not to talk to pharmacy owners Gene and Tracy Lanning, but said he “couldn’t remember” whether it was Ensey, board president John Wheeler, or a lawyer for the hospital who told him that.
Hannaford said it was probably best not to talk if there was pending litigation, but he denied knowing whether any litigation is pending.
St. Luke is a tax-supported hospital. During 2022, it collected $556,966.39 in taxes. It received $201,796.05 more in March.
According to county clerk Tina Spencer, the hospital’s board of directors is filled by elections operated by the hospital, not the county.
Current board members are Wheeler and Chris Mercer, whose terms expire in 2024; Linda Carlson, Hannaford, and Suzanne Robinson, whose terms expire this year; and Byron Lange, whose term expires in 2025.
The next hospital board meeting will be 5 p.m. Tuesday in the basement of the hospital clinic.
Ensey was asked by text message to call, but did not call.
Senator Jerry Moran’s office was contacted for this article, but said it needed more time to look into the situation before commenting.
Hillsboro Hometown Pharmacy declined to comment. As a for-profit hospital, Hillsboro Community Hospital is not covered by the 340b program.
Last modified April 19, 2023