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Community Pharmacy "Backbone" - Building a Stronger Health Delivery

Neil Johnston
Management Consultant Perspective

Issue 73: July 2008
Page: 1 of 1 Author's Profile | Send to a Friend | Printer Version

The rate of change within pharmacy has certainly stepped up to a new level and with the current spate of PBS reforms coupled with the rise of supermarket pharmacies, many community pharmacies have been forced to trim their inventories sharply along with staff levels, including pharmacists.
For those who survive this belt tightening and continue to review their market range regularly, plus bridge the gap to provide fee-paying clinical services, the upside is that they will emerge over the next two years as a very productive and profitable model.
The downside is that as more pharmacies develop clinical services there will be a scramble to recruit suitable pharmacists, but they will be in short supply.
So don’t let your senior pharmacists fully retire.
Encourage them to stay in an active capacity and one that allows them to use their “people skills” rather than force them into sausage factory dispensing that is fatiguing and soul destroying.
Help them transition by providing as much in-house education as possible.

Because of the demand and short supply, some well-trained pharmacists will find that they can look forward to commanding a strong fee for service.

Drivers within the market place will involve:

1. Automating the dispensary, delegating pharmacists out of the dispensary and tapping in to training systems that can provide fee for service competency for pharmacists. This becomes mandatory expenditure. Confidence in this area is yet to reach a critical level, but it will happen.
Relying on PBS revenue to pay for pharmacists to develop a clinical setting will prove impossible unless other market settings are adjusted to provide the gross profit to pay for this development.
Information technology across all systems and procedures is also advised. There are many procedures within pharmacy that can be more efficiently computerised, even if you have to write your own custom software.

2. Baby Boomers will drive aged care services that will include a “pharmacy in the home” component.
High petrol prices are biting into all retail stores visits now, so the ultimate in convenience will be home-based services. The Internet can play a critical part in some of this activity, as can the telephone.
As part of a “pharmacy in the home” program, a fresh look at dose administration aids may prove worthwhile as well as some form of a prescription management program for patients willing to leave their prescriptions at your pharmacy.
Managed correctly, a home prescription service could eliminate peaks in dispensing, schedule ethical orders so that they come in-store today and are delivered to patients tomorrow and then join the first available PBS claim.
There are many benefits here that could improve stock turns, cash flow and profitability and these financial benefits should, if properly and efficiently planned, offset the cost of a home service.
Because impulse sales are lost through less frequent customer/patient store visitation, the development of a catalogue and a loyalty club linked to your service might prove a suitable offset.

3. Anti-ageing and the products and processes that help to slow down the effects or the appearance of ageing, are starting to boom.
The body of scientific knowledge around this subject is building each day.
A new look at the “beauty room” needs to ensure that it becomes unisex and that the products used have a higher anti-ageing content rather than the older-style cosmetics.
Bio-identical hormones, nutritional supplements and nutraceuticals play an important part here and will require a compounding service backup.
In fact a complete look at the entire pharmacy range is well overdue, as some products can no longer justify the space and diminishing return they provide.

4. Drug prices will continue to escalate and patients, particularly those with chronic illness, will seek more economical therapies.
The first stage in that process will be the conversion of branded drugs to generics.
This revolution is well under way in most pharmacies.
The next stage will be to reduce dependence on drugs by using selected nutritional supplements in an attempt to reduce or eliminate drug doses.
This will finally evolve to adding nutraceuticals to the daily diet as well as consciously making better food choices.
Each step of these changes can be facilitated by pharmacists in the form of patient education (based on evidence) and how these services are to be delivered creates the challenge of a successful pharmacy.
Some US pharmacies are already at the “better food choices” stage and are beginning to have some of the “look and feel” of a standard supermarket.
Some food industry associations are actually structuring clinical trials of some foods (e.g. blueberries, green tea) to illustrate the advantage of using a specific food in preference to taking drugs.
I am a diabetic (Type 2) and I recently read of a formal clinical trial involving green tea compared with Avandia. Green tea beat Avandia in its ability to clear blood glucose, so I started to use it and can confirm that it does work. So for the past six months I have been drinking green tea at least four times a day and remain on one diabetic tablet, having dropped Avandia from my regimen.
My household budget has improved as well as my diabetes control.

I suspect that there are many patients who would prefer to go down this pathway and provision of good information by pharmacists would certainly win hearts and minds.
Keeping green tea in your inventory range would seem to me to be a better business and health choice as it will generate a higher return through a higher turnover, stimulate impulse buying through more frequent store visits and create better outcomes for patients as other health benefits kick in.

Multiply this process and that should be one of the gross profit drivers to help pay for the establishment of clinical services in pharmacy.

5. Store size, location and layout as always, will need review and investment.
Opportunities for alliances and amalgamation or relocations should be sought if your existing site has deficiencies.
No longer is the luxury available to have multiple pharmacies, each physically small, servicing a location in a highly competitive area.
There needs to be a smaller number of larger-sized pharmacies, well managed and with a fresh marketing approach.
This process of rationalisation and alliance formation forms part of a cycle well established in pharmacy, but it needs to be regenerated with a fresh design.

Because of the trends noted above whereby nutrition, nutraceuticals, functional foods, or simply good and local fresh foods, it is hard not to envisage that a pharmacy is going to end up looking like a food supermarket.
After all, as pharmacists we should be servicing the needs of our patients.
If that gets down to providing goods that are not drug related then so be it.
The general public does not necessarily accept a pharmacist view of the world, because they have already told us they prefer supermarkets.
It is surely not that difficult to design a pharmacy with a strong food component that can still have a private clinical services area?
So take off your mantles of inbuilt prejudice and have a good and hard look at your environment - or get someone else to critique it for you.
Supermarket type overheads (and hence competition on price) can only be achieved if there is a higher level of self service assisted by information services delivered through imaginative information technology.
Clinical services based on a fee for service model will not have the competitive pricing structure that exists with identical goods sold in diverse settings.
A fee for service isolates payment for the professional involved in delivering that service, so many pharmacists can be employed, if they are capable of generating their own income.
This will mean treating an employee as a sub-contractor i.e. as a self-employed person.
Only then will there be a creative move in the development of clinical services because there is an incentive to do so.
Smart pharmacy owners will concentrate on building their infrastructure to accommodate this process, looking to develop health precincts perhaps involving multiple health professionals from different disciplines in alliance (not as master/servant), even to the extent of investing separately and helping them to build their practices.
It is at this point that the Pharmacy Guild of Australia (PGA) begins to work against the best interests of its members.
Some members are beginning to realise the poor quality of PGA leadership vision and are taking their own rectification steps.
Others are yet to look outside of their four walls.

Pharmacy is currently not the interesting and rewarding profession it once was and is still capable of being.
The PGA, using its current behaviour as an example, is not going to self-correct.
Therefore, a new organisation needs to emerge that will give it some competition.

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