Four Business Tips That Make Cents for Community Pharmacy

May 3, 2018

Article

Practical tips for the community pharmacy, to help you be profitable and still care for patients.

Julie Hammes is a partner in two pharmacies in northeast Kansas and is an officer in a corporation that owns another. As an accountant, she understands the financial pressures that confront community pharmacy - but she’s still optimistic about the future.

I had a chance to interview her a few weeks ago based on an introduction from Monty Rogers, RPh. Rogers is the CEO of Pharm Assess, a boutique pharmacy business services company that Hammes has used for 15 years. During that interview, Hammes shared four things she believes will help independent community pharmacies succeed.

1. Manage the Numbers

While not a pharmacist, Hammes understands the first priority of a pharmacy is patient care. Still, she says, pharmacy is a business and it must be profitable if it wants to care for its patients.

In addition to classic financial reports, she studies customized performance reports developed by Pharm Assess. Then, in concert with her account manager she analyses the gross profit on each medication, each patient, each payer, and each prescriber.

She also manages inventory to achieve high service levels and inventory turns. Doing this, she says, improves sales, cash flow, and profitability.

2. Get Help with Employee Compliance

With an interest in three pharmacies, Hammes has a lot of employees. They all need to meet a confusing array of training, credentialing, and background checks required by HIPAA, Medicare Fraud Waste and Abuse, and be checked with both OIG and GSA Exclusion Lists.

Her advice? Contract with a company that specializes in this area. Her business partner provides a dedicated account manager equipped with the experience, software, and web-based tools to monitor, track, record, and remind her of all the deadlines.

Information on new hires is shared with her account manager who ensures they get the training, background checks, and certifications they need. When the need arises Hammes can get the documentation she needs with a simple keystroke. All for a monthly fee that is about what it costs to pay a pharmacist for one hour.

3. Manage Third Party Plans

Hammes says too many pharmacy managers don’t have the expertise, time, or inclination to manage third-party plans. One effective strategy she’s found is to pay attention to pricing her cash prescriptions. While they represent only a small percentage of the scripts she fills, carefully monitoring them improves profits on cash scripts-without compromising her third-party claims.

Hammes also says her pharmacists work with prescribers to suggest appropriate changes to their patients’ medications-A process that improves patient care, adherence, STAR ratings, and reduces DIR fees.

Hammes also uses a commercial program that helps patients identify Medicare Part D plans that reduce medication costs while allowing them to fill prescriptions at one of her pharmacies.

4. Diversify

With the help of Pharm Assess, she has successfully navigated the financial, logistical, and regulatory hurdles so that she now profitably services four 340B entities. If you have not been through this process before, she believes, the purchasing and inventory control aspects of serving 340B patients are different enough from traditional retail pharmacy that the odds of submitting a profitable bid are increased with the help of an expert.

The same advice holds true for the long-term care and assisted living facilities. The rules, regulations, and procedures associated with serving these kinds of patients are different enough that retaining the services of an expert could be the difference between success or failure.

So, what’s the bottom line? Running a pharmacy is complicated. Chains hire managers that implement policies and procedures that both enhance revenue and reduce expenses. According to Hammes, small chain and independent pharmacies would be well advised to contract with outside experts that can help them do the same.