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Pharmacy Efficiency Strategy: Part 2

  • Adele Curran
  • 25 January 2019

Hello everyone!

In November, we explored the ten points on our 20 Point Checklist. Figure 1 lists the areas that need to be done consistently to maximise your business performance. In this article we are going to look at the remaining ten points in some detail.

Improving performance in these business areas can help you see quick wins in revenue, patient care and increased efficiency across your pharmacy. Without clear visibility of your information, available to you at the time that you need it, important decisions can be made based on inaccurate data.

Industry Overview - Items

In the NHS data just released to September, items for the month were down 3.2% compared to September the previous year (One extra trading day). The familiar trend of independents and independent multiples continues to outperform the corporates, partially due to closures of branches by corporates.

(Figure 1)

Industry Overview - Services

The average MURs per branch done from April to September was 145. This was mainly led by the Corporates and Independent Multiples. Most pharmacies continue to struggle with NMS’s, with an average of 5 done per pharmacy in September.

(Figure 2)

20 Point Checklist to Drive Efficiency in UK Pharmacy

In November, we introduced this 20 point checklist that can be implemented with the help of excellent information over the next 1-3 years (depending on where you are now).

The first 10 points were covered in November and the remainder this month. We understand that you will have implemented many of these already, but without quality information and efficient processes, we have seen these done inconsistently and quite a bit of money is left behind.

  1. Claiming CD, ERD and other EPSR2 Scripts on time
  2. Get cash in from Unclaimed Scripts
  3. Get Exemptions right
  4. Move Dead Stock every quarter
  5. Do MUR’s consistently each month
  6. Get routine going to get full allocation of NMS’s
  7. Max out QPS
  8. Other Services - CCG and LPC led
  9. Can hours be reduced?
  10. Get consistency across branches to maximise performance
  11. Grow ERD’s to 10 - 20%
  12. Eagle Eye view of your local competitive position and take action
  13. Grow Nominations to 90%
  14. Follow up on overdue patients
  15. Expensive Item Matching?
  16. Unload unprofitable care homes
  17. Hustle suppliers for better cost prices where price is greater than Tariff
  18. Review supply chain shortages, key margin products and concessionary prices
  19. Claims for Safeguarding Payments
  20. Review use of Branded Generics

Let’s get moving on the next 10:

11. Grow ERD's to 10 - 20%

With the growing % of Electronic Repeat Dispensing in Online pharmacy, it is imperative that the community pharmacies keep up. The first step could be to highlight any managed repeat patients to their doctor that could be moved on to electronic repeat. The second step could be to identify surgeries that are already doing electronic repeat scripts and introduce new patients that meet the repeat criteria to them, i.e. patients that have the same item dispensed each month or 6 times out of 12 months and are being treated in non-risk BNF categories – hypertension or lipid regulating drugs for example. The third step could be to approach surgeries not doing any ERD to encourage them to do it by having a list of suitable patients for them.

12. Eagle Eye view of your local competitive position and take action

Even if you are 100% proficient operationally in your pharmacy, you are still susceptible to local factors - New competition, online, poorly run surgeries, aggressive marketing strategies from corporate competitors. By using published NHS data you should be able to monitor your local area with movement to online, the +/- growth within surgeries and growth from competitors.

13. Grow Nominations to 90%

The % of Industry Nominations are at approx. 80% with a +3% growth on the last 3 months. All community pharmacies should be striving to move their nominations to 90%. Each patient who has been into your pharmacy from an EPS live surgery should be encouraged to be nominated to your pharmacy even if the script they are currently being dispensed cannot be electronically dispensed yet.

14. Follow up on overdue patients

Looking to see growth in nominations is a weekly process for all pharmacy groups. This allows us to see how well we are doing. But on the other hand if patients are leaving your pharmacy or their nomination has moved, how do you track this? By looking for patients who have consistently been coming to your pharmacy and who may have been nominated that have stopped coming in for their script should enable you to see movements to other pharmacies in your area, or indeed to Online.

15. Expensive Item Matching?

Payment tracking can be a tedious task – by focusing on the most expensive items dispensed first and ensuring you have been paid for this. Using a payment matching method, it can be easier to see the exceptions rather than having to check all expensive items. As a lot of specials are expensive items it is good practice to ensure that the correct fee has been claimed for and paid.

16. Unload unprofitable care homes

It can be difficult to get a handle on the profitability of a care home as there are potentially a lot of hidden extras that a lot of the time are not included into the cost – delivery, MARs sheets, trays etc. By analysing the dispensing of BNF categories within any care home by the cost of the medicines and the additional cost uplift versus the reimbursement value, it can be possible to identify the profitability, or not, of your care homes.

17. Hustle suppliers for better cost prices where price is greater than Tariff

By analysing your cost prices monthly prices v’s tariff and concessionary pricing you should have the ability to see if you are dispensing any medicines where your cost is above the tariff. Lower dispensed medicines are more likely not to be negotiated and are likely to cost you in margin. Monitoring exceptions like these will ensure you hustle the suppliers more & make more margin.

18. Review supply chain shortages, key margin products and concessionary prices

Review Owings by Product in order to see where your pharmacists are experiencing shortages. It is important for the buying team to keep a constant eye on these shortages, key lines, concessionary priced products, particularly at the moment in order to minimise damage to your margins.

19. Claims for Safeguarding Payments

By monitoring the dispensing trends for each surgery you should be able to see if any of your surgeries are increasing their prescription durations on a significant number of their prescription items.

20. Review use of Branded Generics

If your surgeries are prescribing branded generics, they could be significantly affecting your margin. In a lot of cases a branded generic may be costing you to dispense, with the cost being considerably higher than the reimbursement. By having visibility of these dispensing’s, it is possible to discuss alternative dispensing with the surgery.

It would be very useful to consider these as you implement your plans for 2019. Very often it is easier to implement 90% of a new area rather than get 5% out of an existing area of focus. The key obviously now is to be on top of all of these all of the time with the least amount of effort.

Data Analytics has made this not just possible but is setting a new benchmark in terms of how sophisticated UK pharmacy businesses are becoming.

Should you like any clarifications, or if you’d like to explore any of these areas further please let me know.

Adele Curran
Chief Customer Officer

adele.curran@realworldanalytics.com
0808 1890 617

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