How to improve efficiency in the pharmacy?
Welcome to the November issue in our series of monthly newsletters where we bring you industry insights using the NHS data to keep you updated on changes that affect you from a business point of view.
This month is Part One of a Two Part series which will focus you on strategic actions to ensure that you are making the most of your pharmacy business. These actions will help you to survive and thrive in the midst of continuing industry uncertainty. How to increase efficiency in retail pharmacy?
Industry Overview - Items
In the NHS data just released to August, items for the month were up 1.4% compared to August the previous year (same number of trading days). The familiar trend of independents and independent multiples continuing to outperform the corporates, partially due to closures of branches by corporates.
Industry Overview - Services
The average MURs per branch done from April to August was 123. This was mainly led by the Corporates and Independent Multiples. Single pharmacies continue to struggle with NMS’s, with an average of 6 done per pharmacy in August.
20 Point Checklist to Drive Efficiency in UK Pharmacy
We are introducing this 20 point checklist that can be implemented with the help of excellent information over the next 1 - 3 years (depending where you are now). The first 10 points will be covered this month and the remainder next month. We understand that you will have implemented most or many of these already, but without quality information and efficient processes, we have seen these will be done inconsistently and quite a bit of money is left behind. So, how to improve efficiency of pharmacy?
- Claiming CD, ERD and other EPSR2 Scripts on time
- Get cash in from Unclaimed Scripts
- Get Exemptions right
- Move Dead Stock every quarter
- Do MUR’s consistently each month
- Get routine going to get full allocation of NMS’s
- Max out QPS
- Other Services - CCG and LPC led
- Can hours be reduced?
- Get consistency across branches to maximise performance
- Grow ERD’s to 10 - 20%
- Eagle Eye view of your local competitive position and take action
- Grow Nominations to 90%
- Follow up on overdue patients
- Expensive Item Matching?
- Unload unprofitable care homes
- Hustle suppliers for better cost prices where price is greater than Tariff
- Review supply chain shortages, key margin products and concessionary prices
- Claims for Safeguarding Payments
- Review use of Branded Generics
Top 10 tips for pharmacy business strategy:
1. Claiming CD, ERD and other EPSR2 Scripts on time
On average, pharmacies can leave about £800 behind per annum per branch. This area is becoming more complicated with more CD’s and ERDs (repeats). Your timescales for claiming these are:
- CD’s - 28 days from start date.
- ERD’s - 365 days from the original start date.
- EPSR2 - 180 days from start date.
Best practice is having all claimed within 3 months at the latest and within 2 weeks for the CD’s.
2. Get cash in from Unclaimed Scripts
What about pharmacy efficiency? The critical things to look at here are ‘Dispense Notification Success’ not done by the month end and claim notifications done by the 5th. There is a lot of money here at a time when cash flows are pressured. Typically, more than £2,000 of cash flow per branch is left behind at month end and by 5th of the month on EPS scripts that could have been claimed but have drifted into later months.
3. Get Exemptions right
There are quite a few reasons why Patient exemptions do not automatically update the EPSR2 scripts. Therefore, having an easy way to identify which scripts have not been marked as exempt within the month is important to avoid an unnecessary cash loss. At a cost of £8.80 per Item this adds up to a lot quite quickly.
4. Move Dead Stock every quarter
This is typically worth £1,000 - £2000 per branch per annum when done correctly. It can be addressed by moving stock identified as:
- Previously dispensed at least twice but not in last 4 months in a particular branch and still dispensed in another of your branch(es).
- Scanned stock figures not dispensed in last 4 months in a particular branch and still dispensed in another of your branch(es).
5. Do MUR’s consistently each month
Whilst most pharmacies will do their allocation of MUR’s, it is better that these are done as part of a regular and even routine over 12 months rather than altogether in February and March. There are lots of patients that previously have not had an MUR that would really benefit from one rather than continuously going back to the same MUR patients.
6. Get routine going to get full allocation of NMS’s
It is possible to do as many, or more NMS’s as MUR’s each month. Although in practice, pharmacies do a lot less. With good information, processes and the right level of resources, continuous improvement can drive these numbers up significantly. Increases are achievable, there are now;
- 40 groups doing more than 100 NMSs per branch on average per annum
- 5 groups doing more than 200 NMSs per branch on average per annum
- 2 groups doing more than 300 NMSs per branch on average per annum
7. Max out QPS, SCR, Flu
How to improve efficiency of pharmacy? Both the Quality Payment Scheme and the Summary Care Records are services that can be tracked to ensure that full payment is achieved. In addition, flu vaccinations are very enthusiastically done by many branches and inconsistently in others – careful management can drive more profit.
8. Other Services - CCG and LPC led
We have noted that CCG’s and LPC’s contract pharmacies to do other ad-hoc services which can be worth as the national MUR and NMS services. Tools such as PharmOutcomes augmented by data driven decision making do a really good job to streamline this area.
9. Can hours be reduced?
For Pharmacies not on 100 hour contracts, looking at weekends and after 5pm openings is something to be carefully considered. We see many customers with sophisticated resourcing models with regard to hours needed, but a tool to review these every 6 months in line with changes in the business will deliver better results.
10. Get consistency across branches to maximise performance
We are all human, so we struggle to work like machines in terms of consistency of how we operate. As a result, things will be left behind unless we can see dashboards/scorecards of where we stand in order to deal with the exceptions. Strong area management and quality information are indispensable to ensure that nothing is left behind. How to increase efficiency in retail pharmacy?
It would be very useful to consider these as you formulate your plans for 2019. We will address the remaining 10 in more detail next month.
Should you like any clarifications, or if you’d like to explore any of these areas further please let me know.
Check also how to increase pharmacy profit margin.
Chief Data Scientist
0808 1890 617