PDS 2014 Round-up: Helping Independents Think and Act Big
May 27, 2014 by Smart Retailing Rx
Business and Operations
Business and Operations
Learn about some of the actionable business strategies discussed at the 2014 Pharmacy Development Services conference that can help you to re-energize your pharmacy to get results.
“Play big” was the theme of the 2014 Pharmacy Development Services (PDS) Independent Pharmacy Business Growth Conference. For three days, over 1,000 attendees participated in almost two-dozen sessions — all focused on helping independent pharmacy owners grow their business. As a presenting sponsor, McKesson had a significant presence, as did Health Mart® and RxOwnership®.
Here’s our take on some of the main ideas:
- Your mindset matters. A primary message from this conference is that independent pharmacy owners must see and aggressively seize opportunity by thinking and acting differently. The idea is not to be content with the status quo or complain or feel victimized by changes in the industry, but instead to be hungry, ambitious and growth-minded. Sessions focused on the importance of thinking big and being aggressive, innovative, energetic and optimistic in approaching your pharmacy business.
- Be a leader. Owning a successful independent pharmacy is about far more than just being a good pharmacist; it is about being a great leader. Great leaders enthusiastically drive change. Successful pharmacy leaders focus on culture and employee engagement, and understand that success is a result of leading and coaching a motivated, engaged team. They have a sense of purpose and are strong communicators.Leaders also must understand underlying market trends and think ahead, defining clear three- to five-year goals that prioritize how they will grow their business. The best operators are analytical, looking at finances and data to understand what’s driving their success, like who are their top 10% to 25% of customers, what are the best-selling products and where are the primary sources of revenue.
Check out The CEO Approach to Your Success for more tips on how to tackle leadership challenges and coach your employees. And for more ideas on how to “Operate Your Pharmacy Like a CEO,” check out the six-step plan to help you master the balancing act between your roles as pharmacist, manager and leader.
- Don’t delegate being the chief. Speakers emphasized the wide range of roles that pharmacy owners must play and cannot delegate:
- Chief Experience Officer. Successful owners constantly think about all aspects of the customer experience and design the experience to boost satisfaction and loyalty. Customer experience expert Ryan Estis explained how Ritz-Carlton teaches its employees to proactively look for opportunities to surprise and delight guests.
- Chief Customer Service Officer. Along with the customer experience, owners must define the type of service they want to deliver and then create a culture and processes that result in consistent service delivery. For example, each day Ritz-Carlton has short (5-minute) daily staff “line ups,” where keys to service delivery are reiterated and success stories are shared, which reinforces the culture of service. Keys that are emphasized include a warm and sincere greeting for each guest, where the guest’s name is used and a fond, warm farewell after each interaction. While basic, such customer service experiences are rare.
- Chief Sales Officer. Owners can’t think just about operations and filling prescriptions; they must think about sales and revenues. This requires having the people, processes and technology in place to ensure that the operations run smoothly. This includes acting as a “trusted advisor” and making customized, proactive recommendations to each customer based on their specific situation. This will help to build trust, relationships and sales.
- Invest in marketing. You need to spend money to make money. Speakers reinforced that owners must engage in consistent marketing and outreach that drives increased sales. That means having staff, budget and tracking dedicated to supporting a promotional plan and sticking with it for a while to get results.Visit Smart Retailing Rx’s Marketing & Promotions section for the latest in how to use social media, resources to create a marketing plan and activities that are working for your peers.
- Capitalize on the industry’s focus on clinical outcomes. Enthusiasm and optimism are necessary for success, but aren’t enough. Savvy owners need to look to capitalize on major industry developments. Multiple speakers (including Health Mart president Steve Courtman) discussed the importance of CMS Star Ratings and the role that quality scores will play in network participation and reimbursement in the future. Speakers talked about the opportunity to partner with other providers in accountable care organizations (ACOs), and to work with hospitals to improve adherence, provide medication reconciliation services and reduce unnecessary hospital readmissions.Several case studies (including one from Hashim Zaibak who owns five Hayat Pharmacy stores in Milwaukee, Wisconsin; and from Tripp Logan, a pharmacist in Missouri) highlighted independent pharmacies that are providing MTM services and aspiring to take MTM to the next level. These MTM leaders know that improving adherence can help improve quality ratings and patient outcomes, and can increase refills and revenues. They are identifying complex patients with chronic diseases who take multiple prescriptions to synchronize all of their medications. They are even hiring pharmacists specifically to focus on MTM. To make MTM even more effective, they want access to patient medical records and discharge summaries, as well as immunization, allergy and lab information, to be able to provide complete medication reviews. Many innovative pharmacy owners see this care as the future of pharmacy.
- Seek out partnerships. PDS speakers stressed that independent pharmacy owners don’t need to go it alone. There is an entire ecosystem of potential partners to help independent pharmacies drive growth. Potential partners include other healthcare providers, such as physician practices and ACOs; consultants with expertise in areas such as compliance, training, customer service or marketing; innovative vendors. There were almost 100 vendors at PDS, many with new products, services, and solutions to help independent pharmacy owners increase efficiency, revenue and profitability, including vendors focused on areas such as MTM and med sync; financing partners, which can provide sources of capital for operations, expansion and acquisitions; technology suppliers with new types of pharmacy management systems or systems to automate aspects of marketing and communications; other locally owned businesses, such as restaurants, cleaners or florists; and even local non-profit organizations focused on different diseases, such as diabetes or heart disease, or focused on demographic groups such as children or the elderly, which may be interested in joint promotions. Also, independent pharmacy owners should look to form relationships with peers in other geographies who can share real-world insights and best practices.
- Use technology to level the playing field. To compete against the chains, independents must be agile. Technology gives entrepreneurial owners the ability to move fast. Instead of avoiding new technology, speakers called on pharmacy owners to use technology to improve their speed, efficiency and operational effectiveness. Technology gives small companies the ability to grow by thinking and acting big — from providing refill reminders and med sync, to targeted up-sell of immunizations and other services, to greater integration with other healthcare providers and systems.One example of how independent pharmacies can leverage technology in a novel way to compete with chains’ on-site clinics is to have on-site telemedicine technology to connect with remote, on-call physicians. This provides an independent pharmacy with the ability to have a form of a clinic on-site, without having to build a clinic or incur labor costs. Off-site physicians can use telemedicine technology to diagnose, treat and prescribe for many conditions. This leverages technology to provide a valuable clinical service, which can lead to more revenue, and can differentiate and compete with chains (which typically only have nurses on-site) and requires little or no investment. It is a way that independent pharmacies can move quickly to leverage technology to transform the services they offer and their role in the community.
- Explore high-value niche markets. One way for independent pharmacies to differentiate and help increase revenue is to develop deep expertise in specific clinical niches. Areas mentioned include DME, compounding, obesity education and nutrients and supplements. For example, one speaker described how independent pharmacies may be able to increase revenue by thousands of dollars each month by counseling patients on nutrients and supplements. The overall idea, expressed by several speakers, is to find opportunities that are not currently being met in the community, and then to focus on one or more specific opportunities. This might mean carrying an extensive supply of durable medical equipment and marketing this focus on and expertise in DME.So, identify a clinical niche that is not being adequately addressed (possibly a new and emerging area) and has significant opportunity, and then aggressively become the market leader in that niche.
Even though all independent pharmacy owners know that significant changes are taking place and significant challenges exist, the PDS 2014 conference provided a clear sense of optimism and opportunity. Speakers consistently reminded independent owners that they are not merely pharmacists; they are entrepreneurial business people who aren’t satisfied with letting change happen to them, but look for new ways to solve problems and change the game.
Were you at PDS 2014? If so, share your thoughts, observations and takeaways. If you weren’t there, what is your take on these observations from PDS?