There has never been a better time to invest in design and technology to improve pharmacy efficiency write Bruce Annabel and Mal Scrymgeour
One morning in 1869, a proud group of blockers, caulkers, sawyers and sailmakers watched as their latest ship, the Cutty Sark, slipped into the River Leven, in Scotland.
After a year of construction, the Cutty Sark, a British ‘tea clipper’, started her working career. She was built at the zenith of wooden sailing ship design and technology.
However, the Suez Canal opened the same year, making the journey shorter, but also significantly reducing the benefit of a fast sailing ship.
Adding to the woes of the owners of the Cutty Sark, steam ships started making huge strides in performance. The Cutty Sark became even less economic. What had once worked so well, was no longer the case. The ship effectively became a museum piece.
It is a salient message for pharmacy. The ‘old way’ of thinking in pharmacy is becoming not only outdated, but its economic benefits are eroding, and fast. The fundamentals are the same—patients want advice from an expert, in a retail outlet, and all of it done immediately. What is changing, and needs to change, is how pharmacy is executed.
Owners have a choice—to lead and be at the front of that change to make their pharmacy a viable, profitable business, or keep doing what they have always done and become a quaint relic of times gone by. Are you powered by steam or sail?
Some government support
In a rare piece of good news for pharmacy, the government is helping you move from sail to steam power. From now until 30 June 2022 the federal government is offering businesses with turnover less than $5bn a full tax deduction for expenditure on depreciating assets provided the asset is ‘held’ and ‘installed ready for use’ from 6 October 2020 to 30 June 2022 (we recommend you consult your accountant for specifics).
This suits pharmacy well, providing deductions for investment in refits, fit-outs, computers, robots, etc. There has never been a better time for pharmacy to become more efficient and improve your economics.
Why is this important? One of the key success factors for improving efficiency and the economics of your business is investing in the right design and layout. There are four pre-determinants:
- Determine the purpose of your pharmacy, e.g. improve health and wellbeing.
- What are the strategies you will employ to achieve that? These should be dominated by the big four —premises, merchandise, service(s) offered and people/skills mix—that differentiate compared with the ‘beige’ pharmacy offer.
- An expert designer assembles a plan based on 1 and 2.
- Select a shop fitter. The first three steps are vital in avoiding a re-fit, or fit-out, based on cost and/or the ideas of someone else, not you.
Good pharmacy design will lift average sale, reduce the number of walkouts, increase visit frequency and attract new health consumers. A good plan should encapsulate three fundamental elements including efficiency, effectiveness (patient health service(s) and reward) and, most importantly, the patient experience.
The patient experience
Just like a better sailing experience, patients prefer what is easier and better. Therefore, the most important design objective is increasing patient visits by raising their experience. It sees current patients return and it attracts new ones. The focus is all about raising the in-pharmacy patient experience which is the secret to today’s innovative and highly profitable pharmacies. We believe that approach will be important as the industry grapples with the 2021 economic recovery and associated difficulties. It will be a challenge and that’s why the RBA cut official rates to 0.1% in November 2020.
Owners can grow the bottom line by being more efficient or cutting cost. Efficiency improvement is all about reducing time taken to process scripts and tasks generally. That can result in either lowering staff costs or, much smarter, using that same time/cost to grow via improved service. Most pharmacists never think about this opportunity, cutting wages provides a short-term benefit. Growing the business means re-investing in services.
Dispensary management systems
Modern dispensary storage systems require less floor space m2 and fewer linear metres while saving ordering, replenishment and picking time. Dispensary robot technology is an option, but the script volume financial break-even point is much higher. DAAs are a rapidly growing and profitable service. Assembly using a DAA virtual dispense system saves space and time with the exciting benefit of a high ROI and the capacity to grow community patient DAAs easily.
We have found that the greatest contributor to improving dispensary efficiency is placing the right people in the right roles at all times (or as close to ‘all times’ as you can get). Technicians handling the dispensary administration tasks of pick, order, replenish, assemble and transfer are the critical pre-cursors. It also allows more scripts to be handled and growth more easily absorbed. The result is happier patients engaged with the pharmacist and, as a result, the business grows.
Layout and design
In general, the design must allow patients to easily flow around the pharmacy, accessing areas they can clearly see, e.g. script in/out, medicines, wellness, wound care, sleep, etc., and speak with a pharmacist to solve health problems including minor ailments.
Many of the recent pharmacy of the year winners do this very well. Dispensary design is critical—minimising the distances between Rx in, Rx process and Rx out is essential to have an efficient process. We do not advocate stationing a pharmacist behind a dispense pod because at busy times this role curtails service effectiveness. The best design offers patients superb service and services, even at the busy times.
Effectiveness is also about productivity. And process. That means consistently high standards for each patient, all day, every day.
Patient health solution services
Increasing service capacity, designating services precincts for different purposes and positioning pharmacists in them will drive professional service and patient visit growth.
Service precincts include:
- script in, script checking and script out;
- advice/counselling/health product solution recommendations;
- sit down semi-private counselling area for script/medicine consults plus DAA/MedsChecks/blood pressure/peak flow, etc;
- minor ailments counselling area; and
- consulting rooms for professional services, vaccinations, wound dressings, etc.
Separating activities into distinct areas allows more patients to be helped thus increasing the number and quality of interactions. The double counter dispensary design where more than 80% of activity occurs within a few square metres compromises the patient experience and isn’t the optimal design.
Providing the ability to improve service allows pharmacists to generate much higher incomes—boosting retail health sale/patient and services income. It’s not just a theory either. It works.
Client examples include:
- 110m2 floor space/two consult rooms and $300,000 services income;
- 205m2/three consult rooms with >$300,000 services;
- 300m2, with three consult rooms with $600,000 services income.
Placing the health solution recommendation lines in and/or near where the pharmacists are stationed is important. Placing, for example, S3 and practitioner lines behind scripts ‘in’, while they may look nice, at busy times won’t allow you to recommend much. Dual locating can work well provided those lines are also placed in pharmacist service areas.
As we learnt with the Cutty Sark, great design improves efficiency and the underlying economics of a business. A great design saves time, lifts effectiveness, raises patient professional health service experiences and gives patients powerful reasons to return.
The government has provided a window of support to redesign pharmacy dispensaries, the engine room of the business. Steam ahead to a better future—launch your new dispensary design in 2021.
Will you be at the cutting edge of pharmacy, or will you be a museum piece like the Cutty Sark?