How much revenue is pharmacy ‘leaving off the table’ asks Glenn Guilfoyle
A recent story featured in The Pharmacy Guild of Australia’s Forefront highlighted the revenue “being left on the table” by the typical pharmacy in relation to the newer government funded professional services.
In the article, $20-25,000 was the range quoted as being missed by the average pharmacy from under-utilisation of:
- 6CPA funded programs
- Fixed third party income
- Prescription and medication programs
- Screening and testing services
The points made and learnings gleaned are well-intentioned, and directionally unchallengeable.
But, for the intended target audience, the messaging would have arguably been more potent with some context.
I would say don’t sweat these newer government-funded income opportunities…. well, at least reserve a good dose of your sweat for getting the fundamentals right.
The income opportunity almost certainly will be significantly larger, the customer satisfaction differential more widespread, and you will gain a “leg up” towards accessing a share of this $20-25K anyway.
Data collected over recent years by The Next Level – studying real time dispensary workflow, customer engagement effectiveness, script processing efficiency and team task allocation from a cross-section of over 200 pharmacy studies – indicates that for many pharmacies the lost income opportunity from sub-optimising the fundamentals already unique to retail pharmacy will be thirty times larger!
This means in the vicinity of $200-250,000 in missed margin…
How can this be? That number more than off-sets the lost income from PBS reform for many such pharmacies.
A specific extract of the pool of data collected, suggests that the basis of the service model applied by the industry to health customers is still predominantly of a retail “react and respond” nature.
Non-script ‘OTC’ health customers experience twice as long engaged in conversation that they have initiated with the pharmacist/assistant than the time spent engaged in receiving advice and recommendations initiated by the pharmacist/assistant.
Even more pronounced for the script bearing health customer with data showing three minutes of retail “react and respond” for every one minute of “prompt and pro-act” delight.
The complete solution fundamentals already available at the fingertips, are pharmacist-only, pharmacy-only medicines and the leading PPIs – Meds Checks, Clinical Interventions, DAAs. These fundamentals enable the pharmacist to exceed the expectations of the typical health customer.
But a different extract of the data pool alluded to suggests that this wonderful array of products and services are under-utilised.
- For every 100 script customer visits, 27 s3, s2, unscheduled health products are added
- In other words, 3 out of 4 script customers go away without any companion medicines to assist in treatment, relieving symptoms, alleviating side effects, helping prevention, supporting overall health and well-being in relation to the condition. The fourth customer receives 1 such companion.
- For every 100 otc customer visits, 117 s3,s2, unscheduled health products accompany them back through the cash and wrap
- Little more than a one-for-one ratio
- The average pharmacy administers 5 Meds Checks per month …. remember the hue and cry when monthly cap was set?. Yet only half of that limit is actually administered.
- The average pharmacy administers 3 clinical interventions per 100 script customer visits
- The average pharmacy administers 2 DAA services per 1000 script customer visits
The ‘call to action’ is to get good at the skills to boost your complete health solution offer, optimising the pharmacy-only products and services that have long been available, and thereby achieve two compelling outcomes:
1 – Off-set your financial loss from pbs reform
2 – Give your health customers a wow experience that will clearly differentiate you from local competitors your customers could easily visit
Glenn Guilfoyle is Principal of The Next Level, building better systems and better sales. Click here for more information.