Every Pharmacy Business Needs to Spend One Hour Every Day Doing This
For most independent pharmacy business owners, it often feels as if small changes in daily activities could rarely contribute to a substantial increase in a store’s profits.
Your team spends countless hours every day filling scripts, restocking shelves, staying up-to-date on inventory orders, offering your patients premium care, and if you’re really on top of your game, syncing patients
It doesn’t feel as if you have a spare moment, let alone a spare hour to put toward a new project…
But what if we told you that spending those 60 minutes, every day, on data mining could drastically improve your pharmacy business?
Greg, a Utah-based PDS member and independent pharmacy owner, increased his gross margin by 5% with data mining in just a few short months. The result? His team was able to add almost $400,000 to their annual profit through data mining. Read more stories like his here!
Data mining is not only a great way to increase your profits, but it will ensure your patients are receiving the best possible medications for their needs.
What exactly is mining your database?
Data mining is really a way of thinking and looking at your business. You have a wealth of information at your finger tips and most likely it goes unused everyday. A part of data mining is the process of habitually running daily reports on your existing patient database to identify profit-driven opportunities within your pharmacy business. For example, a simple, doctor-approved switch from one low-profit drug to one in the same drug class, but with a higher margin, can increase your profits every month that patient is on the prescription, and often lead to fewer side effects.
Step 1: Running Reports DailyChances are, you know what your volume is on a daily, weekly and monthly basis, but you’re focusing on the wrong metric! Pharmacy owners need to concentrate on their gross profit per prescription.
Utilizing the PDS Profit Chart to identify exact drug class switches being accepted, and working with Profit Gurus to identify opportunities specific to their pharmacy, PDS members are creating systems that allow their teams to find more of that type of business.
It’s about working smarter, not harder, and focusing your efforts to earn more from your existing patients. However, you’ll also start to Identify Trends – step 2.PDS MEMBERS: To have your database analyzed by one of our Profit Gurus and access a list of ready-to-make switches, please email your Performance Specialist!
Step 2: Identifying Trends
With your daily report figures, you can begin to break down commonalities in your customer database, which is a key step in optimizing your profitability.
For example, you may identify a number of patients that suffer from the same ailment who are registered with the same insurance provider. Half the patients may have been prescribed medication A, while the other half have been prescribed medication B. If medication B pays out significantly higher and is known to produce better results, it’s worth attempting to switch the first group over to medication B from medication A.
Typically, a database can be mined for opportunities either by looking at disease-based or prescription-based pathways. It’s best to check both pathways regularly, and once you’ve identified a strong opportunity to improve patient care and profitability, you want to move on to step 3 – Replicating Your Success.
Step 3: Replicating Your Success
With a profitability opportunity identified, the most efficient way to benefit from the discovery is by identifying all candidates within your database that meet the same criteria.
For example, rather than identifying one patient, Mary Smith, who should be switched from medication A to medication B – look for all of the patients that meet the same criteria as Mary and work on reaching out to all of those patients for maximum profitability.
Getting Results With Data Mining
After running your reports to identify opportunities and analyzing trends, you will be ready to work toward increasing profitability with strategic medication switches.
Your team will be in an excellent position to reach out to patients with recommendations for better medications, supplementary products, programs and services that will both improve patient care and increase revenue.
Data mining is arguably the most impactful change you can make to your pharmacy business profitability and the change can easily be executed in an hour a day. If you’d like to learn more ideas for increasing your profits, download our eBook: Pharmacy Business Blueprint for Massive ROI where we outline three proven tactics that help owners get out of the profitability rat race while providing world-class healthcare to patients.