Improve Pharmacy Profitability: 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 pharmacy profitability.
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.
Most pharmacy owners feel as if they don’t have a spare moment, let alone an hour for a new project. Spending 60 minutes, every day, analyzing your dispensing data can drastically improve your pharmacy’s gross profit margin per prescription. Read on to learn the first three steps toward improving pharmacy profitability by analyzing your dispensing data.
Make an impact on your bottom line with RxAnalytics
Greg, a Utah-based PDS member, and pharmacy owner increased his gross margin by 5% in a few short months when he started the program. The result? His team was able to add almost $400,000 to their annual profit by analyzing their pharmacy’s dispensing data. Read more stories like his here! This strategy is not only a great way to increase your pharmacy profitability, but it also ensures your patients are receiving the best possible medications for their needs.
What does it mean to analyze dispensing data?
Data analysis is a new way of thinking and looking at your business using PDS’ proprietary software, RxAnalytics. There is a wealth of information at your fingertips and most likely it goes unused every day. A part of this strategy is 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 Daily
You probably already know what your volume is on a daily, weekly and monthly basis. The fact of the matter is that you’re focusing on the wrong metric! Pharmacy owners need to concentrate on their gross profit per prescription.
PDS members utilize the PDS Profit Chart to identify exact therapeutic optimization switches, and working with Profit Gurus to identify opportunities specific to their pharmacy; enabling the creation of pharmacy 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 which is the next step in this strategy.
Step 2: Identifying Dispensing Trends and Profit Opportunities
Daily reports help owners to identify commonalities in your customer database, which is critical to optimizing your pharmacy profitability.
For example, look to 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, you or a key employee can assess 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 – Dispense and Repeat
When 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 who should be switched from medication A to medication B. Identify all your patients that meet the same criteria and work on switches across the board for maximum profitability.
Getting Results With RxAnalytics
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.
RxAnalytics is arguably the most impactful change you can make when it comes 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.