What we’re about to show you will likely make your blood boil. It did ours. These are pictures you must see to affirm your sneaking suspicion that yes, you are in fact getting duped by PBMs, such as CVS Caremark.
The images below were provided by a fellow pharmacy owner and were obtained during the process of filing a MAC appeal with the Medicaid HMO, Molina. Like many owners who bill to CVS Caremark, she noticed a consistent pattern of being underpaid on reimbursements. In response to the complaint, she received the following files which show the charges to Molina for the prescription, a stark contrast to what her pharmacy received.
|Prescription||Amount Submitted by Pharmacy||Molina Paid Caremark||Pharmacy Reimbursement||PBM Spread|
|Guanfacine HCL ER 2 MG tablets ER 24H||$320.00||$121.55||$7.60||$113.95|
|Neomycin-Polymixin-Hydrocor 3.5-10K-1 solution||$106.00||$50.32||$5.40||$44.92|
Images one and two show what Molina paid CVS Caremark for two prescriptions while images three and four show what the pharmacy was paid. This highlights the reality that pharmacies are regularly underpaid for prescriptions while the insurance plans are charged far more, and the PBM gets to keep a considerable spread of profits in their pocket.
We’ve also attached the documents for download here.
What This Means
There are approximately 22,000 independent pharmacies in the United States. If we looked at the Guanfacine prescription alone, the yearly payout to PBMs is $29,832,000 if the baseline assumption is that pharmacies nationwide fill this script once a month.
MAC list pricing by PBMs puts independent pharmacy owners at a considerable disadvantage. Adding insult to injury, the majority of the pharmacy owners on the PDSadvantage message board are in agreement that the appeals process is ineffective. A best-case scenario is periodic price adjustments depending on the appeal, which, in the long run, never affect changes in pricing for pharmacy owners as a whole. Overall, this process is designed to force busy owners to choose between below cost reimbursements or an endless cycle of appeals with little change in outcome. Many argue that the effort invested in submitting appeals isn’t worth it because the core of the problem isn’t addressed, and it takes up precious time that should be spent on growing the business, not in the pharmacy.
Fight Smarter, Not Harder
CVS Caremark and other Pharmacy Benefits Managment companies, such as the other 2 of the “Big 3,” OptumRx and Express Scripts, will continue to intentionally narrow the gap between reimbursement and acquisition cost while keeping the appeals process ineffective in the face of repeated price adjustments. This leaves independent pharmacies underwater. We at PDS don’t count ourselves among those who think fighting is futile. The answer is fighting smarter, not harder by making these issues and any other unfair regulations IRRELEVANT to how you operate your pharmacy business. Here and now, we can affect change that will make issues like unfair MAC pricing a blip on the radar. If we come together, our own collective and individual success will be exponentially greater than any threat the PBMs can sling. Filing appeals is a start, but alone it is not the answer. Informed pharmacy owners know that the focus should be on putting effort toward strategies that directly impact your bottom line.
Taking Matters into Our Own Hands, Together
There are over 1,800 pharmacy owners and professionals that know the value of fighting smarter with a proven plan, backed by a community that supports and stands with them. This gathering happens every February in Orlando, Florida.
Independent pharmacy owners just like you gather with the experts and titans of the industry to:
Give owners proven, sustainable strategies that will pay immediate dividends
Light the passion for pharmacy most owners lose in the landscape of this unfair game
Give you the confidence to battle MAC pricing, DIR fees, below-cost reimbursements and any other obstacle in your way – and win
Find your people. Fellow owners that are walking the same path as you. The value of this support and knowledge-sharing is priceless. If you’d like to continue to file appeals and disputes on your own, we commend you. At least you’re doing something and making your voice heard, but that is not your only recourse.
Attend the PDS Super-Conference and see for yourself why we are so confident in our ability to change your life that we have a conference guarantee. If you don’t see the value of after the first day, we’ll reimburse your travel up to $500 and give you an additional $300 — no questions asked.
With our SyncRx+ Intensive training course coming up, we’ve had requests for the Facebook Live video we posted below. In it, our very own Dr. Lisa Faast discusses the benefits of synchronization in your pharmacy and answered questions from pharmacy owners about our SyncRx+ program.
Watch the short video below and you will discover:
- Benefits of a medication synchronization program
- Managing the growth of a synchronization program
- Mitigating inventory and staffing challenges
- Identifying ideal patients for your program
- Setting goals for your synchronization program
- Managing compliance with patients
Still have more questions? Watch a free on-demand webinar, Sync or Sink: An Insider’s Guide to Successful Synchronization, hosted by the developer of the program, Jason Turner. He answers more in-depth questions about the program and exactly what to expect from the training plus the incredible results you’ll see. Watch it now here.
SyncRx + Intensive incorporates the traditional synchronization adherence model and adds an MTM component. The program will help improve your pharmacy’s performance through data mining, improved quality measures, workflow efficiency.
There is no shortage of options for owners looking to impact pharmacy growth. Successful independent pharmacy owners must maintain a balance between growing profits, investing in the business, and managing operational cash flow. This formula is not new. However, in light of significant industry shifts and stringent regulations; the balance is more challenging to achieve. Success is a matter of surrounding yourself with the right team in an environment that will cultivate pharmacy growth. The PDS Super-Conference and premier sponsor Live Oak Bank are the solution partners you need to establish successful programs and unlock capital for your pharmacy.
In an industry where large competitors have unlimited access to funds, and you need capital to implement essential profit programs; where do you start?
Step 1: Know Your Pharmacy Market
Understanding where your profits are coming from is the first step in taking your business to the next level. Passively waiting for the next prescription to walk through the door does not work anymore. The waiting game will not keep you operating at full potential. Actively targeting the most profitable aspects of your business keeps you on top of market conditions and prepared to adjust course in the face of changes.
Step 2: Managing Pharmacy Cash Flow Effectively
Cash is king, we all know it. Your pharmacy should have enough cash flow to reinvest back into your business and employees from marketing to new equipment, all while maintaining salaries and keeping the lights on. Mismanagement of or inattention to cash flow will limit how far you can take your pharmacy. It affects how banks look at you when applying for loans, and your ability to scale successful initiatives.
These are just a few of the tips that we cover with independent pharmacy owners at the Annual PDS Super Conference. Our goal is to provide owners with the tools and solutions to establish a solid foundation, kickstart pharmacy growth, and provide ongoing support you navigate the industry in the coming year.
Live Oak Bank is one of the largest investors in community pharmacies in the industry and has provided nearly $750 million in loans since 2010. They provide funding and packages to address all of your pharmacy needs.
- Quick loan closes – approximately 47 days
- Favorable terms with low-interest rates
- Low equity requirements
As your dedicated solutions partner, Live Oak Bank can assist your pharmacy with everything from facilitating prescription file purchases and software solutions to streamlining improved inventory management. As a major sponsor of #PDS2017 Live Oak Bank will be in attendance, making it the perfect time to stop by their booth and learn more about their loan capabilities, low-interest rates, and equity requirements.
Data Analytics For Pharmacy owners
We have said this countless times before; pharmacy owners play an unfair game. This isn’t just a maxim we tout to tug at your emotions. The unfair game is the core of why we wake up every day to champion pharmacy ownership. If you think you’re doing okay or getting by just fine, check out some of our pharmacy owners who are nailing data analytics among other strategies and winning the game.
Our winning strategy for lasting success is and always has been, an introspective one. The chances are that any deterioration on the outside will indicate a decay within. What is the first thing you look at when you start assessing your pharmacy business opportunities? Your team, customers, pharmacy data, financial statements, even yourself, should all be audited and tested to bat.
This is why our PDS2017 Keynote speaker is so relevant to our cause.
Paul DePodesta Has Made His Name Creating Actionable Strategies
Based on Data Analytics
During the show, he will get attendees to rethink how their system works by asking what Paul calls the naive question, ”If we weren’t already doing it this way, is this the way we would start?” By applying an analytics-driven mindset to common pharmacy issues, Paul will help PDS Super-Conference attendees rethink:
- The idea that prescription volume equals pharmacy profits. Would you rather fill 100 scripts at $5 each or two scripts for $250?
- The tools of the trade. Would you rather keep guessing at who your best customers are or experience tools that will revolutionize the way you visualize your data to target your plan?
- The resolution that pharmacists must accept any customer and prescriptions that walks through the door. Wouldn’t you rather control where you get your profits instead of being at the mercy of the cash register?
For those unaware of why Paul is a results-driven analytics titan, he is the inspiration for the Moneyball Methodology used in the major motion picture “Moneyball,” starring Brad Pitt. Sound familiar?
He served as Assistant General Manager of the Oakland Athletics from 1999 to 2003. At the time of his hire, Oakland was one of the worst teams in the league, coming off of six losing seasons while posting one of the lowest payrolls in baseball. In an industry entrenched in ingrained thinking and outdated systems, the stagnant team needed the unique management and creative approach that A’s GM Billy Beane and Paul DePodesta brought to the table.
By Paul’s final four seasons in Oakland, the A’s won more regular season games than the New York Yankees, who during the same period spent $350 million more on player payroll than did the Athletics. By his unique approach and commitment to leverage data to maintain a level of unimagined success, he and Billy Beane revolutionized the way baseball teams are built. His work has been recognized by various publications, including Fortune, who named him one of the Top 10 innovators under 40.
At PDS Super-Conference, we’re not just going to make you more money. We’re going to revolutionize the way you see your pharmacy to get you fast results you have never dreamed were possible. Pharmacy data analytics is available to the independent industry and PDS is helping owners stay competitive in an increasingly challenging business landscape.
Data-Analysis for Independent Pharmacy Owners
Are you the type of independent pharmacy owner who is content to drift along with the dated model of taking whatever business happens to walk through the door? Don’t settle for “business as usual” and “my pharmacy is doing just fine.” The unfair game PBM’s are playing won’t change until you start to look at your profitability differently. Discover where big money can be made in independent pharmacy–it’s right under your nose, and you don’t even know it.
Pharmacy Development Services (PDS), believes that the success of each independent pharmacy is a win for everyone and we are ready to show you the level of commitment we have to your success.
Improve Pharmacy Profitability
The average independent pharmacy operates on very thin profit margins, forcing owners to reevaluate ways to keep costs low and profits high on a regular basis. Not knowing where to look first can be frustrating and overwhelming. Here are the three methods of improving your pharmacy profitability you should regularly assess in your business.
How to Buy Smarter with Pharmacy Wholesalers
Typically, a single wholesaler will not meet all of your purchasing needs nor provide the best pricing for all prescription purchases. A good way to avoid relying on one wholesaler and putting your already thin profit margins at risk, is to have several secondary suppliers as a point of comparison. Taking advantage of the Pharmacy Development Services (PDS) industry-exclusive message board in PDS Advantage will enable you to get peer recommendations, insights and customer service feedback, before making commitments.
Know Your ‘Top 20’ Prescribers
Not all prescribers are created equal so ramping up your profits should start with identifying your most profitable prescribers. A deep dive into your data will show you which prescribers are moving the profit needle, and which ones keep you busy behind the proverbial bench. Prescribers may land on your list for a number of reasons, but volume should not be one of them. Once you have identified key providers, start implementing ways to stay top of mind by providing value-added services and exceptional customer service to keep the referrals coming in your door.
An often overlooked way to increase your pharmacy’s profitability is to ensure you are recouping the maximum on insurance reimbursement claims. There are three strategies every pharmacy should implement and enforce to remain confident that you are not leaving any profits on the table.
- Regularly update U&C price points — This information is critical to setting an accurate cash price for prescriptions and receiving the maximum on insurance reimbursements. It should be standard operating procedure to examine your switch data to identify claims that paid at U&C.
- Ensure accuracy with DAW claim codes — Incorrect coding can result in the accrual of significant losses. Train your team to be attentive when submitting DAW codes, because not doing so will negatively affect the profitability and efficiency of your pharmacy; the reimbursements will be inaccurate; the pharmacy will lose time over claim resubmissions and misinformation on claims may trigger the most dreaded consequence — a pharmacy audit.
- Consistently update AWP information — Pricing and reimbursements models are still largely based on AWP, and ‘bad data’ leads to inaccuracies that affect profits. Pharmacy owners should make sure their software is updated daily with the latest pricing information. Many third parties lag in their updating of AWP, which will mean a pharmacy will have to invest time to reverse and resubmit claims to capture lost profit.
Independent pharmacy owners often believe they cannot impact their pharmacy profitability. However, the strategies above can result in thousands of dollars in profits each month. Yet, most pharmacies haven’t changed the management of prescriptions and processes in years. If you are waiting for prescriptions to come in the door, dealing with inventory and purchasing headaches and finding little time to implement new initiatives or improve your current processes..you are doing it wrong!
Running a reactive pharmacy is ineffective and killing your bottom line…but there is a better way! SyncRx Plus is a program that incorporates the traditional synchronization adherence model and with an added MTM component. The implementation of this program will improve your pharmacy’s profitability through data mining, improved quality measures, workflow efficiency and by leveraging your third-party contracts.
As social media becomes increasingly effective as a marketing tool, it is little wonder that small businesses as independent pharmacies are starting to take advantage of this convenient and cost-effective medium. Without a huge brand name or giant marketing budget, independent pharmacies need to get creative in engaging with customers and social media can be a great way to keep the relationship going beyond your store’s four walls.
However, many independent pharmacy owners and managers, find the thought of tackling social media confusing and overwhelming. Pharmaceutical marketing doesn’t have to be intimidating and in fact, here are a few easy ways to start using social media for business:
- Create a dedicated Facebook page for your pharmacy
By creating a simple Facebook page online, you will be able to post helpful information for your store, such as business hours, dates you will be closed, special events, disease-specific information, tips and more. Simply think of this as a modern day interactive phonebook, where people can look you up and stay in touch. You can post messages, answer questions and interact with customers and patients to help them find what they are looking for. Facebook provides easy instructions and best practices for getting started on their site.
- Consider setting up a Twitter account for your pharmacy
Pick an easy to identify Twitter handle (account username) for example @A1Pharmacy, which can be really effective for driving awareness to your store. Twitter is an easy and simple way to communicate with customers and prospects in real time. It can be a great tool to spread “short and sweet” messages about sales, vaccination clinics, CDC updates, awareness campaigns, educational seminars and so much more. Twitter can also be utilized for sharing information or suggestions either “live” or prescheduled at a later time that you designate. For example, you might tweet (a “Tweet” is a Twitter message in 140 characters or less) “Stop by our store today to get your flu shot before the season kicks into high gear.”
Regardless of what social channel you use, remember to create posts that lead to conversations rather than simply provide information. Negative comments should also be addressed on social media quickly and honestly. Complaints are a part of any business, but managing the issue and repairing your pharmacy’s brand with quick explanations or apologies will go a long way in increasing customer loyalty.
- Providing critical information to customers on your website
Although Facebook and Twitter can be easy ways to engage in online conversations, it is equally important to provide helpful information to customers via your website and follow-up with social media posts. This can include policy changes, medication recalls, emergency information after a natural disaster, job openings, disease education, government regulations, vaccine reminders and other important details about your pharmacy that customers should know and be able to learn about quickly. All information should be presented in a professional and knowledgeable manner, representing your pharmacy’s brand. Simply think of this method as another tool to engage and delight customers and reach those people who may not be responding to traditional direct mail or advertisements.
Both your website and social channels should be activated for promoting sales, seasonal events, invitations to customer appreciation days and other local community events.
Finding new methods to drive awareness to your store may seem challenging, but using a combination of traditional and new media marketing methods, will help your independent pharmacy thrive and grow.
One of the biggest advantages of managing employees at an independent pharmacy is the flexibility to design a personalized pharmacy team. In fact, a well-managed, high-performing team will produce better business results.
But how does one build a team of high performers?
Effective communication is an essential part of effective team management. Better communication facilitates more streamlined operations, and helps eliminate time-wasting activities because everyone understands what is expected of them.
Pharmacy owners must shift the focus of their employees towards achieving business goals, personal accountability and top-notch customer service. Your customers and employees will all be happier thanks to this approach.
Here are some important tips for turning individual pharmacy workers into an impressive high-performance team:
1. Effective Time Management
Start by analyzing the duties of each team member. For a thorough and accurate analysis, it is best to do this without following the workers around like a shadow. Simply observe what they do throughout the day, and ask them about their duties. Ask these questions about different tasks to determine if they are essential:
- What would happen if this task were removed?
- Are there more benefits or disadvantages for changing this process?
- Is there any way to simplify this task or process?
- Are there too many people working on the same tasks?
- Are technologies available to make this process simpler?
Never make a change that compromises quality, service or accuracy in filling medications. When time-wasting tasks are cut and duties are clearly outlined for each team member, assignments will be finished faster. The day-to-day nature of the pharmacy business can be unpredictable, but implementing a time-management plan will make fluctuating volume demands easier to navigate.
2. Set Clear Business And Performance Goals
Every independent pharmacy owner should have specific goals. Setting daily goals for managing time, completing tasks or hitting a specific sales target can be a great way to help your team stay focused. Communicate these goals with your team members using a central shared bulletin board or an electronic system for better clarity. Hold regular meetings to evaluate progress.
3. Motivate With Incentives
When most independent pharmacy owners think of incentives, they think of cash bonuses. These are not always necessary. Weekly rewards such as a free bottled beverage and a protein bar could also do the trick to reward behaviors inexpensively. Consider offering gift cards, an extra vacation day or a credit voucher for in-house purchases to the best-performing worker on your team for each quarter. Simple recognition tactics such as paper awards, thank-you notes and a program for honoring the top employee of the month, can help boost morale and encourage quality work.
4. Rethink Training Strategies
Are staff members effectively trained when they are hired? Examine pharmacy training materials and methods. If there are processes that seem ineffective, remove or replace them. Ask your seasoned team members to suggest improvements for new employee, team training and development plans. One of the most important elements to incorporate throughout training and beyond is a collaborative culture.
5. Create A Team Culture
pharmacy success stories have a positive culture of teamwork, which translates to increased efficiency and improved ROI. Though building a strong team is not a one-time activity or a box you can check off. The process itself takes time and work, and maintaining it requires a team-oriented workplace culture.
If a pharmacy has several employees and a few departments, it’s a good idea to designate leaders for each. Then encourage team leaders to strengthen their sub-teams and support one another. It can be helpful to have regular “all team” meetings where workers praise one another for their efforts.
High-performing pharmacy teams are worth their weight in gold. Pharmacy owners have the power to create a positive and collaborative store environment that makes for happy customers and better results.
Would you like to learn more about building and leading a High-Performance Team? Let’s talk!
Schedule a free assessment call with an experienced Business Growth Advisor today.
Become a Community Healthcare Destination
How can pharmacy owners stand out among the competition and grow market share? By positioning your store as a community healthcare destination.
The healthcare landscape is one of constant change and gaining a competitive advantage can be an ongoing battle for the independent pharmacy owner. There are a multitude of challenges that owners like you deal with every single day just to keep the lights on and leaving little energy to innovate.
So how can pharmacy owners stand out from the competition and enhance market share?
It’s simple. By positioning their pharmacy as the “community healthcare destination”.
But You May Be Wondering How To Position Your Pharmacy As a Community Healthcare Destination
Utilizing tools, such as data-mining which means analyzing information to find patterns of useful information that can be applied to your business. Data-mining enables you to identify key areas of opportunity that you can react to. You may find trends that indicate a need to stock a certain product or a product or service that might need to be eliminated. By reviewing data and learning what is really happening in your store, you can find areas to improve your business, streamline and ultimately increase your bottom line.
Keep in mind that innovation can take on many forms; there may be dated processes in need of overhaul, or a new niche service that you can incorporate to address a specific healthcare concern within your local area. Or perhaps a new more profitable medication that you can use to replace another one.
Here are some simple steps to getting started on the path to establishing your pharmacy as a community healthcare destination in your neighborhood:
- Strive to understand the unique healthcare needs of your community – Once you begin to understand the healthcare needs of your community, you can identify how to address them by adding, clinics, immunization programs, disease education and much more.
- Use data to discover opportunities and refine numerous aspects of your business – Analyzing and understanding your data, can help you determine key areas of focus such as improving customer service, adding new disease-specific products and/or managing your P&L more efficiently.
Pro-tip Don’t just look at profit data, track results! Successful patient outcomes will be instrumental in the long-term marketing of your pharmacy services.
- Become a Community Healthcare Ambassador – Once you identify one or more areas of specialization to focus on in your pharmacy, you can start planning the implementation and marketing of these services. Visit doctors offices, hospitals and elder care facilities to build your network and share the unique services you offer to support the needs of these patients.
Pro-tip: Your knowledge is your strongest asset. Focus on quality, not quantity when it comes to patient interactions.
BONUS: Community-centered programs to solidify your position as the local community healthcare authority:
Below are some helpful turn-key programs and initiatives that PDS has developed to help independent pharmacies expand their reach and establish themselves as the leader for treatments and education. Need help getting started? Contact us for more information!
Understanding the needs of your patients will allow you to identify new services, key products, and distinguish you from your competition. Utilizing this knowledge will be invaluable for the longevity and sustainability of quality programs and exceptional customer care.
No one knows your local community better than you do, so use these tips and free program guides to decide which programs will be the best for your business.
Let’s talk! Schedule a call with an experienced pharmacy business expert to learn more about our independent pharmacy strategies that will have you on the fast track to profitable results.
How to overcome negative stereotypes often associated with compounding pharmacies
In an interview recorded at the PDS 2015 Super-Conference in Orlando, Florida, PDS expert, Lisa Faast, PharmD explains how pharmacists can use their expertise to overcome negative stereotypes often associated with compounding pharmacies.
Faast says, “the majority of compounders out there are the most outstanding educated pharmacists…” and the best thing you can do as a compounder is showcase your patient success stories.