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Creating A (Successful) Virtual Event For Your Pharmacy

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2020 will be remembered for a lot of things. Staying apart, coming together, learning a new normal. Pharmacies have found innovative ways of keeping their businesses moving and operating efficiently – including an abundance of virtual communication. We are going to take it a step beyond virtual meetings and talk about virtual events in your pharmacy. This could be a product or service launch, a grand opening, a community event, etc. Big or small, there is a real advantage to hosting a pharmacy event virtually. 

Why Should You Host a Virtual Event?

The advantages of a virtual event don’t just apply during times when it has to be done, when we are all socially distanced. You can reap the benefits of a virtual event even when you can host an in-person event because it expands your reach.

Key Benefits of a Virtual Event

  • Engage with an entirely separate audience (along with your community AT the event).
  • Your content can be used to promote your pharmacy long after the event.
  • Save time and money; virtual events will cost you less of both.

How to Get Started

The first step to hosting a virtual event (or any event!) is to decide when you want the event to take place. Even though its virtual, it will be live, so you need to decide on a date and time that will work for your audience. 

Next, you need to decide on a platform. The easiest option for a virtual event is Facebook Live. This allows you to share the experience in real-time with your audience. It won’t be perfect (it’s live, so you can’t edit), but it will be authentic, and that’s what matters. Live streams are available to viewers with or without a Facebook account. Viewers without a Facebook account just need the live stream URL. Facebook has an easy outline that talks about the technicalities of how to set this up. We are going to focus on how to promote your event and some tips and tricks to help it go smoothly!

Promoting Your Virtual Event

Just as with a regular, in-person event – you have to let people know about it or they won’t show up. At least with this, you don’t have to worry about ordering the right amount of food! So, what are the best ways to generate interest for your virtual event?

  • Schedule the Live Video – Let your fans know when you’re going live! Facebook sends a notification to your followers when your stream begins.
  • Create a Facebook event – Publicize the event details and invite your network.
  • Promote on Facebook – Create a buzz with organic posts and paid advertisements. Think beyond just posts – include photos and videos for interest.
  • Promote via other social channels – You don’t have to limit yourself to Facebook, post on Twitter, Instagram, LinkedIn, etc. and include the link to the Facebook event.
  • Send direct mail / invites – They don’t have to be fancy (or expensive). A simple, handwritten note (copied and printed) will do just fine! Send to your patients, your community, and your broader network.
  • Promote via community channels – Think about the boards you sit on; the community organizations are you involved in. Can they help promote this to their extended networks as well?
  • Promote via email – Do you already have a database of email addresses? Send the invite out via email and include the link to the Facebook event.
  • Utilize your colleagues and friends – Have guests, employees, friends, etc. share with their networks to broaden your reach.
  • Send out a press release – If you can get local press to attend (in-person or virtually), they will help to spread the word and gain publicity for your event.

Planning is Key

Now that you have spread the word and generated interest, you need to organize the event. A virtual event isn’t the same as an in-person event. You need to be able to engage your attendees even when you’re not face to face. A well-developed plan and a smooth-running event will help you do just that. There are technical considerations you need to make as well, but we’ll talk about that in a moment.

Start with the Goal in Mind

When you start developing a plan, first define what the goal of the event is. Once you have your goal in mind, you can plan out what you need to do to achieve that goal. Do you want people to know about the excellent patient care you offer? Do you want to drive patients to a new location? Are you trying to increase awareness about a new product? Each of these examples will have a slightly different plan.

Lay out the Logistics

Take a look at the length of your event and break it out into beginning, middle, and end. Depending on what your overall goal is, set up the plan for the event. Some ideas may include a virtual tour or a look behind the scenes, a promotion for participants, a ribbon cutting ceremony, a giveaway, a speaker, etc. Each portion of the event should be engaging for viewers. Unlike an in-person event, you don’t need time built in for mingling or networking. Be thoughtful, keep it concise and keep your viewers in mind.

Add a Little Incentive

While many people will attend just to support you, you can also use incentives to entice more people. Offer something to everyone who joins the Facebook Live (a gift, discount, etc.). If you promote this ahead of time, it will increase the number of viewers and it will also help to drive business following the event. You can also design a more significant contest or giveaway that you can promote and then announce a winner during the Facebook Live.

Tips and Tricks for a Seamless Virtual Event

A virtual event does involve technology, so it’s important to be prepared. Here are just a few pieces of advice that will help ensure your event goes smoothly.

  • Stick to the plan (generally) – It’s live so you may go off script a bit, but in general, if you stick to your plan you will feel more prepared and your confidence will come across to the audience.
  • Use a tripod and mic – Nothing is more frustrating than bad audio or visual when you are trying to watch something virtually. Invest in some equipment (you can get them inexpensively on amazon)and test it beforehand.
  • Make sure lighting is good – See above. You want people to see what you are showing them.
  • Make sure bandwidth is sufficient – You’re depending on the ability to stream your event. Make sure your connection is reliable.
  • Make sure the background reflects the brand – We all know people stage photos (eh-hem, you who just took a photo of your kids and your house looks spotless, meanwhile there is a pile of unfolded laundry in the corner). Same concept. Show the viewers what you want them to see (even if you have to stage it!).
  • Use a horizontal frame – This will give viewers a more comprehensive view of the pharmacy or location and allow them to feel like they are part of it.
  • Interact with the viewers – Pretend you are in the same room. Acknowledge people who join, give people shout-outs, encourage questions, address comments, etc.
  • Have back-up – Backup might include a person – someone to help with the technical aspect or problem solve any issues that may arise. That also includes backup equipment (computer, phone, etc.).

That’s a Wrap. Now What?

You’ve made it through your event with minimal footage for the blooper reel and you’re feeling good. It’s not time to sit back and relax just yet. Following your virtual event, there are steps you will want to take to maximize and repurpose the content.

Once you complete the Facebook Live and post it to your page, you will want to add some context around it. Edit the post with a brief and actionable summary about the event and tell people why they should watch. You can also add closed captioning to the video since many videos on Facebook are listened to without sound.

Once your video is cleaned up, you will want to address comments and answer questions that you maybe didn’t get to during the live broadcast. This will continue the conversation and the engagement with your audience. Continue to keep an eye on the post in case questions and comments come in from people who didn’t watch it live.

Finally, don’t forget to repurpose the video. Post it on your website, on other social channels, create a blog about it, etc. The create thing about a virtual event is that it doesn’t have a hard end time. You can extend the shelf life of the video and reach more people by continuing to push it out to your network. Think “In case you missed it” or “Did you miss our grand opening? Check it out now for a special discount code.”

Don’t Stop There

Your pharmacy deserves to thrive and there are many (both traditional and out-of-the-box) strategies you can implement today to make that happen. For more marketing ideas and advice to help grow your pharmacy, check out the webinar – How to Market Your Pharmacy During COVID-19, our Podcast – Marketing Strategies for Your Pharmacy and the blog – Marketing Your Pharmacy: Four Steps to Get You Started.

pharmacy services

A Changing Industry and the Future of Pharmacy

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Your pharmacy is your business, your livelihood. The industry is evolving, and you need to evolve with it so you aren’t left behind. In this blog we will explore the shift, what the future of pharmacy looks like, and the easy way you can gain more control over your business and serve your patients better. The bottom line is you deserve to be paid for the services you are providing.

A Changing Industry

Our lives have been turned upside down by COVID-19. We are experiencing a new normal. Our healthcare industry especially, has been pushed to its limits. Beds are full, and the long-term concern is whether we will have enough healthcare professionals to provide essential care.

The US doctor shortage preceded the pandemic, but this situation has exposed the severity of it.

Independent pharmacists are positioned to play a more significant role in healthcare than they currently do. In fact, we are seeing evidence how essential pharmacists are as we navigate the COVID-19 situation. This evolution has the potential to help patients while impacting the entire healthcare system for the better. The fact is that pharmacies are the most convenient and accessible place for patients to receive the care they need. Our pharmacists are on the front lines of healthcare and deserve to be recognized as providers.

Take vaccinations for example. As pharmacists administer them, inoculation rates increase and the burden on hospitals and doctors decreases. Independents are more than just medication dispensing machines, they are healthcare providers with a depth of knowledge and the education to prove it. It is critical that we begin to expand their role to provider status. Pharmacy has transformed over the years and our communities need these front-line healthcare workers more than ever.

Why is the Future of Pharmacy Happening Now?

Frankly, it’s long overdue. In the last several years pharmacies have struggled – especially with the pressures of higher DIR fees, aggressive audits and other clawbacks. The typical pharmacy has somewhere between 90-97% of their revenue coming from the prescription part of their business, under the control of the PBMs, which means that they don’t control a majority of their revenue stream.

It is no longer sustainable to sit back and wait for things to change. The good news is that there is a way forward. Diversification allows pharmacy owners to take control by creating new revenue streams. By working at the top of their license, they can bring services to their pharmacy that will increase their bottom line. They will also provide accessible care, which will positively impact the healthcare industry overall.

Pharmacy Services to Help Patients and Your Bottom Line

Pharmacists have the means and the knowledge to provide healthcare services to patients. Think about the time you spend consulting with patients or administering immunizations, you should be compensated. But how? Implementing a Service-Based Pharmacy model allows for easy medical billing so pharmacists can get paid. It is the future of pharmacy.

The good news is that you don’t have to change your operations. Start small, within your current scope. That’s the low hanging fruit. That’s where you can see immediate results.

1 FLU SHOTS: Flu season will be here before we know it and the pharmacy is the most accessible place for your patients to get their shots.

The flu shot on a commercial plan averages $142. If you administer 50 shots, that’s $7,100*.

2 EDUCATIONAL CLASSES: Engage your patients and help them learn more about a topic that is top of mind for them (smoking cessation, weight loss, wellness). This is fully covered by insurance for in-network providers so most patients can attend at no cost.

Educational classes can range from $50 – $150/hr per patient. If you hold 3 classes a month for 15 patients each at an average of $100, that’s $4,500*.

3 15-MINUTE CONSULTATIONS: You are already spending time with your patients, you should be charging for your time. Whether it’s substance abuse or diabetes, you have an opportunity to formalize these consults and get paid.

Consultations average $142. If you have 20 consults a month, that is $2,840*.

*These examples are based on national averages, rates vary by plan and state.

Opportunity to Scale with Service-Based Pharmacy

While these are just a few things that are easy to implement, there are many opportunities to build upon this, when you’re ready. Whether you have a small pharmacy and are working the bench yourself, or you have multiple locations with several employees – you are able to scale the program to work within the framework you have already created. You don’t need to add extra work. You can bill for the pharmacy services you are already providing. No added work for added revenue? Yes, please!

Reduce reliance on PBMs – reduce your percentage of revenue that flows through a PBM.

Improve cash flow – increase your margins with high margin professional services revenue.

Add new revenue streams – get paid for the non-dispensing services you already provide.

Improve patient care – give your patients the care they deserve.


service-based pharmacyHow does the Service-Based Pharmacy model work?

Service-Based Pharmacy is a turn-key program that provides pharmacies with the means to provide professional healthcare services. This model enables you to continue to provide excellent education and consulting to your patients AND get paid for it, outside of the PBMs influence. You can bill for the services you already provide directly to the medical insurance plans as an in-network credentialed provider.

  1. Get Credentialed. Become an in-network provider for Medicare, Medicaid, and commercial plans of your choice.
  2. Utilize an EHR. Get access to an easy-to-use, fully certified EHR platform for maintaining patient charts and clinical notes.
  3. Innovate. Continuously develop new ways to use the tools to improve patient care and monetize your services.
  4. Bill for Your Services. An easy-to-use platform makes medical billing simple and having access to an affordable complete do-it-for-you option can eliminate all billing challenges.
  5. Further Your Education. Learn to think like a provider, understand your scope of practice and be guided through the intricacies of medical plans.
  6. Implement. Get the training and coaching to evolve and bring services to life.


Act Now

As we move into the next evolution of the healthcare industry and the future of pharmacy, you as pharmacists will undoubtedly make a difference in the lives of your patients. You went to school to perform at the top of your license and to help people. The future of pharmacy will allow you to do just that. Your pharmacy is likely already providing many services for patients and now you just need to set up the infrastructure so that you can perform at the top of your license and get paid for it.

Visit the PDS Service-Based Pharmacy page to learn more.

What Can Your Pharmacy Data Do?

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Here at PDS, we take pride in highlighting some of our incredible exhibitors. We know these companies have the potential to revolutionize pharmacies just like yours through their products and services. We’re excited to introduce American Associated Pharmacies (AAP). Read on for their sponsored blog post about building your bottom-line.

Data is everything. It can drive business growth, increase profitability, and improve your relationships with your patients, but only if you use it.

Here are just some of the key categories of data you should be interested in, and suggestions for how to get started acting on it.

Questionable and Open Claims

It’s important to monitor all claims going through your pharmacy. A good practice would be to double check any claims outside of some key financial rules that make sense for your business, to help avoid negative outcomes. If no copay is collected on a cash claim, was it processed correctly? If the profit margin on a prescription is less than the cost, are you purchasing that drug correctly?

Be sure to monitor and resubmit claims that are reversed. It’s also to your advantage to monitor changes in Average Wholesale Prices and consider other claims to resubmit. One pharmacy generated $2,000 in additional revenue in only a week using a tool to access up-to-date AWP data.

Timeliness of Refills and Missing Patients

Does your pharmacy monitor when patients are due for refills, or if patients disappear altogether? Using that data to stay in contact with these patients can mean better care for them, and more revenue for your pharmacy. Pharmacies using one tool have proven that contacting just a few dozen of these patients in a month can mean an average of $11,000 or more of increased revenue. With the added benefit of increasing adherence and Star Ratings, along with building essential loyalty with patients who feel cared for, it’s data you can’t afford to ignore.

 

Other Marketing and Outreach

Marketing and outreach are important ways to take the data you already have and apply it. Patient data can tell you if you have patients nearing 65 who may need help selecting a Medicare plan; it can tell you if you have brand new patients who could use some outreach to build a relationship; it can tell you if there are prescribers in your area who aren’t sending prescriptions your way, or if there are others who may make up a large share of your fills. Data can help you target your marketing efforts and spend less to do more for your pharmacy’s health and growth.

These are only some of the opportunities that can deliver great benefits from the data your pharmacy collects on a daily basis! The good news is, there are tools like AAP’s ProfitAmp that can sift through your dispensing, patient, and prescriber data and provide easy-to-use reports with immediately-actionable data.

Saying pharmacy is a busy profession is an understatement, especially considering current events. However, watching these metrics as much as possible can be a key way to optimize profitability.

About the Author

As a cooperative of over 2,000 member pharmacies with an independently owned warehouse and specialty pharmacy and qualified preferred partners, American Associated Pharmacies (AAP) is so much more than a buying group. AAP provides the tools and resources needed for members to improve their bottom lines, such as business intelligence tools, a powerful proprietary ordering system that syncs across devices, and more! Visit RxAAP.com/ProveIt to learn more.

Planning for Success with Adherence Packaging in Your Independent Pharmacy

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Here at PDS, we take pride in highlighting some of our incredible partners. We know these companies have the potential to revolutionize pharmacies just like yours through their products and services. We’re excited to introduce RxSafe. Read on for their blog post about planning for success with adherence packaging in your independent pharmacy. 

You’ve no doubt heard the saying, “If you fail to plan, you’re planning to fail.” Marketing adherence packaging is no different. If you begin with the end in mind, you’ll have a much better chance of success.

At RxSafe, we’ve worked with hundreds of independent pharmacy owners, including a few who have successfully added 15-30 new adherence patients each and every month. How did they do it? It starts with a plan, which incorporates best practices as well as taking into account your local market and its needs, your unique value proposition, your competition, the strengths of your team, and other factors.

“It’s definitely not Field of Dreams, like ‘If you build it, they will come’… you really have to build it and then go out and tell everybody about it,” says PDS member Matthew Massey, pharmacist and owner of Massey Drugs, with three stores in Florence and Tuscumbia, Alabama. “You have to educate your patients, you have to educate the doctors and your community that you’re doing this, and why it’s important. But I really believe you can grow this quickly, pick up new customers and take care of those customers better than they were being taken care of before. To me, it’s all about what’s in the best interest of the patient.”

Like Massey, fellow RapidPakRx owners and PDS members Bruce and Lisa Kocian have a lot of experience with compliance packaging.

“When you’re starting out, I would say to focus on communication,” says Lisa Kocian. “This is a new concept for a lot of people, and they don’t necessarily understand it, and they may have expectations that are not realistic. And so, we’ve learned to thoroughly explain the program to the patient, that we’ll have to sync their prescriptions first, and then we can get them in the RapidPakRx. People are so excited about getting their prescriptions in the packaging, they want them immediately in the packaging. And sometimes it takes a refill cycle to get everything synced up. But communication and doing a really good job of explaining what they should expect from the program, I think makes things run smoothly.”

 

PDS member Clayton Gilde, owner of McBain Family Pharmacy, recommends a multi-pronged marketing approach.

“We usually get about seven patients per week from the PakMyMeds Network (social media advertising), Gilde explains. “When we get a lead, we’ll usually reach out to them and ask them how they’re currently taking their medications. Sometimes the patients are taking it from another provider like PillPack, or something else, and they’re happy to switch over to someone local.

One thing we noticed was that we put in the PakMyMeds box right by the register, and by the drop-off area, it was able to spark a lot of conversations with our patients that are already using us. We also use ads in local newspapers and radio explaining the PakMyMeds program and how it can benefit patients.”

The three most important things to do when adopting automation for your synchronization program are:

  1. Make a plan for marketing and promotion.
  2. Effective communication and set proper expectations.
  3. Don’t rely on one marketing approach, use a variety of methods to get the word out.

About the Author

RxSafe is the leader in robotic automation that improves patient safety and boosts profitability for retail pharmacies. Our RapidPakRx™ adherence strip packager enables pharmacies to run a 30-day med cycle at the lowest possible cost. RxSafe’s BlistAssist™ medication blister card packaging assistant improves the manual preparation and verification of single or multi-med blister cards. Our RxSafe 1800™ system helps pharmacies achieve better accuracy & speed, space savings, narcotics security, and inventory management. Learn more at www.rxsafe.com.

How Vaccination Programs Can Bring Profits to Your Independent Pharmacy

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Here at PDS, we take pride in highlighting some of our incredible exhibitors. We know these companies have the potential to revolutionize pharmacies just like yours through their products and services. We’re excited to Drug Topics. Read on for their sponsored blog post about how vaccination programs can bring additional profits to your pharmacy

The majority of pharmacies in the United States now offer vaccinations, but there is still a significant opportunity to turn a well-run vaccination program into a profitable

endeavor that benefits both patient and pharmacy.

Many adults still fail to get the recommended vaccinations each year. According to the CDC, just 37.1% of adults received the flu vaccine during the 2017-2018 flu season. This presents a significant opportunity for independent pharmacies to improve these numbers by expanding their immunization efforts, marketing their programs to the community, and relying on what makes a pharmacy a unique health care setting.

“Pharmacies have a huge advantage right off the bat of being readily available and accessible,” said Beverly Schaeffer, RPh, of Katterman’s Sandpoint Pharmacy in Seattle, WA.

Katterman’s was one of the first to offer vaccines—starting their program back in 1996. Schaeffer said the pharmacy had been hoping to give 300 vaccines but found themselves administering 1,200. Since then, the program has continued to grow and the pharmacy now offers all available vaccines in the state and can even administer to children and infants.

“All pharmacists could be doing more immunizations than they are if they wanted to,” she said.

Expanding immunization efforts can not only improve public health, but it can also serve as an increased revenue stream for community pharmacies. Close to 100 million Americans get the flu shot each year, translating to $4 billion to $5 billion in revenue, PBA Health reported.

Immunizations outside the influenza vaccine can often bring in even larger administration fees for pharmacies. “Almost all immunizations pay an administration fee that varies from plan to plan, but you get paid for the vaccine plus an administration fee,” Schaeffer said.

Vincent Hartzell, PharmD, president of Hartzell’s Pharmacy in Catasauqua, PA, said successful immunization programs not only provide revenue for a pharmacy on their own, but they also often drive other areas of business. “Vaccines have allowed us to provide marketing and attract new customers,” he said.

The most effective marketing strategies, he said, don’t always have to be costly and can be as simple as an effective social media post, informing local physicians and area senior centers of the pharmacy’s immunization services, or using banners and signs.

Schaeffer has found one of her best marketing tools is a sandwich board placed outside the pharmacy each day that highlights different services such as its tetanus shots, travel vaccines, or the highly sought-after shingles vaccine.

Her pharmacy does a significant amount of business in travel vaccines, so she also tries to drive other store business through a separate travel aisle where customers can find everything needed for an upcoming trip; anti-diarrhea medications, rehydration packets, eye drops, all in one convenient area.

Hartzell believes it’s important that all the pharmacists in a community pharmacy be trained to give immunizations so that there is always an available staff member whenever a customer arrives at the store.

To improve the workflow, he said, non-pharmacist staff should also be a critical aspect of vaccination programs. Those workers should have ways to identify patients who may be behind on immunizations or could benefit from annual vaccines such as influenza and pneumococcal vaccines.

“Make sure that your technicians know how to do the billing, make sure your technicians know how to fill out the consent forms because that’s the stuff that you don’t need a pharmacist for,” he said.

Overall, Schaeffer and Hartzell agreed, successful vaccination programs can yield big rewards for community pharmacies and their patients.

About the Author

Drug Topics is the leading pharmacy journal for retail, health system and specialty pharmacists. Drop Topics provides news, information and trusted perspectives through peer-based forums and opinions, relative to all aspects of pharmacy practice and also offers direction on elevating your profession and career. Check it all out at drugtopics.com.

Solutions to Build Your Independent Pharmacy’s Bottom Line

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Here at PDS, we take pride in highlighting some of our incredible exhibitors. We know these companies have the potential to revolutionize pharmacies just like yours through their products and services. We’re excited to introduce American Associated Pharmacies (AAP). Read on for their sponsored blog post about building your bottom-line.

Your Brand Rx cost of goods is one of the largest factors affecting your independent pharmacy’s bottom line, but it isn’t the only one. You may have found the right buying group or wholesaler, but inefficient processes or small losses that may seem insignificant now could mean a huge difference for your profitability later.

growing pharmacy profits

Let’s look at some of the things you should watch for when evaluating the best independent pharmacy business solutions to build your bottom line.

Don’t Lose Your Specialty Patients

Patients on a specialty drug have an average of 13 additional prescriptions.* A majority of these are maintenance prescriptions your pharmacy can fill, but only if these specialty patients continue to come to your pharmacy. They may not return if they are directed to a pharmacy other than yours for their specialty needs, and the specialty drug market is one of the fastest-growing. Specialty drugs are expected to account for 50% of the drug market as soon as this year (2020).

It’s in your best interest to be able to help patients who need these medications, and the good news is that you don’t have to spend tens of thousands of dollars to become certified as a specialty pharmacy yourself. There are programs available to help you keep your specialty patients in your pharmacy while making sure they’re provided with quality specialty care.

*According to Specialty Pharmacy Times Magazine

Keep A Unique Front-End in Your Pharmacy

On average, front-end products carry a profit margin of 15% higher than on prescriptions. This average of 38% for OTCs and other front-end merchandise, much greater than the average of 22% on prescriptions, is a clear opportunity. Are you taking full advantage of that knowledge?

Rather than only stocking items your patients could find in any big-box retail store, you have the opportunity in your pharmacy to be unique. Basic supplements like vitamins are essential and can bring in a hefty amount of revenue. Don’t leave them out! But you can do more. You can carry the variety of over the counter products that big-box stores are spread too thin to offer.

There is a wealth of niche markets to branch into. From specialized health products to pet pharmaceuticals and diabetic footwear, do what only you can do as an independent pharmacy. Take your queues from your community or target market. Attract patients who might otherwise have to travel long distances to find the products they need or order blind from online sources. They’ll be glad you’re there.

Streamline Ordering Within Your Pharmacy

Save precious time by streamlining your ordering process. Having a plan and a robust ordering system will go a long way in this area. Make sure your system will keep an order queue consistent across devices to avoid redundant spending, automatically submit orders to keep you from missing deadlines and make the process as efficient as possible. Don’t waste time typing in numbers, dragging bottles to a stationary scanner, or ordering from multiple websites.

Do your research and find a solution that offers all the flexibility you need in your setup!

About the Author

As a cooperative of over 2,000 member pharmacies with an independently owned warehouse and specialty pharmacy and qualified preferred partners, American Associated Pharmacies (AAP) is so much more than a buying group. AAP provides the tools and resources needed for members to improve their bottom lines, such as business intelligence tools, a powerful proprietary ordering system that syncs across devices, and more! Visit RxAAP.com/ProveIt to learn more.

Three Tools that Lead to Smarter Decision Making in Independent Pharmacy

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When a methodology works for everyone, it gets its own name. Take Pearson’s Law, for example, which has helped everyone from basketball coaches to restaurateurs see better results. The rule says that “everything measured improves; everything measured and reported improves exponentially.”

In short: looking at your data leads to smarter choices. This is certainly true for pharmacy owners, who can find some of their most useful data in just three routine financial statements and gain the clarity and confidence to move their pharmacy forward.

Pharmacy Finances: If It’s Not Broke, Why Fix It?

Pharmacy owners don’t think about diving into their finances because that’s not what they studied to do (outside of a one-semester business class, maybe). Pharmacists are in the business of helping people, not balancing books – which is why they tend to be content as long as they’re in the black.

But the pharmacy world is fluid and increasingly suffocating, and without strategic financial planning, big moves (like opening a second location or taking on an esteemed hire) may not be feasible. Not being savvy with the financial basics and being unaware of the ins-and-outs of pharmacy performance data to make smart decisions — can cost your pharmacy businesses plenty.

In this blog, we’ll take a look at three financial statements, how to decode them, and what information you can get to develop the future of your pharmacy.

Get Your Footing with a Balance Sheet

Your Balance Sheet is a simplified overview of your current financial situation. It should be used to make budgetary decisions – similar to how you check your bank account balance before saying “yes” to that new car purchase.

The balance sheet lists everything in your pharmacy as either an asset or a liability for providing a comprehensive financial snapshot. Here are some quick tips for getting more out of your Balance Sheet:

  • Determine your accounting method. Ask your accountant whether he or she uses the Cash Method (working with money already in the bank or register) or the Accrual Method (popular with most pharmacies, it works with all money, including revenue still pending from insurance companies). As tax laws change, have discussions with your accountant about which method is best for your business.
  • Diagnose your pharmacy’s health. One of the most important figures here is the Retained Earnings, which is the go-to gauge for the health of your business. To find it, take your assets and liabilities (see the totals on the left- and right-hand side in the above example?) and add invested capital. The larger the difference, the healthier your pharmacy is.
  • Distinguish what you can (and would) invest. Know what you have in the bank to reinvest (e.g., “Current Assets”), and what is untouchable (e.g., “Payroll Account”). Determine what you feel comfortable with moving when considering what to spend. For example, what can you liquify from your Fixed Assets, like office equipment? To find out what you really have to work with, subtract the depreciation figure from your total fixed assets.
  • Work the ratio. The golden ratio for pharmacy owners is a different figure from that of Ancient Greece: for a healthy and robust pharmacy that is seeing positive growth, you want to have a 2:1 assets-to-liabilities ratio. This ratio is known as the quick ratio and can be an early indicator of financial trouble.

For more balance sheet hacks (and how often you should generate one), download our eBook or get in touch with us.

Income Statement = Outgoing Investments

An Income Statement is a two-page document that goes into further detail than the Balance Sheet. It will provide more insight around trends in your spending (where is the money pit?) and the performance of different revenue sources (like prescriptions vs. over-the-counter items). It’s also an excellent resource for comparing how your business has fared month-over-month or year-over-year.

     

It shows financial data current to the month, and data from the same time the year prior. Your revenue (income) should exceed costs (your spending). You’ll want to figure out the following using your Income Statement:

  • Find your hotspots. Even if your profits are stable, the sources may not be uniform; a few items could have wide profit margins while others really don’t, and this is certainly something to consider when deciding how to grow your business. The key lies in percentages. To find your gross margin, divide the gross profit by total revenues. To see your profit margins, divide net profit by total revenue.
  • Understand the outliers. Numbers don’t lie, but they don’t always tell the whole story. There are unlisted factors that pharmacy owners should consider when examining their Income Statement, such as depreciation. Using a car analogy, your new car lost some value as soon as you drove it off the lot — the same can apply to office equipment but it doesn’t affect cash. A good accountant will advise a pharmacy owner on how to work these factors into the equation.

For more information on this, read about additional influences you should consider when planning your pharmacy’s long-term success.

Go With The Cash Flow

A partner of the Income Statement is the Cash Flow Statement and is a bit of a fortune-teller. Instead of the retrospective that an Income Statement provides, the Cash Flow Statement gives pharmacy owners an idea of what to expect next.

The more pharmacy owners understand how to read this document; the more accurate their assessments will become over time. Here’s where to find some clues hidden in your Cash Flow Statement:

  • Ask for the time. While every business has a Cash Flow Statement, this document is especially valuable to pharmacists whose revenue is tied up with third-party payers. It’s difficult to accurately project future cash flow if you’re unsure of reimbursement time frames. To determine the gap, look at the difference in monthly revenue vs. cash sales (copays, OTC goods, etc.). Then add up the percentage of cash in Accounts Receivable that came from prior months’ sales. This will give you an idea of how much of your monthly cash flow relies on earlier transactions and how much available equity you shouldn’t expect to receive from your sales from month-to-month.
  • Play it safe. Always err on the side of underestimating the cash you expect to come in, and overestimate the cash you plan to spend, whether it’s due to surprise DIR fees or flood damage. Plus, ending up with more than you planned for is always a great way to operate!

Working With Your Accountant

Financial statements are interdependent, and you need both the parts and the whole to understand how you’re doing. Now that you’ve got the basics down for a better understanding of how your pharmacy is performing, it’s time to make informed, strategic decisions. This is a little harder to come by. And admittedly, even with a better understanding of these three financial statements, pharmacy owners have too much on their plate to stay on top of intelligent accounting choices. That’s why it’s crucial for pharmacy owners to partner with accountants who deeply understand the industry. Anyone can produce a Balance Sheet, but unless those numbers are examined in the context of the pharmacy industry, it’s easy for even the best accountant to miss key data (for example, taking DIR fees, 340b contracts and clawbacks into consideration). For a checklist of questions to ask your accountant in addition to tips for accounting software users, download our eBook. Are you interested in working with us to make more of your pharmacy? Good, because so are we! Schedule a short call with our accounting team.

For PDS members, log into PDSadvantage to find the applicable pharmacy team resources in the Knowledge Library that can help you start making your finances work for you such as the Finances Peer Group, Budgeting Worksheet, Profit vs. Cash Flow, and many more.

Flu Season Essentials for Your Patients

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Here at PDS, we take pride in highlighting some of our incredible exhibitors. We know these companies have the potential to revolutionize pharmacies just like yours through their products and services. We’re excited to introduce American Associated Pharmacies (AAP). Read on for their sponsored blog post about flu season essentials for your patients this flu season.

It’s that time of year where we experience an increase in cold and flu activity. Patients will be turning to your pharmacy for medication and remedies that they can rely on to get them through the winter.

Popular Supplements to Keep in Stock

According to the Nutrition Business Journal, the US supplement industry has seen an increase of 5-6% each year over the last two years, with growth expected to continue at that rate or higher until at least 2022. Make the most out of this opportunity for profitability by supplying your community with OTC products that carry valuable health benefits.

Elderberry

Elderberry syrup is growing in popularity as a powerful alternative to both prevent and fight cold and flu. It has been tied to a significant reduction in the severity and duration of symptoms in studies. Patients taking Elderberry syrup reported symptoms clearing up an average of four days earlier than those taking a placebo.

The syrup has been nearly impossible to keep on pharmacy shelves in recent flu seasons, and the market is expected to continue to grow at an accelerating rate of over 7% until 2022 at the very least. Don’t miss out! Your patients will thank you for keeping this new staple in stock.

Vitamin C

Studies have shown Vitamin C can boost your immune system, and possibly even help protect against heart disease, cancer, and stroke. This safe and effective supplement is a strong preventative for flu season. It’s recommended that the average adult receive at least 75-90mg daily for peak effectiveness.

Vitamin D

Vitamin D is particularly useful in areas with harsher winter weather. When the sun is hiding behind clouds, it’s harder to soak up enough! Vitamin D is essential to the body’s immune system and bone strength, but our bodies cannot store it for extended periods of time. Supplements can help combat this and will also keep your patients happy and healthy.

Iron

Iron is another immune booster. It has shown to help keep energy levels up during short, dim days. Iron is essential to blood flow and oxygen transfer in the blood, making it a key component to heart, lung, and neurological function. Deficiencies are common even here in the US, with an estimated 8-12% of Americans not receiving enough iron in their diets. Women, young children, and patients with heart conditions are among some of the most likely to have these deficiencies and could most benefit from iron supplements.

Zinc

Zinc is known as another preventative supplement that can help to prevent the common cold if used regularly. Similar to elderberry, it strengthens the immune system and can aid in reducing the length and severity of a common cold. The average adult needs about 9.5mg a day, while women need about 7mg.

Cold and Flu Shots and Medications

While supplements are popular and can help prevent sickness or shorten a bout already underway, encourage your patients not to pass on a flu shot.

If your patients do come down with the flu, a cold, or a fit of allergies, you can be ready. Keep plenty of flu medication, nasal spray, and cough syrup on hand, as some of these–particularly a prescription like Tamiflu–can grow scarce as the season drags on. Stock up and stay ahead of the rush as much as possible to avoid losing potential income.

From AAP’s Member-Owned Warehouse for Cold and Flu Season

Find these remedies and more at store.apirx.com.

  • Supplements: Vitamins such as C, D, & E; Iron; Zinc; and more
  • Medications: Generic Tamiflu, Fluticasone nasal spray, Promethazine-Codeine cough syrup, Mucinex, and more
  • Other: Nasal strips, thermometers, socks, and other winter essentials

About the Author

As a cooperative of over 2,000 member pharmacies with an independently owned warehouse and specialty pharmacy, the nation’s 4th largest PSAO, and qualified preferred partners, American Associated Pharmacies (AAP) is so much more than a buying group. AAP provides the tools and resources needed for members to improve their bottom lines. Visit RxAAP.com/ProveIt to learn more.

Your TEAM is a critical piece of the puzzle

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What comes to mind when you think of pharmacy success? Most will mention efficient operations, the ability to grow, and of course, profitability. When it comes to measuring success though, one critical aspect of the business that is often overlooked is the TEAM. It’s not that they aren’t important, it’s that business owners often fail to recognize the direct and immediate impact their employees can have on the bottom line.

In any business, including independent pharmacy, individual employee performance impacts the performance of the team as a whole. In order to run a truly successful business, you must have an engaged and dedicated team. So how do you get there? What will the impact be when you do?

PDS member, Travis Wolff of Med-World Pharmacy, realized how important this piece of the puzzle was. He DOUBLED his revenue in only 9 months by focusing on (you guessed it) – his TEAM and their engagement.

 

Watch this webinar from the Oval Group, LLC, a PDS partner, to hear this inspiring story.

 

Are you ready to experience the impact of an engaged team? Here are a few things you can do to get started.

  1. Review your current team – are their roles aligned with their abilities? Aligning existing talent with responsibilities that fit their strengths can make a big difference in their performance.
  2. Look at your hiring process so you can hire and select the right staff. According to the Society of Human Resources, 80% of employee turnover is due to bad hiring decisions.
  3. Understand your employees and help them understand themselves. There are many assessments available that allow you to take a deeper look at the individuals on your team and figure out how to configure your team for success.
  4. Enhance team communications to increase efficiency and productivity. This will help improve morale by reducing stress and conflict.

The right team in the right roles with the right goals will be as invested in the success of your pharmacy as you are. Getting there is not always easy, but the outcome is worth it.

For PDS members, log into PDSadvantage to find the applicable pharmacy team resources in the Knowledge Library that can help you start engaging your team on a higher level such as Designing Your Company Culture, Recruiting, Hiring, Training and Retaining the Right People, Incentivizing Your Team, and many more.

PDS partners are vital to the success of our members. The Oval Group LLC is a talent management solutions provider that specializes in tools that enable business owners and corporate executives to make informed strategic decisions about their unique business and the people who hold the keys to its success.

Section 179 Tax Deduction.

Smart Year-End Tax Moves: Section 179

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Are you thinking about purchasing new equipment to offset income or to begin expanding your services to improve your business? Make the purchase and install it by the end of the year to qualify for a Section 179 deduction.

Section 179 Tax Deduction.

Why Leverage Section 179?

The tax code is certainly a beast that many of us never want to think about and yet if you understand it, you can take actions that will benefit you and your pharmacy. Pharmacy automation improves operational efficiency while also expanding services. An investment in equipment is often the best step to improving automation. You can leverage Section 179 to help attain pharmacy automation at the lowest cost is possible.

What is Section 179?

Section 179 refers to a tax deduction that allows businesses to deduct the full purchase amount of qualified equipment in one large deduction rather than having to slowly depreciate the equipment over many years. For tax year 2019, this allowance can be as high as $1,000,000. This deduction goes directly against any business income for this year and if your deduction is higher than your income, you can carry any remaining deduction over to future years!

What kind of equipment will qualify?

Equipment will qualify at any price point, there is no minimum purchase amount. It also does not have to be new equipment; it just needs to be new to you. Since this is a business deduction, the equipment must be used for business purposes more than 50% of the time. If you want to take this deduction in 2019, you need to have the equipment installed in your pharmacy by December 31, 2019.

Are there any changes coming for Section 179?

While we can’t predict the future, the Section 179 deduction seems to be secure but it’s important to note that significant changes in politics can affect the tax code. Section 179 was recently increased from a maximum of $500,000 to its current level of $1 million.

Section 179 at a Glance

  • It can only be used to offset business income
  • The equipment must be new to you
  • It must be installed before the end of the year
  • Maximum amount is $1,000,000 for 2019
  • Any remaining amount not offset by 2019 income can be rolled over to offset 2020 income

RxSafe RapidPakRx Will Qualify for a Deduction

A popular piece of automation for independent pharmacies is the RxSafe RapidPakRx strip packager. Pharmacy owners choose this equipment because of its speed and small footprint. It also enables them to compete against Amazon PillPack by having their own compliance packaging service.

Priced at $175,000 ($165,000 for PDS members), it will certainly qualify for a Section 179 deduction as a business equipment purchase if installed by the end of the year. Time is running out but RxSafe still has the ability to take orders and get them installed before the deadline. If you would like to learn more about the RapidPakRx and how it can help you grow your business, please reach out to RxSafe here.

You can also learn more about Section 179 at RxSafe’s resource page.

Can you benefit from Section 179?

The answer is maybe. If you are getting regular monthly financials and having strategic calls with your accounting team then you probably know what your year to date income looks like. If you are not receiving accurate financials or pharmacy specific accounting advice, please reach out to our PDSfinancials team to discuss how critical financials are for you to make smarter business decisions and to operate your pharmacy at peak performance.

To help you get caught up with your 2019 financials, PDSfinancials is offering to rebuild your entire 2019 financials for free for all new PDSfinancials members in 2019 (a $10,000 value!). Even if you are not positive you have income to offset this year, you could still make those strategic equipment purchases that will help you produce a profit in 2020 because the Section 179 deduction is allowed to be carried over to future years’ tax returns.

You deserve to have the best insight into your pharmacy’s financial performance. Schedule a call with the PDSfinancials team to learn more.

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