The pharmacy space is increasingly becoming more competitive as local pharmacies fight to compete with their corporate counterparts. Along with increased competition, shrinking margins and declining reimbursement have made it incredibly challenging to grow and sustain a local pharmacy business over time. With that said, operating a successful local pharmacy still isn’t impossible—at least not with the right technology and strategic approach to drive your clinical and financial performance.
Douglas Hoey, registered pharmacist and CEO of the National Community Pharmacists Association (NCPA), described the opportunity independent pharmacies have to remain competitive: “In many ways, the market remains hungry for the kind of services independent community pharmacies provide that big-box stores are not equipped for. Community pharmacists don’t have to wade through corporate red tape or run things by a distant corporate office. They can make decisions that work for them and their patients.”
Here are six ways local pharmacies can remain competitive and thrive among giants in a crowded, ever-evolving industry:
1. Expand patient care to introduce new revenue streams.
Pharmacists today offer services well beyond dispensing medications. A vast majority of pharmacies, both big-box and independently owned, have implemented a myriad of patient care services, such as:
- Flu shots and other immunizations
- Point-of-care testing and diagnostics
- Medication therapy management
- Medication adherence counseling
- Chronic disease prevention/management
- Durable medical equipment and supplies
- Smoking cessation programs and support
Providing these services enables independent pharmacists to introduce new revenue streams while also providing higher-quality care for members of their community. Local pharmacies have a unique advantage when it comes to engaging with patients and forming meaningful relationships. (After all, a local pharmacist is much more likely to remember you by name, right?)
Take the opportunity to not only introduce new, profitable clinical services but also to differentiate your business by delivering patient-centered care that helps set you apart from mega-chain retailers. Keep in mind that if you do decide to offer clinical care in your pharmacy, you should also prioritize investing in a medical billing solution to ensure you’re paid on time and in full for the patient care services you provide.
2. Implement a med sync program to increase on-time refills.
Prescription abandonment is a real pain point for a number of local pharmacies, often cutting into profits, creating waste, and causing medication nonadherence. Fortunately, medication synchronization (med sync) programs help to prevent cases of prescription abandonment, enhancing pharmacy profitability while also encouraging patients to take their medications as prescribed.
Launching a med sync program has the potential to benefit your local pharmacy in numerous ways, increasing the number of on-time refills, improving medication adherence, streamlining dispensing workflows, and ultimately transforming your prescription center for the better. Patients will appreciate the convenient option to refill all their medications at one time, while pharmacy staff enjoy the ability to work more efficiently. Plus, better medication adherence = better reimbursement—it’s a win-win!
Curious about medication synchronization and how it can benefit both your patients and your pharmacy? Check out our med sync calculator to gain a better understanding of potential profits for each patient you enroll in your program.
3. Track and reconcile pharmacy claims for greater profitability.
Claims reconciliation is a must for small, local pharmacies that rely on third-party reimbursements to maintain a competitive edge, improve profitability, and ensure their business thrives. Reconciling unpaid pharmacy claims helps prevent unnecessary revenue drain, so you’re never leaving money on the table.
All that said, pharmacy claims reconciliation can be a time-intensive, complex process that creates a significant administrative burden for pharmacists, technicians, and staff. Investing in a modern solution can help streamline your claims reconciliation processes and significantly improve your pharmacy’s profitability. For example, FDS ECONCILE customers were able to identify up to $152,000 in missing reimbursements and reduce unreconciled claims by as much as 40 percent.
4. Uncover hidden insights with performance data and reporting.
Are you making smart use of performance data and reporting? New Era Pharmacies know how to take advantage of the data and analytics available to them, using these insights to drive growth and pinpoint low-hanging fruit opportunities for improvement.
Using pharmacy business intelligence tools with comprehensive reporting, customizable dashboards, and various exporting capabilities, you can identify lost and missing patients to prioritize outreach; improve medication adherence; monitor your daily, weekly, monthly, and annual revenue; manage your inventory; and more—all while driving better outcomes for your patients. This way, you’re always aware of the current state of your business from a clinical, financial, and operational perspective.
5. Partner with a pharmacy services administrative organization.
There are several advantages to joining a pharmacy services administrative organization (PSAO). For one, there’s strength in numbers: PSAOs bring several local pharmacies together, allowing them to join forces within one network to create a more influential group that can negotiate contracts with more favorable terms.
In addition to purchasing power and negotiation leverage, partnering with a PSAO can help independently owned pharmacies remain competitive in the market. Plus, local pharmacies can benefit from increased reimbursement opportunities and reduced direct and indirect remuneration (DIR) fees, which can be quite costly for smaller stores. In fact, approximately 2,000 pharmacies have closed in the past few years alone due to high DIR fees, clawbacks, and other financial pain points.
6. Use pharmacy software and add-ons to work more efficiently.
With the help of technology, independent pharmacies can still thrive—even without the corporate resources and support of big-box retailers. Pharmacy technology that’s designed to streamline and automate manual, time-consuming workflows—while integrating with your pharmacy management system—can help you cut down on overhead costs while also freeing up time to expand your patient care services and explore new revenue opportunities.
Implementing a comprehensive, forward-thinking strategy—coupled with technology designed exclusively for local pharmacies like yours—will ensure your business thrives, even amid ever-increasing competitive and financial challenges plaguing the industry. Unsure of which pharmacy software can help you improve your business?
Check out our guide, Technology Additions to Pharmacy Management Systems, to learn about how using software can take your business and care to the next level.