The Right Pharmacy Management System Parag Damle & Kunal Puri
Abstract The key benefits of pharmacy management systems - automating processes, streamlining workflow and thereby enhancing the customer base - are attractive enough to draw retail pharmacy chains competing in a world of growing challenges. However, the choices are tough with a handful of products and the high cost of customized solutions. This Infosys paper outlines some ideas on selecting the right option.
May 2007
Challenges for pharmacy chains Pharmacy chains competing for growth in the face of significant competitive challenges face a dire need to improve productivity (to cope with the severe shortage of trained pharmacy staff) and revenue (in the light of reducing reimbursements from insurance and government). To address these challenges, the need is for streamlined operations aligned with their business objectives. As proven by leading Pharmacy chains, selecting the right Rx workflow system can provide a definitive competitive edge in the marketplace.
Pharmacy Management Systems - An Overview To enable operational efficiency across the chain, managements need to deploy the right-fit pharmacy management system. With adequate due diligence and the right implementation approach, these systems can help with • Addressing the shortage of pharmacists by streamlining and automating the workflow process steps. The system should aim for efficient filling of prescriptions while freeing up pharmacists for customer consultation and allowing technicians time for valueadded activities • Streamlining operations through data sharing across store locations allowing patients to order / refill their Rx from any store. Significant improvement is possible in this area with workload balancing and remote / distributed operations • Segmentation of work process for efficient division of labor • Systemic data checks to scan impact of drug combinations or drug allergies to ensure patient wellness and provide counseling to improve relationships with the patient • Enhancing customer satisfaction levels and repeat business through timely and consistent customer service
Pharmacy Management Systems - Critical Features Pharmacy management systems must work unfailingly, flawlessly and seamlessly in complex multi-store, cross-geography environments to enable drugstore chains to operate efficiently and profitably. Some of the functionality driven critical features include: 1. Smooth workflow processes enabling external services such as third party payments, DUR (Drug Utilization Review), consultation, wait time calculation, etc. 2. Integration capabilities for robotics/central fill, refill alerts, grouping of Rx‟s, point of sale (POS), reporting, order-topromise, order/inventory management, labor scheduling, etc. 3. Centralized view of data including patient history, inventory and ability to fill prescriptions anywhere in the chain, vicinity store inventory view, Rx transfers 4. Ability to improve store productivity by off-loading activities to alternate locations using remote processing and workload balancing 5. Maintain schedule and records of counseling activities, particularly for Medicare MTM requirements as well as allow for electronic signature capture 6. Ability to extend services and integrate across channels, viz., e-commerce, eprescriptions, IVR/mail-order, kiosks, concierge, etc. From the architecture perspective, pharmacy management systems can be centralized with Corporate as the hub and client terminals at the stores as spokes. An alternative could be standalone store-driven systems where frequent connectivity with headquarters is not essential, or even a combination of the two. The model to be followed can be selected based on a pharmacy chain‟s specific requirements.
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The technology features essential in a pharmacy management system include: 1. Scalability to add stores on the network on the same foundation / platform 2. No performance variations due to additional stores or increased transaction volumes. Ability to manage peak loads considering a mix of 24 hour, extended hour and normal hour operations 3. Quick response to user query/user inputs 4. Restricted access based on functionality and role 5. Real time synchronization between Corporate and stores for fast and convenient data transfer 6. Robust downtime architecture. Ability to continue prescription processing with minimal impact on productivity in connectivity breakdown scenarios 7. Flexibility to address specific requirements by setting rules and test/modify specific code areas 8. Reliable disaster recovery and back-ups with data storage at stores as well as at Corporate 9. Ease of maintenance 10. Ease of integration and data transfer with other systems such as IVR, Robotics, PoS, website, etc. 11. Ability to ensure quick roll-outs of enhancements / upgrades
Options for Retail Pharmacies Pharmacy chains can choose between ready-to-deploy products, custom built products or buying out source code and customizing it for their requirements. The right choice will depend on factors like size, geographical spread and complexities of each organization. Their current state with respect to system sophistication and process standardization are also important considerations. Some critical factors that must be considered from the economic and implementation perspectives include: • Effort and cost involved in developing/purchasing the base version • Effort required to deploy the base version across a number of stores • Development of user training modules and ease of transition • Estimated long term maintenance effort and costs • Effort and documentation for support team to stay abreast of developments • Flexibility and ease of enhancements for future business needs • Ability to run different versions in production, test and development for different environments and different applications
The product route Although most existing products cover the base requirements, the overall picture of ready-built pharmacy systems is not encouraging. This is partly due to the lack of product choices in the field. Product vendors are yet to gain credibility with retail pharmacy chains due to: • Unfulfilled promises in terms of product launches • Rigid enhancement regimes • Generic products that have failed to address specific pharmacy needs In addition, a string of mergers and acquisitions has given rise to concerns over the viability and sustainability of vendors in this space.
Custom-built systems Often for want of a better option, pharmacies have tried the custom build route. However, this option has had its own share of failures. The exception to this is a custom built system at one of the largest pharmacy chains that has become the gold standard in pharmacy systems. In fact, for over a decade, this system has helped provide the pharmacy a competitive advantage by offering significantly advanced capabilities over all other systems Infosys - View Point | 3
Buying the source code Another option for retail pharmacies is to buy out the source code from product vendors and customize it for their specific requirements. With this option, retail pharmacies benefit from starting with an existing, working base version that can be beta-deployed to quickly ascertain changes or enhancements to be made. However there are significant challenges even in this mode: • The source code version is often generic. If the beta deployment is not carefully planned and executed, it could trigger a strong negative sentiment and scuttle any further deployments (or even enhancements) • Since the pharmacy would own the source code, it needs to figure out the mechanism and impact of changes. Frequently, the product vendor‟s commitment plummets after the sale is completed. Although some vendors may continue to provide support, it could come at a steep price which could alter the economics and make the option unviable • There is a strong need for organizational and governance processes to manage the product without which success can prove elusive. This is necessary as the pharmacy now needs to make arrangements to “manage the product” in the future.
Key Decision Factors Infosys believes that retail pharmacies need to consider the economics and their commitment to any option prior to undertaking a pharmacy management system initiative. Equally important is conducting a thorough due diligence exercise to identify challenges and strategies for their mitigation. Economics - A custom-built pharmacy application for a mid-large pharmacy chain can start with an upfront cost upwards of $20 million. While the cost would rule out this option for smaller and regional chains, they could consider products offered on an ASP platform. Although the ASP model in pharmacy systems is still in its infancy, the entry of a large vendor could help jump start and stabilize it in the future. Long-term commitment - On the custom-build route, it is not just the upfront investments that count. Any pharmacy embarking on this journey must think like a software product vendor. Unless it can commit to nurturing its product for a span of 5-10 years, this option could quickly succumb to the same issues surrounding other products and head for failure. Due diligence - Above all, it is detailed due diligence of not merely evaluating the options but also in developing the road map that will make the difference. Specifically: 1. If a pharmacy has invested in a product or the source code but is not very pleased with the outcome, it should • Analyze if the problem lies with the foundation, the peripherals or the execution. Foundational problems are bad news, but otherwise there is typically enough good to move forward although success may not be guaranteed. The big problems usually pertain to: i. Scalability / Architecture / Performance - While this could mean a problem is “foundational” in nature, it can also be traced to „Big Bang‟ implementations. In such cases, taking a step back and evaluating a phased approach can help. ii. Functionality and change management - Although this problem is not foundational from a system perspective, business can find that rolling out a system that is “radically different” from the existing one to be an insurmountable hurdle. A few factors to consider in this case: • If technicians could master an old character-based system to record productivity levels, what could be the worst case intermittent productivity drop with an intuitive GUI-based system which is better navigable, and possibly smoother? Instead of gut feel an actual usability test and hard numbers would provide reliable pointers. • If the pain involved in transition is too high, creating a façade (a layer of screens) mirroring the existing UIs (but with a better and more robust platform) could be an interim option. This additional effort could also be phased. • Futuristic functionality can be a key dissent factor and some of these features could be pulled out to be plugged in at a later date when they are truly required. * Infosys has put together a check list of critical functionalities, technology features and process parameters that can assist in selecting the Right Pharmacy Management System for your needs. This list is available as Appendix 1.1 at the end of this document.
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iii. Inability to support the system in the future - This is often due to a burn-out in achieving the first release or lack of planning to take it further. Considering that these decisions involve millions of dollars, it is logical to plan for at least a few years ahead with a strong organizational and governance model to sustain the initiative 2. On the other hand, If the pharmacy is weighing its options, it should: a. Undertake a detailed due diligence exercise - Involve internal stakeholders as well as vendors in the exercise. If an option appears attractive, follow up with a detailed conference room pilot by testing more of exception scenarios than smooth flow cases b. Build a robust roadmap for all options generated for a minimum of 5 years c.
Include necessary legal clauses around SLAs and possibilities of the vendor rendering control of the product in the event of missing the SLAs or undergoing merger / acquisitions / delinquency
Conclusion Choosing the right pharmacy system has been one of the tougher questions faced by pharmacies. However, successes in this area show that it is a critical decision that needs to be evaluated and planned for carefully with a 5-10 year roadmap in view. Given the multitude of considerations and individual operational nuances, the choice often is specific to each pharmacy chain. Retailers will need to evaluate their specific environment for opportunities, constraints and their long term vision before deciding whether an approach is aligned with their specific objectives.
About the Authors Kunal Puri (kunal_puri@infosys.com) is a Senior Consultant with the Retail and Consumer Goods Consulting Practice of Infosys and focuses on the retail pharmacy domain. Kunal has extensive experience in defining and executing a range of Business and IT initiatives for leading pharmacy retailers. Parag Damle (parag_damle@infosys.com) is a Principal Consultant and Solution Manager with the Retail and Consumer Goods Consulting Practice of Infosys. Parag leads the Retail Pharmacy and Store Operations practice and has extensive experience in defining and executing large complex projects for retail pharmacy chains and PBMs.
Appendix 1.1 Infosys - View Point | 5
FACTORS INFLUENCING THE SELECTION OF A PHARMACY MANAGEMENT SYSTEM Functional Description Typical Workflow Consultation Tracking Capability Wait Time Calculation Base Functional Feature Sets Centralized Patient File Inventory Check prior to Fill Grouping of Rxâ€&#x;s
Out-of-the-box Integration Capabilities
IVR Robotics PoS Website E-Prescribing Signature Capture Refill Alerts
Additional Desired functionality
Workload Balancing Capability Vicinity Store Inventory View Single Click Rx Transfers within the Chain Central Fill Facility Integration Capability
Technical Architecture - Distributed, Centralized, Stand Alone
Scalability Performance Communication Procedures Data Security & Access Authentication Disaster Recovery Data Storage and Transfer Downtime Operation Application Configurability Modularity - for ease of maintenance/enhancements Reliability Ease of Interfaces / Integration
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Description RxWorkflow Systems can be Central (completely Host driven with a dumb terminal at the store), Central + Store or Standalone (Completely Store driven - regular connectivity to Host not required) # of Claims processed, 24 hour Operational Capability, Workload Balancing Avg Application response Time to user query / user input Real Time Synchronization Capabilities between Corp (Host) and Store Application Restricted Access to functionality based on role Data Backup and Recovery Data Storage at Store as well as Host. Frequency of Data Transfer between Store and Host Ability for Store application to operate if connectivity to Host is lost Ability to handle for plan / state specific requirements by setting rules Ability to modify and test specific code areas Frequency and Duration of Downtime Easy Integration and Data Transfer with other systems (IVR, Robotics, PoS, Website, etc.)
Process Development Effort Deployment Effort End User Training (Availability of CBT and Training Effort) Production Support / Maintenance Effort Maintenance Team Training Enhancements Plan and Effort Version Control and Change Management Effort
Description Effort to develop base version Effort to deploy base version across a significant # of stores User Training Modules Development and Ease of Transition Estimated ongoing Maintenance Effort Effort & Documentation to bring Support team up to speed on an ongoing basis Ongoing effort to enhance application for business needs Planning for multiple environments and multiple applications version existing concurrently (different versions in production, test and development)
Notes: 1. The factors listed above are indicative of the considerations to determine the capability of a Rx Workflow System and should not be construed as a comprehensive set. 2. There is no one-size-fits-all approach that can be used across retailers to evaluate the applicability of a Rx workflow system since the impact of each of the above listed factors is dependent on the size and operational capability of an individual Pharmacy Retailer