RISKY BUSINESS Risk management strategies for small businesses
RELIEF RX Pharmacy relief agencies come through during temporary staff shortages
THE ROLE OF
VOL. 10 ISS. 4 | DECEMBER 2021
ARTIFICIAL INTELLIGENCE
IN PHARMACY
18
CONTENTS ON THE COVER
18 FEATURE
| The Role of Artificial Intelligence in Retail Pharmacy
DEPARTMENTS NEWS 06
| CancelRx
New study evaluates e-prescribing tool that improves the accuracy of medication lists
FEATURE | The Role of Artificial Intelligence in Pharmacy
08 TRENDS
16
Why every pharmacist should take mental health first aid
12 RETAIL
| Crisis Support
| Shelf Improvement
Best practices for front-end pharmacy shelving
16 SOLUTIONS
26
| Make It Your Own
he advantages of offering your own T brand of OTC products
SPOTLIGHT | Pharmacogenetic Testing
This independent pharmacy personalizes patient care down to DNA
30 MONEY
| Risky Business
Risk management strategies for small businesses
32
OUTLOOK | Relief Rx
Pharmacy relief agencies come through during temporary staff shortages
ELEMENTS | The business magazine for independent pharmacy | DECEMBER 2021
SOLUTIONS | Make It Your Own
3
E
ON THE WEB
ELEMENTS
The business magazine for independent pharmacy
VOLUME 10, ISSUE 4
Find more strategies, tips, and expert advice to improve your business.
DECEMBER 2021 PUBLISHER & EDITORIAL DIRECTOR Matthew Shamet EDITOR Greyson Honaker
The Real Reason Pharmacy Profit Margins Are Declining There’s one statistic in the industry data that doesn’t make headlines. A statistic that tips the profit pendulum.
SR. ART DIRECTOR
Most importantly, a statistic that
Brenda Reagan
pharmacies can actually control.
CONTRIBUTING WRITER Erin E. Rand
Biden’s Executive Order on Drug Pricing Reform INTERESTED IN ADVERTISING? elements@pbahealth.com
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How to Perform a Break-Even Analysis (and Why You Should) This essential equation determines the exact point you start turning a profit. Learn how to use it to make your business viable for the longterm.
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NEWS
CANCEL RX New study: e-prescribing tool improves the accuracy of medication lists
T
he implementation of electronic health records (EHRs) has been
After CancelRx was implemented, workflow didn’t change much on
nothing short of a miracle for retail pharmacies. E-prescribing
the prescriber’s end. The e-prescribing software simply prompted
has effectively eliminated the second-guessing of medication
them to identify medications that were being discontinued and
names or dosages while trying to decipher a prescriber’s chicken-
select a reason for why. That information was then automatically
scratch handwriting.
sent to the pharmacy.
But while EHRs have been indispensable in reducing
transcription errors, there is still plenty of room for miscommunication to occur. A prescriber might decide to change a patient’s dosage and send over a new prescription, leaving the pharmacy with two prescriptions on file—but only one of them is correct. Or perhaps a prescriber decides to discontinue a therapy but doesn’t inform the pharmacist, who continues to fill it for
After the study was over, the percentage of medication discontinuations reported to pharmacies went from 34% to 93%
the patient.
Such oversights can cause adverse drug events, which harm
patients’ health and cause $8 billion in unnecessary healthcare expenditures every year. Before now, there was no consistent
CANCEL RX FOR PHARMACIES
way for prescribers and pharmacists to communicate about
For pharmacies, CancelRx made more waves. They received
discontinued therapies, but an innovative piece of technology
approximately 20 to 50 cancelation messages a week. For some
called CancelRx aims to change the landscape of electronic
participating pharmacies, that increased level of communication
communication between prescribers and pharmacists.
proved to be an irritant—especially when the messages were about acute therapies with no refills, like antibiotics. Despite this
WHAT IS CANCEL RX?
frustration, after a bumpy start, most pharmacists eventually
An e-prescribing tool, CancelRx allows prescribers to electronically
acknowledged that the technology was too important for patient
communicate updates about medication discontinuation orders,
safety to stop using it. Nine months after implementation, it only
which means pharmacies can always have accurate medication lists
took pharmacists between 5 and 10 seconds to acknowledge each
for their patients.
cancelation message from CancelRx.
In a recent study of CancelRx at the Wisconsin-based health
Errors sometimes did occur, like when an older prescription
system UW Health, 80 outpatient clinics and 15 community
had already been marked as inactive by the pharmacy
pharmacies implemented the technology in an attempt to reduce
management system or when the prescription had been
information discrepancies.
transferred by the pharmacy to another pharmacy. There were also
occasional technological hiccups if both the clinic and the pharmacy
Before the study, the medical system had no consistent
method for canceling medications and communicating that
did not have the CancelRx functionality activated.
information to pharmacies. Often, employees at the clinic relied
on patients to remember what they were currently taking, and
discontinuations reported to pharmacies went from 34 percent to
many did not feel it was their responsibility to discontinue a
93 percent, significantly reducing the risk that a pharmacy would
After the study was over, the percentage of medication
medication from a patient's electronic health record. Occasionally,
dispense a discontinued medication to a patient and cause an
clinic staff would call or fax pharmacies to let them know about a
adverse drug event.
medication discontinuation, but this level of intentional outreach
was uncommon.
SureScripts, has been around for about a decade but has never
been widely implemented because of the cost. However, SureScripts
Under this system, a mere 34 percent of medications that were
CancelRx, which is distributed by the e-prescribing vendor
canceled at the clinic were also canceled at the pharmacy. Worse, 5
has announced that it will remove financial barriers for community
percent of discontinued medications were later dispensed by the
pharmacies, and the Centers for Medicaid and Medicare Systems
pharmacy, and about a third of those medications were considered
have included CancelRx in its Stage 3 Meaningful Use criteria, which
high risk for adverse drug events.
means it is eligible for the EHR incentive program.
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TRENDS
CRISIS SUPPORT Why every pharmacist should take mental health first aid
I
n the United States, one in five people suffer from a mental illness.
Nearly half of Americans will experience a mental health crisis in
their lifetime. And if those numbers aren’t troubling enough, less than half of the people who had a mental disorder in the past year received professional help.
These were the statistics before a pandemic swept through
the country and upended all facets of life, including vital social connections and access to care. In August of 2020, the Centers for Disease Control and Prevention reported that the number of people with an adverse mental health condition doubled from 20 percent to 40 percent, mainly driven by rising rates of depression and trauma.
Pharmacists aren’t the first professionals that come to mind
when thinking of mental health issues. But they are uniquely positioned to benefit those in need, particularly the 55 percent who never seek care. "Pharmacists have more eyes on patients than any other healthcare provider," said Hannah Fish, PharmD, director of strategic initiatives at the National Community Pharmacist
providing support for someone who might be undergoing an acute
Association (NCPA). "They are going to notice changes in their
mental health crisis, in which case they need to be referred to
patients because they're seeing them more often and because
additional help," Fish explained.
of their highly trained medical background. They are that perfect
bridge to open the door for a patient to talk to someone and get
You see a person collapse with a heart attack, you try to resuscitate
the level of referral that's needed."
until the ambulance arrives and takes over. Much the same,
you see a patient hyperventilate from a panic attack during an
The way for pharmacists to be the bridge, Fish said, is to take
While CPR is triage for the body, MHFA is triage for the mind.
the national Mental Health First Aid (MHFA) training, an eight-
immunization, you support them during the crisis, and then direct
hour course on how to identify and respond to signs of mental
them to professional care.
illnesses and provide initial help and support to someone who may
be developing a mental health problem or experiencing a crisis.
say they have encountered the opportunity to provide mental
In Bishop’s experience as a certified MHFA trainer, pharmacists
"Look for a course, then get trained and train your staff," she said.
health first aid far more often than CPR. And Bishop has personally
"The skills are crucial right now, especially during this time when
found almost no limit to the applications of the training in his
everyone is at their wits' end and probably experiencing some sort
pharmacy. "There are examples every week I could go through. I
of mental health problem."
use parts of it every single day."
When Clark Bishop, pharmacist and owner of five independent
Bishop has trained his staff in MHFA at all five of his
pharmacies, attended the training for the first time, it turned his
pharmacies, teaching them how to have conversations with
worldview upside down. Like many others who have taken the
patients and recognize needs. "We’re arguably the most accessible
training, he discovered how much of his thinking had been driven
healthcare provider," he said. "Someone can walk into our
by social stigma and misunderstandings. "It dispels a lot of the
pharmacy and visit with a staff member when they’re struggling,
misconceptions of the common person," he said. "It’s a complete
and we can use our tool to help them."
change of how you treat mental health issues."
The tool Bishop refers to is ALGEE, an acronym for a series of
actions to perform when you encounter someone developing or PHARMACY’S ROLE IN MENTAL HEALTH
experiencing a mental health crisis. The gist is to approach them
Pharmacists aren’t expected to provide mental health services, or
and assess their health, listen nonjudgmentally, and encourage
to even diagnose mental health illnesses. "It’s really more about
them to get help. Fortified with the knowledge from the in-depth
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MHFA training, staff members can use ALGEE as a shorthand reference to confidently navigate the whole spectrum of mental health crises. "You can apply those five steps to any situation in the pharmacy," said Fish.
The final Es in the acronym refer to two different kinds of
encouragement, personal or professional, based on the level of care they need. "If it's something mild, can you encourage someone to get exercise or do some meditation or some of the general best practices?" Fish explained. "If we're dealing with a mental health disorder, then we encourage professional help: Do you need to see a counselor or a doctor?"
Bishop’s staff uses a couple of methods to recognize when a patient might need aid. First, a patient’s medication profile—looking out
THE ALGEE ACTION PLAN ASSESS for risk of suicide or harm. Try to find a suitable time or place to start the conversation with the person, keeping their privacy and confidentiality in mind. If the person does not want to confide in you, encourage them to talk to someone they trust. LISTEN nonjudgmentally. Many people experiencing a challenge or distress want to be heard first, so let the person share without interrupting them. Try to have empathy for their situation. You can get the conversation started by saying something like, "I noticed that …" Try to be accepting, even if you don’t agree with what they are saying. GIVE reassurance and information.
for antidepressants, in particular. Second, watching for dramatic changes in behavior or mood.
This is one area where independent community pharmacists
show their unique value in mental health first aid—they know their patients well enough to identify when something is amiss.
And because the staff has relationships with the patients, it
makes patients more open and receptive to the next step in the first aid response: asking them directly if they are thinking of hurting themselves or someone else.
"The first couple times are extremely difficult. You're terrified
when you do it," Bishop said. "But once you get into a rhythm of doing it, it becomes second nature. I probably subconsciously do the five steps of mental health first aid all throughout the day at different periods without even realizing it." BEST PRACTICES For Bishop, the key to it all is using your ears more than your mouth. "Mostly what I do for mental health first aid is listen," he
After someone has shared their experiences and emotions with you, be ready to provide hope and useful facts.
said, "because a lot of these people haven't had an opportunity to
ENCOURAGE appropriate professional help.
The earlier someone gets help, the better their chances of recovery. So, it’s important to offer to help this person learn more about the options available to them.
said. "Now that the door is open, they become much more willing
ENCOURAGE self-help and other support strategies.
This includes helping them identify their support network, programs within the community, and creating a personalized emotional and physical self-care plan.
so it’s just as accessible to your clerks as it is to your pharmacists.
have someone listen to them in a long time. You'd be shocked at the response you get from the patients." Even if they don’t want to talk, you’ve still opened a door. "They
now realize that somebody else is capable of seeing that they're going through something and cares enough to ask them," Bishop to talk to you." To make mental health first aid effective, it takes more than the
pharmacist. The national curriculum is designed for the layperson, In addition to being more helpful to patients, having your staff trained helps with workflow by allowing the pharmacists to stay
Source: www.mentalhealthfirstaid.org
behind the counter when necessary.
Right now, pharmacies can only bill for mental health first
aid services through a collaborative practice agreement with a prescriber, but Bishop hopes that will change in the future. "We have to figure out documentation on e-care plans, get the data, and show the money these third parties are saving before it will become completely reimbursed." ELEMENTS | The business magazine for independent pharmacy | DECEMBER 2021
9
CULTURAL TRANSFORMATION After he received the training, Bishop applied what he learned to his pharmacy. "I immediately saw a complete culture shift inside of my store because it started changing the way we actually dealt with our patients," he said.
At Bishop’s pharmacy, the staff used to play a game. Whenever
a certain difficult and talkative patient called, everyone put their finger to their nose. The last one to do it had to take the call. "What I didn't realize at the time is that it was having a huge impact on how we treated all patients," Bishop said. "I got the training, it completely changed my perspective on what this person is going through. I no longer think of it as somebody who's crazy or nuts or lost their marbles. I think there's somebody who's dealing with a mental health issue but is capable of being made well."
Then Bishop trained his entire staff in mental health first
aid, and now his employees race to be the first to answer when that difficult patient calls. "They know the kind of impact they can make because they have this new tool," he said. "They are no longer scared of this person or worried about not being able to help them."
In the lobby of the pharmacy, there’s a white board hanging
on the wall. They call it the Community Hope Board. "We invite members of the community to share their victories here and what they have hope for," Bishop said. "Once a few people start writing, it just takes off and I have to erase it and start all over again because so many people are sharing. It’s amazing."
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OUTLOOK RETAIL
SHELF IMPROVEMENT Best practices for front-end pharmacy shelving
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W
hen designing your pharmacy space, shelving might seem
like a utilitarian choice: shelves do the simple job of holding
patients will have another opportunity to browse on the way out.
By placing your retail checkout counter at the front of the store,
up your merchandise. But your shelving can affect everything
But they might take a different route, so be sure to consider the
from how patients move throughout the store and interact with
shelving at the perimeter of your store, as well. Wall units can be
merchandise to how they perceive your pharmacy.
used in conjunction with lighted canopies to draw patients in.
DiOrio noted that pharmacy owners should be aware of local
"The design of your retail shelving can have a significant impact
on revenue," said Steven DiOrio, marketing manager for Storflex
laws when creating a floor plan because every state has different
Holdings, a retail store fixture manufacturer. With proper shelving
requirements when it comes to the spacing between aisles.
and store design, you can create a friendlier shopping experience for your patients by improving the organization of your front end
FORM AND FUNCTION
and enhancing the visibility of your merchandise.
Pharmacy shelves should be attractive enough to create a welcoming
atmosphere, but you should never prioritize aesthetics over function.
Shelving isn't just a matter of picking out some gondolas and
end caps and putting your products on them. It is an extension
A few simple investments can add some flair to your shelving.
of merchandising, helping you arrange your products in a way
"If your pharmacy is in a high-end geographic location or you
that makes them more appealing to patients. "Pharmacists must
want to impress your customers, gondola shelving units featuring
develop a strategic design centered around merchandising," said
slatwall panels with a beautiful wood-tone finish won't hurt or
DiOrio. "A terrific way to look at it is by taking each three-foot or
sacrifice the merchandising functionality business owners require,"
four-foot section and developing a plan for each area."
DiOrio said. Another budget-friendly option is to add mica panels
How you display your products affects patients' perception.
Not every item in your pharmacy will look great on a shelf. In your
on your end cap displays. Adding a wooden top to your gondola shelves can both improve the appearance and create more space
oral care section, for example, toothbrushes won't be appealing
for merchandise that lands right at patients' eye level.
if they are scattered on a shelf. Instead, achieve a cleaner look by
Show off some of your pharmacy's unique flair by
displaying toothbrushes on peg hooks hanging from slatwall. On the
incorporating the colors of your pharmacy branding into the
other hand, toothpaste should be displayed on shelves only, so that
shelving or adding eye-catching signage or decor.
patients can clearly see all the diverse options your pharmacy carries.
you can keep it that way for a long time. DiOrio recommended
One of most important shelving units in your store is the end
The good news is that once you've settled on the right shelving,
cap, which needs strategic arrangement to maximize value. "Most
sprucing up your displays every five to seven years. In the interim,
retailers think that end caps should be for your most popular
focus on keeping your shelves clean and tidy. "Many customers
products," DiOrio said. But in reality, they are a chance to increase
view pharmacies as an extension of a medical facility. Therefore,
exposure to your most profitable products. "When designing a
pharmacists must keep their stores as clean as possible, including
store with the goal of boosting profits, you want to merchandise
the store fixture displays and retail sales counter," he said.
your highest-profit margin items on those end unit displays." CREATING A FLOOR PLAN Your shelving unit choices influence your floor plan, which dictates how patients move around your pharmacy. Typically, the pharmacy department is at the back of the store because it’s most people's ultimate destination. Creating retail displays that encourage people to browse on the way to the pharmacy counter increases the chances they will add something to their cart. "When creating a floor plan, the goal is to increase sales of impulse items," DiOrio said.
The design of your retail shelving can have a significant impact on revenue.
Most of the shelving in the middle of the floor will be gondolas,
which are double-sided islands. Gondolas can display a wide variety of merchandise and can be strategically placed to encourage flow through the pharmacy in a specific direction. To encourage impulse buys, DiOrio recommends "prominently featuring end cap displays and other free-standing displays around the sales counter," in addition to standard gondolas.
ELEMENTS | The business magazine for independent pharmacy | DECEMBER 2021
13
SHELVING FAUX PAS High-quality shelving can encourage people to shop more, but low-quality shelving will work against you. DiOrio emphasizes investing in good shelving as a customer relations strategy. With well-maintained shelving, you will create a positive impression as soon as patients walk into the pharmacy.
When planning a remodel, shelving should be one of your first
priorities. Set the budget for shelving at the very beginning of the
CHOOSING THE RIGHT GONDOLA SHELVING
process so that you don't get to the end and realize you can't afford the shelving that works best for your store.
Worn or cheap-looking shelving will negatively color patients'
impression of your pharmacy. If a shelf is falling apart or poorly maintained, patients might subconsciously worry about the quality of the merchandise displayed on those shelves. Look out for chipping paint, sagging shelves, or cracks in your shelving and take quick action to repair or replace them.
Shoddy shelving can also pose a physical danger to your
patients. If shelves aren't sturdy, they could fall over or cause patients to trip. Aisles that aren't wide enough can create accessibility problems for patients using mobility aids. Walk through your front end periodically to examine shelving and identify any potential hazards or age-related deterioration.
Gondola shelving is the most versatile option for showcasing your pharmacy’s front-end merchandise. You can mix and match pieces to create the perfect setup based on the products you sell. Here’s what to consider before investing in new gondola shelves. SIZE Consider the size of your pharmacy and how patients move around the fixtures. If shelves are too big, your pharmacy will feel cluttered and crowded. If they are too small, you miss out on merchandising opportunities. Also reference local laws regarding aisle width. MATERIAL
Many customers view pharmacies as an extension of a medical facility. Therefore, pharmacists must keep their stores as clean as possible.
Metal shelving is more affordable and easier to keep clean. It can also be more versatile, allowing you to change shelf spacing and add features like hooks for hanging merchandise. Wood shelving is pricier, but can give your pharmacy a high-end feel. Wood shelves can also be custom fit to your space. ACCESSORIES Think about what will be displayed on and around your gondola shelving unit. Will the products benefit from additional undershelf lighting? Should the products be hung on hooks rather than set on a shelf? Will you add an end-cap display for cross-merchandising? STYLE Your shelving should complement the rest of the pharmacy’s look and feel. Customize the steel colors to coordinate with your pharmacy branding, or upgrade to a wood-toned pegboard or slatwall. Also consider how you will incorporate signage into your shelves. Sources: Storflex Holdings, Shelving Design Systems
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SOLUTIONS OUTLOOK
MAKE IT YOUR OWN The advantages of offering your own brand of OTC products
C
ostco has Kirkland; Walmart, Great Value; Target, Good & Gather.
retailers to funnel purchases to their products. The retailer controls
Think of any major retailer and fill in the blank. They all have
the positioning, the in-store marketing, and the prices of those
their own private brands, which span categories: household goods,
products—meaning they have all the means to direct shoppers to
apparel, pharmaceuticals, health and beauty.
their brand over the competitors. Moreover, consumers who trust
If there’s a unanimous trend among the large chain retailers
the retailer are likely to trust their brand.
across industries, there are probably good reasons. Costco’s
Kirkland Signature brand is worth $40 billion, Walmart’s Great
independent retailers are getting in on the trend, including
Though this practice is seen at major corporations, some
Value $27 billion, and Kroger’s private brands $23 billion. Store
pharmacies. Whit Moose, owner of Moose Pharmacy in North
brands account for more than a quarter of many of these retailers’
Carolina, had noticed a lot of demand for probiotics, but he wasn’t
total sales.
satisfied with the quality of the available brands and generics.
At the same time, he had been thinking of ways to promote his
In a recent poll, 63 percent of American consumers said they
plan on buying more private label goods in the future. According
pharmacy. That’s when he had the idea to invest in his own line of
to CB Insights, a technology data platform, private label sales are
high-quality probiotics, branded with his pharmacy’s logo. "When
poised to account for a quarter of all sales for packaged goods in a
patients go home and take their vitamins or supplements, that's
few years.
our name and our logo they see when they open that bottle every
day," he said. "Just the name recognition part of it is huge."
Store brands are often a product of "white labeling," which
is the process of purchasing goods from a manufacturer and
branding them with your own label. These products are referred
Moose’s strategy was ahead of the curve. In the past, private labels
Looking at the current landscape of store-branded products,
to as private label, store brand, or owned brand. For example,
were seen as inferior but much more affordable than their brand
Walmart, Target, and Amazon all get their acetaminophen from
peers. But now, store-branded products have grown into legitimate
the same manufacturer (Perrigo) but put their own brand's logo on
competitors in quality and variety while still winning the pricing battle.
their bottles.
than he makes selling generic versions. But he earns about the
On average, private labels earn margins 20 to 35 percent
higher than brand names. Creating a store brand also allows
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In general, Moose makes more money selling his own brand
same as the pharmaceutical-grade and name brands because of
his commitment to quality. "It’s not like you’re buying it for pennies
products based on demand, he is cautious before making any
and selling it for a huge amount," he said. "We wanted it to be a
decisions because of the volatile nature of the supplement industry.
quality brand and a product we could expand on."
"Most of what we have are tried-and-true. They’re not fads," he said.
"You have to be nimble enough to strike when it’s hot, but at the
But quality not only elevates the pharmacy's brand, it also
makes the products more desirable. He’s found that over time
same time, supplements come and go. By next year something new
patients prefer his products over the cheaper alternatives because
will come along and everyone will have forgotten about it."
they provide the greatest benefit.
and apply your pharmacy’s labels for you. Moose decided to
"All in all, I’m pleased with how it’s gone," Moose said. "It is a
Most vendors that offer a white label option can also print
great opportunity to put your name out there, and as independent
produce his own labels through a marketing firm for more creative
pharmacies we want people to see our name on people’s shelves,
capabilities and more control over the final product. "What we were
not Walgreens and CVS."
looking for was more advanced than what a lot of these folks were
GETTING STARTED
professional product."
willing or capable of doing," he said. "We wanted ours to look like a The hardest part of getting Moose's private label off the ground was finding a supplier. Many manufacturers that he preferred couldn’t or
MAKE THE PRIVATE LABEL SUCCESSFUL
wouldn’t provide a private label. It would have been easier if he was
The most important decision for store-branded products is how
willing to settle for lower quality, but Moose prioritized products that
to price them. Pricing varies depending on the retailer's goals and
he knew would benefit his patients the most.
what else is on the shelf. Because Moose chose to focus on quality,
he must walk a fine line. "With our community, we try to be price-
He began by picking up the phone and contacting vendors he
already used and liked, asking if they could make him a private
conscious, but this is not the cheapest product you can get," he said.
label. Most were worried about increasing competition with their
branded products or lacked the production capacity to supply a
alongside theirs, giving patients a "good, better, best" option to suit
private label. Eventually, after much Google searching and cold
people of every financial situation. Moose’s version is the "best" in
calling, he found a quality brand to partner with.
each category, but its price point lands between the generic and
"It’s been a good choice and a good relationship," he said. Since
The pharmacy sells the generic and brand name versions
the brands.
then, he has broadened his partnerships to expand his assortment
and has changed some suppliers after they stopped servicing the
educates them on the alternatives, noting many of them aren’t going
When someone comes in for brand-name products, Moose
pharmacy. "One thing we learned was to make friends, find other
to give them nearly the benefit that Moose’s will. "This is not the
vendors that you can use," he said. "Because you never know what
cheapest product you can get, but quality-wise you can't beat it," he
might happen with your current vendor."
said. "You are more likely to get the results you’re looking for."
After seeing the success of his probiotics, he started adding
Much of Moose’s private label success has come through
more supplements based on popularity and trends. "As we would
prescriber referrals, which began unexpectedly. During a meeting
see a product that was about to take off, and we felt like it would be
about his compounding service, he offhandedly mentioned his
a good fit with what we were doing, we would add additional ones."
probiotics. To his surprise, the prescribers were much more
interested in those than in his compounding.
Now the pharmacy offers 15 products branded with Moose
Pharmacy’s logo, all in the supplement category. Although he adds
"The one we offered was so much better than what they were
recommending to patients," he said. "So we were able to get on their formulary and in their dispensing or prescribing software, and now we get referrals from the local GI doctor group. When that happened, it really took off."
When patients go home and take their vitamins or supplements, that's our name and our logo they see when they open that bottle every day.
Moose wishes he would have been more confident when he
started out. A part of making this work, he said, is "taking a leap of faith." As an independent, the risks aren’t as great because you can adapt quickly. You don’t even have to revamp your entire inventory. Moose said many of these vendors will let you buy just a dozen of the items to test out. "If you get a deal like that, what’s the worst that can happen?"
In the end, Moose thinks most independent pharmacies can
create a private label that works. "Give patients a good reason to buy," Moose said. "And if you can do that, if you believe in it, if you understand the products, then I think you can be successful."
ELEMENTS | The business magazine for independent pharmacy | DECEMBER 2021
17
FEATURE
THE ROLE OF ARTIFICIAL INTELLIGENCE IN RETAIL PHARMACY
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W
hen you think of artificial intelligence, what comes to mind? A killer cyborg from the future? A Pixar robot saving humanity
from itself? A virtual assistant who can fall in love?
AI holds the potential to enable community pharmacies to be even more proactive and personalized in how they understand and serve their patients.
Although artificial intelligence (AI) is still in its early stages, it
is no longer just the projection of Hollywood and science fiction. "Because of all the advances in computing, artificial intelligence is not pie in the sky," said Ken Perez, vice president at Omnicell, a multinational healthcare technology company. "It's something that is already occurring."
Artificial intelligence is nearly everywhere in life, though it
isn’t the kind of thing that will destroy or save all of humanity. Its application is more mundane, powering many of the daily conveniences we now take for granted: search suggestions, autocorrect, face recognition, chatbots, ridesharing apps, social media recommendations, Spotify playlists. Machine learning powers Apple’s Siri, Amazon’s Echo, and Google’s Assistant. Likewise, you might not recognize AI even though it powers familiar pharmacy technology. "For the most part, AI is under the hood of various solutions," Perez said.
AI solutions in retail pharmacy can offload laborious, menial,
and time-intensive tasks so pharmacists can center their time
To illustrate, Subramanian gave the example of a GPS. On a regular
around patient care. "The technology is going to aid in reducing the
computing model, the program will tell you when to turn to reach
pharmacist’s load so that they can actually practice at the top of
the chosen destination. With AI, the program will not only tell you
their training," said Ram Subramanian, PhD, chief technology officer
which path to take but will adjust the route in real-time based on
at InterLinkAI, an automated pharmacy management system that
changes in the environment, such as a pedestrian crossing the
uses machine learning.
street or a red light. "It's not just blindly taking a right or left. It's
actually sampling some information from the environment, and
Although it may sound counterintuitive, leveraging more
technology will enable independent pharmacies to become
then based on known examples that we've used in the past, it's
more human, and more personal, than they have been since the
going to make the best decision possible."
soda fountain days. "AI holds the potential to enable community
pharmacies to be even more proactive and personalized in how
and the computer choosing one of them depending on the
they understand and serve their patients," Perez said. "AI is the
circumstance. Instead, it’s the result of the machine mimicking
engine that empowers them to do even better personalization."
brain neurons by organically reconfiguring connections as it learns
AI DEFINED
explains it like this: "With life experience, depending on a particular
Most simply, artificial intelligence describes computer systems that
person’s trials and errors, the synaptic connections among pairs of
mimic the brains of humans. Perez puts it this way: "How can a
neurons get stronger or weaker. An artificial neural network could
This isn’t the result of humans inputting a bunch of formulas
new data. Gideon Lewis-Kraus, in New York Times Magazine,
computer simulate the intelligence of the human being?"
do something similar …. It wouldn’t need to be preprogrammed
with fixed rules. It would, instead, rewire itself to reflect patterns in
Humans can input new information (learning) and change
their output (behavior) based on what they learned. They can
the data it absorbed."
make judgments based on context and situation. They can identify
patterns and adapt. They can recognize things visually. The goal of
computer and it can come up with all kinds of insights on its own,
AI is for a machine to imitate those kinds of abilities.
even ones humans would not have expected. "With big data you
can extract information automatically," Perez said. "You can sort
Most of the time, the phrase artificial intelligence really refers
That means you can give massive amounts of data to a
to "machine learning," a subset of AI. As the name indicates,
it. You can analyze it. You can apply algorithms to it. And you can
machine learning systems process information and change their
actually learn and draw conclusions and derive insights."
output organically as they learn new things. The machine identifies
patterns over time, building an increasingly complex database that
unprecedented potential. Because there is no limit to the amount
enables it to respond more specifically to any given situation and to
of data an AI machine can absorb, it can not only copy advanced
This unique capacity for data analysis and application unlocks
more scenarios it hasn’t encountered.
human abilities but surpass them. "Computers can do some
amazing things that would take smart people with PhDs literally
"We're using a lot of data in order to develop a decision-making
system that then tells us what to do next. Given an input, what
decades," Perez said. "The algorithms draw conclusions that are
should we do?" Subramanian explained.
way beyond what a lot of humans can do." ELEMENTS | The business magazine for independent pharmacy | DECEMBER 2021
19
AI IN THE PHARMACY With its unique ability to mine and track tons of data, machine
SEVEN WAYS AI CAN IMPROVE PHARMACY BUSINESS
learning can make calculations and predictions more quickly and accurately than humans. This predictive prowess can drive all sorts of optimizations in inventory management, workflow, patient treatments, patient interactions, and customer service.
"There’s a huge variety of things that pharmacists can use,"
said Scott Nelson, PharmD, assistant professor of Biomedical Informatics and director of the MS Applied Clinical Informatics (MS-
Personalized care
ACI) program at Vanderbilt University. "Some of those will help the business in terms of workflow and in terms of having better quality
Drug diversion prevention
control and better adherence for patients."
For workflow, AI can streamline operations by optimizing
staff levels to match expected traffic, reducing the time to fill with automatic pill counters, and minimizing wait times with more
Reduced medication errors
accurate timing for prescription pick up.
Computers can do some amazing things that would take smart people with PhDs literally decades.
"Think of a pharmacy getting 50 orders within the hour. AI can
Improved medication adherence
Inventory optimization
More efficient operations
Delivery optimization
Better patient monitoring
SKUs in real time; minimizes holding costs through precise
determine which order has a higher priority because the patient is
forecasting; syncs inventory purchases more closely to the time of
more likely to pick it up within the hour versus picking it up after an
pickup; and more.
hour," Subramanian explained. "So now you can prioritize which prescriptions you're going to package first. There are nuances that
PERSONALIZATION
will ease any sort of bottlenecks in the workflow for the pharmacy."
AI enables more precise and personalized care by learning a lot
about your patients: who is unlikely to adhere, who might need a
Technology exists to translate e-prescriptions, saving at
least 10 seconds per prescription while improving accuracy from
consultation, who needs medication reviews, who needs delivery,
40 percent to 90 percent compared with manually transcribing,
who will respond to what type of intervention.
according to one company. AI populates all the necessary fields,
flags missing information, and substitutes NDCs based on current
who would benefit from patient communications or medication
inventory stock—all automatically.
therapy management, or who would be more likely than not to
respond well to these actions," Perez said. "Understanding who will
AI can help pharmacies master inventory control with greater
precision, helping them order the right items in right quantity at the
"Predictive and prescriptive models can identify individuals
respond to which interventions is as important as understanding
right time. It does this in several ways: predicts demand by mining
who needs those treatments."
historical and real-time purchasing data and other factors; reduces
costs by finding the best prices and tracking contract incentives
its patients into very specific categories with common behaviors,
to maximize rebates; minimizes spoilage by monitoring individual
allowing the company to tailor its service to better meet needs.
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Perez described a company that is already using AI to segment
"At first they say we're talking about women who live in rural areas
to identify the pills, so there's no chance of a wrong medication
in the Northeast who are between the ages of 30 and 40 who have
getting to the patient," Subramanian explained.
two children," Perez explained. "They discover these women don’t
pick up medications from retail pharmacies. Why is that? Because
virtually, which means a single pharmacist can work at multiple
With this technology, pharmacists can verify prescriptions
it’s hard to get daycare. They've got two kids, not one. It's a hassle
locations without leaving a computer. A remote pharmacist can,
to put them in the car and it's treacherous driving. There's ice and
among other benefits, provide extra support during peak hours
snow. And during these months from, let's say November through
but simply be on call during regular hours. This not only enhances
February, the retail pharmacy should ask if they would like their
operational efficiency but also provides a safer environment by
medications mailed or delivered."
allowing pharmacists more breaks and preventing long shifts that lead to errors.
SAFETY
Artificial intelligence is especially suited to improving safety in the
different data sources, it is effective at preventing controlled
pharmacy. It can reduce adverse events and errors by noticing
substance diversion, Nelson said. AI can continuously analyze
immediate problems, like the wrong number or kind of pill, and by
prescription information with a patient’s entire history in view and
foreseeing potential problems, like who may experience serious
spot predictors of opioid abuse the instant a prescription comes in.
Because of AI’s ability to quickly identify patterns among
side effects.
"It could identify weird outlier medications, like wrong dosage
FUTURE OF PHARMACY
or wrong patient, and it would flag those errors," Nelson said.
Although artificial intelligence offers much promise, its practical
With fully adopted AI applications, perennial issues related to
application will be limited until there are more robust and universal
polypharmacy and drug-drug interactions could almost disappear.
data-sharing solutions among all the stakeholders in healthcare.
But AI can go beyond noticing outliers through information
"One of the key challenges is the gap between pharmacists
alone—it can recognize objects visually as we do. In a sense, it has
who understand the problems and workflows, the developers
eyes. Just as a pharmacist would notice a pill is blue instead of red,
and data scientists who create the model, and the administrators
artificial intelligence can spot errors by "looking" at it through a
who make decisions about which AI solutions to client," Nelson
photo lens.
said. "There's a gap that needs to be crossed to bring together the
leading science and the clinical practice."
Subramanian referenced technology by InterLinkAI that
not only counts pills but also scans them visually. If a clonidine
accidentally mixes in with clonazepam, for example, the machine
technology, they are at the whim of companies to provide the
And no matter how enthusiastic pharmacies are about AI
will recognize the difference in the lettering and send an alert even
solutions. "They need vendors to aggregate the data and apply
though the pill count is accurate.
algorithms to build the models and to produce the analytics and
"From a safety standpoint, not only are we recording an image
of every code being dispensed, but every code is also using AI
generate recommendations, and those need to be integrated into work," Perez said.
AI will continue to grow and transform retail pharmacy in
ways even unforeseeable right now. There was a time when it was inconceivable that a computer could translate language on its own or that cars could drive themselves. What will AI be capable of in ten years from here? And how could that transform pharmacy
The technology is going to aid in reducing the pharmacist’s load so that they can actually practice at the top of their training.
profession?
Since its inception, the prospect of artificial intelligence has
made humans apprehensive. What if they replace us? What if they render essential human jobs extinct? Nelson suggests using the phrase "augmented intelligence" instead of artificial intelligence to emphasize AI’s true role in improvement rather than replacement.
"It's here to help us with mundane tasks that we as humans
typically don't like doing, which then frees us up to do more human things faster and better, thereby allowing us to do more complex higher-level thinking," Nelson said. "It allows us more time for compassion and empathy with our patient. No matter how good an AI model is, it's never going to be there to hold the patient’s hand when they're going through a hard time or to listen to their concerns. We're the only ones who can do that."
ELEMENTS | The business magazine for independent pharmacy | DECEMBER 2021
21
AI IN THE FRONT END Machine learning can enhance numerous areas in front of the counter to improve the customer experience and increase retail sales. Here are some of the most important retail applications of artificial intelligence.
INVENTORY With machine learning, AI can mine sales data, market data, seasonal trends, local events, individual customer data, and more to
LOYALTY
determine what to stock and when
The depth of AI analytics makes
to stock it to meet the precise needs
loyalty programs more effective by
of your customers and fluctuating
enabling an intricate understanding
supply and demand. That translates
of individual customers—so you
to having the right items in the right
have a better idea of what exactly
quantity at the right time.
will keep them engaged with and committed to your pharmacy.
SENTIMENT ANALYSIS AI can search the web for references of your pharmacy and evaluate the comments to determine how people feel about you, whether positive, negative, or neutral. The data can be segmented into various categories—like wait time, item availability, or pricing—so you can focus on improving specific areas that customers may feel negative toward.
PROMOTIONS Predictive analytics can be disturbingly precise. Even 10 years ago, Target’s machine learning was able to identify women who were pregnant based on their shopping data. The technology can help you segment customers to create more effective promotions—like sending a diaper coupon to an expectant mother.
IN-STORE INSIGHTS Cameras powered by AI can analyze traffic patterns in your store to learn how shoppers navigate. What path do people take? Where do
SHELF CHECKS
they spend the most time? When is the store busiest? The data can
With cameras homed in on the shelving
be segmented by different criteria, like demographics and seasons.
units, AI can prevent many problems that
Some of this technology is sophisticated enough to track facial
human employees can’t keep a constant
gestures and physical interactions with products, such as picking up
eye on—stockouts, label mishaps, and
an item and putting it back. These insights enable you to optimize
inconsistencies in inventory arrangement.
your store layout, product placement, and in-store marketing.
PRICING With access to the right data, AI can determine the best price for any given item. It can base its recommendation on your priorities, too. Do you want a certain profit margin? Do you want to turn them quickly to prevent spoilage? Do you want volume? Do you want to match the competitor?
CHECKOUT Self-checkout machines are prevalent at the national chain and big box stores, but AI provides an even more convenient way to check out. In 2016, Amazon introduced its first brick-and-mortar grocery store. The truly groundbreaking feature was that there were no cashiers. Shoppers simply put the items in their bag and walked out. Cameras and sensors automatically recorded the purchases and charged them to a credit card. Though this
THEFT AI can quickly spot deviances from the norm that could indicate theft. While you might assume that DayQuil
technology may be out of reach for community pharmacies now, it may become more accessible in the future.
is disappearing because it’s winter, AI notices that the demand is irregular even for the season. Its understanding is based on vast amounts of historical and real-time data, so it can be more precise in its awareness.
CUSTOMER SUPPORT Chatbots serve as the first line of response to questions customers might have about logistical or technical issues that don’t need an actual human to resolve, such as how to return a product or even the side effects of medications. In addition to reducing staff workload, chatbots improve the customer experience because they are available 24 hours a day and respond to questions immediately.
SPOTLIGHT OUTLOOK
GENETIC GOLDMINE This independent pharmacy personalizes patient care down to DNA
P
eeking into your patients’ DNA to gain insight into their
as expected, but now pharmacogenetic testing offers a shortcut.
treatment might seem like something out of science fiction.
Greenwood Pharmacy started offering pharmacogenetic
But with pharmacogenetic testing, sometimes known as
testing in February 2019 after hearing about the service at trade
pharmacogenomic testing, looking at genes isn’t just a plot from
shows. "We were interested in helping people understand how
a Jurassic Park movie. It’s accessible technology you can use to
that one piece of themselves—their genetics—can impact how
personalize patient care.
their medications will work for them in the future, in addition to
all the other things that can impact how medication therapies are
Greenwood Pharmacy and Compounding Center, an enhanced
services pharmacy located in Waterloo, Iowa, started offering
effective or ineffective for people," Nichols said. "It's the kind of
pharmacogenetic testing as a way for patients to learn more about
thing we'd learn about in pharmacy school, but up until that point,
themselves and their medication therapies.
we didn't really have a good means of implementing it."
"Since we are practicing as an enhanced services pharmacy,
Pharmacogenetic testing works by testing a saliva or blood
we try to focus on optimizing the medication therapy for each
sample from a patient and looking at a set of genes known to
individual patient," said Rob Nichols, a pharmacist at Greenwood.
influence how drugs are metabolized. By looking at variations
"This was another tool that would allow us to move closer to
within these genes, pharmacists can assess the effectiveness of the
precision medication."
patient’s drug regimen. For example, they may find that the patient
Most pharmacists are familiar with this scenario: a drug that
works perfectly for one person doesn't have the desired effect on
is metabolizing drugs faster than average and would therefore benefit from a higher dose to achieve the desired outcome. If a
another, or one patient suffers from the worst side effects while
patient has a slower metabolism, they could need a lower dose to
others don't have any side effects at all.
avoid side effects.
The reason for these differences lies in patients' DNA, which
Having a pharmacogenetic test on file can also help prescribers
affects how they metabolize drugs. In the past, physicians and
make better decisions from the beginning because they can
pharmacists would have to go through months of trial and error to
prescribe the right drug and dose right off the bat.
figure out the right drug and dosage if a medication wasn't working
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METABOLISM PHENOTYPES
PERFORMING THE TEST At Greenwood, patients who want to receive pharmacogenetic
When you perform a pharmacogenetic test, each gene tested will be classified with a metabolism phenotype. These phenotypes indicate the enzyme activity for each gene, which in turn gives providers a clue about how patients will react to their prescribed medications.
fill out a consent form and a mini medication review. Nichols
The phenotypes are defined by the Clinical Pharmacogenetics Implementation Consortium as:
testing services can sign up for an appointment through the pharmacy's website. At their scheduled appointment, they will explained, "That's so we can appropriately evaluate all their current medications with the test and start thinking about potential future medications." After collecting the patient's medication history, health
history, and allergy history, they swab the cheek to collect DNA data from saliva and send that sample off to a lab. After
NORMAL METABOLIZER (FORMERLY EXTENSIVE METABOLIZER)
about three weeks, the pharmacy receives results from the
These patients will metabolize drugs at a normal rate, meaning they can take the standard dose.
the pharmacist goes over the test results with the patient and
INTERMEDIATE METABOLIZER
The pharmacist also discusses the results with the patient’s
These patients metabolize drugs more slowly, meaning they could experience unwanted side effects at a
lab that break down the genetic reactions of the patient. Then discusses how it affects their current and future treatments. healthcare providers and makes recommendations. Certain types of patients are particularly strong candidates
normal dose and could benefit from a lower dose.
for pharmacogenetic testing—those who have been prescribed
POOR METABOLIZER
effects or adverse medication reactions, and those who are not
These patients metabolize drugs even more slowly than intermediate metabolizers. This could cause an accumulation of the medication in the body. Even at a lower dose, poor metabolizers could experience unwanted side effects.
four or more medications, those experiencing unwanted side responding to their current medications as intended. Nichols has established relationships with medical practices in the area that will refer their patients for pharmacogenetic testing, including pediatricians and mental healthcare providers. "Those are the patients we work with most often," he said. "But realistically, we will work with anyone who is interested in learning more about
RAPID/ULTRARAPID METABOLIZER
their genetics."
These patients metabolize drugs more quickly than a normal metabolizer, meaning the drug could metabolize before it achieves the desired effect. They may need a higher dose to attain the desired effect.
Nichols finds that the vast majority of patients who use the
pharmacogenetic testing service gain useful information for the future, regardless of why they chose to take the test. "When we are able to gather more information about patients, we can always find something that can be implicated about their current or future therapy," he said. "It may be something that we can suggest to the provider if they need to go another route with medication choice or dosage. At the very least we're able to give some education on things they will need to keep in mind about how their future medication therapy choices will be impacted by the pharmacogenomic data."
Typically, the pharmacy receives about one referral for the
service a month, but it's a service that patients value highly. Nichols said, "The patients we do interact with are very grateful for the breadth of information that we have regarding their genetic profile." WORKING WITH VENDORS Since pharmacogenetic testing is done in a lab, you will have to find a company to partner with. Many labs offer pharmacogenetic testing, but they aren't all created equal. When choosing a vendor, look beyond the price point and investigate what each testing panel actually tells you. Some testing companies will give you information pertaining to 45 genes, while
ELEMENTS | The business magazine for independent pharmacy | DECEMBER 2021
27
other companies will only test for 30 genes. Ask vendors to provide you with a sample report so you can get a detailed idea of what kind of information you will be able to share with your patients.
"The feedback we have been getting from our patients is that
our panel is more extensive and provided at a lower cost than what they are able to find online," Nichols said.
When Greenwood Pharmacy decided on Rx Genomix as their
vendor, they enrolled with the company as a provider, which means they can send samples to the company's lab for testing. They pay Rx Genomix for each test rather than paying on a contract basis.
"It's very simple. We send the tests in and receive the lab
reports, and then we get an invoice for the test, which we pay for," Nichols explained. "It allows for really good cash flow prediction, which made it an easy decision for us to start offering the service."
On the patient side of the payment equation, some insurance
plans cover pharmacogenetic testing, but that coverage is spotty. Greenwood offers their pharmacogenetic testing as a cash service, and the service began turning a profit just a few months after implementing it.
IMPLEMENTING PHARMACOGENETICS
WHO IS PHARMACOGENETIC TESTING FOR?
"It's still a relatively new service, but it was nice when we started to
Most patients can benefit from learning more about how
and those referrals really helped us along," Nichols said. "I would
Like any new service, one of the biggest challenges Greenwood Pharmacy faced was simply getting the word out to the community. have providers reach out to us asking questions about the service,
their genes affect their medical treatment, but certain
definitely recommend that people reach out to local providers to
conditions are more frequently treated with medications
see who is interested." Tell them about the test that you offer and
that have a pharmacogenetic implication. Patients with
the kind of results you can share with patients, because they may
these conditions may see an even greater benefit from
see a way to apply that information to their practice.
pharmacogenetic testing:
Another asset Greenwood had when starting its program
was an online scheduling program where patients book their
• Acute or chronic pain • High blood pressure • Depression • Anxiety • Mental health conditions • Diabetes • High cholesterol • Cancer Source: Rx Genomix
• Arthritis • Acid reflux • Peptic ulcer • Migraines • Thyroid disorders • Asthma/COPD • Heart attack
appointment online. "It made things a lot easier that we could predict when people were going to be interested in the service and make sure to have it available for them," Nichols said. "It definitely helped us manage our workflow a little better."
Training staff on the cheek swabbing was fairly easy, as the
skill overlaps with some of the other services the pharmacy offers. "There's not much of a training barrier," Nichols said. "We were doing the nasal swab for patients during Covid, and transitioning to a cheek swab for the pharmacogenetic testing meant that training for that collection was really easy."
Greenwood Pharmacy is one of the University of Iowa’s
community-based residency sites, and the residents can easily perform the service. "In pharmacy school, we learn a lot about the main enzymes that pharmacogenetic tests evaluate, so our residents are already trained and knowledgeable about how to evaluate these tests," he said. Overall, pharmacogenetic testing has required no time-consuming staff training or burdensome workflow disruption.
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OUTLOOK MONEY
RISKY BUSINESS Risk management strategies for small businesses
R
isks are a necessary and expected part of running a business. If you tried to operate your pharmacy without incurring any
risks, you would never grow or make a profit.
"One thing people don’t understand when they get into a
business is that it’s nothing but one big gamble. If going into business were a sure thing, everybody would do it," said Brenda Wells, Robert F. Bird Distinguished Professor and director of the risk management and insurance program at East Carolina University. "But the benefits of taking risks are you can make a nice return and you can build a nice business for yourself."
While risks are part and parcel with running a pharmacy, a
process called risk management balances risks with rewards and builds a more durable business. IDENTIFYING RISKS Risk management boils down to five steps. The first step, identifying potential risks, is often the biggest hurdle to clear. "There are so many places you can find risks," Wells said.
Start by looking at your income statement and balance sheet.
Wells pointed out the Tylenol murders of the 1980s when someone snuck cyanide capsules into Tylenol bottles in pharmacies, resulting in the deaths of seven people. "Before that, there was never even concern that something like that would happen. Then, all of a sudden, we have to seal bottles with foil and then seal the lid onto the bottle and seal the box up," she said. "New risks are always popping up. You can’t just do a risk assessment and say, ′Okay, I’m done.′ You have to constantly be looking for new risks that come into play."
"The balance sheet shows assets—things of value—so it’s a great place to start your risk identification process," she explained. "The income statement should indicate where your revenues are coming from, and ultimately those assets need to be protected, too."
Take inventory of the kinds of losses you’ve experienced in
the past. Wells said, "If your employees keep straining their backs lifting things, you’ll probably need to implement some prevention techniques to get that under control, because you could go bankrupt paying those workers’ comp premiums."
Perform a physical inspection of your pharmacy to identify
risky areas. This includes areas where patients are likely to injure themselves or areas where you could accidentally reveal private health information.
In a busy environment like a pharmacy, it’s especially important
to look for risks associated with your workflow behind the counter. "It only takes the phone ringing while you’re filling a prescription to mess up," Wells said. "Recognize that these kinds of things can happen to anybody at any time."
Your work isn’t done after you’ve completed a single risk
management assessment, because the risks to your pharmacy are always changing. Sometimes, you can’t recognize a risk until after the damage has already been done.
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5 STEPS OF RISK MANAGEMENT STEP 1: Identify Potential Risks Take a look at your pharmacy’s finances and physical layout to identify areas of potential loss exposure. STEP 2: Analyze Risks Determine which risks could cause severe loss and which could cause minor loss. STEP 3: Determine a Plan Decide which tools to use to prevent and reduce losses, like safety improvements or insurance policies. STEP 4: Implement Your Plan Put your loss control strategy in place by buying the insurance coverage you need or making improvements in the store. STEP 5: Review Continuously assess your risk management plan and look for opportunities to improve it.
TYPES OF RISK
INTERNAL RISKS
EXTERNAL RISKS
Internal risks are things you can take steps to prevent and control.
External risks are ultimately out of your control, but you can still prepare for them with an emergency fund and insurance.
• Illness or death • Theft and fraud
• Poor economy
• Downtime caused by outdated equipment
• Regulatory changes
• Patient injuries
• Natural disasters
• Financial risks, like poor cash flow
• Changing demographic needs
BEHAVIORAL RISKS In risk management, one area tends to be a blind spot for many
procedures so employees can avoid risks in their day-to-day duties.
business owners. "Lawsuits can extend from bad behavior," Wells
said. The lawsuits typically involve HIPAA regulations and Equal
should still have insurance to back you up in case of a loss. Wells
Employment Opportunity Commission (EEOC) laws. The "bad
recommends having an insurance policy with at least a $1 million
After you’ve implemented loss control measures internally, you
behaviors" include releasing confidential health information, firing
liability limit per occurrence, which is how much you will pay for a
people, not hiring people, or not promoting people. As a pharmacy,
single event. This limit is distinct from the aggregate limit, which
you are always subject to HIPAA regulations, and many EEOC laws
how much you’ll pay in a year.
kick in with 15 employees.
your shelves and several people get hurt. That million dollars has to
Because these risks are hard to identify on your own, Wells
Wells explained, "Let’s say somebody put some bad Tylenol on
recommends seeking outside guidance on the HIPAA and EEOC
pay for all of their damages because that’s one occurrence, so it’s
regulations your pharmacy could be at risk of violating. "Even if
really not that much."
you don’t violate regulations, if someone accuses you of violating, it
could hit the news and your business will suffer," she said. "From a
actually be too low. "It’s a pretty high-stakes game. If a pharmacist
For pharmacies in particular, Wells thinks $1 million may
public relations standpoint, there’s a benefit in just knowing what
uses the wrong dosage or dispenses the wrong medication, it can
can get you in trouble."
kill somebody. So I think higher limits are better."
MINIMIZING RISK
BRINGING IN AN EXPERT
Once you’ve identified the risks in your pharmacy, the next step
One problem for every business owner is overlooking risks because
is mitigation. This is typically accomplished through loss control
their perspective is inherently limited. "Sometimes people are too
practices and insurance.
familiar with their setting, and they don’t see the problems," Wells
said. "I used to have my students choose a business and complete
"Insurance is an expensive tool, so we like for people to
implement practices that can prevent and reduce losses," Wells said.
a risk assessment for them. It was always interesting to me what
undergrad students with almost no training would find that the
Some loss control measures are obvious. If you notice a
shelving display that could cause someone to trip, you can
business owners didn’t see."
immediately take action to fix the display and prevent someone
from falling. Other measures won’t completely prevent losses, but
expert. Your insurance company should have somebody in-house
they will reduce the impact when risks become reality. "When you
to do a risk assessment, or they can make a recommendation for
put fire sprinklers in a building, that’s not going to prevent a fire,"
someone who can. "If you go to your insurance agent and say you
To find those hidden risks, Wells recommends bringing in an
Wells explained. "But when they go off, they can stop the spread of
want a thorough risk assessment and he says he can’t help you, he
fire and reduce the severity."
shouldn’t be your agent," Wells said.
Incorporate loss control practices into your training so your
A third party will go through the standard five steps for
employees are empowered and educated enough to mitigate risks.
risk management assessment—but with an expert’s eye. After
Discuss your loss control practices at staff meetings and write
their assessment, you will have a comprehensive idea of your
your risk management measures into your standard operating
pharmacy’s risks, which will help you prepare for the future. ELEMENTS | The business magazine for independent pharmacy | DECEMBER 2021
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OUTLOOK
RELIEF RX Pharmacy relief agencies come through during temporary staff shortages
I
n the midst of an industry-wide labor shortage, independent
FINDING RELIEF
pharmacists are stretched thin trying to ensure proper coverage
To partner with a relief service, pharmacies typically sign a contract
at their practices.
"There's a huge problem," said Linda Moran, founder and CEO
of R.Ph.S., a pharmacy relief service that serves Oklahoma, Kansas,
for a specified amount of time, and then the service can step in and connect pharmacies with the staff they need. "The norm is a year, but we build a custom contract that depends on the pharmacy's
and Missouri. "It's a supply and demand issue."
need," Moran said.
For independent pharmacies that may only have one
pharmacist on staff, finding relief is critical to keeping their
Balaguer recommends establishing a relationship before you
ever need relief so that when you do need to fill a position, it can
business running. Even the most devoted community pharmacist
be done quickly. "I think it's always a good idea to partner with an
will eventually need to take some time off.
agency and get the lay of the land early so you can understand
requirements," he said. "Get a contract in place and out of the way,
When Moran was a pharmacist, relief was provided by retired
owners in her community who would fill in for the new owner when
and then when you have a need, you can just call and ask for help
they needed help, which wasn’t often. "When I started, it was a
and don't have to worry about the contract approval process."
whole different dynamic. In the small towns, pharmacists almost
never took time off because there wasn't someone to relieve them,"
take anywhere from a couple of days to a couple of weeks. If
she said. "If they were sick or needed surgery, they would have to
a pharmacist is already credentialed and qualified to work in
close the store."
your state, you may be able to find a match within 72 hours, but
turnaround isn’t always that fast. It’s best to request relief at least
Nowadays, most independent pharmacy owners can’t afford
to close shop and don’t have consistent help to rely on. "They don't
Finding the right person to work at your pharmacy can
two weeks in advance, because it can take three to five days to get
necessarily have a list of people they can call to help keep the store
compliance done and another three to five days to make sure they
open if the pharmacist needs to take some time off," said Luis
are a good fit for your pharmacy, according to Balaguer.
Balaguer, vice president of the pharmacy staffing agency RPh on
the Go. That’s where staffing agencies like Balaguer’s and Moran’s
a pharmacist who is in the right place at the right time. "When we
R.Ph.S. has a long list of contractors that they reference to find
come in. "We're simply trying to help pharmacies stay open,
need to fill a position, it’s all about staying on the telephone and
especially the independents."
calling people," Moran said.
Both R.Ph.S. and RPh on the Go typically place relief
pharmacists into pharmacies for short stints—a few days or a
Before hiring a relief pharmacist, it’s a good idea to interview
to the candidate. "I would suggest that any time you have a
week, often for a short vacation or a holiday weekend. "Anywhere
pharmacist coming into your facility that you at least talk to them
a pharmacy needs a pharmacist, they call us and we try to match
on the phone," Balaguer said. "That way you can make sure to get
them up with a candidate who has called us looking for an
answers to any questions that you have and answer any questions
opportunity," Balaguer said.
the relief pharmacist might have, and be sure that it's a good fit."
One of the most common reasons for long-term relief is
maternity leave. "Women make up a majority of the profession
PREPPING YOUR PHARMACY
now, which means maternity leave is going to come into the
Relief pharmacists don’t have weeks to get trained on all of your
picture," Moran said.
pharmacy's standard operating procedures—they need to hit the
R.Ph.S. also helps independent pharmacies through
ground running. To make sure your relief pharmacist can handle
transitional periods. "A lot of places call us, and they've lost their
things while you're away, let the relief service know the basics of
pharmacist. Maybe they decided to go to law school or get their
your business. This includes workflow information like pharmacy
MBA," Moran said. "There's a transition before they are able to hire
management software and your typical daily volume, as well as
a new permanent pharmacist, and they want to use our services for
more mundane information like your pharmacy hours and how
a month or two months or three months."
to get into the building. "We try to gather as much information as possible to really understand what the client's needs are so
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STRATEGIC STAFFING FOR SAFETY
we can to match them up to the candidate's experience,"Balaguer said.
There are a few things you can do to make the transition easier,
like dedicating a point person to meet the pharmacist to give them an overview of the pharmacy workflow. Set up the pharmacist’s computer access and any other accounts they’ll need before they arrive. Send additional information to the relief agency or directly to the pharmacist in advance: onboarding documents, training materials, technology education, etcetera.
Communicate your expectations about the relief pharmacist’s
duties very clearly. "Maybe even provide some workplace culture
You need more than the bare minimum of staff members to keep your pharmacy running safely. When pharmacists are stretched thin, they are more prone to mistakes, which can jeopardize patient safety. Last year, CVS was fined for making errors filling prescriptions because of insufficient staffing. To avoid potential fines and prioritize patient safety, your pharmacy should always be "fully staffed"—never overstaffed or under-staffed—and you can fill in the gaps using a relief service. Determine the best way to keep your pharmacy fully staffed by using one of the five strategic staffing models:
dos and don'ts, because every pharmacy is different, and the last thing we want is to have a great pharmacist who is a mismatch
1. STAFFING QUANTITY
because they don't quite fit in with the culture," Balaguer said.
Forecast the total headcount you need to keep the pharmacy running and compare that to your actual headcount. If your actual headcount is less than the forecasted headcount, you're likely understaffed.
WHO WORKS RELIEF? When a relief pharmacist shows up at your pharmacy, what kind of person can you expect? "We get people who are all ages, all backgrounds, and all stages in their careers," said Balaguer. "I remember we once had a pharmacist who was an actor, and he only wanted to work two days a week, so he did relief work." Many of the pharmacists who work relief for RPh on the Go are either retirees or people who want to have a dynamic work life that involves travel.
Moran says that her base of relief pharmacists is mainly made
up of retirees and women with young children. "There are a lot more women in the industry than there used to be, and when they have young children, they only want to work a few days a week," she explained.
Relief work is ideal for pharmacists who want a lot of
flexibility in their schedule. They are independent contractors, not employees, so they can pick and choose what jobs work for them. "We call them with a job, and if they're busy, they just say they are busy, and then we go onto the next person," Moran said. "They are in control of their own schedule."
Balaguer agreed. "I think what makes this work so attractive is
the pharmacists get paid for the hours they want to work, but they don't necessarily have to deal with the constraints of a regular job.
2. STAFFING QUALITY MATCH — PERSON/JOB Align the characteristics and qualifications of individual staff members to the characteristics and qualifications needed for a position. The better these match, the more impact your staff can have on outcomes. 3. STAFFING QUALITY MATCH — PERSON/ORGANIZATION In addition to matching the qualifications of a specific position, staff members should also align with the organizational values of your pharmacy. With this staffing model, employees can be flexible to the pharmacy's needs and perform new tasks when asked. 3. STAFFING SYSTEM COMPONENTS This model relies on a back-and-forth between an applicant and the organization where each evaluates the applicant's knowledge, skills, and abilities to come to mutually agreeable employment terms. By concentrating on professional development, the staff member can focus on organizational goals and safety policies.
They want that independence," he said. "They are running their own
5. STAFFING ORGANIZATIONS
business, a lot like the independent pharmacists we work with."
Create a staffing strategy with your pharmacy's mission, goals, and safety objectives in mind. Aligning your staffing strategy with organizational goals ensures that all of your pharmacy's core needs can be taken care of.
All relief pharmacists go through a battery of compliance
checks, including a background check, drug screen, license verification, and a check for OIG exclusions. "That's the very minimum that we need in order to get somebody to work," Balaguer said. "On top of that is anything the client needs. Part of the contract process is understanding what all the compliance requirements are for that particular pharmacy. Our credentialing team can make sure that the pharmacist we send is qualified and can do everything that you've asked for."
Sources: Staffing Organizations, McGraw-Hill; RPh on the Go
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