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What does it take to be a value-driven pharmacy?

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Roderick Slavcev, Ph.D., Assistant Professor, Pharmaceutical Science – University of Waterloo, shared some startling statistics with a group of pharmacists at a PharmacyU conference.

 

By Claire Sowerbutt

Photo by Brandon Gray

Specifically, by 2036 one-quarter of the population will be over 65 years of age, and for the majority of countries, 100 per cent of revenues will go towards healthcare. “Add to that a 10 per cent reduction in the workforce, and we are facing the spectre of a completely unsustainable healthcare system,” Slavcev said.

Noting Statistics Canada numbers, Slavcev stated that currently some 40 per cent of the population has chronic illness, placing a growing demand on access to a healthcare system that deals largely with acute illness. Given pharmacy’s unique position in healthcare, this ‘crisis’ provides an unprecedented opportunity for pharmacists and pharmacies to increase their profitably through the creation of value-driven patient care. “Pharmacy is the interface in a bloated system. We can use new pharmacy to redefine healthcare,” he said.

Citing strategist Michael Porter, Dr. Slavcev described two approaches an organization can take in the marketplace. The first is a cost reduction strategy: “In the commodity market you have to have some way of lowering your cost compared to your competition, therefore you can lower your price to the customer,” he said. “So you need that cost structure to be competitive in the marketplace.”

In contrast, there’s the differentiation strategy. According to Dr Slavcev, “If you can offer something in a different way that is still in high demand, then your price can be higher and the value will be higher as perceived by the customer. The other great thing about the differentiation strategy is that it reduces switching costs, and it reduces rivalry.”

Pharmacy is the fastest growing occupation in Canada, he added. “This is a problem in an industry with an internal focus on costs savings and cost containment, where the only differentiation between pharmacies is based on price and product offerings,” he said.

With value-driven pharmacy, however, the focus is from the customer’s perspective and pharmacy is seen as a consultative service.

In order to facilitate the shift to value driven pharmacy, a longitudinal focus is required. This involves focusing on the customer/ patient, seeing health not products, assessing what needs the pharmacist is satisfying per patient, and determining what the pharmacist’s job is actually doing for the customer. “Pharmacy should be practiced as a specialized service. This is where the focus has to change,” Dr. Slavcev said.