Adding new services in his dispensary has helped B.C. pharmacy operator John Shaske fill 60 per cent more prescriptions over the past few years and record the highest profits in the store’s 36-year history.
By Randy Ray
“Good pharmacy outcomes drive commerce,” says Shaske, who has operated Howe Sound Pharmacy in Gibsons, B.C. since 1979.
Providing more dispensary services is a growing trend, says Dave Cunningham, a Toronto-based consultant/chartered accountant who helps pharmacies and other businesses plan and implement organizational changes designed to boost sales.
“Any time customers can go to one place to have their needs filled, it is better for patient health and better for business,” says Cunningham, a partner with Cunningham LLP. “If I know I will be taken care of at a particular location that is the place I will go to and come back to.”
In fact, Cunningham has seen pharmacies that add dispensary services and focus on patient care boost their prescription business by nearly 250 per cent.
Improved customer loyalty and a significant increase in business are precisely what Shaske has experienced since 2005 when he began transitioning his business to a service-oriented operation with a reduced frontshop footprint.
Shaske’s original location was a traditional 1,000-sq. ft. pharmacy with a frontshop in a small health professionals’ mall in Gibsons, a Sunshine Coast community that’s a 40-minute ferry ride from West Vancouver.
Since 2011, Howe Sound Pharmacy has operated from a 4,500-sq. ft. outlet shared with doctors in the Gibsons Park Plaza Mall. The business, which he refers to as a “pharmacy services office,” has three gondolas for healthcare-related frontshop and focuses on a range of complementary and traditional healthcare products and services offered by a fine-tuned team that’s up to date on acupuncture, chiropractic, herbal medicine, physiotherapy, meds counselling and several other services.
The transition saw the pharmacy add prescription adaptation, nutritional therapy and immunizations for flu, hepatitis and pneumonia. Like most pharmacies, it also provides one-on-one meds counselling.
Dispensing leads to other sales
Shaske has discovered that by focusing on dispensary services he is building customer loyalty and boosting revenues as clients spend more.
While giving a couple heading for the sunny southern U.S. their flu shots, for instance, one of his pharmacists asked some questions and discovered the couple was experiencing four drug therapy issues. All were solved within 20 minutes, earning the store an extra $200 in gross profit for additional delivery of services and OTC products.
“We solved their problems, made them happier, and made a nice bit of additional profit, and all they came in for was a flu shot,” says Shaske. “If you focus on healthcare, the money will come.”
The secret to adding services is to develop a system that ensures a pharmacy runs like a well-oiled machine without the long dispensary lineups that annoy customers.
“The key is that when a customer walks in the door all staff know what to do, whether it is the cashiers, the pharmacy tech or the pharmacist. … they must know who sends a customer to the dispensary, who meets that customer, what they are supposed to do with that customer. Even if someone comes in to buy gum, it should be all about workflow and the healthcare of individuals,” says Cunningham.
Improved workflow leads to savings
Shaske perfected his system by doing a year-long workflow experiment that determined that when pharmacists and pharmacy assistants work effectively together, backlogs are reduced, patients are happier and the cost of consulting with a patient and preparing a prescription dropped by $3.60. As a result, salaries that once ate up 65 per cent of the store’s gross profit now account for only 50 per cent.
On the business side of the operation, Shaske’s accounting system enables him to measure items such as salaries and cost per prescription, all tied to patient encounters. As a result, at the end of each month, he knows which portion of dispensary services generated revenue and which did not, allowing him to determine whether providing free dispensary services is efficient. “When they are not, we adjust our operations accordingly.”
Without question, adding dispensary services has increased Shaske’s profits but of equal importance, it has led to patient outcomes that are considerably more positive. “I never got a handshake in the old days. Now, I get it and I feel happy. People tell me I have helped get them off all of those pills, and that equals job satisfaction.”
4 top tips:
- Hire a professional to develop an appropriate business plan.
- Control work flow and keep track of wages.
- Develop policies and procedures so all team members know their roles.
- Monitor your finances to ensure dispensary services cover your costs.