Independent pharmacies have some of the highest customer satisfaction rates in the industry. But in a changing health care market, such pharmacies face daunting challenges that can easily gobble up the margins they generate with superior customer service.
In order to combat these challenges, independent pharmacies are increasingly turning to more robust pharmacy management software, as the results of our survey of independent pharmacies show.
Key Findings
- 36 percent of independent pharmacies have replaced their software within the past year.
- 60 percent of respondents with a medication synchronization program in place report that their software helps support the program.
- Faster prescription processing and improved control over expenses are the top benefits of pharmacy management software, cited respectively by 30 and 27 percent of our sample.
These findings demonstrate the central role that pharmacy management software plays in keeping independent pharmacies competitive in a challenging market. Let’s take a closer look at some of the trends our research has revealed.
Independent Pharmacies Are Investing in New Software
Due to the complex nature of pharmacy workflows and the regulations that pharmacies must comply with, independent pharmacies have been using software to manage vital aspects of their operations, such as inventory, for quite some time. But not all software is created equal—some systems have barely changed since the mid 80s, whereas others have continually evolved.
Our survey shows that independent pharmacies are now reaching the end of the replacement cycle:
The conclusion to be drawn here is that old software isn’t cutting it for independent pharmacies. Many of the pharmacy management systems now hitting the market offer new features in areas such as financial management in order to help independent pharmacies cope with challenges such as direct and indirect remuneration (DIR) fees.
DIR fees are imposed by pharmacy benefit managers (PBMs), third-party companies that insurers contract with to administer prescription drug benefits for health plans. PBMs charge “pay-to-play” fees for network participation, and DIR fees are imposed for a variety of other reasons, such as noncompliance with the PBM’s policies.
The National Community Pharmacists Association (NCPA) recently surveyed pharmacists about DIR fees, and found that 87 percent believe that such fees are significantly impacting their abilities to provide care to patients and remain in business.
New pharmacy management systems are helping independent pharmacies to deal with this problem by:
- Automatically factoring DIR fees into prescription costs when a given PBM is selected as the payment method.
- Allowing users to edit prescription data before it’s sent and edit claim data after the claim has been adjudicated, in order to deal with headaches like fees imposed by PBMs for noncompliance with their policies.
Such features aren’t present in old systems, which are more focused on inventory management—hence the high rate of software replacement we observe in the market.
Pharmacy Software Plays Critical Role in Med Sync Programs
One important area where independent pharmacies can stand out from franchises and mail order services is customer experience. Medication synchronization programs, or “med sync” for short, provide more personalized care to certain patients, while also improving customer retention.
Essentially, med sync involves synchronizing the prescription regimen of patients with chronic issues that require maintenance medications (heart problems, high blood pressure, high cholesterol, digestive disorders etc.) by getting them to pick all of their regular prescriptions up on the same day of the month.
For patients on multiple maintenance medications, it’s easy to forget when to pick up prescriptions. Patients may end up filling them at different pharmacies, or they may neglect to fill them altogether.
Instead of shouldering the costs, you can actually grow your revenue stream by encouraging patient adherence via med sync. The NCPA has found that med sync patients are 2.5 times more likely to adhere to their medications, and 21 percent less likely to discontinue therapies.
Med sync can be accomplished through pen-and-paper methods, but you’re probably not looking forward to the work of digging through all of your patient records to identify the best date for each patient to pick up a prescription.
Moreover, one of the benefits of med sync is simplifying your pharmacy’s workflow, which is much simpler with an integrated workflow calendar in a pharmacy management system that tracks med sync prescriptions.
Slightly more than half of our sample of independent pharmacies currently has med sync in place:
Med sync still isn’t universal at independent pharmacies, but those that do have it in place are using software to support it. When we exclude respondents without med sync programs, the segment reporting that their pharmacy management software supports med sync jumps to 60 percent.
This finding indicates that pharmacy management software is becoming one of the primary ways in which independent pharmacies are maximizing the benefits of med sync.
Pharmacy Software Helps Pharmacies Work Faster, Cut Costs
Pharmacy management systems offer features that cut across areas that include inventory management, order management, financial management, customer relationship management etc., so we asked about the top benefits:
However, the number two benefit, improved control over expenses, is more important than ever in a health care market in which DIR fees and other hidden costs can quickly destroy margins.
Slightly over a fourth of our sample chose this benefit, which is significant given that not all respondents work in roles in which they’d be familiar with the financial health of the business:
Overall, even the least common benefit (reduction in paperwork) was cited by at least one fifth of our sample. Incremental gains in operational efficiency and revenue generation can’t be taken lightly given some of the challenges that independent pharmacies face.
Note: You can find more information about our methodology here.
