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Cardinal Health focuses on front-end design to capture and keep new shoppers

BY Michael Johnsen

Cardinal Health will introduce a number of new tools at this year’s Cardinal Health RBC that are designed to energize the front-end of an independent pharmacy’s footprint. Because one of the big challenges facing community pharmacy on the front-end is price perception, Cardinal Health is working with their supplier partners on temporary price reduction promotions and end-cap displays to increase consumer awareness around the complete value community pharmacists can bring to the market.

“Definitely, there’s a price perception challenge,” Sam Hoye, director of Consumer Health Marketing at Cardinal Health, told Drug Store News. “There’s a point of view that this is a small retailer; therefore, they are not going to be [price] competitive. We know for a fact that’s not always the case,” she said. “The other piece of this is having the right product — you’ve got to know what your shoppers are looking for.”

Independent pharmacy operators have already won the hearts and minds of their local community, Hoye said. So their ability to localize and have the kind of niche offerings that their national competitors struggle to get on the shelf should be a core competency for independents.

To boost the front-end further, Cardinal Health is in the process of eliminating that “conversion conundrum.”

“What we saw with retail independents is that they were disproportionately behind the national players in terms of having customers buying items on the front-end,” said Naomi Duvall, director of Category Management at Cardinal Health. Customers patronizing their independent pharmacy were making a bee-line for the back-bench without stopping to shop, she added. And that’s a problem.

“A customer makes 42 trips every year to buy OTC and beauty aids,” Duvall noted. “The average consumer is only coming into a pharmacy two times per year,” she said. “You want to build to that 42. That’s where that conversion conundrum comes into play. You want to earn their loyalty.”

To that end, the Cardinal Health team has developed a front-of-store package that independents can implement immediately upon returning from Cardinal Health RBC.

First, Cardinal Health invested in its private-label product development, growing its current offering of LEADER SKUs and adding health and beauty products to shelves in the coming year. “We’ve spent the last year reinvigorating this brand,” Hoye said. “People are going to be really excited to see the portfolio, how it’s growing and the profitability opportunities.”

Second, Cardinal Health’s front-end team, in conjunction with supplier partners, pieced together a series of promotions and end-cap displays designed to attract consumer attention. Patients visiting their neighborhood independent need to be “wow’d” by what they see on shelf, Hoye suggested. “That visual impression is critically important,” Hoye said. “The shelf is the moment of truth. A well-stocked shelf is important in creating that experience.”

The reality an independent operator faces, however, is limited inventory capacity — both in the dollar-value of the inventory stocked in the store, as well as limited storage capacity beyond front-end shelves and counter space. Hoye suggested a “one to show, and one to go” philosophy that helps reduce the potential for an out-of-stock placement without straining resources.

The end-cap program being rolled out by Cardinal Health features both private label and national brand and is turnkey, Hoye added. “Independents work from a very lean operation [viewpoint], and require solutions that are plug-and-play,” Hoye said. “They also need to make a visual impact to resonate with the shopper and help reset that shopper’s price perception.”

Finally, Cardinal Health is in the process of launching a new portfolio of nationally-known homeopathic solutions, making a direct appeal to that niche customer in search of more natural health options.

The new planogram creates a homeopathic destination center that’s replicative of the kind of brands customers might find at Whole Foods. “Our approach to get [independents] started is, to create a section in the store that stands out [as compared with] what you might see in the mass segment,” Hoye said. In this way, independents are offering their consumers a merchandising experience they won’t find at other retailers.

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Honing in on caregiver needs

BY DSN STAFF

Cardinal Health has been strategically focusing on reaching family caregivers with several pharmacy solutions and, recently, a caregiver panel at Cardinal Health RBC 2016. Drug Store News had the opportunity to talk to Christi Pedra, SVP marketing and consumer solutions at Cardinal Health, about the upcoming caregiver panel.

Drug Store News: What made you focus on caregivers?

Christi Pedra, SVP marketing and consumer solutions at Cardinal Health: It’s projected that 45 million adults in the United States will provide unpaid care to an adult or a child in the course of a year, and in the next few decades, the demand for family caregivers is expected to rise by 85%. It’s more than just the numbers that matter. Caregivers are our mothers, our sisters, friends, co-workers, neighbors and consumers in community pharmacies. They make up a vast majority of our communities, and they are seeking support. We feel strongly that they can find the level of support they need within their community pharmacies; there they can find specialized care for their loved ones and for themselves.  

Cardinal Health is helping to ensure our customers are equipped with the right information and insights to help them provide optimal care for their communities. Understanding more about who shops at community pharmacies is a critical step in informing business strategy; the more we understand their customer-base, the better we can help them market appropriately and increase foot-traffic in their stores. Through extensive research, we learned more about the needs of caregivers, a key audience for community pharmacies. I encourage all RBC guests to attend the caregiver panel during the general session, Saturday, July 23. I will host both customers and caregivers on the main stage.

DSN: What will customers take away from the panel?

Pedra: Our hope is that we can share some valuable insights into the challenges caregivers face and how community pharmacies are perfectly positioned to connect with these individuals to provide them care beyond the counter. Often times, caregivers are supporting two generations. They could be working moms with their own kids who need help managing the health of everyone in the family. Or they could be a single, young man looking after an aging relative. The composition of nuclear and extended families has dramatically changed and so have their needs for care. Understanding these factors is imperative for community pharmacists because caregivers are the ones coming into their pharmacies to pick up prescriptions — and it’s a huge opportunity for our customers.  

DSN: In addition to the panel at RBC, how else is Cardinal Health leading this conversation?

Pedra: We offer a host of solutions such as MedSync Advantage, Dispill Multi-dose Packaging and Cardinal Health Hospital Quality at Home products that can help our community pharmacy customers support caregivers. We will highlight these solutions within the showcase with a caregiver icon so customers can easily identify caregiver support tools and resources.

Also, we recently launched a “Voices of Care” Facebook caregiver community. The page offers advice and support for caregivers and is a place where our community pharmacists can hear directly from caregivers. The page also operates as a best practice tool for addressing caregivers on social media. Caregivers and pharmacists can access the site at Facebook.com/VoicesofCare/.


 

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Taming the Medicare Audit Beast: Three Ways to Improve Your Pharmacy’s Outlook

BY Deborah Roberts
There are few things that rock a pharmacy manager’s world like a Medicare Part B Audit, and the likelihood that an audit request will be received is increasingly high.
 
Efforts by the Centers for Medicare and Medicaid Services to address “fraud, waste and abuse” has resulted in the introduction of numerous Medicare contractor programs. From a variety of audits, including Medical Review and RAC to CERT and ZPIC, resource-strapped pharmacies must now navigate complex processes and stringent Medicare requirements.
 
It’s a mammoth undertaking, and the reality is that internal management strategies often fall short of readiness and compliance. The resources required to successfully maintain up-to-date documentation practices as well as respond timely to audit requests are simply a non-starter for many pharmacies. 
While some pharmacies choose a hybrid approach that leverages both in-house and external expertise, the best strategy is characterized by engaging a strong partner for end-to-end management of audit responses. The right framework of technology and expertise can improve the outlook on Medicare Audits in the following ways.
 
1) Improve front-end processes
Pharmacies are best positioned for a Medicare audit when they take a proactive approach to documentation and claims on the front-end. Solutions exist to ensure documentation templates are updated to reflect the latest Medicare requirements and identify potential issues before a claim is submitted.
 
For instance, small details such as the legibility of physician signatures can warrant a denial. When a pharmacy is leveraging the expertise of a strong partner, there is proactive management of signatures and other details on the front-end to ensure compliance. Without this framework, pharmacies might otherwise have to hire staff to address the nuances of ever-changing Medicare requirements and implement formal education programs.
 
2) Timely and appropriate response 
Pharmacies often struggle with responding in a timely manner to audits due to difficulties identifying if a request has been received. Consider a large pharmacy chain with corporate and accounting offices across the United States, for instance, and the challenge that presents to correctly identifying and managing a request for audit. 
 
Also, because Medicare audits are usually complex and resource intensive, some pharmacies choose to ignore requests, which may potentially allow earned dollars to go back to the payer. The rationale for that decision often rests with the belief that it will cost more to take the time to work an audit than to lose the money.
 
This practice is not prudent for a number of reasons. First, pharmacies want to keep a solid record of compliance to reduce the potential for future audits—and response is part of that equation. Second, pharmacies might be allowing earned dollars to be recouped by the payer when there are legitimate reasons to retain that money
 
When the right technology and partner are engaged, pharmacies can streamline processes to enable prompt identification of audit requests and timely responses. 
 
3) Ongoing Quality Improvement 
When audit management activity is automated and centralized, greater opportunities exist to identify areas for improvement. Pharmacies can leverage data from robust analytics platforms and expert analysis and thereby improve feedback and education for the pharmacy. 
 
Audits are inevitable in today’s healthcare climate. In preparation, pharmacies should consider following these key partner strategies to improve front-end processes, enable timely response to audits and provide the visibility needed to improve performance going forward.
 

Deborah Roberts is Change Healthcare’s Manager Recovery and Audit, CMS Compliance. 

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