RxOwnership luncheon emphasizes efforts to ‘keep independents independent’
Since it began in 2008, McKesson’s RxOwnership has helped more than 3,500 pharmacy owners buy, sell or start their own pharmacy business in an attempt to, as RxOwnership national VP Chris Cella told Drug Store News, “keep independents independent.” Cella participated in an “Ask the Experts” panel with three longtime RxOwnership collaborators at McKesson ideaShare 2016 to help potential pharmacy owners and sellers understand RxOwnership’s services and the work required to break into being a small business owner.
The panel, moderated by RxOwnership northeast region ownership adviser Tammy McDonald, saw Cella discuss the finer points of buying, selling and starting pharmacies with Waypoint Strategic Advisors founder Rick Coakley, Live Oak Bank pharmacy division general manager Jimmy Neil and former RxOwnership national VP and current managing director of First Financial Bank’s professional services division Bob Graul.
The panelists discussed the resources that RxOwnership provides for no fee to would-be owners, including tools for helping customers figure out the basics of their pharmacy, from a demographic breakdown of their local market to the number of prescriptions being written in the area, and tools to help them project when they might begin to see ROI on a new store, in addition to financial advising and other resources.
But the process begins, at least for start-up pharmacies, with what they’re hoping to contribute to the independent pharmacy space that can differentiate them from competitors.
“You've got to be able to tell me why patients want to come to your store from where they're currently going,” Cella told Drug Store News. “It's extremely important with a start-up that the business plan is done, that it's done right and that you understand it's a living document that needs to be reviewed constantly. It's not something you just submit to the bank to get your loan and then tuck away for the rest of your career.”
One of the major themes that emerged from the panel was the need for potential owners to become informed about the industry, where it is headed and the work that comes with getting a pharmacy off the ground — especially when it can take several months for a pharmacy to break even.
Coakley told luncheon attendees, “There is some personal sacrifice in starting up your own business or buying your own business, and it's important to think about that and take care of that personal side.”
Owners looking to sell their pharmacy face their own set of challenges, Cella explained, that RxOwnership can help them overcome. Cella emphasized the need to have at least a five-year plan to exit the business, rather than what he calls the “fire sale” approach of deciding to sell and trying to do so the next day.
For new owners looking to purchase a pharmacy, perhaps even more important than actually being a pharmacist is the desire to be involved in every area to help grow the business. That starts with knowing what sort of pharmacy you want to run; RxOwnership can help narrow down the search among its database of pharmacies to match the buyer.
“As a lender, what I’ve seen in the last 20 plus years is: Are you an active investor and participant in the business?” Live Oak’s Neil asked attendees. “Are you there working it all day long solving problems, motivating and leading people, innovating, inventing, doing the things you need to do to differentiate? To me that's more important than whether you’re a pharmacist or not.”
The end goal of assisting three different types of clients to open, buy and sell a pharmacy, as well as the outreach efforts RxOwnership makes to entrepreneurial pharmacy students, is to provide better health care to communities. And ultimately that often means helping independent pharmacies remain independent — even after an owner decides it’s time to move on.
“We’re finding that independents are more prepared for the changes in health care,” Cella said. “The switch from fee-for-service to pay-for-performance is more geared toward an independent. There are numerous studies done by the National Community Pharmacists Association and the American Pharmacists Association showing that the independent pharmacy owner and the independent pharmacist are better healthcare providers.”
McKesson ideaShare 2016 closes with emphasis on taking initiative to grow business, enhance services
The focus on education at McKesson ideaShare 2016 certainly did not stop when the Exhibit Floor opened, as there were Health Mart University Live and other continuing education sessions, including “Leveraging medication synchronization to optimize patient care,” “Driving change management,” “How to create a digital footprint, “How to turn the store into a wellness destination,” “Developing effective marketing programs” and more.
In all, McKesson ideaShare hosted more than 30 CE sessions over the course of the conference. Drug Store News reporters sat in on a number of the sessions over the course of ideaShare. Following is a brief recap from a few of them:
Syncing to improve patient care
As the chief of innovation and co-founder of Creative Pharmacist, David Pope is an expert in helping to bring together retail and clinical pharmacy — “something that is very much on the mind of independent pharmacists looking to improve patient health by expanding the services they offer as well as opening up new revenue streams for their businesses,” he said.
“One of the cornerstones of starting a clinical program is medication synchronization, which uses an appointment-based model that pharmacists can leverage to manage workflow and better optimize patients interactions, carving out time to perform such clinical interventions as diabetes education, medication therapy management and weight-loss counseling, among other services,” he explained.
“Everyone is syncing now, and the question is can you make that appointment an impactful moment in the life of that patient that you might use to improve outcomes?” Pope told the Health Mart University Live class. “Leveraging that sync appointment is the bedrock and springboard for what you could do in the future to optimize patient care, because really what we’re doing now is managing chronic care patients. … Connecting and engaging with patients to improve their health is the key.”
Using vulnerability to bring about change
Over the past several years, independent pharmacists have seen their business model change fundamentally, explained Kelley Babcock, who works with Pharmacy Development Services’ business coaching and management team.
Babcock, part of the Health Mart University Live CE lineup at McKesson ideaShare last month, was on hand to help attendees learn to embrace change and drive the kind of transformation necessary in their businesses to become more of a clinical services provider, unlocking profitability while improving patient health.
Babcock told attendees that vulnerability — which isn’t necessarily something people want to embrace — is a necessary first step toward bringing about change. Once business owners make themselves vulnerable and decide to embrace change, they can move on to developing a change management model and implementing it in their stores.
“You might not feel comfortable with the concept of change, but you’ll be a little more comfortable with how you begin the change management process,” Babcock said. “Because only then will you be able to accelerate to get the results you want and to lead that change with the confidence that not only you deserve, but that quite honestly your teams deserve.”
Using digital marketing to engage patients beyond the store
Many independent pharmacies know that the Internet is a force in their lives that’s here to stay, but getting found online, building a brand on social media and creating a marketing database to extend the one-on-one patient interaction beyond their stores can be a daunting task. With her Health Mart University Live course, Ebus Innovation chief idea officer Elizabeth Estes helped attendees figure out which strategies to implement as a way of growing digital customer engagement in ways that extend beyond Facebook.
Estes highlighted the importance of having digital listings on search engines and business listing sites, creating a mobile-optimized website for their business and the importance of creating a content calendar around when to plan marketing initiatives and social media posts.
“Think about what’s been happening in the market and what you want your brand to be,” Estes said. “Are you a healthcare leader? Are you a member of your community and you’re proud because you’ve been there for years? Think about the things that make a difference to the people that are going to see it.”
Estes said that “creating a strong digital presence begins with asking “what if” and taking chances, evaluating the performance of your efforts and repeating what works. Even though digital strategy might be out of your comfort zone, taking time to grow a digital presence will build customer loyalty — even if it means asking for help,” she said.
Carving out a niche to become a destination
As the ways healthcare is delivered change, independent pharmacies must position themselves to be their patients’ go-to resource when it comes to wellness. Hamacher Resource Group VP strategic relations Dave Wendland helped McKesson ideaShare 2016 attendees better understand the market conditions that have changed the nature of their business, how they can build on their strengths, leverage community outreach efforts and how niche marketing can help independents succeed.
Wendland noted that independents already have an advantage over chains, in that they are locally owned and provide higher quality service. By combining those strengths with store strategies that shift consumers’ perceptions of the pharmacy to being a place for wellness essentials and that place the pharmacist as the most accessible healthcare professional, pharmacies can adapt to the changing healthcare environment by focusing on front-store wellness offerings and encouraging patient engagement, even getting out into the front of the store more often.
“An independent’s strength,” Wendland said, “is in knowing what makes them different, which he said should be the basis of any effort to make a pharmacy into a wellness destination. Patients will look for something that makes a location unique, and owners can help them in that process by trying out new ideas.”
And Wendland emphasized that owners need not tackle the challenge of carving out a niche alone. “You’ve got resources in your community, in your family, on the web — tap them,” he said. “Nobody will be more anxious to help your business survive than people you ask for help. So reach out; don’t be too proud.”
Making marketing work
Getting started in marketing is as easy as setting specific, focused goals and knowing the audience you’re trying to reach. That was the message from Kevin Joyce, SVP at EMG3 in his session at McKesson ideaShare 2016.
“Oftentimes what happens with pharmacies is they either don’t embark on marketing because they don’t know how to approach it or they get stuck in a rut of doing the same thing over and over again, and they don’t monitor, iterate and ultimately evolve to make their plan more successful,” Joyce said. “Even once a marketing plan is in place, pharmacies need to react to the results of their efforts and adjust accordingly to reach their audience.”
Key to this, more than ever, is having a digital plan, but also knowing how to complement it through multimedia advertising that can bolster an online presence. Additionally, one of the biggest ways to market the business can be leveraging one of independent pharmacy’s strengths — its place in the local community.
“More than ever you’ve got to have a strong online presence for virtually all audiences,” Joyce said. “Sometimes print’s the right thing, sometimes TV is the right thing. But almost always, community outreach, local partnerships and giving local pharmacies the opportunity to flex their local muscles can be a real key to success.”
VIDEO: Health Mart marks accomplishments, looks toward future
Many accomplishments were highlighted and goals were set at this year's McKesson ideaShare 2016. From 50% growth over the last three years to 4,700 Health Mart stores to being recognized for superior customer service, McKesson and Health Mart executives praised owners and operators.
"We are recognized as a leader in the evolution of pharmacy," said Health Mart president Steve Courtman. "We have the scale and we have the performance. … Forty-four percent of you have metrics in the top 20%, and we are either No. 1 or No. 2 for adherence for many plans across the country."
Watch the video above to hear more of the accomplishments, and click here to view complete coverage of McKesson ideaShare 2016.