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How to benchmark your pharmacy’s professional services

July 7, 2022

Peter F. Drucker,Austrian-born American management consultant, educator, and author, whose writings contributed to the philosophical and practical foundations of the modern business corporation. He was also a leader in the development of management education, and he invented the concept known as management by objectives.

Benchmarking: improving your pharmacy’s professional services

By Max Beairsto and Mike Jaczko

During our work in pharmacy consulting and sale facilitation services, pharmacists ready to sell their business usually ask about ways to improve the pharmacy’s financial performance. We like to answer that question with another question: “How are you benchmarking?” After all, you can’t know how to improve until you know where you stand with your business goals. We often find the pharmacist-owner relies on rule-of-thumb or casual “benchmarks,” like how their friend in another community is doing or what someone in an unrelated industry says.

It’s especially true for professional services. This is often a grey area for many pharmacists, even though most provinces cover at least some of these services under their drug plans. Yet improving the efficiency of how you deliver things such as medication reviews, prescription renewals, smoking cessation counseling and immunizations can boost your pharmacy’s bottom line, and effective benchmarking is an excellent way to begin.

It is also fairly simple, since there are only two relevant benchmarks for professional services: “revenue generated per hour of store operation ($/hour)” and “revenue generated per regular prescription filled” ($/script).

$/hour

The first benchmark, $/hour, can help you not only compare your professional services efficiency to industry norms, but also gain insight into potentially underperforming team members. It is not, however, very scalable, since small pharmacies (<10,000 scripts per year or so) do not see enough customers to allow for meaningful comparisons with industry-average-size pharmacies (~30,000 scripts per year).

$/script

The second benchmark, $/script, has the advantage of being highly scalable. It should be as relevant for small pharmacies as for the biggest ones. It does not, however, provide insight into particular day-part performance or, therefore, into how efficiently individual pharmacists are delivering the services.

Provincial averages

Which is the right benchmark for improving your pharmacy’s professional services? The scale of your business is key. As is your province of operation and a host of other factors. Including clinician competence and quality of services delivered. Before you begin comparing your professional services delivery to the averages in the chart below,  first ensure your pharmacy is really producing clinically sound interventions.

In these charts, we present averages for $/hour and $/script in four provinces (B.C., Alberta, Saskatchewan and Ontario). Note that averages are not benchmarks; in our view, pharmacies should aim higher. So consider them as indicators of the minimum performance your professional services should be delivering.

As you can see, there is wide variation from province to province. For instance, the average $/hour and $/script for pharmacies in Alberta are about 10 times higher than in Ontario.

How to improve efficiency

Here are a few concrete steps you can take to enhance professional services performance at your pharmacy:
• More advanced training in professional services delivery for your team members, including you.
• Ensure every staff member is fully operating within their practice scope. Could a technician handle script checks instead of a pharmacist, freeing up     the latter’s time to provide professional services?
• Consider an appointment-based model. This gives you and your team time to prepare for the most efficient delivery of professional services.

When it comes to professional services, there is no need to operate in the dark.  Your pharmacy’s performance is a journey. Effective benchmarking of will help you move in the right direction – and start on the right foot. If your improvement plan is part of your overall exit strategy, you might consider also picking up a copy of “The Pharmacists’ Guide to Selling Their Pharmacy” available on Amazon.

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