Innovation's Executive VP Doyle Jensen talks with ComputerTalk's Maggie Lockwood about the role automation plays in the renewed push to implement central fill to solve the reality of decreasing reimbursement rates and fixed costs.
CT: Doyle, please give us the backstory on what's happening today with central fill.
Jensen: There was a push about 10 years ago [with central fill]. Approximately 10 chains employed this approach to reducing costs. Other chains deployed retail automation. It's hard to cost-justify the expense of a robot at a retail pharmacy no matter who you are. Today, the driving factors are somewhat the same across the different pharmacy areas; decreasing reimbursement rates are continuing the need to eliminate fixed costs.
CT: So central fill is answering the problem of fixed costs?
Jensen: Here are some of the dynamics. A pharmacist's time is the highest expense in filling a prescription, and so the chains are centralizing the processing systems to lower the cost per prescription. Central processing is step one and central fill is step two. They can be separate, but generally if you deploy one, you will most likely deploy the other.
The chains using this model have centralized work queues. Step one is when the store scans the paper script and then routes it to a central-processing center, where it's reviewed by a pharmacist. If that is all the pharmacist is doing, the pharmacist can do it very quickly. At a local pharmacy it might take four times as long. Once the script is processed, it's sent back to the store - or if it's central fill, the system sends it to the automation for filling.
With central fill you have to consider many things: the volume that can be pulled from the store and how to reengage the labor at the store. Even with processing and delivery costs, you can still realize a savings of 300%-400% per prescription.
The trend we're seeing is that there is more of an opportunity for pharmacists to generate revenue by being forward facing with the customer rather than being in the back of the pharmacy. With central fill you have an opportunity to reemploy the pharmacists and generate revenue in different places. Of course, the software is just starting to catch up to track the counseling.
CT: Can you give us some examples of who's active in implementing the central fill model?
Jensen: I can only say that almost every one of the top 20 chains in the U.S. and Canada is either implementing or investigating the central-fill model.
CT: Without mentioning specific companies, can you give us an example of where central fill is being used now?
Jensen: Central fill has worked very well for a large grocery chain. They are going to double their central-fill volume because their pharmacies have such a high volume to begin with. Another large chain plans to take $1 billion out of operating costs with centralization. We've designed systems for some of the largest chains, doing 135,000 scripts a day with 40 people.
CT: What's the technology behind this buy-in?
Jensen: Central-fill systems use high-speed robotics, conveyors, and imaging systems that allow scripts to be filled at a much faster rate than in-store robotics. There are all types of technologies available with central fill that you would never have in a store.
Innovation's central-fill robots can do many things at once, rather than one thing at a time. Each one of our robots can handle 240 scripts per hour. Thus, if you operate one robot in a central-fill environment for 10 hours, you can fill 2,400 prescriptions with one piece of technology. Depending on your volume and formulary of drugs, you can right-size as many units as you'll need now and then scale up when you need to.
Another key component is the Symphony software that synchronizes the orders across multiple robots. In our central-fill systems we process multiple orders simultaneously. For example, if a patient order has three prescriptions and they are in three different robots, and one is already in the queue, Symphony will move the other two to the top of the queue so they are all filled and processed at the same time.
Symphony's Rx verification module provides an image verification process for pharmacist verification. The pharmacists at the central-fill location just have to look at the image and compare it to a reference image. Because they are verifying two images on the screen, they can do it anywhere. We know that one chain is doing home-based pharmacist verification right now.
From an economic standpoint, we approach automation in our central-fill models differently than the competition. We automate a much higher percentage of oral solids, thus minimizing the labor required and lowering the cost per prescription. Also, with central fill you decrease your inventory-carrying cost. You can now centralize a segment of your inventory in one place rather than carrying it in all your stores. You know how much of the drug you need, and maintain a limited supply of that product at one location.
Lastly, the technology helps you decrease waste. What happens a lot is that someone comes in with a prescription, you order it in, you use part of the bottle, and before you use it again it expires.
CT: So central fill doesn't mean a mail-order-like situation?
Jensen: Not at all. The goal is to deliver the prescription to the customer at the retail pharmacy location, so the staff can provide any necessary counseling and customers will shop in the store while picking up their prescription.
Keeping the local pharmacy as the customer's point of contact raises a few other issues that we've solved. For example, you want to have transparency into where the prescription is so you can provide effective patient communication. At the store the prescription can be diverted to central fill, and the staff can keep track of its status through Symphony or through the pharmacy's own workflow software that's integrated with Symphony at central fill.
CT: Are there other areas where you see the trend on the upswing?
Jensen: We're seeing a trend in hospitals that are now modifying their benefit plans to keep their own employees in their pharmacy networks. This is increasing their prescription volume dramatically, to a point where it is now justifying automation or a central-fill operation.
CT: Clearly there's ROI for large prescription volumes. What's the application for a smaller chain?
Jensen: Because of the latest technologies, even a small chain can benefit. We have smaller, efficient systems that can start to make sense at 1,500 prescriptions a day. It used to be that a chain wouldn't see enough of a benefit at a low volume, but with advances in software and automation this model now is feasible.
With new advances in technology, we have smaller footprints and designs that enable chains to enter the market at a lower level. If someone says "I want to start with just 2,000 scripts per day," we say "no problem." There's an ROI there if you can save 20% on labor.
Wholesalers are also experimenting with central-fill models. Another concept is independents that can subscribe to central fills. Even with two or three stores you can make a more effective use of retail-level automation. CT