|The Latest from ideaShare 2012: An Interview with Health Mart’s Chuck Wilson||| Print ||
ComputerTalk's Will Lockwood got the chance to check in with Chuck Wilson, VP of operations for Health Mart, at ideaShare 2012. Wilson grew up in a family that owned an independent pharmacy and gained experience working in operations for several of the big chains, including a 13-year stint at Target, during which he grew the pharmacy business from 114 to 1,400 locations and studied the ins and outs of branding and running retail establishments. In this interview, he talks about what's been happening with Health Mart over the last year and plans to help support community pharmacies as they forge ahead in today's competitive and uncertain healthcare market.
CT: What have been the highlights for Health Mart over the last year?
Wilson: I think that if you talk to our customers, the launch of the Health Mart private brand has been the biggest, most visible change. We started with the diabetic category last October, and we wrapped up with incontinence and personal diagnostics in July. It's been very well planned and very well staged and executed. We've made every effort to make this as easy on our customers as we could have. We send support in every month, cut in the new items, and process the returns of all the old product. It's been a success, I feel. We've SKU-rationalized it, which means we've reduced the number of items available. Our original private label, Sunmark, has about 600 items available. We cut this down to 330 and edited out the items that were, quite honestly, not selling. This could be the third flavor or the one additional size of product. By us editing the assortment, it makes it easier for customers to come in to shop. They don't have to debate which item to buy. We cut it down to the number-one product in the number-one flavor and size. So we helped with that. The independent pharmacy always wants to be everything for everybody, and it can take time for them to understand the value of being more selective.
CT: So it's a matter of educating the pharmacist about why this more selective approach to OTCs works.
Wilson: Right. And we also tell them not to go out and try to find another source for the products we've cut out. We tell them that they are going to get the sales and more, and we've shown that, with sales up 10% on a dramatically reduced SKU count.
The other focus we've had over the past year has been on simplification. These guys are busy and spend too much of their time in their business as opposed to working on their business. We put the marketing toolkit through a whole reinvention process, not only adding content but making it much easier to find the tools. Use of that went up pretty dramatically. Now these pharmacists are doing a little more marketing and bringing more people in.
Last year we launched an online operations manual, but the content wasn't as robust as we wanted it to be. So we've spent the last 12 months adding a significant amount of content to it. My catch phrase is "simplified self-sufficiency." We want to give them access to the information they need in an easy-to-manage way, when they need it.
We added a bunch of content to our Health Mart University, and our usership went up pretty dramatically. What we learned is that once customers start using it, they come back time and time again. The problem was getting them to start. And we provide them with a lot of the annual update trainings that are required for fraud, waste, abuse, and HIPAA. It's all in there, and it's all free of charge. Some of our customers were going out and paying for this training. We really made an effort to let them know what was available in Health Mart University. We also reorganized it so that the content is arranged by team member, so if you have a new technician or pharmacist or cashier starting, you just go in, click the role, and there's all the training the person needs. We've really simplified the use of the tool.
CT: This kind of training resource sounds critical for community pharmacy, particularly considering all of the regulatory requirements and the need for strict policies to meet them.
Wilson: I think it is vital. And everyone has to understand their role. The pharmacist should really be focusing just on the professional, legal side of what they have to do. Unfortunately, a lot of pharmacists are still down in the technical process. In order for them to have the capacity to take advantage of some of the new revenue opportunities that are coming along, they can't be wrapped up in the technical details of filling a prescription. So you need to make sure that the team you train understands what they are supposed to do and has the skill set to do it. The pharmacist can then pull himself away from the computer and get in front of the patient.
CT: This really fits into the theme of changing the pharmacy workflow in order to change the pharmacist's role in the pharmacy and in healthcare.
Wilson: In fact, the most successful business management tool is when your best practices are supported by technology. We present a lot of our best practices independent of any kind of technology or computer support because we want to make sure pharmacists understand the process first, but the success rate goes up dramatically when we can add some technology to it. A great example is the pharmacy intervention program. You have to have the proper workflow to take advantage of those interventions when they come across. We hear a lot about mail order and other challenges, but to me it's the direct patient contact that you get that really differentiates the community pharmacy. If you miss opportunities to do that, not only are you giving up potential revenue, but you are giving up a way to differentiate yourself. And it makes sense from a financial perspective. The pharmacy intervention program paid out $1,000,000 in fees to McKesson customers in the last year. That's great. But the additional fills are where the real value is. If you look at COPD patients, those that participated in the intervention program got two additional fills on an annual basis. Diabetes patients got four additional prescriptions.
CT: This speaks to the overall effort to increase adherence. And when this process is supported by technology, it puts community pharmacy on the road to being able to show the value it's providing to patients.
Wilson: That's right, and that's kind of the next step. A lot of preferred networks have care requirements, and if you are going to participate you have to be able to show that you are meeting them. So we need to make sure that pharmacists have the capacity to do this.
CT: I believe that community pharmacy has proved that it provides patient care that improves outcomes, but this is something that will have to be proved continually to payers and plan sponsors.
Wilson: A lot of the focus in the business of pharmacy has been on the commoditization of the business, the $4 prescriptions and that kind of thing. And for some models where prescriptions are just a small part of the overall revenue, you can do this. But in the community pharmacy, where prescription volume is the lifeblood, you can't afford to let patients move to a different pharmacy because you aren't delivering the care they need.
CT: So community pharmacy has a real opportunity if it can get the operational aspects down, although most pharmacists aren't really that comfortable with marketing and merchandising, or they're on a steep learning curve.
Wilson: Right. It's not part of their education, and when it's only maybe 5% of their business, they don't want to spend a lot of time to figure it out. That's where we have to help them. Some of them get it, and peer-to-peer interaction is a great way to learn from those pharmacists who are good at this. Our customers can then take a face-to-face interaction, from ideaShare for instance, and take it one step further to our McKesson Connect Community platform to leverage these relationships. There are a handful of guys out there on this platform, and they are chiming in on all the threads and starting them. I call them super-users.
CT: So this is a social network that is really going to help a group of professionals.
Wilson: Yes. And quite honestly, I didn't expect it to be quite as big as it got. I thought people would dabble, and that it would be a complaint center. But it really hasn't been that. It has been more solution focused. Sometimes someone from McKesson will join a thread, but it is primarily peer-to-peer interactions.
CT: What are you hearing from Health Mart pharmacies about what they need and want?
Wilson: I'd say ScriptAlert as the first thing. It may not be a competitive disadvantage to not have it yet, but it very soon will be, as the population becomes more and more comfortable with text messaging and the mobile aspects of life. Smartphones and tablets are more and more prevalent. You can absolutely drive adherence and improve outcomes when you sign people up for automatic refills and message them when they are ready. You can even provide medication reminders. That's one of the biggest things we can go out and use to create a competitive advantage and stay out front. I think the improvements to the Web portal we offer our Health Mart pharmacies are pretty significant, too. We had this before, but it was pretty basic. Now with the IVR interface you can link patients in with tools that will really help them manage their healthcare. I know from experience that this drives up engagement and refill rates. It helps tremendously. We've also been updating our physician outreach network.
CT: That last one really interests me. If you are collecting information on the interactions you are having with patients and you then have the ability to understand who the prescribers are in your area, you then have the chance to do some really effective marketing to them.
Wilson: Some of our pharmacists are taking it to this extreme. You know where your scripts are coming from, so you can focus on serving your heavy writers the best you can, on the one hand, and then some owners have even hired detail staff to go out and market to the rest of the prescribers. The portal itself gives pharmacists the opportunity to create some marketing materials, but then they have hired people to actually go out and do the work so that the pharmacists can keep a presence in the pharmacy.
CT: What else is coming?
Wilson: One thing that's going to take a little longer to build is providing the business intelligence side of things. We want to know what the key metrics are that our pharmacies want to measure. Today they can probably look at an annualized view of their own numbers, but they can't benchmark against like-volume stores or like-model stores or like-demographic stores. I look at this as part of the foundation of what Health Mart is going to provide. We just need to help our customers understand that if they can help us get some of the information, that there will be tangible value in it.