“I don’t have time to forward dispense!” vs “I don’t have time not to!”

The KordaMentha Industry report of February pulls no punches (ref 1). Retail pharmacy industry is in a maelstrom, due largely to the twin forces of the discounters and PBS reform. One of the numerous recommendations, all too clear and oft reiterated …….. community based pharmacy must reinvent to a forward dispensing service model to survive and thrive.

There is documented evidence dating back twenty years (ref 2) at least, suggesting that forward dispensing has been described, even exhorted in Australia, for a generation now. In current times, there is anecdotal evidence to suggest that the burning platform is focussing renewed interest in forward dispensing.

It seems to us, at The Next Level, as we roam the countryside scoring and benchmarking customer engagement effectiveness and script processing efficiency at the dispensary, that there are those pharmacists who have heard about forward dispensing, but are either scared, ignorant or both, and have not attempted execution. Or attempted feebly once or twice and retracted to the comfort zone at the back of the dispensary. Often their perception is “I don’t have time to forward dispense”. Conversely, there is a growing number of pharmacists who have attempted and successfully embedded the processes and practices accordingly, a smaller number still have mastered it. Often, the perception of these pharmacists is “I don’t have time NOT to forward dispense”. Funny conundrum, huh?

We have had the pleasure of observing a number of such models in action, and have come to the conclusion that there is no ONE forward dispensing model. There are numerous. And the variations on the theme seem to follow some sort of Darwinian evolutionary progression. More about that later. Numbers before words ….. let’s look at the stats that represent the current level of customer service for the health customer at the dispensary. For the first time on the Australian retail pharmacy landscape, very specific data has been collected from real time observation at some 115 mid to large sized community based pharmacies – all states ; all major cities/towns. A representative sample of this type of pharmacy at large.

The benchmarks that represent the level of service provided by “mainstream mid-large community based pharmacy” to health customers across Australia

• 48% of customers stay at the dispensary for the duration of their dispense ….. more than half go “to do the shopping” to return later, either by their own volition, or because staff invited them
• Regardless of this scenario, the script bearing customer spends on average 4m 52s at the dispensary for their dispense
• Of this time, 49% (2m 22s), is spent engaged by members of the dispensary team … more time (2m 30s) is spent disengaged, standing in queues or waiting
• Perhaps more sobering, is that of the 2m 22s engagement, only 38s on average is invested in proactive medicines or health counsel administered by the dispensary team … the rest is counsel in response to the enquiring customer, or just idle chit chat and other value neutral engagement
• Regardless of proactive counsel duration, the benchmarks show that 48% of script bearing customers receive some proactive medicines counsel … more than half do not
• It takes, on average, 4m 16s to process ONE script item……….less than half that time (2m 2s) is invested on processing; more than half (2m 14s) processing is stopped, in suspended animation, waiting for a human being to (re)start
• More than half the time (53%), the Pharmacist is stationed with at least one counter, often two, away from the customer at the rear undertaking the lion’s share of manual processing
• The average script customer “companion sell” ratio is 17 – for every 100 script customers, 17 non-script health category products are sold
• The average non-script health customer “basket size” ratio is 116 – for every 100 such customers, 116 non-script health category products are sold

The same data providing these benchmarks, also allows for correlation strength to be tested at the behavioural and commercial levels.

The correlations that paint the dual picture of the problem and the opportunity for the industry, against the backdrop of downward pressure on profitability

• Create a compelling value proposition to keep your customers at the dispensary for their dispense ……… the correlations demonstrate that high performance here leads to longer engagement, shorter processing time, and higher frequency of administering proactive medicines counsel
• Speaking of shorter processing time, the correlations demonstrate that minimising rehandling (so-called “straight through processing”) and reducing “white space” (idle time) are the keys
• Speaking of longer engagement time, the correlations demonstrate that longer engagement time DOES lead to longer proactive counsel provision, regardless of any extended chit chat time
• Back to the notion of forward dispensing, the correlations demonstrate that pharmacies that position pharmacists in a more forward orientation at the dispensary counters, are more likely to deliver longer proactive counsel to script customers

So far, so good. Now we have data to support the practices and processes exhorted by industry peak bodies like the Guild and PSA. Now comes the twist in the tail. As we move from these behavioural correlations and search for their alignment to commercial correlations, the picture becomes very mixed.

• Pharmacies with relatively higher pharmacist “fronting up” at s2/s3 counter show no correlation to those customers receiving more proactive counsel.
• The correlations between behavioural aspects such as higher levels of proactive counsel, higher levels of pharmacist fronting up and higher companion sell and basket size item numbers are mixed and inconsistent
• The correlations between behavioural aspects such as higher levels of proactive counsel, higher levels of pharmacist fronting up and higher companion sell and basket size, from a value perspective are also mixed and inconsistent

We believe that there is a hypothesis to explain this, and that as the population of the representative sample of 115 continually grow, the hypothesis will bear out in the correlations. The hypothesis goes something like this ….

Proactive medicines and health counsel is NOT the major component of engagement in the typical mid-large sized community based pharmacy. Further, the relatively short duration of administered counsel very often stops short of a conversation concluding “solution sale”. This phenomenon appears to be true, regardless of role type administering the counsel ,ie pharmacist vs dispensing technician vs pharmacy assistant.

We believe that this hypothesis, based on the statistical correlations, defines both the problem and the solution that faces the typical retail pharmacy in the current environment. The call to action seems clear ….

• Convert Pharmacists from rear to front
• Convert customers to stay at the dispensary
• Convert stay to engage
• Convert engage to counsel
• Convert counsel to solution sale
• Convert survive to thrive!

Back to the point “parked” earlier … that there is no single forward dispensing model, and that the variations on the theme seem to come together in a kind of Darwinian evolutionary model.

The progressive forward orientation stages of dispensary service models

According to our observations focussed on this 115 mid-large community based retail pharmacy “cohort” over recent years, at least 90% still practice to the traditional rear dispensing model. But like a bear slowly awakening from its long seasonal hibernation, we are gradually seeing pioneering pharmacists attempt to execute a tailored form of forward dispensing. And we are seeing varying levels of development, which remind us of the Darwin analogy. It looks something like this …..

• The classic rear dispense model
  • Mostly, the customer is separated from the script, which goes over the back, and the customer also moves backward (either to step back and wait, go to the front of shop to browse, or leave altogether)
  • The pharmacist’s “home base” is the rear processing counter, which is the focus of his/her activity
  • The pharmacist will venture forward to engage selected customers on a perceived as-needs basis, but return like a homing pigeon to the rear counter as soon as practical

Some pharmacists are trying to come forward more often and more proactively, but without repositioning dispensing terminals/printers and product, this can only provide for limited increased engagement and counsel.

• Forward dispensing
  • The customer and script are still predominantly separated at script induction, each taking their backward migration as described above, with processing implemented at rear counter
  • Technicians become the mainstay of the manual processing in this model, and a pharmacist is home-based at the script out counter with dispensing terminal and printer to provide counsel to the customer as the medications are handed over
  • The pharmacist will venture backward to help out at rear and conduct pharmacist checks, but return like a homing pigeon to the script out counter as soon as practical

• Triage based direct dispensing
  • The customer in this model is educated and the dispensing team trained in the triage rules that provide for superior engagement and streamlined processing
    • No longer is it mostly “first come first served”
• In appropriate scenarios, the customer is engaged by the pharmacist at script in, which features a dispensing terminal and printer, so as the whole dispense is conducted with the customer in one fell swoop. The pharmacist is able to accomplish this because of able support by a dispensing system (robotic or otherwise) and/or a well co-ordinated dispensing technician.

• This concept runs counter to the traditional notion of separating the customer and the script, and paradoxically (or otherwise, according to those who have mastered it) customer engagement is maximised, and processing is streamlined, with all these activities conducted in parallel
• In scenarios inappropriate for direct dispensing (eg polypharmacy customers), the forward dispensing model as described above is applied
• Therefore in this model, a pharmacist is stationed at script-in for the direct dispense scenarios, and another at script out for the forward dispensing scenarios.

• Twin frontage at script and s2/s3 counters
  • This is a further development on the previous model, in the sense that the pharmacists, as stationed in the description above are adept at “straddling” their script counter posts to serve at s2/s3 as well

• Forward pharmacy
  • This appears to be the manifestation of the “new world” order that will characterise successful pharmacies on the other side of the industry maelstrom
  • Leveraging the previous model, there is now also a pharmacist on the floor in front of the s2/s3 and script counters, who engages customers before they arrive to those counters
    • In fact, the pharmacist will often host the customer to the right counter, based on the counsel he/she has provided on the floor

The key for any pharmacist reading this in bewilderment and wondering how and where to begin, the good news is that there is a growing number of case study pharmacies that have taken progressive “bite sized” steps, and are enjoying significant commercial benefits from their tailored and paced progressive forward dispensing journey. Remember, Paul Kelly’s beautiful ode to retail pharmacy………”from little things, big things grow”.

In conclusion, then, we believe those pharmacies that innovate and reinvent their dispensing service model to embrace a progressively forward orientation, will rise above the twin negative forces impacting the industry currently and become the beacons that light the way to the new world order for Australian retail pharmacy (dispensary). A world where profit from script product is more balanced with profit from service and pharmacist-only product ….where the leading exponents truly become THE health destination in their community and triage health customers to GPs (reversing the dominant traffic flow in the old/current world) and other health system professionals.

Like most other industry “shake-outs” we have all witnessed, some players will not survive, some will be consigned to a bare subsistence, others will thrive and create opportunity from enforced environmental change. The time is nigh for all Australian retail pharmacies … the “call to action” is clear.