- Matthew’s family pharmacy history
- What are the financial complexities pharmacies face?
- The levers you can pull – stock profiles & improving reporting
- The e-CASS tools that can help
- Save time – the vital hours you can ‘clawback’
Both my parents and my granddad – they were all pharmacists. I remember being a kid, sat in dispensaries and watching them talk to patients and seeing how much they cared.
You really see how far that care & effort extends in community pharmacies. The building blocks to having an amazing service for patients involve so many things behind the counter.
Community pharmacist’s tend to have family who get what it means quite quickly. It’s understandable given the elongated hours and being key pillars of the community – recognisable faces.
Given his family ran pharmacies in South Wales, Merseyside, Cheshire & beyond, new Cambrian Alliance CFO Matthew Loch is no different in understanding how demanding a role it can be. But also what resonates is what he says about how the challenges community pharmacists currently face – whether it be financial or otherwise, is that they are incredibly unique & specific.
“My background as a CFO and during most of my career has been in the manufacturing industry. Business owners there just don’t have the problem of not being the master of their own destiny with prices or that they might have to order stock at a loss. These are such specific problems in pharmacy finances that owners must factor in that people don’t realise.
They need specific solutions and it’s been exciting to start to be part of that with Cambrian.”
From clawback, an expanding list of concessions lines, sometimes antiquated digital systems and dealing with fluctuating purchasing prices, profit is not only harder to find, managing profitability means managing multiple opaque or complex processes – all whilst often directly taking on a number of other functions.
“I know how overloaded with complex workflows & information community pharmacists owners are. My parents weren’t only people giving advice in front of the counter. They were healthcare professionals, shop owners, purchasers, managers, HR, you name it. But with the amount of hurdles, unknowns and moving parts in pharmacy financials now, community pharmacists now almost have to be their own CFO as well.”
The sight of continuing lengthy concessions lists is one thing currently presenting increasing financial quandaries for pharmacists. They reached a hefty 198 items in December 2022, but many people continue to report that concessions far too often don’t reflect market prices, and issuing of them (tending to be toward the end of the month) leaves pharmacists forced to order medicines potentially at a loss.
“Members are continually saying, and have been for years that the current funding model wasn’t sufficient when it was made. Combined with inflation, which is sky-rocketing and impossible to fully predict and there are obviously knock-on effects – you’re on the hop when it comes to longer-term planning. Pharmacists are having to innovate in other ways to make up the gap.”
But what are the levers that pharmacy owners CAN move to improve their financial fitness and to think “like a CFO” for their business?
One thing is being able to get the best possible oversight on your purchasing financials.
Whilst the price concessions & drug tariff struggle to keep up with market fluctuations, knowing when & where to improve purchasing margins is more important than ever.
For Matthew, a key example of such an opportunity for many pharmacies is in stock management.
“It obviously won’t be the same for all – but we know that there’s a chance for some pharmacy owners to use stock management to add data to their purchase planning.
The less cash you have tied up in slow moving stock, the more you have available to finance the rest of your business. Find time to look at stock holding profiles and leverage that information to help you make more agile, smart buying decisions but also analyse data to plan how you buy over the long term.”
The better the data you put in, the better you get out. Once orders have been pushed through, setting up reporting that gives you a clear picture on your purchasing is also vital.
“Price concessions & clawbacks make purchasing reporting hard. It’s why I’ve been really impressed by the monthly profitability report our developer team added to e-CASS Web.”
This is a tool for Cambrian’s members which gives clear detail on the purchasing profit for every single product line ordered through our platform.
“Being able to look at overall volumes for lines, what the exact % profit margin is for every product and supplier can be a gamechanger. It gives amazing insight into where your ebbs & flows of your profitability are.
Additionally, it gives a true overview of profit, given that concessions are included and pharmacies are able to input their clawback %, so it really can act as a ‘purchasing bible’ in many ways.”
It’s a tool added to do something that Matt talks about more broadly – help save pharmacists time on what often can be the lengthy buying process.
“All the information is in one place, not in ten and it takes so much guesswork out of the equation. Purchasing in pharmacy can be opaque or over-complicated, so anything we can do to give more oversight will help”
With multiple systems, dozens of suppliers and some pharmacists naturally wanting to retain complete control over their purchasing – ordering still takes lots of invaluable time for many community pharmacists. Earlier this year, Chemist + Druggist reported that 7 in 10 pharmacists spend 1-4 hours every day sourcing drugs.
That’s time that community pharmacists simply don’t have.
“I think the mix of price concessions, a lack of time and supply problems are making more and more people consider cascade systems. I’ve been impressed with the functionality of e-CASS – how clear the cascade is and the transparency of it. Most of all, it saves time and pharmacists trust we get the best prices for them from a range of suppliers.
One of the best strategic financial improvements people can make is to take as much manual process out of your workflow. Time is a pharmacies most precious asset. Buying can take up a lot of a pharmacists time – that time can be a greater investment elsewhere. If they can kind of take the administrative burden out of ordering and dispensing it can leave time for looking at things like delivering flu & covid vaccines, smoking cessation and lots of other added value elements.”
Like community pharmacies, the culture in Cambrian is a close knit one – something Matt has enjoyed in his first month;
“We all quickly learn a lot about the processes pharmacy’s use. Partly that’s because there’s so much experience in the team, but also because our business managers & account services team are really proactive. I’m constantly hearing conversations of our team helping people use new features, talking to suppliers, solving urgent enquiries – so you quickly get a feel for what pharmacies need.
And like our customers, as a small team, we all have to know each others processes inside out. If my colleague Jasmine is off, I’m covering her, so we can’t be silo-ed from each other. Taking that responsibility is something we see pharmacists doing constantly, so whatever we can do to make understanding their business simple and improving their workflow, we’re proud of.”
Image attribution: Image by aleksandarlittlewolf on Freepik