Maximizing the Investment in Your Pharmacy

“We don’t have time to plan.

Right now we just need more business.”

~ Author Unknown

Does this quote describe you? Over the years you always knew you needed a plan but just didn’t have time to develop one. What about your “Exit Strategy”? Sure, you want to exit some day but you really haven’t planned for it because the rules of pharmacy keep changing, profit margins are getting smaller, and insurance companies have you doing more work than ever just to get a small reimbursement. Some of you may even be saying, “If this new Medicaid reimbursement plan gets implemented in January, then our government has already planned my exit”.

Of course many Independent & Small Chain Pharmacy Owners can relate to the above. We all have the same challenges. However, some are choosing to handle their challenges in a different manner. Now that you know you are not alone, let’s talk about exit strategies or succession planning.

Professional athletes provide us with some great examples. The best examples of doing it right are those who really think out their exit and leave at the top of their game. They leave the game even though their fans are begging for more.

Ideally, you want to be like that professional athlete when you exit your business. You want to leave when you and your business are at the “top of your game” with your employees and customers “begging for more”. At this point, you are worth your maximum value and you deserve to be compensated for it.

No matter if you exit now or 30 years from now, you need a plan that will help you achieve your maximize value. Here are some things to consider:

1) What goals do you want to achieve with your exit?

2) Do you want to keep the integrity of your business intact?

3) Do you want to make sure your employees and customers are taken care of without much change?

4) Who would you prefer to sell your business to? A family member? A loyal employee? Another Independent Pharmacist? Groom an up and coming young pharmacist to take over your pharmacy down the road? Or let the maximum value dictate who you should sell to?

5) Economically speaking, how are you going to transfer your pharmacy or pharmacies to the buyer if it is a family member or employee? Will they pay you throughout time? Will you have to finance their purchase?

6) Should you redefine your focus in the marketplace because of all the changes in pharmacy? Should you buy more pharmacies and/or sell one or more of your pharmacies now because of the changes in pharmacy?

These questions will start you on the path to planning your exit strategy. If you would like to discuss your options, please visit the Keep Your Pharmacy Open website to request a complimentary initial call. KYPO is a non-profit to help not only the troubled pharmacies but also help you develop the succession plan that is right for you.

Should I Stay or Should I Go?

As a Pharmacy Owner with the upcoming implementation of AMP hanging over your head, Medicare Part D, PBM’s and other pharmacy reimbursement issues, has this become your theme song? Are you frantically trying to figure out how you can sell your pharmacy while you can still get some money for it?

STOP BEFORE YOU TAKE ANY ACTION


Is the end near for Independent Pharmacy?

NO


Are the rules changing in Pharmacy?

YES


Will I need to change the way I do business in order to survive?

POSSIBLY

Important Points to Consider Regarding YOUR Future in Pharmacy:

1) My Pharmacy Future - Do I want to continue being a pharmacy owner? Seriously think about this question. Write down all the pluses and minuses of owning a pharmacy. Ask yourself, “If I sell my pharmacy today, what will I do? How will that affect my family; My future?”

2) Exit Strategy – Whether you decide to get out now or 20 years from now you should have a planned exit strategy. And no, your exit strategy is not . . . . “Medicaid and Medicare Part D forced me out.” That is not an exit strategy. You need to develop a plan in order to maximize the sale of your pharmacy when the time is right for you. This may be the right time for you or . . . . .

3) Keep Doing? Stop Doing? Start Doing? - Why did you become a Pharmacy Owner? Did you get into this business to lose money? Of course not! So, take a serious look at your business and decide what parts of it you should keep, what part(s) you should seriously consider getting rid of, and what service(s) you can add to your business.

Here’s an exercise for you. Take a half a day away from your pharmacy with no interruptions. Go to the lake, the park, the library, or wherever you think the best. Grab a legal pad and pen and take the above questions to heart. Write down everything that comes to mind.

Subsctibe to the KYPO blog or check back here frequently as the KYPO Team begin discussing topics such as exit strategies, the future of independent and small chain pharmacy, what to look for when working with a consultant or broker, tips on growing your business, where to take your pharmacy business from here, and so much more.

To answer your question, “Should I stay or Should I go?”

That Depends on YOU!

You Have to Check out this New Website to look up Medications

As a pharmacist, do your customers ever come to you confused after researching their medications on the internet hoping you can interpret all the information they just read? How would you like to be able to refer your customers to a website that is easy to navigate and that will answer their questions and concerns? Well, you need to look no further because the answer is finally here.

The National Community Pharmacists Association (N.C.P.A.), the American Pharmacists Association (APhA), the National Alliance of State Pharmacy Association (NASPA) and Mirixa Corporation have announced the beta launch of RxWiki, the first Web 2.0 medication therapy management encyclopedia for consumers, written and edited by pharmacists. RxWiki also serves as a community network for pharmacists to create and share information for their patients and consumers at large, and to collaborate in the advancement of Medication Therapy Management (MTM).

RxWiki features include:

• Medication content created by authorized pharmacists
• Latest articles from leading medical news services via RSS content syndication
• Weekly newsletter personalized for subscribing consumers
• Easy to integrate website “gadget” provides access to search RxWiki from pharmacy websites
• Free Toolbar provides search capabilities, updated information and links to other resources

KYPO checked out this website and must admit we were quite impressed. We were so impressed that we have added a permanent link under our “Pharmacist Links” and our “General Public Links” on the right side of this blog. The information RxWiki provides on the medications is quite easy to comprehend unlike most websites that offer drug information.

Pharmacists, RxWiki is looking for more Pharmacists to contribute to their site. Please visit here to find out how you can help. In addition, www.rxwiki.com would be a great link to add to your pharmacy website.

The Side Effects of Our Healthcare Crisis

An article on the front page of the Dallas Morning News set me off this morning. Check out this story “Small drugstores can’t swallow prospect of slashed payments”.

I applaud Angela Shah, the writer, and the Dallas Morning News for putting the spotlight on this “hot issue”. Reimbursement rates for pharmacies (Medicaid, Medicare, and Insurance) have been an issue for quite some time. However, the new Medicaid reimbursement rate effective in January ’08 could destroy one of the most respected professions in the nation.

Despite the fact that Pharmacists went into this profession to help their patients, Pharmacies will be forced to make a business decision. They will either have to close their doors or turn away their Medicaid patients. Neither choice is good for the patient or the community.

Thanks to Medicare Part-D, 1000 pharmacies were forced to close their doors in 2006. Now with the new Medicaid reimbursement rate, they are predicting an additional 2300 will close in early ’08 (click here for article). Do you know what closing a pharmacy does to a community? There are small towns across America who do not have a pharmacy because the pharmacy could not afford to stay in business. When the pharmacy leaves, the doctor(s) leave, and then the hospital closes its doors. Since the patients now go to another town to see their doctor and get their prescription filled, they do all their shopping in that neighboring town. It is a huge domino effect.

As for the pharmacies that don’t close, the best “business decision” for them would be to not accept Medicaid.

So, now that we have all these stores closing and the remaining independents turning away Medicaid patients, who will service all those patients? Sure the chains can pick up a little slack but how much more can they really handle? Have you seen how busy those pharmacists are in the chains? If all these independent pharmacies close, the chains won’t be able to handle the massive volume of patients coming to them. The result is an increase in prescription errors which could result in more health problems for the patients which could lead sometimes to a coma or death. Death is a nasty side effect for patients to pay because the Government won’t fix our healthcare crisis.

We as patients and citizens of this nation need to write our Representatives and demand that they solve our healthcare crisis A.S.A.P.

Pharmacy Owners if you are looking for a way to reach out and educate your patients in a cost-effective manner, we encourage you to check out Pharm Aid online. A great resource for the pharmacy community.

What You Don't Know About Your Prescription Drug Costs

Does your insurance company tell you that you can’t get a prescription filled because really “there is a better alternative to that medicine”? It may not be a better alternative for you (the patient) but it is a better alternative for the insurance company because you are saving them money.

Have you ever had to get a prescription filled at a higher dose and then required to “cut the pills in half” yourself? This is just another ploy to save your insurance company money but how does it benefit you?

Is your insurance company pressuring you to get your prescriptions filled thru their mail order house? Are they telling you how much money you can save? Have you thought to yourself, “Hey, I can get 3 months of my prescription thru the mail for the same price I can get one month at the local retail store”?

STOP BEFORE YOU SUCCUMB TO THE PRESSURE

Keep Your Pharmacy Open came across this great website Medicine & Money that patients need to read. The authors of this blog educate the patient on where your money actually goes when you get your prescription filled (it is not where you think) and what you can do about it. Bottom line, they tell you what your insurance company does not want you to know.

We encourage you to visit the Medicine & Money website and share your story about the problems you have encountered in getting your prescriptions filled. You can also go to General Public Links (on the right side of this page) and click on “Truth about prescription drug costs”.

Before you run to Walmart for your $4 prescription

We will start our first blog discussing a frustrated patient. The patient fell into the trap of the Walmart $4 prescription. So, they took their prescriptions to Walmart and found out that only 2 of the 4 prescriptions were going to be $4. Then, they waited 90 minutes to get 2 prescriptions filled. There is a reason Walmart is taking 90 minutes to fill 2 prescriptions, they want you to take the money you will be allegedly saving and spend it in their store. Bottom line, you come out spending much more than the $4 for a prescription and you just wasted 90 minutes of your time.

There seems to be a perception that Independent Pharmacies are going to always charge more than the chains. I am here to tell you that perception is NOT REALITY.

A couple of weeks ago I had 2 prescriptions filled at an Independent Pharmacy. It took the pharmacist all of 5 minutes to fill them and then the pharmacist consulted me on my new prescriptions. One prescription was $4.04 and the other was $3.51. In addition, they deliver. Had I been too sick to wait, they would have been happy to bring the medicine to me.

We want to hear from the patients in the communities and pharmacists. Let us know your thoughts on independent community pharmacy. Do you support them? Please let us know your thoughts on why you do or why you don’t support your local independent pharmacy.