Two suppliers spoke to Independent Community Pharmacist about what independents should consider when choosing between hub and spoke systems and a dispensing robot…

Community pharmacy is being given the opportunity to take a greater part in the clinical care of patients. Could a hub and spoke model or perhaps an automated system such as a dispensing robot free up time for greater involvement in clinical services?

Kath Hughes, senior national sSales manager at Omnicell UK & Ireland, said the hub and spoke model can enable pharmacies to outsource their most labour-intensive, manual tasks to a third party without the capital outlay for automation.

This will enable them to offer more clinical, patient-facing services that will drive pharmacy revenues. However, there are also some challenges to the hub and spoke model, which can include a loss of buying power for medicines.

Community pharmacists would need to consider the onward cost of outsourcing this work (i.e. fees paid to the hub). They would also need to consider the hub’s approach to medication safety, patient safety, accuracy, audit trail and supporting service level agreements to ensure such a model is the right fit for their business.

Rikesh Lad, automation solutions expert at Omnicell International, feels the question is a tricky one as there is a lack of clarity about what hub and spoke dispensing will look like, how the funding will flow, and the legal framework to underpin it.

It is clear the Government aims to continue funding clinical services and expanding the role of pharmacists beyond dispensing. Automating dispensing ‘in house’ means contractors are – and will be – in control of the process, timelines, quality, accuracy and ultimately the service to their customers.

Investing now could allow contractors to offer a hub and spoke dispensing service to other contractors in the future as an additional income stream. But this should not be the main reason for investing in a robot as the timelines for hub and spoke legislation changes are not yet clear.

Cyrus Hodivala, managing director of Meditech in the UK and Ireland, said the term hub and spoke model can either refer to a secondary supply from a large wholesaler or the centralisation of work within a small group of independent pharmacies.

The former may appear attractive to a small pharmacy but commonly involves centralisation of a majority of the procurement with a single supplier.

With escalating costs and squeezed margins the opportunity for a wholesaler to edge up pricing and take control away from the purchasing pharmacy is significant. While this model may work for very small pharmacies, most average and large pharmacies rely on their retained margin to feed a chunk of their profitability: this would be impossible to give up.

“We have multiple instances of experience where larger single pharmacies or small groups of independent pharmacies have automated and centralised their dispensing with spectacular effect,” Hodivala said.

“Eliminating the two simplest functions of stock put away and rotation together with high-speed automated picking will typically save two headcounts in an average-sized pharmacy.

“However, if this is twinned with a ‘scan-to-bag process’ to eliminate a large proportion of accuracy checking further time benefits can be achieved. Where the environment allows, the leached benefits from increased service levels and integration with cascade ordering systems can create massive revenue increases.”

Source of funding

Funding is a key issue for any business, perhaps never more so than now for community pharmacies. Kath Hughes comments that many solutions are available, with affordable low-cost entry options that pharmacies can consider initially to grow their business over time.

For example, Omnicell’s 24/7 collection kiosks help pharmacies begin their automation journey and help free up staff time, reduce queues and patient waiting times. This enables pharmacies to refocus on delivering more clinical patient services.

Additionally, there are tax initiatives to help pharmacies investing in automation. For example, Omnicell partners with finance companies that can assist with the costs of ownership via lease or purchase and offer tax advice.

Sometimes funding can be available to support automation investments at a local level if the technology can demonstrate clear outcomes such as patient safety.

Hodivala says Meditech are introducing long-term rental schemes for their robots to fix costs over time in an effort to keep monthly costs as low as possible. There are no upfront costs for the pharmacy, no interest to pay and no leveraged debt against the pharmacy.

Decisions, decisions

In terms of what to consider when deciding which route to take, Kath Hughes advises pharmacists to do their own research, find the right partner, and have a pharmacy automation consultation – which Omnicell offers with no obligation to buy.

This helps ensure the solution is right for the business and patients, and ultimately one that offers complete business flexibility and a reasonable return. Rikesh Lad adds that we are at a pivotal movement for independent community pharmacy owners.

In light of the changes in pharmacy funding over the years and announcements in the recent Autumn Budget – increasing employers’ national insurance contributions and minimum wage, coupled with the effective freeze in pharmacy funding since 2015 – pharmacy owners must have a robust and considered business plan.

“Delivering clinical pharmacy services is the future of community pharmacy, and to deliver these services, pharmacies must free up time by automating pharmacy processes,” Lad says.

‘My advice would be to consider all automation solutions on the market, not just dispensing robots. Give thought to how automation complements the long-term business plan, the benefits of the solution, capital required, and the return on investment. These should be key considerations from the outset.”

Hodivala says when considering a hub and spoke model, do not underestimate the amount of time and space it will take to de-aggregate a tote full of stock back down to patient level.

He adds: “If you are not purchasing 100% of the items from the hub and spoke model, then you also need to consider how much time it will take to pick and integrate any external items that are required.

“The larger the pharmacy, the more space and time this will take on a daily basis.’ Pharmacists also need to consider the effect of relinquishing their purchasing margin to an external organisation.”

He says Meditech UK can create a full 10-year business model and return on investment based on a pharmacy’s specific figures, offered as a free consultation service.

Beyond this, the company can help pharmacists understand the realities of true efficiency. “The worst implementations automate your current manual process,” he says. Meditech can help pharmacy owners understand the benefits of automation and opportunities that PMR choice, scan-to-bag process and hybrid workflows can bring.

It is also important to consider the longevity of equipment. For example, Meditech guarantees a 15-year minimum end-of-life for their pharmacy robots.

Lastly, a robot is a mission-critical system for a pharmacy. Hodivala advises paying special attention to the average interval between failures. For example, it is better to buy one reliable machine than having to add a back-up just in case it breaks down, as some advocate.

He also feels it is beneficial to have a network of UK-based engineers to install, and ideally maintain, the equipment.