Hilary Cunningham, Numark’s information pharmacist, outlines how to develop a care home business.
With cuts to funding and Category M clawbacks, if you haven’t already done so, now is the time to look at other ways to drive income opportunities into your pharmacy. Care homes have long been a successful avenue to secure prescription business and while servicing homes can be time consuming and resource intensive in the early stages, it can help drive profitability now and into the future.
In addition to the benefits to the pharmacy business, pharmacists can have a positive influence over the management of medicines within a care home setting.
The Royal Pharmaceutical Society’s publication ,The Right Medicine: Improving Care in Care Homes, published in February 2016, demonstrated that pharmacists working as part of a multidisciplinary team can add significant value when responsible for the whole system of medicines and their use. This value was estimated to be in the region of £135 million a year.
This added value which has been recognised by NHS England who have committed to the recruitment of 240 pharmacy professionals (160 pharmacists and 80 registered technicians) to work within care homes.
There has been regulatory change in recent years across all four home countries. Each country has developed its own interpretation of best practice standards in the delivery of care, so before a pharmacy undertakes the provision of pharmaceutical services to a care home, the legal and professional requirements, along with what the relevant inspectorate will be looking for, should be clearly understood.
It is essential to understand the basic economics of providing care home services. The margins are obviously lower as it takes longer to dispense into a monitored dosing system (MDS) and there are also the additional costs of the MDS product and equipment. An alternate approach would be to consider offering an electronic service where an electronic MAR chart is provided and medicines are supplied in original packs. Before offering this service contractors should fully investigate the costs involved in providing the technology and offset this against lower staff and equipment costs for the dispensing of medicines.
Each care home bed delivers to your pharmacy an average of 5-6 items per prescription cycle. With 28 day prescribing there are 13 cycles per annum, delivering an average annual item return of 65-78 items per bed. A 20 bed care home is therefore likely to deliver between 1,300 and 1,560 items a year. This is from the provision of the regular repeat items. There will also be additional items from medication and patient changes, and acute prescriptions. Care homes registered with nursing services will return a higher item/bed rate due to the frailness and poor health of the residents.
A walk-in customer visiting a pharmacy will on average have 2.5 items on their prescription. If you are servicing a 20 bed care home and lose the business, you will have to find 100-120 items: effectively this means recruiting more than 40 new walk-in customers to replace this business. Not only will you need to recruit these new people, but also keep them each and every month. A major benefit of providing a care home service is that if you retain the business, the items are there each and every month.
Having decided to provide a care home service from your pharmacy, there are a number of points to be considered:
It is important that you understand what your competition will be offering to establish what you are prepared to provide to compete and win the business. Part of establishing your service offer is to decide on the type (or types) of MDS you are prepared to offer.
Most of the larger pharmacy groups will offer either multi-dose or unit dose systems and there are advantages to both. Most care homes with nursing will opt for the unit dose systems, as this makes identification of the medicines simpler and also changes to prescribed medication mid-cycle easier to implement.
What type of service?
When deciding on the type of service that you are going to offer it is important to ensure that you will be able to consistently provide all aspects of the offer. In all cases it is better to under offer and over deliver than fail to deliver on your initial commitment.
The next step is to look at where you will operate the care home service. You should have a separate dispensing area for your care home service to ensure best practice and safe dispensing procedures can be operated. It is not practical to integrate the dispensing for a care home within the dispensary area used for the normal walk-in prescription business. A separate, preferably quiet area should be set up for the care home operation. In addition to the actual dispensing of the prescriptions there will need to be adequate space for administrative activities involved in providing a care home service, such as checking of prescriptions prior to dispensing to ensure that all the medicines ordered by the home have been prescribed. This area may need a dedicated telephone line and fax machine.
Additional PMR terminals and ordering facilities may be required to allow stock to be ordered and labels and MAR charts to be printed in advance of dispensing.
Once dispensed you will also need an adequate area to securely store the dispensed MDS/medicines until dispatch.
When planning the service that you intend to offer, you should consider the staff required to provide the service. Consideration should be given to who will accuracy check the medication – will this be a pharmacist? Can he or she be freed up from the daily walk-in business or would an ACT be a more cost effective and consistent option?
The next stage of your business plan is to identify possible care home business targets. Where can you find out exactly what homes are in your locality and where they are? There are websites that can provide most of the background information you need. An effective approach would be: www.cqc.org.uk or www.carehome.co.uk which provides information for all home countries.
Having prepared your list of target businesses, you now need to make an initial approach. This can be done by first sending out an introductory letter or directly telephoning the care home to request an appointment to discuss the service you can provide or simply knocking on the door and leaving some information with the home. When planning your initial approach consider the time of day that you visit the home: visiting at meal times or medicine administration times will reduce your chances of speaking to the home manager, deputy or nurse in charge.
You will need to have a clear picture of the exact service you are prepared to offer from your pharmacy. This should include:
The main purpose of the meeting is to demonstrate that the service from your pharmacy better suits the home’s requirements than the service currently provided. Remember, people do not just buy into a product or service; they buy something they consider will bring benefits to their business, so you should be aiming to demonstrate throughout how your service will benefit the running of their home.
Should you be successful and win business from a care home you need to establish a service level agreement (SLA) to clarify the service for both parties. Putting an SLA in place is vital in ensuring there are no misunderstandings on the exact service, timings and frequency of deliveries, availability of prescriptions etc.
In addition to an SLA pharmacy contractors should ensure that they complete equipment loan forms for all equipment, such as medicines trolleys, cabinets and fridges provided to the home. This equipment is a significant investment by the pharmacy and
it is important that the pharmacy maintains ongoing ownership.
It is a good idea to do an initial visit when you first take on a new care home. A check of how they operate their medicines procedures will give you a good idea of how efficient they are and where they will need your support. A visit, at least annually, is also good for business retention.
The care home market is very competitive. A good service level has to be maintained if your care homes are not going to be tempted to move to another pharmacy. That said, a number of surveys have highlighted that care homes do not move pharmacy supplier easily.