Pharmacy contractors need to grasp business fundamentals

As director of consultancy firm Innovate Pharma Services, Sanjay Patel helps pharmacy businesses to innovate, grow and achieve their full potential. Arthur Walsh finds out more

The last few years have seen growing recognition that pharmacists are skilled clinicians, equipped by their training to make the right calls around medicines dispensing and an ever-growing raft of services. But in the community sector, those who come to own a pharmacy can be daunted by the nitty-gritty of running their business – something that isn’t covered in their MPharm degree. 

This is all but universal, says Sanjay Patel, director of the consultancy business Innovate Pharma Services. “All my clients – most pharmacists I meet – haven’t had any structured learning on a number of matters that are important to running a good business,” he says.

“This can include finances, IT, running a complex spreadsheet, marketing and project management – all things you will need if you’re going to be a senior executive or director in any business.” Many will have a “limited amount” of HR training, he acknowledges. 

“Directors have varying levels of skill base,” Patel tells P3pharmacy. “Some may have started out as a locum then gone on to buy one pharmacy, then another, without receiving any formal leadership training. I work with pharmacies all across the country, and all have different needs.”

Innovate Pharma Services’ clients include single-branch independents, smaller groups (three to five branches) and mid-sized ones (eight to 16).

Patel has also worked with large organisations comprising “several hundred” pharmacies in the past. 

Are there any common themes when it comes to the advice his clients need? “They’ll come to me for a range of reasons,” says Patel. “Setting up services, improving margin and managing people issues are the three big ones.”

Carrying out research for a new client, he typically finds there will be some things they’ve done really well and others “they haven’t grasped”. “Usually,” he says, “I can benchmark quite effectively. I can look at any pharmacy and say ‘you’re doing this, you could be doing this and achieve the following results’.

“I benchmark against what the potential of that pharmacy in that area is. Take a particular service like the NMS – there may be loads of pharmacies in the area that are doing really poorly on it. That doesn’t mean it’s a tough area; it just means that none of these pharmacies have been taught how to do NMS properly. Every pharmacy can do extremely well at it.” 

Deep analysis

Patel outlines his approach with a new client: “I sit down with them and spend some time seeking to understand their business in detail; what’s working for them, what their challenges are. Then I do a deep financial analysis, going over payments for the last 12 months.”

It’s crucial to iron out any people issues, he says, referring to both staff members and customers, as well as competitor pharmacies in the area. 

“We’ll look at a whole raft of things, always starting with people first – who the leaders and teams are, and their individual capabilities.”

Next comes things like governance, operational standards and – crucially – keeping a handle on finances. “We’ll often find a lot of financial holes that need plugging,” says Patel. “Over the last eight years, I’ve stopped clients losing over £2 million, both through recovering money from the NHS Business Services Authority and preventing losses in the first place. I rarely find an NHS payment statement review where there are no opportunities.”

After helping the pharmacy get its house in order, he then looks at its service offering and how to drive prescription loyalty. Of the latter, he says it’s about seeing it from a patient’s perspective: “They want to be able to come into your pharmacy and collect their prescription with good care and a speedy service. They need to know they can always get that.”

“I’ll look at how they’re engaging with their local surgery, connecting with their customers and managing repeats. Just offering a great service and setting it up correctly will lead to good loyalty.”

It’s crucial to plug into the pharmacy’s data, Patel advises. “We measure on a regular, weekly basis – are they adding to their patient base? Often people don’t know how many patients they add in; a lot of clients only look at their figures monthly.”

Get services right 

Patel tells clients to nail down NHS and local services before focusing on private ones like travel health or ear wax microsuction. “Get the fundamentals right,” he says. “Why set up a private service when you haven’t maximised the NHS ones? You have to get them nailed first; that’s a more logical way of working for me. NHS services are usually much simpler to deliver, too. 

“Often, I find that teams have the service level agreement and the SOP, but they’ve never had the training on operating it in an efficient way, using the skill mix correctly. I’ll put systems in place so we can monitor and grow that, and usually after three to six months, all our clients are upper quartile in terms of their performance nationally.”

What does he think of Pharmacy First? “The devil will be in the detail,” he says. “If done correctly, it’s great for patients. It would also free up GPs’ capacity and allow pharmacists to use their clinical skills and develop a broader range of services. But the numbers are quite tiny. I think they’re looking to save 10 million appointments a year – when you divide that up by the number of pharmacies, that’s around three per day per pharmacy.

“We should be a lot more ambitious than that. It’s about £30k per pharmacy over two years, or one and a half by the time it’s implemented, but pharmacies need immediate funding to help cover all the cost increases they have sustained. 

“How much of the £30k is going to get used up in the cost of delivering the service; how much profit will be left over? I’m sure a handful of pharmacies will do really well out of it, but it’s not a massive game changer in the sector." 

Equally, it’s important not to pin the pharmacy’s hopes on a change of heart from the Treasury, he says. “Contractors need to look at what’s in their control in their own business and how they can sharpen things up. It’s a mistake to rely on someone coming up with more funding.”

General practice colleagues

Patel has previously said that forging a strong relationship with your local surgery can be worth tens of thousands of pounds to the pharmacy each year. He tells P3pharmacy that this comes from making sure the pharmacy engages with the practice on the NMS, CPCS, hypertension checks and other services: “You won’t achieve the best results if you don’t work with the surgery, and it will only be more important when Pharmacy First launches this winter.”

Are surgeries often not aware of the services available? “You get a variation,” says Patel. “Some are aware but don’t see the benefit to them. Pharmacies need to be able to explain this to surgeries. Take CPCS, for example. We say we want more referrals, but don’t explain to them that it’s all about releasing capacity in surgeries. Also, they don’t always have confidence in the clinical skills of the pharmacist. We need to spend more time with them and help them understand the skills we have.”

The 2023-24 Quality Outcomes Framework (QOF) guidance offers GP surgeries points for the effective management of hypertension patients. Patel suggests approaching surgeries and explaining how the community pharmacy hypertension check service can link in with this. “Doctors aren’t going to automatically start doing stuff you want them to do,” he says. “You’ve got to think first, what’s important to them? Understand their payment structure and the activity they need to do, and how we can fit behind that.” 

A bit of empathy helps, too. “It’s tough for us in pharmacy,” says Patel, “but it’s equally tough for GPs. They’re stretched; they’ve got a lot of bureaucracy and resourcing issues.”

He says contractors shouldn’t just set their sights on partners and doctors, but instead be prepared to build relationships with any and all working in GP-land. “You might have 20-30 people working there; they all have a role and they all speak to your patients. You want to talk to the person who manages repeats and the person responsible for appointments, as well as front desk and practice managers.” 

Background

Patel’s career in pharmacy began as a Saturday boy in Boots while he was at university in London. He then did his pre-reg year with the multiple, and upon qualifying, quickly became a branch manager. There followed a series of promotions over the next 10 years that saw him managing progressively larger teams at different branches, before he moved into regional leadership positions.

In his last role at Boots, Patel was promoted to head of pharmacy for the Central England, Wales & Northern Ireland division, overseeing almost 800 branches. He would meet with regional pharmacy managers, looking at their plans and exploring opportunities like services, new stores and relocations. “I was effectively on the pharmacy board for Boots,” he recalls.

When the high street behemoth merged with Walgreens, he “took the opportunity to voluntarily leave and start my own consulting business – and it’s just grown from that”.

“The final piece that’s helped me is that six years ago, I bought my own pharmacy in West London in partnership with an old colleague,” explains Patel. “He now runs the pharmacy on a day-to-day basis, and together we organise all the finance and strategic stuff.

“Sometimes ideas that I want to trial with clients, I’ll try in our pharmacy first. Over the last few years, I’ve bought two more pharmacies as well. Then my wife Vaishali, who’s an accountant, joined the consultancy business to help with the data analytics and financials of running a small business. That frees me up to spend more time helping clients.” 

www.Innovatepharmaservices.com