Working with care homes will have advantages and disadvantages for independent pharmacies. Where does the balance now lie from a business perspective for the sector?

By contracting out services on a national level, care homes are limiting the opportunity for local independent pharmacies to get involved. But is it still worth the struggle to get care home business? Market dynamics can present a barrier to pharmacies that want to provide services to care homes, but it can also be a problem when things go wrong.

In 2011, care home operator Southern Cross ran into cash flow problems, which led to the closure of its 750 care homes. And last year, Pharmacy Plus, which supplied hundreds of residential care home across the UK, went out of business with the loss of 240 jobs. It had a 7 per cent market share and £25 million turnover. Local pharmacies were left to pick up the pieces.

Get involved

“There is profit to be made from care homes, but it depends on the number of staff you need to recruit to do the work. Clearly, MDS [monitored dosage system] homes are more onerous in this respect,” says a pharmacist contractor (AP), who wants to remain anonymous.

“If you are a relatively quiet pharmacy, a care home can be a good add-on without much, if any, staff outlay. If the pharmacy is already at capacity, or near it, the care home will take it to tipping point and sometimes beyond, leading to staff demoralisation. New staff should be put in at the outset.”

Mimi Lau, Numark’s director of pharmacy services, concedes that working with care homes isn’t suitable for every community pharmacy. “It requires investment, space and time,” she says.

“However, for those pharmacies that can commit the necessary resource, it can be lucrative and rewarding. “Some independent pharmacies may choose not to undertake this work because of workload or small margins, but if you are considering taking a care home on, make sure that you do your homework and go into it with your eyes open,” she suggests.

Not everyone thinks it is a good idea, however. “I don’t believe care homes are worth chasing in community pharmacy,” says pharmacist Allan Shields, who secured a care home contract in a previous role.

“It’s a sector that badly needs good pharmacy support. It’s a geriatric polypharmacy patient group in a heavily inspected setting. This results in the constant need for advice, support, training and visits. “However, pharmacies have now devalued themselves with the offer of a free service, drug trolleys, training, visits, deliveries, compliance packs and CD registers with our only source of revenue being the dispensing fees (and in some areas a small health board payment).

“This may have been manageable with the previous higher dispensing fees, but with this reduction brings more pressure. I can understand the need for more items and figures, because on paper it shows greater value to the business but the staffing costs and time, along with the other factors, make it very difficult,” he concludes.

Home secured

If you do decide to go ahead, it is vital to consider the implications of increased prescription volumes on premises, staff, and the impact on the rest of the business. “Don’t be fooled into thinking greater volumes mean more profit,” advises Ms Lau.

“You need to understand the market, get the right financial model and develop a service proposition that meets a home’s objectives. By building a trusting and informative relationship with the care home, including regular meetings and audits, you will minimise the risk of the home being enticed away to competitors.”

Our anonymous contractor AP agrees. “An independent can easily secure such business from a multiple, especially if the home is local, because the level of service offered by independents can be tailored to the individual needs of the home, whereas with multiples the scripts are usually dispensed from a dispensing hub,” he says.

So, if you do manage to secure a care home, what about the provision of MDS? “MDS isn’t worth the hassle,” feels AP.

“It’s expensive, because it eats away at your profit, not to mention the initial outlays of buying trolleys and ancillary equipment, which the care home will expect the pharmacy to pay for. The care homes see this as the cost of doing business; business that they could take somewhere else at the drop of a hat, so the pressure is on the contractor from the start.”

Maintaining the business relationship

The key to a smooth relationship is communication and managing expectations. “Managing the differences between their expectations of service, and the service that can safely be offered without allowing your core business to suffer is essential,” says AP. “However, in some pharmacies, the care homes are the core business, and all stops are pulled out to service their demands.”

So, how do you keep the business? “By giving them what they want, pure and simple,” says AP. “But sometimes this is not enough because the home may be subject to a buyout by a company which has a national contract with a particular pharmacy multiple. In this case it is taken out of the contractor’s hands.”

NICE advice for managing medicines

Last year the National Institute for Health and Care Excellence (NICE) produced recommendations for good practice on the systems and processes for managing medicines in care homes.1

“Implementation of these guidelines, which includes the care home having a medicines policy that is reviewed regularly, accurate and up-to-date records and medication reviews for each resident, is more than challenging,” says Ms Lau. “As a consequence, many care homes will need greater input from pharmacists to provide the level of support around medicines that NICE recommends”.

She believes this is a “great opportunity” for independents to reach out to care homes and build a “compelling case to improve medicines management”. Despite his reservations, Mr Shields found working with a care home satisfying. “I enjoyed the challenge that a care home brought: the

need to investigate specific queries, discussing these with the Care Inspectorate, advising on dosing schedules that can work alongside rounds, training staff members, helping develop robust medicines-related procedures and having a good rapport with all members of the home result in the feeling of worth,” he says. Nevertheless, he echoes what AP feels. “The pressure of delivering this with minimal financial support can have a detrimental effect on pharmacy morale.”

Home run

Receiving pharmacy services locally makes good business sense for care homes because it can lead to improved care and quality of life for residents, reduced hospital admissions, an enhanced reputation for the home and peace of mind for its staff.

“The relationship that you and your staff can have with the care home at a local level will give you a competitive advantage over some of the multiples who manage the home at arm’s length,” says Ms Lau. “Play to this strength.”

However, Mr Shields urges caution. “In my opinion, care homes are generally seen as overdemanding and unrelenting,” he says. “But I don’t blame them. If I were offered a free allsinging, all-dancing service, why would I expect any less? The difficulty now is showing that a good service with support is worth paying for.”


  1. Managing medicines in care homes


Resources for care home provision

A care home toolkit for community pharmacy, produced by Numark, includes audit tools, templates for service level agreements, and advice on structuring visits and tips on relationship management. In addition, a ‘care home calculator’ helps pharmacies to model care home business scenarios. Numark also offers a pack to support pharmacies delivering medicines management training to care homes, including an assessment process for care home staff to demonstrate competence.

On paper it shows greater value to the business, but the staffing costs and time, along with the other factors, make it very difficult


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