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Organizational Development

Are your pharmacy departments optimized for cost savings and overhead reduction? An organizational development strategy can help you to install invaluable programs to realize operational optimization and cost reductions in the following areas:

  • Staff Orientation / Training (decreased turnover)

  • Medication Billing / Error Prevention Techniques

  • Complaints / Customer Service (complaints cost money!)

  • Cold Chain Distribution (maintaining temperature integrity while shipping prescriptions to patients)

  • Orientation / Training

    • Streamline operations and add new programs that create value for the business. 

    • The average cost of replacing an entry level employee is about 30-50% of the salary, meaning that a pharmacy technician making $12 an hour would equal a cost of $7,500 to $12,500 to replace.

    • 64% of retail new hires (pharmacy technicians included) leave within their first year, 40% within 6 months.

    • HR Magazine says companies that invest in training can see an average of 24% more profit due to employee commitment, productivity and accuracy.

    • A study done by ATD says companies that offer thorough training had two times the amount of income per employee.

    • Many studies have proven that effectively training new hires will decrease the turnover rate of the organization.

  • Medication Error / Billing Error Prevention

    • The overall dispensing accuracy rate of any community pharmacy is 98.3% without a continuous quality improvement (CQI) program in place.  A 98.3% accuracy rate may look pretty good, but let’s look at some numbers.

    • The average prescription mix of a pharmacy is 89% generic, 9% brand, and 2% specialty.

    • Average generic drug costs $26, average brand $308 and average specialty is a whopping $4373.  These are 2017 figures.

    • This means that a pharmacy that fills 100 scripts a day would see about 408 medication errors a year totalling $55,818 throughout the course of a year!

    • This number accounts for medication and billing errors, which are preventable.  This does not include costs associated with adverse events experienced by patients, which are not always preventable.

    • Med error reduction strategies is another program that a pharmacy would expect to implement in organizational development.

  • Complaints / Customer Service

    • 95% of customers share bad experiences with others, 54% share with 5 or more people, and 45% share their bad experience on social media

    • 88% of customers trust online reviews as much as they trust their friends (Consider how often you check online reviews when purchasing a product online)

    • A single negative online review costs a company an average loss of 30 customers!

    • By using the figures and drug costs from the last bullet point, we can calculate that losing 30 customers equates to $124,488 per year!

    • By analyzing the root cause of customer complaints using tools learned here, a pharmacy can avoid this extremely costly mistake.

  • Cold chain distribution channel

    • This term describes maintaining temperature controls and manufacturer stability recommendations while mailing prescriptions to patients’ homes.

    • Specialty prescriptions are more commonly shipped to the patient due to the nature of the disease state being treated.  For example, a multiple sclerosis patient may be wheelchair-bound and not as mobile as other patients, and may request his/her medication to be shipped to their mailbox to make it easier for the patient.  Specialty medications also require special handling requirements such as narrow temperature ranges. During hot summer months these prescriptions are easily damaged due to extreme temperatures. The same goes for cold winter months and snow storms.

    • Plain and simple.  With an average cost of $4,373 for one specialty prescription, having to replace just one of these per quarter would mean $17,492 a year.

    • It would be much cheaper to ensure your cold chain channel with programs recommended here.  Especially considering how completely avoidable this extra cost is.

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