Title Goes Here - ASHP Media€¦ · Web viewINSTITUTION A Development has agreed to help fund our project at $7 per square foot as part of tenant improvement. Thus, this will decrease

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INSTITUTION A

Business Plan for a Mail Order Pharmacy

Prepared <Date>


TABLE OF CONTENTS

TABLE OF CONTENTS...............................................................................................................2

Executive Summary.................................................................................................................3

Program Description................................................................................................................4

Market Analysis.......................................................................................................................5

Competitor Analysis...................................................................................................................5

Program Start-Up....................................................................................................................5

Capital Requirements.................................................................................................................5Other Start-Up Expenses/Requirements....................................................................................5Operating Capital........................................................................................................................6Staffing RequirementS................................................................................................................6Regulatory and License Requirements.......................................................................................7Contractual Arrangements.........................................................................................................7

Project Time Frame.................................................................................................................7

Positioning (Niches/Differentiation)...........................................................................................9Pricing.........................................................................................................................................9

Management and Organization...............................................................................................9

Operations..............................................................................................................................9

Equipment and Technology........................................................................................................9Staff and Training Requirements..............................................................................................10

Evaluation.............................................................................................................................10

Data Management/Continuous Quality Improvement.............................................................10


Executive Summary

Proposal is made to put a mail order pharmacy, herein called INSTITUION A Mail Order Pharmacy, in a 2,546 square foot space at the Location A.

A capital investment of approximately $262,200 would be required be for initial tenant improvement, phone systems, and equipment costs prior to opening. An additional $222,530 in non-capital start-up expenses to cover licensure requirements, initial inventory, mailing supplies, workstations, communication and minor equipment will be required at opening. INSTITUTION A Development has agreed to help fund our project at $7 per square foot as part of tenant improvement. Thus, this will decrease our start-up expenses by $17,822.

INSTITUTION A Mail Order Pharmacy business model is to be a primary “Central Fill” facility for all INSTITUTION A retail locations. We will transition approximately 35% of current business, including mailing for INSTITUTION A Specialty Pharmacy business, to this location to alleviate space constraints and challenging access to our pharmacies. Utilizing INSTITUTION A Mail Order Pharmacy as a central fill facility will allow retail pharmacy staff to focus service to our new patients which, in turn, will bring additional refill business to this facility. Management of the INSTITUTION A Mail Order Pharmacy would be structured and operated as a “closed” pharmacy. Our goals are to maximize operational efficiency, decrease pharmaceutical expenses, and increase revenue.

In conjunction with the INSTITUTION A benefits office, the Pharmacy is participating in the revision of the employee prescription benefit in order to potentially increase the capture of prescriptions filled for employees from the current 18%. It is anticipated that the pharmacy will capture 50% of employee prescriptions generated annually. The capture of 50% will represent a volume of 75,000 prescriptions annually.

We anticipate additional mail order volume from over-the-counter sales and specialty pharmacy services.

We would like to complete this project by December 20XX to coordinate with the annual change in employee benefits. This space is being designed with a view to future expansion as other opportunities present.

Since the plan is to transition refill business to mail order from our current retail locations, current pharmacy staff will be relocated to the facility to meets its demand. On start up, we will hire and train 1 FTE for customer service and mailing/delivery services, 1 FTE Computer User Support Analyst for computer support, and 1 FTE for Pharmacy Operations Manager. We will increase additional staff as our volume increases.


Program Description

The INSTITUTION A Mail Order Pharmacy will be located in XXX Building. The 2,546 square foot pharmacy will reside in space available on the first floor near loading dock area.

For the purposes of this business plan, INSTITUTION A Mail Order Pharmacy would operate Monday through Friday from 8:00AM to 5:00PM (excluding holidays).

Our current retail locations dispense of 60% new prescriptions and 40% refill prescriptions. Statistically, new prescriptions tend to require substantially longer turn-around time to process. In order to provide a highly satisfied “first time” experience with INSTITUTION A retail locations, transitioning their refill business to a central fill facility will increase patient satisfaction; thus, increase our refill prescriptions rate.

Provision of prescription services to INSTITUTION A employees are a part of the current medical insurance benefit. Potential savings to the organization can be derived if INSTITUTION A is capable of providing most of the all these services from one of its retail locations.

Savings can be maximized by providing these services from a mail order facility where automation and volume purchasing can be implemented. Mail order facilities are typically operated as “closed” pharmacies. This eliminates distraction of on demand services and allows processes to be streamlined and automated more easily. These are typically high volume operations.

Because the facility will be operated by INSTITUTION S, it will qualify as a 340B ship to site, allowing us to take advantage of these lower priced contracts. We can use the same automation resources as are used in our other retail pharmacies, which will minimize the need for interface build. We can use the INSTITUTION A network as a platform, which will permit operation as an integrated facility from the patient perspective.

Additionally, the mail order pharmacy would provide inventory of non-prescription items (OTC drugs) offer at volume-based discounted price savings.

Market AnalysisCOMPETITOR ANALYSIS


Pharmacy NamePrescription Number YTD

(#)XXX Mail Order (INSTITUTION A employees) 14,088 Current INSTITUTION A Mail Order Pharmacy 15,600YYY Mail Order Pharmacy (additional employees) 270,000Current INSTITUTION A Outpatient Pharmacy Refill Business 36,612

Program Start-UpCAPITAL REQUIREMENTS

Start-up Capital Expenses - Mail Order Shelving $90,000 Security $30,000Construction/ Plan design $70,000 Refrigerators (2) $10,000 Safe $3,500 INSTITUTION A Project Management $15,000Project Contingency (20% per INSTITUTION A Facilities) $43,700 TOTAL START-UP EXPENSES $262,200

OTHER START-UP EXPENSES/REQUIREMENTS

Stationery/Office Supplies $2,500 Centricity Software licensing $60,000 XXX and YYY Data Conversion $1,500Licenses $2,000 Freezer $500Printer $6,000 Phones (10) $2,000 Chairs/Tables $1,000 Workstations (8) $12,000 Faxes (2) $800 Moving $5,000 Initial Inventory $100,000 Cash register/credit card machine $9,000 Project Contingency (10% per INSTITUTION A Facilities) $20,230


TOTAL OTHER START-UP EXPENSES $222,530

OPERATING CAPITAL

Location A will require financial capital resources in order to convert from a non-healthcare facility to a healthcare facility to maintain standards and compliance with The Joint Commission, Board of Pharmacy, Drug Enforcement Agency, and other regulatory agencies.

STAFFING REQUIREMENTS

In order to keep up with the projected volume, we will recruit 1 FTE Administrative Assistant trained in mail order pharmacy operations. The following staffing model is necessary for providing INSTITUTION A employees prescriptions and expansion of other services such as specialty pharmacy, Medication Therapy Management (MTM), DUR Outcome, compounding, and OTC sales:

Pharmacy Operations Manager (1) – This manager will be responsible for the responsible for the overall performance of the operations. This manager will report to the assistant director.

Pharmacist-In-Charge/Lead Pharmacist (1) – This pharmacist will be responsible for the overall aspect of pharmacy operations in terms of regulatory standards & compliance, workflow efficiency, dispensing, script/revenue growth initiatives, scheduling, formulary management, inventory control, and patient/employee satisfaction.

Technicians (2) – These technicians duties include but not limited to supporting the pharmacists, data entry, mailings, inventory control, patients/providers communications, and patient/employee satisfaction.

Administrative Assistant (1) – Duties include but not limited to supporting the pharmacists, mailings, inventory control, patients/providers communications, patient/employee satisfaction.

Computer User Support Analyst 3 (1) – The CUSA will be responsible for maintaining the information systems and computer operations for the mail order facility and also support the other retail pharmacy operations.

Pharmacists-In-Charge and two technicians are currently INSTITUTION A retail staff who will be transition over to mail order.

REGULATORY AND LICENSE REQUIREMENTS

Board of Pharmacy as a Mail Order facility Licensing in other states that require licensure for mailing City licensing for floor plan approval Drug Enforcement Agency


OPA – Office of Pharmacy Affairs (340b registration) DME Certification

CONTRACTUAL ARRANGEMENTS

XXX Licensing Wholesale Drug Distribution Shelving Hardware Security System Agreement Third Party Contracts (Medicare, Medicaid, Private Payors) Pharmacy Benefit Manager NABP/NPI Enrollment Office of Pharmacy Affairs for 340B Discounted Drug Pricing Phone system Third Party Reconciliation System

Project Time Frame

Phase 1 – Plan approval and Startup (end of July 20XX)

Business Plan Approval

Capital Investment Approval

Tenant Improvement Plan Design

Recruit & Hire Pharmacy Personnel/Pharmacy Operation Manager

Pharmacy Benefit Managers Selection

Phase 2 – Tenant Improvement, Move-In (July - September 2009)

Secure Location

Initiate Tenant Improvement Build-out

Install Shelving


Install Security System

Complete purchase orders for equipment/technology

Initiate Direct Mailer Marketing campaign

Order inventory and stock Prescription and OTC

Complete and Submit Board of Pharmacy Application

Complete and Submit DEA Application

Complete and Submit NABP Application

Complete and Submit with OPA for 340B Discounted Drug Pricing

Phase 3 – Building Business / Measuring Results (September - December 20XX)

Monitor & evaluate pharmacy financial summary compared to plan

Continue advertising attached to employee check stubs

Continual Business development and expansion of specialty pharmacy business

Patients/Employees Satisfaction Index

Marketing Plan

POSITIONING (NICHES/DIFFERENTIATION)

The major part of our marketing strategy is to ensure that patients will recognize INSTITUTION A pharmacy as a place of convenience despite challenging access to pharmacy. Current retail staff will focus on service to new patients while the mail order pharmacy staff will market a mail order option for prescriptions and the over-the-counter medications for patient convenience.

Pharmacy leadership team is working closely with INSTITUTION A benefit department to market/introduce INSTITUTION A Mail Order Pharmacy as an option to employees via Open Enrollment Materials.


PRICING

Pricing is based on AWP (Average Wholesale Price) not acquisition cost, and will be dependent on third party contracting arrangements.

Management and Organization

The full-time pharmacist will be registered as Pharmacist-In-Charge (PIC) in compliance with requirements by State Board of Pharmacy. The PIC shall be responsible for daily management and all regulatory compliance issues.

The Pharmacist-In-Charge shall report to the INSTITUTION A Pharmacy Operations Manager for mail order.

Pharmacy Operations Manager, reporting to assistant director will be oversee all aspects of pharmacy operations and will play a key role in business expansion.

OperationsEQUIPMENT AND TECHNOLOGY

The INSTITUTION A Mail Order Pharmacy will use the same prescription software as is currently used at the other INSTITUTION A outpatient pharmacies.

Eight INSTITUTION A network computer terminals and towers would be required. Six printers could meet all printing needs.

Specialized phone system will increase pharmacy workflow by allowing our pharmacy staff to prioritize their work queue.

STAFF AND TRAINING REQUIREMENTS

Our staff will be trained in current dispensing systems, phone system, customer service, workflow efficiency, and mailing services.


EvaluationDATA MANAGEMENT/CONTINUOUS QUALITY IMPROVEMENT

(e.g. Inventory Control, Quality Assurance, Customer Satisfaction Index, Continuous Profit Driven Operations)

Inventory Control – Utilization 80/20 inventory utilization report on a monthly basis to track and monitor drug purchase history for inventory turns, generic usage, overstock, and outdate/recall returns for proper credits, and updating/creating pharmacy formulary system.

Quality Assurance (QA) – Patient and medication safety will be our primary focus to positively impact patient outcome and quality of life. Measures to be determined.

Customer Satisfaction Index (CSI) – Evaluation of pharmacy monthly CSI survey will positively impact workflow efficiency, turnaround time (TAT), and medication delivery.

Continuous Profit Driven Operations – Evaluation and interpretation pharmacy monthly financial summary and data collected from our PBM will drive pharmacy daily operations in regards to inventory control, quality assurance, and patient/employee satisfaction.

Documents

Title Goes Here - ASHP Media€¦ · Web viewINSTITUTION A Development has agreed to help fund our project at $7 per square foot as part of tenant improvement. Thus, this will decrease