industry news

 

The following article appeared in the May-June 2005
publication of Computer Talk for the Pharmacist.  

More Value Than Ever

While different pharmacists will offer different motivations for installing a point-of-sale (POS) system, one thing is very clear: Pharmacists of all kinds are  increasingly finding that an integrated POS is central to closing the loop on dispensing workflow by allowing them to track prescriptions from data entry through checkout. Not only this, but pharmacists are finding that POS offers a range of functions — including pricing, inventory and reporting, signature capture, general business management, and customer loyalty programs — that are fundamental to running their businesses properly. POS has so much to offer these days that you’ll find it in single-store independents with a big front-end business, in multistore pharmacies using central-site management, in specialty and apothecary pharmacies, and even in medical center outpatient pharmacies. It seems there isn’t anywhere that POS isn’t ready to go.

The Workflow Connection

One very exciting aspect of POS comes from its ability to integrate directly with the pharmacy management system. Though not every pharmacist initially sees integration as the main appeal of POS, many come around to see its benefits. Listening to a range of pharmacists will help you understand all the ways this integration creates a better, more efficient dispensing process.

Leonard Lynskey originally viewed his QS/1 POS as a way to handle retail sales better at Sachse Pharmacy in Rockwall, Texas. Over the four years the store has been open, Lynskey has had to deal with growing competition from chains. Having his pharmacy system and POS on the same database, with staff able to access register information from the pharmacy, has been one way to give him an edge, he says. For example, his pharmacists and technicians can view a patient’s charge balance when they begin to fill a prescription and make a decision about whether to fill if there’s a big balance due. 

Byrum Kelly’s pharmacy, the Prescription Shop in Hazen, Ark., is almost exclusively a prescription pharmacy, with his frontstore items limited to over-the-counter (OTC) medications. Kelly had his eye on POS for several years, with the aim of reducing paperwork. “We used to have to handwrite tickets on everything,” he explains. But while paper reduction was his original goal, he too has found that POS doesn’t stop there. Kelly now views his Emporos POS as part of his workflow. The two big benefits he points to are keeping staff informed and making patients happy. Here’s how he does that. Simply scanning the prescription bar code will bring every prescription that’s waiting for a specific patient up on the POS screen. For instance, if a patient has called in a prescription and then a doctor’s office calls in another for that same patient, the POS will show both as ready for pickup. Or if a prescription is on hold, the register staff will have this information for the patient. Kelly’s sure that patients are happy not to have to make a special return trip for an errant prescription.

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Integration Critical

But there are others who get into POS for the very reason that it can streamline their workflow. For David Lutz, who has been a QS/1 POS user for about three years at his full-service Rhoads Pharmacy in Hummelstown, Pa., integration with his pharmacy system was a key factor when choosing a POS. “I could easily put a system in that was designed exclusively for the front store,” he says. “But if you have the opportunity to integrate, it is foolish not to go with it.” Now, with a scan of the prescription bag bar code, his sales associates are capturing signatures and the prescription sale data at the POS and making this information available to his pharmacists behind the bench.

Marvin Fong, who runs Centurywood Medical Pharmacy, a professional pharmacy in Lynwood, Calif., was looking for just this ability to share information between the pharmacy and the front end when he put in his Emporos POS. He calls the two-way link he’s gotten “total integration.” When his staff enters prescription data in the pharmacy, appropriate parts of this information, such as patient name, prescription number, and a prescription’s pickup status are all immediately ready to be viewed on the POS system. “We don’t make the drug name or other information available, for privacy,” says Fong. “But we do have important basic information.”

This link can work to make a pharmacist’s life easier and to let the focus move from running a store to working with patients. Wayne Dawson, another professional pharmacy owner, opened Dawson’s Pharmacy in Goochland, Va., at the beginning of the year to create the environment he’d always wanted to work in: one focused solely on clinical pharmacy and healthcare.

Over the years, he’s seen owners working without POS who didn’t know where money was coming from or going to. So even without selling general merchandise, Dawson knew he needed POS to help handle the business side while he focused on the clinical. There was no question in his mind that the best way to make POS bear the burden was to have systems that integrate the pharmacy with checkout. He went with McKesson and got what he describes as a seamless link between front and back that allows him to track a prescription through checkout right from the pharmacy. He can also see where a prescription is in the dispensing queue from the POS. He can even access the same patient information from his POS, should he need to, that he can access by looking at his pharmacy system.

And as far as specialty pharmacies go, POS is also working well for Bruce Ball, who is in charge of three retail pharmacies on the campus of the Long Beach Memorial Medical Center in Long Beach, Calif. All three locations were using old manual cash registers when Ball decided to install the CAM Commerce POS across the board. Not only did he want to centralize accounting and wholesaler updates — a reasonable goal for a multisite operation — but he really wanted to integrate the POS with the pharmacy management systems as well. “The key,” he says, “is that integration helps you improve your workflow by letting you know more about where your prescriptions are and aren’t.”

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When to Install

The moment to make a choice for POS came for Steve Pertz at Bayboro Pharmacy in Bayboro, N.C., when he was moving into a new space six months ago. That’s when he took the opportunity to get rid of his old cash registers and add the Freedom Data Systems POS to his lineup. Just as with other pharmacists, Pertz’s main objective for adding POS was to create an integrated flow with his pharmacy system. Now, whenever a prescription is scanned at the POS, it moves from the “active” file to the “picked up” file. Each prescription checked out is stamped with time picked up, method of payment, and even the payer’s name. “Knowing for sure that a prescription has been picked up has come in handy a number of times,” he says.

The benefits of POS to workflow don’t stop with the ability to share information about a prescription between the pharmacy system and the POS. Moving patient signatures from paper to digital is also a big part of the solution pharmacists are seeking. Bill Thompson and his father, Bill Sr., have always had their work cut out for them at Thompson’s Pharmacy in Altoona, Pa. This location, the centerpiece of their  three-store group, takes up 25,000 square feet in a building that used to house a grocery store. What Thompson says he got with his CAM Commerce POS is a true interface to the pharmacy system. “I wanted to be able to be in the pharmacy and see if a prescription is checked out, what it was, and, specifically, to see the signature as well,” he says. Jim Harris, who describes his Medicine Shoppe in Abingdon, Va., as an apothecary pharmacy, also got started with his Retail Management Systems POS about a year ago for the signature capture features. The added burden of collecting HIPAA privacy notice acknowledgements was the final straw for him. Now he uses the POS as the entry point into his workflow for all signatures. When his staff scans at checkout, the POS system generates prompts for signatures for insurance, safety caps, and HIPAA, if it’s still needed.

Another benefit of integrated POS with signature capture is that you can make sure you only ask for the HIPAA signature once. For David Lutz, that’s a great thing. The connection between his POS and pharmacy system means that patient files are automatically flagged when a HIPAA signature is collected. Once it is done, the prompt for this particular signature no longer comes up at the POS. “This is the most efficient way to handle the requirement,” says Lutz. “And it helps us maintain a professional image when we don’t ask multiple times for a patient’s signature.” And when e-signature capture becomes part of the workflow through the POS, it offers some transaction management wrinkles that appeal a great deal to others as well.

Centurywood Medical Pharmacy’s Marvin Fong uses his POS as a signature collection and management tool, just as Harris does. In addition to using e-signatures to eliminate the need for paper records, Fong says there are also big advantages to using the connection he has between the POS and pharmacy system to make signatures a permanent part of the prescription transaction record. “We used to have paper logs in chronological order,” says Fong. “That takes a lot of manual labor and storage room and forces you to search for a signature by date.” Fong’s staff can now retrieve signatures for third-party audits, for example, at the touch of a button, and can sort and print signatures based on such criteria as time and date or patient. The next step, according to Fong, is to be able to sort by payer.

The benefits that come from using e-signatures to enhance the job POS already does of creating a detailed prescription-tracking record accrue not only to the pharmacy but to customers as well. For example, since Craig Tavis of Rochester Drug in Rochester, Wash., installed his Retail Management Solutions POS, he knows not only when, at what register, and by which staff member a prescription was checked out, but he knows who signed for it as well. By now we’ve seen that this is what you should expect from your POS. But he’ll also give you a good example of customer service. “People forget that they’ve picked up a prescription all the time,” says Tavis. “Pulling up the transaction record on the POS, complete with the signature, saves us a lot of trouble and helps us avoid ill will from our customers.”

Another interesting way to use the POS/e-signature connection comes from Sachse Pharmacy’s Leonard Lynskey. He uses his POS to manage the pharmacy’s shipping to patients all over Texas for the niche dialysis and mental health services he has developed. A prescription designated for mail delivery is scanned through the POS, a staff member signs off on it using e-signature capture, checks the “shipped” box, and it is ready to be picked up by UPS or FedEx.

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The Convenience Factor

As excited as pharmacists get about e-signature capture, it is only one of the functions that can be used with POS to smooth interaction with patients. Charge accounts and special memos are among the other convenience features pharmacists are using.

Offering charge accounts is a crucial service for many independent pharmacies, but managing them can be a bear. The move from paper charge slips to POS-based accounts has certainly meant a great deal less stress for Casey Greene. He and his father, David, run Greene Pharmacy, a full-service store in Steele, Mo. The Greenes offer all their customers charge accounts, but they also have significant business coming from the city government and from local correctional facilities. Of course, the easiest way to handle billing for these accounts, including for prescriptions, supplies, and even shipping, is through a house charge. But there’s another fact to consider:  Both the city and the correctional facilities require strict accountability for who charges what to their accounts. Greene’s ECR Software POS helps out a lot here. For example,
when a city employee has a prescription filled, she comes into Greene Pharmacy with a purchase order number provided by the city. Then, when the pharmacy staff pulls up the city’s account, the POS prompts for this P.O. number and the prescription number. With these linked to each other in the system, Greene has the information he needs to create detailed billing statements at the end of the month, a service that helps the city keep its books straight and keeps it coming back as a customer.

For another way to use POS to run charge accounts better, talk to Bayboro Pharmacy’s Steve Pertz. He adds notes to customer files that help cashiers make sure a charge goes on the right account. For example, if there are two John Smiths in your database, a note generated by the POS will prompt the cashier to verify the proper account with information such as address or date of birth.

Centurywood Medical Pharmacy’s Marvin Fong also takes advantage of the memo feature in his POS, though in his case not for charge accounts but rather to give special instructions, such as who is allowed to pick up a prescription. Similarly, Wayne Dawson, of Dawson’s Pharmacy, adds a variety of special notes that appear when a prescription is scanned at the POS. This means his staff can be reminded of such things as whether a patient has written bad checks or has a social services debit account that is only valid for certain kinds of products. Dawson can even note if a patient has a preference as simple as paper bags over plastic. “Tracking these kinds of details really puts your staff on a good service footing with patients,” Dawson says. “You always want to remember people’s preferences.”

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Customer Incentives

So making POS part of your workflow can help create a professional pharmacy environment managed by staff who are never at a loss for information about a prescription and who can provide top-notch service to your customers. These are excellent ways to bring customers to your store. But they are not the only ways POS lets you generate and cultivate business. Use it to run customer loyalty programs and watch the results.

Tony Saloum runs a central-site Freedom Data Systems POS to help manage eight retail locations and a warehouse for Klingensmiths Drug Stores in western Pennsylvania Klingensmiths customers are all able to have what the store calls its VIP loyalty card. As Saloum describes it, this means that customers get a flyer every three months with a coupon for accumulated points that can be used as store credit. A $3 coupon also goes out to customers who haven’t accumulated usable points yet. Of course, Klingensmiths doesn’t run this program on a hunch. Using centralized POS management, Saloum says, he can track each VIP customer’s response to the mailings. The results have been impressive. “People who haven’t bought at a store in three months come back with the coupon,” he says. POS also means that Saloum knows customers don’t just use up their coupon and leave when they visit. He has proof that they come to buy. How big of an improvement is this over what Klingensmiths used to do? Well, Saloum says the stores used to send out 75,000 to 100,000 mailers and get a small response. Now, using the data tracking capabilities of POS, Klingensmiths VIP card program has between 15,000 and 20,000 members who receive flyers with coupons, and yields a whopping 85% return rate. “We’re probably getting the same people we used to get with the mass mailers,” says Saloum. “But we are reaching them much more efficiently.” Saloum has even had customers ask when the flyers and coupons are coming out. “We’re very happy with how customers respond,” he says.

Loyalty cards aren’t the only customer incentive available from POS. It can also give you the ability to offer gift cards that work just like debit cards. For example, take Thompson Pharmacy’s Bill Thompson, who just started with gift cards last fall. The proof of the value to him was seeing sales during the holiday season up 30%, driven, in his estimation, by the gift cards.

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Managing the Business

Once you’ve used POS to get customers coming into your store, you will want to take advantage of some of the system’s management tools to make sure you have the right mix of products at the right prices, to keep customers coming back regularly.

This means using POS to streamline the management of pricing and inventory and using reports to base buying decisions on data rather than intuition. Pricing is a big plus for Bayboro Pharmacy’s Steve Pertz. Doing it the old way, Pertz had to input price changes manually. Now he gets a disk with new pricing in the mail once a week from his wholesaler. David Lutz doesn’t even have to wait for a disk to update pricing on his prescriptions and OTC medicines. This information is piped into his POS via the phone line at night, an increasingly common way to handle this task.

Whichever way you do it, getting this pricing information in a timely manner that is also accurate is of the utmost importance. As Bill Thompson points out, “You have to have solid information for making pricing decisions in today’s competitive environment.” This better pricing leads to better buying and a more profitable store. For example, Thompson creates sales reports that let him judge his gross margin percentage and track what was sold at a discount. Knowing what items he’s had to discount to sell means that he can match his buying for an item to his demand and look for a price from suppliers that will meet his profit margin goals. What it boils down to is using your POS tools to know that your sales data comes from properly priced items and then using that sales data to make informed buying decisions.

It is the same for Peggy Triscik of Curtis Pharmacy in Claysville, Pa., who certainly agrees about the importance of making buying decisions based on sales data. Triscik uses the ECR Software POS to create a report of items purchased from a supplier that gives the store’s buyer specific data on what is selling, how long it was on the shelf, when it sold, and if it sold at a discount price.

The pricing benefits of POS can scale up to work well for multistore locations as well. For example, Tony Saloum uses the Klingensmiths central management POS setup to make sure that prices are consistent across all stores. But as important as pricing is, Saloum will tell you that no matter how perfect it is, you can’t expect to compete with the chains and mass merchandisers on price alone. Customer service is the thing, he says. And one way to provide superior service is with careful inventory management. What does he mean by this? One of the things that Klingensmiths can do because of its centrally managed POS is to allow any store to search other sites’ stock for an item. This saves time spent on calling around and asking staff to walk the aisles looking for a product. Klingensmiths staff will then offer to ship the item over to a customer’s local store or put it on hold for pickup. That’s a customer service edge based on inventory management, according to Saloum.

You will also want to use POS inventory management capabilities to make sure you aren’t putting too much stock on the shelves, says   Rochester Drug’s Craig Tavis. He has carried a great variety of general merchandise over the years, even getting into yarn and hardware. Now that POS has allowed him to start doing a daily rolling inventory, he has been able to focus and specialize his stock based on firm data about what was selling and how profitable it was. Bill Thompson had a very sobering experience the first time he did inventory using his new POS. He found that his store actually had 40% more stock than he thought. Selling that inventory off has had definite financial benefits, reducing the money he has tied up on his shelves and using the improved focus to increase his OTC and general merchandise sales by 15% over the past nine months.

Of course, underpinning these pricing and inventory capabilities is the vast amount of information that a POS system can collect and organize far more efficiently and quickly than most people using paper records could ever hope for.

As we've seen when hearing about pricing and inventory, it is reports that distill and present the information pharmacists need to make decisions. Jonathan Brunswig, who bought the newest of his three stores, Scott City Pharmacy in Scott City, Kan., two years ago, offers one example. Jonathan and his wife, Jena, own the only pharmacy in the county and they have stocked it with a full suite of automation, including workflow, robotics, and the McKesson POS. Brunswig uses reports that track OTC sales to judge which departments to maintain and which to shrink. This is particularly important for seasonal items such as cough and cold. “You want the most shelf space dedicated to cough and cold when it is most in demand,” he says. “Historical sales reports let you fine-tune your inventory.”

Tony Saloum makes a point of reviewing historical information as well. For example, he’ll look back at a previous holiday period and use it to make ordering decisions and to judge how sales are progressing in the current year. Saloum can create reports by item, department, store, promotional event, and even companion sales. This means that he can see what sold on the same sales receipt as certain items featured or on special. This is the kind of detailed sales intelligence that the big chains and mass merchandisers use to carefully tailor their product mix to maximize profits.

Greene Pharmacy’s Casey Greene knows how important this information is and reviews department sales reports every day to catch problems before they get out of control. “If there’s an unusual sales pattern, I then look at an item report to see whether we are losing money and what the reasons might be,” he says. This doesn’t take him long and, in his opinion, there’s no reason to let a problem go undiscovered if you have the tools to catch it immediately. Reporting isn’t just about inventory and pricing, either. Whatever data your POS collects can probably be put into a report. You might be surprised what a little creativity in this area can yield.

For instance, you can use reporting to keep track of employee hours and even to fine-tune your store’s opening hours, according to Wayne Dawson and Peggy Triscik. Dawson has his employees clock in and out on the POS and enter a reason why they arrive or leave late. Then Dawson runs a report every week when he does payroll. “This is one of the little touches that makes the system shine,” he says. On the other hand, Triscik made a very worthwhile discovery about everyone’s work hours when she began reviewing daily sales reports to see which hours were busiest, in terms of both dollar and customer volume. The hard data on the store’s evening business showed her that Curtis Pharmacy could profitably close earlier than it had traditionally. Not only has this improved the pharmacy staff’s quality of life, but it has also reduced the overhead costs from those low-volume hours.

And as far as quality of life goes, Rochester Drug’s Craig Tavis has seen benefits at tax time, when the reporting and inventory features of POS combine to make it no big deal to create a “cost of goods sold” report for his accountant. POS has certainly made tax reporting easier for Marvin Fong as well. It used to take him an hour to produce a list of taxable sales. Now he just works with his POS to print out a quick report for his accountant. “This is more accurate and satisfies audit requirements, should they come up,” he says. Leonard Lynskey will agree with that. He has had just the experience that proves the value of POS and reporting when it comes to a tax audit. When the IRS asked for more information on his taxes, all he had to do was hand them a POS report that tracks all the revenue coming into the store, broken up into appropriate  categories. This report wasn’t created especially for the IRS, but is a standard part of Lynskey’s operations. He reviews the report regularly and uses it to make the journal entries in his accounting software. “POS takes the business management of the pharmacy from labor intensive to something that you can delegate,” Lynskey says. “I can spend only 30 minutes a day and hand clean reports off to my accountant.”

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Good Advice

By now your head might be spinning with all the things that POS can help you accomplish, and there are more features waiting to be put But you aren’t alone if you are feeling both excited and slightly overwhelmed by the prospect of POS.
More than a few of the pharmacists we talked to say that the key for their colleagues ready to take the next step is to make the commitment to POS and be willing to move into it piece by piece.

First of all, the size of your store should not deter you. The Prescription Shop’s Byrum Kelly encourages every pharmacist to look at POS. From Bill Thompson’s point of view, POS is a no-brainer because you have to have good computer systems to tell you what you are doing right and what you are doing wrong to do well in business. “You have got to know how many turns you are getting on your
cash to make sure you aren’t going to have cash flow problems,” he says. You can get this from POS. “I wouldn’t trade my POS for all the tea in China,” says Wayne Dawson. He has practiced pharmacy since 1977 and he credits POS as being a main reason he has been able to open and run the professional pharmacy of his dreams. It doesn’t matter to Dawson if you have one register or six. “With POS you can stop worrying and start handling your day-to-day business activities quickly and efficiently,” he says. Peggy Triscik also wholeheartedly endorses POS. “Get POS?” she asks. “Absolutely. It saves so much time.” But she’ll also advise you to make sure your staff gets the training it needs. “You go to training to find out about all the stuff your system can do that you don’t know about yet,” she says.

What she’s expressing is the learning curve inherent when adding not only a new system but what are likely some new business processes as well. Tony Saloum found that you have to expect to learn on your feet with POS, but he also says that this has actually been a positive for him. “There’s a world
of features in POS,” he says. “You can work your way into it without having to dive in fully on day one. That’s what makes it wonderful. You start using functionality as you need it.” CT

— by Will Lockwood, Senior Editor