Long Term Care

PHSI Identifies $3 Million in Opportunities to Improve Gross Margin

IndustryLong Term Care
ProblemA national long term care (LTC) provider was concerned that they were not maximizing third party margins based upon their prescription pricing and operational procedures. They needed outside expertise to provide an independent assessment of their pricing strategies and negotiating tactics with PBMs.
PHSI SolutionPHSI reviewed pharmacy operations and pricing as it pertained to the third party contracts. PHSI developed model contract language for the client to use to maximize reimbursement. We undertook an exhaustive claims analysis to identify opportunities to improve pharmacy margins through changes in procurement, pricing, and staff training. Functional specifications were developed for the client’s IT department to write software code to insert into their proprietary dispensing system to realize the margin opportunities and prevent losses.
ResultsPHSI identified over $3 million in opportunities to improve margins and the client has implemented PHSI’s recommendations to improve profitability.

Nursing Home Pharmacy’s Operations and Financials Dramatically Improved

IndustryLong Term Care
ProblemA privately held nursing home company with ten facilities opened a pharmacy to service their homes. Pharmacy management had failed to improve operating results and additional funding was required from the parent company.
PHSI SolutionPHSI worked on site with the chief operating officer and general manager to evaluate the functional areas, understand the workflow, assess the capabilities of the dispensing system, and create a turnaround plan. A perpetual inventory system was created using dispensing software and purchase information from the wholesaler. PHSI helped the company set specific goals for inventory turns that enabled the pharmacy to free up $300,000 in inventory while maintaining service levels. Operational reports were created to assist management in assigning duties to the staff. Meetings were held with the pharmacy billing staff, facility administrators, and directors of nursing to discuss outstanding prior authorization issues, requests from facilities for non-covered items, and cycle fill procedures. A standard set of operating processes and procedures were jointly developed and implemented to improve operating efficiency and profitability. Pharmacy workflow was revamped to increase dispensing efficiencies and better allocate resources to improve customer service.
ResultsOwnership regained control of the pharmacy operation with new business processes and internal controls that freed up over $400,000 tied to excess inventory, supplies, and staffing.