Using Kaizen To Streamline a Specialty Pharmacy
Client: Specialty Pharmacy
Industry: Retail
Service: Kaizen Event
Challenge:
This specialty pharmacy provides medication to patients with chronic or genetic illnesses, including Multiple Sclerosis, Rheumatoid Arthritis, Cancer, and Pulmonary Arterial Hypertension. Medication referrals for one of these serious, potentially fatal diseases were not being handled efficiently, leading to lost business because:
- Slow turnaround time meant referrals were lost to competitors
- Patients, physicians, and drug manufacturers were dissatisfied with the perceived inefficiency in obtaining important medication
- Employees were hobbled by an inefficient work structure
Solutions:
Guidon Performance Solutions helped the client:
- Streamline its physical workspaces for more efficient work flow
- Reduce the number of steps and hand-offs necessary to enroll new patients
- Educate employees to look for opportunities for continued improvement
Results:
An enthusiastic Kaizen team, led by Guidon consultants, helped the company improve in a number of ways:
- Active patients increased by 84 percent in nine months
- By the end of the year, revenue had increased by 94 percent
- Capture rate of new patient referrals increased by 10 percent
- Referral volume increased by 37 percent across all stores
- Maintained or improved stock levels
When doctors have chronically ill patients, they often refer them to one or more specialty pharmacies which provide medications to patients with long-term health issues–often shipping direct to patients’ homes. A patient’s information may be submitted to multiple pharmacies as a means of finding the quickest respondent, which most often becomes the pharmacy that retains the business. Considering that some referrals represent an average of $100,000 in annualized revenue, responding quickly is essential to capturing the business.
However, that wasn’t happening with one specialty pharmacy. Turnaround times were averaging 14 days, which is an eternity for a chronically ill patient seeking important medication. Patient and physician complaints were high and capture rates were low.
Guidon assembled a cross-functional team of managers, supervisors, nurses, pharmacists, and other non-operational staff and conducted a Kaizen event to find opportunities to streamline the process and address the challenges the company was facing. As the team delved into these challenges, they found staff didn’t have access to information technology that would increase their efficiency, referrals weren’t being closely tracked through the process, and standardization was nonexistent. All of these added up to an opaque system where it was challenging to find out where the referral was in the process. These factors were leading to frustration on the part of staff, physicians, and patients.
With each new challenge came ideas for improvement, however. With the involvement of staff-level associates to ensure understanding of the processes, a number of improvements were made, including:
- Development of standardized work for clinical and non-clinical staff
- Introduction of work-in-progress protocols to signify when resources needed to be adjusted to meet demand
- Use of visual tools to monitor the referral’s process to conclusion
- Streamlining of approval and processing steps
- Reconfiguration of work space for greater efficiency
While it was initially difficult for the team to embrace change, the dynamic nature of the Kaizen event and the multiple improvements identified captured their enthusiasm. When it was time to put the improvements into action–changing the way orders were processed and moving physical workspaces to be more efficient–they had a greater level of buy-in.
As a result of these improvements, the team was able to reduce handoffs from 44 to four and reduce steps from 151 to 40. Mean lead time plummeted from 14.35 to 6.22 days. The average turnaround time for processing dropped from 11.67 to 5.25 days. This doubled the volume of referrals retained and resulted in a 56 percent decrease in cost-per-referral. As of June 2009, the pharmacy has doubled the number of patients serviced at the time of the Kaizen event–a multi-million dollar improvement.
Related Links
Guidon Business Process Management Services
Retail Industry Solutions
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