The Future of Retail Pharmacy: An Interview with Eric Graf

February 2016, Vol 4, No 2 - Inside Pharmacy

In a recent interview with Inside Patient Care, Eric Graf, President and Chief Executive Officer of Ritzman Pharmacy, discussed what the pharmacy of the future looks like, as well as trends in community pharmacy.

What is your background?

A: I have been with Ritzman Pharmacies, Inc. for almost 29 years. Ritzman was founded in 1950 in Wadsworth, OH. In 2015, we celebrated our 65th anniversary. Forrest Ritzman is our original founder; 5 of his 6 sons became pharmacists, and his 2 daughters became nurses.

In 1985, Mr Ritzman’s 5 brothers and 1 other partner—Larry Fligor—brought 4 corporations together to form what is currently known as Ritzman Pharmacies, Inc. I started working there in the summer of 1986, during my master’s residency program, and they hired me in 1987 after I completed my degree. They hired me at a time when they really had only accounts payable as the central operation. Everything else was done at the store level, as it had been before they became incorporated.

I had the opportunity to build out the corporate office, bringing in accounts receivable, third-party and store charges, centralization of payrolls, timekeeping functions, and, during the next couple of years, moved accounting functions in-house. We did all of our own general ledger preparation, etc. It was a privilege to be part of that process.

Eventually, I became Vice President of Administration. In 1989, we formed a joint venture with Summa Health System, a large, local hospitals health system in Akron, OH, and opened an outpatient pharmacy and home infusion pharmacy. I became the manager of that joint venture, in addition to the corporate duties that I already had. That really took me out of the stores on a full-time basis, whereas, initially, I spent about half of my time as a dispensing pharmacist. I had these responsibilities for approximately 6 to 8 years, and then became the Chief Operating Officer. In 1999, I became President and Chief Executive Officer of Ritzman Pharmacies, Inc. I have been in that role for approximately 16 years now. During that span of more than 10 years, we grew from the 4 locations we originally had; we bought approximately 6 to 7 pharmacies that we internalized, and then opened another 6 to 7. Altogether, we had 8 to 10 pharmacies from late 1990 through 2010. In 2011, we acquired 11 Buehler’s Fresh Foods Pharmacies, and essentially doubled in size. Two years later, we acquired 5 Mast Drug Pharmacies, resulting in a total of 25 pharmacies.

In addition to the community pharmacy practices, we have another pharmacy business that we call our Med-Dose Services, which is our compliance adherence packaging that is exclusively focused on people in their home. We started this compliance packaging program with our existing customer base, including high medication users, and people who we knew were taking their medications out of their bottles, and trying to put them in containers to determine whether they had taken their Monday or Tuesday dose, and so on and so forth. We use TCGRx’s technology to dispense those multidose packages; it’s a separate business, and has been a huge growth opportunity for us.

We have become a niche provider that’s not an open pharmacy. We do everything as a closed-door pharmacy in the sense that no patients visit there, because we deliver or mail almost everything directly to their homes. That business venture has really grown, helping a lot of healthcare practitioners, social services, discharge planners, and people who are referring patients to us for this service.

How are pharmacies transforming to become healthcare delivery organizations?

A: We are a significant driving point for this in the Accountable Care Act, and in increasing the number of insured lives, as well as driving more patients away from hospitals and specialists, and focusing on primary care. We all know that the pharmacy has always been the most accessible primary care provider.

All too often, unfortunately, pharmacies have become known only as dispensers of medication. It’s not necessarily the thought process as a pharmacist, or as a healthcare provider. That’s a huge opportunity. We have definitely, as a profession, and as an industry, taken steps that way; the integration of nurse practitioners and quick care clinics has been a big step in that direction. Ritzman Pharmacies, Inc. had a clinic approximately 8 years ago, but, unfortunately, we have not been able to partner with a strong provider to sustain that. We do, however, have clinics inside our grocery store locations. There are opportunities for nurse practitioners to interact with pharmacists and help manage patient care in a very timely way to provide primary care to our patients.

Pharmacists have an opportunity to grow as healthcare providers. We administer immunizations, for example; however, the challenge is that the physical structure or workflow of current healthcare organizations is not set up to accommodate pharmacists. Although some organizations are working to change that, many times I have seen that pharmacists are not included in locations promoted as new healthcare centers.

What is “the pharmacy of the future”?

A: In May, the Northeast Ohio Medical University College of Pharmacy, Roots­town, OH, came to Ritzman and said, “We would like to build a pharmacy of the future. Here are the characteristics that we feel are necessary in that offering.”

They wanted patients to be received by a concierge. When patients enter the pharmacy door, no matter what they are looking for, they wanted them to be greeted and engaged by somebody interested in health and wellness. For instance, are they here to talk about supplements or nutrition? Are they here to talk about how to use their activity tracker? Are they here to have a prescription filled, or to pick up a prescription? The concierge would guide them to the right place within the pharmacy. For prescriptions, immunizations, or other services provided by the pharmacist, the patient would be directed to a pharmacist located on the pharmacy retail floor. The pharmacy itself—where the dispensing area is located and the technician is working—would not be visible to the patient. In this way, the pharmacist would be the centerpiece—the visible healthcare professional within the organization—and interact with patients.

When the Northeast Ohio Medical University College of Pharmacy described that model, we smiled and laughed at each other before telling them, “This was really encouraging because this is the exact model that Ritzman Pharmacies has been putting together.” We were in our internal prelaunch phase at that point in May. This was a huge opportunity, because the experience they described is a large part of our rebranding and remodeling strategy, to build the pharmacy of the future.

In fact, we go beyond calling a pharmacy. A store is where you buy things, a practice includes medicine, physician, chiropractic, and physical therapy practices, etc. We need to have the practice of pharmacy, not a reference to a physical store.

How will university students interact with Ritzman Pharmacies?

A: There is a huge opportunity for pharmacy students to learn, support, and understand the different levels of pharmacy practice.

Students will be scheduled at the pharmacy practice on a very formal and consistent basis. We will have a full-time faculty member in the practice to support the student’s experience and rotation. Part of the functionality will be in simply taking the education for patients to a higher level. For instance, at the counter where pharmacists have their interaction with patients, students will have the opportunity to be there and learn from those more detailed and involved encounters, compared with what a pharmacist would typically provide in a retail pharmacy. This is a perfect opportunity for them to be shown, demonstrated, and educated about the technologies that can support people’s compliance, and be understanding of their disease states, wellness activities, and fitness activities.

Students will also have the opportunity to learn and document successes in patient intervention. We may develop studies looking at certain disease conditions or adherence compliance issues, to get more solid study patient outcomes data, and determine whether our care plan is working. Another aspect that will benefit the pharmacy student is that it’s going to help give them a vision of the pharmacy practice, and what it can and should be as they graduate from pharmacy school.

I believe there are more students graduating from pharmacy school with an entrepreneurial mind-set who are looking to see how they cannot avoid the routine of a high-volume dispensary, where, really, the only opportunity is just to run the workflow process. This is going to create a vision around the practice of pharmacy. A secondary strategy for this joint venture is for us to develop models that would support a student operating his or her own pharmacy practice, and what tools and things we could bring to support them.

How does your business model enable you to grow and compete?

A: We need consistent encounters with patients and our pharmacy practice. We have exceptional customer service, but those first couple of elements are merely the entry point of creating the expectation around excellent customer service.

There would need to be a follow- through to really create a lasting impression, the lasting tie for that relationship so that, now, when it comes time for people to enroll in Medicare Part D once a year, they’re looking at their options and saying, of their own volition, “One of my number 1 criteria is not only price, but also that Ritzman be in this network at the preferred copays,” or whatever their mantra might be for making a decision when selecting Medicare Part D plan for the upcoming year.

We want to change that customer expectation and experience so that they know and understand that, without Ritzman Pharmacies—they’ve lost these levels of rapport, education, community warmth, and friendliness.

Part of that involves us trying to elevate our pharmacy on the basis of these 4 promises: (1) we’re trying to elevate the pharmacy to a place where everyone is treated as an individual, by breaking down that line of customers—of people waiting—and making sure that everyone is known by name, and treated as an individual; (2) we also want it to be a place to gather so that there are fun things happening—that there are opportunities to just sit and visit and be a part of the community—and we’ve seen that happen already over the years, although we simply did not grow or develop it the way we should have, so some of our more inner-city stores have bigger waiting areas that people will sit and visit in for half an hour to an hour, while their transaction is happening, as well as after it’s done; (3) we want the pharmacy to be a place to learn about their health, wellness, and their medication; (4) and, lastly, we want it to be a place where the patient can expect care beyond their prescription. This is more than about the prescription, it’s about a whole experience.

What are some barriers to the growth of the pharmacy practice?

A: We need to relieve the workload. The store-level associates are getting more work to do all the time, and to alleviate that workload, we have built a central pharmacy services platform so that central service is doing all of the intake for our specialty pharmacy initiative.

At the central pharmacy services operation, the pharmacy personnel are doing all the intake for what is now medication synchronization after retail pharmacy, but they bear no labor component of communicating with the patient, communicating with the physician, getting all those refills lined up on the same day, generating and managing all the pre- and post-calls to that, etc.

All of our medication therapy management systems are being monitored and managed centrally now in pieces and elements, but they are still executed at the pharmacy practice level. We are trying to manage as much as we can and take responsibilities off pharmacists’ plates. Then we are putting in a new pharmacy dispense system.

We are moving to Pioneer, which has elements to relieve pharmacists’ burdens, as well as to elevate the customer experience. In the short term, we hope to centralize processing, and in the long term, build and develop central fill.

Those will be the biggest relievers of workload; if you can imagine the practice having 30% to 50% of prescriptions dispensed at an off-site depot and sent to the practice for final dispensation and patient interaction that will change the workload dynamic of the practice tremendously, allowing them to elevate their customer experience, which is the next key strategy.

We go from relieving burdens to elevating the customer experience. Within that one process, we are doing a number of things, including medication synchronization, medication dose services, and we introduced a retail-friendly compliance packaging which allows patients taking 5 or 6 medications to have their medication dispensed in a packaging that is conveniently available at the community pharmacy to pick-up.

Do you have any concluding remarks?

A: One of our key strategies is to innovate and expand, and this joint venture with Northeast Ohio Medical University is a huge opportunity for us with regard to innovation and expansion. This strategy is helping us move toward achieving those treasured moments. To give you a better idea of what we mean by treasured moment—something we, and many pharmacy practices, already have occurring—what we are really striving for is to have, day in and day out, the expectation from a customer’s perspective move along just like it moved Starbucks from more than just a cup of coffee, because in the commoditization of community pharmacy, we think that the people are just looking for that black cup of coffee and are not aware of what a total pharmacy experience entails.

Today, patients are looking for pills in a bottle, and at how long it is going to take for their prescription to be filled. Will their insurance cover it? We are trying to move beyond these basic services to providing treasured moments. Here is an example of a treasured moment from earlier last year; we had a pharmacist in one of our practices that, after the death of the patient, was referenced in the patient’s obituary as having been part of the care team that helped this loved one through the final days of their journey.

That is truly a treasured moment—when the pharmacist becomes a caregiver. You will often see the hospice nurse, or other healthcare providers, experience that, but you don’t often see the pharmacist go through that. Ultimately, it is trying to change the expectation so that the customer knows, “I should have more out of this pharmacy, out of this pharmacist interaction, than I currently have.”

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Last modified: March 16, 2016
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