Pharmacy Improvement Services at Cvs Essay Example

by a third party, with only a small portion paid with their own money. However, payors have intricate regulations and rules around which drugs they cover and the conditions for payment. To control costs, they have established increasingly complex formularies, making CVS's job much more complicated and one of their most significant challenges.

In the event that a doctor prescribes a non-formulary drug for a patient, the first time anyone may realize there is an issue is when an insurance check is performed. This prompts the doctor, patient, and payor to coordinate efforts to switch the prescription. Payors may also enforce stricter rules regarding prescription refills, leading patients to delay refill requests and risking non-coverage if they do not wait long enough. Violations of these rules typically do not interrupt the process, as CVS employees address issues when identified or upon customer pick-up. Counting and verification of drugs by certified pharmacy technicians account for step three, with quality assurance constituting the fourth and final step.

Ensuring that scripts have the correct drugs and quantities while verifying all other details is a crucial responsibility that only a pharmacist should undertake, not technicians or other pharmacy employees. From data entry to quality assurance, completing the process typically takes around five minutes, assuming no issues arise. Once the final step of quality assurance is completed, scripts are sealed in bags and organized alphabetically in the pick-up area.

During the pharmacy fulfilment process, the technician working at the pickup window was responsible for searching for the correct prescription among bags, checking customer identities and collecting necessary payments. The PSI team discovered that 16% of customers were dissatisfied with what they received

from the pickup window. Furthermore, 27% of prescriptions experienced significant issues in the process. Despite CVS' market growth, customers perceived that no other pharmacy provided satisfactory services, leading to difficulty in switching. At the beginning of 2000, CVS had around 7.

CVS experienced a loss of 2 million regular pharmacy customers in the course of a year, which led to an estimated loss of 55 million annual prescriptions that would typically contribute $2.5 billion to the company's revenue. Therefore, retaining customers should be of utmost importance for CVS. To achieve this, our group recommends improving CVS's services and operations. A more comprehensive database within an upgraded computerized service system would lay the foundation for a smooth business operation. The system should monitor and record logistics, inventory movements, insurance checks, and customer profiles, among other things.

In addition, it is important to offer training to technicians and other floor personnel in order to improve their ability to handle customer inquiries and effectively manage more advanced computerized stations. Furthermore, addressing issues at the drop off stage is crucial, with the primary concern being the absence of supervision at the in-store drop off window.

When allocating scripts, one tech becomes occupied at the scheduled time, leaving nobody available to manage it. This results in potential sales loss. In addition to this, the field team has observed that service at the drive-thru is either closed or suffers from long waiting times. The tech is too occupied to address the customers at the drive-thru, which can negatively impact CVS's image. The first impression that customers receive about CVS is crucial, and prolonged waiting times reflect poorly on the company. To address these

issues, we recommend hiring additional staff to manage the drop off window during peak periods. This will ensure that all forms are properly organized and in order.

Our proposal includes three techs to be stationed at the drop off area, as well as an additional drop off window at the drive through area to ensure smooth handling of forms. It is crucial that these techs receive proper training to serve customers efficiently. They should be able to inform customers that without refills, processes may take up to three days. Additionally, the techs need to regularly check for faxes and voicemails and provide reliable phone services. Data entry encountered various problems.

The in-store procedures for authorizing refills are not optimized. Due to various scripts permitting customers to refill their prescriptions at least once, customers may become confused about the number of refills permitted and submit ineligible scripts. To handle such scripts, a technician is required to place them in a "Dr. call bin" and contact doctors' offices via phone or fax to request refill authorization. This process can result in a significant waste of time.

To resolve the issue of customers forgetting their prescription refills, CVS should track the refill count at the data entry stage and store it in their central database. By doing so, ineligible scripts due to this reason can be eliminated, which will also cut down on the need for a technician to handle them.

If there are valid reasons leading to rejection of scripts, the tech needs to confirm with a doctor, pharmacist and key in the findings into the database. In case the doctor also rejects the script, the tech must inform the

customer by either calling or sending an SMS for accountability. CVS faces challenges with insurance checks, and solving third party issues remains a significant change in their industry. Due to complicated formularies, CVS needs to make phone calls to insurers and prescribing doctors. If the issue remains unresolved, customers may be asked to pay the full amount at pick up without prior warning.

An urgent need exists for a clear protocol to resolve these problems. The proposed protocol includes setting up a database that is constantly updated with formularies from various government agencies, employers, and insurance companies. It involves determining if customers are first-time or existing customers of CVS and requires first-time customers to state who will pay for them and provide formularies to aid CVS. They must also be informed that they are expected to pay in full if they are unsure of the formularies. Existing customers will be asked if they have changed jobs or insurers and must provide formularies to assist CVS.

- At drop off point, CVS should check the new database for approval, to ensure that any potential problems are addressed early on.
- This is important because insurance checks should not be the first time any issues are discovered.
- If there are serious problems with a customer's insurance check, CVS should contact them via phone or mobile text message to determine if they are willing to pay the full amount.
- If the customer agrees to pay, CVS can proceed.
- However, if the customer is unwilling to pay, CVS technicians should advise them to see their doctor again for a different prescription within the formularies.

By implementing the

protocol, the handling of difficult situations by techs and other staff would be improved. CVS can anticipate a reduction from the current rate of 17% of prescriptions that face issues during automated insurance checks. Furthermore, at pick up points, techs will have less difficulty managing customers due to decreased customer complaints about this issue. The production process highlighted only one concern, which was a lack of inventory to fulfill entire scripts. Seven percent of scripts had insufficient medicine supply resulting in partial or total shortages.

It is highly inconvenient for customers when medicine is dispensed in inaccurate amounts, which can harm CVS's reputation. Therefore, CVS needs to implement a more sophisticated inventory monitoring system that can monitor inventory inflow and outflow accurately. Furthermore, the system should notify CVS when any inventory is running low so that it can restock their inventory promptly to prevent dispensing inaccurate amounts of medicine.

To ensure accountability, technicians need to notify customers about partial stock to keep them informed. Quality Assurance can be improved by hiring more pharmacists especially during peak periods so that they don't lag behind. Additionally, images of different pills should be printed and kept available for reference by pharmacists. Finally, issues related to unpleasant customer surprises were commonly reported at the pickup station.

CVS customer service experienced various difficulties such as the unauthorized refills, unpaid insurance scripts, and unready prescriptions that impeded fulfilment. As a result, customers left the pickup window empty-handed and frustrated with the service. The problems were most severe from 5pm to 7pm when customers rushed to retrieve their pre-ordered or called-in medications. Techs were unable to locate scripts and lacked guidance on how to

finalize the process. Moreover, they struggled to clarify insurance concerns. To alleviate such issues and improve operations, CVS must alleviate human traffic through increasing the number of registers and recruiting additional techs.

Our group suggests stationing techs at both the drive-thru and pickup areas to ensure all customers are attended to promptly. To address the pickup bottleneck, we propose upgrading and computerizing the entire system and database, as explained later. However, we also recommend stationing experienced staff, such as techs or pharmacists, at the pickup area to address insurance checkup concerns.

To handle databases effectively, the tech team should undergo some form of prior training to tackle any known issues that may arise during any stage of the process. The overall process can be improved by rearranging the computerized checks. An insurance check should be performed during prescription drop-off while the customer is still present, as shown in Figure 2. To facilitate this change, several IT adjustments are needed. CVS may implement an IVR system for incoming calls, a dialler for outgoing contacts, and a separate system to manage email and web requests. This will enable a single platform to handle multi-channel customer service.

CVS faced the issue of having a disjointed service operation, leading to an inconsistent customer experience. The management was unable to gain a centralized overview of service across all channels. Therefore, they required a quality management solution to record customer interactions. With limited resources, CVS struggled to meet its objectives and integrate its applications effectively.

The company required a vendor that offered comprehensive solutions and excellent services to successfully migrate their applications and data management with ease. A single technology platform should be developed

to integrate inbound, outbound, and blended multi-channel contact, such as voice, email, web, and fax. Along with catering to the company's need for an integrated multi-channel solution, it should also have features like voice portal, recording, and quality management to provide customers with better service through enhanced speech-enabled self-service. Furthermore, this open platform must allow CVS to smoothly blend with their present technological investments.

This platform aims to improve service quality, customer response times, and deliver a consistent and satisfying experience. Integrating CVS' critical applications on a single platform supports the company's unified service strategy, making it the most significant advantage. However, technical problems may cause issues for CVS techs and customer service staff. Therefore, it's crucial to train them to interact with patients over the phone if the platform fails. While technology empowers pharmacists to perform their work accurately and efficiently, a comprehensive and continuously updated printing network is also essential for achieving maximum impact.

Automating each step discussed earlier in the process would result in a high volume of print materials, including documents, scripts and bills. Additionally, a printing network would be necessary to connect to all workstations. Implementing a reliable printing network would minimize printer downtime and enable CVS to optimize its technology investment for years by incorporating various product generations onto the network and sharing options among device models.

The implementation of new or updated print technology will contribute to improving the efficiency of prescription filling at CVS. As a result, pharmacists will have more time to attend to new customers' needs and provide them with counseling and service. This will significantly increase the solution's overall lifespan. However, the management might encounter budgeting

challenges when implementing this solution.

It will be quite expensive to establish a top-quality printing system, and a comprehensive cost-benefit analysis is necessary to justify its expense. CVS typically follows industry standards by using historical data and safety stock to safeguard its stores from costly inventory shortages. However, these measures may not be sufficient, since seven percent of prescriptions still experience partial or complete stock deficiencies. Automating connections with hundreds of suppliers and carriers should enable the company to implement a warehouse management system that enables monitoring of inventory movement and automatic alerts.

By proactively managing supply chain events, CVS can prevent order failures, ultimately reducing safety stock and order cycle times while improving logistics execution. This will result in fewer stock shortages, better logistics execution, and increased profitability. To eliminate wait times, CVS should implement a system for patients to place prescription orders on their website and pick them up at a local store, thereby avoiding server errors that can cause disruption and chaos for hundreds of patients waiting to pick up medications.

CVS requires a 24/7 team of IT engineers to resolve any website issues. They also use automated prescription dispensing, which involves machines linking with the pharmacy computer system. Medication orders are inputted into the system and connected to the machine, giving pharmacists access to patient profiles and medication information. This technology facilitates scheduled medication retrieval and allows for emergency medication access through the override function. Automated medication storage and retrieval lockers enhance accuracy and efficiency in medication dispensing, inventory management, and charging processes.

The automated dispensing machines provide systematic monitoring of controlled substance access, auditing capability in the event of discrepancies, and regulatory-compliant medication storage,

all while ensuring timely access to medications. Though automated dispensing machines can improve efficiency and accuracy, they cannot eliminate medication errors. Such errors may occur due to manual replenishment, incorrect placement of drugs within the machines, human overrides, or circumvention of safety features, ultimately increasing the risk to patients. To minimize these risks, quality assurance checks should be implemented by assigning pharmacists to manually inspect dispensed medications.

Introducing PC Terminals for Digital Drop-off can address the issue of customers taking a long time to fill their prescriptions. By having PC terminals at the drop-off point, multiple customers can quickly fill up or refill their prescriptions, thus reducing illegible writing and speeding up the process. However, implementing IT changes may cause problems for all stakeholders, including patients, CVS staff, and CVS management due to potential system failures.

Although sophisticated IT systems can be unreliable at times, CVS staff and management must remain prepared for any possible scenarios and react appropriately. Implementing enterprise systems, particularly those that incorporate internet technologies, can significantly improve a company's ability to replicate business processes with accuracy. However, there is a risk of backsliding after implementation, especially when it comes to convincing all CVS staff members of the operational changes. It's likely that some staff members will be sceptical and resistant to the new changes.

With CVS stores located widely throughout the United States, the issue may become exacerbated. Additionally, some employees may feel overwhelmed by the advanced protocols and high-tech appearance of the system. To solve this potential issue, effective change management is crucial. Upper management must persuade the pharmacy staff that this updated process will not only save money but also save time

for employees. It is crucial for staff to continuously upgrade their skills.

Incorporating training schemes into the implementation process would improve staff's IT skills and enable them to operate new IT systems and databases. In addition, specific training on insurance should be provided to ensure staff can handle customer questions related to insurance coverage. This approach will encourage staff integration into the new system while preventing anyone from being left behind. Lastly, CVS should consider revising employee pay schemes to incentivize higher work output and self-improvement.
Regarding customer relationship management, in the event of an automated customer service platform failure, call centre agents will be trained to provide service customized to each client's pharmacy benefit program by accessing details such as claims history. It is crucial that management prioritize accurate and efficient inquiry resolution.

It is important for CVS representatives to adhere to standardized procedures when interacting with customers. Top management personnel should physically visit stores to verify the effectiveness of new processes, but it may be difficult to do so for all stores. To address this, a network of systems should enable CVS staff at headquarters to monitor stores and gain insight into their configurations and volume decisions.

CVS aims to utilize automation effectively and maintain some degree of control. They will be automating connections with suppliers and carriers, which means logistics must be able to handle the influx and outflow of supplies. CVS must also consider transportation costs and potential vehicle breakdowns that could prevent pharmacists from dispensing supplies. CVS needs a contingency plan in case the automated connection with suppliers fails to maintain smooth inventory inflow and outflow. Staff must be briefed and

trained to use the back-up system.

Our group is evaluating the financial potential of new CVS operations by calculating the average amount of money earned per customer per prescription. According to the case study, customers who left in 2000 took with them an estimated 55 million annual prescriptions that could have contributed $2.5 billion to revenue. Dividing the total revenue by the total annual prescriptions results in an average of $45 per customer. By preventing 60% of customer defections due to service and assuming an average of 5 scripts filled per year, the extra revenue gained would be approximately $972 million per year. Exact costs for the new operations have not been determined.

In order to determine if the new operations will be advantageous for CVS in the future, our group has reached a unanimous decision that the IT alterations will necessitate a multimillion-dollar investment. We have estimated that by preventing customer loss, CVS can potentially earn enough revenue to offset all expenses. We do not anticipate costs to surpass $972 million.

Based on Exhibit 3, it is evident that net operating revenues amounted to $24181.5 million in the year 2002. Our group's estimation is that it will take around two years for the new operations to be fully established. Upon analyzing the net operating revenues between 1998 and 2002, our group discovered that CVS experienced an increase of 18% from 1998 to 1999 and 10% from 1999 to 2001.

Between 2001 and 2002, there was an 8% increase. Our group has opted for a 10% growth over the following two years. This suggests that in 2004, CVS is expected to reach around $29259.62 million. With

the implementation of new operations, CVS should be able to reach $30000 million in approximately 2005. However, it is essential to keep in mind that while net operating revenues will increase substantially, operating expenses will also see significant growth.

Considering the amortization of expenses and purchase of assets in the upcoming years, our group expects slightly higher operating expenses for the next five years. However, by 2010, the benefits of the new system should outweigh the costs, resulting in a higher return on investment for CVS.