Feeling lucky?

You chose a great set of specialty pharmacies for your network. Now you can relax and just let them do their thing, right?

Wrong.

That old nugget, “you can’t manage what you don’t measure” applies to the performance of your specialty pharmacy networks.  While famous management theorist, Peter Drucker, may not have actually said that famous quote, “he certainly did believe that measuring results and performance is crucial to an organization’s effectiveness” Furthermore, he wrote: “It is the relationship with people, the development of mutual confidence, the identification of people, the creation of a community.”

If you don’t want to leave things to chance, you’re going to want to follow that advice: measure performance and build a relationship with your Specialty Pharmacy Providers (SPPs) to get the best out of them.

While there has been some concern lately about paying for performance for fear of that being seen as some type of inducement, it would seem especially conservative to say you can’t check to see if the performance you are paying for has been achieved. You could even argue the reverse: that to not check if the required performance has been achieved could be considered a kickback.  Clearly, we’re not attorneys so please check carefully what your counsel has to say on the matter!

One of the most effective techniques we’ve seen in recent years is to chart the relative performance of all the SPPs in a network on each performance metric you’re monitoring and then share that with each pharmacy during Quarterly Business Reviews (QBRs).  We recently worked with a manufacturers that didn’t even hold QBRs with their SPPs, and, not surprisingly, they weren’t happy with network performance.  No measurement and no relationship was not helping performance.  And then without a consistent calculated set of metrics based on good quality data, it was really hard to even work out what was going wrong.

If you show a specialty pharmacy their relative performance, it gets their “competitive juices flowing” as one SPP exec recently told me.  And it provides a great hammer for those that are at the bottom of the pack and not improving. One large manufacturer recently removed a SPP from their network for non-performance, something that would have been much harder to argue without evidence.

Still feeling lucky?