SITUATION
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- Since mid-1990’s significant revenue growth through numerous
acquisitions
- Acquisitions were left to run independently without integration
for economies of scale
- Medicare PPS reimbursement issues dramatically reduced
revenue per prescription — converting
a cost-plus business with limited receivables into a fixed-price business
with growing receivables
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RESULTS
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- 26.4% increase in net sales
- 3% increase in total payroll
- 18.5% reduction in ratio of total payroll
to net sales
- 17% decrease in headcount
- 70+ pharmaceutical facilities closed/consolidated;
12 new pharmacies opened
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ACTION TAKEN
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- Launched a transformation program to achieve low-cost provider position
and create a sustainable boost to income in order to counter the impact
of PPS and capture the value of past acquisitions
- Conducted a comparative
analysis across all pharmacies to determine “best
practices”; quantified improvement potential across the business
if all units achieved best practices
- Developed optimum regional pharmacy
organization model designed to drive implementation and results
- Drove implementation
unit by unit to ensure results
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