Pharmacy Service Improvement at CVS

Pharmacy Service Improvement at CVS (A) [HBR case #606015]
CVS's retail pharmacy operations are functioning poorly and dissatisfying
customers. Many customers are defecting as a result. A pharmacy service
improvement team has documented the current prescription fulfillment
process, its exception rates, and the problems generated by exceptions. The
company must now decide how to change this process, and what information
system changes to make in support of the redesigned process.

What changes do you recommend to CVS's existing pharmacy fulfillment
process? The greatest problems are occurring at the pickup, but it is not
the actual pickup process that is inherently flawed. Looking earlier into
the process it was thought that "nothing happened" at drop off. Change that
thought and use this time to eliminate problems from occurring at pickup.
At the drop off do the initial data entry, verify customer information is
correct, screen out any "no refill allowed" issues, and perform the
insurance check. This extra attention at drop off would allow the customer
to know upfront if there are any issues that need to be addressed and be
notified of the timetable for closing out the issue. The majority of the
pickups occur after work but the drop-offs occur all throughout the day.
Even if the drop off took more time than currently this would not increase
lines because it would be occurring mostly during not peak times and would
reduce the lines during peak times through eliminating those that would try
to pickup their prescription during peak times only to find out an issue
needs to be resolved. The new process must be able to identify customers
that have multiple scripts to be filled and group them together for ease of
pickup.

What IT changes, if any, are required to implement your changes? The IT
system must increase the speed of the initial data entry and verification
of customer information. If the IT system could perform a check of
insurance this would allow for the customer to be notified upfront of the
cost and eliminate cost surprises at pickup. The pharmacist largely
resolves DUR hardstops, an IT system could use the same criteria to provide
solutions. This would allow the pharmacist more time to complete other
task. A system that could notify the customer when their prescription was
ready for pickup either through text message, automated phone call, or
email would eliminate the problem of misquoting and guessing of times by
technicians. Instead of the pharmacist and technicians moving the scripts
through boxes a system that will organize the number of scripts to be
filled, the order they need to be filled, and provide a priority list for
fulfillment.

How can you be sure that the new process you propose will be an improvement
over the existing one? Each piece of the new procedure needs to be
evaluated in terms of how it will benefit each person and the customer
issues that it will eliminate. The staff needs to see how it helps them
specifically. Identify specific problems that occur and then note where the
new process eliminates or reduces such problems.

How can you be sure that it won't make things worse? The new process needs
to be tested at some pilot locations to ensure that the changes create the
efficiencies sought after. Review the changes and review the largest
complaints. Are the changes addressing those complaints specifically and
is it a noticeable change to the customer?

What groups, if any, are likely to have problems with your proposed
solution? Pharmacist may be reluctant to have IT assist in the DUR hard
stop resolution process. Technicians may be reluctant to take more time
with the customer at drop off.

How will you deal with their objections? It must be clear to the pharmacist
the logic being used will keep or improve the level of customer safety;
this has to be expressed as a quality control improvement and not just a
time saver. Technicians feel that they are not responsible for many of the
issues that arise at pickup, if they can see how this process will reduce
the amount of the issues at pickup they will buy in.

How will you ensure that there's no backsliding – that there won't still be
wooden boxes in use six months from now? Buy in from all levels is crucial
from the very beginning. The staff must not only be told about the changes,
they must learn why the changes came and they must see improvements in
their own working environment. This cannot be a halfway system, where the
new system is eased in. It must be a complete switch for the full effect of
the improvements to be realized.

How can technology be used to prevent or inhibit backsliding? The
technology must be fully integrated into the process in such a way that it
does not allow for an alternate system to be used. For instance the filling
process must be tied to the payment process so if they tried to fill the
script outside the new system when they came to the payment time they would
not be able to complete the payment process. A wholly integrated system
allows for tracking of data to compare number of filled scripts to revenue
and be auditable.

Does PSI represent a significant opportunity for CVS? Would improving
customer service be of significant financial benefit to the company? PSI is
a huge opportunity for CVS in both terms of image and the bottom line. In
2000 CVS was able to gain 8.5 million new customers. In the same year they
lost 7.2 existing customers, which translates into a loss of 2.5 billion
dollars. The two largest factors that customers left for were location &
service. The most profit was being lost from those that left for service.
Decreasing the lost customers from service would make an immediate impact
on profits and allow CVS to continue to expand which attacks the issues of
lost customers due to location.