Pharmacist is chains' biggest asset in building patient-care sales effort

Drug Store News, Nov 17, 1997 by James Frederick

In profile: Gary Halick, McKesson Home Health Care

Hundreds of healthcare and fitness product suppliers and thousands of home healthcare dealers, chain buyers and healthcare experts focused on the medical products market last month at the 18th Annual Medtrade Exposition and Conference. The big Brent in New Orleans (see coverage in this issued spotlighted an industry that is still highly fragmented, often poorly merchandised and reeling from the impact of federal budget cuts and consolidation, despite enormous opportunity for growth.

To get one viewpoint on the potential for drug chains to build sales in home health, mobility, wound-care, fitness and disease-related categories, Drug Store News Chain Pharmacy talked to Gary Halick, vice president of McKesson Home Health Care. Halick oversees the distribution of durable medical equipment and fast-turning healthcare supplies to thousands of independent home-care dealers and chain and independent pharmacies. His department also provides the know-how to merchandise properly and execute successfully healthcare product programs in retail settings.

Halick demonstrates a refreshing realism about what drug chains can and can't do in home medical equipment and services under current conditions. Any successful program, he said, hinges on the ability of chain pharmacy to leverage its greatest asset--its pharmacists--to build sales of disease-related products aimed at specific patient groups. The reward, he added, will be a loyal base of important repeat customers and a solid, highly defensible niche in a crowded market.

Chain Pharmacy: The aging of the boomers and their parents, the cost-cutting revolution, the rise in home-care and self-care and other trends--all seem to bode well for the home healthcare industry. But at the same time, you've got lower reimbursements from the federal government for home oxygen services and durable medical equipment, along with growing pressure on the industry to root out fraud and waste. Given these forces, what's your outlook for home healthcare products and services, particularly the kinds of products and services that chain pharmacies can reasonably provide?

Halick: I think the market is very attractive--both from the viewpoint of McKesson Home Health Care and from the viewpoint of the drug store or provider that we distribute to. The demographics certainly support the growing trend in home health care.

What also makes it attractive is that this is an important value-added program for pharmacies' financial health.

[Home-care and self-care products and services; allow drug chains another avenue at the front end of their stores for additional profitability. And the key is that it keeps them in health care at the front end. When compared to some of the other types of front-end profit opportunities drug chains have, the key difference is that this is health care related.

Obviously there are many nonhealth-related departments chains have added for additional profit to supplement their pharmaceutical sales and profits. But in this case, with the pharmacist still very much a trusted healthcare professional [home-care and self-care products and services] fit very well.

Chain Pharmacy: Kevin Browett [founder and president of MedMax health and wellness superstores] has made a point about drug store operators abandoning much of their role in community health care in recent decades to chase the convenience-store customer.

Halick: Right. The pharmacist is the healthcare consultant people naturally like to approach. There are so many related product categories that fit the drug store setting, such as the areas of diabetes and hypertension. Pharmacists have been dealing with the same patient from the prescription side for many years, and now you're talking about expanding into a category that's very familiar to them.

The pharmacists' training gives them a very solid base of knowledge. It's just a matter of being very familiar with the multitude of devices out there [for asthmatics, diabetics, homebound patients and others].

Chain Pharmacy: There's a growing interest in disease management and patient compliance programs among chains as they deal with managed care and look for other ways to be reimbursed. Given that, do you think there is a window of opportunity to grow home healthcare sales in chain drug stores as well?

Halick: Very definitely. What it does is allow the chains to concentrate on a niche, rather than being all things to all people. If you are the expert in asthma or airway management, for example, and you have a disease management program that will accompany that, you're setting yourself apart from the others who are simply selling a device.

Chain Pharmacy: It's a point of differentiation.

Halick: Yes. It also creates barriers to entry for [potential competitors]. If you have a program and you've built up a clientele, your competitor down the street is going to have a much more difficult time getting into that. It's not a matter of just selling that nebulizer, for instance; you've got a real program there. The key is it ties the customer to that location. The location then becomes a destination ... because of that program.