Running a successful pharmacy can be a tough challenge these days. With modern pharmacies offering ever-expanding services and taking a much broader healthcare role in the community, the risks are naturally expanding too. You have more personal interaction with customers. You have competition from big chain and mail order pharmacies, HMOs, and hospitals that get volume discounts from drug manufacturers. You’re seeing lower reimbursements for prescriptions from health insurance companies. And advances in technology and evolving healthcare laws are creating even more complex risks for you.
How can your pharmacy not only survive, but thrive in this environment?
An aggressive risk management strategy is a good place to start. And that includes being proactive about controlling one of your biggest expenses – your business insurance. How do you do that? Put on a risk manager’s hat and consider what you need to protect:
- Your employees. Be smart about managing your biggest asset. Thoroughly screen job applicants, hire smart, document everything, foster a culture of safety, and have a plan for the potential loss of a key person to death or disability. Also, take control of your workers’ compensation insurance costs, as we detail below.
- Your property. Install fire and burglar alarms, take precautions against damage from severe weather, safeguard data from cyber threats, and develop a thorough emergency response plan.
- Your income. Keep meticulous records, create a business continuity plan to keep income flowing in case of disaster, and seriously consider disability insurance.
- Your liability exposures. Take thorough and regular assessments of your business operations and potential risks. Are you compounding drugs? Offering delivery services? Every service has unique risks.
How to take control of workers’ compensation insurance costs
If you operate a business with employees in California, workers’ compensation insurance is probably one of your largest business insurance expenditures, costing as much as $30,000 to $75,000 annually. According to a 2016 survey, California work comp costs are 76 percent above the national average!
Fortunately, conditions are improving. The California workers’ compensation system has lacked competition for many years, creating high prices for pharmacy owners. But with new markets opening up, you now have options that could save you money.
In fact, you may be able to save 10 percent or more by switching carriers. If you do the math, you’ll see how that savings could significantly add to your profit. For most independent pharmacies, there’s no reason not to switch. Price, payroll, and experience mod are the only pricing variables, and the work comp insurance policy can easily be changed without disrupting other coverage lines.