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DIR Fees 2024, Retail pharmacies, DIR Fees, Pharmacy Growth

The Bottom Line Pharmacy Podcast Getting to the CORE of Your Pharmacy Featuring Scott Pace

No matter where you are in your ownership journey, it’s always a good idea to go to back to basics.  

This is exactly what the CORE Program from The National Community Pharmacists Association help you as a pharmacy owner do!  

In this episode of The Bottom Line Pharmacy Podcast, we sit down with Pharmacy Owner and Lawyer Scott Pace as he dives deep into getting back to the basics in your pharmacy with leadership, marketing, operations and finances as well as some of the innovative things happening in Arkansas pharmacy and more!  

Join the discussion with us!

The Bottom Line Pharmacy Podcast is your regular dose of pharmacy CPA advice to fuel your bottom line, featuring pharmacists, key vendors, and other innovators.

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More resources about this topic:  

Press Release – Sykes & Company, P.A. Joins NCPA’s CORE Program 

The NCPA CORE Program 

If you prefer to read this content, the video transcript is below:

Scott Pace: I’m a pharmacist and Owner of Kavanaugh Pharmacy in Little Rock, Arkansas with my wife, Anne, who is our Pharmacist in Charge and the true brains behind the operation.  

Bonnie Bond, CPA: That’s what I was about to ask. Who actually runs that pharmacy? 

Scott Pace: We also own part of, yeah, there’s no question about that, Bonnie. She is the, we actually have a joke that I’m the vision guy and she’s the implementer and it makes for a good team for us actually. So it’s really a good way for us to grow and adapt in the business because I’m always thinking big picture and she’s always thinking how to make it work at the store level from day to day. So it works really well. 

Scotty Sykes, CPA, CFP: I bet it does. And, and I know that.  

Scott Pace: So obviously pharmacy owner piece. but I’m also an attorney and former CEO of the Arkansas Pharmacist Association. It’s been a number of years in the state association advocacy world working on a myriad of pharmacy issues. A lot of PBM legislation over the years, was instrumental in helping with the Rutledge Vs. PCMA case a number of years ago, which now is golly a number of years in our rearview mirror. It’s hard to believe it’s that far back. And then also have a government relations firm that I’m a partner in in Arkansas called Impact Management Group where I do a lot of healthcare advocacy work at the state level and then also healthcare consulting across the country. And one of the things I’ve gotten to do is work a little bit with NCPA the last couple of years on trying to bring a pharmacy owner’s perspective, former state association’s perspective to the table on how can NCPA better touch pharmacists on the ground where some of their needs are. And so I’ve always appreciated that perspective about Doug and his team at NCPA trying to make sure they keep their pulse on the ground of owners around the country. So, appreciate that very much. 

Bonnie Bond, CPA: Scott, do you sleep? Is that something? Do you have time for that? I’m just curious. Pickleball, yes. 

Scott Pace: Well I have to choose between sleep and pickleball Bonnie and I usually pick pickleball over that. 

Scotty Sykes, CPA, CFP: There you go. Not golf? I mean, you  to watch golf this weekend, right? Down in Pinehurst North Carolina. 

Scott Pace: Of course, I watched that. Yeah. It was, it was a great, a great finish between Bryson and Rory. And I was secretly rooting for Rory. So, I was kind of sad to see his collapse on those last four or five holes. He’s due for a major, but you gotta hold on at the end on the fourth day and he just didn’t do it this time. 

Bonnie Bond, CPA: Even I watched golf this weekend a little bit, Scotty. I mean… 

Scotty Sykes, CPA, CFP: You have to, it’s in our backyard, I mean, how could you not? 

Scott Pace: Well, it’s a major, it’s in North Carolina. I think I saw a couple of North Carolina pharmacy people posting on their Facebook pages this weekend. Clint from Mutual Drug was, you know, photobombing some photos during the last round. 

Bonnie Bond, CPA: Yep. I think somebody on this call was there. I’m not gonna name any names. 

Scotty Sykes, CPA, CFP: I made an appearance.  

Scott Pace: Scotty, were you there? 

Scotty Sykes, CPA, CFP: I was, I sure was. 

Scott Pace: Good for you. 

Scotty Sykes, CPA, CFP: Not on Sunday. I didn’t go Sunday. But we were there Friday and, it was, it was amazing. It really was. That’s a special place. Of course I’m a big golfer, so I, you know, I play there quite a bit. but it was, it was just a special tournament when they host it there. 

Scott Pace: Well, since you’re a big golfer, I’ll have to tell you my favorite golf story. I’ve played Pebble one time in my life. It was about five, I guess five years ago in 2019, went with a group of friends and we took our wives and did the whole, you know, the peninsula thing that you do out there, go into Carmel and eat and just kind of chill and play, play some golf. And we played Pebble one day and we were on hole six, somewhere in the middle of fairway and this golf car kind of zooms by and it looks like something I’ve never really seen before golf cart wise. And our caddy said, hey, that’s Jim Nance. He lives over on 12 or 13, one of the holes on Pebble. And so we kind of pulled out our phones and took pictures from 250 yards away and thought, well, that’s cool. There’s Jim Nance. And we finish up on six and walk to the tee box of seven, which is that short par three that looks like you’re hitting out into the ocean. And he comes back by and parks his golf cart and gets out and walks to the 7T box. We get to shake hands with him and meet him and that was pretty cool. And then while we were standing there teeing off, he was filming a, I guess a promotional video for some charity event on the T box of seven. He commentates all four of our shots on the T box of seven.  

Bonnie Bond, CPA: Nice. 

Scotty Sykes, CPA, CFP: Come on. 

Scott Pace: So, I’ll have to text you the video so you can, it’s pretty cool. 

Scotty Sykes, CPA, CFP: That’s quite a story there. To have Jim Nance on Hole 7. 

Scott Pace: And I didn’t shank it, which is even the better part of the story. 

Scotty Sykes, CPA, CFP: Yeah, talk about some nerves on that. Gosh knows. Not only are you on hole seven of Pebble Beach, but you got Jim Nance there. 

Scott Pace: I hit the green and he said he’ll have a shot for Birdie trying to hold off Keppke and Woods is what he said. So, I mean clearly he has a sense of humor but it was pretty cool. It is, I’ll email you or text you the video. 

Scotty Sykes, CPA, CFP: That’s a good story. We’ll have to get you down here for the Pinehurst when it returns because they’re going to be doing it every five years I get now, so that’s good. Yeah, every five years at Pinehurst. 

Scott Pace: Well, that is a beautiful course. It looked great on TV. 

Scotty Sykes, CPA, CFP: It is.  

Bonnie Bond, CPA: It’s impressive. 

Scotty Sykes, CPA, CFP: Bonnie, maybe you can get out there and play sometime.  

Bonnie Bond, CPA: I told you I’m gonna have to go the next time. 

Scott Pace: You play Bonnie?  

Bonnie Bond, CPA: I do not, but my son has recently… I’d say over the last year. He’s obsessed. He’s got the bug. 

Scotty Sykes, CPA, CFP: The Golf Fever. 

Bonnie Bond, CPA: Obsessed. He is. He’s 15 and he played this year on the team and he’s… we live about, I don’t know, eight miles from the course, a course, a local one, and he started… he plays every day and now he’s got a job… a job at the golf course on his own. I got a job. And so I think that consists of him maybe washing some carts for about 30 minutes and then he…  

Scott Pace: Then he gets to go to the range and hit a couple buckets.  

Bonnie Bond, CPA: He hits the course. Hey, I don’t know that he’s getting much of a paycheck, but…He plays for free.  

Scott Pace: Maybe there’ll be a scholarship in this future.  

Scotty Sykes, CPA, CFP: Maybe. 

Bonnie Bond, CPA: I mean, I’m not sure. I don’t know about that. So yeah, he’s already said he wants to go the next time that they play at Pinehurst. So I guess maybe I’ll be there. 

Scott Pace: There you go. And he’ll be 20, so it’ll be a different experience than when he’s 15.  

Bonnie Bond, CPA: Yeah, maybe I won’t be there. He might not want me there at that point, but… 

Scotty Sykes, CPA, CFP: Well, I’ll tell you what, we’re going to New Orleans for McKesson and it’s hot, but I’ll tell you what, it was burning down in Pinehurst.  

Bonnie Bond, CPA: It was hot this weekend. 

Scotty Sykes CPA, CFP: You know, if you’re in those bleachers and there’s no shade and it’s 195 degrees, I mean, burning.  

Scott Pace: Your face does look a little red, you get some sun, I’m guessing. 

Scotty Sykes, CPA, CFP: Man, I got a lot of sun. I was roasting out there. Roasting. 

Scott Pace: But you got to see some of the greats in golf, so that’s pretty cool. 

Bonnie Bond, CPA: How did Ollin, how did Ollin deal with that he doesn’t have a whole lot of patience what was… 

Scotty Sykes, CPA, CFP: He sat in the bleachers where there was a shade. So he, you know, he knows how to do it. It’s not his first rodeo.  

Bonnie Bond, CPA: Okay. Alright, so he didn’t have to, he didn’t have to complain too much then. Okay. 

Scotty Sykes, CPA, CFP: No, no, this is his first rodeo. Yeah. Once  it heated up in the afternoon, you almost , you know, if you can’t stand the heat, you to get out of there. 

Scott Pace: Yeah. Not ideal. Kudos to you to get to go. I’ve never made a major golf tournament. So  that’s pretty cool 

Scotty Sykes, CPA, CFP: Well Scott, you’re a man of many talents. Golf obviously sounds like to be another one of those in pickleball. 

Scott Pace: No, it’s not. Pickleball we can add to the list. Golf is, I’m a shankopotamus I think is what they officially call that on the golf course. 

Scotty Sykes, CPA, CFP: Okay. Alright, well, with Jim Nance watching along and he didn’t shank it, that’s pretty… that’s noteworthy.  

Scott Pace: I just sent you the video so you can check your email out. 

Scotty Sykes, CPA, CFP: Yeah, I’ll have to check that out. 

Bonnie Bond, CPA: Maybe we could add it at the beginning of this podcast. So you’re an attorney and a pharmacist. That’s impressive. Let me just throw that out there. 

Scott Pace: Yeah, most trusted, least trusted all at once, you know, so it’s a good mix. 

Scotty Sykes, CPA, CFP: You got to balance that. You got to wear your different hats there. I guess I want to start off here, Scott, and just say, I want to start with Arkansas because it seems like Arkansas stands out as being a leader in the country. This is just my own opinion here of being a leader in the future of pharmacy and what you guys are doing there. Perhaps with your leadership, I’m sure at that, as your time in the state association, as well as just what you do in the state in general with everything you’re doing. But it seems like Arkansas is really just ahead of the curve in a lot of different areas. And I know, you know, clinical type services, you know, beyond just filling scripts. How do you see that? How do you see, you know, Arkansas in that role and how do you see that playing out in the rest of the states and you know the rest of pharmacy in the future here near future? Just curious. 

Scott Pace: Yeah, well, thanks for recognizing our state. You know, I’m very biased, so I’ll just say that on the front end. I tend to think we’ve historically  one of the strongest state pharmacy associations in the country, and that’s not anything that I did. I just got to be a part of it. I mean, when you look back at the strength of our association, I mean, you literally go back 50 plus years to a guy named Charles West. Dr. West, you may not know, was a pharmacy owner in Arkansas who became the head of the Pharmacist Association in Arkansas and in the 80s went up to Washington and became the CEO of what is now NCPA. It was the National Association of Retail Drugists when he went up in 1984. So we  Charlie West as a CEO who was just a legend in pharmacy in Arkansas, Norman Canterbury, Richard Beck, Mark Riley, myself, and now John Vinson, who’s just doing a great job. And so when you look at all of those, the common theme amongst all of us is that our state is prioritizing, has prioritized hiring a pharmacist as CEO of the organization over the years. And that’s not to say that non – pharmacists can’t do the job and do it well. One of my good friends, Joni Kover in Nebraska, served for many, many, many years as the Nebraska CEO and did just a tremendous job out there. There’s just a learning curve, as you guys know, when you’re coming into pharmacy issues and not just understanding the acronyms and the lingo, but how it works and how to be able to be relatable to those policymakers. And our state has just done that well. And the other thing I think is really unique about Arkansas is we’re a state of 3 million people. And so, you know, when Bill Clinton ran for president in 1992, one of the reporters asked him, why do you relate so well with people? And he said, well, in my state, back when he was governor, he said, there’s a chance if a factory closes or someone gets laid off, I know one of those people personally, because our state is that small and interconnected. And that’s still true all these, you know, 30 plus years later, if something happens good or bad or indifferent in the state of Arkansas, we know those people personally, whether they’re legislators or, you know, business people who are making decisions on health benefits, et cetera. Doesn’t mean we always get our way, but it generally means we always can get an audience. And I think that type of personal relationship and cutting through the bureaucratic layers of whatever it happens to be, makes this unique. And I know a lot of states probably have similar setups, but for us, there is no six degrees of separation in our state. There’s like, you know, a degree and a half top of the deal. And I think that’s a real important thing and a testament to the power of relationships. So that’s, that’s really good. The other thing that I think makes Arkansas unique is that we are still one of a handful of states, four or five that have more independents than chains in our state.  

Scotty Sykes, CPA, CFP: Hmm. 

Bonnie Bond, CPA: That’s awesome. 

Scott Pace: So when, when people think of, pharmacy in Arkansas, they don’t think of a boarded up Rite Aid, like they’re about to in Michigan and, and Ohio now, cause I saw they were closing another 35 or 40 of those yesterday.  

Bonnie Bond, CPA: I saw that yesterday. 

Scott Pace: Yeah. they think of, you know, Bob’s Corner Pharmacy on the corner of Maine and Pruitt street or whatever town it happens to be. And to me that continues to bring home the importance of not just what we do as a profession, but what we bring to a community. And our state still values that. And I think that’s really an encouraging thing. 

Bonnie Bond, CPA: It’s interesting you mentioned that we have a lot, strangely enough, a lot of clients in the Arkansas, in the state of Arkansas. And I remember one of the first ones I started working with in Arkansas years ago, that was one of the first things, which you just described is what she told me. And she’s like, the networking within your state is so great. She’s like, I have relationships with people all over the state. If I have a question even about her software, she’s like, I know I can call anybody and everyone’s willing to help. So, and we continue to hear that with other Arkansas clients that pop in with us. So, kudos to you guys. 

Scott Pace: Give you an example just last night. One of my good friends who I think happens to be a client of yours, Spence Mayberry at Economy Drug in Berryville, Arkansas, I was on a walk with my wife after dinner last night and he texted me and said, hey dude, which A1C test do you guys use in the pharmacy? So, it’s just kind of the nature of the relationship that we have in this state and frankly, independent pharmacy is kind of like that around the country a lot of these message boards that have  you know popped up over the last number of years on Facebook have really been great to be able to you know to be able to pull the expertise of you know the Amina’s of the world the Benjamin Jolley’s of the world you know all of the Joe Williams etc. I’ve got a list of about a thousand I could name here. Mark Oscar and gene you know. There’s just a whole bunch of folks that just love to be able to connect on there. 

Bonnie Bond, CPA: And you guys have recently pulled in Bri as well.  

Bonnie Bond, CPA: Bri from NCPA has joined you guys. It’s awesome.  

Scott Pace: Bri’s from a place called Dewitt in Southeast Arkansas. And Bri spent 10 years with NCPA and came back to Arkansas about a year ago and now is leading our Arkansas CPESN. So we’re super happy to have her back in Arkansas. 

Scotty Sykes, CPA, CFP: Definitely gonna do a good job with you guys. So Scott, what about, you got Arkansas and all the great things going on there in terms of pharmacy. Speaking of the NCPA, I know you’re involved in the NCPA currently assisting with various programs, one being the CORE Program. Why don’t you touch on that and kind of share what that’s all about. 

Scott Pace: Sure, yeah, thanks for asking about that. I’ll begin to start off by saying NCPA has a special place in my heart. That’s part of where I started my professional career after I graduated pharmacy school. I did NCPA’s executive residency a couple of decades plus ago, right as they were getting that program started. I think I was their second resident. And then I stayed on staff for a couple of years working under Doug Hoey and Catherine Kuhn when they were both more junior in their positions before Doug ascended to the peak of NCPA leadership there. And so, I’ve always a great relationship with them and appreciate the very important role they bring to the profession. And that’s part of where I learned the love for association work. And so, I give that organization a lot of credit for me getting involved with Arkansas in the way that I did for so many years. So Doug and have just been friends and kept in touch for 20 plus years. And about a year and a half ago, we were talking  and he was saying, Hey, I know there are holes that exist in pharmacy education and pharmacy training as a result of PDS going away that Pharmacy Development Services that existed down in Florida. And, you know, they did, they did some good programs with PDS. They, you know, they a couple of different lines of what they did, right? They kind of figured out how to do it. There was the quick make a buck stuff that they did, but then there was also the, how to build yourself as a better leader and a business owner. And I think that that piece of how to build yourself as a better leader and a business owner really fell off after PDS went away. And I think that was a shame. And kudos to Doug and his team for recognizing that there was a gap in that type of education for pharmacy owners in the marketplace. So, we just kind of brainstormed and thought what can NCPA do to help fill that gap that existed. And one of the things that we did, we did a member survey and I just am consulting with them. So I don’t, I’m not on their full – time payroll or anything, interested member who’s consulting a little bit with them. But one of the things I said is we need to ask pharmacy owners what they think and what they want and what they need before you go out and just build something. And so they did that. And one of the things that I thought was really interesting was the overwhelming theme from the independent owners that they haven’t been really taught how to be good leaders. They’re learning on the job training and they haven’t really been taught to be good marketers. They’ve learned through on the job training and you know the same way when it comes to managing finances and figuring out how to make their store work as efficiently as possible. You know I can tell you in my pharmacy school training we had a single pharmacy management class and while we did a project and it was fun none of it really involved putting my own money at risk and trying to you know, build an airplane while you’re flying it. And I think that’s what a lot of pharmacy owners have to do every day. And most of them don’t have MBAs and most of them don’t have CPA backgrounds. And, but they’re still flying a $4 or $5 million a year business and trying to learn as they go. And with the margins that we have today, it gets harder and harder to have room for error. And so, the survey, told us that stuff. And so, we started brainstorming and Bri was a big part of this when she was still at NCPA. How can we build a program that plugs some of the holes that these owners are telling us that they recognize that they have, but don’t necessarily have the time or the dedicated part of their day to go and build it for themselves. And so, a couple of things came up. So, Kelly Babcock and Terri Norville, a couple of names that you may know in the leadership space. They were actually part of PDS for a great number of years through their leadership training programs and advanced leadership programs that cycled through a number of probably several hundred pharmacists over an eight- or 10-year period. And people loved them. And they believed not only in the theory that they were teaching, but the practicality of what they brought to the table. And so, I never been a part of their program before. So, one of the first things we did is I just wanted to experience it and see is there some there. And so, I went down to Florida last year and went to one of their intensive, long three -day weekend programs and was really impressed with their passion, but with the practicality of what they brought to the table. And I knew that what we wanted to do was to build a program that incorporated a lot of that leadership because whether we’re talking about making good financial decisions or marketing decisions or operating decisions, all of it comes with knowing who you are as a business owner first and foremost and setting that foundation for being able to know what you know. And most importantly, knowing what you don’t know and when to, when to go out and grab help. And so, we built that program around, around that leadership piece first and foremost and I keep on my desk this is my materials from their three -day intensive weekend that  I did with them last year and I reflect back on it multiple times a week because I’m always pulling something from what I  heard and  teasing out okay why did I react that way to a situation how could I have reacted better it’s those little things that we all probably think about, but don’t spend enough time figuring out how to change it for the next time. And the changing it for the next time is really where the upshot and the victory is in being a better leader and being a better manager. And so, so we built the program. I’m babbling about the leadership piece, but it’s really hard to quantify what that, what it means, but it really does change your psyche because you can’t lead people if you don’t know how to lead yourself. And so that was kind of the first cornerstone of what we wanted to do with this program is to build people into being better leaders of themselves. Because the second pillar is using another industry expert, Travis Wolfe, who is on those message boards a lot too that I mentioned. Travis is fantastic and he has really developed a niche as a former pharmacy owner and helping to build good teams. And so we’re going to build yourself through Terri and Kelly. And Travis is going to be there helping you to build, use that self-leadership to turn around and help lead your team, which is going to be great. And then we heard from those pharmacy owners that there’s still some subject matter areas that even though they’ve built on the job training, expertise in finances and marketing and operations, they still need more. And I think you guys would probably acknowledge, I know when we talked to y’all early on in the program, there’s some smart, smart pharmacy owners who probably still don’t know how to get the most out of their P&L and balance sheet and use them as a management tool and not just to report that they can check the box that they got on a monthly basis.  

Bonnie Bond, CPA: Scott, we have things that we see people have, they have no financials. You know, they’re awesome pharmacists, but no, I mean, they have no clue where they stand. 

Scott Pace: Yeah. 

Scotty Sykes, CPA, CFP: We really we always say we always say you know use your accounting as an asset. You know not as a liability so 

Scott Pace: Yeah, a hundred percent. And even the ones who probably get the financials don’t open them because they’re afraid to look at them from month to month. And you know that, and I get that, right? I mean, it’s, nobody’s saying that this world is a panacea that we’re living in, but you can’t improve what you can’t measure. And you can’t, you know, make purposeful changes if you don’t look at those measurements and see how they trend over time. And its common sense to say it’s a lot harder in practice to do when you’re juggling a whole bunch of people. I mean, last night, my wife came home from the store and you know, the focus wasn’t on so much what the margins looked like for the day. The focus was on some dude who was trying to pass off a script that they thought was forged. You know, those are some of the realities of dealing with a pharmacy in the world that we live in, but you can’t let it distract you from what the main purpose is, which is to have a financially solvent business so that you can continue to provide great care to those patients who depend on you every day. And at the heart of what the program, what the core is gonna be working on is building those leadership skills so that you can build those foundational business skills, the finances, which you guys are gonna be a big part of and we’re so grateful for, and the operations and the marketing pieces. And we’re gonna have Dave Wineland at Hamacher as a part of those and some other experts that are going to plop in during the course of the year to help us with inventory and other, you know, just key things that are important to managing a business. And I know you guys probably tell people this all the time, but calling your pharmacy a small business is really a misnomer because the average pharmacy is a you know, four and a half million dollar a year business. There’s nothing small about that. And I think if you call it a small business, you’re going to have a small business mindset. And that’s one of those really important things that we’ve got to change for people. 

Scotty Sykes, CPA, CFP: I’ll tell ya. I tell folks all the time, you know, we specialize in pharmacy, so on and so forth. And I tell them, you know, the average pharmacy is about $5 million in revenue and they have no clue that that was even near what a pharmacy is doing. So, these are big businesses. These are some serious business going on here in these pharmacies. But, you know, just like the ownership workshop that the NCPA does, you know, NCPA puts on a first-class program. They do not mess around when they put together these programs. So, I’m sure this is gonna be an excellent program. And there’s certainly a need there for all pharmacy owners, really anybody, because like you said, Scott, these are the foundational pieces of who you are and what you have here in your pharmacy that you have to master, you have to invest in that because pharmacy owners wear as many hats as anybody I’ve seen. You’re involved politically, you’re involved running a business, you’re involved in patient care, so on and so forth. So having that foundation is just vital, especially in today’s environment that is challenging and with the opportunities that are out there, you gotta have it. So, I’m excited about the program for sure. 

Scott Pace: We definitely are too. We’ve got a great cohort. I think there’s still about four or five spots left in this first group. We’ve got a group. It’s going to be approximately 25 people in this first group. So it’s going to be a small intimate group, but it’s going to be built that way to help create that cohesive year-long relationship structure amongst those folks. Be able to get to know the instructors, but also to get to know each other. And we’re gonna, we were gonna initially kick it off July 1st. We pushed it to August 1st, because we got some feedback. There’s gonna be a lot of people with these, McKesson and Cardinal and ABC trade show or Cencora now, whatever. Whatever they’re calling themselves this week, trade show next month. So, we’re gonna start at August 1st, which is actually probably good timing too, as people get back into the fall months. And that kicks off flu season for 2024, 2025 on August 1st. So, there’s always something new and changing in pharmacy to kind of get us reinvigorated for so no better time than then to get kicked off. So, we’re really excited about it and you know, like I said earlier, I hate to use the airplane analogy over and over again, but it really is. You’re flying the plane and you’re making tweaks while you fly it because you can’t afford for it to land and you sure don’t want it to crash. You know, you’ve got to. You gotta keep it in the air and you gotta course correct while you’re operating. That’s hard. 

Bonnie Bond, CPA: Yeah. Well, we’re excited to be a part of it too. We appreciate the opportunity, but I really think it’s going to be great for folks.  

Scott Pace: Well, we’re very grateful for you guys. Yeah. 

Bonnie Bond, CPA: Switching gears just a little bit, Scott. What’s new with your pharmacy, Kavanaugh Pharmacy, with everything going on these days? 

Scott Pace: Well, we’ve been changing while in the air a lot. I’ve mentioned it on a couple other shows, but two years ago, we took a big leap and bought a new building for our main store. Our pharmacy, you know, I mentioned Charles West earlier, who was a former CEO of the Arkansas Association and then NCPA. His pharmacy when he was a pharmacy owner was Kavanaugh Pharmacy. And so we are, he was the second owner and my wife and I are the fourth. So there was a person between us, but we own Charlie’s old pharmacy in Little Rock, which is kind of a cool small world connection. And that pharmacy opened in 1955 and from 1955 until 2022, it was in the exact same location and the exact same shopping center. And, you know, we bought it in 2013 and we’re growing it and adding extra services and marketing and trying to do all the things that, that you do when you’re, when you buy a business and want it to grow. But we were really limited by parking. We were really limited by visibility. We didn’t have a drive-thru and we live in a small little enclave of Little Rock that is like a small town in the middle of the big city. But we knew that a drive-thru was something that could really help us and a bank two blocks down the street closed during COVID, a realtor reached out to us to try to rent it to us and he wondered kind of some huge rent and I said no, but I’ll think about buying it if you want to sell it. And so, we ended up buying the building and doing a remodel at the beginning of 2022. And we moved over Memorial Day of 2022 and the last two years for us has really been this massive growth cycle, trying to manage new people, new processes, through a time of gigantic growth. That’s certainly been a big piece of it too. And I’ll tell you, frankly, COVID vaccines helped a lot on the cashflow side of things initially because of the government provided vaccine. During the pandemic, and I’ve mentioned this again on other shows, we opened a standalone vaccine center where we did about 70,000 vaccines at the end of December of 20 through I think September, October of 21. So that certainly was a big assistance in us being able to afford the building and the remodel on the building. And it also was a big assistance in us to expand our population of patients who knew about us and wanted to use us because of the service that they experienced. But we’ve been in a big growth phase after we’ve moved the drive-thru, which I would have sworn off for the entirety of my career, but for finally given in has caused us to, we grew about 40 % in year one and we’re on track to finish year two in this new location, another 40 % up. 

Bonnie Bond, CPA: That’s great. 

Scotty Sykes, CPA, CFP: That’s explosive growth. Yeah. 

Scott Pace: And so it is, and let me just say that’s, that’s script volume though. Let’s, let’s be clear about that too. So, it’s. You know, you’re managing your script volume growth and, you know, tread watered sometimes on gross profits in terms of total dollars. So my friends who measure their gross margins and percentages, which I think you’ve got to do to kind of benchmark it. I remind people I spend dollars, not percentages. And so, you know, it’s a, we got, we got to watch both of those as, as we’re growing to make sure that we’ve got the dollars to cash flow with the personnel to run it. And then the processes to make it as efficient as possible. And so, you know, Bonnie, we’ve added, we  to add a, a vial filling robot. We never  that before. We  had the strip packaging machine and frankly, during COVID we neglected that because all of our focus went to point of care testing and to vaccines. And so we have been revitalizing and growing that and Geri Med’s been a big part of that. And we appreciated that and are doing great with that. Incorporating the vial filling robot has been a great transition. We just, this is silly, but we just changed prescription labels just in the last two or three weeks. And you know, that was talking about a financial exercise, not just in quantifying what labels cost and how you can change it, but trying to figure out what do you want on your, what do you want on your label? And how do you want it on there so you can see your financial information in real time for your most senior staff and also for your most junior staff? And what do you want on your label from an operation perspective? So, if it’s going to the robot, your staff doesn’t go looking for a bottle, they know to go look for robots. So, all those little kind of workflow and financial pieces come together when you’re creating a new label. And I know that’s basic, but it makes a big difference when you’re trying to be real time managers and scripts that go through. So those types of things, we’re changing while we fly Bonnie and it’s been really, really good. 

Bonnie Bond, CPA: Well, I’m glad to hear that. That’s the right answer, yeah. 

Scotty Sykes, CPA, CFP: Yeah, I see a lot of owners struggle with the operations side of things. They’re not, because payroll being the second largest expense in the pharmacy and not maybe being as efficient as they could be, maybe the pharmacy’s not set up the way it could be to maximize efficiencies. Is the CORE Program gonna touch on some operational best practices and training?  

Scott Pace: Definitely there’s definitely going to be a big ops piece so that there’s three domains outside of leadership. There’s obviously the financial piece which you guys are going to be a big part of but there’s definitely going to be an operations domain and then a marketing domain. So, and it’s really important we’re actually going to be doing we’re starting our onboarding interviews with the participants here in the next week too. We’re going to try to get a real feel for their practices on an intimate level. That’s part of the reason for keeping it in the small group to start with. We’re going to understand from them, not just sitting in a seat and hoping that they get something from a presentation that week, but we’re going to hear from them on the front end of what they want to get out of the program. What are their biggest challenges? Where do they think their biggest pain points are? We want to personalize it in a way that helps solve an issue that they’re having, right? And that’s part of what the small group and the collaborative, I think, will really assist with. Because sometimes it’s not… 

Scotty Sykes, CPA, CFP: A customized, yeah, customized bridge. I love that, yeah. 

Scott Pace: Yeah, it’s… And that’s hard to deliver, right? But it’s… But it’s not… You’re not necessarily adding a wing onto your pharmacy to change operations in the best way. I mean, I’ve got one of my sample labels here, and I’m going to pull it off just to show you. This is…This is just a little sticker on our label and you can’t really, the whole label is this whole thing here. But this is one little sticker, which is, I couldn’t figure out what to do with this little half inch by four inch piece. So I added just the drug name, NDC, our current balance on hand. I used the deductible accumulator, EDI, how much they paid on the deductible, how much deductible is left, cost of the drug, payment on the drug, patient copay, and whether it’s in the parada or not. And it’s, there’s a lot of kind of random information all put together on the same little bitty sticker, but that’s not patient facing. That stays in the back of the pharmacy. It’s big enough so even the small eyes can read it. And it gives you a financial snapshot and an operational snapshot and an inventory snapshot. Bam, bam, bam, right there at your fingertips. And that’s not rocket science, but it took 30 minutes working inside your label maker program in Pioneer, which is the PMS we use, to make it work. So, it takes time to make. 

Bonnie Bond, CPA: You have to have that information and you have to use it. You know, so we’ve got clients that are pulling all these reports every day to figure out winners, losers, what they can fill, what they can’t, what they need to pass on, and it’s so much. So anything that you can have right there together is, that’s awesome. Make it quick.  

Scott Pace: Right. It makes a difference. And again, what I love about stuff like that is that that didn’t take an engineering degree. It didn’t take anything but hearing other people do something similar and a little elbow grease and 30 to 60 minutes. And, you know, every pharmacy owner can do that if they want to invest the time in it. 

Bonnie Bond, CPA: That’s what the big part is is finding the time to do it. You know, we hear that a lot. They’re like, I’m doing, you know, all these things and you’re, and I get it, but you have, like you mentioned, I mean, you just have to find the time. Yeah. 

Scotty Sykes, CPA, CFP: And that goes back Bonnie, Scott to your point that having a great team, you got to have a great team that can support and do what you need them to do so you can go out and focus on these one off areas perhaps that you need to do. 

Scott Pace: That’s right. Well, and that’s part of the leading yourself piece of CORE that I think is going to be so impactful. I mean, let’s just be honest. I know you guys aren’t pharmacists, but let me let me confess on all the other pharmacists that are out there. We’re type A people. We are control freaks.  

Bonnie Bond, CPA: We figured that out a few years ago. 

Scott Pace: We like to be perfect and we like to be in control. I mean that. 

Scotty Sykes, CPA, CFP: There’s something else about pharmacists, let me interrupt you there. Pharmacists marry pharmacists. I don’t know… That is a fact, I mean… 

Bonnie Bond, CPA: A lot. Yeah. And breed and they breed pharmacists’ children sometimes. Just saying. 

Scotty Sykes, CPA, CFP: There are more pharmacy spouses, both of them are pharmacists than I’ve ever seen in my life. But anyway, I’m sorry to interrupt. 

Scott Pace: That also is true. It works for us. It works for us. 

Scotty Sykes, CPA, CFP: There’s something goes on in pharmacy school that triggers… 

Scott Pace: My wife went to a different pharmacy school, Scotty, so I don’t even know how to. Yeah. Yeah. Yeah. no, but, but if you, if you, if you don’t learn how to let go of the little things and trust people, trust that you can train them and trust that they will do the job, then that’s, that’s okay. And I, you know, what, again, I hate to rely on these message boards a lot, but there’s a lot of wisdom to be had on there. 

Bonnie Bond, CPA: Wow! So, you’re an outlier you two, but you still found each other. 

Scott Pace: You know, you’ve got to know where your big important issues are that you can’t delegate, right? And the ones that you just want to retain control of. That’s okay, as long as you’re purposeful in what you keep track of or what you want to keep task of. But you’ve got to find the small things that consume your time but don’t produce the return and hawk them off.  

Bonnie Bond, CPA: Delegate. 

Scott Pace: They’re still important. Train the people to do it appropriately, and then never expect them to do it as good as you’re going to do it. I mean, you can always hope that they will, but if you’re hoping for you, then you’re always going to be disappointed, right? And so, you know, what I saw on these boards the other day was you should train them to be you and accept 80% as a pretty good reason to let something go. And you know what? That’s not a bad way to think about it because if you’re going to fixate over the 20% that isn’t doing it as well as you would have done it, that’s gonna drive you nuts. Fixate that time on those big areas where your expenditures are. I mean, financials, for example, are easy. Cost of goods and people are your biggest expenses. So, spend most of your time trying to figure out how to make those pieces most efficient, right? That’s really where the money is. And the finance, finance piece of it, even if it’s a label or even if it’s something of lesser expense, people lose sight that if that goes down a dollar, that dollar doesn’t disappear, it goes to your net profit line, for example. So, you know, every piece of efficiency finds its way to the right slice of the pie on the pie chart, which is the net profit, but you gotta be purposeful in how you slice to get there. 

Bonnie Bond, CPA: And you know who really gets that is I’ve noticed because I love to speak with multi store owners, especially those that have 15 and 20 stores. And that’s always kind of a question of mine is like, how do you do this? Like, how do you sleep? How do you manage that? And it’s always the same answer is they find a key person that they can trust, they can handle it in almost every location. And I mean, they’re essentially putting the trust in that person. They train them like you said, like they would do it as much as they can and then you know they touch base and that sort of thing but they’re really letting those people handle the operation and that probably is hard to do I would think with them that sort of personality exactly. 

Scott Pace: It’s hard too when your money is on the line. You know, we opened a store with a group of five or six other owners about two and a half years ago now down in Southwest Arkansas, a little town called Nashville, which is about 4,000 – 5,000 people I’d only been down there once or twice, but we had this young pharmacy graduate who was from that area of the state, whose brother was an optometrist down there. His wife was from there. They were determined they were going to move back home and he wanted to be a pharmacy owner. And so he’s like, well, he came to me and said,  what do you think we should do? Do you want to help me do it? And I said, I have no desire to be three hours away from Little Rock on a regular basis. I said, but there’s a group of pharmacy owners that invest in young people like you and help mentor people like you and put trust in people like you to be the business owner today and the bigger owner tomorrow. And so we did that. So the six of us got together and provided him equity on day one. We provided the cash and he provided the sweat equity and he remodeled an old pawn shop to be a pharmacy. It’s next to a Taco Bell KFC combo, but we did that on purpose because there’s a little drive-thru at the pawn shop. He did a great job with the remodel. And today he’s doing about 200 scripts a day after opening from scratch two and a half years ago. And we’ve trusted him to succeed based upon his own elbow grease and based upon getting nudges from us on think about this, consider this. Has he been perfect? You know, probably not, but I wouldn’t have been either. Has he learned a lot? Absolutely. And he’s been diligent. He’s been conscientious. It’s his, and he has so much pride in it that he wants to, you know, do whatever he can to make it successful when he is and he’s doing a great job. So those are, and those, that’s an N of one, but Bill Osborne in Oklahoma, for example, does that with 30 different stores. I mean, Ken out in California has, golly, I don’t know what he’s up to now, 80 or 90 stores where he has similar types of, you know, just one-off partnerships with people. It’s happening all over the country. People put faith in folks, but it’s a leap of faith to do that. It’s jumping off the high dive when you haven’t done it before and figuring out it’s not as scary once you’re in the pool than it was at the top before you jump in. 

Scotty Sykes, CPA, CFP: That’s right. Scott, I want to switch gears real quick. We, I know we’re coming up on our time here, but we’ve gotten past the, well, hopefully knock on wood at this point we’ve gotten past the DIR fee craziness, double DIR hit. And I don’t want to spend any more time on that. I think we’ve all beat that to death. I mean, we’re, we’re out of that.  

Scott Pace: I think the hangover is gone, yep. 

Scotty Sykes, CPA, CFP: Let’s move forward. Where do you see you know, how do you see PBM reform unfolding in the months, years ahead? You know, what’s your kind of outlook here for pharmacy going forward? 

Scott Pace: Well, I’m very bullish that we’re on the right track in putting guardrails around the PVM industry. I’m also very pragmatic that they’re following the hockey puck better than we do sometimes in terms of anticipating what’s next. And I think we’ve got to get better at that. I think there are a number of states give credit to West Virginia and Kentucky and Tennessee who have move to a true cost-plus professional fee model in their states in the commercial sector and in their managed Medicaid sector that are bringing a fair floor to the table. We’ve seen that in fee for service Medicaid for almost a decade now and we see Congress working on that towards managed Medicaid. Hopefully they finish the fight before the end of this Congress this year. So, I’m encouraged that the heat on the PBM industry has continued to go from a slow boil to a, you know, boiling over the pan now. And I think we’re going to get some, some fix. And it’s probably going to come more to state-by-state basis than it is in a federal basis, but I still am encouraged that Congress will act on the, on the PBM bill before the end of this year. That’s my hope. What am I thinking about down the road? You know, the Inflation Reduction Act, which President Biden signed a year and a half or so ago now, that, you know, has some mandatory Medicare Part D rebates as a part of that. So, starting in 2026, I believe, there will be 10 drugs added to the Medicare Part D federal government negotiating rebates. And it’s going to be drugs like Eliquis and Enbrel and Zarelto, Farziga and you know, know, Enbrubica, several Solara that are on that list, Genuvia, that are high volume drugs. And we don’t know how that’s going to work out yet in terms of what it’s going to mean for us from a payment, what it’s going to mean from are we going to have to cash flow the rebates or not. And I know NCPA and HDA and a lot of those folks are providing comments as we speak to CMS on ways to minimize impact on pharmacies and to make sure that we’re paid appropriately for being a part of that Inflation Reduction Act implementation. But things like that are always challenges to our operations that we’ve got to figure out how to adapt to. They aren’t anything we did, but they’re still things that are going to impact us. And so that’s, to me, the thesis of being an independent pharmacy owner is you can’t just look at what’s in front of you this second. You got to look at what you think is ahead of you 60 days, 90 days, 120 days or a year down the road and be prepared for those so you’re not caught flat -footed. And the IRA is definitely one of those things that I’ll be on two calls later today about that, that I’m not concerned about, but certainly keeping an eye on because I think it can have a big impact on cash flow, can have a big impact not just in 2026, but beyond, because those drugs are going to be added to that list, another eight or 10 drugs a year until they hit I think 50 drugs on the branded side of the world in the Part D space. So there’s always change coming and it’s usually non -pharmacists making that change, which is why it’s so important for us to still be a part of the legislative process. But I think the moral of my story guys is that all of our pharmacy owners are capable of doing great things. I would just encourage them to focus on the 10% of their world that they know they can change and not on the 90% that’s in somebody else’s hands. It’s real easy to get angry about the 90%. It’s a lot harder to focus on the 10% you can control and take ownership of it. And so that’s what I hope everybody does and that’s what I hope or will help people do. 

Bonnie Bond, CPA: That was a heck of a bottom line, Scotty. I mean, I was like, that was great. 

Scotty Sykes, CPA, CFP: Bonnie, that might have been our bottom line segment kickoff right there. So we have a bottom line segment, Scott, anybody listening in knows we have our bottom line segment and I gotta say that was a bottom line right there. Control the 10% you can control. Yep. Bottom line. 

Bonnie Bond, CPA: That was it. Mic drop. What you can. 

Scott Pace: And it’s okay to use F -bombs every once in a while, but that’s only on stuff that you can’t control, right? Not on the stuff you can. 

Bonnie Bond, CPA: But being an advocate’s a huge deal. We say that all the time. I mean, we just said how busy these pharmacy owners are, but… 

Scott Pace: I promise you this, if you’re not your own advocate. 

Scotty Sykes, CPA, CFP: If you’re a pharmacy owner, you have to be an advocate. They go hand in hand. 

Scott Pace: That’s right, if you’re not your own advocate, no one else is going to be it for you. So you have got to be your advocate. 

Scotty Sykes, CPA, CFP: That’s right. Well, Scott, that was the bottom line for me, Bonnie, I’m sure you as well. We appreciate you coming on Scott and spending some time with us. We appreciate all you do in pharmacy, your leadership and keep on keeping on and we look forward to having you back on in the near future.

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