A new report has revealed a range of evidence-based benefits of hub and spoke dispensing, including a return on investment within two years for an average pharmacy.
The report by hub and spoke pioneers, Centred Solutions, found that the return on investment, from setting up a hub and all operational costs excluding transport, can come from either re-directing time saved into delivering services, resource efficiencies or a combination of both. The findings finally demonstrate that hub and spoke dispensing is a realistic and affordable option for many pharmacies across the UK as opposed to a handful of pharmacies.
Other key findings in the report include:
- Hub and spoke can deliver an 81% reduction in payroll costs per item, from 99p per item in a pharmacy compared to 19p per item in a hub.
- Moving to a hub and spoke model will take a minimum of 50% of total dispensing volumes (70-80% of repeat dispensing) out of branch creating much needed capacity.
- An average stock reduction in year one of 50% per pharmacy branch that moves to a hub and spoke model of dispensing.
The Proven Effectiveness of Hub & Spoke Dispensing
“It’s long been thought that a hub and spoke model of dispensing has the ability to create capacity within pharmacy branches. But there has also been a lot of skepticism about this and what has been missing is the evidence to back that theory up,” explains Louise Laban, Sales and Marketing Director at Centred Solutions.
“At Centred Solutions we have been providing hub and spoke solutions to a range of pharmacy groups for over three years now. This has put us in a unique position to evaluate the effectiveness of hub and spoke models in different environments. We have been able to use this local data alongside national data to produce a report which details the benefits and potential return on a hub and spoke investment pharmacy can expect. ” said Mrs Laban.
Alleviate Pharmacy Capacity With Hub & Spoke
The report details just how much capacity can be created in an average pharmacy for the delivery of services and what the value of that looks like for a pharmacy. It found that, even with a conservative estimation model and when all capital expenditure and operating expenditure costs (excluding transport) are taken into account, significant profits for a pharmacy dispensing 8,000 items:
- A group of five pharmacies could make an average profit of £909k over five years from services.*
- A group of ten pharmacies could make an average profit of £2.1m over five years from services.*
- A group of 20 pharmacies could make an average profit of £4.9m over five years from services.*
“Obviously every pharmacy is different so the findings in the report are based on averages and NHS service fees. However we have developed a tool that will allow us to provide more specific data based on a particular pharmacy’s demographics. This tool will help us to bring to life the potential benefits and return on investment for specific pharmacies or pharmacy groups who are considering hub and spoke right from the outset,” said Mrs Laban.
“The findings are really promising. For pharmacies who have the appetite for it, hub and spoke has the potential to be a hugely profitable venture for pharmacy despite the ongoing funding challenges. With changes to hub and spoke legislation imminent our advice to all pharmacy businesses would be to explore what hub and spoke could mean for your cash flow,” said Mrs Laban.
Optimise Your Pharmacy With Hub and Spoke Dispensing
As experts in our field, at centred solutions we have revolutionised pharmacy workflows so the benefits of hub and spoke dispensing are now affordable and accessible for all UK pharmacies.
Whether you want to create your own hub, work with a wholesaler or make a single store more efficient, we’ve got you covered from picking to packing and labelling to checking.
Get in touch with us today to schedule a demonstration of any of our products.
Curious about the return on investment for a FLOWRx Hub and spoke solution?
Use our ROI Calculator to discover the potential benefits for your pharmacy.
*Profits once all hub install costs and operation costs have been taken to account with the exception of transport. Capex costs include hub solution cost, InStore software cost, refit costs to create hub and initial stock purchase. Opex costs includes annual licence fee for all software, support costs, hub staffing costs and leasing and bills cost for hub.
