Wednesday, October 2, 2013

The New Theme Song For Mail-Order Pharmacy Customers? 'I Can't Get No Satisfaction'


For all the chatter about the increasing reliance on mail-order pharmacies for delivering prescription drugs, old-fashioned brick-and-mortar retailers are apparently gaining ground with consumers. A new survey finds that customer satisfaction with mail-order pharmacies was essentially flat compared with last year, while satisfaction with a traditional pharmacy rose nearly 3 percent.
Why? Mail-order pharmacies are having trouble competing on cost. Last year, they had a seven-point advantage on a 1,000-point scale, but now find themselves trailing brick-and-mortar pharmacies by 20 points, according to JD Power and Associates, the market research firm, which queried more than 13,500 consumers who filled a prescription during the three months prior to the recent survey.
“For the most part, the widening gap in satisfaction has more to do with improved satisfaction in the brick-and-mortar segment than declining satisfaction in mail order,” says Scott Hawkins, who heads the JD Power healthcare practice. Of course, mail-order pharmacies have been plagued with complaints for years. But the survey suggests customer satisfaction is a glaring weak spot.
[UPDATE: The results, however, should not come as a surprise. As Adam Fein at Pembroke Consulting noted recently, prescription growth at mail-order pharmacies remained depressed with a five-year total growth rate of just 0.4 percent. A couple of reasons: Last year, more employers allow community pharmacies to fill 90-day prescriptions for maintenance medications, which is reducing the cost gap between mail order and retail pharmacy for both consumers and third-party payers. And generics, retail pharmacies have either pursued cash-paying customers with discount generic programs or reduced reimbursement rates to providers to participate in more limited networks (read more here and here).]
Besides cost competitiveness, satisfaction includes perception of delivery, ordering and customer service. As another example, an index used to gauge satisfaction with mail order service fell five points from two years ago, while another index used to measure satisfaction with pharmacists at brick-and-mortar shops remains high. Similarly, an index gauging non-pharmacy staff jumped 20 points.
Meanwhile, the number of prescriptions refilled at a brick-and-mortar pharmacy climbed to 61 percent this year from 56 percent last year, but refills ordered through a mail-order pharmacy was flat, at 74 percent. Hawkins cited this as another manifestation in which customer satisfaction with mail-order pharmacies has begun to lag. “You would think that’s the kind of business going to mail order,” he says.
“For the most part,” says Hawkins, “the widening gap in satisfaction has more to do with improved satisfaction in the brick-and-mortar segment than declining satisfaction in mail order.” Of course, mail-order pharmacies, especially those run by the largest pharmacy benefit managers, have been plagued with complaints for years. But the survey suggests customer satisfaction is a glaring weak spot.
The message? Mail-order pharmacies can no longer count on winning big contracts to grab large numbers of consumers. “For mail-order pharmacies, it’s important to combine high-tech with high touch. Not only does the online experience need to keep technological pace with other retail sites that pharmacy customers visit, but customer service opportunities that provide personal connections are essential, as well,” he posits.
The mail-order pharmacy that ranked highest is run by Kaiser Permanente, followed by Humana and Walgreens. They were above the average of 797 points on the 1,000 point satisfaction scale that the research firm developed. Finishing below average was Prime Therapeutics, Express Scripts (ESRX), Aetna, Cigna and Caremark, the pharmacy benefit manager that is part of CVS/Caremark.
STORY ENDS HERE