By reaching out to college students studying pharmacy, Pharmacists Mutual educates future professionals about the unique insurance coverage they’ll require while simultaneously building a pipeline of prospective clients.

Each year, Pharmacists Mutual Insurance Company provides scholarships to students at pharmacy schools across the country and conducts frequent lectures on pharmacy law. Ed Berg, president, said the company’s forward-thinking marketing strategy is part of the reason why this Iowa-based insurance provider has doubled in size, from writing $50 million in premiums to $100 million, in the past four years.

“By connecting to students directly in their colleges, we establish name recognition and help to influence the purchasing decisions they’ll make when they become pharmacy professionals,” he said.

Now active in 45 states, Pharmacists Mutual will look to continue its recent growth surge. The company expects to be in California later this year and New York and Florida in the near future.

History of service
In 1898, Albert Falkenhainer moved to Titonka, Iowa, to open the town’s first drug store. Four years later, fire destroyed the store and Falkenhainer discovered the difficulties druggists encounter when seeking insurance: problems with loss settlements, poor service, and excessive premiums.

Falkenhainer rebuilt his store, and in 1909, he obtained a mutual insurance company charter. That same year, he began offering policies catered to the unique needs of pharmacists, and Druggists Mutual Insurance (now Pharmacists Mutual) was born. As an active member and officer of the Iowa Pharmaceutical Association, Falkenhainer believed in pharmacists working together for the good of the profession. He founded Druggists Mutual with the support of his peers and a focus on providing members with the very best service.

In 1992, Druggists Mutual changed its name to Pharmacists Mutual and renewed its commitment to its niche customer base. “It’s the way we do business that keeps us a step ahead,” Chairman of the Board Kirk Hayes said in a press release announcing the name change. “What is new is the name Pharmacists Mutual. What is not new is our commitment to pharmacy.”

To provide the best in service to its niche customer base, Pharmacists Mutual employs the Total Quality Management (TQM) techniques of W. Edwards Deming. Berg said the management strategy has embedded an awareness of quality in all processes and helped the company eliminate errors before they reach the customer. Pharmacists Mutual also follows Ken Blanchard’s and Sheldon Bowles’ Gung Ho methodology to inspire and motivate employees at all levels.

Using the Gung Ho system, Berg said the company motivates its employees by creating worthwhile work driven by goals and values, places workers in control of achieving goals, and recognizes achievements. “Each employee has an understanding of their value to the company and to our customers. When people feel that their work is worthwhile and important, they’re motivated. That translates to better service for our customers.”

To further serve the needs of its customers, Pharmacists Mutual works hard to keep its finger on the pulse of the industry. The company has close relationships and endorsements with 30 state pharmacy associations as well as multiple national associations.

“It helps us to clearly understand the timely issues affecting the industry—both regulation and marketing wise,” Berg said. “We know what’s happening in the marketplace, and we can quickly respond to our customers’ needs.”

Managing risk
When it comes to healthcare, one word can make even the most experienced insurers cringe: malpractice. To help minimize claims, Pharmacists Mutual focuses on education and offers risk prevention resources to its customers.

The company’s risk management department provides an array of services designed to help customers reduce risk. Because prescription errors account for more than 50% of all claims, Pharmacists Mutual works hard to educate its customers on how to eliminate these costly errors. Through the Risk Management Process, Pharmacists Mutual helps pharmacists identify and analyze loss exposures, select safeguards to handle each exposure, implement new procedures, and monitor and adjust changes.

Pharmacists Mutual also encourages its customers to learn from the mistakes of others. By studying professional liability claims and communicating these trends to the pharmacy community, the company believes pharmacists can better recognize professional pharmacy risks and develop techniques to reduce errors.

The overall goal of Pharmacists Mutual’s education efforts is to create risk managers among its customers. According to the company’s Pharmacist’s Journal: “As an expert in drugs and the practice of pharmacy, the pharmacist is in the best position to take the steps necessary to prevent or at least lessen the effects of errors in the prescription filling process.”

When errors are made, the company calls on its in-house pharmacist/ attorneys to handle claims. Since the mid-1980s, the organization has employed pharmacist/attorneys to provide its customers with the most experienced claims coverage. “It’s a competitive advantage for us,” Berg said. “Our people can better discuss and understand the situation with pharmacists because they once did the same work themselves.”

Continued growth
Pharmacists Mutual’s marketing, customer service, and risk management efforts have produced tangible results. Not only has the company doubled in size in the past four years, it has also seen its policy retention rate remain above 90%, year after year.

With the continuation of planned expansion into additional states, and a pipeline of prospective customers graduating from college every year, it doesn’t look like the company will be slowing down anytime soon.