Archives for category: Regulations

In this ongoing series we look at ways of preventing employee theft. In part one we looked a cash handling methods, in part two we looked at credit card theft, in this part we take a look at best practices for preventing theft from inventory, and in part four we look at time theft.

As with credit cards, and particularly cash, inventory control and theft prevention are a matter of sensible precautions, double checking, and never allowing any one person too much control. Video cameras are also a prerequisite for any kind of inventory theft protection. The deterrent factor alone makes them a worthy investment. It is important to consider placement with video cameras, however, and to consider this when placing items in storage that are more likely to be stolen.

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Risks

Identifying the high-risk items that desirable to a thief is an important first step in any prevention strategy. What makes items desirable to a thief? High value, small size, and / or easy to sell or use themselves. In a veterinary practice, controlled substances would be at the top of this list for obvious reasons, but pet food and treats would also make the list as they are routine supplies for any pet owner. Any establishment that sells alcoholic beverages, needs to consider just how easy, and desirable, it is to steal them – particularly hard liquor. It is informative to walk around your local grocery store and check out the different levels of security in different items and then apply those to your own business. Alcohol, of course, has additional measures in place in a grocery store, but so do razor blades (due to their expense and small size) and movies (due to their small size and ease of resale.) High risk high value items should have significantly higher levels of security and scrutiny than other items. That means that only key people will have access. This will make things more complicated for their handling, but the alternative is no security at all.

Certain items are always at risk of theft due to their ubiquitous nature: toilet paper, stationary, and cleaning supplies. Keeping an eye on reorder quantities is really the only way to ensure that a problem with theft is not missed; however, just watching the cameras on the employee entrance/ exit can often be enough.

Businesses that have significant issues with employee theft, will often ask to look in employee bags before as they leave the premises. While this can seem overly intrusive, it is important that your employee handbook contains language to make this a possibility if required.

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Ordering & Receiving

Ordering in any business needs to be controlled. The person that is responsible for ordering, should not be the same person who is responsible to receiving goods and ensuring that what was ordered has indeed arrived. In addition to having multiple people involved, there also has to be a paper trail. When an item is ordered, the order has to be logged through a purchase order record of some description. When the item arrives, it should be received by someone other than the person who ordered it, the packing slip should be signed off on (or a packing slip created if the goods did not come with one) and then forwarded to accounts payable.

The packing slip should be matched to the purchase order which it turn is then matched to invoice. When things are paid for by credit card, it should be indicated on the purchase order, and then the credit card bill should be reconciled against packing slips and purchase orders.

The above may seem over the top for most small businesses, but the question that has to be answered is what is to stop an employee ordering an item from a supplier, destroying any paperwork, and taking the item home? Is your accounts payable person, assuming that they are not the same person who has been ordering, going to be able to find that one uncounted for item in amongst everything that is ordered when a supplier’s statement comes in weeks later?

On a side note, it should be made abundantly clear to all involved with ordering and receiving that “free product” or “gifts” from suppliers belong to the business, not to whomever receives them. There is sometimes the impression that because items have not been ordered, or have been nominally given a $0.00 value, that they are free to anyone who wants them. This cannot be the culture in your business.

Items which arrive outside the hours when they can be received properly, and by the appropriate members of staff, should be locked away unless there are serious reasons why they should not be (items that need to be refrigerated for example.) This prevents well intentioned, but misguided attempts to “help” and also more nefarious outcomes. It also prevents the frustration of knowing that an item is in the building but being unable to find it due to it being put away somewhere other than where it should be.

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Stock

In order to sell products, employees need to have access to those products. That does not mean; however, that all employees need access to all products, at all times. A limited amount of non-high risk non-high value items should be placed on employee accessible shelves. Your main stock should be under lock, key, and camera. The inventory manager, or a supervisor, should be the only one who moves stock from one location to another. For high-risk high-value items, senior members of staff should be the only persons who can have access, and they themselves should have a strict protocol (a log book at minimum) which they have to follow when retrieving an item.

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Counting

Inventory has to be tracked. If you order 10 widgets and have 5 widgets in stock your inventory system should be able to tell you that after you have received your new widgets that, yes you can fill that order for 15 widgets.

The reality, of course, is rarely that simple. When it comes to inventory control you get out what you are prepared to put into it. An accurate inventory management system, where you can spot that five items are missing almost as soon as they are gone, only happens through hard work and effort. Good systems that are easy to use will work well, but they have to be maintained and repaired. Not just so that the system is correct, but so that the faith of employees, and managers, in the system is maintained.

High risk items should be counted once or twice a week. Discrepancies should be resolved or reported. All inventory items should be counted once or twice a year and the running count in the inventory control system reset. Constant shortages should be investigated as to whether it is shrinkage (theft), orders in process, or the mis-selling of items.

This level of effort put into inventory control can seem expensive and wasteful; however, you cannot track what you do not count. And you cannot know what is going on with inventory unless you count it.

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Auditing

In addition to counting, there is another way to see if items are walking out of your premises and not being accounted for. At the beginning of the year you bought 100 fidget spinners. You look up the invoice from Fidget Spinner Inc. and confirm that you were billed and paid for 100 units. At the end of the year you have 10 fidget spinners on the shelf. You run a report from your sales software on how many fidget spinners you have sold. Hopefully, it says you have sold 90. But what if it says you sold 80?

The inventory control side of things says that there should only be 10 in stock, which there are, but you have not sold 90. The problem could have been in the number that were received originally from the supplier, or whomever received them, or someone with access to the inventory control system has manipulated the system to make it appear that 10 fidget spinners are not missing.

You’ll notice in the above example, that it does not rely on inventory management to find that there is a problem; but it does allow for the problem to be narrowed down. This can really only ever be used for spot checking, but it does provide a backup system to the general inventory control system.

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Employee Sales

Sales of items to employees can be tricky to navigate from a theft prevention standpoint. An employee leaving the building with a bag of dog food from the vet’s office looks identical to an employee stealing a bag of dog food from the vet’s office. Having a strict protocol in place for sales of items to employees so that all items can be accounted for is essential. Do not allow employees to process their own transactions; there is just too much opportunity for issues to arise. All items should be billed for at full price and then a senior member of management should handle any discounts.

Inventory can be difficult at the best of times. Employee shrinkage; however, can be a serious problem and significant inventory controls will not only serve the needs of the business, but protect it from those should have its interests at heart.

Next week we will look at Time Theft.

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A short book, Entangled Empathy puts forward the case that for upgrading our relationship with animals to one of responding to the “needs’ interests, desires, vulnerabilities, hopes, and unique perspectives” based on the context of their situation rather than focusing on animal “rights.”

What does context have to do with this subject? Gruen uses the example of man and his children entering a subway car where upon the man sits down and closes his eyes while the children proceed to become extremely disruptive. When eventually someone suggests to the man that he do something about the behavior of the children the man agrees, apologizes, and states that his wife had just died and they don’t seem to know how to deal with it anymore than he does.

Essentially, Entangled Empathy is a rallying cry to abandon ridged ethical principles when dealing with animals and move to a more empathic model. To do this we have to recognize that we already have complex relationships with animals and when it comes to their welfare a one size fits all solution can actually be harmful.

There is a lot of merit to what Gruen is talking about in Entangled Empathy; however, the execution leaves a little be desired. There are some rally quite interesting models used to prove ethical points (such as the man and the children on the subway); however these are not expanded upon with any great new insights. Rather they are broken down to component parts and never put back together again.

Gruen does use a couple of examples from her own life, and work, but they are never fully explored in any meaningful fashion. Anyone who reads the book and expects to finish with a set of tools to better handle animal welfare based on entangled empathy is going to be sorely disappointed.

While certainly interesting, and it gives some food for thought, there is little in the way of answers here which makes Entangled Empathy much more that a statement of principles bordering on “we can do better.”

In this ongoing, and occasional, series I discuss the process of learning to be a manager. Since my background is for the most part in the veterinary field we will mostly focus on the peculiarities of that industry; however, the majority of points made here are transferable to other professions / industries.

In the previous post, we looked at the initial steps in becoming a new manager. In this post we look at potential areas of responsibility.

New managers, or rather managers who are new to managing, can face a couple of dilemmas in their first few days in the job. The unlucky ones face both!

The first is being overwhelmed by all the areas of responsibility that have now landed squarely upon your shoulders. The second is not knowing what your responsibilities actually are, and therefore, not really knowing what your job is.

Take a deep breath and relax.

The first is easy – you will be overwhelmed, you will always be overwhelmed. It is the middle name of all managers. Split your days up, as much as you can, by focusing on different areas each day (see below), and prioritize.

The second is also easy – the buck stops with you. If it doesn’t, then you need to act like it does unless instructed to by your owner, or a more senior manager. You may not know anything about Information Technology (I.T.) other than it is a fancy term for computers. But if the computers are not working then you are the one responsible and in all likelihood fixing them or calling the person who can.

I have identified a number of areas that managers may, or may not, be responsible for. Depending on your particular circumstance, some of these will not apply, or you may share the responsibility with another person. If nobody is looking after that area then guess what? That area is now your responsibility.

We will look some of these areas in more depth in future posts, but for now, welcome to your new world…

The Building

I have worked in buildings that are over 100 years old and in buildings that are brand new and they all had one thing in common: things always break down, never worked properly, or need upgrading. In other words buildings, and the equipment inside them, need looking after. Few things can grind a business to a halt as quickly as a building problem. Having no water, no electricity, or no access to your building, means that in very short order you are closed. This does not mean that you have to understand plumbing, electricity, how quickly concrete sets, or the basics of I.T. (however a little knowledge is very useful) but it does mean you need to work closely with those that do and ensure that you trust them. You do also have to listen to them, and not just hear what you want to hear. They know nothing about veterinary medicine, for example, so they know more about their field than you do.

Staff

We are going to cover managing people in a future post; however, it is important to note that the staff look to you to be there for them. Remember the only stupid question is the one not asked and communication can never be a bad thing. So encourage the staff to talk to you.

H.R.

Human Resources (or H.R.) is the general catchall term given to the hiring, firing, benefits, coaching, and disciplining of employees. It is usually a job that requires a lot of paperwork and attention to detail. Depending on your circumstances, H.R. can make up a significant proportion of your time and it can also land you in hot water if handled incorrectly. I consult colleagues regarding H.R. issues more than any other subject.

Payroll can also sometimes fall under H.R. although this may be more of a support roll to either an outside company or in-house accountant. If you do find yourself handling payroll in its entirety and you do not know what you are doing – STOP! There are computer programs, companies, and accountants who can all help with this. Nothing will undermine you quicker than getting payroll disastrously wrong. 

Belonging to an organization such as your local SHRM (The Society for Human Resource Management) chapter is also a great way to get tips, C.E. and to build a support network in what in itself can be an overwhelming area of the manager’s responsibilities.

 Financial

You don’t need to be an accountant to have a significant interest and impact on the financial management of your business. The days takings need to be reconciled and deposited with the bank. Credit cards need to reconciled both daily and monthly when the statements come in. If they are not already in place, controls need to be developed so that nobody, including you, has too much access and unsupervised control over any financial area. Bills need paid, money put aside for taxes and payroll, but an eye also need to be kept on how the business is doing. Are we doing better than last year or worse? Not are we busier, but is more money coming in the door?

Marketing

I’ve covered starting a marketing program in this series of posts; however it is important to remember that marketing can be as simple as making sure that your opening hours are correct on the front door and, for a veterinary hospital, that your vaccine and appointment reminders are going out.

Inventory

Supplies need to be ordered, expired stock needs to be removed / returned, and checks and balances need to be put in place so that pilfering can be noticed and stopped.

Safety

Safety is more than making sure that all of OSHA’s boxes are ticked. Although this in itself can be a monumental task depending on where you are starting from. Being responsible of the safety of the employees, and your clients, means that you have to be the bad guy. It is not enough to tell staff to wear the proper Personal Protective Equipment (PPE) you are now responsible for ensuring that they do.

San Juan College have a great presentation on OSHA and the veterinary practice that forms part of their Veterinary Technician program – well worth checking out.

Scheduling

Even if you do not handle the mechanics of your hospital’s schedule, you may well have to give guidance as to staffing levels and when is a good time to give vacation time and when is not – for example. It may not be your fault that you do not have enough staff on a busy day or time of year but it is your responsibility.

Regulatory Compliance

Taking a critical eye to a practice, or any business for that matter, and ensuring that things are being done in a correct and legal way can be a seriously challenging task. This is particularly true when you may be asking people to change how they have done things for a significant period of time. However, it is part of the job and is one of the areas where getting it wrong can have significant consequences for both the business and you personally.

State Veterinary and Pharmacy boards vary widely in how helpful they are in response to questions about interpretation, but as a rule it never hurts to ask.  Certainly reading the practice acts that govern your state is a great start and reaching out to other managers through a local organization as we discussed in the last post will also be extremely useful.

Clients

All businesses are ultimately about clients. You can have the best veterinary practice in the world but without client’s you’ll close. Ensuring that they are looked after and that they have a great experience at your facility is outside the remit of this post; however, it is part of yours as manager. If you want a starting point take a look at this earlier post of mine about getting the basics right.

Managers can have an extremely wide, and challenging, portfolio of responsibilities. The most challenging ones; however, are the ones you don’t know about.

Remember, the buck stops with you. 

Did I miss anything? Let me know in the comments!

For those looking for more on being an existing manager and starting a new position, this may be for you.

Additional Resources:

Be Safe! Manager's Guide to Veterinary Safety by Philip J. Seibert, Jr. CVT

Click on the image to take you to the AAHA Press page for this book.

It is hard to beat Philip J. Seibert, Jr. CVT when it comes to putting together an OSHA program and this single volume, Be Safe! Manager’s Guide to Veterinary Safety which I reviewed here, although pricey is a great place to start your program.

Just like Phil is hard to beat when it comes to safety, it is hard to beat Scott Stratten when it comes to customer service. I strongly suggest seeking Scott out on YouTube; but for those of you who might like the written word The Book of Business Awesome / The Book of Business UnAwesome is for you and my review is here.  

As always, clicking on the pictures will take you to Amazon and where Amazon may give me a tiny percentage to help my book buying habit.

The legal status of compounding, particularly in Arizona, has come into sharper focus of late with the never ending stream of pharmaceutical products going on back order which has left compounding pharmacies as the only source for several medications.

After numerous articles appeared in the AZVMA’s magazine regarding the legal status of compounding multiple people asked for my input and so I decided to reach out and do a little digging. Because I did not explicitly state that I would be writing about this situation when I talked with various people, I have decided not to quote anyone. Therefore this post is purely my opinion as to the current state of regulations in the State of Arizona and how they are interpreted by the various boards and agencies. Some of these issues may well transfer to other states, but regardless I would urge anyone with an interest in this subject to contact the agencies most directly responsible – including the agencies in Arizona (in your State or Providence you may find that not only are you under the State VMA practice act but also must follow the Pharmacy board Practice Act – which is the situation in AZ). I have no great expertese in this area at all other than an interest in the subject. From my personal experience and that of the friends and colleagues who helped collate this information for this blog post all the various agencies and players has been very open and honest about the current state of play in Arizona regaurding compounding.

What is Compounding?

This is a surprisingly complicated questions to answer. In essence, compounding is the act of changing the nature of a FDA approved pharmaceutical product. Adding a flavoring to a medication, crushing a tablet and combining it with a liquid medication, and obviously creating a medication from a set of ingredients are all examples of compounding. Interestingly, taking a liquid inject-able medication and dispensing that medication for use orally is also considered compounding as the method of FDA Approved administration is being changed.

So what is the difference between compounding and “off label use?”

It is my understanding that “off label” essentially means using a product in a way that is consistent with the labeling of that product but is not explicitly defined. For example, using an inject-able medication that is licensed for dogs as an inject-able medication for a cat would be an example of off label use. However, taking that same inject-able medication for dogs and using it as an oral medication for a cat would be an example of compounding.

It should also be noted that the “off label” use of medications carries considerable risk to the prescribing veterinarian and it is always recommended to get the owners express consent and be sure to check the latest literature about using any product in this way.

Can a Veterinary Hospital Compound for its own internal Use?

Technically no. Only a pharmacy can compound, but it does seem that the major issue for the Pharmacy board and the State Veterinary board is the dispensing and re-dispensing, of compounded medications.

What is the legal issue with dispensing compounded medications?

TITLE 4. PROFESSIONS AND OCCUPATIONS

CHAPTER 23. BOARD OF PHARMACY

 

Supp. 11-4

 

Authority: A.R.S. § 32-1904 et seq.

ARTICLE 1. ADMINISTRATION

Section

 

Neither the pharmacy permittee nor a pharmacist employed by the pharmacy permittee provides a compounded pharmaceutical product to a pharmacy, medical practitioner, or other person for dispensing or distributing except that a compounded pharmaceutical product may be provided to a medical practitioner to administer to a patient of the medical practitioner if each container is accompanied by the written list required in subsection (I)(5) and has a label that includes the following:

a. The pharmacy’s name, address, and telephone number;

b. The pharmaceutical product’s name and the information required in subsection (I)(4);

c. A lot or control number;

d. A beyond-use-date based upon the pharmacist’s professional judgment, but not more than the maximum guidelines recommended in the Pharmacy Compounding Practices chapter of the official compendium unless there is published or unpublished stability test data that shows a longer period is appropriate;

e. The statement “Not For Dispensing;” and

f. The statement “For Office or Hospital Administration Only.”

The upshot of above article is that medical practitioners, such as veterinarians, in the state of Arizona cannot purchase a medication from a compounding pharmacy and then repackage it for sale – dispensing in other words. A compounded medication can be bought and used internally but if a patient needs compounded medications to go home they need to be dispensed directly by the compounding pharmacy.

What does the Future Hold?

The re-dispensing of compounded medications by medical practitioners, according to the Arizona Pharmacy Board, will never be allowed. However, veterinarians being able to compound medications themselves and then dispense them to their clients does have a brighter future.

The AZVMA are planning to submit legislation to ask for a compounding exemption for veterinarians. However, this legislation has not been written and its passage is by no means guaranteed. It is also worth noting that if an exception for veterinarians is passed there will be significant regulations that practitioners will have to comply with to allow for the creation of compounded medications. There are also potentially areas where Federal law will trump State law with regards to compounding.

So Where does this Leave Us?

I have been informed by several reliable sources that both the pharmacy board and the veterinary medical board are not currently actively seeking out compounding cases to find veterinarians in violation. There is an understanding that compounding should be a tool available to Arizona veterinarians and it is considered a significant priority to have the law changed. However, it should be understood that should issues arise it is against the law and is potentially a source of liability.

The re-dispensing of compounded medications, however, is a black and white issue. Patients who need a compounded medication must have it dispensed by the compounding pharmacy.

This post is only meant as a starting point for your own research on the subject, and as a primer as far as the various issues.

As usual, comments, questions, and general abuse are always welcome.

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