Tuesday, January 8, 2013

A Money-Saving Idea for John L. Workman, CEO, Omnicare, Inc.

Dear Mr. Workman:

How’s it going?  I notice you’ve been CEO of Omnicare only since October 2012, so maybe you haven’t found your sea legs yet.

(BTW: Are you the CEO or the interim CEO?  Things seem to be in flux over there at Omnicare, what with Joel Gemunder resigning in 2010 and then suing the company for breach of his $146 million separation agreement, and then his replacement, John Figueroa, quitting in June 2012, apparently because Omnicare had to pay $50 million [according to USAToday] “to settle allegations that it improperly dispensed drugs for nursing home patients without a doctor's signed prescription”.  Wow, three CEOs in three years.  Looks like you’re in a tough business!)

But you’ll be happy to know I’m writing to you with an idea that can save your company tens of thousands—maybe hundreds of thousands, even millions—of dollars a year.

I hit upon this idea when, as the proxy who pays my mother’s pharmacy bills (she’s no longer well enough to pay them herself, you understand), I recently received one of those serious 1st NOTICE past due account letters from your company.

Here it is, with just a few details blurred out to protect my mom’s privacy:

Did you look it over?  Did you see those spots I circled in red?  I bet you already know what I’m going to suggest Omnicare do!

That’s right: skip billing customers whose balance due is $0.00.

Now, of course, I don’t know how many zero dollar past due account letters Omnicare mails out every year, but I’m guessing it could be more than a few.  Why not get one of your database gurus to write some code—I’m not a tech nerd, so I don’t know how the lines would read—to have Omnicare’s servers only generate a past due account letter when the balance due is greater than $0.00.

You could even play it safe and only generate a letter when the balance due is greater than or equal to, say, $1.00.  (I don’t know how much your dunning letters cost to print and mail, but your database gurus could certainly ask and make sure those letters don’t fire until those costs are fully covered.)

And no, I’m not going to stand on ceremony and demand a royalty for implementing a sure-fire money-saving suggestion like this one.  A lesser man might insist on 2% or 3% of your annual savings as a kind of finder’s fee, but not me.

I bring this idea to your attention and ask only that you give it your full consideration.

Thanks for listening.


Richard Hartzell
Principal Rantiste