Shrinking reimbursements doom Homewood pharmacy
By Mike Nolan mnolan@southtownstar.com February 13, 2012 10:08PM
Southgate Pharmacy's Leonard (left) and James Skoniecke talk with customer Donna Roach, of Flossmoor, about the closing of their business in the coming weeks at their Southgate Pharmacy location in Homewood, Illinois, Monday, February, 13, 2012. | Joseph P. Meier~Sun-Times Media
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Updated: March 15, 2012 8:03AM
Kim Pearce said that, for as long as she can remember, going to the drugstore has meant a trip to Southgate Pharmacy.
But after 56 years, the Homewood pharmacy will fill its last prescription Tuesday, squeezed out of business by what its operators say are meager reimbursements from insurance companies.
Longtime customers, such as Pearce, have been stopping in to say goodbye.
“I don’t remember ever not coming here,” the Homewood woman said, adding that three members of her family previously worked at the pharmacy. “As a kid I came here for the candy and comic books, then later for prescriptions.”
It’s a frustrating and emotional time for the third-generation druggists, James and Leonard Skoniecke.
“Times have been changing, and not in our favor. Insurance companies expect you to operate like a mail-order pharmacy,” James Skoniecke said, bemoaning the reimbursements that often don’t cover the pharmacy’s cost of filling a prescription.
He said it’s not uncommon for Southgate to get reimbursement checks for less than $1 on some prescriptions.
“They expect us to survive on those reimbursement checks,” he said. “It was written on the wall we were going to close someday.”
His grandfather, Frank Skoniecke, had owned Community Drug Store in downtown Harvey, and their father, Leonard Sr., and his brother, Tom, operated a second Harvey store, Community Medical Pharmacy. Leonard Sr. and Tom opened Southgate in 1956, and the business is owned by Skoniecke Sr.
“It’s been a hard thing,” Leonard Skoniecke Jr., a Tinley Park resident, said. “They (his father and uncle) really built up the business but we couldn’t hang in any longer.”
While it’s no longer filling prescriptions, Southgate will remain open for a time to sell off its inventory of non-drug items, including toys, greeting cards, school supplies and household items. Customer drug accounts were sold to Jewel-Osco, and Leonard, 49, is taking a job at the Osco at 183rd Street and Kedzie Avenue in Homewood, while his brother, 46, is unsure of his plans.
Gerry Spindler said she’s worked for the Skoniecke family since January 1974, and that the customers at Southgate are part of her extended family.
“I’m going to miss it,” the New Lenox woman, a pharmacy technician, said. “I will miss all the people, especially the people.”
Evelyn Testa, a Southgate pharmacy technician from Palos Park, has spent the past 33 years with the family. Like Spindler, she started at Community Medical in Harvey.
“The independents just can’t make it any more,” she said.
Robin Barrett said she moved to Homewood five years ago from the St. Louis area, where she patronized “small, family-owned businesses,” and that Southgate “sort of gave me that back-home feeling.”
“They were good neighbors and caring,” she said.
While shrinking insurance reimbursements are the “biggest issue” facing independent drugstores, the number of stores has stayed fairly stable the past few years, according to John Norton, a spokesman for the National Community Pharmacists Association.
“Reimbursements are low,” he said. “Independent pharmacists are working off of a 3 percent profit margin.”
It’s a bigger factor for independents because more than 90 percent of their revenue comes from filling prescriptions, he said. While chain stores derive the majority of their revenue from prescription drug sales, it’s a smaller percentage than the independents, and chains see more sales from non-drug merchandise than independents do, Norton said.
James Skoniecke, who’s worked in the family business for 22 years, said he and his brother have known for some time this day was coming. They both tried to stick it out as long as they could, but it was “time to let something go that hasn’t been working,” he said.
“We loved the business,” he said. “We didn’t want it to die.”
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