While opening and managing an in-hospital retail or outpatient pharmacy requires a large investment of time and money, the upside can be tempting. With proper management, these pharmacies can add to your hospital’s bottom line by both increasing profits and improving patient outcomes. They can also be instrumental in promoting medication adherence.
With most hospitals struggling to remain profitable while providing quality healthcare, finding a new source of revenue and savings can be a necessity. Investing in a retail pharmacy for your hospital may be the answer. Adding a pharmacy in your facility can increase profits by:
- Reducing employee drug benefit costs. By having employees and their families fill their prescriptions through the hospital pharmacy, hospitals can benefit from the discounted drug pricing (typically 5% – 12%) they receive through group purchasing organizations (GPOs).
- Driving new revenues through discharge and emergency department fills. In a Comprehensive Pharmacy Services White Paper by Becker, TW. and Ketchum, R., the potential annual in-house pharmacy revenue for a sample 300-bed hospital with 14,000 discharges, 50,000 emergency room visits and 161,000 outpatient visits is estimated to be $25.2 million.
- Utilizing a portion of outpatient pharmacists’ time to pursue Patient Assistance Program drug-replacement benefits or outsource a company to do so. In a 2011 article in Pharmacy Practice News, SwedishAmerican Hospital in Illinois outsourced this process to McKesson MedSource Medication Assistance Program and reported a savings of $40,000 per month.
Improving Patient Outcomes
Improving patient outcomes has become more critical than ever. With reimbursement by Medicare being tied to patient satisfaction through the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey, and penalties for readmissions increasing, you may be able to help your cause by achieving better patient outcomes from:
- Fewer medication errors, resulting in a decreased number of readmissions. According to Christine Collins, Director of Pharmacy at Lifespan, “Research has shown that over half of medication errors occur during transitions in care.” An in-house pharmacy that focuses on a patient’s transition from hospital to home reduces the occurrence of these errors.
- Better medication compliance and a more accurate regimen once patients are discharged. In-house pharmacists have access to a patient’s electronic medical record and can ensure patients are put back on medications that were discontinued when they were admitted. In addition, these pharmacists can easily consult with physicians and other healthcare professionals at the hospital. They are able to confirm that patients receive the correct medications and understand how to take them before they leave, promoting medication adherence.
- Specialty pharmacy services for those, such as oncology patients, who require high-cost medications or other products that are not normally stocked in retail pharmacies. In addition to ensuring that medications are available, pharmacists can help with services such as obtaining prior approvals and dealing with insurance denials, all leading to higher patient satisfaction and better outcomes.
An outpatient pharmacy can provide a valuable revenue source but it needs to make sense for your facility. At present, these pharmacies are found mostly in larger hospitals. According to the American Society of Health-System Pharmacists (ASHP) hospital survey data, about 70 percent of hospitals with 600 or more beds have at least one on-campus retail pharmacy. Fewer smaller hospitals (200 beds or less) support outpatient pharmacies due to their smaller prescription volume.
Does your hospital have a retail pharmacy? If so, have you seen an increase in profits and improved patient outcomes as a result?