A recent study by the American Hospital Association and the Federation of American Hospitals showed that between 2013 and 2015, inpatient drug spending increased an average 23.4 percent annually, and 38.7 percent on a per admission basis. Given the recent coverage of astounding price hikes for name brand pharmaceuticals, this jump isn’t exactly surprising.
As such, many hospitals are turning to technology to manage costs. By implementing the latest technologies, facilities can better navigate drug shortages, enable forward buying and increase inventory turns in the hospital pharmacy.
Technology Provides Visibility
Medication accounts for 5-8% of the hospital’s operating expenses on average. With drug prices fluctuating in as little as 24 hours, hospitals need to have visibility into medication inventory so they can see exactly where drugs are in their system, and quickly identify if they need to reallocate or preserve their stock on hand.
An article in the November/ December 2016 issue of Supply Chain Strategies & Solutions Magazine discusses the value of available technologies that provide visibility into inventory across a health system. By implementing this type of infrastructure, hospitals can receive a detailed accounting of drug usage and recommended purchasing decisions that are beneficial across their facilities. Knowing precisely where drugs are and when they expire can help reduce hospital costs incurred through over-ordering and waste.
Technology as Part of a Supply Chain Approach in the Pharmacy
So where do hospitals focus their efforts to keep medications on hand while costs are rising? Many are realizing that by applying supply chain strategies to their pharmacy departments, they are able to better allocate medications across their health system—reducing waste and expired medications, and ensuring patients receive the correct medications in a timely manner.
Other benefits of utilizing health information technology in a supply chain capacity to track medications across a hospital or health system include:
- An enterprise-wide look at pharmacy operations, including medication use rates, and stock balancing
- Improved inventory optimization, and ultimately a reduction of medications on hand
- Mitigating drug shortages and reducing expired medications by having better insight into how medications can be shared across a health system and the exact location of these medications
- Remaining compliant with 340B and CSOS regulations
For more information on this technology and clinical service support that helps identify actionable and attainable steps to achieve your organization’s goals, click here.