Skyrocketing drug prices took over healthcare headlines in 2016, with price jumps often hitting triple digit percentages. As a result, hospitals and legislators are speaking out about the unsustainability of continued increases and the impact they have on patient care. Most recently, the House reviewed bipartisan legislation to reduce prescription drug prices by speeding up FDA approval of high-cost medications that lack competition.
Given that the hospital pharmacy is tasked with dealing with the rising costs of drugs, it’s crucial that hospital executives work with pharmacists to identify efficiencies that can help offset the painful financial impact. From more strategic use of pharmacy staff to better management of existing inventory, changes in the pharmacy department can significantly impact the bottom line.
Steps which can be taken to better manage pharmacy costs include:
Better tracking medication inventory across a health system
Having a complete understanding of where medications are in your hospital can have positive financial and clinical impacts. From a financial perspective, you are able to more strategically place your inventory to ensure each area of the hospital is optimized based on usage rates and storage abilities. Hospitals that have taken this approach to medication management experience increased inventory turns and are better able to manage shortages internally.
The ability to quickly identify the precise location of a medication can also impact clinical outcomes by improving distribution time and reducing unnecessary substitutions that result when the original medication is perceived to be out of stock.
Using enterprise data to coordinate bulk buying across facilities
Different facilities in the same health system may use medications at different rates. This can result in ordering that may contribute to overstocking, particularly when medications are sold in large batches. When a facility purchases an abundance of a medication it doesn’t need in order to get batch pricing, they risk increased waste due to expiration. With visibility into usage across an entire system, that same medication can be sent to a facility where it will be utilized.
Bringing IV compounding in-house
Outsourced compounding is popular for hospitals due to the hands-off approach it allows them to take with complex IV mixtures. However, this comes at a price, with outsourced compounding costing up to three times as much as insourced methods. Through IV robotics, hospitals have more control over both the quality and cost of their compounding, and increased flexibility around volume.
New offerings allow hospitals to pay a monthly subscription fee for insourced compounding services, which includes the technology, labor, and data support–such as beyond-use dating. These programs make on-site IV compounding more attainable for hospitals, as they don’t have to invest significant capital in technology or new hires.
While hospitals are waiting for relief on drug pricing, they still must navigate complex value-based payment systems and increased utilization of services from “super-utilizers,” or individuals struggling to manage multiple chronic conditions. The hospital pharmacy may be the root of many costs, but it can also hold immense promise for financial savings when managed strategically.