It’s a costly time for hospitals. In the report, “Trends in Hospital Inpatient Drug Costs: Issues and Challenges,” the National Opinion Research Center found that inpatient drug costs per admission are skyrocketing, having increased 38.7 percent in the three-year period from 2014 to 2016. These increases are due to higher demand for prescription drugs and the growth in drug unit prices. But most hospitals and health system executives have an underutilized resource at their disposal for lowering drug costs: the hospital pharmacy department. Rather than being considered a cost burden, hospital pharmacies can drive meaningful financial margin changes.
Here are four best practices for how hospitals can tap into the talents and expertise of experts in their pharmacies to cut costs, improve patient safety, and improve outcomes:
When hospitals tackle drug expenditures, the traditional approach has been through cost-containment strategies. This can range from preferred pricing and contracts to inventory management and waste reduction. However, the hospital pharmacy itself has the potential to drastically improve an organization’s cost savings. The pharmacy is one of the more clinically advanced departments in the hospital. Their role has expanded beyond just dispensing drugs to being accountable for medication selection, ongoing medication management, ensuring optimal drug dosing, pharmacogenomic evaluations, managing high-risk drugs, and antimicrobial stewardship. Pharmacist-led teams have advanced knowledge of their health system, the patient population, and complex medication therapies. In a number of ways, they are uniquely poised to identify the most effective medication management approaches from both a clinical and cost perspective.
Using data analytics and insights in hospital prescribing patterns and outcomes, clinical pharmacists can encourage alignment among physicians and hospital staff focused on improvements in medication use. Clinical pharmacists can identify opportunities to improve prescription practices, increase adoption of medication-use policies, strengthen formulary compliance, and optimize medication therapies. All four will contribute to lowering costs.
As more pharmacists influence clinical decisions, hospitals should seek to empower pharmacy leaders. By giving the chief pharmacy officer (CPO) a more prominent role at the executive table, hospital leadership teams will benefit from the strategic perspective of seasoned professionals with a strong mix of clinical and business acumen around medication management.
Pharmacy teams can significantly enhance how provider organizations manage quality, safety, and compliance. Central to that is a common, evidence-based approach to identify and act on opportunities to improve medication management. Clinical surveillance tools, in particular, allow hospitals to guide and scale clinical interventions to support goals of lower overall medication costs and optimized use of medications. Whether that is in the form of identifying opportunities to discontinue unnecessary high-cost agents or to ensure proper dosing, clinical surveillance provides accurate and detailed insight that ultimately improves the bottom line.
Amid tighter margins and the persistent specter of mergers, these are challenging times for hospitals and health systems. It not enough to stick with old cost-containment strategies. The in-house pharmacy stands out as an important cost lever that is often overlooked. But by combining pharmacy expertise with the right strategy and the right technology, providers can innovate from within to curb costs and improve patient care.