Why health systems should invest in their internal pharmacy enterprise
By Scott J. Knoer
and Steve Rough
As we shift our focus from volume to value on our quest to improve population health, we must invest in programs that reduce costs while improving outcomes, quality, safety and the patient experience for all patients we serve. When integrated across the continuum of care, a comprehensive health system pharmacy strategy positively impacts all of these patient-centered objectives.
The importance of optimizing drug therapy cannot be overstated from a financial perspective. For example, pharmaceutical purchases across the Cleveland Clinic enterprise exceeded $700 million in 2015, representing 30% of all non-labor expenses and 50% of total supply costs for the organization. The 2016 drug budget is projected to grow to over $770 million.
A leading driver of this increase is the rising cost and use of specialty pharmaceuticals, which has become a $100 billion national business that is projected to grow twice as fast as the overall drug market. Without proper oversight to ensure appropriate medication utilization, the cost of specialty medications will quickly overwhelm our health care system (see related story on page 1). Conversely, underutilization of breakthrough therapies will limit our ability to improve population health and patient outcomes.
To succeed in the new reality of value-based payment models, health systems must develop a comprehensive and cost-effective medication use system. Investing in a high-performance internal pharmacy enterprise is an essential strategy to succeed in the global payment paradigm.
Medication use is a constant thread that remains with a patient throughout their lives as they transition across all levels of the health care delivery system. Optimizing medication therapy makes good clinical and business sense.
Pharmacists practicing in health systems as part of the interdisciplinary patient care team are uniquely positioned to positively impact patient outcomes. They are vested in both the patient and the health care organization. They are focused on lowering total health care expenditures and improving health for all patients, regardless of reimbursement plans. They also have direct access to patients, doctors and other providers.
Pharmacists practicing in health systems operate within the patient’s comprehensive electronic health record, enabling them to make meaningful assessments about how drugs are working and make recommendations to doctors based upon laboratory values and clinical assessments. They have the ability to follow the patient through the continuum of care including outpatient, inpatient, emergency, and in-home settings, not just in one acute care encounter. They strive to streamline drug therapy and boost efficiencies.
Next to physicians, pharmacists are the most highly educated and trained health care professionals. Many of today’s health system pharmacists have a minimum of eight years of formal instruction, including one or two years of post-graduate advanced specialty training and board certification in areas such as pharmacotherapy, oncology, critical care, pediatrics, psychiatric pharmacy, transitional care and ambulatory care.
The health system’s mission drives us to hire pharmacists with advanced training and specialization. These credentials are increasingly the norm for entry level hospital pharmacists, although they are uncommon in chain pharmacies. Roughly 3,000 new pharmacy residency graduates will enter practice in 2016 and most of them will work in health-systems.
Many published studies have documented the value that internal health system pharmacy programs provide for our organizations and our patients. Evidence demonstrating positive patient and financial outcomes from partnering with external pharmacies is limited in the health care literature.
Positive published outcomes for internal pharmacists include reduced 30-day readmission rates and hospital length of stay; a better patient experience related to the hospital discharge process; fewer emergency department visits; and the delivery of more effective and efficient patient care.
Four fast, high-return pharmacy investments. Implementing four simple, low-cost investment strategies related to internal pharmacy programs will provide immediate benefits for population health, the patient experience and the financial performance of health systems:
• Establish an internal retail pharmacy infrastructure with bedside discharge prescription delivery,
• Establish an internal specialty pharmacy supported by robust medication prior authorization, access and patient care programs,
• Embed pharmacists in primary care and specialty clinics as part of the interdisciplinary care team, adopting virtual technology to maximize their efficiency, and
• Implement a pharmacist post-discharge telephone follow-up program for complex patients to optimize medication adherence and avoid adverse drug events.
A complete pharmacy strategy includes insourcing retail and specialty pharmacy services; bedside prescription delivery at discharge; deploying pharmacists as team-based care providers within the inpatient and clinic settings; accountability for medication reconciliation at admission and discharge; post-discharge medication teaching and follow-up; collaborative chronic disease therapy management; and patient medication adherence coaching.
Investing in a comprehensive internal pharmacy enterprise will decrease the total cost of care and improve patient safety, satisfaction and outcomes.
Knoer is the Cleveland (Ohio) Clinic’s chief pharmacy officer and Rough is the University of Wisconsin Health’s pharmacy director in Madison. Knoer will participate in a May 3 executive briefing on the “Rising Cost of Drugs: Impact and Implications” at the AHA’s 2016 Annual Membership Meeting.