[BLOG]: How to position your hospital pharmacy as a strategic asset

October 27, 2014

Hospital pharmacies play an essential role in the nation’s healthcare system, and these days, are expected to add value to every aspect of a hospital's strategic agenda.

Ms Baxter

Hospital pharmacies play an essential role in the nation’s healthcare system, and these days, are expected to add value to every aspect of a hospital's strategic agenda.  

As hospital administrators are increasingly being forced to rethink how their hospitals are leveraging resources to achieve their strategic agendas, the idea of a hospital pharmacy as a supply expense or order-filling service department has become outdated. Hospital pharmacies can, and should, substantially contribute to grow revenue, improve efficiency, reduce waste, improve patient outcomes, and create a competitive advantage.

Based on more than 30 years’ experience in pharmacy I believe that hospitals today must implement what I call the "4 F Framework" to transform a pharmacy into a strategic asset.

 

 

The 4 F Framework, in simplified form, is:

  • Find meaningful growth. Growth opportunities can be a powerful lever to lift profitability and turn a hospital pharmacy into a strategic asset, rather than a necessary cost center that manages expenses. Finding growth is a classic win-win business strategy. Customers (patients) reward a hospital when it delivers new and valued services. And hospitals benefit financially and strategically by unlocking hidden value from an undervalued asset-the hospital pharmacy. Hospital pharmacists can generate cost savings by ceaselessly looking for new opportunities, such as filling employee prescriptions or optimizing the pharmacy's inventory management. Improving reimbursement and federal funds capture-by more fully participating in the Federal 340B Drug Pricing Program and by capitalizing on cost-savings opportunities offered by patient assistance programs-are other crucial opportunities.
  • Fix inefficiencies. Making a hospital pharmacy more efficient is a proven way to drive down costs. Quality and service often improve dramatically at the same time. Today, with so much pressure on costs, innovative pharmacies are using efficiency gains to elevate their bottom lines and their strategic importance inside hospital systems. Eliminating waste in purchasing, inventory, workflow, and other key areas can significantly improve operating margins. Lean management techniques can result in shorter patient stays, reduced working capital needs, and reduced pharmacist overtime and turnover, while leading to other benefits.
  • Fulfill quality care mission. The ultimate goal of every hospital is to improve the health of the communities they serve. That mission can be boiled down to these components: access and quality. As every hospital pharmacist knows, filling medication orders is only one part of their essential job in a value-based healthcare world. To operate as a strategic asset, hospital pharmacists are increasingly focused on helping to deliver the highest quality clinical care to their patients, while also supporting their hospital in extending the care they provide to their community. By integrating pharmacists into patient care, hospital pharmacists can improve patient outcomes. This can be done through implementing a bedside pharmacy program; comparing drug therapies for efficacy, safety, and cost effectiveness; and improved medication reconciliation, among other strategies. Pharmacists should be included as clinical partners, with physicians and nurses, who produce desired and measurable outcomes such as improved patient safety, fewer readmissions, and reduced errors.
  • Follow the patient. Hospitals must view patient care as broader than a 4-day hospital stay. The continuum of care includes clinics, nursing homes, patients’ homes, and more. Hospital pharmacies need to follow the customer – the patient – wherever care is given, especially if it's within the same healthcare system. That can mean, for example, providing 30 days of medicine at discharge; developing models to support chronically ill, high-risk patients; and/or creating an outpatient pharmacy.

The strategies that make up the 4-F Framework are part of an interconnected whole. The goal is to synchronize the pharmacy's agenda to the hospital's agenda. Hospital leaders need to reimagine the pharmacy as a strategic asset, an asset containing untapped value that can be released by making specific changes that align the pharmacy's functions with the hospital's overall strategic agenda.

Ms Baxter is vice president, Innovative Delivery Solutions, Cardinal Health, Dublin, Ohio.

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