The challenges are familiar: Your hospital pharmacy must reduce operating costs. You must create new sources of revenue. And you must do both while providing the best level of patient care. Doing all three requires insights into your drug spend that only analytics can provide.
Hospital pharmacies track their drug spend in lots of different ways. Some are simple. Others are complex. You may manually review reports from the system you use to place your drug orders. You may track your drug spend digitally across multiple sites within an entire health system.
By moving from a simple system to a sophisticated one fueled by drug spend analytics, your hospital pharmacy can gain the capabilities it needs to meet the demands of today’s healthcare environment.
Track all of your hospital pharmacy’s drug purchases
The most powerful thing analytics can give your hospital pharmacy is visibility into its drug spend. With analytics, your pharmacy can capture data from:
- Each facility across your health system
- Purchases made through your distributor
- Purchases made outside your distributor
After aggregating your data, you can benchmark it internally. Then, you can track it for trends and variances. You can use analytics to spot drivers of your drug costs. The most common cost drivers will be changes in:
- Drug prices
- Patient volume
- Drug usage
- Types of patients
- Patients’ severity of illness
Your hospital pharmacy can look at changes in drug spend over time, by facility, or for specific drugs. With that capability, you can investigate, understand and correct anomalies or variances.
Convert drug spend insights into financial benefits
Using analytics to quickly spot spending trends and cost drivers can create financial benefits for your hospital pharmacy.
Containing your drug spend is at the top of the list. When you can flag an issue in real time, you can address it at once rather than waiting for the issue to eat up your drug budget.
- Drug prices. Analytics may flag an unexpected increase in the price of a specific drug as a cost driver. If that’s the case, your hospital pharmacy may want to buy an alternative drug rather than continuing to buy the more expensive one.
- Drug ordering. Analytics may flag a problem with drug ordering. Some staff at your pharmacy or at pharmacy sites within your system may be ordering drugs that aren’t on your formulary. They may be ordering drugs that are outside of an agreement with a distributor or manufacturer. In either case, you may be paying more for drugs when there is a more cost-effective alternative. That creates an opportunity to work with your staff on formulary and purchase agreement compliance.
- Drug usage. Analytics may flag an increase in usage of a drug. This creates an opportunity for you to work with your prescribers to ensure the appropriate use of the medication in terms of diagnosis, dosage or length of therapy.
Another financial benefit comes from workflow. When you track your drug spend with analytics, you’re reducing the time it takes your staff to manually run reports and pore over them. Analytics gives you insights into your drug spend much faster. That reduces the strain on your pharmacy staff, and it saves time and money.
Drug spend analytics can improve patient care
Patient care is everything. And where analytics can be really powerful is its ability to create clinical benefits for your patients.
Ideally, you would integrate your drug spend analytics solution on one platform with other health IT systems in your own hospital and across sites in your health system. As hospitals merge with other hospitals or buy physician practices, that’s important.
The other health IT systems that should connect to your drug spend analytics solution include:
- Your pharmacy management system
- Your EHR system
- Your billing and reimbursement system
Connecting these systems would give you a view of the entire lifecycle of a medication. You’ll know what you spent on a drug. You’ll know if you dispensed the drug to a patient. And you’ll know what a health plan reimbursed you for the drug for outpatient stays.
When you can see that full picture of medication use, you can begin making better clinical decisions for your patients. Is the medication appropriate for the diagnosis? Is there a more cost-effective alternative? Is the length of drug therapy appropriate for the patient?
Another clinical benefit is the ability to find and track clinical initiatives that can reduce your drug spend without compromising patient care. That could be an alternative drug therapy that costs less but is just as effective for a patient. Or it could be adjusting prescribing practices for some of your physicians.
What to look for in a drug spend analytics solution
The clinical and financial benefits of using analytics to track your hospital pharmacy’s drug spend are clear. But not all analytics solutions are equal. Here are some criteria to consider when selecting a drug spend analytics solution:
- Is the analytics solution user-friendly and interactive? You need to get to the information you need quickly and easily.
- Does the analytics solution provide data in real time? You need to know your drug spend trends and cost drivers now, not at the end of the month or quarter.
- Does the analytics solution have the reporting capabilities you need? You need the right insights in a visually understandable way to guide your decision making.
- Is the analytics solution easy to install? You need the set-up to be easy with the right support instead of relying on your hospital’s already limited IT resources.
- Does your solution partner offer tech support and subject-matter experts? You’ll need both. The first to handle routine technical issues, and the second to help you interpret and act on your data.
Before investing in drug spend analytics, your senior executives will inevitably ask if it’s worth it.
After you track and add up your drug cost savings and savings in staff time and resources, the question will be: Why didn’t you do this sooner?
Related: Read more about Web2pro’s drug spend analytics technology for your hospital pharmacy
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