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What does your CEO know about your pharmacy?

By Dennis Tribble posted 03-02-2018 12:17

  
Today I received an interesting email from The Advisory board containing an article entitled "What CEO's don't know about pharmacy". Their list had five items in it. I think my list would have been longer (I think it would have included things like "unlike other organizations in the health system, our human capital budget is not our primary expense, and drug expense tends to vary inversely with staffing).

They also had an interesting infographic on supporting your pharmacy.

I was generally gratified to read the five points elevated to this list:

1) Not all drug spending is bad - The primary import of this point is that, while inpatient drug spend occurs under capitation and must be carefully controlled, outpatient drug spend generally represents increases in revenue. I think I might also add that, in some cases, increased inpatient drug spend may represent the acquisition of a patient population whose care is highly reimbursed for other reasons. In any event, I think we need to be prepared to defend our drug spend as best we can, which means anticipating and planning for objections.
 
2) Reducing undesirable inpatient drug spend requires a team effort -  It was really gratifying to see recognition that we have likely already done most of the obvious in reducing inpatient drug spend, and that we need the support of the medical staff and hospital administration to approach those opportunities that remain. What remains is not just a pharmacy problem.

3) Ensuring infusion center profitability will require a new level of business discipline - like other apparent silver bullets, outpatient infusion and other fee-for-service activities are no longer opportunities to print money. As we have seen so often in the past, the payer community eventually needs to turn to these venues to control costs as opportunities for higher margins disappear in other venues. This means that we have to keep a close eye on whether or not we actually got paid, and how much we actually got paid, and go the extra yard in appealing or managing pre-authorizations and denials.This may mean acquiring personnel and skill sets that are a bit foreign to the way we think of our business.

4) The U.S. health system routinely fails at medication management - not surprisingly, this was less about inpatient drug therapy management than it was about ongoing medication therapy management. There was a specific call out for concierge discharge medication services, and other services intended to attack a patient's ongoing access to the medication they need, ensuring that they know how to take their medications appropriately, and know who to talk to about side effects and symptom control issues.

5) Although pharmacy has changed, pharmacy leadership structures remain stuck in the past - it was really gratifying to see a call for the elevation of the pharmacy leadership to the C-Suite. It occurred to me, though, that waiting for such elevation is probably not wise. In my experience, leaders get elevated to positions of leadership because they have already shown that they can lead. 

In general, it occurs to me that these five points could become the basis of some interesting (and brief!) educational points that get delivered up the chain about the economics of the pharmacy enterprise. Are you keeping your leadership informed of how well (or poorly) you are able to manage your costs? Do you have the right people on your staff to ensure not only that you are getting the revenue on paper but are also succeeding in getting paid?

Are you involved in on-going efforts at long-term medication management? I often hear about medication reconciliation programs being run by the nursing or medical staffs because it doesn't increase anyone's budget. Does your administration understand the statistics about the relative effectiveness of those strategies compared to having pharmacists (or even pharmacy technicians) doing that job?

Since pharmacy is one of the few departments in the health-system that is not under direct physician leadership, we sit in an interesting position to be a first-among-peers leader and to demonstrate a priori that we deserve a seat at the table in the C-Suite. Are you maximizing that opportunity?

Just thinkin...

What do you think?

Dennis A. Tribble, Pharm.D., FASHP
Ormond Beach, FL
DATdoc@aol.com

The opinions expressed herein are my own, and not necessarily those of my employer or of ASHP.
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