Category: Fellows Posters
Purpose: The aim of this project is to evaluate the effectiveness of a variety of cost containment strategies implemented at the global level of a multi-hospital system. Pharmacy spend is one of the main cost drivers to a hospital system and there is a strong need for effective strategies to combat the rising costs of pharmaceuticals. This analysis will evaluate the effectiveness of these new strategies being utilized to contain drug costs within a large and diverse multi-hospital system.
Methods: Several new cost containment strategies were implemented in July 2019. Spend compliance was monitored using a weekly wholesaler report detailing all drug spend made when a lower option was available. Leveraging this weekly report, a system of soft blocks were utilized to put barriers against high cost drug spend and drive national drug code-level compliance. Contract compliance was monitored utilizing a custom built wholesaler spreadsheet identifying where any national drug code was purchased at multiple different prices across the entire enterprise. Once identified, the group purchasing organization representative for these accounts was contacted and given a list of corrections that needed to be applied. Additionally, credit rebills were monitored using a custom built wholesaler spreadsheet to ensure appropriate follow through back from the group purchasing organization to the wholesaler. Information analyzed from this data included trends on week to week non-compliant national drug code spend, individual hospital outliers contributing most to the non-compliant spend, quantities of shortage and non-stock drugs driving higher spend, number of contracts not appropriately loaded on a monthly basis, quantities of purchases made on misloaded contracts, and amount of credit rebills expected per month.
Results: Preliminary analysis of non-compliant spend through the weekly wholesaler report is positive with average weekly spend decreasing from $20,187.75 per week in weeks 1-4 to $15,439.27 per week in weeks 9-12. Of additional note, the most recent weeks of 11 and 12 have an average weekly spend of $7569.50. This is a net savings result of $12,618.25 from average weekly spend in weeks 1-4, which equates to annualized savings of $656,149. Additional secondary savings data on contract compliance/price parity initiatives through credit rebill tracking and group purchasing organization follow-up communications is still pending analysis.
Conclusion: Based on initial results from our wholesaler weekly non-compliant spend report, a robust soft block strategy helps drive national drug code-level formulary compliance at a global level and ensures optimal purchasing compliance in a diverse multi-hospital system spread over 17 states. Inappropriate drug spend is of major concern to the financial health of a hospital and dramatically impacts the quality of patient care and ability to provide necessary facility and equipment upgrades. This financial analysis provides strategies any hospital can employ to improve formulary compliance and shows significant financial rewards when spend is monitored closely.