Through a strategic partnership leveraging data analytics, the system saved more than $7.5 million in drug spend over the past two years.
In a Feb. 6 conversation with Becker’s, Tyson Frodin, PharmD, reflected on his former purchasing and procurement experiences.
“I remember the days, even in smaller independent health systems or independent hospitals, all of the sticky notes that would be around my laptop,” he said. The notes would be reminders on what vendor to contact for this medication, who to call for that therapy and when to purchase a specific drug from a wholesaler.
He joined MultiCare in 2020 after COO roles at Idaho hospitals. At the time, the health system had 11 hospitals (now 13) — and no uniform drug purchasing structure.
“I was like, holy smokes. [I went] from about a million dollars a year in drug spend to $350 [million], and it’s about $375 [million] now,” said Dr. Frodin, MultiCare’s assistant vice president of pharmacy supply chain, revenue cycle and technology. “But it’s like, there is just no way to effectively manage our spend.”
Leaders looked to working with wholesalers to set preferred products and creating a coordinated, centralized purchasing structure. They reviewed orders to ensure each site was buying the same product that was best for patients and best in value for the organization.
Within six months, about $500,000 was saved. However, the system needed more control over the mixed budget involving wholesale acquisition cost, group purchasing organization agreements and the 340B program — which accounts for 63% of the system’s $375 million annual budget.
Dr. Frodin and his team eventually partnered with QuicksortRx, an award-winning data analytics firm that “stood out head and shoulders above the competition,” he said.
QuicksortRx, studied a year’s worth of MultiCare’s drug spend data to discover cost-cutting opportunities. The research led to real-time identification of best-priced products.
“That first year, they gave us a conservative savings estimate,” Dr. Frodin said, “and we ended up tripling it.”