A seat at the table: How IU Health overcame obstacles to physician engagement and drug cost savings

Traditionally, hospitals have addressed rising drug costs through purchasing optimization and pharmacy-managed programs. Hospitals typically focus on driving savings through group purchasing organizations, pharmacy-managed cost control initiatives and active formulary management. However, for many hospitals, sustainable results remain out of reach. 

Sustainability requires hospitals to redefine drug costs to account for drug utilization. "True cost is actually price times utilization," said Michael Brown, R.Ph, vice president of managed services at Cardinal Health, during a March 19 webinar hosted by Becker's Hospital Review and sponsored by Cardinal Health. Mr. Brown was joined by Christopher Weaver, MD, senior vice president of clinical effectiveness and a practicing emergency physician at Indiana University Health and Heather Warhurst, PharmD, director of drug use policy, quality initiative and regulatory at IU Health. 

To be successful at generating sustainable savings, hospital leaders "need to look beyond pharmacy medication costs," Mr. Brown said. "You need to get all the stakeholders involved to drive change that impacts the cost curve in your drug purchases and utilization."

How IU Health looked beyond its pharmacy to drive sustained results

Indianapolis-based IU Health was no stranger to drug cost containment strategies when the 16-hospital, nonprofit health system began working with Cardinal Health to generate drug cost savings. The health system had implemented several purchasing optimization and pharmacy medication cost control programs like inventory management, maximizing GPO and self-contracting agreements, drug-waste recovery, formulary management and more. Yet sustaining lasting change remained elusive.

Two years ago, IU Health began trying a different approach that made the health system's more than 3,600 physicians a central part of its cost saving strategy. Thirty clinical councils were created across specialties to address unwanted care variation. The goal of the councils was to identify best prescribing practices and produce cost savings.  

To choose council leaders, IU Health asked presidents and CMOs in each region of the health system to nominate a provider in a certain specialty that others trusted and supported. The clinical councils also included representation from nurse leadership, pharmacy, clinical analytics, quality and other departments. 

Using Cardinal Health technology, hospital leaders began tracking and sharing drug utilization data with the councils to illustrate prescribing patterns and to help identify opportunities to reduce unwanted practice variation. This data helped inform discussions about which medications would be equally safe and efficacious and the most cost-effective.

Case study: IU Health's emergency medicine council

For example, to limit overuse of opioids, IU Health's medicine council aimed to reduce the number of patients discharged from the emergency department (ED) with a narcotic prescription.

The emergency medicine council started with a goal to reduce the number of patients discharged with a narcotic to 8 percent. Leveraging data showing prescribing rates down to the physician level, council leaders met with prescribing physicians and held peer-to-peer conversations with those who had outlying prescribing patterns. 

Through enhanced data tracking and physician engagement, the council helped decrease the number of ED patients discharged with a narcotic from 13 percent in 2017 to 8 percent in 2019.

"Instead of me or any other administrator sitting in an office making decisions for physicians, we said, 'Hey, come to the table, you're the right people, the experts to make the decision,'" Dr. Weaver said. "The caveat being that you have to make a decision. You can't keep doing it the way you've always done it." 

Systemwide change, lasting results

Since implementing the clinical councils two years ago, in addition to its pharmacy and purchasing initiatives, IU Health has saved $24.7 million and reduced unwanted care variation. For Dr. Warhurst, IU Health's director of drug use policy, telling a story for change through data has been key to the program's success.

"What we provide and what we show providers is helping us tell that story and mobilize clinical change," she said.

Overall, the system has learned several lessons from its approach. The leaders found every region had different practices, audiences and needs, which the clinical councils were best suited to address. Repetition through multiple communication vehicles proved necessary for the clinical councils, as well as continually ensuring that all stakeholders were involved in discussions. Finally, the leaders said it's important to remember that these types of programs aren't a one-time change — they are an ongoing initiative.

To view a recording of the webinar, click here.

To learn more about Cardinal Health, click here

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