Below are responses from eight pharmacy leaders who were asked: What is one strategic initiative your pharmacy has implemented that has successfully optimized savings?
Eric Arlia. Vice President of Pharmacy Services at Hartford (Conn.) Healthcare: The Hartford HealthCare pharmacy teams have successfully hard coded a high expense medication review process that has helped reduce unnecessary inpatient drug expense and maximize reimbursements whenever possible. This process was developed in partnership with our clinical leadership teams with our core values of excellence and affordability at the forefront. A multidisciplinary panel was assembled that included pharmacy, medical staff and specialty leadership, revenue cycle, finance and contracting. These stakeholders will come together virtually whenever a high-expense drug request is made for an inpatient. We are able to avoid the expense on the inpatient approximately 25% of the time. When a high-expense med is necessary, the revenue cycle and contracting teams partner with us to ensure documentation is present to make the best case for reimbursement. Contracting will also intervene and make a case for a carve out payment when possible.
Beyond the savings benefits of the program, it has opened up new relationships for the pharmacy team with our revenue cycle and contracting partners. We launched a finance subcommittee of our pharmacy and therapeutics council shortly after, which is regularly attended by all parties. The contracting team now routinely reaches out to us during contract negotiations. They have been able to add carve-in medication payment language to several contracts. Last year, we obtained approval to create a pharmacy revenue cycle program manager role for our team that is shared with the revenue cycle department. The person in this role has already identified more than $1 million in missed reimbursement opportunities in her first six months. Improving revenue capture for services provided helps us reduce the need to pass additional costs on to patients.
Elie Bahou, PharmD. Chief Pharmacy Officer at Providence St. Joseph Health (Renton, Wash.): Like many other organizations, Providence has realized value from our 340B programs. Providence Pharmacy has been instrumental in establishing and optimizing a subset of the 340B program:
Pharmacotherapy clinics (PTCs) and contract pharmacies. In conjunction, PTCs provide pharmacy services for our covered entities while contract pharmacies allow Providence to realize the 340B discounted drug savings for eligible patients treated at our covered entities. This effort has allowed pharmacy to contribute financially, clinically and operationally to the overall mission of Providence.
More importantly, it would not have been possible without the collaboration of stakeholders throughout our organization, particularly our 340B pharmacy leaders. These leaders oversee contract pharmacies through audits/compliance, record management, maintenance of drug pricing standards, communications, etc. Furthermore, these same leaders, alongside my team at system pharmacy, tirelessly helped address the many headwinds faced by the contract pharmacy program over the last few years in the form of new restrictions from drug manufacturers. This effort allowed us to partially mitigate the impact from these manufacturer restrictions.
Wayne Bohenek, PharmD. Chief Officer of Ancillary Services at Bon Secours Mercy Health (Cincinnati): We manage our employee pharmacy benefits. While we utilize MedImpact as a PBM, they are just a claims adjudicator. We have a custom formulary, tier our drug formulary, drive both generics and specialty scripts to our retail and mail order pharmacies, and move patients on chronic meds to a 90-day supply. All of these initiatives offer savings as compared with traditional PBMs.
Ann Byre, PharmD. Vice President and Chief Pharmacy Officer at Allina Health (Minneapolis): Allina Health has improved patient care by reinvesting 340B Drug Pricing Program savings into expanding specialty pharmacy services and complex care management. This initiative provides patients with chronic or rare diseases with a more comprehensive specialty pharmacy services program, ensuring they receive the coordinated, specialized support (i.e. tailored medication management and monitoring) they need to best manage their complex conditions.
As a result, patients benefit from improved adherence and medication safety, reduced hospital readmissions and better overall health outcomes. Through programs including 340B, Allina Health continues to demonstrate its commitment to improve patient care, support underserved populations and enhance healthcare access.
Madeline Camejo, PharmD. Chief Pharmacy Officer at Baptist Health South Florida (Coral Gables): One of our key strategic initiatives last year was the enhancement of our Pharmacy Shared Services Center, our centralized pharmacy distribution model that officially launched in November 2023. This initiative provided significant operational and financial benefits, leveraging centralization to improve efficiency, service reliability, and cost-effectiveness across the health system. Our strategy focused on the following areas:
- Cabinet replenishment: By centralizing this nonclinical distributive function, we have enabled the advancement of pharmacy practice at hospital campuses, allowing pharmacists to focus on direct patient care while improving service reliability and standardization. Currently, over 85% of the medications stored in automated dispensing cabinets (ADCs) are supplied by the PSSC, significantly reducing on-site medication management tasks.
- Centralized procurement: Streamlining purchasing has optimized cost savings, improved contract compliance and enhanced supply chain resilience. A key emerging opportunity is strategic purchasing, which has already generated nearly $580,000 in savings through direct manufacturer partnerships and compliance programs.
- NDC optimization: Standardizing National Drug Codes across the enterprise has improved continuity of care, reduced purchasing variability, and ensured regulatory compliance, resulting in annual savings of over $4.7 million.
- Centralized prepackaging: Consolidating the prepackaging of non-controlled substance medications at the PSSC has driven operational efficiencies, enhanced medication availability and reduced costs. In the past year, over 2 million medication doses were prepacked, generating savings of over $750,000 annually.
- Package sharing: Implementing lowest unit of measure distribution across multiple facilities has optimized inventory utilization, reduced waste and improved stock availability.
Nilesh Desai, MD. Chief Pharmacy Officer at Baptist Health (Louisville, Ky.): One strategic initiative that Baptist Health has implemented to optimize savings is the opening of our $40 million, 102,000-square-foot Central Pharmacy Services Center in La Grange, Ky., in June 2024. This centralized hub serves all 10 of our hospitals and leverages advanced automation, robotics and technology to reduce medication waste and minimize errors. By streamlining operations and improving efficiency, we not only enhance patient care but also reduce costs, enabling our pharmacy technicians and clinicians to focus more on direct patient care.
Jess de Jesus, PharmD. President and Chief Pharmacy Officer at Beth Israel Lahey Health (Cambridge, Mass.): One of the strategic initiatives that we have implemented at Beth Israel Lahey Health that focused on cost savings is our central distribution center. By consolidating the distribution process for our 14 hospitals, our organization is able to leverage economies of scale and improve efficiencies by:
1. Contracting and NDC optimization: Centralizing and streamlining contract negotiations, optimizing National Drug Code usage, and efficient use of repackaged items ensures the best prices are locked in for high-volume items.
2. Formulary standardization: Standardizing drug formularies across all hospitals minimizes variation, allowing for bulk purchasing and reducing redundant costs.
3. Forward buys: Purchasing drugs in advance, especially when discounts, availability/drug shortages, or price variation is identified, reduces costs over time.
4. Optimizing high-cost, low-use drugs: Avoiding stockpiling drugs that are infrequently used and will expire helps prevent waste and reduces costs.
5. Volume-tiered pricing: By adjusting pricing tiers based on volume, we leverage our purchasing power to maximize savings for frequently used drugs.
All of these efforts are aligned with enhancing operational efficiency while reducing costs across the health system.
Melanie Massiah-White. Vice President and Chief Pharmacy Officer at Inova Health (Falls Church, Va.): At Inova, our pharmacy team is focused on cost containment and optimizing revenue while decreasing out-of-pocket expenses for patients. We have partnered with two innovative platforms to help drive our results. One is a cloud-based application that helps us manage medication ordering from our acute care pharmacies, guiding our pharmacy purchasing team to the most cost-effective products while ensuring contract compliance. This tool also highlights opportunities for both bulk and strategic buys. Another platform automates the selection of biosimilars at the patient level, streamlining workflow and improving margin. Both tools position us for success as we open our 75,000-square-foot, state-of-the-art Pharmacy Services Center this spring.
