What hospital executives should ask their pharmacy: 3 questions with Cardinal Health expert Michael Brown

Hospital pharmacies' role continues to evolve. Today, they play a critical role in delivering safe, effective care for patients. They are also uniquely positioned to improve patient outcomes, cut drug expenses and accelerate operational efficiencies to help health systems meet hospitalwide strategic initiatives.

Yet as the pharmacy's role evolves, hospital executives need to understand how to fully leverage this emerging asset and resource to its full potential, noted Michael Brown, RPh, vice president of Managed Services at Dublin, Ohio-based Cardinal Health. For example, said Mr. Brown, today's hospital executives need to leverage their pharmacies as strategic assets to help counter rising drug costs, promote population health initiatives and foster more innovation. 

"Hospital administrators need to ask how their pharmacy can help their organization meet its goals—If administrators don't take the steps to utilize this expertise, their health system is going to miss opportunities to decrease drug expenses and implement productivity and quality standards, which affect outcomes," Mr. Brown said. 

Mr. Brown has more than 30 years of experience in healthcare and is responsible for the operations of more than 200 hospital pharmacies across the U.S. The inpatient pharmacy services business Mr. Brown oversees at Cardinal Health celebrates its 50th year of service this year. 

Here, Mr. Brown outlines what questions hospital executives should ask of their pharmacies to maximize performance and help meet their hospital’s strategic goals.

Editor's Note: Responses have been lightly edited for length and clarity. 

Question: How can hospitals leverage pharmacy to help achieve hospitalwide strategic initiatives?

Michael Brown:Today, hospital administrators must balance a lot—from regulatory pressures, reimbursement challenges or shifts in patient volume to outpatient care. To address these challenges successfully they must be innovative. However, recent research states that about 60 percent of hospital administrators don't have time or resources to focus on new programs or improvements. In terms of the pharmacy department, administrators said that about half of all new initiatives are driven by outside forces – like a new regulatory requirement or shortage alert. So, it's not strategic at all. More often than not, administrators are reacting.  

That said, hospital administrators need to begin asking how their pharmacy can help them meet organizational goals. Innovative approaches, centered on optimizing medication utilization, improvement opportunities and cost-cutting strategies, should come from the experts who live in the pharmacy world daily. Administrators must expect their pharmacy leaders to bring strategic ideas to the table. Overall, I think C-suite leaders should begin elevating the system pharmacist or director of pharmacy to the executive branch, so that these leaders can be part of the holistic, organizational decision-making and strategic planning processes.

The reality is that pharmacy costs have been increasing at about 5 percent annually. That is a big issue hospital leaders must address. When it comes to pharmacy, many administrators don't know how to address those rising costs. However, they have pharmacy experts in their health system who do. If administrators don't take the steps to utilize this expertise, their health system is going to miss opportunities to reduce drug expenses, as well as to implement productivity and quality standards, which can improve patient outcomes. If your patient outcomes are poor, you're going to get hit by penalties and receive less reimbursement. The pharmacy can help ensure better patient outcomes. Administrators should expect their pharmacy leaders to bring their clinical expertise and ideas to the top of the organization. 

Q: How should hospital administrators measure pharmacy performance? What types of questions should they ask their pharmacies today? 

MB:I think a lot of administrators struggle with this question because pharmacy can be an enigma. It is a clinical, technically complex world, and many administrators are unsure when to dig deeper into opportunities. When it comes to measuring pharmacy performance, I urge C-suite leaders to think outside the box. Don't just ask questions like, "How are we doing against my drug budget? How are we doing against regulatory standards?" It must go beyond that. Instead, administrators should focus on several different areas. The first thing they should do is take a step back and look at pharmacy as a whole and asks questions like, "What is pharmacy doing to drive my top-line revenue or patient volume? Do they have a retail strategy? What drugs are being used and how do I maximize reimbursement on those drugs? Are we participating in patient assistance programs?" 

Another area to look at is operational efficiency. Administrators must ask, "What is the pharmacy doing that can improve costs within the hospital? What drugs am I utilizing and how much is it costing me to use those drugs? Are there alternatives that can maximize margins?" 

A third area to focus on is the pharmacy staff's involvement in quality initiatives and productivity. Administrators should ask questions like, "How am I using my pharmacy staff? Are they practicing at the top of their licenses or just checking and entering orders in the pharmacy? Or are they out on the floors, talking to physicians, talking to patients and improving quality care, patient outcomes, proper utilization of medicines, etc.?" Additionally, C-suite leaders should assess the pharmacy's role in various quality initiatives, such as medication safety, pain management programs and how pharmacy can help with medication management across the continuum of care. 

Those are just a few of the new areas that hospital pharmacies should address to help their hospitals succeed and thrive. In terms of measuring and benchmarking pharmacy performance, there are commercial programs that can help hospitals track various data—mostly surrounding productivity and clinical utilization. In addition, there are metrics to use to ensure that your hospital is getting the most from your pharmacy—like those that track medication safety. However, at the end of the day, the C-suite needs a pharmacy leader who can prepare these statistics for them. A hospital needs to have the ability to measure how well it’s doing against their peers, and most pharmacy leaders should have scorecard tools to help their organizations do so.  

Q: What else can pharmacies do to help ensure their hospital's future success?

MB:The pharmacy has to start thinking about the hospital of the future. We pharmacists are no longer just treating patients as they are admitted. We're treating a population and a community. Hospitals are buying clinics, infusion centers and physician practices. As the market consolidates and managing the health of a population becomes the standard, it is important to understand how pharmacy can help address the issues that come with these changes. Most patients are on a medication of some sort and they can obtain their medications in myriad ways, whether at a hospital, retail store, physician's office or infusion center. The pharmacy is in a unique position to ensure patients receive the right drug, take it the right way and understand what it does — regardless of where they obtain the medication. The end goal is to improve quality and patient outcomes. To do that, leaders must look at expanding pharmacy's reach into the community. By working with retail, long-term care and infusion center partners, hospital pharmacies can help improve patients' healthcare journey outside of the three to five days they stay at a hospital.

To learn more about Inpatient Pharmacy Services at Cardinal Health, please click here.

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