Blog Post

How Mayo standardized system-wide prescribing—and saved $50M annually in the process

June 21, 2019

    Care variation reduction (CVR) continues to be an evolving priority for CMOs. It's no longer enough to reduce care variation only in the acute setting; CMOs are increasingly setting their sights on reducing variation across the care continuum. A critical—yet often overlooked—step is to implement a system-wide formulary and standardize medication selection across care settings.

    Mayo Clinic's system-wide formulary

    Approximately 15 years ago, Mayo Clinic aligned its formulary across all care settings, as well as its system-owned health plan. Like many systems experiencing rapid growth, Mayo Clinic found that its hospitals and physician practices were all using different medications. This situation led to inefficient purchasing and inconsistent clinical care. In response, Mayo's supply chain department led a multi-stakeholder effort to create of a single, system-wide formulary, which the supply chain department still oversees today.

    Dynamic committee membership keeps formulary up-to-date

    At Mayo, there are two groups that make standardization possible: a single, system-wide pharmaceutical formulary committee and 12 specialty task forces.

    A few times a year, the system-wide committee meets to review drugs used by multiple specialties. On a monthly basis, the 12 specialty task forces meet to do the bulk of the decision-making. Importantly, it’s not the same people convening around the table each time: Task force leaders can swap out clinical experts based on the expertise needed for the drugs on the agenda at each meeting. What does remain constant are the task force leaders—a physician chair and pharmacist vice-chair—as well as the pharmacists who support contracting, managed care, and logistics.

    The benefits of a system-wide formulary

    A system-wide formulary helps limit drug cost growth and supports volume discounts for purchasing. Mayo estimates that it yields $50 million in drug savings annually, shaving off an estimated 5% of total annual drug costs.

    In addition to the financial benefits, leaders at Mayo report that a system-wide formulary improves care continuity for patients. Using one set of rules across care settings reduces the potential for medical errors and makes life easier for physicians who don't have to juggle different requirements for inpatient and ambulatory settings.


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