Blog Post

Your biggest ally in managing medication costs and quality

January 4, 2019

    Do you think there's an opportunity to save money on drugs in your medical group? How about improve medication quality? In our 2018 Medications in Physician Practices survey, pharmacy executives around the country overwhelmingly said there's an opportunity to do both.

    Learn essential strategies to oversee pharmacy-related operations in physician practices

    Specifically, 77% of pharmacy leaders thought there was a significant financial opportunity, and 85% thought there was a significant quality improvement opportunity from improving medication procurement and storage in their health system's medical group clinics.

    Here's where the biggest opportunities lie, and how pharmacy can help.

    Biggest opportunities lie in ensuring all clinics are getting the best possible price for medications

    Pharmacy leaders consistently told us they saw savings from identifying the best available price for each drug and ensuring clinics purchased drugs at this advantageous price whenever possible. For many drugs, the best available prices were accessed through the health system's acute care GPO contract.

    To ensure that clinics were getting this best price, leading systems are standardizing their purchasing processes. In some cases, health systems centralized purchasing for medical group clinics through a pharmacy or supply chain buyer. Other systems use a decentralized model, directing clinics to order directly from a specified wholesaler or distributor, but with accountability in place to monitor off-contract purchases.

    Once purchasing process have been standardized, and health system leaders have visibility into who is buying what, pharmacy can work with manufacturers and wholesalers to contract better prices for high-cost and high-volume drugs. From a quality perspective, purchasing visibility also ensures that system leaders know exactly where hazardous drugs are kept within the system, which is critical for maintaining compliance with regulations like USP 800.

    Leaders' misperceptions about drug costs mean many medical groups are missing out

    Many medical group leaders haven't yet looked closely at their drug spend because they are not "at risk"; however, even clinics operating under buy and bill can lose thousands of dollars through inadequate reimbursement or wasted drugs.

    It is crucial to understand how much you are paying for drugs across all medical group clinics, and to compare those prices with your reimbursements to ensure you aren't losing money. This can be difficult if purchasing processes are not standardized, as this makes it hard to oversee drug purchasing and reimbursement across the system.

    On the waste side, simple inventory management best-practices can provide quality assurance while helping your clinics reduce excess stock, resell unneeded medications before they expire, and implement proper waste management protocols to reclaim some revenue and prevent expired medications from accidentally being administered to patients.

    Pharmacy leaders are a critical ally

    A key takeaway from this research is that pharmacy leaders want to help. The pharmacy team brings expertise in managing medications in both inpatient and outpatient settings, and they want to help extend that value into medical group clinics. A first step toward pursuing medication-related opportunities in your medical group is to connect with your system's chief pharmacy executive to discuss how pharmacy can help optimize purchasing, elevate inventory management, and ensure a consistent standard of care.

    Want to learn more?

    Download this research report to learn how you can utilize centralized purchasing to lower drug costs and ensure consistent quality across your medical group.

    5 ways to control the flow of drug expenditures

    Prescription drug expenditures are the fastest growing component of health care spending, putting pressure on health systems' inpatient margins while also creating new revenue opportunities in the outpatient spending. It's critical to understandand useavailable controls to manage drug spend, capture revenue, and position for growth.

    Get the Infographic

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