Drug Utilization Efforts Save Hospital $290,000

November 2, 2005

Containing costs while improving patient care is a perennial challenge for hospitals and health systems. Today's issue of HFMA Wants You to Know provides a look at how one hospital reduced spending on pharmaceuticals by pinpointing the best opportunities for utilization improvement, as reported in the September 2005 issue of HFMA's Supply Chain Solutions newsletter.

Located in Jackson, Miss., St. Dominic-Jackson Memorial Hospital is a 571-bed hospital owned and operated by the Dominican Sisters of Springfield, Ill. An informal group at St. Dominic, which includes the director of medical staff services and the director of pharmacy services, made a number of drug utilization changes over the years that had a positive impact on the hospital's bottom line.

But the group felt as if it was at a standstill. The director of pharmacy services decided it was time to get a fresh perspective to help identify additional savings opportunities. To do this, St. Dominic's staff worked with consultants from its group purchasing organization to identify new cost-saving opportunities.

Pinpointing Opportunities for Change

The first step was to identify which pharmaceuticals offered the greatest cost-savings opportunities. The consultants looked at St. Dominic's drug spending and identified the following high-cost, high-volume pharmaceuticals:

• Antinausea drugs
• Antibiotics
• Antifungals
• Hematopoietics (drugs that stimulate red blood cell production)

The consultants performed a literature search to identify recommended dosages and other important guidelines for these high-cost, high-volume drug classes. Their research also gave them a starting point to begin discussions.

The consultants met with dozens of physicians and staff members to identify possible ways to either improve patient care or decrease costs by adjusting drug utilization. During these interviews, the consultants asked clinicians about how they prescribed or administered the drugs, as well as about changing the drugs' protocols and/or dosages.

As a result of these meetings, the consultants identified specific drug changes that would potentially save the hospital $290,000:

• Allowing pharmacists to switch from using an expensive, name-brand intravenous antibiotic to a generic version (savings: $90,000)
• Developing a protocol that allows pharmacists to switch from an IV to an oral antibiotic (savings: $50,000)
• Educating nurses about appropriate dosing of a popular postoperative nausea and vomiting drug (savings: $100,000)
• Administering a commonly used antifungal agent orally rather than intravenously (savings: $50,000)

Pharmacy staff at St. Dominic also established an antibiotic subcommittee of the pharmacy and therapeutics committee to review future drug recommendations. The subcommittee includes a core group of experts from pharmacy, nursing, laboratory, and medical staff.  Subcommittee members now meet regularly to discuss the utilization and selection of antibiotics.

Getting Clinicians on Board

To ease the medical staff's concerns regarding cost-saving measures, the consultants and St. Dominic's pharmacy staff held one-on-one meetings with physicians to explain the purpose of the changes and how those would benefit the hospital. To build additional buy-in, the team used information from physician literature and case studies from other medical centers that supported its recommendations.

In many hospitals, the pharmacy is located away from the physicians and nurses -- sometimes in a basement. At St. Dominic, however, the hospital's pharmacists are decentralized and work on the units, side by side with physicians and nurses. Because the pharmacists work closely with clinicians, they are able to assist in implementing suggested utilization changes.

SOURCE:

 "Drug Utilization Efforts Save Hospital $290,000," from the September 2005 issue of HFMA's Supply Chain Solutions newsletter.

Additional Resources

• Cost Control: Comprehensive List of HFMA Products and Services 
• HFMA Supply Chain Solutions Conference NEW!

HFMA Wants You to Know ISSN: 1540-0697. Volume IV, Issue 21. Copyright 2005, Healthcare Financial Management Association. All rights reserved.