Baptist Health, based in Louisville, Kentucky, is leading a rapidly growing trend in pharmacy optimization. The health system is centralizing, automating and enhancing pharmacy operational, clinical and regulatory processes across its eight hospitals and more than 450 ambulatory care sites within a 102,000-square-foot Central Pharmacy Service Headquarters.
The consolidated pharmacy service center (CPSC) model is designed to address the many challenges facing health system pharmacy leaders today: rising costs, drug shortages, labor shortages, pricing/reimbursement complexities, and increasingly stringent regulations.
Additionally, economies of scale enabled by pharmacy optimization position health systems to capitalize on growth opportunities for increased revenue capture, including pharmacy service expansion into non-acute areas.
Here are five ways Baptist Health is leveraging its CPSC pharmacy optimization to overcome today’s challenges and support future growth.
1. Purchasing and Reimbursement Accuracy
While pharmacy leaders rely on the 340B Drug Pricing Program to partially offset the cost of uncompensated care and to provide critical services in the community, compliance with the program is notoriously complex and “participation comes with significant administrative requirements.”
Errors can lead to overspending on drugs when an entity misses 340B opportunities, or penalties if they erroneously claim 304B purchase eligibility.
Baptist Health’s CPSC is being designed as a central hub for nearly all drug purchases with systemized policies and procedures. This is operationalized through the Tecsys advanced cloud-based Elite™ platform, which captures all applicable information required for the 340B pricing program.
Real-time pricing updates improve accuracy across general purchasing and 340B, assisting in the three-way matching of the purchase order (PO) to the price paid to the expected price, as well as ensuring accurate accumulations in the third-party administrator (TPA) software.
2. Inventory Management Automation and Optimization
With the inflationary impact of pharmaceutical pricing expected to be in the high single or double digits in 2024, U.S. health systems and hospitals are seeking ways to contain drug costs. This includes pharmacy optimization practices that minimize waste.
Leveraging the Tecsys platform, Baptist Health is extending automated inventory tracking from the CPSC out to Baptist Health facilities all the way through to the point of use to unburden pharmacy staff and clinicians of manual inventory management tasks.
Real-time visibility into and control over drug products inside and outside of the CPSC — including medications that are in transit or stored in automated dispensing technologies, storage rooms, and clinical departments — allows the Baptist Health pharmacy team to improve inventory management, helping to reduce waste and costs while enhancing patient safety.
3. Regulatory Compliance
Drug diversion is a growing problem among health systems and hospitals. In a recent survey of health executives, 69% of respondents pointed to the increased presence of floating staff or contract workers as the primary factor that made drug diversion detection more challenging.
Heightened risks of counterfeit and diverted drugs in the U.S. healthcare supply chain have prompted more stringent regulations and compliance requirements for health system and hospital pharmacies.
Automated capture and tracking of lot numbers, expiration dates and full product pedigree within the Tecsys platform supports Baptist Health’s compliance with regulations and standards, including:
- U.S. Drug Enforcement Administration (DEA) drug diversion regulations
- The Drug Supply Chain Security Act (DSCSA)
- U.S. Pharmacopeial Convention requirements for sterile and non-sterile compounding (USP)
- National Association of Boards of Pharmacy (NAPB) and state boards of pharmacy medication handling requirements
4. Analytics and Demand Planning
Health system pharmacy leaders cite manufacturing shortages and a lack of forecasting as the greatest threats to the supply chain.
The integration of the Tecsys platform with Baptist Health’s electronic health record (EHR), enterprise resource planning (ERP), financial systems and pharmacy point of use solutions establishes a single repository for drug purchasing, tracking and usage data. With all the data in one place, and the application of advanced analytics, the pharmacy team has actionable insights for informed decision- making and proactive planning.
Furthermore, with pharmacy services centralized, standardized, and automated from the CPSC out to patient care settings, Baptist Health pharmacists and technicians can spend less time on tactical tasks and more time on strategic activities as the scope of their profession shifts in this direction.
5. Expansion of Pharmacy Services
A recent survey by McKinsey & Company reveals the desire for growth among health system pharmacy leaders, with 85% of respondents considering expansion of services into ambulatory and specialty networks, 70% home infusion, and 60% retail or mail order.
Baptist Health’s CPSC pharmacy optimization supports it growth trajectory, expansion of patient care into the communities, and generation of revenue to reinvest in care delivery. It provides centralized hub for mail orders, kits and trays management, compounding, and specialty pharmaceuticals.
Health system leaders are increasingly turning to pharmacy optimization to contain costs, improve process efficiency and accuracy, enhance compliance, and better serve clinicians and patients. Furthermore, the expansion of space and operations in the CPSC, centralization of pharmacy staff resources, and use of automated technologies establishes a flexible, productive, and cost-effective foundation for service and revenue growth. Through their implementation of key pharmacy optimization strategies, Baptist Health provides a practical model for other health systems looking to turn today's challenges into a strategic roadmap.