Reduce Hospital Pharmacy Costs: Better Reimbursement, Less Spend

Every year, hospital leaders are asked to find more ways to tighten their budgets. Doing more for less is the norm. One place where cuts can occur, often without reducing staff, is the pharmacy, which at 10-20 percent of the average hospital’s operating budget is one of the highest cost centers in a hospital.

It’s a double-edged sword. New regulations demand that hospital pharmacies spend more to ensure the highest level of patient care. Meanwhile, the pharmacy is a prime location for hospitals to start improving cost efficiencies and setting benchmarks for improved reimbursement.

Efforts to cut hospital pharmacy costs have shown real promise

Indiana University Health’s Bloomington Hospital, for example, saved $50,000 annually by using an IV preparation of an anti-infective instead of capsules. Using spacers so they could re-use inhalers netted a similar annual savings. These totals may not sound like much taken individually, but in their comprehensive medication utilization review,  Bloomington Hospital implemented 50 cost-saving recommendations that added up to $755,000 in savings. That saved jobs they otherwise would have had to cut and improved the quality of patient care.

At Trinity Regional Health System in Rock Island, Ill., reducing pharmacy spend and optimizing reimbursement resulted in a cost-savings opportunity of between $1.5 million to $2 million.

Long story short? The only solutions to such nuanced problems in hospitals — and there are many — include  a mix of technology, new governance procedures, and automation that collectively eliminate time-consuming, paper-based manual work and allow hospital staff focus on what matters.

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