Lancaster General on reducing hospital pharmacy costs
Guest post by Jill Rebuck
Hospital standardization programs typically involve physician preference items for orthopedic/spine and the catheterization lab. However, this approach also can be used in other departments as hospitals look for ways to cut costs. In particular, pharmacies represent a significant cost-saving opportunity since pharmaceuticals represent a substantial percent of hospitals' operating budgets.
We took this approach at Lancaster General Health (LGH), a 623-licensed bed, not-for-profit health system in Central Pennsylvania, keeping the focus on providing the safest, highest quality medications while lowering costs.
Toward this goal, LGH worked with VHA Inc., our regional purchasing coalition, to identify and implement tactics like standardization and utilization. As a result, we reduced our pharmacy costs by $1.5 million last year.
One of the keys to our success has been our engaged, interdisciplinary formulary and pharmacy and therapeutics committees, which consist of physicians and other clinicians and pharmacists, including those with knowledge in clinical pharmacotherapeutics, who work together to identify new ways to improve patient care and lower costs.
Every month we review our top 50 drug spend to identify trends in cost and usage. We also analyze our year-over-year drug spend and compare our prices with those of other hospitals of similar size. We've found 10 percent of medications represent 90 percent of our costs, especially when it comes to biologics and medications administered in our infusion center.
With this information, we worked with clinicians on the following standardization and utilization efforts:
Cardiology: We were paying $280,000 a year to administer esmolol, an injectable drug to treat hospitalized patients with hypertension. For uncomplicated, non-emergent patients, diltiazem is an equally effective drug to reduce high blood pressure. Through an education campaign of the cost impact of available alternative therapies with our cardiologists, emergency medicine providers and hospitalist physicians, we have decreased usage by 50 percent, saving approximately $130,000 a year after considering the cost of diltiazem while preserving good clinical outcomes.
Chemotherapy: Oncology medications are our number one drug spend, representing 40 percent of our budget. To reduce waste and maximize cost avoidance, we round pemetrexed dosages to the nearest 100mg and bendamustine to the nearest 25mg, which helped improve the bottom line without impacting care.
Blood Product Derivatives: In the case of blood derivatives, cost savings stemmed from a patient safety initiative to prevent dangerous potential side effects of epoetin alfa, as thrombosis and other serious events can occur with too high hemoglobin levels. We began pharmacist monitoring of patients' hemoglobin and more frequently adjusting the dose of epoetin alfa per protocol to ensure the most cost-effective approach that resulted in the safest care possible while saving $80,000 per year. We also reduced waste by switching from 20,000 units to 5,000 units of thrombin in the operating room and to adjusted weight-based dosing for IVIG (an immunoglobulin agent).
Antibiotic Stewardship: We also took a number of steps to better manage antibiotics prescribing. For example, we prescribe aztreonam (an expensive antibiotic) to patients with penicillin allergies; however, upon examination of records we found 38 percent of those who received the drug did not have a penicillin allergy. Changing this practice saved our hospital $25,000 a year.
While hospitals across the United States are being asked to do more with less in this era of post-healthcare reform, at Lancaster General, we've found keeping the focus on patient safety but continuing to examine our performance has helped us make more effective purchasing decisions to better serve our community.
Jill Rebuck, PharmD, is director of Pharmacy Services at Lancaster (Pa.) General Health