Drug Spend Analytics: Why Hospital Pharmacy Should Leverage this Data
December 23rd, 2019
Your hospital pharmacy can reduce costs, boosts revenues, and improve patient care with drug spend analytics. Find out how.
As a hospital pharmacy, you probably are consistently encouraged if not mandated to reduce operating costs. In addition to less spend, you also have to consider new streams of revenue. To do this effectively, you’ll need to understand drug spend analytics. Only with this focus can you accomplish your top objectives.
Tracking Drug Spend
Tracking drug spend isn’t simple, as there are many ways to do this. You may look at reports from your drug ordering system. Or, pull information from your pharmacy software system. Ideally, you’d have a central hub for drug spend data, which aggregates all sources.
By carefully tracking drug spend, you’ll be able to capture data from each facility across the health system as well as have visibility into drug purchases made through all distributors.
Benchmarking and Looking for Drivers
Once you have aggregated your data, it’s time to develop an internal benchmark on spending. From there, you’ll keep monitoring this information to spot trends and variances. Use analytics to identify the drivers of drug costs. You’ll find that most costs related to changes in drug prices, patient volume, dosages, types of patients, and the severity of illnesses.
With this data in one central hub, you can review shifts over time relating to specific drugs, facilities, and more. With this clarity, you’ll be able to understand anomalies better.
How to Use Drug Spend Analytics
When you have a wealth of knowledge about drug spend, you can use this to take advantage of financial benefits. Containing drug spend is easier when you can view issues in real-time.
For example, if you see an unexpected increase in the cost of a drug, then you can determine if a less costly alternative will be acceptable. You can also keep track of drug ordering to ensure that it’s done so per the agreement you have with your distributors or manufacturers. Finally, you may also see a surge in drug usage, which could lead to conversations with prescribers about appropriate dosages and length of therapy.
Drug Spend Analytics Could Enhance Patient Care
To improve patient care, you’ll need analytics to be integrated with other systems like a pharmacy management system, EHR, or other software. By connecting these systems, you can have a better picture of the lifecycle of a medication. This lifecycle includes what you spent on the drug, who it was dispensed to, and the reimbursement received by payers.
With this comprehensive picture, you can start asking deeper questions:
- Is the medication appropriate for the diagnosis?
- Are there more cost-effective alternatives?
- Does the length of therapy make sense for the patient?
- Should dosages be adjusted?
- What are the most prescribed drugs?
- What is the percentage of drugs prescribed that are controlled substances (especially opioids)?
With drug spend analytics, your hospital pharmacy can learn, on a granular scale, what impacts the numbers. With careful analysis, you can use that information to reduce costs, manage trends, and find revenue opportunities.