As health systems face new performance-based reimbursement models, diminishing resources and increasing prescription drug spending that is expected to grow at a rate of 5% annually over the next five years, hospital pharmacy leaders are turning to data analytics.1 Yet, it is estimated that 70 to 80 percent of business intelligence initiatives fail to deliver promised results.2 This is because tracking and analyzing data often takes longer and is more costly than expected.
By leveraging best-practices and powerful technology, pharmacies can harness the power of data analytics and transform this challenge to their organization's competitive advantage.
Best Practices for Improving Clinical, Financial, and Competitive Outcomes
Effectively using data to manage a hospital pharmacy's
drug spend while driving quality patient care requires a clear view into purchasing history and spending trends, plus the ability to turn that robust information into results. Here are four best practices to help pharmacies achieve their goals.1. Determine priorities through collaborative analysis
Prior to launching a hospital pharmacy's data initiative, pharmacy directors should invite a cross-functional team to define the patient care priorities, cost objectives, and desired outcomes. This team should include hospital executives, supply chain leaders, directors of pharmacy, physicians and nurses to ensure that everyone influencing drug use has a voice in the process. Pharmacy directors should then keep these stakeholders regularly informed about the insights gained from data analysis so they can understand the impact of their actions and adapt their practices accordingly.2. Ensure that data is accessible, meaningful, and usable
A hospital pharmacy's analytics will only be as effective as its source data. That's why it's important that IT platforms throughout its health system have electronic data exchange (EDI) functionality. In addition, the data that its organization gathers should be organized and formatted in a way that makes it easy for its cross-functional team to understand and to use. And data should be tied to patient records in a meaningful way, while protecting patient privacy.3. Automate analysis to reduce manual hours and increase insight
Today many pharmacy leaders are tracking and analyzing data manually using tools such as Excel. This is a cumbersome, slow process that leaves significant room for human error and generally doesn't yield a clear view into their drug spend. Another challenge with this format and similar 80/20 reports is that they often lack key features like historical purchase data, making it difficult to identify and track cost containment initiatives.
In contrast, an automated, digital solution can give pharmacy leaders greater insight into their spending trends; reduce valuable time spent on analysis; ensure accurate, comprehensive and timely reporting; and allow their organization to make more informed decisions.
When choosing a platform, pharmacy leaders should look for an interactive, intuitive dashboard that is highly visual. They should make sure there is a clear path to accessing desired data quickly and easily, with the ability to drill down further. They will want a solution that updates drug spend data automatically on a daily basis and includes at least 24 months of historical data to give their organization both immediacy and a long-term perspective on trends and variances.
The small amount of time that pharmacy leaders initially invest in learning how to use an interactive data analytics tool will save their organizations a tremendous amount of time and energy in the long run. They could even delegate others on their team to capture and track data according to their specifications, giving their organizations back precious time to analyze and take action on the findings.4. Review drug spend frequently, identify trends and respond immediately
By dedicating resources to regularly evaluate and leverage
drug spend data that reflects the hospital pharmacy's strategic priorities, pharmacy directors can discover trends and variances that help determine how to alleviate inappropriate usage. The two primary trends to consider are drugs that are increasing in utilization or price.
When pharmacy directors see a significant increase in utilization of a drug, they can evaluate why usage has increased and if the drug is being used inappropriately. Whereas, when they identify drugs with price increases or cost inflation, their organization has justification for spending that does not indicate inappropriate use. And they can plan for how these costs affect their organization's budget.
It's important that pharmacy directors respond to the trends and variances they identify immediately -- by taking steps to arrive at their desired outcomes. The more frequently they review their drug spend, the more proactive they can be about addressing variances. Whereas, if they're looking at reporting quarterly, they are getting a picture of the past that doesn't give them the opportunity to course-correct in present time.
Analyzing Drug Spend is Becoming a Strategic Necessity
Hospital pharmacies face increasing pressure to leverage data analytics to reduce costs, help with budget forecasting and fiscal year tracking, and drive quality patient care. When implemented strategically and collaboratively using the right tools, this kind of investment can yield meaningful drug spend analysis, giving pharmacy leaders the evidence they need to effectively establish and track cost containment initiatives. This can help them lower drug spend, reduce manual work hours and improve efficiency so they have more time to focus on medication safety and patient care.
Related: Learn about Studiomaca's Drug Spend Solution