As hospital profits fall, outpatient pharmacies should help
Wednesday, May 09, 2018
The Wall Street Journal recently published a somber-sounding article sure to send shivers down the spines of hospital investors. It was entitled "U.S. Hospital Profits Fall as Labor Costs Grow and Patient Mix Shifts," and it reported a margin decline to 8.1 percent last year, from 9.5 percent the year before.
This is grim news for health systems, which are already struggling to maintain their market share amid growing competition from clinics and outpatient services.
Since this week is National Hospital Week, and I care deeply about the services and financial stability of the hospital systems in our country, I wanted to share some thoughts from the perspective of a pharmacist.
While the financial picture is complex, and the solution to the problem for hospitals is multifaceted, one sometimes overlooked opportunity is the revenue and patient satisfaction gained from implementing a full-service outpatient and/or specialty pharmacy.
Outpatient pharmacies are positioned to help transition patients safely home with the medications they need. They also serve the needs of hospital employees and can function as specialty pharmacies as needed, depending on the types of specialists employed by the health system.
Outpatient pharmacy services are on the cutting edge of patient care and financial stewardship. We find them at world-class facilities like Johns Hopkins, Dana Farber Cancer Institute and the Mayo Clinic. Even smaller hospitals can experience a return on investment by operating their own outpatient pharmacy.
From a career perspective, I think pharmacists will enjoy the atmosphere of a hospital-based outpatient pharmacy. I tell my students who spend six weeks doing an Advanced Pharmacy Professional Experience (APPE) rotation at our outpatient pharmacy that it is like having one foot in hospital and one in retail.
It is, in some ways, the best of both settings. There are opportunities to use your clinical and patient care skills, while at the same time running a highly efficient and valuable pharmacy for the whole hospital and community.
With falling profits a concern for hospitals, the leadership will want to tap into the revenue-generating opportunities that exist within an outpatient pharmacy.
There are cost savings related to filling employee prescriptions, while offering a convenience often appreciated by the hospital staff. Some sites I have worked with offer intra-hospital delivery of medication to hospital employees, saving them time and improving satisfaction.
Cost savings are improved by outpatient pharmacy involvement in patient transitions, resulting in reduced readmission rates. A recent study published by the American Journal of Managed Care found: "Patients receiving post-discharge care from pharmacists had a 28% lower risk of readmission at 30 days and a 31.9% lower risk at 180 days compared with usual care."
Additional profit opportunities exist for 340b-eligible institutions due to purchasing advantages which can help supplement additional patient service program within the hospital. While this whole subject remains a hot topic, the margins are still there and unlikely to totally disappear any time soon.
Personally, I urge pharmacists who work in or near hospitals that don’t currently offer an outpatient pharmacy to speak to the hospital leadership about this concept.
Get it on the agenda for your next meeting. The investment pays for itself quickly and offers the opportunity to take patient-care to a new level.
And hospitals don’t have to do it alone. In talking to colleagues I find that most of the hesitation around starting an outpatient pharmacy has to do with lack of experience.
It’s true, doing it wrong can be costly. But there are businesses, like Pharmacy Healthcare Solutions, that can work with hospitals to help make this happen and minimize the risk while maximizing the opportunity.
The issue of declining profits for hospitals is a concern. For the sake of patient care, my desire as a pharmacist is to show hospitals that they can supplement revenue losses with services that will actually improve patient outcomes and the bottom line.
An efficiently implemented outpatient pharmacy is one of those services, and it should not be overlooked.
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