Las Vegas—As the financial pressures on health systems continue to mount, facilities are responding with a wide range of cost-cutting strategies, many of which were presented during the American Society of Health-System Pharmacists 2012 Midyear Clinical Meeting. Whether it was billing for drug waste, putting limits on the use of high-cost pancreatic enzymes or having pharmacy leaders manage employee drug benefits—the latter racking up nearly $2 million in annual savings—all of the efforts shared a laudable goal: to conserve precious health care dollars without compromising patient care.

Flushing Out the Waste In Unused Medications

The Overlook Medical Center in Summit, N.J., recouped more than $500,000 in 2011—and another $350,000 from January to August 2012—by ensuring that Medicare reimbursed the hospital for discarded portions of biological agents and other costly drugs. The payments were made possible by collaboration between the pharmacy and the hospital’s Finance Department, which identified Centers for Medicare & Medicaid Services (CMS) regulations allowing certain levels of reimbursement for wasted medications from single-use vials. (Multidose vials are not eligible for waste reimbursement.)

According to Carlos Marin, RPh, lead pharmacist in the IV room of the Oncology Department at Overlook, the initiative began when the Finance Department approached the pharmacy and asked it to track discarded infliximab (Remicade, Janssen). “Every time, we were able to capture payment for a certain percentage of the waste if we documented it,” he explained.

In a pilot study, Mr. Marin and his colleagues identified 11 drugs stocked in single-dose vials at the hospital’s outpatient infusion center and documented any amounts that went unused; they had the same success that they’d seen with wasted infliximab.

The targeted drugs are mainly monoclonal antibodies and chemotherapeutic agents, and the pharmacists responsible for order entry in specific areas were trained on how to document wasted portions of every vial. To make the process easy and fast, the pharmacy’s order-entry system prompts users to record the amount of unused portions of all of the relevant drugs. The system won’t let pharmacists proceed until they supply the requested information, and the extra steps add only a few seconds to the process, according to Mr. Marin.

The results were eye-opening: In 2011, reimbursements for drug waste for the 11 drugs totaled nearly $508,000. Oxaliplatin and bevacizumab (Avastin, Genentech) accounted for 70% of that total. From January to August 2012, the hospital recouped another $346,515. That amount included waste reimbursement for several drugs administered mostly in the inpatient setting, and accounted for about $8,000 over a two-month period.

“You won’t get full payment for all of the unused portion of a vial, but you will get a percentage of these very expensive drugs and realize income that otherwise would not have been there,” Mr. Marin said. For example, the hospital submitted $491,000 worth of claims to CMS for wasted bevacizumab, but received $191,724 in reimbursement.

Since the pilot study, the list of drugs scrutinized for waste reimbursement has expanded to more than 30 agents. “We try to capture those very expensive drugs [for which] reimbursement is very beneficial for the hospital, and it’s working out very well,” Mr. Marin said.

Targeting Pancreatic Enzyme Therapy

At the Ralph H. Johnson VA Medical Center in Charleston, S.C., Karen C. Downer, PharmD, and her first-year pharmacy residency program director, Dorothy E. Jenrette, PharmD, saw an opportunity to simultaneously reduce costs and improve patient care by evaluating the use of pancreatic enzyme therapy and adjusting (even eliminating) therapy when appropriate. By the end of the initiative, Dr. Downer calculated an overall annual cost avoidance of $92,000 for their facility—a mean of about $2,050 per patient.

After the local pharmacy service noticed that the average cost of enzyme therapy for its facility exceeded costs at comparable VA facilities nationally, the Pharmacy and Therapeutics Committee approved a pharmacist telephone clinic to evaluate therapy for patients prescribed more than 60,000 lipase units daily. Between Sept. 1, 2011 and April 1, 2012, 45 patients received clinical pharmacist intervention.

“I called each patient and worked with them to see if we could get them on an appropriate dose,” Dr. Downer said. “I tried to find a way to reduce their daily pill burden and still control their disease, and, ultimately, [reduce] the total cost of the prescribed medication.”

Dr. Downer performed a thorough medical chart review and interviewed each patient for any current or past symptoms of pancreatic disease. She evaluated patients for the frequency and consistency of their bowel movements, any history of weight loss and currently prescribed proton pump inhibitors. “First, I wanted to gauge how they were doing with their current treatment,” she said. If the patients were symptom-free, enzyme doses were gradually lowered by one capsule per meal until they reached a personalized dose without having symptoms.

Many patients were able to decrease their doses significantly and keep symptoms under control. Patients whose symptoms were unstable were referred to the gastroenterology clinic.

All patients received routine follow-up to assess for symptom changes. “I continued to call them until we got them on the lowest dose that kept them stabilized,” Dr. Downer said.

Pill burden was decreased from 6.5 to 2.1 capsules per day (P=0.0001) for the entire group, and from 7.9 to 5.5 for patients who remained on therapy after the intervention. In some cases, even patients with confirmed pancreatitis were weaned completely off the enzymes because they remained asymptomatic without therapy. Twenty-eight patients (62%) were able to discontinue therapy completely; 10 (22%) had a dose reduction; and seven (16%) remained on their original dose. The mean daily dose change from 105,444 to 79,111 lipase units daily represented a statistically significant difference for patients who continued therapy (n=17).

Perhaps the most surprising finding was that 25 of the patients had no history of chronic pancreatic disease and were able to discontinue therapy completely. These patients often were taking enzymes for a history of a single acute pancreatic attack or other bowel disorders for which enzyme therapy was providing no benefit.

Based on those outcomes, the facility was able to establish criteria for prescribing pancreatic enzyme therapy, which includes a confirmed diagnosis of chronic pancreatic disease from a gastrointestinal specialist or by radiographic findings, and patient symptoms of fat malabsorption evidenced by steatorrhea or weight loss. “The diagnosis should not come from a primary care physician or after one visit to the ED [emergency department] without expert or radiographic confirmation,” Dr. Downer said. “The prescription also goes through the pharmacy for approval based on these criteria. These enzymes have become high-cost medications that we monitor monthly to evaluate for appropriate prescribing and use.”

Pharmacists Do It Cheaper Than PBMs

By assuming responsibility for pharmacy services normally delegated to its external pharmacy benefit management (PBM) company, one major hospital system created a novel and more cost-effective way to provide pharmacy benefits for employees enrolled in the system’s health plan.

“Traditionally, we’ve outsourced most of our pharmacy benefit management work,” said Kelley Curtis, PharmD, MBA, corporate director of pharmacy at Sisters of Charity of Leavenworth Health System (SCLHS), in Lenexa, Kan. “Our approach has changed, and now we’ve become very involved with pharmacy benefit consulting and development to create our own pharmacy benefit plan that covers our health system employees and their beneficiaries.”

The health system is composed of 11 SCLHS and Exempla Healthcare facilities in four states, and the employee health plan covers more than 19,000 individuals. In 2010, the health system spent more than $15 million on prescription medications for its employees, including $7 million for mail order prescriptions.

SCLHS/Exempla met with inpatient pharmacy leadership and asked them to identify options that would provide pharmacy benefits to employees, potentially improving health outcomes and lowering drug costs. For example, according to Dr. Curtis, pharmacy administrators worked with the health system’s mail order pharmacy to replace all employee prescriptions supplied by the external PBM with drugs purchased at considerable savings with group purchasing organization (GPO) prices. “Usually you have to pay what [the insurer] wants, but we were able to replace the inventory with prescriptions purchased under GPO pricing, since our employees are eligible for ‘own-use’ pricing,” she said.

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Figure. Cost per day, specialty pharmacy benefit.

The health system also internalized specialty pharmacy services. Dr. Curtis explained that specialty pharmacy services had been outsourced to a company that did little to help SCLHS/Exempla employees enroll in prescription assistance programs. Many were left to scramble for resources to obtain expensive medications, so the health system shifted the responsibility to its own retail infusion center pharmacy, which staffs specialty pharmacy experts. That change alone resulted in a $400,000 savings, along with a notable rise in the number of employees enrolled in prescription assistance programs. The specialty pharmacy plan cost per day of therapy also dropped considerably: from $82.89 per day in the fourth quarter of 2011 (before the plan was brought in house) to $71.35 and $67.94 in the subsequent two quarters (after the plan was internalized) (Figure). Other measures that contributed to savings included encouraging prescribers to select medications in accordance with evidence-based practice, monitoring employee drug usage for over- and underutilization and using copay incentives to drive employees to use outpatient pharmacy services in hospitals where they are available.

As of September 2012, the system had saved an annualized $1,875,000 before drug rebates—a 13.4% decrease from the previous year.

“We’ve handed over many decisions about our employees’ pharmacy care to some of our hospital pharmacy leaders,” Dr. Curtis said. “The human resources department at many hospitals doesn’t realize [it has] access to such a high level of pharmacy benefits specialists right in their own backyard.”

For other systems that want to follow the SCLHS/Exempla lead, Dr. Curtis said the pharmacy department should inform human resources personnel that it wants to become involved with the development of an employee pharmacy plan. “Hospital pharmacy leadership tends to shy away from [such plans], but we could get a lot more involved. We have thousands of employees and their families who could benefit from our services.”

Savings From Lean Process Improvement

Significant savings also accrued to the University of Massachusetts Memorial Medical Center, in Worcester, as a result of its Pharmacy Department’s participation in a system-wide lean process improvement initiative and concurrent adjustments to medication management protocols. By changing its approach to dispensing and administering costly oncology drugs, the facility racked up savings of more than $400,000 from fiscal year (FY) 2009-2010 to FY 2010-2011, according to Karen Smethers, PharmD, BCOP, the manager of the Oncology Pharmacy and Investigational Drug Services.

The cost for inpatient rituximab (Rituxan, Genentech) alone decreased from baseline by more than $250,000 in FY10 and by $150,000 in FY11. The driving force behind the savings was shifting the location of the infusion from the inpatient setting to the outpatient clinic, where the cost of delivering care is lower and reimbursement is higher, Dr. Smethers noted.

The lean process improvement effort was made possible through the work of various multidisciplinary committees representing pharmacists, physicians, nurses, clerical staff, laboratory personnel and hospital administrators, Dr. Smethers added. As a result of that collaboration, several additional cost-cutting strategies were recommended by the medical center’s Oncology Pharmacy and Therapeutics Subcommittee and carried out by caregivers. The strategies included the following:

  • Promoting evidence-based provision of care so that patients receive only those oncology drugs determined to be effective for their specific circumstances according to the most current research. For example, the pharmacy promoted the use of oral immunosuppressive therapy, such as mycophenolate and tacrolimus in clinically stable patients, to reduce cost and promote earlier discharge.
  • Ensuring that patients arrive at the oncology clinic only after they have received prior authorization from their insurance company.
  • Encouraging prescribers to practice dose rounding within 5%, which eliminates waste from partially used vials.



Drs. Smethers, Downer and Curtis, and Mr. Martin reported no relevant financial conflicts of interest.