Institutional Pharmacy Financials

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StaviZFingerZ said:
You're going fishing in South Dakota? Take lots of pictures! :thumbup:
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Hmmmm, now you've got me thinking. That would actually be a fun trip! I'll have to keep it on the back burner...
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WVUPharm2007 said:
Photography...fishing...looking at trees...man, you people are boring.
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Guess they need to put a Dave and Busters out near the fishing hole to get you interested....or maybe they could attach flashing lights to the fish and give out tickets when you catch one.
 
StaviZFingerZ said:
Hospital pharmacy does not have "cashflow" unless there's an outpatient pharmacy service. The revenue through inpatient pharmacy service is typically termed "ghost revenue" because it's meaningless when the reimbursement is DRG based.

So, the emphasis must be put on controlling the "Cost of goods" rather than increasing the cashflow through revenue.

Does it make sense?
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I wasn't necessarily meaning cashflow from a profit/loss standpoint per se. More of a where does all the money in pharmacy go, who controls it, who makes the decisions. I'd be interested in your idea.

We had a 3 hour discussion/roleplay on the interplay between pharma, PBMs, Health plans, aggregators, employers, retail pharmacy, etc. in determining cost to each and reimbursements/rebates/incentives. Very enlightening to know how many times the same money can change hands, it almost seems like a shell game.
 
StaviZFingerZ said:
I would think if RX school had different elective tracks, I can lecture the "institution pharmacy track" students.. then perhaps more than 10% of this select group of students would be interested.

I don't want to lecture to kids who are not interested.
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SU has this very thing. They also have a golf tourney every August. That'd be double score for you.
 
OK,

Here goes. But let's make it interactive. So pay attention.

Z Medical Center Zosyn 3.375 gram Purchase History:

June: 125 sleeves (10 vials) $17 per vial
July: 150 sleeves
Aug: 140 sleeves

How much did they spend per month on Zosyn 3.375grams?
 
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StaviZFingerZ said:
This is not a trick question. Don't think too hard. It's simple math.
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Too bad the world isn't as simple as an algebra equation. I need to know whether or not you are using minibags, the added cost, if any, in labor, if they are frozen, I need to know how much it would cost to run the freezer/fridge to keep them fresh...and so on...
 
WVUPharm2007 said:
Too bad the world isn't as simple as an algebra equation. I need to know whether or not you are using minibags, the added cost, if any, in labor, if they are frozen, I need to know how much it would cost to run the freezer/fridge to keep them fresh...and so on...
Click to expand...


Now I see why you don't make a very good student. I asked a simple question of how much zosyn was purchased and you're worried about how it's dispensed. If you would play along and answer the question that's asked, either I will or this little workshop will answer your concerns.
 
WVUPharm2007 said:
Too bad the world isn't as simple as an algebra equation. I need to know whether or not you are using minibags, the added cost, if any, in labor, if they are frozen, I need to know how much it would cost to run the freezer/fridge to keep them fresh...and so on...
Click to expand...

Haha, overanalyzing **** like this made me suck at multiple choice, but rock questions that required critical thought or explanation ( a la long answer).
 
OK, the rogue Canadian gets the candy. Good job.

June: $21,250
July: $25,550
Aug: $23,800

So, what's this mean? Zosyn cost for July was the highest..it seems, right? But not really.

Hospitals collect daily census at midnight by counting the occupied beds.

And here's the monthly census info. We call it Patient Days.

June: 7,500
July: 8,300
Aug: 7,200

What would you do with the information here?
 
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StaviZFingerZ said:
Now I see why you don't make a very good student.
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So, then, you would admit that success in school is a terrible barometer for the ability to display critical thought. Yet, like others, you are starting to buy the residency hype machine...even though the only people that get into them are the type that are good at school.

Boo, I say, booooooooooo.
 
WVUPharm2007 said:
So, then, you would admit that success in school is a terrible barometer for the ability to display critical thought. Yet, like others, you are starting to buy the residency hype machine...even though the only people that get into them are the type that are good at school.

Boo, I say, booooooooooo.
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You don't get it do you? I don't believe you'll find me saying residency is required to become a better pharmacist. What you will find me saying is residency will allow you to become more competitive in tight job markets. Residency will certainly expose a pharmacist to many different areas of institutional pharmacy operations in a concentrated dose in a short period of time while the approach you're taking and the same one I took will require more time to acquire that experience. It took 7 years out of pharmacy school for me to land my first DOP job...with residency, I would have done it faster.

And residency is now more relevant because of oversupply of pharmacists and tougher job market. That's why I endorse residency. If you can get a hospital position out of pharmacy school without a residency, then that's not a bad way to do it. But more likely, you'll be passed up for a promotion in the department to pharmacists with residency. Again, individual variation applies here.

School is a game. And you suck at playing the game for whatever the reason. You live your life as you believe is the right way. I like to live my life through a path of least resistance. And I learned that playing the game well makes things easier for me as long as I don't compromise my beliefs..
 
Ok...drug cost per dose vs drug cost per patient day vs drug cost per admission...yes....we can do algebra...I'd rather get to your point...really drug cost per dose is the only thing that I can control...unless I get power to tell the physicians that drug x will kill our all-mighty and all-important drug cost per admission...and they actually listen to me...which isn't likely...because they don't care...unless they are hospitalists...or your P&T committee has the power to tell the ID docs to **** off whenever they start ordering Synercid...


...but if you can tell me how to lower drug cost per patient day outside of the physicians' ability to **** it all up...that would be useful...
 
StaviZFingerZ said:
And I learned that playing the game well makes things easier for me as long as I don't compromise my beliefs..
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Those two things are directly going against each other in my mind...

...because I refuse to play bull**** games...because I find it to be immoral and dishonest...and, frankly, beneath me...

...oh well.
 
WVUPharm2007 said:
Ok...drug cost per dose vs drug cost per patient day vs drug cost per admission...yes....we can do algebra...I'd rather get to your point...really drug cost per dose is the only thing that I can control...unless I get power to tell the physicians that drug x will kill our all-mighty and all-important drug cost per admission...and they actually listen to me...which isn't likely...because they don't care...unless they are hospitalists...or your P&T committee has the power to tell the ID docs to **** off whenever they start ordering Synercid....
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What is the Zosyn cost per patient day each month? Just play along..I'll learn you something. You fool.
 
WVUPharm2007 said:
Those two things are directly going against each other in my mind...

...because I refuse to play bull**** games...because I find it to be immoral and dishonest...and, frankly, beneath me...

...oh well.
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And you're saying this financial case study is bull chit game?
 
StaviZFingerZ said:
And you're saying this financial case study is bull chit game?
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If it has a use, sure, I'm cool with it.

If its an organized, insidious system that shifts the burden of training upon pharmacists under the facade of greater prestige; and, meanwhile, potentially punishes those that refuse to comply with said insidious system...then, yes, its a bull**** game.

And I don't see you offering to pay me $40,000 a year to kiss ass and work 60 hours a week...so I'd assume you have a point.
 
Ok,

June: $2.83 per Patient Day
July: $3.08 per patient Day
Aug: $3.31 per Patient Day


Clearly we're seeing an upward trend in Zosyn cost.

But wait... did patient days include inpatients occupying beds..what about patients that came to ER, outpatient surgery, infusion clinic... they are not counted in the patient day calculation...that doesn't seem fair...

How do we account for them? Suggestion?
 
...and if I'm a director, I'd really have a hard time deciding whether or not I'd hire residency trained people.

On one hand, you could probably dangle enough cheap and easy to create prestige-facade-carrots in front of their faces to keep them reasonably happy. They are the type of person that get all warm and tingly whenever you give them a nice-sounding title. I could give out titles all day. "Well, Karen, you are being promoted to Senior Clinical Pharmacist of the Luther Vandross Department of Clinical Pharmacotherapy." Then I'd just give her essentially the same position. And pay. Maybe let them do some stupid side-dish of a clinical program on the side...

Then on the other hand, I couldn't trust them. If you are willing to jump through bull**** to get where you are...sorry, can't trust you. Of course, they could just be the type of person that does what their professors thought would be impressive in school. Those people would be awesome to hire...always willing to please and look good.

And with non-residency types...you know...those smart kids that got terrible grades...I'm not sure I could control those very well. While I think I could trust them, I know they wouldn't take my bull**** that I would create to control them. A facade of a "promotion" would only piss them off more because they would find it insulting...I'd actually have to get HR to pay them more.

Hmmm....

Interesting...I'll have to think about that one...
 
WVUPharm2007 said:
...and if I'm a director, I'd really have a hard time deciding whether or not I'd hire residency trained people.

On one hand, you could probably dangle enough cheap and easy to create prestige-facade-carrots in front of their faces to keep them reasonably happy. They are the type of person that get all warm and tingly whenever you give them a nice-sounding title. I could give out titles all day. "Well, Karen, you are being promoted to Senior Clinical Pharmacist of the Luther Vandross Department of Clinical Pharmacotherapy." Then I'd just give her essentially the same position. And pay. Maybe let them do some stupid side-dish of a clinical program on the side...

Then on the other hand, I couldn't trust them. If you are willing to jump through bull**** to get where you are...sorry, can't trust you. Of course, they could just be the type of person that does what their professors thought would be impressive in school. Those people would be awesome to hire...always willing to please and look good.

And with non-residency types...you know...those smart kids that got terrible grades...I'm not sure I could control those very well. While I think I could trust them, I know they wouldn't take my bull**** that I would create to control them. A facade of a "promotion" would only piss them off more because they would find it insulting...I'd actually have to get HR to pay them more.

Hmmm....

Interesting...I'll have to think about that one...
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Don't hurt yourself thinking that hard. I'm not as calculating as you.
 
StaviZFingerZ said:
Ok,

June: $2.83 per Patient Day
July: $3.08 per patient Day
Aug: $3.31 per Patient Day


Clearly we're seeing an upward trend in Zosyn cost.

But wait... did patient days include inpatients occupying beds..what about patients that came to ER, outpatient surgery, infusion clinic... they are not counted in the patient day calculation...that doesn't seem fair...

How do we account for them? Suggestion?
Click to expand...

Do dose per diagnosis-stay...or go by each patient and figure out how long the actual therapy lasted...or whatever...

...but when you go down that road, you are talking about **** I can't control...so...?
 
WVUPharm2007 said:
Do dose per diagnosis-stay...or go by each patient and figure out how long the actual therapy lasted...or whatever...

...but when you go down that road, you are talking about **** I can't control...so...?
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Good try. But not the best way to evaluate outpatient volume.. keep thinking about it. Give me a solution to account for outpatient volume... Einstein. :smuggrin:
 
StaviZFingerZ said:
Good try. But not the best way to evaluate outpatient volume.. keep thinking about it. Give me a solution to account for outpatient volume... Einstein. :smuggrin:
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Ok...and...again...is this something *I* can control...or something that is going to be based upon begging physicians to do as I say...because we all know how that works. They ignore you and do the opposite of what you told them to do in spite of having an RPh try to tell them what to do.

That said.

You need to figure out a way to compare Zosyn as a total therapy for random infection vs other available modalities for same infection...which is what I'm assuming the road you are going down is...otherwise, you need to tell me what your point is before I can surmise a guess at wtf you are trying to accomplish.
 
WVUPharm2007 said:
Ok...and...again...is this something *I* can control...or something that is going to be based upon begging physicians to do as I say...because we all know how that works. They ignore you and do the opposite of what you told them to do in spite of having an RPh try to tell them what to do.
Click to expand...

You're way way out in the left field. I'm asking how do we quantify outpatient volume because hospital patient days doesn't count outpatient service volume in the patient days count.

That said.

You need to figure out a way to compare Zosyn as a total therapy for random infection vs other available modalities for same infection...which is what I'm assuming the road you are going down is...otherwise, you need to tell me what your point is before I can surmise a guess at wtf you are trying to accomplish.
Click to expand...

You're even further away..outside of the ball park.

I'm not talking clinical pharmacy. I'm talking pharmacy financials. I will bridge the gap between pharmacy financials and clinical pharmacy eventually...but this little exercise is not it.
 
StaviZFingerZ said:
You're way way out in the left field.
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Pretty much.

I'm asking how do we quantify outpatient volume because hospital patient days doesn't count outpatient service volume in the patient days count.
Click to expand...

Hell if I know. I figure you figure out a way to only count admitted patients. Which prolly isn't that hard...though I'd wonder why you wouldn't go further...why count people admitted with CV probs or whatever...



I'm not talking clinical pharmacy. I'm talking pharmacy financials. I will bridge the gap between pharmacy financials and clinical pharmacy eventually...but this little exercise is not it.
Click to expand...

Yeah...and I was talking comparing abx regimen A vs regimen B...and seeing which is the most cost-effective for diagnosis X...which is what I assumed you were going for.
 
This isn't a clinical talk. I used Zosyn because it makes for an easily identifiable drug.

Again.....don't you give drugs out to patients who aren't admitted? And the get discharged before a 24 hour stay. So pharmacy service is being provided to those patients not admitted who are not counted in the daily census.

My question now is...how do we account for them?
 
StaviZFingerZ said:
This isn't a clinical talk. I used Zosyn because it makes for an easily identifiable drug.

Again.....don't you give drugs out to patients who aren't admitted? And the get discharged before a 24 hour stay. So pharmacy service is being provided to those patients not admitted who are not counted in the daily census.

My question now is...how do we account for them?
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Change your increments from days to hours?
 
StaviZFingerZ said:
and how would you include those outpatients into hours?
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Include their hours towards a patient day by including them into a census. I'm merely suggesting increasing your census by doing a more thorough sampling technique than once daily. If you had a census each hour, you could translate that into a relatively accurate picture of per patient day. I've got no clue of the setup of a hospital though.
 
joetrisman said:
Include their hours towards a patient day by including them into a census. I'm merely suggesting increasing your census by doing a more thorough sampling technique than once daily. If you had a census each hour, you could translate that into a relatively accurate picture of per patient day. I've got no clue of the setup of a hospital though.
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hmmmm.... interesting... actually, that's a very logical and well thought out recommendation. :thumbup: But not practical. Tho, you get a snickers bar for trying.

I say not practical because there's an easier way of doing it.
 
My best guess is that you could keep a running tally of the ratio of the number of patient days to the number of sleeves used each month to determine the relative number of outpatient hours for each month. Theoretically, the lowest value for the ratio of the number of patient days to the number of sleeves used would indicate the month that had the lowest number of outpatient hours and thus would have the "truest" patient day value. You could then use this ratio to calculate the number of "true patient days" and assign "patient days" values to the miscellaneous outpatient hours.

For your example:
June: 7500 p.d. (patient days)/125 sleeves = 60 p.d./sleeve
July: 8300 p.d./150 sleeves = 53.3 p.d./sleeve
Aug: 7200 p.d./140 sleeves = 51.4 p.d./sleeve <--winner!

So, August looks like it had the fewest number of outpatient hours. We can then use the p.d./sleeve in August to calculate the number of outpatient hours in terms of patient days for the other months, relative to August:

June: 7500 p.d. - (51.4 p.d./sleeve)(125 sleeves) = 1071 outpatient p.d.
July: 8300 p.d. - (51.4 p.d./sleeve)(150 sleeves) = 586 outpatient p.d.

You could calculate the p.d./sleeve ratio each month and update your relative outpatient hours as needed if a month came along with fewer absolute outpatient hours. The only problem is that, since you're never going to have a month with zero outpatient hours, you're never going to know what that absolute outpatient hour value is using this method. So, this may not be the solution you're looking for.
 
YesPharm said:
My best guess is that you could keep a running tally of the ratio of the number of patient days to the number of sleeves used each month to determine the relative number of outpatient hours for each month. Theoretically, the lowest value for the ratio of the number of patient days to the number of sleeves used would indicate the month that had the lowest number of outpatient hours and thus would have the "truest" patient day value. You could then use this ratio to calculate the number of "true patient days" and assign "patient days" values to the miscellaneous outpatient hours.

For your example:
June: 7500 p.d. (patient days)/125 sleeves = 60 p.d./sleeve
July: 8300 p.d./150 sleeves = 53.3 p.d./sleeve
Aug: 7200 p.d./140 sleeves = 51.4 p.d./sleeve <--winner!

So, August looks like it had the fewest number of outpatient hours. We can then use the p.d./sleeve in August to calculate the number of outpatient hours in terms of patient days for the other months, relative to August:

June: 7500 p.d. - (51.4 p.d./sleeve)(125 sleeves) = 1071 outpatient p.d.
July: 8300 p.d. - (51.4 p.d./sleeve)(150 sleeves) = 586 outpatient p.d.

You could calculate the p.d./sleeve ratio each month and update your relative outpatient hours as needed if a month came along with fewer absolute outpatient hours. The only problem is that, since you're never going to have a month with zero outpatient hours, you're never going to know what that absolute outpatient hour value is using this method. So, this may not be the solution you're looking for.
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You're right about that...:smuggrin:
 
Here is the accepted means to capture outpatient volume in the US healthcare system. And this method isn't limited to pharmacy. It's done in every hospital department that provides both inpatient and outpatient service.

By Revenues.

Pharmacy has both inpatient and outpatient revenue. Revenue is generated every time a medication is given to a patient, both inpatient and outpatient.

Example of an outpatient revenue is when a patient receives tylenol in the ER or an chemotherapy in an infusion clinic. Inpatient revenue is for every drug given inpatient.

Remember, inpatient revenue is a ghost revenue meaning hospitals don't expect to collect what they billed since most reimbursement is in DRG. However, outpatient revenue has a good chance hospital will get paid what they billed. Of course this is whole another topic.

Let's say:

June: Inpatient Revenue: $1,200,000 Outpatient revenue: $200,000
July: Inpatient Revenue: $1,300,000 Outpatient revenue: $200,000
Aug: Inpatient Revenue: $1,250,000 Outpatient revenue: $250,000

Ok, here is how you calculate "Outpatient Factor."

Outpatient Factor = ( Total Revenue/inpatient Revenue)

So tell me.. what is an outpatient factor? What does it measure? What is the outpatient factor for each month?
 
StaviZFingerZ said:
Oh..sorry..too late...but don't worry... I always lead you to another question.
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No problem. I see I was headed in the wrong direction anyway. I'm game for one more round. Thanks.

Outpatient factor--factor by which inpatient revenue is amplified to yield total revenue. It measures by how much total revenue comes from outpatient revenue than just inpatient revenue alone.

June: 1.17
July: 1.15
August: 1.20
 
YesPharm said:
No problem. I see I was headed in the wrong direction anyway. I'm game for one more round. Thanks.

Outpatient factor--factor by which inpatient revenue is amplified to yield total revenue. It measures by how much total revenue comes from outpatient revenue than just inpatient revenue alone.

June: 1.17
July: 1.15
August: 1.20
Click to expand...

Good Job.

Ok, here were the patient days.

June: 7,500
July: 8,300
Aug: 7,200

Let's adjust the patient days using the outpatient factors.

Pharmacy Adjusted Patient Days (PAPD) = RX Outpatient Factor X Patient Days.

So, what are the PAPD for June, July, and August. And now what is the Zosyn Cost per PAPD?
 
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