Institutional Pharmacy Financials

[StaviZFingerZ]

...and being as though we have no control over length of stay or selection of agent...wtf is the point, again?

You may not have the control over the LOS or the selection of agent at your hospital due to the lack of a strong pharmacy leadership and dysfunctional relationship with your physicians. But I strive to operate my pharmacies where pharmacy has as much input into selection, dosing, and de-escalation of antimicrobial therapy.

Perhaps where you are, this is all meaningless since pharmacy has no control over drug expenditures? And at the same time, when an admin inquires to your DOP why your drug cost is going up, the response will be..well...doctors use whatever they want to.

Do you know what we call DOPs like that? Staff pharmacist in training.

But what I'm showing you is an effective financial tool to measure clinical pharmacy cost effectiveness.

Actually your question is very premature and irrelevant to this topic.

---

Members don't see this ad.

 

[WVUPharm2007]

Actually your question is very premature and irrelevant to this topic.

Well, I live my life immature and as a relative nonsequitor...


You are like a professor though. In fact, you are making me have terrible, terrible flashbacks. Just tell me the info. I don't need a lecture.

 

[StaviZFingerZ]

Well, I live my life immature and as a relative nonsequitor...


You are like a professor though. In fact, you are making me have terrible, terrible flashbacks. Just tell me the info. I don't need a lecture.

But unlike school, I don't give you a grade nor can I flunk you.
Then again, if your aspiration is to become an effective DOP, you'll learn this stuff.

And don't ever compare me to a professor...you fool. One more interruption from you, I will put you on ignore because you're like a little kid who wants attention.

 

[WVUPharm2007]

But unlike school, I don't give you a grade nor can I flunk you.
Then again, if your aspiration is to become an effective DOP, you'll learn this stuff.

And don't ever compare me to a professor...you fool. One more interruption from you, I will put you on ignore because you're like a little kid who wants attention.

You can't put me on ignore, I'm the only person that talks to you.

In all honesty, I'm still going to do that program at UF once the wife ever gets done with school and we get settled down. Now which is more impressive to you...a one year residency...or a dual Masters in pharmacy business/general MBA...

...plus, I'm all about actually paying for information...rather than this indentures servitude bull**** the residency people push...

**** looks cool...and just what I need...

 

[Praziquantel86]

Well, I live my life immature and as a relative nonsequitor...


You are like a professor though. In fact, you are making me have terrible, terrible flashbacks. Just tell me the info. I don't need a lecture.

I thought you were all about the Socratic method. I don't see how this is any different than an e-version.

 

[MountainPharmD]

You can't put me on ignore, I'm the only person that talks to you.

Now that is funny!

 

[ffpickle]

You can't put me on ignore, I'm the only person that talks to you.

In all honesty, I'm still going to do that program at UF once the wife ever gets done with school and we get settled down. Now which is more impressive to you...a one year residency...or a dual Masters in pharmacy business/general MBA...

...plus, I'm all about actually paying for information...rather than this indentures servitude bull**** the residency people push...

**** looks cool...and just what I need...

hmm 20k for a master's degree isn't bad...not sure how this particular one looks though, given that it's an on-line (distance education) format...but it sounds sweet.

 

[StaviZFingerZ]

Ok let's recap.

Zosyn Purchase

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

June: PD = 7,500 OF = 1.17
July: PD = 8,300 OF = 1.15
Aug: PD = 7,200 OF = 1.20

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?

 

[MountainPharmD]

I thought you were all about the Socratic method. I don't see how this is any different than an e-version.

Ohhh...I think he got you on that one WVU. I think you like being a difficult person who likes to argue.

 

[Praziquantel86]

Ok let's recap.

Zosyn Purchase

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

June: PD = 7,500 OF = 1.17
July: PD = 8,300 OF = 1.15
Aug: PD = 7,200 OF = 1.20

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?

I'll bite.

June: 8775
July: 9545
Aug: 8640

So at previous price points...

June: $2.42/PAPD
July: $2.68/PAPD
Aug: $2.75/PAPD

Unless I'm missing something, which is very possible. So it looks like Zosyn use is trending upwards.

 

[WVUPharm2007]

Ohhh...I think he got you on that one WVU. I think you like being a difficult person who likes to argue.

I like discussing **** when it makes me think critically and there is a point. Making me do simple algebra is a ****ing boring waste of time.

And I am a self-proclaimed argument enthusiast.

 

[StaviZFingerZ]

I'll bite.

June: 8775
July: 9545
Aug: 8640

So at previous price points...

June: $2.42/PAPD
July: $2.68/PAPD
Aug: $2.75/PAPD

Unless I'm missing something, which is very possible. So it looks like Zosyn use is trending upwards.

That's very good. So the administrator of the hospital asks the DOP...what's going on ..antibiotic cost has been going up. And if WVU was the DOP, he'd just say well, I can't control the doctors and I sure don't want to do simple algebra...so fire me.

But you...have a different explanation. You could swear, the patients were sicker in July and August... How could you prove this?

 

[Priapism321]

That's very good. So the administrator of the hospital asks the DOP...what's going on ..antibiotic cost has been going up.

New interns started in July, and they were all treated to an "educational" dinner supported by an "educational" grant from Wyeth to celebrate their Doctorness. Unfortunately, the ID PharmD was in attendance as well because "no one influences his drug selection recommendations/decisions."

 

[Praziquantel86]

That's very good. So the administrator of the hospital asks the DOP...what's going on ..antibiotic cost has been going up. And if WVU was the DOP, he'd just say well, I can't control the doctors and I sure don't want to do simple algebra...so fire me.

But you...have a different explanation. You could swear, the patients were sicker in July and August... How could you prove this?

Percent of patients with specific DRGs?

 

[StaviZFingerZ]

New interns started in July, and they were all treated to an "educational" dinner supported by an "educational" grant from Wyeth to celebrate their Doctorness. Unfortunately, the ID PharmD was in attendance as well because "no one influences his drug selection recommendations/decisions."

LOL! I see you're still the same!

 

[StaviZFingerZ]

Percent of patients with specific DRGs?

Smart man! That's exactly right... It's called the Case Mix Index. Higher the CMI, sicker the patient population.

Here is how we calculate CMI adjusted PAPD

CMI X PAPD

June CMI = 1.1
July CMI = 1.3
Aug CMI = 1.45

Tell me, what is the Zosyn Cost per CMI adjusted PAPD now?

 

[Praziquantel86]

Smart man! That's exactly right... It's called the Case Mix Index. Higher the CMI, sicker the patient population.

Here is how we calculate CMI adjusted PAPD

CMI X PAPD

June CMI = 1.1
July CMI = 1.3
Aug CMI = 1.45

Tell me, what is the Zosyn Cost per CMI adjusted PAPD now?

Soo...

June: $2.20
July: $2.06
Aug: $1.90

So they're sicker. Pharmacy is still spending the money though...

 

[StaviZFingerZ]

Soo...

June: $2.20
July: $2.06
Aug: $1.90

So they're sicker. Pharmacy is still spending the money though...

Excellent. Yes, pharmacy is spending the money yet looking at the surface, you can't really tell if they're spending more or less... the adjustment factors play a big role. Now, with the information you have, you report to the admin...

"Well, Mr. CEO, actually, our zosyn cost has been going down... from $2.20 per PAPD down to $1.90 per PAPD...and if we maintain this level of decrease...$0.30 per PAPD for the entire year means approximately $30,000 to $40,000 (assuming 100,000 in PAPD per year) decrease."

"And the decrease in cost is due to the new clinical pharmacist we hired...Prazi... he's been out reviewing all culture and senitivity for Zosyn patients...renal dosing..and making recommendation to de escalte therapy." And it's paying off...


I just gave you an example of Zosyn...but I typically follow 15 to 20 different classes of med (abx, hematopoeitics, PPI etc) and have ability to track all drugs purchased or utilized for my hospitals. How many DOPs do you know that do this? How many know how to set this up? How many acutally set goals to decrease drug cost with a plan?

 

[Praziquantel86]

Excellent. Yes, pharmacy is spending the money yet looking at the surface, you can't really tell if they're spending more or less... the adjustment factors play a big role. Now, with the information you have, you report to the admin...

"Well, Mr. CEO, actually, our zosyn cost has been going down... from $2.20 per PAPD down to $1.90 per PAPD...and if we maintain this level of decrease...$0.30 per PAPD for the entire year means approximately $30,000 to $40,000 (assuming 100,000 in PAPD per year) decrease."

"And the decrease in cost is due to the new clinical pharmacist we hired...Prazi... he's been out reviewing all culture and senitivity for Zosyn patients...renal dosing..and making recommendation to de escalte therapy." And it's paying off...


I just gave you an example of Zosyn...but I typically follow 15 to 20 different classes of med (abx, hematopoeitics, PPI etc) and have ability to track all drugs purchased or utilized for my hospitals. How many DOPs do you know that do this? How many know how to set this up? How many acutally set goals to decrease drug cost with a plan?

I've never really asked my director about it, so I s'pose I'll have to find out.

This makes me wonder though...why do I have to learn this through an anonymous internet forum? I feel like a class called "Managed Care Pharmacy" should have mentioned this at some point.

Thanks for the info!

 

[StaviZFingerZ]

I've never really asked my director about it, so I s'pose I'll have to find out.

This makes me wonder though...why do I have to learn this through an anonymous internet forum? I feel like a class called "Managed Care Pharmacy" should have mentioned this at some point.

Thanks for the info!

This isn't managed care. This is pharmacy management. And as easy as it seems, most pharmacists do not understand this concept or they fail to utilize this method to track clinical pharmacy initiatives.

Every one of my clinical initiative will have a cost/PAPD tracking associated with it. Baseline cost then monthly tracking to measure the performance of clinical pharmacy activities and the money saved. I know it's hard for you to visualize it but effective clinicians lower cost. And this is how we show it and justify our position. This is hard dollar tracking..the real money. There are many soft dollar tracking intervention methods which most administrators don't buy.

Your DOP will most likely shrug you off and say it's not important. But it is..and it's the only method we have today to track clinical pharmacy programs in a financial way.

Again, I showed you a very elementary example. It's much more involved than this. Yet, you should get the idea. Also, I have an automated tool that tracks this and puts it into a nice chart..graph..and illustrations..

 

[WVUPharm2007]

Case Mix Index.

Finally, something useful. Now that I get the point of the stupid ass algebra, we can move on. You can't just come at someone and go "here, do this random math, I'll explain later."

 

[StaviZFingerZ]

Finally, something useful. Now that I get the point of the stupid ass algebra, we can move on. You can't just come at someone and go "here, do this random math, I'll explain later."

Yes I can. I'm never going to just explain something. I will always have you think about it. If I just tell you and explain it..then it's in through one ear out the other. And I didn't make you do the random math. I told you to think about it...then made you do the math to know why you were doing it.

Think about it.....

 

[StaviZFingerZ]

To recap, I went over how to use inpatient and outpatient revenues to calculate pharmacy adjusted patient days then apply CMI to PAPD to calculate Drug Cost per PAPD. And I went over why we do it that way.

This method can apply to either one drug, class of drugs, and/or the entire pharmacy purchase.. and should be done monthly to track pharmacy spending.. then compare to the same period previous years..

This is the basis of how hospital drug expenditure should be tracked.

Most clinical pharmacy interventions will show up in this tracking one way or another. Thank you for your participation.

Close the thread!

 

[Priapism321]

To recap, I went over how to use inpatient and outpatient revenues to calculate pharmacy adjusted patient days then apply CMI to PAPD to calculate Drug Cost per PAPD. And I went over why we do it that way.

This method can apply to either one drug, class of drugs, and/or the entire pharmacy purchase.. and should be done monthly to track pharmacy spending.. then compare to the same period previous years..

This is the basis of how hospital drug expenditure should be tracked.

Most clinical pharmacy interventions will show up in this tracking one way or another. Thank you for your participation.

Close the thread!

Why is cost avoidance considered a "soft intervention" that does not fly with administrators? Too hard to measure?

 

[StaviZFingerZ]

Why is cost avoidance considered a "soft intervention" that does not fly with administrators? Too hard to measure?

Yes, no means to measure it correctly. Also, how do you measure avoidance of an ADR? How do you know ADR would have occured? Or Drug Interaction...

It's also my anecdotal experience having dealt with many admins.. when you mention soft dollars, they typically ask "Can you write a check with it?" and the answer is No... then they shrug it off...

I understand.. clinical pharmacy and cost avoidance are inseparable to many. For me, I discount cost avoidance..as I believe you're barking up the wrong tree... I've sat in meetings where a DOP proudly told the admin...we saved $435,000 in cost avoidance last month!!..and the Admin says...but you only spend $150,000 per month on drugs...

And I usually have my head down and look other way...

 

[WVUPharm2007]

Yes I can. I'm never going to just explain something. I will always have you think about it. If I just tell you and explain it..then it's in through one ear out the other. And I didn't make you do the random math. I told you to think about it...then made you do the math to know why you were doing it.

Think about it.....

ADHD trumps all that. I need to see a point or its going to get ignored.

 

[StaviZFingerZ]

ADHD trumps all that. I need to see a point or its going to get ignored.

Not my loss..

 

[WVUPharm2007]

Not my loss..

If yo ig-nant ass wants to teach, you best be prepared for someone like me.

 

[Farmercyst]

Sounds like what Merv Kalman wanted to teach in Pharmacy Management, but couldn't get around to because he was too busy making us memorize slides on SWOT analysis rather than discussing how we could actually do it and use it to our advantage.

 

[StaviZFingerZ]

If yo ig-nant ass wants to teach, you best be prepared for someone like me.

I taught college for 2 years. students like you are nothing new.

 

[StaviZFingerZ]

oh...merv.... I saw him last year at the midyear. my roomie worked for him when he was the dop at norris.

Sounds like what Merv Kalman wanted to teach in Pharmacy Management, but couldn't get around to because he was too busy making us memorize slides on SWOT analysis rather than discussing how we could actually do it and use it to our advantage.

 

[Prepharm1214]

Though I joined this thread a bit late, I found this information to be extremely useful. Can you pick another worthwhile topic linking clinical pharmacy and finance to discuss? Our school provided elective has thus far covered nothing of the sort, lol.