Imagine walking through the doors of your hospital and the floors are covered with $100 bills and all you need to do is pick them up. Saving money in your hospital pharmacy spend is about that easy if you know what you’re doing, and you have the right tools to pick up the dollars.
Over the last decade I have worked with countless hospitals and health systems to help optimize their pharmacy purchasing. Pharmaceutical spend within a health system is usually the largest or second largest category of annual non-labor spend within a health system. It consists of thousands of medications, even more NDC’s, hundreds of contracts and manufacturers, and dozens of suppliers. It can be one of the most daunting categories to try to optimize and capture cost savings. But…if you know what to look for and have the right tools, finding and capturing the opportunities in this category will result in the most significant savings for your health system.
It all starts with one foundational element: really strong pharmacy spend analytics. I’m not talking about the basic, canned reports provided by your wholesaler or group purchasing organization (GPO). You have had those same reports for two decades. Sure, they’re helpful in giving you some high-level spend numbers or even the details of a specific invoice. But in most cases, despite those reports, the savings are right there at your feet…you just can’t see them.
I’ve been building analytics specifically for pharmacy purchasing for a long time. When I first started, my reports were basic. Show me total spend over time. Check. Show me total spend by therapeutic class. Check. Things like that. But as I learned more about pharmacy, the medications, and the data, I started to see the thousands of dollars on the floor that we were just walking over every day. All we had to do was pick it up.
That’s when pharmacy analytics began to change for me. I began stitching together data in such a way that the largest and easiest savings opportunities rose right to the top. Work became much easier to prioritize. “Potential Savings” quickly and easily became “Realized Savings!” And not just in the hundreds of thousands of dollars, but in the millions of dollars. In a single year, one of my health system clients saved over $30 million based upon simple and clear recommendations from my spend analytics!
I am not surprised as I meet with new clients that they do not have much in the realm of good pharmacy spend analytics. So, don’t get down on yourself if you don’t; that’s the case for the majority of hospitals and health systems around the country. But do not let it stay that way. The money is at your feet. Make changes now to start saving now. Implement powerful pharmacy spend analytics and start picking up the money.
Reach out to us at firstname.lastname@example.org to learn more about how we can help your hospital and health systems pharmacies start saving significant dollars today!
Curtis McEntire. CEO of Trulla. Curtis is a pharmacy supply chain expert and is dedicated to helping health systems optimize their pharmacy supply chain.
Disclaimer: The information provided in this article does not constitute legal advice and should not be construed as such. Readers of this document are encouraged to contact their attorney to obtain advice with respect to any particular legal matter. The views expressed in this document are those of the author and not those of the Trulla LLC. All liability with respect to actions taken or not taken based on the contents of this document are hereby expressly disclaimed. The content in this document is provided “as is;” no representations are made that the content is error-free.