How University Hospitals Saved $7.5 Million Through Pharmacy Operations Improvement

Key takeaways:

• University Hospitals recognized the vital need to unlock greater value from its pharmacy operations – driving margin improvement, efficiencies and the continued delivery of outstanding patient care.
• As a catalyst for innovation, University Hospitals is leveraging robust data to pinpoint cost reduction opportunities and support meaningful change for patients and providers.
• The health system partnered with Premier’s PINC AI™ Pharmacy Consulting team to help achieve their goals.

With more than 155 years of excellence, University Hospitals serves the needs of patients and communities across 16 counties in northern Ohio. Through an integrated network of 21 hospitals, more than 50 health centers and outpatient facilities, and over 200 physician offices, University Hospitals is consistently ranked among the nation’s best by U.S. News & World Report[i].

In September 2021, the health system sought to further advance operational excellence and uncover solutions to maximize efficiency and cost savings across 13 of its acute care hospital pharmacies. To date, University Hospitals has realized more than $7.5 million in total savings from pharmacy operations improvement.

Premier spoke to Champ Burgess, Chief Pharmacy Officer and Vice President of Operations for University Hospitals to learn more about how the pharmacy service line is driving significant value for the health system.

The following is a question-and-answer format conducted in an interview between Premier and Champ Burgess.

What is the Opportunity?

Rising drug prices and ongoing shortages have placed significant strain on hospitals’ budgets and operations. As a result, pharmacy leaders are increasingly focused on cost reduction efforts while ensuring patient safety and strong outcomes.

University Hospitals needed a partner that could help us optimize pharmacy performance and build financial resiliency to fulfill our mission of providing high-quality patient care.

Critical to this are advanced analytics and data to unveil streamlined processes and savings opportunities in medication purchasing and usage, including wholesale acquisition costs and 340B spend. The better data you have, the more you can focus attention and understand both the risks and opportunities to eliminate unnecessary spend and inefficient tasks.

Meeting our goals at University Hospitals required meaningful data and insights into high-price-tag drugs for our system to help manage overall costs and utilization.

What is the Solution?

Premier utilized its PINC AI™ platform to help University Hospitals analyze our pharmacy operations – pinpointing areas to standardize, reduce waste and improve care.

The platform enabled us to tie together various sources of pharmacy data to break down our purchases by specific facility, unit volume, percent generic and potential dollars saved. The data provided insights into cost structures and reimbursement levels, switches to generics or biosimilar drugs, and improving contracts for large-spend specialty drugs as well as generics.

As one example, in March of 2022, PINC AI™ data showed that 96 percent of University Hospitals' purchases of vasopressin could be a potential opportunity for savings as generic competition entered the market. The Pharmacy Consulting team evaluated this opportunity and put an implementation plan in place for capturing the savings identified.

This effort and our work overall with Premier’s PINC AI™ team has been vital in our ability to access best-in-class pricing and reducing pharmacy supply expenses – while also ensuring our clinicians are engaged and have access to the high-quality pharmaceuticals they need to best treat our patients.

PINC AI™ Pharmacy consultants worked closely alongside us to develop a process and roadmap for how we’d realize savings opportunities and ensure consistent communication, engagement and accountability enterprise wide at University Hospitals. A governance structure and weekly Pharmacy Steering team meeting was established to:

• Provide direction and accelerate decision-making;
• Review and validate data and opportunity areas with key subgroups comprised of purchasing, operations, clinical, formulary and 340B experts; and
• Define consistent standards and metrics.

What are the Results?

Our Pharmacy Operations Improvement initiative enabled University Hospitals to implement more than $7.5 million in total savings to date – inspiring credibility and confidence that our pharmacy team can deliver notable financial and operational value to our health system.

Meaningful data and a proven, established process for drug purchasing cost mitigation affords us the ability to make informed formulary choices that eliminate inconsistencies, support our bottom line and gain access to products that best serve our patients.

And today, hospital pharmacy teams across the nation are more resource constrained than ever before. Replacing many cumbersome, manual means of contract, utilization and cost savings analysis with a streamlined, technology-enabled approach has been a game changer for us at University Hospitals.

What Advice Would You Give to Other Hospitals?

Continuous improvement can sometimes be a cultural paradigm shift for an organization. An imperative to gaining and sustaining success in operational transformation is partnership – bringing in a true partner to support as opposed to a vendor. We chose Premier’s PINC AI™ Pharmacy Consulting team because they are ingrained with us in working toward a common goal, and invested and engaged in our success over the long term.

By working together and taking full ownership of roles, the team was able to drive rapid identification, validation and approval of opportunities as well as the escalation of any concerns and barriers. This led to our almost doubling the savings target for the initiative.

We view the PINC AI™ Pharmacy Consulting team as an extension of our University Hospitals Pharmacy team – one continually sharing expertise, data and insights to ensure we’re getting the most value for our patients and providers.

For More:

• With data, technology and unique expertise, see how PINC AI™ Margin Improvement is supporting operations optimization and a healthier bottom line.
• Fill out the form via the link above or contact Dima Awad to connect with the PINC AI™ Pharmacy Consulting team and learn more.

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[i] https://health.usnews.com/best-hospitals/area/oh/university-hospitals-case-medical-center-6410920.