Signs It’s Time to Review Your Hospital Pharmacy Business Intelligence

If it feels like managing hospital drug spend is more challenging these days - you're not alone. Drug shortages, specialty drug considerations, and procurement strategies continue to evolve. Meanwhile, financial pressure on organizations has never been higher.

Pharmacy teams have not been immune to the staffing shortages taking place in healthcare. In a recent ASHP survey, pharmacy administrators reported turnover rates of at least 21% over the past couple of years, and nearly 1 in 10 said they had lost 41% or more of their technicians.

Stakes are high: Hospital total drug spending grew to $39.6 billion in 2021––an increase of 8.4 percent, according to the most recent study released by the American Society of Health-System Pharmacists. 

In the face of these pressures, hospitals and health systems are relying on their pharmacy teams to set priorities to make the most of limited staff time.  The right pharmacy business intelligence tools can be key to finding where it is worth your time to examine contracts, reinforce compliance, and identify savings targets. 

Seven Signs It’s Time to Review Your Hospital Pharmacy Business Intelligence Capabilities

To keep up with a rapidly changing market, hospitals and health systems need the right pharmacy data management and analysis capabilities, including meaningful, timely, and practical information. Here are seven signs that your health system's current processes may not be doing all they can for your spend:

1: Spreadsheet Triage

Pharmacy staff are analyzing med spend using manual spreadsheets, and frequently make evaluations for only a small percentage of your formulary.

What It Means: Your spend is highly dependent on a manual process that’s leaving you vulnerable to making big decisions with a limited perspective.

Manual calculations can be time-consuming to execute, limit the speed of decision-making, and can restrict the amount of data that your team is able to manage at once. Without a comprehensive view, your organization’s ability to view the impacts of WAC spend, 340B pricing, and GPO discounts will be compromised. The result is often an undue burden on staff to recognize opportunities and either delayed decisions or outdated assumptions around purchasing due to information restrictions.

Sign 2: Missed Indicators of Change

When prices of important drugs change, contracts drop off, or generic alternatives launch, it can take days or even weeks to identify.

What it means: Your spend is vulnerable to surprises in the market, and you could be caught unaware with big swings that impact your budget.

For your team to make timely decisions based on the most current pricing and contractual conditions, speed is everything. No one wants to be the last to know when price shifts on a high-dollar or high-use drug could quickly lead to thousands of dollars spent unnecessarily.

Sign 3: Delayed Insights

Questions from leadership about med spend changes can take several days to investigate and report up confidently.

What it means: Showcasing your team’s expertise will be difficult, and you can be left spinning your wheels to respond to unrealistic outside advice.

The right tool will enable you to manage spend and facilitate fast drill downs for deeper analysis and better answers. Without the ability to quickly develop and share analysis and insights, your opportunities to collaborate with (or respond to) those outside of pharmacy, such as administrative, clinical or financial leadership, will be limited. 

Sign 4: Reliance on Specialized Expertise

Your custom workflow is so specialized that only a small number of your pharmacy team know how to use your existing system.

What it means: Your operation may be open to risk when there is turnover or face difficult succession.

Health systems have faced unprecedented turnover, and when too few members of the team can understand or work with your data, you risk the loss of knowledge should staff change. Simplified processes can democratize information and decisions that are vulnerable to siloed thinking. 

Sign 5: An Imbalance in External Influence

You’re totally dependent on advice from a non-neutral source to determine your procurement strategies and opportunities.

What it means: At best, you are outsourcing your highest-impact financial work. At worst, you may be letting foxes guard the hen house.

Your team spends tens or hundreds of millions of dollars on medications – shouldn’t you own the key decisions on how they are purchased? No one will understand your hospital’s needs or be as good a steward of health system resources as your own people.

Technology that provides an objective, comprehensive view of data can separate good from bad advice in seconds. Otherwise, limited perspectives or assumptions can drive decisions that ultimately benefit those outside the hospital most.

Sign 6: Fragmented or Over-Broad Reporting from Your Pharmacy Business Intelligence

To create reports with a complete view of purchasing across your enterprise health system, you have to assemble them facility by facility. Alternatively, if you are ONLY getting a full-system view, and identifying facility trends is difficult.

What it means: Each supply chain decision could have different scopes of impact. You may find balancing individual facility needs with the “big picture” to be impossible.

On one hand, creating alignment between individual facilities in a complex organization can be a challenge if each reports individually. The ability to look at med spend trends throughout the organization with the ability to parse out as needed is key to success.

On the other, if all you have is individual facility reports, the ability to consolidate multiple classes of trade, regions, or hospitals can reveal system-wide trends that may not stand out on their own. 

The right tools and the right balance of perspective is key to making each piece work in concert.

Sign 7: Botched Benchmarks

When trying to benchmark spend performance between institutions, you often end up with overgeneralized targets and/or unrealistic goals.

What it means: Your benchmarking services may be failing to group your spend with the right peers or isn’t sufficiently recognizing nuances between health systems.

Your pharmacy business intelligence may be capturing med spend data, but it lacks needed detail and/or data management capabilities for deeper insights. Your platform should be able to bring together data from disparate sources in a way that still enables you to understand gaps, set meaningful goals, track progress, and validate current performance metrics. 

Importance of Pharmacy Management Software for Managing Med Spend

As hospitals and health systems seek to become smarter with drug purchasing and manage costs and compliance, having the right tools to support real-time data and analysis is crucial. The right platform is integral to protecting margin, making timely decisions, and using precious staff resources effectively.

Those organizations armed with the right pharmacy business intelligence are best positioned for competitive strength in the near term and years to come.

Discover how QuicksortRx is changing how hospitals and health systems manage pharmacy procurement. For details, see https://quicksortrx.com/tour.