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Could Pharmacy-Based Analytics Finally Address the Paradox of Reducing Costs While Improving Quality?

Dawn DeAngelo, Chief Pharmacy Officer, Sentry Data Systems
Written by: Dawn DeAngelo
The National Center for Biotechnology Information recently reported that patient-centered care has made it to center stage in discussions of quality, particularly as insurance payments are increasingly linked to that provision. Clinicians, who have always worked with the best interests of their patients in mind, must now also consider a patient’s holistic care and drug regimens, especially with the industry-wide push for healthcare organizations to produce better outcomes. By reviewing a patient’s overall care and length of stay, and not just a drug’s cost, hospitals can begin to more fully understand trends and make more informed decisions.

Costs, charges and reimbursement, then, must be monitored very closely, and interdependencies between pharmacy and revenue integrity clearly understood. One way to accomplish this goal is through a comprehensive, real-time, patient data set that can provide the transparency needed to gain insights from pharmacy costs, charges and reimbursements, so hospital leadership can take costs out of the system and improve quality of care. That’s why so many of us are hopeful about the future of pharmacy-based analytics, which has the potential to truly transform how health systems care for patients by unlocking insights not found anywhere else.

By aggregating claims with clinical and granular pharmacy data into a longitudinal patient data intelligence platform, healthcare organizations are beginning to gain access to tools that enable them to run evidence-based algorithms against the data to deliver actionable insights into their clinical, operational and financial processes, in near real-time. These targeted results can identify and address pharmacy-related opportunities to lower costs, capture additional revenue, manage utilization, reduce diversion, and improve quality.

Unlocking the Future Through Analytics
Over the years, hospital systems have become increasingly aware that they need some sort of analytics to manage drug programs and drug costs. While the underlying analytics capabilities have existed, the industry hasn’t been ready, partly because it’s never been easy to get at the data elements that are truly predictive. A healthcare organization traditionally has had to string siloed information together through a time-consuming and labor-intensive process that involves making requests of multiple, disparate departments that may not provide the needed information until it’s too late.

By contrast, using evidence-based cost, utilization and quality analytics to seamlessly connect the hospital pharmacy to existing information systems allows today’s healthcare organization to:

  • Triage patients to the right care, at the right time, in the right setting 
  • Implement evidence-based patient care plans 
  • Reduce inappropriate admissions and readmissions 
  • Optimize length of stay 
  • Dissect episodes of care to better understand each component’s cost 
  • Manage pharmacy costs

Sentry Data System’s longitudinal patient database, with more than 97 million unique patient records collected since 2003, enables its clients to recognize patterns in cost and quality and modify their treatment protocols in real-time based on these data-driven insights. Maury Regional Medical Center, a 255-bed, not-for-profit hospital based in Columbia, Tennessee, is an example of one healthcare organization that’s beginning to utilize sophisticated analytics to manage the seemingly contradictory goals of reducing rising drug costs while improving quality of care.

Prior to using Sentry’s DataNext® analytics solution, gathering all the necessary data elements into a single data repository was very challenging. Now, the data is readily available, allowing the organization to maximize margins. For example, Maury identified more than $177,000 in incremental annual revenue by analyzing just eight drugs whose costs were increasing faster than reimbursements. The hospital pharmacy immediately updated its charge master, and these savings went straight to the bottom line. The organization went on to identify more than $1 million in combined drug cost savings and revenue improvement opportunities in less than 90 days thanks to pharmacy-based analytics available through DataNext.

Leveraging Actionable Patient Data
Boston Medical Center (BMC), the largest safety net hospital and busiest trauma and emergency services center in New England, is another organization that’s working to unlock insights using DataNext. BMC’s leadership has begun to examine its pharmacy billing practices and identify opportunities to lower costs, capture additional revenue, manage utilization and improve quality.

Applying data analytics to examine prescription-drug spending and utilization means better patient care and improved quality today, and even more so in the future. In fact, it’s no longer a dream to believe healthcare organizations can:

  • Reconcile supply chain purchases versus use at both a population and an individual patient level
  • Compare physician utilization variation at both the group and individual level
  • Measure and improve drug purchasing efficiency at the physician, pharmacy, and patient level

With its early successes, BMC began to dig deeper into its treasure-trove of analytic insights. In most cases, these opportunities would have been nearly impossible for the pharmacy staff to identify on their own. These two examples demonstrate the types of insights that BMC realized by drilling down into their billing practices:

  • BMC distributes vaccines in high volumes at all of its clinics. According to David Twitchell, BMC’s former Vice President and Chief Pharmacy Officer, “DataNext provided a better grasp on the cost/charge/reimbursement structure among the multiple sites that deliver the vaccines and a method to understand discrepancies, in real-time, so that we could bill and be reimbursed appropriately.”
  • BMC analyzed data by service line and discovered several key practice areas, including obstetrics and urology, in which revenue will be dramatically increased by using DataNext. One case in point is a birth control device, Mirena, which demonstrated a revenue underestimation of 76 percent.

Overall, BMC realized a 280% ROI in a thirty-day pilot through the identification of increased revenue opportunities, as well as through significant time savings. Prior to implementation, the analysts had to manually log into and pull data from four separate IT systems to perform the same analysis that DataNext provided in full automation, with all results displayed on a single screen in just seconds.

A New Approach to Analytics
There’s a balance between understanding the cost of doing business, maintaining liability for reimbursements and making sure the drugs being used are producing the best possible quality of care. As we look to the future, we believe our customers will continue to help steer the ship on how products and analytics evolve. It’s not a one-size-fits-all approach.

Through a true healthcare enterprise management platform, coupled with a proprietary data set, it’s no longer a vision for the future to use pharmacy analytics to seamlessly connect to existing information systems. It’s a reality that hospital organizations can now begin to improve data governance, identify actionable ROI and deliver never-before-seen insights.