Strategies for Managing Rising Prescription Drug Prices in Hospitals

Written By Lauren Davis, BS, CPT

Summary

  • Implementing formulary management techniques
  • Exploring group purchasing organizations
  • Utilizing technology for inventory management

Introduction

In the United States, hospitals are facing significant challenges when it comes to managing their budgets, with one of the biggest issues being the rising prices of prescription drugs. With pharmaceutical costs continuing to increase, hospitals are finding it increasingly difficult to provide essential medications to their patients while still maintaining a financially sustainable operation. In this article, we will explore strategies that hospitals in the United States can implement to reduce the impact of rising prescription drug prices on their budgets.

Implementing Formulary Management Techniques

Formulary management is the process of creating a list of approved medications that can be used within a healthcare organization. By implementing formulary management techniques, hospitals can effectively control which drugs are being utilized, ultimately helping to reduce costs. Some strategies that hospitals can implement include:

  1. Creating and regularly updating a formulary list: By carefully selecting which medications are included on the formulary list, hospitals can ensure that only cost-effective drugs are being used.
  2. Encouraging the use of generic medications: Generic medications are typically more affordable than brand-name drugs and can provide significant cost savings for hospitals.
  3. Collaborating with physicians and pharmacists: By working together to review and adjust the formulary list, hospitals can ensure that the most cost-effective treatment options are being utilized.

Exploring Group Purchasing Organizations

Group purchasing organizations (GPOs) are entities that leverage the purchasing power of multiple healthcare organizations to negotiate discounted prices on medical supplies, including prescription drugs. Hospitals can benefit from joining a GPO in several ways, such as:

  1. Access to discounted pricing: By joining a GPO, hospitals can take advantage of the discounted prices negotiated by the organization, helping to lower overall medication costs.
  2. Streamlined purchasing process: GPOs often have established relationships with pharmaceutical suppliers, making the purchasing process more efficient for hospitals.
  3. Expertise in Contract Negotiations: GPOs have the expertise and resources to negotiate favorable contracts with pharmaceutical companies on behalf of their members, helping hospitals to secure the best pricing.

Utilizing Technology for Inventory Management

Effective inventory management is crucial for hospitals to control costs and ensure that medications are readily available when needed. By utilizing technology for inventory management, hospitals can improve efficiency and reduce waste. Some technologies that hospitals can implement include:

  1. Automated inventory tracking systems: By implementing automated tracking systems, hospitals can accurately monitor medication usage and minimize the risk of stockouts or expired medications.
  2. Inventory optimization software: This software can help hospitals predict medication usage trends and adjust their inventory levels accordingly, reducing excess inventory and waste.
  3. Barcoding systems: Barcoding systems can help hospitals track medications from the time they are received to the time they are administered, improving accuracy and efficiency in the Supply Chain.

Conclusion

Rising prescription drug prices pose a significant challenge for hospitals in the United States, but by implementing strategic measures such as formulary management techniques, exploring group purchasing organizations, and utilizing technology for inventory management, hospitals can mitigate the impact on their budgets. By carefully managing medication costs and improving efficiency in the Supply Chain, hospitals can continue to provide quality care to their patients while maintaining financial sustainability.

a-gloved-hand-holding-two-purple-top-tubes-with-blood-speciments

Disclaimer: The content provided on this blog is for informational purposes only, reflecting the personal opinions and insights of the author(s) on the topics. The information provided should not be used for diagnosing or treating a health problem or disease, and those seeking personal medical advice should consult with a licensed physician. Always seek the advice of your doctor or other qualified health provider regarding a medical condition. Never disregard professional medical advice or delay in seeking it because of something you have read on this website. If you think you may have a medical emergency, call 911 or go to the nearest emergency room immediately. No physician-patient relationship is created by this web site or its use. No contributors to this web site make any representations, express or implied, with respect to the information provided herein or to its use. While we strive to share accurate and up-to-date information, we cannot guarantee the completeness, reliability, or accuracy of the content. The blog may also include links to external websites and resources for the convenience of our readers. Please note that linking to other sites does not imply endorsement of their content, practices, or services by us. Readers should use their discretion and judgment while exploring any external links and resources mentioned on this blog.

Related Videos

Lauren Davis, BS, CPT

Lauren Davis is a certified phlebotomist with a Bachelor of Science in Public Health from the University of Miami. With 5 years of hands-on experience in both hospital and mobile phlebotomy settings, Lauren has developed a passion for ensuring the safety and comfort of patients during blood draws. She has extensive experience in pediatric, geriatric, and inpatient phlebotomy, and is committed to advancing the practices of blood collection to improve both accuracy and patient satisfaction.

Lauren enjoys writing about the latest phlebotomy techniques, patient communication, and the importance of adhering to best practices in laboratory safety. She is also an advocate for continuing education in the field and frequently conducts workshops to help other phlebotomists stay updated with industry standards.

Previous

Maximizing Durability of Reusable Medical Equipment Through Proper Sterilization Maintenance

Next

Strategies for Negotiating Lower Drug Costs in Hospitals