In the ever-evolving landscape of healthcare, hospital pharmacies are constantly having to evolve in order to face new challenges as well as manage the lingering impacts of COVID-19 on the industry. As a critical player in patient care, it can be tough to navigate the complex intersections where multiple factors demand immediate attention in the present and innovative solutions for the future.
From the revenue cycle and staffing shortages to 340B updates and artificial intelligence, we’re taking a look at the top challenges and current events in pharmacy that are shaping the industry today.
The Current Issues Facing Hospital Pharmacies Today Include:
- Higher Focus on Pharmacy’s Role in the Revenue Cycle
- Pharmacy Technician Staffing Shortages
- The Impact of AI
- Updates in Hospital Information Systems
- 340B Updates
- New Regulations in 2024
- Getting Back to Basics
- Financial Recovery
- Work-Related Burnout & Stress
- Drug Pricing and Shortages
- Telehealth
- Technology & Automation
- Cybersecurity
1. Higher Focus on Pharmacy’s Role in the Revenue Cycle
At the most recent American Society of Health-System Pharmacists (ASHP) Leadership Conference, one of the biggest topics was the hospital’s revenue cycle. From pre-authorization to reimbursement to making sure your chargemaster is clean, a big emphasis was placed on how hospital pharmacies can impact revenue.
Between the finance office and the pharmacy department, crucial details can fall through the cracks. It’s important to determine what part of the process belongs to finance and what part belongs to pharmacy. But having someone oversee the entire program allows you to look at not only what you’re charging but what you’re getting reimbursed as well and being able to spot any discrepancies.
Every hospital system is looking for money, and getting the focus back on the total revenue cycle will go a long way to finding it. This bird’s eye view will help maximize your reimbursements. It’s a safeguard to understand what you’re charging and then ensure you’re actually getting reimbursed for the correct amount.
It also helps to identify outliers. Is it just a pre-authorization issue, is something being coded incorrectly, or is there a more serious issue going on? Oversight of the entire revenue cycle can not only help to spot these anomalies but also help figure out why they’re happening.
2. Pharmacy Technician Staffing Shortages
Recruiting and retaining pharmacy staff is one of the top concerns for hospital leadership this year, especially pharmacy technicians. Back in the late 1990s and early 2000s, there was a pharmacist shortage in the United States, resulting in a rapid increase in the number of pharmacy schools, which saturated the market.
Over the last ten years, we’ve actually seen enrollments in these schools decline. A lot of people are choosing not to go into pharmacy for a variety of reasons. Whether it’s burnout and stressful post-COVID work conditions or state mandatory minimum wage laws resulting in cost compression on the pharmacy tech side, many would-be techs opt for simpler, less stressful jobs.
Add to that changing attitudes about work in general, where prospective employees are looking for flexible scheduling and remote or work-from-home options, and the impact on staffing grows.
To combat the shortages, some health systems and organizations are taking on additional costs and providing higher salaries to pharmacy techs. In addition to salary increases, it’s crucial for hospital pharmacy leaders to make sure their people feel valued through engagement, clear communication, and support.
Partnering with health-system HR professionals on recruiting strategies and developing training options for new skills and competencies will help hospital pharmacies stay competitive.
3. The Impact of AI
Looking ahead to the future, we can’t ignore the impact of artificial intelligence on the healthcare environment. The massive influence of this quickly developing technology on nearly every industry in the world makes it one of the most significant current events in pharmacy today.
We’re already seeing cases where AI is able to accurately recognize normal and abnormal chest X-rays, but what impacts might it have in the pharmacy, especially as it applies to medication management?
Currently, the physician writes an order, and the pharmacy reviews it and fills it. Will we get to the point where AI can gather all of the information from the physician and determine the most cost-effective medication and dosage? It’s hard to say, and we’re a long way off from pharmacists being replaced by computers. But AI is very likely going to have significant implications on the profession in the future with varying ways to apply its innovations.
The most natural progression will likely be in inventory management and logistics, like product purchasing. But whatever the future of AI holds in our industry, it’s certainly something we need to be paying attention to.
4. Updates in Hospital Information Systems
Another key area to review when addressing pharmacy issues is any updates or changes to your hospital information system. Anyone who has ever gone through system changes knows that there are bugs that need to be worked out along the way.
We’re talking about a full system conversion of your hospital’s Electronic Health Record (EHR) or Electronic Medical Record (EMR), for example. Pharmacy is a piece of it, but it includes everything from finance to labs and charting.
We’ve seen multiple locations where they’ve done a major conversion to their system, only to run into situations afterward where they can’t properly bill or the data is inaccurate, which can have a significant financial impact.
Get ahead of potential issues by making sure the system is created properly on the front end, then go through each area after it’s gone live and ensure that everything is tracking correctly. Paying attention to all these details may take extra labor and effort initially, but it will save you time, headaches, and money in the long run.
5. 340B Updates
When talking about current issues in hospital pharmacy, the 340B Drug Pricing Program must be part of the conversation. Manufacturers have been limiting the eligibility for contract pharmacy revenue, which has a significant impact on many institutions that rely on that income, both today and in the future.
In the current 340B landscape, manufacturer restrictions have heightened the importance of knowledge and involvement in contract and specialty pharmacies. They’re now requesting prescription information to be sent to a third party for verification, resulting in an increased workload for hospitals and 340B staff.
Faced with these restrictions, hospitals are exploring avenues to offset the loss and considering the advantages of having an entity-owned pharmacy, as manufacturer restrictions currently don’t apply (though this may change).
Additionally, the referral program presents an opportunity to mitigate the impact of manufacturer restrictions.
We hear administrators say they don’t think they’re getting any actual savings out of the 340B program, but if you look at the data there are more and more hospitals still enrolling. In fact, the program hit $54 billion in 2022 and is only continuing to grow. Drugs are more expensive, and the discounts are higher, so there is still a significant benefit on the inpatient side.
It’s tricky, though, because the manufacturers and politicians set the rules. So, it can feel like your hands are tied. But the bottom line is that even though the contract pharmacy revenue may be less than it was previously, the drug discounts remain.
6. New Regulations in 2024
One of the latest guidelines updated by the U.S. government in 2023 was the USP 797/800, addressing clean rooms in the hospital. We’ll continue to see scrutiny around this in 2024.
It includes any facilities, including hospital pharmacies, where compounded sterile preparations such as IV medications are prepared, stored, and dispensed will require specific conditions such as:
- room construction and materials (ceiling, walls, and floor),
- airflow requirements for flow and filtration,
- monitoring requirements and standards – pressure, temperature, and humidity,
- staff hand washing and gowning requirements,
- room cleaning schedules,
- staff training and certification,
- room testing and certification.
7. Getting Back to Basics
Hospital pharmacies can continue to adapt to the USP 797/800 and any other regulations or guidelines by ensuring they stay informed and that their staff undergo strict training and testing on all policies and procedures.
We’re seeing many hospitals placing a significant emphasis on evaluating their policies and procedures. At the most recent ASHP midyear meeting, it was pointed out that the majority of findings are due to not adhering to the hospital’s written policy. It’s crucial for hospital pharmacies to make sure their policies are current and reflective of what is actually being implemented.
So much focus was placed on COVID-specific protocols that it would be wise to get back to the basics of operations and dust off the policies and procedures manual for an annual review to make sure it’s up to date. In addition, prioritize conducting audits of your processes and hold regular meetings with staff on any issues. Then dive deeper by testing your findings.
8. Financial Recovery
Many hospitals are still struggling to get back on solid financial ground post-COVID. Billions of dollars were lost during the pandemic due to things like having to cancel more lucrative services and surgeries to prepare for COVID surges, the inability to reopen floors due to nursing and other hospital staff shortages, and drug inventory shortages and pricing issues as well as time spent trying to find other products and substitutes.
In addition to the ebbs and flows of flu season, hospitals are now facing a “new normal” with the combination of COVID, flu, and RSV at the same time. For many institutions, especially smaller hospitals, it’s difficult enough just to keep the lights on.
With the lingering financial impact of COVID-19 as well as funds being diverted to other emergencies like the migrant crisis, pharmacy leaders and hospital administrators will be focused on recovering patient volumes and revenues by honing their efficiency in purchasing, inventory, and other important areas that will manage costs and improve margins to help with financial recovery. They can also make efforts to instill confidence in healthcare so that patients are more likely to return to hospitals for services.
Ongoing Hospital Pharmacy Issues We Will Need to Continue Addressing
While not exactly new, there are impacts to the hospital pharmacy that will always be an area of concern and are worth including in this list.
9. Work-Related Burnout & Stress
Stress is inevitable, and burnout has become endemic in the healthcare setting. Addressing it remains one of the most urgent current issues in hospital pharmacy today.
According to the American College of Healthcare Executives, over 50% of physicians and nurses have admitted to being overwhelmed and emotionally exhausted.
The effects are both mental and physiological. When you’re under continued stress and your cortisol levels are always high, it takes a toll on the body. Between overworked pharmacists, high turnover rates of techs, and nurse shortages, a lot of extra responsibilities are falling on the hospital pharmacy.
In order to alleviate burnout while still maintaining quality pharmacy services, strategies will need to be implemented, such as telehealth and virtual consultations, flexibility with scheduling, a renewed focus on salaries, and innovative plans for staff wellness and resilience.
10. Drug Pricing and Shortages
Drug prices continue to go up. So, this one will always be in the mix of current events in pharmacy. An analysis presented by Kaufman, Hall & Associates, LLC was released by the American Hospital Association, projecting that drug expenses would grow by $1 billion in 2022.
As an organization, CompleteRx is constantly monitoring the producer price index for prescription drugs. Prior to the COVID-19 pandemic price increases had moderated to around 1 to 1.5%, but as of December of last year they were up 4.6% or 4.8% and may even go as high as 7%.
From drug reforms to the trickle down effect from supply chain costs, pricing hurdles aren’t going away any time soon. Being proactive and coming up with a systematic plan for drug purchasing and inventory control will help drive down costs and improve efficiency.
11. Telehealth
Telehealth has been around for well over a decade, but the COVID-19 pandemic pushed it to the forefront, allowing patients easy access to their healthcare providers. And the trend seems to be here to stay.
A recent report shows 90% of patients utilized a patient portal to electronically access their medical information such as labs and test results. And evidence suggests that access to virtual care has a positive impact on the quality of patient care as well as limiting the loss of revenue on the hospital side.
With the telehealth market set to reach $787.4 billion by 2028, hospital pharmacy leaders should keep a few things in mind. Consider ways to expand patient-centered care through telehealth platforms, providing easy access to pharmacists. Incorporate “pharmacy services without walls” into all future strategic planning. And ensure that cybersecurity measures are taken to keep patient information safe.
12. Technology & Automation
Technology continues to drive us into the future. The U.S. market for automation in pharmacy is expected to grow exponentially throughout the next decade. The automated dispensing cabinet market, alone, is expected to grow to $7.95 billion by 2030.
Automation, robots, AI, and software impact most aspects of healthcare, but in pharmacy in particular, they help to streamline workflow, reduce the risk of medication errors, help determine how we collect and use data to make decisions, and allow pharmacy staff to focus on and improve personalized and direct patient care.
To make the most of technology, pharmacy leaders should prepare and train staff how to use and leverage technology for patient care and pharmacy services. They can also be aware of challenges such as safe and effective use, especially regarding accuracy and bias, and understand the potential for both benefits and harm.
13. Cybersecurity
For all of its exciting benefits, one of the biggest challenges of our increased reliance on technology is cybersecurity. As healthcare expands with things like telehealth and electronic records, the risk of cyberattack grows exponentially.
Cybersecurity may be an expensive investment, but the costs of not implementing it are unthinkable. Cyberattacks and data breaches not only put patients’ data – and possibly lives – at risk, but they can shut down entire healthcare organizations, resulting in a loss of millions of dollars.
Hospital pharmacy leaders must make cybersecurity a top priority in order to maintain tight security, address concerns about data breaches, and ensure preparations for when the system inevitably goes down.
In the event of a cyberattack, it is key for hospital pharmacies to have a good incident response plan that details exactly what to do and who should do it so that they can continue to operate.
About the Author
Rick Burnett, Pharm. D., FACHE, Chief Operating Officer
Dr. Burnett joined the CompleteRx team in 2011. As COO, Rick leads the day-to-day operations delivery for all CompleteRx customers. His 25+ years in hospital pharmacy management include experience in a variety of sets from small rural hospitals to multi-system academic settings.
Rick started his career as a pharmacy technician. He earned his Pharm. D. from the University of Illinois and completed a residency at the University of Florida. Rick spent most of his career working for a Fortune 20 company where he held various leadership positions in multiple disciplines including pharmacy management, consulting, product development and product management. One of his key achievements was the co-development of a patented method for analyzing data to minimize drug costs. Rick has a hands-on style of leadership and enjoys working in teams with executive leadership, customers, corporate partners, and employees.
Rick is an active member of the American Society of Health System Pharmacists. He was appointed twice to serve on the ASHP strategic advisory for leadership development. He is also a Fellow of the American College of Healthcare Executives.
