Hello Fellow Buyers,
As a Premier member, we receive an email update every Friday with any new information regarding what's going on in the Premier world. This past Friday, the following article was published advertising the Break Through Conference they have coming up. Two things that got me fired up. The mention that Pharmacists are taking care of hospital pharmacy buying (and they don't learn the necessary skills in pharmacy school to do this) and that the recommendation is to get Supply Chain (not that I haven't had help from them and would mind help in the future) involved to help! How about getting some education for the Techs that do the job. I've never even heard of a Break Through Conference before (just into my 3rd year here) but is anyone going to this one? Any one have any ideas how we could get the word out that Premier's preception is wrong about who buys? I'm sending a few emails to my Premier reps. Just thought I'd pass this along.

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Experiences of the Supply Chain Executive with Pharmacy Purchasing

The expansion of health systems has necessitated individuals having particular skills to actively participate in areas of department management, to a degree that has not been previously seen. The hospital pharmacy spends an increasing number of dollars to procure medications than ever before. Managing the purchasing, contracting and business processes is not necessarily taught in pharmacy school. Yet we assume that the pharmacist is naturally inclined to understand and optimize these processes.

Graduates from business schools and supply chain managers from other industries can add tremendous value to these functions inside the pharmacy. We are seeing more professionals with non-pharmacist backgrounds assume this role. But how do they get started? Where do they get trained in the jargon, drug names and overall practices of the hospital pharmacy? How do they learn more about their customer?

This session will describe the evolution of supply chain involvement with pharmacy purchasing at a major health system. Starting with relative disengagement, the specific tasks and activities that were initiated by a new pharmacy supply chain manager will be discussed. This progression of involvement included designing strategies to support contract analysis, understand budget variance and aggregate financial intelligence.

www.premierinc.com/breakthroughs2010

Name of Facility: Carroll Hospital Center

City, State: Westminster, MD

Years as a Buyer: 2

Hopefully none of the pharmacists I work with ever monitor this forum.

I have found that few pharmacists understand (or care to understand) the purchasing process. And just because someone has an RPh or Pharm D after their name does not mean that I jump. So when I receive a request from someone that may be unreasonable - such as the request to obtain an entire 7-day supply of clotting factor (which we all know come in the next morning) - I simply assure them that the patient will be well cared for and then use best purchasing practices to obtain the product. Trust in our abilities gets built over time.

We have an excellent pharmacy manager who understands the purchasing process very well. So if a pharmacist gets irate, I simply refer him or her to the manager and it normally gets cared for.

I do not neccessarily think that Premier's perception is wrong. After all there are several programs (i.e. antibiotic stewardship) that do require pharmacist management and that have a direct impact on pharmacy spend. I think that their session is directed at cooperation with the buyer, not taking the position over.

Thanks for posting the topic,
Jeff B

Name of Facility: Peacehealth Sacred Heart Medical Center

City, State: Eugene, OR

Years as a Buyer: 14

Aleena,

Good Morning,

I think there is a silver lining here in the message being delivered by Premier. First Premier is offering some training it looks like. Secondly, this should get you fired up about making NPPA the professional organization stronger due to the expanding skill set that we all need to move forward. Have you ever asked what the spend is for Pharmacy compared to the entire hospital? You will find that the Pharmacy spend is a large amount to the total.

I have a Bachelors degree in business and came here 7 years ago without any knowledge about healthcare or drugs. It was a steep learning curve about the medications, but the business knowledge has been extremely beneficial to our department and our system. I just look at things differently because I am not clinical. Although, they have done a great job of teaching me many things and now I ask a lot of questions. Here is an example of how I interact with the Pharmacy staff:

Scenario is that there is a new generic medication.
Step 1: I put together a spreadsheet with the old item purchased with purchase history and the new item with all costing information and what an annualized savings is.
Step 2: I send this information off to my Director and Clinical Coordinator to say Yes or No for clinical perspective.
Step 3: Implement the decision if a change is needed.

Quite honestly, my Director (I report to her) is totally supportive of the Inventory Control Coordinator position. She wrote a new job description and that is what was posted and I applied to and got the job 7 years ago. She has an MBA and a Pharmacy degree. She had the forsight to change life here in this Pharmacy when it comes to the Pharmacy purchasing program. I have had the opportunity to interact with people all over the hospital, our system of hospitals and our clinics. I went to the first system wide class in LEAN training and continue to push the envelope on what my role is in the Pharmacy and hospital.

I hope this helps you out. I look forward to seeing you at the NPPA conference in August. It will take all of us to elevate our status and show our skills in Pharmacy Purchasing.

Name of Facility: St. Francis Health Center

City, State: Topeka, KS

Years as a Buyer: 7 in healthcare and 25+ in home improvements

On average pharmacy represents 25% of the total supply spend, be it a 200 bed facility or health system, the millions of dollars we as pharmacy purchasing professionals manage is a concern for any CFO. The current landscape of increasing cost, extended length of stay, rapidly growing indigent patient loads, compounded by an aging physician workforce, antiquated faculties, and deceasing reimbursement rates has forced the C-suite to make difficult decisions. To manage the financial implications of our respective facilities a CFO usually has to two options: reduce labor, which is about 52% of total operating cost, or supplies, which is about 24% of total operation cost.

When evaluating supply reduction efforts, it would only be logical for the CFO to turn to the primary purchasing professional within their facility. This role might be a Vice President of Supply Chain and Support Services, Chief Procurement Officer, Director of Materials Management, a consultant, or your GPO. According to the Pareto principle, a principle we as pharmacy purchasing professionals utilize daily, logic would dictate these purchasing professionals address pharmacy spend quickly because as an individual department, only surgery exceeds our purchasing volume; however, pharmacy has always been the pink elephant within most faculties. While this elephant still eludes many primary purchasing professionals, starting in the late nineties and with a recent explosion in 2005 this elephant is quickly being tamed.

The lack of clinical expertise in the purchasing department gave way to clinical resource mangers, a position to help align the efforts of the value analysis teams, similar to P&T’s function, but for non-pharmaceutical items. Several articles have been written regarding the importance of addressing pharmacy’s spend from the primary purchasing professional’s perspective, for example: From the Basement to Boardroom by Way of the Pharmacy, Pharmacy operations: The Next Logical Extension of Supply Chain Operations, Supply Chain and Pharmacy Integration: Improving Patient Care, and Supply Chaining the Pharmacy. In addition to these articles, pharmacy as a profession has also been addressing these same concerns through articles, books, and position statements, for example, Institutional Pharmacy Practice Handbook, Financial Management for Health-System Pharmacist, ASHP Guidelines on Medication Cost Management Strategies for Hospitals and Health Systems, and Prudent Purchasing of Pharmaceuticals.

Just as clinical resource managers deliver a unique skill set and diverse background to the purchasing department so will the pharmacy purchasing professional. Several articles in the past year call for business managers within the pharmacy department to address the perceived supply chain management deficiencies and now GPOs are supporting the advancement of non-pharmacy personnel managing purchasing, contracting and business processes in the pharmacy, but few CFO’s or primary purchasing professionals utilizes the greatest resource already at their disposal, the pharmacy purchasing professional. The National Pharmacy Purchasing Association and a few professional advocates seem to comprehend the financial impact pharmacy purchasing professionals have on the CFO’s vision of tomorrow, while managing much more than a purchase order today.

The skill set required to manage a productive and cost effective purchasing department is already integrated within pharmacy through the pharmacy purchasing professional. Instead of sponsoring the training of non-pharmacy professionals to manage purchasing, contracting and business processes in the pharmacy, support the professionals already performing these functions. These professionals are highly educated, trained, certified, and already comprehend the complexities associated with managing a pharmaceutical supply chain.

A pharmacy purchasing professional traditionally begins a career as a pharmacy technician, exposing themselves to the daily operations of pharmacy, while absorbing the language of the profession. While working as a technician and after becoming National Certified, some technicians peruse additional pharmacy training/certification. This additional pharmacy training encompasses compounding, sterile preparations, and chemo therapy, but also extend beyond the pharmacy. Certification in purchasing, supply chain management, six sigma, lean, project management, and inventory management are but a few of the certification earned by these purchasing professionals. As purchasing professionals in the pharmacy these professionals seek out additional education, be it excel courses offered by their internal education department or the graduate degrees in the collegiate arena their learning never stops. In addition to intimate application of purchasing laws required for any purchasing professionals, the pharmacy purchasing professional must also be as familiar to all regulations concerning pharmacy.

To accurately understand the value of a pharmacy purchasing professional you must know one. I challenge each CFO, each primary purchasing professional leader, and each industry sponsor to meet, engage, and utilize the expertise of a pharmacy purchasing professional in your next cost control initiative for pharmacy.

Name of Facility: East Jefferson General Hospital

City, State: Metairie, LA

Richard,

Along with your challenge to the CFO, each primary purchasing professional leader, and each industry sponsor to meet, engage, and utilize the expertise of a pharmacy purchasing professional in your next cost control initiative for pharmacy. I would also challenge each of the Pharmacy Purchasing Professionals to engage the aforementioned people by providing reports, become involved in the budgeting process and know the numbers of the Pharmacy each month if they are on budget or not and why. Discuss these numbers with finance and the department Directors.

We, as Pharmacy Purchasing Professionals have significant influence on a daily basis. We need to promote our profession by being seen and heard.

Name of Facility: St. Francis Health Center

City, State: Topeka, KS

Years as a Buyer: 7 in healthcare and 25+ in home improvements