With the changing times, and pharmacy gaining more exposure and traction as a revenue generating department, rather than a cost center, it is important we, as pharmacy leaders, continue to evolve and evaluate new opportunities to continue to be business savvy. This may mean we will be pushed beyond our comfort zones, but we should find comfort that we have a network of pharmacy executives and leaders who will work collaboratively together. We are in a unique position, as we must always balance cost savings, revenue opportunities with clinical and professional judgement, which includes limiting risk and predicting the downstream impact of certain decisions. 

As we get out of Covid-19, with a whirlwind of new expectations, including rising costs and shrinking margins have put us in a unique position to be innovative and think differently. One opportunity that may not be novel, in nature, but gaining more attention in the inpatient space is inpatient rebates. When I first heard of the concept years ago, I shut it down immediately; however, with the growing need to find every penny, this has moved from a hard pass and gone beyond exploratory to being a real option. 

As you consider the concept of inpatient rebates, including the vendor you decide to partner with, there are several things you should consider before making a decision to 1) even entertain this concept, and 2) selecting a vendor.

Understand that the business model has been around for a while, particularly in long term care facilities and the retail pharmacy space (particularly between manufacturers and PBMs). As you begin your journey and perform your due diligence, ensure you speak with your colleagues across your network to see if they’re comfortable and how they got comfortable. Equally as important, ensure you work internally with your counsel and other stakeholders, so you do not accidentally cause a negative impact at your organization.

Evaluate the data requirements: Get into the details about what the third party wants vs. what they need to process the rebate, and if that is acceptable for your organization. In a world where data and data sharing is a hot topic, it’s best to know the position of your organization when it comes to data. 

Eligibility: Ask about which medications are eligible and compare that to your inpatient operations. Pay attention to payor mix and 340B eligibility and how that may complicate and impact the potential pro forma. 

Legal: Although your legal counsel will play a significant role in going through the contract and protecting the organization with certain boiler plates and mitigate liability whenever possible, you should take care to understand the process between all parties and see where you and your organization may be vulnerable or at risk. 

Timeline: Be sure to understand the timeline on how and when the data is to be transferred and when to expect the rebate back to the organization. It’s important to set clear expectations for all parties. 

As we embark in new territory and asked to evaluate new ideas, be sure to take a step back and take a 360-lens approach when performing your due diligence.

Those of us who have been in healthcare for a long time have seen changes come and go at a breakneck pace. Regulations, practice, lean into clinical, defer to the physician, multidisciplinary practice, silo mentality, more tech, less tech…yada yada yada. With so much energy spent attending to putting out fires every day, I have found it is easy to lose sight of the person behind the profession.

School taught us the Krebs cycle and anatomy. We learned the “lock and key” theory as drugs do their thing. We spent hours memorizing every written word and nugget of wisdom from our professors. As I now have a lifetime of experience in this chosen profession of ours, I find that the most valuable lessons are the ones life has taught me and unlike the tenets of practice back and forth, these lessons hold true throughout. Secret weapon: the intangibles. Here I share a few thoughts on pharmacy leadership that I have gathered over years of being in the trenches at every level.

Find your value and lean into it. You know how to do the job, but do you know how to lean into your strengths? The things that make you a good leader also make you a good follower. Managing goes both up and down. Learn from everyone around you, and then take that and create your strongest path. Tell a joke in a tense situation. Offer a creative idea from the cheap seats. This will be hit and miss, but you don’t know if you don’t try. Find your best voice and sing from the rooftops.

Learn your surroundings and adapt to how the organization works. No matter how good you are, how smart you are, how high your GPA was, none of that matters if you can’t operationalize your big brain so be sure to read the room. This includes the people you are working with which can be hit and miss. I offer this: taking a swing and missing at times, and knowing when to make a change, is as important as sticking with it at all costs. You may lose a little of yourself if you don’t take time to identify the moment. Learn the “politics” of your organization and work within that framework to show the immense power of what you bring, and how pharmacy can be transformative to an organization.

Think of things you can do to make strides. Real strides, things that propel you and your practice forward in a different way. Ruth Bader Ginsburg said, “Fight for the things that you care about, but do it in a way that will lead others to join you”. This will get you noticed for all the right reasons.

You can’t do it alone. None of us does it alone. We may think we do, but if you dig a little deeper you will realize that whatever success you have or wish to have does not happen in a vacuum. Think about key turning points in your professional life and there will always be someone or something that helped you get there. Never forget that and remember to pay it forward. Maybe take that call you would normally screen. Set that meeting that you think you don’t need. I have always said that you never know whose hand you will eventually shake, be open to it.

Of course, we should be talking about Specialty, 340B, staffing, budgets, etc., but we should also talk about and share how we take our profession to new heights outside of the daily grind and look a little deeper at our success as highly trained professionals in a rapidly changing world.

It is said that with challenges come opportunity. Well, as most every hospital CEO and CFO knows, hospital finances certainly are laden with challenges. Some economists described 2022 as the worst financial year for U.S. hospitals in decades, as expense increases continued to exceed revenue growth. According to data from healthcare data and consulting firm Syntellis Performance Solutions, cumulative hospital expense growth from 2019 to 2022 was 17.5%, while reimbursement by the Medicare Inpatient Prospective Payment System (IPPS) grew only 7.5%. 

Labor shortages fueled explosive growth in contract labor expenses, which contributed to overall hospital labor expense growth of 20.8% over the same period. Even after accounting for increased patient acuity, labor expenses per patient jumped 24.7%. 

Not surprisingly, over half of U.S. hospitals ended 2022 operating at a financial loss. Also not surprisingly, in December 2022 credit rating firm Moody’s concluded that more healthcare organizations were at risk of credit downgrades or default—which turned out to be prophetic, as the first quarter of 2023 saw eight hospitals default, according to research firm Municipal Market Analytics. That figure represented the most hospital bond defaults since 2011, and only one hospital defaulted in the first quarter of 2022. Perhaps most concerning, some of the defaults came from large, highly rated systems. 

Moreover, Kaufman Hall predicts expense pressures will continue through the remainder of this year. The firm’s May 2023 National Hospital Flash Report concluded that: 1) the median operating margin for U.S. hospitals was 0%--meaning just breakeven--in April, leaving most hospitals with little or no financial wiggle room; 2) inpatient volumes declined while lengths of stay rose, and outpatient volumes also dropped; 3) the effects of Medicaid disenrollment could be materializing, as reflected in increases in bad debt and charity care in April, and this trend could continue as substantial disenrollment from Medicaid is projected as a result of the end of the COVID-19 public health emergency on May 11; and 4) inflation continued to impair hospital finances, as labor costs jumped in April and the costs of goods and services continued to be significantly above pre-pandemic levels.

With no quick fix to the labor shortages, hospitals and health systems are scrambling to find other areas to reduce costs and/or increase revenue profitably. Therein lie opportunities for pharmacy leaders to help bolster hospital finances. 

Since prescription drugs are the fourth-largest category of non-capital expenses for hospitals, pharmacy departments can support cost reduction through the deployment of automation to generate labor savings and by leveraging insights gleaned from medication use evaluation, preferably in an automated manner, given the continued widespread shortage of pharmacy technicians, which has required many pharmacists to perform pharmacy technician tasks. 

Furthermore, financial information and analytics firm S&P Global has advised hospitals to diversify beyond acute care and generate new, often more profitable, revenue streams, and the list of promising areas includes an outpatient pharmacy and other pharmacy services. Similarly, McKinsey & Company has identified specialty pharmacy and home infusion as attractive areas for growth and profitability during the next two years.

Those of us who have been in healthcare for a long time have seen changes come and go at a breakneck pace. Regulations, practice, lean into clinical, defer to the physician, multidisciplinary practice, silo mentality, more tech, less tech…yada yada yada. With so much energy spent attending to putting out fires every day, I have found it is easy to lose sight of the person behind the profession.

School taught us the Krebs cycle and anatomy. We learned the “lock and key” theory as drugs do their thing. We spent hours memorizing every written word and nugget of wisdom from our professors. As I now have a lifetime of experience in this chosen profession of ours, I find that the most valuable lessons are the ones life has taught me and unlike the tenets of practice back and forth, these lessons hold true throughout. Secret weapon: the intangibles. Here I share a few thoughts on pharmacy leadership that I have gathered over years of being in the trenches at every level.

Find your value and lean into it. You know how to do the job, but do you know how to lean into your strengths? The things that make you a good leader also make you a good follower. Managing goes both up and down. learn from everyone around you, and then take that and create your strongest path. Tell a joke in a tense situation. Offer a creative idea from the cheap seats. This will be hit and miss, but you don’t know if you don’t try. Find your best voice and sing from the rooftops. 

No matter how good you are, how smart you are, how high your GPA was, none of that matters if you can’t operationalize your big brain so be sure to read the room. Learn your surroundings and adapt to how the organization works. This includes the people you are working with. This will also be hit and miss, but taking a swing and missing at times, and knowing when to make a change, is as important as sticking with it at all costs. You may lose a little of yourself if you don’t take time to identify the moment. Learn the “politics” of your organization and work within that framework to show the immense power of what you bring, and how pharmacy can be transformative to an organization.

Think of things you can do to make strides. Real strides, things that propel you and your practice forward in a different way. Ruth Bader Ginsburg said, “Fight for the things that you care about, but do it in a way that will lead others to join you”. This will get you noticed for all the right reasons.

You can’t do it alone. None of us does it alone. We may think we do, but if you dig a little deeper you will realize that whatever success you have or wish to have does not happen in a vacuum. Think about key turning points in your professional life and there will always be someone or something that helped you get there. Never forget that and remember to pay it forward. Maybe take that call you would normally screen. Set that meeting that you think you don’t need. I have always said that you never know whose hand you will eventually shake, be open to it. 

Of course, we should be talking about Specialty, 340B, staffing, budgets, etc., but we should also talk about and share how we take our profession to new heights outside of the daily grind and look a little deeper at our success as highly trained professionals in a rapidly changing world.