Justifying a Residency Program and Showing a Return on Investment

1. Justifying a Residency Program and Showing a Return on Investment Janet Teeters, M.S. Director of Accreditation Services

2. Objectives: • Why ↑ demand for residency positions • Why you might want to start or expand a program • Financial and non-financial elements to consider when justifying a program

3. Pharmacists in 2020 Pharmacogenetics Gene Therapy Nano Therapy Molecular Target Therapy

4. To support the position that by the year 2020, the completion of an ASHP-accredited postgraduate-year-one residency should be a requirement for all new college of pharmacy graduates who will be providing direct patient care. ASHP Position Statement approved June 2007

5. Residencies are the bridge between Education and Practice Helping to develop clinical & professional maturity

6. What’s Happening with Residencies? Although we are growing more programs, the demand by new graduates is higher than the supply. Market conditions are changing and employers are seeking ASHP accredited residency trained pharmacists.

7. Pharmacy Organization Support for Residency All of these organizations are partners with ASHP at the ASHP Commission on Credentialing table.

8. Demand from new graduates • Pharm. D. entry level degree –everyone has the same degree and individuals need to find a way to differentiate themselves. Additionally colleges are graduating an increased number of students. • “Ideal job” requires residency training • Many jobs, not just ideal jobs, now require residencies (e.g. Health systems) • ~19% of new graduates complete a residency, but even higher numbers seek them • Current Economy has tightened up the number of jobs, while the number of graduates increases, managers can be more selective in requiring residency trained individuals

9. PGY2 Administration Nuclear Ambulatory Nutrition Cardiology Oncology Critical Care Pain/Palliative Care Drug Information Pediatrics Emergency Medicine Pharmacotherapy Geriatrics Psychiatry Infectious Diseases Solid Organ Transplant Informatics Internal Medicine Medication Use Safety

10. Opportunities to meet the demand • Increase # Residency Programs • Increase # Residency Positions

11. Why start a residency?

12. There must be perceived value… Human Resources side • Recruitment • Retention • Residents cover some staff shifts • If hire your resident • No recruitment fees • No interview fees • Advertisement • No outside recruiters • Reduced Training costs • No relocation expenses • You know the person

13. Perceived value… Service • Residents expand your normal scope of service • Improve patient care • Keep services and staff progressive • Residencies tend to drive innovation • Projects • CQI

14. Perceived value…Cost Avoidance • Improved Financials • P&T (therapeutic substitution) • DUE • ↓ Medication Errors/ ADR • ↑ Interventions • Special Projects focusing on cost reduction

15. Perceived value… Education • Precept Students • Education for Techs, R.Ph., RN, MD • Interdisciplinary focus • Improved credibility

16. If perceived value: How to begin? • Initial assessment • Costs of the program • Support for program Part I • Core Elements • Program Design • Individuals Role Part II Justification Design

17. Initial assessment • Organization • Mission/Philosophy – does it include education? • Patient types & Volume – do you have enough variety and volume to support a program? • Department • Staff (experience, interest, commitment, presence) • Services (wide scope & depth) • Complete ASHP Pharmacy Practice Model Initiative (PPMI) Hospital self assessment (if a hospital) http://www.ashpmedia.org/ppmi/ • Complete “RU Ready” http://www.ashp.org/menu/Accreditation/ResidencyAccreditation/RUReadyTool.aspx Justification

18. Costs of a residency program • Preceptor and program directors time • Space and equipment • Stipends & benefits of residents • Travel • Recruitment expenses • Training of Preceptors • Accreditation Fees You will need detail to receive CMS funding Justification

19. Gathering support • Pharmacy • Physicians • Nursing • Administration Justification

20. Business Plan • Description • Market analysis • Costs • Value to offset costs (intangibles and financials) • CMS Inpatient Reimbursement Pass through funding for hospital run pharmacy residencies, if you meet their criteria, and are ASHP accredited • Executive Summary Refer to your hospital for their format Justification

21. Costs – 2 residents Residents stipend & benefits $87,500 (2 residents @ $35,000 +25% benefits) Travel $ 4,000 (2 residents MCM, Regional Residency Conf) Accreditation Fees $ 3,655 (2010: $780 application fee 1X & $2,875 annual assessment -1 program) Residency Program Director $ 8,600 (4hr/week X $43/hr x 50 wks) Preceptors $21,500 (10hr/week X $43 x 50 wks) MISC – copying costs, etc. $ 1,000 Residency Showcase $ 555 TOTAL $126,810

22. Offset Costs (2 residents) CMS Funding (PGY1 only) – direct costs $63,405 (Est same % as Medicare Pts $126,810X 50%) CMS Funding indirect costs $ 25, 362 (see your finance dept 20% of directs?) Staffing commitment (not paying RPH) $ 34,944 (Every other Weekend 16hr/wk x 52 weeks x $42/hr RPH Shift diff) Sub total $123,711 Once established: Projects that reduce costs (therapeutic substitutions, DUE) ???? Hire 1 resident (soft costs) ↓ recruitment $ est $15,000, ↓ training time 3 months 480 hr X $40/hr est $19,200 $34,200 SUBTOTAL $157,911 Versus costs $126,810 This does not address intangible benefits

23. Include intangible benefits • Innovation • Progressive staff • Recruitment & Retention • ……

24. Where’s the $ coming from? One-time start up costs Grants (Foundation, state, college, industry) Vacant FTE 1RPH ~ 2 Residents RN, MD vacancies Partners shared cost Justification may be enough 

25. How will you justify or show a return on investment of your residency?