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Impact of Trained vs. Non-Trained Pharmacy Purchasing Professionals on Pharmacy Finances. Richard Ponder, MBA, CPhT, CPP, CEPP, CMRP Pharmacy Supply Chain Supervisor East Jefferson General Hospital, Metairie, LA. 1. Introduction. 2. 3. 4. Agenda. Current Survey. Training. Resources.

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impact of trained vs non trained pharmacy purchasing professionals on pharmacy finances

Impact of Trained vs. Non-Trained Pharmacy Purchasing Professionals on Pharmacy Finances

Richard Ponder, MBA, CPhT, CPP, CEPP, CMRP

Pharmacy Supply Chain Supervisor

East Jefferson General Hospital, Metairie, LA

agenda

1

Introduction

2

3

4

Agenda

Current Survey

Training

Resources

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current environment
Current Environment
  • Pharmacy cost continue to exceed inflation and continue to exceed the rate of increase for total healthcare expenditures.
  • Healthcare reform will drive more supply chain cost cutting. Labor vs. Supplies
  • Pharmaceutical supply chain executives are looking to maximize their operations in the face of changing legislation, expanding scope and mounting pressure on cost control.
  • Most hospitals emphasize education for their clinicians; however, many Pharmacy Purchasing Professional do not receive any formal training.
  • Materials Management/Supply Chain Management Department and Pharmacy address increasing pharmaceutical cost.
  • GS1 and GLN

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healthcare supply chain
Healthcare Supply Chain

“Despite well-documented evidence of significant competitive advantage and cost reduction resulting from supply chain management practices, the healthcare industry has been extremely slow to embrace these practices. Barriers include… and limited education on supply chain.”

Source: Journal of Supply Chain Management, February 2005

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purchasing impact to the bottom line
Purchasing Impact to the Bottom Line
  • Example: Average, private sector, not-for-profit hospital with margins <1%
  • Objective: Improve bottom line by $500K
  • Options:
    • Reduce supply chain expense by $500K
    • Increase revenue by $50 million

Source: HFM Magazine, 2008

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survey
Survey
  • Overview
    • Participants and Methodology
  • Who is the Pharmacy Purchasing Professional?
    • Demographics
  • Training
  • Supply Chain Management
  • Operations
  • Finances

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demographics age
Demographics - Age

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demographics gender
Demographics - Gender

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demographics education
Demographics - Education

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demographics licensed
Demographics - Licensed

*Consultants, Non-Licensed Technician, Non-Pharmacy Staff

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training certification
Training - Certification

*Master in Pharmacy Administration

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training formal
Training - Formal

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experience position held immediately before becoming a pharmacy purchasing professional
Experience – Position Held Immediately Before Becoming A Pharmacy Purchasing Professional

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experience years before becoming a pharmacy purchasing professional
Experience – Years Before Becoming A Pharmacy Purchasing Professional

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facility size
Facility - Size

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facility type
Facility - Type

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supply chain management wholesaler
Supply Chain Management - Wholesaler

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supply chain management gpo
Supply Chain Management - GPO

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supply chain management inventory reorder points and quantities
Supply Chain Management – Inventory Reorder Points and Quantities

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operations routinely meeting with the pharmacy director to review purchasing
Operations - Routinely Meeting with the Pharmacy Director to Review Purchasing

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operations attend management operational review or similar meetings
Operations – Attend Management Operational Review or Similar Meetings

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operations dual report
Operations – Dual Report

*Pharmacy Manager - Operational and Clinical, System Coordinator, Business Operations Manager, Sr. Accountant, COO, SCM

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supply chain management organization
Supply Chain Management Organization

Contract Management

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pharmacy supply chain management model 3 dual report
Pharmacy Supply Chain Management Model 3 – Dual Report

Director of Supply Chain

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supply chain management reports type
Supply Chain Management – Reports Type

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sample pharmacy purchasing report
Sample Pharmacy Purchasing Report
  • Dashboard
    • Compliance, Penetration, Coverage
  • Contracts
    • $ Increased or decreased
    • XX contracts changed in XX period with XX change in XX period
  • Spend Analysis
    • Top Therapeutic Categories
    • Unbudgeted Drug Expense
      • Factor
  • Expense – Reduction Efforts
    • IV to Po: xx savings
    • Projects

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finance ftes
Finance - FTEs

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finances contract compliance rate
Finances – Contract Compliance Rate

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finances factors considered when calculating the switch between two equal products
Finances – Factors Considered When Calculating The Switch Between Two Equal Products

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finances inventory is performed
Finances – Inventory is Performed

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finances inventory turn rate
Finances – Inventory Turn Rate
  • Mean – 12.426
  • Median – 12
  • Mode – 11
  • Standard Deviation – 4.165
  • Minimum – 5
  • Maximum – 21

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from non trained to trained
From Non-Trained to Trained
  • Find a Mentor
  • Network
  • Educate Yourself
  • Make an Impact and Promote the Results
  • Know Your Skill Set

Source: Materials Management in Health Care, 2009

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training purchasing assessment of skills for success pass
Training – Purchasing Assessment of Skills for Success (PASS)
  • The PASS program measures purchasing professional’s proficiency in seven key skill dimensions:
    • Purchasing Fundamentals
    • Analysis & Spreadsheets
    • Contract Law
    • Project Management
    • Purchasing Best Practices
    • Sourcing
    • Negotiation

*Next Level Purchasing Benchmarking Program; 475 purchasing professionals from 46 companies

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training skills and knowledge
Training – Skills and Knowledge

The Center for Advance Procurement and Supply (CAPS) Research of Arizona State University summarized the top skills and knowledge area required for tomorrow.

  • Skills
    • Ethics, interpersonal communication, negotiation skills, project and team orientations, and strategic thinking.
  • Knowledge
    • Supplier relationship management, total cost analysis, purchasing strategies and plans, and supplier analysis.

Source: 92nd Annual ISM Conference, May 2007

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training apics the association for operation management supply chain competency model
Training – APICS – The Association for Operation Management: Supply Chain Competency Model
  • Foundational
    • Personal Effectiveness
    • Academic
    • Workplace and Leadership
  • Profession-Related
    • Operations Management Technical
    • Supply Chain Manager Knowledge Areas
    • Supply Chain Manager Technical
  • Occupation-Related
    • Supply Chain Manager Specific Requirments

Source: APICS Future Leaders, 2009

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training pharmacy black hole
Training – Pharmacy “Black Hole”
  • Failure to Supply
  • Expired Products
  • Recalls
  • Borrowing and Loans
  • Shortages – Secondary Market
  • Freight
  • X%net15 – Payment Terms
  • Waste
  • Reimbursement
  • Shrinkage

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resources industry tools
Resources – Industry Tools
  • GPO
    • Broadlane
      • Broadlane University
      • Medication Use Management
    • Premier
      • 2010 Breakthroughs Conference & Exhibitions
  • Manufacture
    • Baxter
      • Pharmacy Advisor
    • Cubist
      • Economics in Infection Management/LOS
      • Access Manager

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resources industry tools1
Resources – Industry Tools
  • Wholesaler
    • Cardinal
      • Inventory Management Best Practices Reference Guide, Version 1, 2008
      • Case Studies
    • McKesson
      • Healthcare Supply Chain Management And The Internet
      • Operationalizing The Event-Driven Supply Chain
      • Supply Management Online
      • Pharmacy Optimization Consulting

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resources suggested readings
Resources – Suggested Readings
  • ASHP Guidelines on Medication Cost Management Strategies for Hospitals and Health Systems. Am J Health-Syst Pharm. 2008; 65:1368-84.
  • ASHP Current Status of Medicines Procurement. Am J Health-Syst Pharm. 2009; 66: 5: Supplement 3 s20-s28.
  • Brown, Thomas.(2010, August). Introduction to Health-System and Hospital Pharmacy Practice
  • Dominick, Charles.(2010, January). Certification Update: The Cost and Benefits of Getting Certified

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resources suggested readings1
Resources – Suggested Readings
  • Goos, Kevin. (2008, March). Identifying Cost Savings Opportunities
  • McKone-Sweet, Kathleen. (2005, February). The Ailing Healthcare Supply Chain: A Prescription for Change
  • Merrifield, Ric. (2009). Rethink
  • Middleton, Diana. (2010, April). Exam Time: More Firms Are Requiring Test-Taking

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resources suggested readings2
Resources – Suggested Readings
  • Nutescu, Edith. Basic Terminology in Obtaining Reimbursement for Pharmacists’ Cognitive Services. Am J Health-Syst Pharm. 2007; 64:186-92
  • Puckett, William. (2008, November). Recruiting a Manager for Financial Activities in Pharmacy
  • Wilson, Andrew. (2009). Financial Management for Health-System Pharmacist
  • World Health Organization. (1999). Operational Principles for Good Pharmaceutical Procurement

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resources publications
Resources - Publications
  • American Journal of Health-System Pharmacy
  • Healthcare Financial Management
  • Inside Supply Management
  • Journal of Supply Chain Management
  • Materials Management in Health Care
  • Pharmaceutical Executive

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resources publications1
Resources - Publications
  • Pharmacy Purchasing & Products
  • Pharmacy Purchasing Outlook
  • PM Network
  • Supply Chain
  • Supply & Demand Chain Executive
  • The Journal of Healthcare Contracting
  • The Journal of Pharmacy Technology

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resources websites
Resources - Websites
  • www.ahrmm.org
  • www.apics.org
  • www.ashp.org
  • www.asq.org
  • www.capsresearch.org
  • www.gs1us.org
  • www.ism.ws
  • www.ncmahq.org
  • www.pharmacyadvisor.com
  • www.pharmacypurchasing.com
  • www.pmi.org
  • www.theiiba.org

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summary
Summary
  • Patient Safety > Cost Savings
  • Facilities should have a trained purchasing professional dedicated to the pharmacy purchasing process.
  • Continuous Education, Training, and Certification
  • Additional Pharmacy Purchasing Professional Specific Research to Follow

14th Annual NPPA Conference

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Do You Have Any Questions?

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Email: [email protected]

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