Health Systems

Bettering the Benefits of Drug Benefits

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Three ways an outpatient pharmacy helps health systems add value for employees.

Across healthcare in general and in the health system specifically, patient care comes first. And as readmissions penalties and other costs rise, controlling costs follows close behind. Can health systems focus on one to the exclusion of the other? In a word, no. But health systems can balance these two critical priorities through an ambulatory pharmacy strategy and other strategies that align care with important cost savings. One example of this strategic approach is improving care transitions to reduce 30-day readmissions that, if unaddressed, could result in significant financial penalties. More and more health systems are finding that providing an in-house outpatient pharmacy improves their employee drug benefit offering. Why? Consider the three biggest advantages of the pharmacy benefit:

  • Convenience. For health systems employing hundreds and thousands of individuals committed to serving patients, excellence in care extends far beyond the walls of the hospital room. In-house pharmacies extend the convenience of on-site prescription services to employees as well as patients. For an employee population largely working long shifts or odd hours, that convenience can make all the difference when it comes to satisfaction with an employer's benefit plan. And when an outpatient pharmacy can also offer over-the-counter products, the health system can demonstrate true responsiveness to employee needs.
  • Cost savings. As benefit costs rise, outpatient pharmacies provide the opportunity for health systems to save employees money on co-pays while also creating cost efficiencies for the health system as a whole. Hospitals can save between eight and 12 percent1 on the drug purchasing side by setting up an in-house pharmacy - and that doesn't include the added savings for 340B entities.
  • Continuity. When employees have to fill their prescriptions at unaffiliated retail pharmacies, they're essentially getting their healthcare needs met outside of an employer whose core competency is care. It's a disjointed healthcare experience for an employee population that needs - and wants - to focus on care continuity. Offering an in-house pharmacy, then, is proof of concept of the health system's commitment to seamless care transitions for both patients and employees. And with medication non-compliance a leading cause of hospital readmissions2, continuity of care is more important than ever for health systems. Consider the benefit of increased ownership of the care continuum when patients can fill discharge prescriptions on site.


Is outpatient pharmacy the right choice?
While the benefits of building an in-house pharmacy may seem clear, health systems should evaluate a few factors as they make a decision around whether to invest time and resources into the build. Size is a factor, as hospitals with just a few hundred employees may have to choose between investing in an outpatient pharmacy or updated equipment. The best way to analyze the return on investment for an ambulatory strategy may be to evaluate the annual cost of prescriptions filled and whether or not saving up to 12 percent on that cost would yield a significant financial benefit. In addition, the health system should consider whether the benefits of in-house offerings outweigh a significant disruption among employees should a pharmacy benefit plan change. Post-implementation results from health systems across the country have shown that, when in-house pharmacies are evaluated for their benefit to employees, ROI targets have been met and exceeded, employee satisfaction has increased and annual benefit costs have gone down. It's compelling evidence of benefits that extend across patients, employers and employees.

11 Shaw, Gina. "Is It Time To Build an Outpatient Pharmacy." Pharmacy Practice News June 2015: 32+. Web. 25 June 2015.)
2 Data from Annals of Internal Medicine 122:415-21, 1995
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