For many healthcare systems, the 340B Drug Pricing Program can be a saver … and a stressor.
That’s why systems like Intermountain Health have devoted centralized resources to helping their more than 20 care sites navigate the complex legislation that allows providers to receive discounted medications to treat underserved populations and, in turn, reinvest in the community.
And it’s paying off. To date, Intermountain Health has saved well over $2 million from continuous improvement projects that significantly increased enterprise drug expense savings, 340B compliance and stakeholder engagement.
“Several years ago, we had 340B staff at every site, and due to the complexity of 340B, we had a lot of turnover because the program is not something you just learn overnight,” said Carrie Dunford, chief pharmacy officer and vice president of clinical services at Intermountain Health.
Since then, she’s hired Kevin Forbush, 340B program director at Intermountain Health. His first week on the job was no walk in the park, considering it involved reviewing two 340B audits. (Though he was wholly prepared for the challenge, having been responsible for the 340B program at his previous organization.)
“As I was going through these audits, I noticed there were missed opportunities for optimization that were being repeated at multiple sites,” he said. “I realized that, along with resolving these process issues, the opportunity for shared learning could help us across the system.”
So, Forbush implemented a straightforward approach to help hospitals navigate the challenge with ease and efficiency:
- Look for waste or suboptimal processes by establishing a baseline assessment of purchasing expense at each hospital.
- Identify high-value, low-effort opportunities for improvement by assessing the data and prioritizing interventions based upon the possible 340B savings for the purchase order. These purchases are identified as "missed 340B opportunity.”
- Just pick one and start. The 340B team member chooses 1-3 of the missed 340B opportunities per month at each hospital and works toward that goal. “All too often we’ll have 17 priorities, and if 17 things are a priority, then nothing really is,” Forbush said. “So, we really try to limit our focus areas to one thing at a time — and certainly no more than three.”
- Iterate.
During the initial phase of the intervention, drug expenses were reduced by over $180,000 (or $2 million annualized) at the four hospitals in scope. Since then, they’ve adopted the process into the monthly auditing process at all 340B hospitals in the Intermountain Health system. The second phase of the project, the reallocation of 340B replenished drug throughout the enterprise, generated an initial value of nearly $600,000 in avoided drug expense — allowing the health system to recapture missed opportunities due to process errors or system downtimes.
“Whether or not you’re a 340B hospital, you want to be purchasing your drug products at the best price every time — and at the extent that you’re able to do that, you’re able to lower your operational costs and reinvest that into the community,” Forbush said. “This process has allowed us to do just that — maintain compliance, deliver better patient care and meet our financial goals.”
To learn more about the 340B Drug Pricing Program and how Vizient can help, visit Pharmacy Consulting Services.