Launching Your Own Home Infusion and Ambulatory Infusion Suite? Here’s What to Consider
Vizient Senior Consulting Director, Pharmacy
Home infusion is a $19 billion market composed of national, regional and local infusion pharmacy providers. And it's expected to grow, with current industry rates at 7-8% revenue growth per year.
So, it's no surprise many health systems are contemplating whether to start their own home infusion and ambulatory services. Recently, I published a blog on why home infusion and alternate sites of care are on the rise, highlighting the new payer requirements, COVID-19's impact on patient care and the new drug approvals from the Food and Drug Administration (FDA).
While administering infusion drugs in the home or ambulatory infusion suite is common practice and may already be part of your hospital's overall strategy, there are other factors to keep in mind when considering opening non-hospital-based infusion services. Here are five questions to ask yourself before making the case to your leadership.
1. Why would my hospital start home infusion and infusion suite services?
Though revenue and profitability are strong rationales for a health system, maintaining continuity of care results in improved patient outcomes. Having non-hospital and non-provider-based infusion services helps enable a cohesive patient experience, decrease hospital length of stay and provide a lower cost of service option for payers and patients.
2. Does my hospital have the right information to assess the opportunity?
Look at your hospital discharge data to determine which infusion therapies are commonly prescribed and where the patients are being referred to for service. There needs to be enough volume and a higher percent of commercial payers (compared to Medicare and Medicaid) to sustain your home infusion and infusion suite pharmacy. You'll also want to keep in mind that these sites are non-provider-based, which means Medicare reimbursement is extremely limited, making the payer mix crucial.
3. What type of infrastructure and resources would my hospital need?
Office, pharmacy dispensing, sterile compounding, packaging and warehousing space are critical to an efficient home infusion operation.
An ambulatory infusion suite is typically in an adjacent suite or separate area in your home infusion pharmacy, making it easily accessible for patients. The suite should be set up like hospital-based infusion centers where the drugs are compounded in the infusion pharmacy and brought over to the infusion suite to be administered by a skilled IV nurse. This process also keeps patient convenience and comfort in mind.
Patient benefits investigation, prior authorization management, pricing, billing, prescription dispensing and clinical documentation are generally managed through infusion specific software. There are a limited number of infusion software vendors available, and it is important to do a detailed assessment of each to ensure interoperability with your EHR, ordering system, courier routing system and nursing management.
4. How would a home infusion pharmacy be managed?
When contemplating opening a home infusion pharmacy, it is important to determine if your organization has the resources and desire to fully implement and operate the pharmacy on an ongoing basis. Options such as partial or full outsourcing may be more beneficial depending on your situation. In a partial outsourcing scenario, you could outsource certain areas of your infusion pharmacy while maintaining ownership. The benefits to doing so include a shortened implementation timeline, an increased independence from health system resources and additional expertise. For example, infusion software vendors and independent companies offer support services for benefits investigation, prior authorization, billing and reimbursement. These are areas health systems new to home infusion may struggle to find experienced staff resources.
On the other end of the scale, pharmacy management companies provide a full outsourcing turnkey solution. These companies provide staff recruitment, ongoing management, technology solutions, payer contracts, policy and procedures, call center support and overall financial management of the operation. The downside to full outsourcing is that the management agreements often require a share of the revenue in exchange for their services.
Additionally, transitioning out of these support and management relationships years later can be difficult, because doing so often involves an infusion software conversion, setting up of information technology support, hiring experienced personnel and setting up financial reporting.
5. What is the investment and is my hospital willing to commit long term?
One of the largest investments for starting an infusion pharmacy is the cost of a USP 797-compliant cleanroom.
Hiring highly skilled pharmacists, nurses and intake/billing staff also is needed to operate an infusion pharmacy. These positions play a unique role in patient care and the availability of these key resources in your area is essential in evaluating how you manage your operation.
Similarly, payer contracting and marketing to key prescribers to change their prescribing habits is critical and can take several months, so you'll want to keep that in mind.
You also should consider these additional operational costs:
- Call center and warehousing space
- Infusion software
- Accreditation
- Billing and reimbursement resources
While it's clear that a home infusion and ambulatory suite may make sense as a part of your hospital's overall growth strategy, there are many factors to keep in mind when deciding if it's right for your health system. If you need help figuring it out, feel free to reach out to me.