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Matthew McGuire, PharmD, manager of pharmacy supply chain and automation at University Hospitals Health System, based in Shaker Heights, Ohio, likes to put the problems encountered in the intricacies of pharmacy supply chain management like this.

THE PROBLEM

A routine trip to the grocery store mirrors the challenges faced in navigating through a plethora of options, weighing the value of generic alternatives against loyalty to branded products, and grappling with fluctuations in availability and rising costs.

“As a pharmacist specializing in supply chain management, one of the most fulfilling aspects of my role is contributing to the delivery of top-tier patient care,” McGuire stated. “However, this comes with its own set of challenges, including mitigating drug shortages, maintaining supply chain integrity and managing costs.

“Conversely, unlike shopping for groceries, the pharmacy supply chain operates within a framework of healthcare and cannot seamlessly follow a simple supply-and-demand model,” he noted. “While a shopper might easily substitute one item for another due to preference or unavailability, the interdependent nature of medically necessary medications often leaves little room for alternatives.”

Ensuring the availability of these crucial products is paramount to meeting patients’ medical needs and initiating effective care, he added.

“Having a comprehensive understanding of purchase patterns is paramount for making informed decisions, particularly during periods of drug shortages or when facing high-cost decisions,” he said. “By delving deeply into purchase patterns, one can gain invaluable insights that serve as the bedrock for strategic decision-making.

“Traditionally, the primary method for quickly accessing such purchase patterns was through internally developed dashboards,” he continued. “However, this approach, while beneficial, proved to be time-consuming to maintain, particularly considering the complexities associated with procurement within larger integrated delivery networks.”

PROPOSAL

McGuire and his team turned to vendor QuicksortRx for help. Its platform assesses real-time medication price, availability and purchasing trends across multiple facilities and their many account classes – group purchasing organization contracted prices, 340B program prices and wholesale acquisition cost.

“The proposal put forth by the vendor aimed to revolutionize the assessment process for pharmacy procurement by introducing a real-time innovative tool designed to address the challenges commonly encountered in pharmacy supply chain management,” McGuire explained. 

“At its core, the vendor sought to provide a solution that not only streamlines procurement operations but also offers an unbiased and unified view of procurement data, thus enhancing decision-making processes for pharmacy supply chain teams.

“The essence of the vendor’s proposal lies in its ability to simplify complex procurement reviews by offering a user-friendly software interface,” he continued. “By leveraging real-time data analytics, the software enables pharmacy professionals to easily identify and implement strategies that optimize procurement practices.”

This includes the instant identification of contract changes, allowing teams to promptly assess when better pricing options become available or when contracts are improperly loaded. Such functionality ensures pharmacies can capitalize on cost-saving opportunities without delay, ultimately driving efficiency and cost-effectiveness in procurement operations, McGuire said.

“Furthermore, QuicksortRx’s proposal extends beyond basic procurement assessment functionalities by providing comprehensive visibility into purchasing activities across multiple accounts,” he continued. “This feature enables a pharmacy supply chain team to gain a holistic understanding of their procurement landscape.

“The innovative spend analysis function offered by the vendor presents a complete pharmacy picture within seconds, allowing teams to identify trends, patterns and areas for improvement effortlessly,” he said. 

“In principle, the proposal represents a paradigm shift in pharmacy procurement by offering a sophisticated yet intuitive solution that empowers pharmacy supply chain teams to work smarter, not harder.”

MEETING THE CHALLENGE

The real-time medication information technology transformed University Hospitals Health System’s procurement process by providing quick and transparent access to aggregated data, McGuire explained.

“This platform helps us to skillfully address challenges related to drug shortages and overspending by means of offering insights and analytics that were previously unavailable in such a timely manner,” he said. “In our procurement team, the platform has become an essential tool for tracking and managing our purchasing activities.

“The platform allows us to analyze real-time and historical purchase patterns, enabling us to make informed decisions regarding procurement strategies,” he continued. “By providing visibility into contract changes and pricing discrepancies, the platform helps us identify daily opportunities for cost savings and optimization.”

One of the most impactful features of the platform is the rolling swap savings and overspend rate tracker, he added.

“This tool allows us to quantify the benefits of product swaps and track savings over time,” he said. “By monitoring the quality of executed swaps on a daily basis, we are able to continuously assess the effectiveness of our procurement decisions and adjust our strategies accordingly. 

“Additionally, the overspend rate dashboard provides insights into purchasing anomalies and misaligned contracts, allowing us to take corrective action and prevent unnecessary expenditures,” said McGuire.

“The platform is used by our procurement team, including purchasers and managers responsible for overseeing purchasing activities,” he continued. “In current state, the platform interacts directly with wholesalers for data collection and processing, in addition to pulling in other key details from stakeholders such as the American Society of Health-System Pharmacists.”

RESULTS

The implementation of real-time monitoring through the platform has yielded significant hard results for University Hospitals Health System, primarily evidenced by sustained seven-figure savings year over year.

“This achievement stems from several key areas facilitated by the platform,” McGuire reported. “First, the ability to identify and execute preferred product swaps has led to substantial cost savings. By leveraging real-time data on purchasing patterns and market insights, we can pinpoint opportunities for more cost-effective alternatives without compromising quality or patient care.

“Second, the platform’s capability to identify contract discrepancies has been instrumental in rectifying pricing inconsistencies and ensuring adherence to negotiated terms,” he continued. “This feature has helped us avoid unnecessary expenditures and maximize the value of our contracts. Additionally, utilizing QuicksortRx to identify, implement and track local contract savings has further contributed to our financial success by streamlining the monitoring process behind optimized contract utilization.”

The market insights provided by the platform have allowed the health system to maintain flexible thinking and nimble action, especially as it maneuvers through a period of unprecedented drug shortage and supply interruptions, he added.

“By providing real-time data on failure-to-supply rates and system-level usage, the platform empowers us to swiftly assess shortage impacts and devise mitigation strategies,” he said. “This capability not only enhances our ability to maintain continuity of care for patients but also mitigates financial risks associated with shortages.

“The active drug shortage tracker coupled with the market share analysis tools have modernized our approach to shortage management by providing actionable insights and reducing sensitization to supply fluctuations,” he continued.

In terms of cost avoidance and savings, the platform has delivered tangible results with a notable return.

“The platform’s robust analytics and tracking capabilities have enabled us to quantify savings and cost avoidance measures accurately,” he reported. “By fixing contract discrepancies and optimizing purchasing strategies based on real-time data, we’ve achieved substantial savings year over year.

“The platform’s guaranteed results for health systems, coupled with our own experiences of capturing significant savings, underscore its efficacy in driving financial stewardship and operational efficiency,” he added.

ADVICE FOR OTHERS

For healthcare organizations considering implementing similar procurement technology, there are several key pieces of advice to consider, regardless of the specific vendor, McGuire offered to his peers.

“First, recognize that adopting procurement software represents a fundamental shift in how inventory procurement is managed,” he advised. “These automated platforms signify a pivotal evolution in purchasing practices, moving away from manual processes toward more efficient and data-driven solutions.

“The substantial hard savings realized through these platforms underscore the necessity for such technology in modern supply chain management,” he added.

Second, when evaluating potential procurement software, it’s crucial to assess the relationship with the vendor, he continued.

“Look for a vendor that prioritizes partnership and collaboration, offering ongoing support and guidance,” he said. “An empowered vendor relationship fosters a more seamless integration of the platform into your organization’s workflow and encourages proactive problem-solving.

“Seek transparency and open communication in your partnership with the platform developers,” he added. “Regular touchpoints and collaboration with the vendor’s experts allow for ongoing optimization and enhancement of platform features to better align with your organization’s needs and goals. By fostering a collaborative partnership, you can maximize the value and impact of the procurement technology within your healthcare organization.”

Additionally, consider the level of empowerment staff will have in using the platform, he said.

“A user-friendly interface and intuitive features empower your team to leverage the software, driving cost savings and improving inventory management practices,” he advised. “Ensuring the platform provides the necessary tools and resources for your staff to take ownership of the procurement process will maximize its benefits.

“Finally, and possibly most imperative for individual success, emphasize the importance of standardized implementation processes and active engagement from your team,” he concluded. 

“Establishing a strong foundational team and implementing standardized procedures ensures consistency in procurement operations. Encourage a ‘more with more’ mentality, where the collective efforts of your team contribute to greater value realization from the platform.”

Follow Bill’s HIT coverage on LinkedIn: Bill Siwicki
Email him: bsiwicki@himss.org
Healthcare IT News is a HIMSS Media publication.

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