Transcript Investing in pharmacy residency programs

Engaging the C-suite to Advance
Pharmacy Practice
Providing quality patient care through
progressive pharmacy practice
Investing in pharmacy residency
programs - What’s the value for
Institution A?
Institution A Pharmacy Residency
Program
• 290 residents since 1963
• Recipient of ASHP Foundation Pharmacy
Residency Program Excellence Award for
producing leaders in the pharmacy
profession
16 Current Institution A Residents
• M.S./Residency in health-system pharmacy
administration
– 8 administrative residents (4 junior, 4 senior)
• Pharmacy practice residency (PGY1)
– 4 hospital residents
– 1 community resident
• Medication systems and operations residency
– 1 MSO resident (2 year program)
• Specialty residencies (PGY2)
– 1 critical care resident
– 1 transplant resident
External
Funding
Cost
Reduction &
Avoidance
Education &
Scholarship
Pharmacist
Recruitment,
Development,
& Satisfaction
Benefits of
Pharmacy Residency
Programs for
Institution A Health
New Business
& Service
Growth
Quality,
Compliance &
Service
Provider
Satisfaction
External Funding
Federal
Government
• Graduate medical
education: “Medicare passthrough funds” (PTF)
available for accredited
PGY1 pharmacy residency
programs
Other
• State and national
pharmacy associations –
professional project
(research) grants
• Pharmaceutical industry
grants
Ex: Medicare Pass Through Funds*
Cost Item
Direct Costs
Resident
Salary + benefits
Travel
Residency accreditation fee
Tuition & related expenses
Teaching time
Program director
Director – administrative time
Preceptor – teaching time
Preceptor – administrative time
Preceptor travel
Total direct costs
Indirect costs
Calculation ($)
(38,300 + 20% benefits) x10
4 programs
9,000 x 4 admin residents
NET COST
459,600
8,605
4,725
36,000
(20% of salary + benefits)
(5% of salary + benefits)
(25% of salary + benefits) x10
(5% of salary + benefits) x10
41,300
10,325
312,000
62,400
2,125
937,080
(30% of total direct costs)
281,124
Total educational costs
Anticipated Medicare reimbursement
Cost ($)
1,218,204
Medicare pt load (35.6%) x
total educational costs
$433,681
(1,218,789-433,889)
$784,523
*Assumes 10 PGY1 pharmacy residents with a 35.6% Institution A Medicare patient
Cost Reduction
• All residents are responsible for
completing one or more drug cost
reduction projects each year*
– On average, each project reduces drug
costs by $40,000
– Total annual cost reduction = $1,280,000
*Administrative residents complete three cost reduction projects per year, all others complete one per year
Cost Avoidance
• Online staffing as clinical pharmacist
– 12 hours/week avoids 0.3 pharmacist FTE
– 0.3 RPh FTE (salary + fringe) = $41,184
– 1 resident FTE (salary + fringe) = $46,800
Avoids $650,000 in pharmacist FTE per year
88% of the cost of a resident is covered by
their staffing component alone
Cost Avoidance
•
•
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•
•
•
•
•
•
•
School of Pharmacy (SOP) lectures
SOP lab teaching assistants
Monograph preparation
Medication use guideline revisions
PSN follow-up
Site visit coordination
Health Link go-live and upgrade assistance
Audits
Drug contract analyses
Advertising, training, and relocation fees*
*Average of 2 to 4 Institution A -trained residents are hired onto staff each year!!
Improved Provider Satisfaction
• Nurse satisfaction
– Resource for questions: drug interactions, compatibilities,
administration rates, ect.
– Aid in communication with MD/PA/NP
– Assist in assuring patient doses are available to the nurses at
the appropriate time
– Assist in changing the dispensing location of medications for
more timely administration of first doses
– Change dosing times to standardized times to reduce time
demands on nurses
– Continuing education seminars
Improved Provider Satisfaction
• Physician satisfaction
– Dose medications to avoid complications
– Contact prescriber regarding abnormal lab values
and cultures found while monitoring patients
– Knowledgeable about Institution A’s drug formulary
and therapeutic alternatives
– Drug expert for clinical rounds
– Modification of inappropriate drug orders
– Increase through-put and efficiency
– Continuing education seminars
Improved Quality and Service
• Patient care
– Enhance pharmacists’ capacity and effectiveness
with patient care rounding, clinical monitoring,
medication reconciliation and patient teaching
– Resource to research best way to manage very
complex patient cases
• Compliance (audits, projects)
– CMS
– TJC
– Third party billing audits
– Detailed follow up on ALL PSN reports
Improved Quality and Service
• Enhanced achievement of external pay for
performance quality indicators
– Improved reimbursement for pay-for-performance and future
accountable care organization measures
• Increased reimbursement for medication therapy
management (MTM) services in Institution A
ambulatory pharmacies
– Leads to direct revenue from payers (Navitus, Unity, Group
Health, etc…) via patient teaching and care management
Improved Quality and Service
• Recruitment of future (well-trained)
pharmacists
• Community service and professional
activities
• Enhance capacity of staff
• Formulary review
• Drug policy development
• Opportunity for externally funded projects
Expanded Pharmacy Services
• Every major new Institution A pharmacy
initiative is powered by a pharmacy
resident project
• Second year administrative residents
complete a rotation with the VP of
Professional Services to help advance
goals of senior leadership.
Expanded Pharmacy Services
2000s – 2010s
1990s – 2000s
1980s – 2000s
1970s – 1980s
Advancements
in patient care
1960s –1970s services
Innovation in core
pharmacy
services
New pharmacy
business
development
Expansion of
clinical services
into ambulatory
and alternate sites
Drug policy and
managed care
pharmacy program
development
Implementation of
fully automated
medication use
process
Electronic medical
record
Innovative
pharmacist roles
New business
ventures
Resident Projects
• 1960s – 1970s
–
–
–
–
–
100% unit dose dispensing
Complete IV admixture system
Fully computerized pharmacy order entry/ distribution system
Pharmacist-managed drug information center
Pharmacist-managed medication administration record for inpatients
• 1970s – 1980s
–
–
–
–
Med histories, reconciliation, discharge counseling for all patients
Pharmacist participation on patient care rounds
Pharmacokinetic dosing services
Decentral pharmacy service in all areas from 0700 to 2300 and
around the clock services for critical care areas
Resident Projects
•
1980s, 90s, 2000s
– Pharmacists participate in >20 ambulatory clinics
– Integrated ambulatory pharmacy network throughout Dane County
• 13 pharmacies
• Inpatient and in-home hospice services
• Pharmacy management consultative services for hospitals in rural communities
•
1990s – 2000s
– Developing, implementing, maintaining, and monitoring policies related to the
use of pharmaceuticals with in Institution A
– Initiation of several external pharmacy contract services
– Manage pharmacy benefit for Unity
– Coordination of technology assessment programs
– Centralized robot
– Automated dispensing cabinets
– Barcode medication administration software at point of care
– “Smart” IV infusion pump
– Medication carousel
Resident Projects
• 2010s (What will we do next?)
– Practice model and professional staff advancement
through development and implementation of the
pharmacist career ladder
– Decision support expansion to maximize evidencebased care
– Operational efficiency improvement
– New technologies (IV Robot, etc)
– Integration of pharmacists on primary care teams
Pharmacist Recruitment,
Development, & Satisfaction
Recruitment
• Feeder-system for new and vacant
positions
• More costly to recruit, orient, and train
outside candidates
• Attract highly skilled candidates – best
RPh’s want to precept residents
Development
• Training of new hires – technicians,
interns, and pharmacists
Satisfaction
• Promotes workplace energy, practice
reflection, innovation, and company
dedication to quality improvement
• Resident projects enhance workplace
experience
Education and Scholarship
• Residents are required to provide
education to doctors, nurses, and
pharmacists
• Precept pharmacy students
• Faculty-resident collaboration on
scholarly efforts
Show me the Money…
Pharmacy Residency Program Return on Investment
(ROI) Analysis
Expense for Current 16 Residents
Expense Item
Salary and Benefits
Travel
Tuition
Accreditation fee
Recruitment
Total Expense
Cost
$734,400
24,585
72,000
5,175
2,185
$838,345
External Funding for Current 16
Residents
Funding Source
Commercial Supporter grant
Medicare PTF
Funds ($)
40,000
442,604
Total Direct Income
$482,604
Cost Reduction for Current 16
Residents
Drug Cost Reduction Project*:
Resident Type
Calculation
Total Cost
Reduction ($)
Administrative
3 projects/yr x $40,000/project x 8 res
960,000
PGY1
1 projects/yr x $40,000/projects x 5 res
200,000
MSO
1 project/yr x $40,000/project x 1 res
40,000
PGY2
1 project/yr x $40,000/project x 2 res
80,000
Total
$1,280,000
Cost Avoidance for Current 16
residents cont…
Cost Item
Calculation
Cost ($)
HL go-live assistance
50 shifts/yr x 4 hr/shift x $66/hr
13,200
Medication audits
8 audits/yr x 15hr/audit x $66/hr
7,920
10/res/yr x 0.3 hr/asmt x $66/hr x 16 res
3,168
5 analyses/yr x 15hr/analysis x $66/hr
4,950
2 ads/position x 2 positions/yr x $5000/ad
20,000
2 RPh FTE/yr x 40hr/wk x 8wks x $66/hr
42,240
2 RPh FTE/yr x $4,000/relocation fee
8,000
Med rec assessment
Drug contract analysis
Position advertisement*
New RPh training*
New RPh relocation fee*
Staffing
~12hr/wk x 52wk/yr x $66/hr x 16 res
Subtotal
646,272
$745,750
*********continued on next slide**********
Cost Avoidance for 16 residents
Cost Item
Calculation
Cost ($)
Institution A SOP lectures
$300/lecture x 5 lectures
1,500
Institution A SOP lab TAs
40hr x $66/hr x 5 res
13,200
$30/CE credit x 25 RPh/tech attendees x 11 res
8,250
10hr/monograph x $66/hr x 10 res
6,600
2hr/revision x $66/hr x 10 res
1,320
1500 PSN/yr x 0.5hr/PSN x $66/hr
49,500
12 visits/yr x 10hr/visit x $66/hr
7,920
CE lectures
Monograph preparation
Med use guideline revision
PSN follow-up
Site visit coordination
Subtotal
$88,290
Subtotal (previous slide)
745,750
Total Cost Avoidance
$834,040
=
(
financial gain – annual expense
annual expense
)x 100
Return on Investment for Current 16
Residents
Item
Total Cost
Cost
Benefit
$838,345
External Funding
$482,604
Cost Reduction
$1,280,000
Cost Avoidance
$834,040
Total ROI
ROI
($482,604 + $1,280,000 + $834,040) – $838,345
=
$838,345
$1,758,299
= 210%
ROI Breakdown per Resident Type
Resident Type*
Cost per
Resident ($)
Financial Value
per Resident ($)
Margin ($)
ROI
Admin (n=8)
54,937
195,761
140,824
256%
PGY1 (n=5)
49,237
137,998
88,761
180%
MSO (n=1)
48,637
110,964
62,327
128%
PGY2 (n=2)
48,937
80,382
31,445
64%
* n= # of residents in current FY11 budget
PROPOSAL
Residency Program Expansion
• Add a permanent PGY2 oncology
resident position
• Add a permanent PGY2 nutrition resident
position
• Add an fifth administrative resident
position for FY12 + FY13
Benefits of Oncology Resident
• Oncology is core Institution A service line
• Area of growth and expansion – key pharmacy
specialty area
• 25% of Institution A ’s $109 million drug budget is
oncology drugs
• At forefront of what we can do at ambulatory clinics
• Hard to find and hire pharmacists with oncology
specialty
• MD demand
• Services can be expanded while at the same time
lowering total costs
Benefits of Nutrition Resident
• Program was initiated 5 years ago, but has alternated
between critical care and nutrition
• Extremely successful program
• High priority of Department of Surgery for both
research and practice – funds 50% of nutrition
pharmacist’s FTE
• Shortage of nutrition pharmacists throughout the
country
• Services can be expanded while at the same time
lowering total costs
• Have seen 25% growth in consistent level of nutrition
service to all patients
Benefits of Nutrition Resident
# of Doses
# TNA Doses Administered at Institution A
8000
7500
7000
6500
6000
5500
5000
4500
4000
3500
3000
Adult Doses
Total Doses
2007
2008
2009
2010
Benefits of Administrative Resident
• Largest ROI (256%)
• Record number of exceptional applicants in
2010
• Shortage of pharmacy administrators
– Huge leadership crisis in pharmacy profession
– A 2005 survey of pharmacy directors and middle
managers found that 80% anticipate leaving their
jobs in the next decade
• Services can be expanded while at the same
time lowering total costs
FINANCIAL IMPLICATIONS
Total Cost to Institution A
• Cost of 3 new resident positions
– Salary + Benefits + Travel = $152,810
• In exchange, 0.7* clinical pharmacist FTE
will be removed
– Salary + Benefits = $96,096
• Total Investment = $56,714
*0.3 FTE for admin resident (FY12 + FY13 only) and 0.2 FTE for each PGY2 resident (permanent)
Can we afford more residents?
$3,000,000
$2,500,000
$2,000,000
Cost
$1,500,000
Benefit
Margin
$1,000,000
$500,000
Current
Additional Additional Additional
Onc
Onc &
Onc,
Nutrition Nutrition,
& Admin
Let’s Compare Total ROI
Cost ($)
Benefit ($)
Margin ($)
ROI
Current
838,345
2,596,644 1,758,299
210%
Additional Onc,
Nutrition, & Admin
991,155
2,925,448 1,934,293
195%
$152,810
$328,804 $175,994
Difference
Financial return is greater with the addition of
oncology, nutrition, and administrative residents
Expanding both the number of residency
positions and roles of pharmacy residents
will benefit the pharmacy department, the
hospital and most importantly, our patients!
Questions????
Additional References
• Smith KM, Sorensen T, Connor KA, et al.
ACCP White Paper: Value of conducting
pharmacy residency training – the
organizational perspective. Pharmacotherapy.
2010;30(2):490e-510e.
• Pasek PA, Stephens C. Return on investment
of pharmacy residency training program. Am J
Health-Syst Pharm. 2010; 67: 1952-1957
• White S. Will there be a pharmacy leadership
crisis