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It’s what you keep — not earn — that counts
It’s no secret or surprise that just about every provider could find some way to save a few bucks here and there. To help uncover those areas that could save you money, Douglas Humphrey Jr., RPh, MBA, president and chief executive officer of Consultants in Pharmaceu tical Care of Phoenix, and Michael Tortorici, RPh, MS, president of Dayton, OH-based national health care consulting firm Alternacare of America, share 12 tips on areas in which providers often overspend:
1. Streamline your deliveries.
Carefully analyzing how and when you ship to patients can save you big money.
"The first thing I look at is the frequency of deliveries," says Humphrey. "One of the big things I see is how frequently providers ship to patients. I see people shipping to antibiotic patients two or three times a week."
By shipping to such a patient just once a week, you can substantially reduce expenditures in several areas.
"Not only can you cut delivery costs, but every delivery to a patient requires that someone spend time generating a supply list, pulling it in the warehouse and then putting it on the truck," notes Humphrey.
He notes the following three specific problems that can prevent the bundling of delivering supplies:
A. Stability of the drug.
B. Stability of the patient.
C. Shortage of inventory.
However, if you can’t reduce the frequency of deliveries for every patient, find the patients who don’t have these limitations and do it for them.
"If you have a patient who you are shipping to every week, do a supply list for them once a month or every two weeks," Humphrey suggests. "If the therapy changes, chances are they are still going to need the supplies because it is usually the drugs or concentration that change. It’s more cost-effective to send one big box once a month than four small boxes each week."
2. Get technical.
"I’m a huge fan of technicians," says Humphrey. "I am the first to say that you can’t hire any tech off the street and place them in an infusion setting. But I do advocate seeking highly skilled staff with strong hospital or home infusion experience."
Pay for a top technician will likely be less than half of that for a pharmacist, yet an experienced technician can do many of the jobs routinely completed by pharmacists.
"Depending on state regulations, technicians can perform many of the infusion pharmacy activities with the exception of the actual clinical monitoring of the patient and making therapeutic decisions," Humphrey explains. "But there is no reason that the tech can’t pull out the chart, see . . . the last time the patient was shipped, where the lab went, call the lab and get a copy, put it on a flow sheet, call the patient and see how the patient is doing and what supplies they need, and then write it down in a narrative form and put it on the pharmacist’s desk."
As a result, a good technician can do 75% to 90% of the footwork of many pharmacists for less pay.
3. Keep it simple.
Many states make it possible to purchase a prepaid pass for tolls. This can save you money and your field staff time.
"Put it on your windshield; it’s like prepaid tolls, but you get a discount — delivery vehicles and nurses who use toll highways don’t have to pay money and wait in line at the toll booths," says Tortorici.
Purchasing such passes also makes it quite easy to monitor expenses.
4. Simplify supplies.
Take a long, hard look at your supplies and see if there is any way to reduce what you stock. The advantages are numerous.
"The less supplies you have, the less chance an error will be made in the warehouse. It’s easier for the patient if you have 10 parts instead of 20 [for the IV equipment]," says Humphrey. "Use the system that provides the most cost-efficiency with the fewest number of pieces."
The best way to do that is through a committee with the sole job of looking at the minimum that patients need in order to get quality, safe infusion therapy. Do patients wear nonsterile gloves when hooking up their own IVs, or do they usually wash their hands with soap and water? Do you count alcohol pads for patients or send them a box of 200 and not worry if 150 of the pads go to waste? Over the long haul, such oversights add up.
5. Shop around.
When it comes to utilities, there are many ways to save money. Tortorici strongly suggests shopping around for the best deal on local and long-distance phone rates. Look at what you are paying for calls (both standard and cell phones) and see if better rates are available elsewhere. The savings of even a penny a minute will add up to big savings over the course of a year.
In addition, Tortorici says you can further reduce costs substantially over the long haul by having field staff pump their own gas rather than paying the higher full-service price.
This one should be self-explanatory. By keeping your full-time staff at a minimum and outsourcing personnel to cover the peaks, you save money on salaries and benefits.
7. Streamline on-call work.
"On-call needs to be an emergency," states Humphrey. "The on-call pharmacist may be doing a few new patients who might be termed emergency, but they usually also end up correcting supply error problems and troubleshooting pumps that aren’t working."
Such problems may seem inevitable, and they often are. But not all problems warrant immediate attention by the on-call pharmacist.
"I advocate a pharmacist being on call 24 hours a day, seven days a week, but that they make the effort to limit their activities to new patients with critical needs or existing patients requiring changes that one would consider life-sustaining," he says. "If a request is made to make changes in a TPN formulation over the weekend, the clinician should be trained enough to evaluate the clinical appropriateness and urgency of such a request and discuss reasonable alternatives with the physician if appropriate. Referrals for once-a-week injections, enteral formula for supplementation purposes, or products such as growth hormone should be postponed until regular business hours in most instances."
Smaller providers also can institute a system in which they call all their patients on Fridays to make sure they have enough supplies for the weekend. Providers with more patients may want to call only those patients who routinely require weekend deliveries or assistance.
Another way to prevent the on-call pharmacist from having to come in is to troubleshoot pump problems as they happen.
"I will often see where an organization exchanges a patient’s pump over the weekend, only to find out later that the nurse who saw the patient several days earlier was experiencing similar problems but failed to report their findings earlier to the appropriate person," says Humphrey.
By changing the pump out during business hours, such an overtime problem can be avoided. Many times it’s simply a matter of judgment and common sense.
"Pump issues must be evaluated individually," notes Humphrey. "A TPN pump failure at 4 a.m. may not require replacement until later in the morning, depending upon the patient’s cycle time, clinical status, and fluctuations in blood glucose level. On the other hand, pump failure for a patient receiving pain management may have no life-sustaining consequences, but urgent replacement would be warranted based upon ethical and humanitarian considerations."
By evaluating on a patient-by-patient basis, you may be able to prevent your on-call pharmacist from going in for every request by deciding ahead of time the appropriate way to handle calls.
Lastly, Humphrey says that simply being efficient by clumping patients together can save money. If you have several new patients coming in each day on the weekend, have the pharmacist come in at 11 a.m. and stay there until mid-afternoon to get all the patients done rather than coming in for every call. By doing so, you’re saving the mileage and distance you have to pay for multiple trips.
8. Pay car allowances.
Some providers are giving staff a monthly car allowance rather than paying for mileage.
"If the company gives a monthly lump sum to an individual, the employee must buy the gas and maintain the vehicle, but some employees like that because they can purchase a new vehicle and use the allowance as a car payment," according to Tortorici, who says that such allowances run anywhere from $250 to $400 per month. And because the allowance is considered income for the employee, staff can write off mileage on their own tax returns as a business expense.
"If you are paying $500 a month on average to each employee for gas, you may be able to give a car allowance of $400," says Tortorici. "You’ll save money; the employee can use the allowance as a car payment and write off the mileage. As long as everybody can win, it’s something to look at."
9. Get in the zone.
Tortorici says he is a strong advocate of using zones for field staff so all their visits fall within a certain geographic area. Not only does it cut down on the travel time between visits, it saves on mileage reimbursement.
10. Reduce inventory.
The rule Humphrey uses is that pharmacies should work on their inventory turn anywhere from 10 to 14 times per year.
"My general rule is that if you don’t have a sophisticated system, don’t keep more than a month’s supply on the shelf," he says. "For slow-moving items, don’t keep more than a weekend’s worth so you can get a patient through until Monday morning."
Old items, big prices
Another way to save money when it comes to inventory is to stay current on your contract book if you are in a buying group.
"One of the most frequent things I see is providers not going through the new contract book to see what the new contract items are," says Humphrey. "You then end up paying big prices for the old items."
Spend at least a couple days each year making sure you are buying the right product, as well as reviewing the product in storage to see if any can be returned for credit or traded to a hospital for something that can be used.
Tortorici adds you can reduce the amount of money tied up in supplies by taking advantage of the prime vendor concept when purchasing. This allows you to order on a daily basis at contract pricing through your buying group, plus a fee above cost that usually ranges from 0.5% to 1.75%.
11. Get immediate payment.
Tortorici says that by accepting credit cards for any co-payments, you can get your money in your account within 48 hours.
12. Think outside the box.
Times are changing, as should your perceptions of how to deliver quality therapy. Tortorici explains that there are antibiotic ambulatory infusers on the market that cost just $4 or $5. The infusers can improve patient compliance with therapy, and because you aren’t using a pole, there is no associated cost of picking up the pole or cleaning it.
"Analyze what your true cost is and look at more creative ways to deliver care to patients," suggests Tortorici.