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Our team surveyed a group of pharmacy directors to learn about their experiences with pharmacy consultants so that the directors might be able to use their consulting resources in a more effective manner.
In May 2012, the University HealthSystem Consortium (UHC) Pharmacy Council Financial Performance Committee developed an electronic survey that collectively measured the characteristics, goals, and methodology of historical pharmacy consultant engagements and level of satisfaction. After e-mailing the initial electronic survey, we conducted follow-up telephone interviews with respondents from July through November 2012. These interviews were designed to include questions about expected outcomes, recommendations for evaluation processes, timelines for implementing the recommendations, consultants’ expenses, and insights gained.
A total of 23 pharmacy directors responded to the initial electronic survey; their organizations had engaged at least one consultant within the previous 5 years. Data were collected for 28 consultant engagements. Subsequent telephone interviews were conducted with 20 of the 23 pharmacy directors (87%) who completed the initial electronic survey, accounting for 25 of the 28 consultant engagements (89%).
Cost reduction along with revenue enhancement was most often the focus of these engagements. These engagements were also mainly within the scope of an organization-wide effort initiated by the executive board or executive team. Consultant experiences varied greatly in terms of (1) the degree to which assistance was provided to the organization, (2) benchmarking methodologies and resources, and (3) timelines for implementing the consultants’ recommendations. In general, most respondents rated their consultant experience as positive and were able to provide “pearls of wisdom” or lessons learned.
Many health care systems engage consultants to identify opportunities for pharmacy cost savings in areas such as the supply chain, labor productivity, and revenue enhancement. Pharmacy leaders have been encouraged to actively participate in the process by preparing data and by developing and implementing a consultant’s recommendations.1 Unfortunately, the successes or failures of pharmacy consultant engagements and the nature of recommendations made remain widely unshared. The University HealthSystem Consortium (UHC) Pharmacy Council Financial Performance Committee surveyed pharmacy leaders in an attempt to identify common consultant strategies, data sources, and methodologies.
In May 2012, the UHC Financial Performance Committee developed and e-mailed an electronic survey to pharmacy directors of the UHC’s member hospitals. Recipients were asked to complete one survey for each instance that their respective organization had engaged a consultant or a consultant group to evaluate pharmacy services within the previous 5 years.
The survey included 14 questions that collectively measured characteristics, goals, methods of historical pharmacy consultant engagements, and satisfaction level. A reminder e-mail was sent 4 weeks after the initial distribution.
All respondents were contacted for a follow-up telephone interview after the initial survey responses were captured. These interviews were scripted with 17 questions designed to ask about expected outcomes, recommendations, timelines for implementing the recommendations, consultant expenses, and the insights gained. Survey respondents were contacted to schedule a telephone interview three times before they were considered lost to follow-up. We used descriptive statistics to report our findings.
A total of 28 pharmacy directors responded to the initial electronic survey, indicating that their organization had engaged at least one consultant within the previous 5 years. Data were collected for a total of 34 consultant engagements. Of the 28 respondents, 26 were at one of the 119 UHC academic medical centers, for a 22% response rate of consultant use within the previous 5 years in this population.
We subsequently conducted telephone interviews with 20 of the 28 pharmacy directors (71%) who completed the initial electronic survey, accounting for 25 of the 28 consultant engagements (89%). Four hospitals also provided itemized lists of specific consultant recommendations and strategies (
The following analysis of our results primarily describes the 19 cost-containment and revenue-enhancement reports of the 25 total consultant engagements with respect to characteristics, scope and objectives, methodology, recommendations, and experiences.
Of 25 consultant engagements in which telephone interviews were conducted, 19 (76%) pertained to cost reduction/revenue enhancement, three (12%) were concerned with strategic development, and three (12%) were related to assessments of the Section 340B drug discount program. Organization-wide efforts initiated by the executive board or executive team were responsible for 18 of the 19 (95%) cost-reduction/revenue-enhancement engagements, whereas all six of the strategic development and 340B assessment engagements were initiated by pharmacy department leadership (
Fourteen different consultants or consultant groups accounted for all 25 of the surveyed engagements (
Scope and Objectives
Within the 19 cost-containment/revenue-enhancement engagements, the top three areas of focus were revenue cycle (13%), formulary management (13%), and supply chain (12%) (
To evaluate the area of focus or pharmacy services for cost-containment/revenue-enhancement engagements, the consultants usually used hospital performance data, as reported in 11 of 19 responses (58%). For benchmarking, the consultants used the company proprietary database or UHC/Solucient databases in seven engagements (37%). Of these 19 respondents, 12 (63%) either agreed or strongly agreed with the benchmarking methodology that their consultant had applied. Respondents at three sites (16%) either disagreed or strongly disagreed, and respondents at four sites (21%) had a neutral opinion.
The consultant data set request that was cited most often to ascertain cost-containment/revenue-enhancement opportunities consisted of 1-year data for operations and purchasing. From this data set, the consultant compared selected databases or best practices to identify and recommend opportunities. References or source documents were rarely quoted or shared.
Rates varied in terms of implementing consultants’ recommendations. Thirteen consultant engagements (52%) resulted in “all” or “most” recommendations being executed, and eight engagements (32%) implemented only “some” recommendations. Four respondent departments (16%) implemented no recommendations, because the pharmacy consultant validated best practices or benchmark targets that had already been achieved.
Respondents reported a wide range of timelines (from 3 or 4 months to 3 years) for implementing consultants’ recommendations. Of 19 cost-containment/revenue-enhancement engagements, pharmacy consultants left progress-tracking tools or spreadsheets at five respondent departments (26%); used various established processes at five respondent departments (26%); and left no aids at the remaining nine respondent departments (47%).
Most respondents (64%) rated their consultant experience as positive. Six respondents (24%) gave consultants a neutral rating, and three respondents (12%) described a negative experience. Pearls of wisdom shared by respondents about their consulting experiences identified several repetitive themes that may inform future administrators about how to optimally engage pharmacy consultants (
Our survey of 20 pharmacy directors (accounting for 25 pharmacy consultant engagements within the previous 5 years at UHC member hospitals) indicated that the focus was primarily on cost reduction and revenue enhancement. These engagements were also mainly within the scope of an organization-wide effort initiated by the executive board or executive team. Consultant experiences differed widely in terms of the degree to which assistance was provided, benchmarking methods and resources, and timelines for implementing the consultant’s recommendations. Overall, most respondents rated their experience as positive and were able to list lessons learned.
Figures and Tables
Consultant engagement characteristics.
Consultant or consultant group engagements. CPS = CPS Corporate Consultants, Inc.; E&Y = Ernst and Young, Inc.; FTI = FTI Consulting; PwC = PriceWaterhouse Coopers; VHA = Voluntary Hospital Association of America.
Pharmacy focus areas for consulting engagements.
Consultants’ Aggregated Recommendations for Cost Reduction and Revenue Enhancement
CAPS = Central Admixture Pharmacy Services; CVVH = continuous veno-venous hemofiltration; ESAs = erythropoeitin-stimulating agents; IV = intravenous; IVIG = intravenous immunoglobulin; MDI = metered-dose inhaler; = NICU = neonatal intensive-care unit; PO = by mouth; TPN = total parenteral nutrition.
|Best Practices Audit||
|Benchmarking and Best Practices Audit Combination||
GPO = group-purchasing organization; UHC = University HealthSystem Consortium; VHA = Voluntary Hospital Association of America.
“Pearls of Wisdom” From Survey Respondents