Matthew McGuire, PharmD, director of pharmaceutical supply chain and automation at University Hospitals Health System, based in Shaker Heights, Ohio, likes to frame the problems encountered in the complexities of chain management pharmaceutical supply like this.
PROBLEM
A routine trip to the grocery store reflects the challenges faced in navigating through countless options, weighing the merits of generic alternatives against loyalty to products with brand and grapple with fluctuations in availability and rising costs.
“As a pharmacist specializing in supply chain management, one of the most satisfying aspects of my role is contributing to the provision of top-notch patient care,” said McGuire. “However, this comes with its own challenges, including minimizing drug shortages, maintaining supply chain integrity and managing costs.
“In contrast, unlike grocery shopping, the pharmaceutical supply chain operates within a healthcare framework and cannot seamlessly follow a simple supply and demand model,” he notes. “While shoppers can easily substitute one item for another due to preference or unavailability, the interdependent nature of medically necessary drugs often leaves no room for alternative choice.”
He added that ensuring the availability of these important products is paramount to meeting patients’ medical needs and initiating effective care.
“Having a comprehensive understanding of purchasing patterns is paramount to making informed decisions, especially during times of drug shortages or when faced with high-cost decisions,” he said. . “By diving into purchasing patterns, one can gain invaluable insights that underpin strategic decision making.
“Traditionally, the primary method for quickly accessing such purchasing patterns has been through internally developed dashboards,” he continued. “However, this approach, while beneficial, has proven time-consuming to maintain, especially given the complexity involved in procuring within larger integrated distribution networks.”
PROPOSE
McGuire and his team turned to vendor QuicksortRx for help. Its platform evaluates drug prices, availability and purchasing trends in real time across their multiple facilities and account types – group purchasing organization contract prices, 340B program prices and spending wholesale purchase fees.
“The vendor-led proposal aims to revolutionize the pharmaceutical procurement review process by introducing an innovative real-time tool designed to address common challenges in pharmaceutical supply chain management,” explains McGuire.
“At its core, the vendor seeks to provide solutions that not only streamline procurement activities but also provide an objective and unified view of procurement data, thereby enhancing the decision-making process for groups in the pharmaceutical supply chain.
“The essence of the supplier’s proposition lies in its ability to simplify complex procurement assessments by providing a user-friendly software interface,” he continued. “By leveraging real-time data analytics, the software enables pharmacy professionals to easily identify and execute procurement optimization strategies.”
This includes immediately identifying contract changes, allowing teams to promptly evaluate when better pricing options become available or when contracts are loaded incorrectly. Such functionality ensures pharmacies can take advantage of cost-saving opportunities without delay, ultimately driving efficiency and cost savings in procurement operations, McGuire said.
“Furthermore, QuicksortRx’s proposition extends beyond basic procurement review functions by providing comprehensive visibility into purchasing activities across multiple accounts,” he continued. “This feature enables pharmaceutical supply chain teams to gain a comprehensive understanding of their procurement landscape.
“Innovative vendor-powered spend analytics capabilities show a complete picture of the pharmacy within seconds, allowing teams to identify trends, patterns and areas for improvement,” he said. Easily”.
“In principle, this proposal represents a paradigm shift in pharmaceutical procurement by offering a complex yet intuitive solution that empowers teams across the pharmaceutical supply chain work smarter, not harder.”
MEETING THE CHALLENGE
Real-time drug information technology has transformed University Hospitals Health System’s procurement process by providing quick and transparent access to aggregated data, McGuire explained.
“This platform helps us gracefully address challenges related to drug shortages and overspending by providing insights and analytics that were previously unavailable in a timely manner,” he said. . “Across our procurement team, this platform has become an essential tool for tracking and managing our purchasing activities.
“The platform allows us to analyze historical and real-time purchasing patterns, allowing us to make informed decisions about procurement strategy,” he continued. “By providing visibility into contract changes and price variances, the platform helps us identify daily opportunities for savings and cost optimization.”
One of the most impactful features of the platform, he added, is the overspending and rolling savings rate tracker.
“This tool allows us to quantify the benefits of product swaps and track savings over time,” he said. “By monitoring the quality of swaps executed daily, we can continuously evaluate the effectiveness of our procurement decisions and adjust our strategy accordingly.
“Additionally, the overspend ratio dashboard provides insight into purchasing anomalies and contract discrepancies, allowing us to take corrective action and prevent overspends,” said McGuire. unnecessary spending”.
“The platform is used by our procurement team, including buyers and managers responsible for overseeing purchasing activities,” he continued. “In its current state, the platform interacts directly with wholesalers to collect and process data, in addition to gathering other key insights from stakeholders such as the Pharmacists Association United States Healthcare System.”
RESULT
Implementing real-time monitoring through this platform has delivered significant results for University Hospitals Health System, primarily evidenced by sustained seven-figure savings year over year.
“This achievement stems from several key areas supported by the platform,” reports McGuire. “First, the ability to identify and execute preferred product swaps has resulted in significant cost savings. By leveraging real-time data on purchasing patterns and market insights, we I can identify opportunities for more cost-effective alternatives without compromising quality or patient care.
“Second, the platform’s ability to identify contract discrepancies is instrumental in overcoming pricing inconsistencies and ensuring compliance with negotiated terms,” he continued. “This feature has helped us avoid unnecessary spend and maximize the value of our contracts. Additionally, using QuicksortRx to identify, deploy, and track local contract savings has further contributed to our financial success by streamlining the oversight process behind optimized contract usage.”
The market insights provided by the platform have enabled the health system to maintain a flexible mindset and act nimbly, he added, especially as it weathers shortages. drugs and unprecedented supply disruptions.
“By providing real-time data on unavailability rates and system-level utilization, the platform allows us to quickly assess shortage impacts and inform strategies,” he said. minimize”. “This capability not only enhances our ability to maintain continuity of care for patients, but also minimizes the financial risk associated with shortages.
“The active drug shortage tracker along with market share analysis tools has modernized our approach to shortage management by providing actionable insights,” he continued. action and reduce sensitivity to supply fluctuations.”
In terms of cost avoidance and savings, the platform has delivered clear results with notable returns.
“The base of He reports that our robust analytics and tracking capabilities have enabled us to accurately quantify cost savings and avoidance measures. By overcoming contract discrepancies and optimizing our purchasing strategy based on real-time data, we achieved significant savings year over year.
“The platform’s guaranteed results for health systems, coupled with our experience in achieving significant savings, underscores the platform’s effectiveness in driving promote financial management and operational efficiency”.
ADVICE TO OTHERS
McGuire gave his colleagues some important advice to consider for healthcare organizations considering implementing similar procurement technology, regardless of the specific vendor.
“First, recognize that the adoption of procurement software represents a fundamental change in the way inventory procurement is managed,” he advises. “These automated platforms represent an important evolution in purchasing practices, moving from manual processes to more efficient and data-driven solutions.
“The significant savings achieved by these platforms highlight the need for such technology in modern supply chain management,” he added.
Second, when evaluating potential procurement software, it is important to evaluate the relationship with the supplier, he continued.
“Look for a provider that prioritizes partnerships and collaboration, providing ongoing support and guidance,” he says. “Empowered supplier relationships drive more seamless integration of the platform into your organization’s workflows and encourage proactive problem solving.
“Seek transparency and open communication in your partnerships with platform developers,” he added. “Regular touchpoints and collaboration with vendor experts enable continuous optimization and enhancement of platform features to better suit your organization’s needs and goals. By By fostering collaborative relationships, you can maximize the value and impact of procurement technology in your healthcare organization.”
Also consider the level of empowerment employees will have when using the platform, he says.
“The user-friendly interface and intuitive features help your team take advantage of the software, save costs, and improve inventory management practices,” he advises. “Ensuring the platform provides the tools and resources necessary for your employees to take ownership of the procurement process will maximize its benefits.
“Finally, and perhaps most imperative to individual success, emphasize the importance of standardized implementation processes and active participation from the team,” he concludes. your”.
“Establishing a strong foundation team and implementing standardized processes will ensure consistency in procurement. Encourage a ‘more with more’ mentality, where collective effort of your team contributes to creating greater value from the platform.”
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