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3 Opportunities For Managing Costs At Veterans Homes

Insights on Managing Pharmacy Spend and Controlling Drug Costs

Veterans homes, long-term care (LTC), and other health providers serving Medicare Part A populations face unique challenges when it comes to controlling and managing costs. In light of the pandemic, which caused many costs, including those related to personal protective equipment (PPE) to skyrocket, identifying ways to bring down costs is critical to these organizations staying in the black.

One area that represents significant opportunities for savings is pharmacy costs, which continue to spiral higher each year.

Pharmacy drug spend represents a significant cost center for most veterans homes and LTC facilities and amounts to tens of thousands, if not millions of dollars each year. One of the easiest ways to impact the bottom line for facilities is to make sure drug manufacturer rebates are submitted properly. Due to the complexity involved in accurately analyzing bills and identifying rebate opportunities, many of these dollars go unrealized. SRX technology is designed to simplify this process, identify all eligible rebates, and submit them to the manufacturers so that these rebate dollars are guaranteed to be put back into homes where they belong. 

SRX recently sat down with Kelly Snowball, COO, and Eddie Bangerter, CEO at Rocky Mountain Care to talk about challenges they have experienced over the past six months and how SRX has helped them weather the pandemic. Like most operators in long-term care, Rocky Mountain has faced an uphill battle in working to keep patients safe and healthy amid a global pandemic. From securing enough PPE to managing the many requirements and restrictions imposed by COVID-19, they have successfully balanced these challenges by managing costs and maintaining quality patient care. 

Snowball discussed the importance of the rebate dollars to their facilities: “It is very important to have the predictability that those rebate checks are coming. This pandemic has really affected the nursing home world, and the businesses we run. Having that predictability and knowing what’s coming, we can take that and apply that back into our operations and make sure that our patients and our employees always have the tools, equipment, and supplies they need to be safe. So we can keep caring for those that can’t care for themselves. At the end of the day, that’s the partnership we value the most.”

While it’s easy to focus on rebates, this is just one small piece of accurately managing your pharmacy drug spend and maximizing cost savings related to drug spend. Real savings and opportunities lie in successfully managing costs—a virtually impossible feat without using technology and automation. The complexity involved in identifying opportunities for savings requires access to drug pricing databases, integration with electronic health records and pharmacy contracts—and then—the ability to analyze all the information to identify errors and credits as well as areas for improvement. 

In speaking with Bangerter, he expressed frustration with the challenges of managing pharmacy costs. “Pharmacy contracts have been something that have been confusing and hard to understand for the entire time I’ve been in this business and with SRX’s help and their assistance, we have a better handle, better understanding, and direction on where we’re going with pharmacy and pharmacy spend.” 

Key Pharmacy Cost Savings Opportunities

This insight into pharmacy spend is what SRX customers find most valuable. On average, SRX customers see an average savings of 11% on their pharmacy bills. Those numbers are significant, and represent critical dollars that can be spent caring for patient populations and improving outcomes. Additionally, through automation, SRX helps customers identify and submit all eligible rebates. The following are some of the key cost savings and rebate opportunities realized through SRX automation and technology.

Drug Utilization Improvements

Many veterans homes and LTC operators are unaware of the significant cost savings that can result from carefully considering their drug utilization. In a recent blog post about the benefits of facilities optimizing their drug utilization reviews, SRX explained, “An effective DUR begins with a thoughtfully-designed formulary that outlines the drugs that best meet the financial and clinical needs of your facility and your patient population. Once this formulary is in place, you can integrate additional rules to help contain costs and build accountability into your relationship with your pharmacy.” 

Proper drug utilization planning plays a key role in managing costs, as well as providing better therapeutic alternatives for patient conditions. This aspect of SRX’s services often provides surprising outcomes for veterans homes and facilities. As Bangerter explains, “SRX gives us a view into what we are buying. By helping us review our drug utilization, our formulary now includes lower-cost drug alternatives that have better outcomes for patients, allowing us to spend less, and help our patients have a better experience.” 


The sheer number of line items on a long-term care pharmacy bill speaks to the heavy burden placed on those charged with enforcing pharmacy contract terms and pricing. Some pharmacies can implement measures that prevent these rules from being broken in the first place. These “front end” adjudication options employ technology in identifying off-formulary drugs, or establishing quantity limits for example, and prevent pharmacies from filling orders that violate these rules. With the right technology, alerts can also be sent to veterans homes and operators, notifying clinicians when they are prescribing outside of recommended parameters. 

While front-end adjudication is considered best practice—preventing unnecessary line items from ever appearing on a pharmacy bill—this option is not always available. In this event, having a robust tool that provides reports used to recoup credits and hold pharmacies to account is the next best option. SRX reports analyze all drug claims, identify pricing discrepancies, and prevent waste related to drug utilization.

Drug Manufacturer Rebates

To put some context behind the type of rebate dollars that can be achieved by switching to an automated solution, SRX recently completed a case study for one state with three participating veterans homes. In one year, beginning in Q4 2020 and ending Q3 2020—after switching to our solution—SRX technology was able to help the state receive $48,860 in rebates.  

These are critical dollars that can be used to put back into homes and facilities that may have been struggling financially. When every dollar counts, rebates represent a simple way to stretch dollars that can be used for veteran care, improving facilities, and staffing needs. 

Significant Cost-Saving Outcomes & Beneficial Relationships

Rebates are always an easy way to show the value of properly managing pharmacy costs, and are certainly an exciting opportunity for facilities to put money back in their pockets. However, the real, long-term opportunity lies in not spending dollars in the first place. If you look at 10% of your total spend, that number is likely significantly higher than your total eligible rebates. The difficulty lies in capturing those cost savings opportunities. It’s only feasible with technology. Those reclaimed savings can be used to offset other costs, a value not lost on our customers during the last six months. 

“You know,” Snowball said, “when we got into this partnership with SRX and the savings that they’ve been able to bring to us at Rocky Mountain … it couldn’t have been a better timing issue for us because COVID broke out shortly thereafter and we were able to take those savings and apply them to programs and equipment and things like PPE to keep our employees safe. We spent an immense amount of money every day doing that, to make sure that our residents are safe and our employees are safe. So we’re fortunate we’ve got in this relationship, and it’s really been a blessing to us as a company to have it.”

If you are a veterans home or long-term care provider looking for a partner to drive down your facility drug costs, reach out today to speak with one of our experts.

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SRX’s Partnership Approach to Helping Long-Term Care Operators Succeed

SRX is a technology and advisory company that helps LTC operators realize the lowest net cost on pharmacy spend. We help our customers improve drug utilization, manage pharmacy relationships, reduce costs and waste, and maximize rebates. We are committed to transparency and accountability and guarantee our quarterly rebates are paid on time, every time. Contact us at 833 633 6833.

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