Most long-term care (LTC) and skilled nursing facilities (SNFs) continue to grapple with substantial financial strain due to the ripple effects of supply chain disruption, staffing issues, and rising drug costs. Drug costs represent the second largest cost center for most LTC facilities, but by adopting the right management strategies, this is one area where your facility can reduce costs without compromising on top-quality care.
This blog will highlight three key areas where you can uncover overlooked opportunities to optimize drug costs and support your operations.
1. Reevaluate Your Formulary
Are you making the most of your facility formulary’s cost-saving capabilities? If the answer isn’t a resounding yes, it’s time to assess your current formulary and consider collaborating with experts to create one tailored to the needs of your facilities that achieves both clinical and cost saving excellence..
Here are ways experts in formulary review and design can help you achieve greater savings:
- Evaluate Generic Alternatives: Incorporating cost-effective generic alternatives to brand-name drugs can lead to significant savings.
- Explore Therapeutic Equivalents: This allows you to find cost-efficient solutions that are clinically effective.
- Implement a Global Therapeutic Interchange Program: If permitted by your state, a therapeutic interchange (TI) program can improve formulary compliance and optimize drug expenditure.
These strategies, when implemented under the guidance of knowledgeable experts, can balance operational and clinical needs while achieving patient satisfaction.
2. Utilize Automation
In a fast-paced LTC environment, managing billing, adhering to guidelines, and overseeing inventory can be challenging. Incorporating automation into your pharmacy operations can improve the accuracy of your processes and save staff valuable time.
- For optimal savings, partner with a technology provider that offers automated reconciliation and reporting solutions.
- Consider implementing point-of-sale adjudication, an automated process that incorporates your formulary rules and pharmacy contract terms into software that monitors dispensing in real-time.
If point-of-sale adjudication isn’t an option—often due to lack of compatible technology—then drug utilization review (DUR) can be beneficial. DUR provides management at the operator level with insights into formulary adherence after-the-fact. This process optimizes resource use, ensures compliance with contract terms, and offers valuable facility-level insights.
3. Improve OTC Management
Maximizing savings begins with accurate information. Reviewing your over-the-counter (OTC) utilization highlights what medications are being used, how often, and where. By analyzing this data, you can:
- Determine more effectively when and where to place orders for over-the-counter supplies.
- Optimize storage space for pharmaceuticals and equipment.
- Minimize waste from items that remain on shelves for extended periods.
Identifying affordable sourcing alternatives for even a few regularly used items can help you realize significant savings. By finding a more cost-effective source for one highly used item, an operator working with SRX saved 50% in their acquisition price, resulting in savings of approximately $75,000 per year.
Right Partner, Right Solution
With limited time and technology, thoroughly analyzing drug spend can be a daunting task for even the most capable operators. Outsourcing these high-impact processes to proven specialists can unlock critically-needed cash. At SRX, our advanced technology and experts in long-term care help operators achieve their lowest net drug cost.
SRX automation conducts a comprehensive review of each invoice, providing essential insights and analytics to reduce drug costs and maximize savings. We work closely with clinical teams to develop a drug utilization strategy that optimizes supply management and identifies opportunities to minimize waste.
With SRX in your corner, you can expect to see significant, risk-free results.
SRX is a unified drug cost management solution for long-term care operators. We achieve unrivaled drug cost savings by combining our proprietary technology with expert advisors. SRX’s solutions automate drug rebates, optimize pharmacy management practices, increase managed care exclusion reimbursements, and provide cost-effective employee prescription benefits. SRX guarantees quarterly rebates are paid on time, every time, with no out-of-pocket cost.