Investing in pharmacy residency programs - What’s the value for Institution A?

1. Investing in pharmacy residency programs - What’s the value for Institution A?

2. Institution A Pharmacy Residency Program • 290 residents since 1963 • Recipient of ASHP Foundation Pharmacy Residency Program Excellence Award for producing leaders in the pharmacy profession

3. 16 Current Institution A Residents • M.S./Residency in health-system pharmacy administration • 8 administrative residents (4 junior, 4 senior) • Pharmacy practice residency (PGY1) • 4 hospital residents • 1 community resident • Medication systems and operations residency • 1 MSO resident (2 year program) • Specialty residencies (PGY2) • 1 critical care resident • 1 transplant resident

4. Benefits of Pharmacy Residency Programs for Institution AHealth

5. External Funding

6. Ex: Medicare Pass Through Funds* *Assumes 10 PGY1 pharmacy residents with a 35.6% Institution A Medicare patient load

7. Cost Reduction • All residents are responsible for completing one or more drug cost reduction projects each year* • On average, each project reduces drug costs by $40,000 • Total annual cost reduction = $1,280,000 *Administrative residents complete three cost reduction projects per year, all others complete one per year

8. Cost Avoidance • Online staffing as clinical pharmacist • 12 hours/week avoids 0.3 pharmacist FTE • 0.3 RPh FTE (salary + fringe) = $41,184 • 1 resident FTE (salary + fringe) = $46,800 Avoids $650,000 in pharmacist FTE per year 88% of the cost of a resident is covered by their staffing component alone

9. Cost Avoidance • School of Pharmacy (SOP) lectures • SOP lab teaching assistants • Monograph preparation • Medication use guideline revisions • PSN follow-up • Site visit coordination • Health Link go-live and upgrade assistance • Audits • Drug contract analyses • Advertising, training, and relocation fees* *Average of 2 to 4 Institution A -trained residents are hired onto staff each year!!

10. Improved Provider Satisfaction • Nurse satisfaction • Resource for questions: drug interactions, compatibilities, administration rates, ect. • Aid in communication with MD/PA/NP • Assist in assuring patient doses are available to the nurses at the appropriate time • Assist in changing the dispensing location of medications for more timely administration of first doses • Change dosing times to standardized times to reduce time demands on nurses • Continuing education seminars

11. Improved Provider Satisfaction • Physician satisfaction • Dose medications to avoid complications • Contact prescriber regarding abnormal lab values and cultures found while monitoring patients • Knowledgeable about Institution A’s drug formulary and therapeutic alternatives • Drug expert for clinical rounds • Modification of inappropriate drug orders • Increase through-put and efficiency • Continuing education seminars

12. Improved Quality and Service • Patient care • Enhance pharmacists’ capacity and effectiveness with patient care rounding, clinical monitoring, medication reconciliation and patient teaching • Resource to research best way to manage very complex patient cases • Compliance (audits, projects) • CMS • TJC • Third party billing audits • Detailed follow up on ALL PSN reports

13. Improved Quality and Service • Enhanced achievement of external pay for performance quality indicators • Improved reimbursement for pay-for-performance and future accountable care organization measures • Increased reimbursement for medication therapy management (MTM) services in Institution A ambulatory pharmacies • Leads to direct revenue from payers (Navitus, Unity, Group Health, etc…) via patient teaching and care management

14. Improved Quality and Service • Recruitment of future (well-trained) pharmacists • Community service and professional activities • Enhance capacity of staff • Formulary review • Drug policy development • Opportunity for externally funded projects

15. Expanded Pharmacy Services • Every major new Institution A pharmacy initiative is powered by a pharmacy resident project • Second year administrative residents complete a rotation with the VP of Professional Services to help advance goals of senior leadership.

16. Expanded Pharmacy Services What will we do next?

17. Resident Projects • 1960s – 1970s • 100% unit dose dispensing • Complete IV admixture system • Fully computerized pharmacy order entry/ distribution system • Pharmacist-managed drug information center • Pharmacist-managed medication administration record for inpatients • 1970s – 1980s • Med histories, reconciliation, discharge counseling for all patients • Pharmacist participation on patient care rounds • Pharmacokinetic dosing services • Decentral pharmacy service in all areas from 0700 to 2300 and around the clock services for critical care areas

18. Resident Projects • 1980s, 90s, 2000s • Pharmacists participate in >20 ambulatory clinics • Integrated ambulatory pharmacy network throughout Dane County • 13 pharmacies • Inpatient and in-home hospice services • Pharmacy management consultative services for hospitals in rural communities • 1990s – 2000s • Developing, implementing, maintaining, and monitoring policies related to the use of pharmaceuticals with in Institution A • Initiation of several external pharmacy contract services • Manage pharmacy benefit for Unity • Coordination of technology assessment programs • Centralized robot • Automated dispensing cabinets • Barcode medication administration software at point of care • “Smart” IV infusion pump • Medication carousel

19. Resident Projects • 2010s (What will we do next?) • Practice model and professional staff advancement through development and implementation of the pharmacist career ladder • Decision support expansion to maximize evidence-based care • Operational efficiency improvement • New technologies (IV Robot, etc) • Integration of pharmacists on primary care teams

20. Pharmacist Recruitment, Development, & Satisfaction

21. Education and Scholarship • Residents are required to provide education to doctors, nurses, and pharmacists • Precept pharmacy students • Faculty-resident collaboration on scholarly efforts

22. Show me the Money… Pharmacy Residency Program Return on Investment (ROI) Analysis

23. Expense for Current 16 Residents

24. External Funding for Current 16 Residents

25. Cost Reduction for Current 16 ResidentsDrug Cost Reduction Project*:

26. Cost Avoidance for Current 16 residents cont…

27. Cost Avoidance for 16 residents

28. ROI financial gain – annual expense annual expense $ = ( )x 100

29. Return on Investment for Current 16 Residents ($482,604 + $1,280,000 + $834,040) – $838,345 $838,345 ROI = = 210%

30. ROI Breakdown per Resident Type * n= # of residents in current FY11 budget

31. PROPOSAL

32. Residency Program Expansion • Add a permanent PGY2 oncology resident position • Add a permanent PGY2 nutrition resident position • Add an fifth administrative resident position for FY12 + FY13

33. Benefits of Oncology Resident • Oncology is core Institution A service line • Area of growth and expansion – key pharmacy specialty area • 25% of Institution A ’s $109 million drug budget is oncology drugs • At forefront of what we can do at ambulatory clinics • Hard to find and hire pharmacists with oncology specialty • MD demand • Services can be expanded while at the same time lowering total costs

34. Benefits of Nutrition Resident • Program was initiated 5 years ago, but has alternated between critical care and nutrition • Extremely successful program • High priority of Department of Surgery for both research and practice – funds 50% of nutrition pharmacist’s FTE • Shortage of nutrition pharmacists throughout the country • Services can be expanded while at the same time lowering total costs • Have seen 25% growth in consistent level of nutrition service to all patients

35. Benefits of Nutrition Resident

36. Benefits of Administrative Resident • Largest ROI (256%) • Record number of exceptional applicants in 2010 • Shortage of pharmacy administrators • Huge leadership crisis in pharmacy profession • A 2005 survey of pharmacy directors and middle managers found that 80% anticipate leaving their jobs in the next decade • Services can be expanded while at the same time lowering total costs

37. FINANCIAL IMPLICATIONS

38. Total Cost to Institution A • Cost of 3 new resident positions • Salary + Benefits + Travel = $152,810 • In exchange, 0.7* clinical pharmacist FTE will be removed • Salary + Benefits = $96,096 • Total Investment = $56,714 *0.3 FTE for admin resident (FY12 + FY13 only) and 0.2 FTE for each PGY2 resident (permanent)

39. Can we afford more residents?

40. Let’s Compare Total ROI Financial return is greater with the addition of oncology, nutrition, and administrative residents

41. Expanding both the number of residency positions and roles of pharmacy residents will benefit the pharmacy department, the hospital and most importantly, our patients!

42. Questions????

43. Additional References • Smith KM, Sorensen T, Connor KA, et al. ACCP White Paper: Value of conducting pharmacy residency training – the organizational perspective. Pharmacotherapy. 2010;30(2):490e-510e. • Pasek PA, Stephens C. Return on investment of pharmacy residency training program. Am J Health-Syst Pharm. 2010; 67: 1952-1957 • White S. Will there be a pharmacy leadership crisis