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KershawHealth manages drug shortages

Posted: April 27, 2012 4:21 p.m.
Updated: April 30, 2012 5:00 a.m.

Another symptom of the economy, hospitals across the country are experiencing a higher number of drug shortages on a more frequent basis. KershawHealth can experience those shortages, too, but has processes in place that, in effect, keep patients from really even noticing.

KershawHealth Pharmacist Doug Murray, who has worked for the health care system for more than 30 years, spoke about drug shortages and how they can be managed during the KershawHealth Board of Trustees’ meeting April 23.

Murray said several organizations have “stepped up” to help hospitals and others deal with shortages. The most helpful, he said, is the American Society of Health-System Pharmacists (ASH-SP). Murray handed out a thick packet of ASH-SP material, which he touched on during his presentation.

First, though, he had to clarify exactly what a drug shortage is -- or, rather, what it isn’t.

“A shortage doesn’t always mean that drugs aren’t available,” Murray said. “It’s just that the way you are able to obtain pharmaceuticals, or the way they are delivered, may change. It’s almost a daily part of the job to predict changes.”

Some of those changes are predictable, some are not, he said.

Referring to the ASH-SP material, Murray counted several of the many reasons drugs shortages may occur. The full list includes natural disasters, lack of raw materials, non-compliance with regulatory standards, voluntary recalls, manufacturer rationing, restricted distribution, manufacturer discontinuation, industry consolidation, market shifts, unexpected demand, “gray” market vendors and “just-in-time” inventories.

Murray touched on unexpected demand as an example.

“An unexpected demand can come from when a study shows the drug is more effective than first thought,” he said.

When that happens, Murray said, more physicians and pharmacists may want to prescribe the drug than there is to go around. Unfortunately, he said, there’s no warning system to alert the public, hospitals or pharmacists that a shortage might be coming.

That leaves health care systems and their pharmacists, like KershawHealth and Murray, on their own to follow strategies to deal with the shortages. Some of those strategies include developing policies and teams, educating staff and communicating.

“The closer you can work with everyone ahead of time, the better,” Murray said. “We’re not the small little rural hospital we were even 10 years ago, but we still work together to deal with solutions and look over options.”

One of the ASH-SP documents Murray shared was a December 2011 letter detailing approaches to dealing with drug shortages. The letter noted that shortages, especially those of generic injectable drugs, have “dramatically increased” since 2006. Then, there were 70 injectable drug shortages. In 2011, the number of such drug shortages shot up to 230.

So, what can KershawHealth do when a shortage occurs?

Murray said the pharmacy tries to learn if other companies are making the drug, whether the drug is available in smaller doses or if compounding pharmacies have access to materials to make the drug.

Murray then opened up the floor to questions. One question focused on KershawHealth’s formulary, the hospital’s official list of medications. Murray said he tries to keep to known, standard medications rather than introducing new drug lines.

“So you know what to expect. All medications are reviewed by a committee before being added to the formulary. We need to well-establish the side effects -- we try to be very cautious,” Murray said.

With the recent announcement that KershawHealth had entered into a partnership with Palmetto Health for lab services, one trustee asked if the hospital would obtain drugs from or with Palmetto Health. Murray said that would be rare and only if circumstances warranted.

President and CEO Donnie Weeks said it was a future possibility in terms of bulk purchasing.

Finances

March was a break-even month, according to Trustee George Corbin, chair of the board’s finance committee. Corbin quickly handed off the financial report to Executive Vice President and COO/CFO Mike Bunch.

Bunch reported that KershawHealth earned net operating income of $183,092, well below a budgeted $1.357 million expected income. Overall net income stood at $114,292 for March, also far below a budgeted $1.439 million.

Bunch said the health care system earned lower net patient revenue (revenue earned directly from patient services) due to lower numbers of admissions and surgical cases.

“Emergency room visits were up 10 percent versus last year, but that didn’t translate to increased income,” Bunch said.

He added that a shift in payor mix toward indigent patients is also affecting financial performance.

Bunch said salaries and benefits were over budget due to the highest level of health insurance claims on record at $927,000.

In response to a question, Corbin noted that bad debt recovery is a “part of our operations,” referring to patients who fail to pay their bills. That bad debt can be recovered either by collection agencies or by garnishing patients’ tax refunds.

“The question is appropriate since those collections are coming from outside (the organization), but it is already accounted for in the budget,” Corbin said. “It’s part of our normal operations, but we are making income in a tough economy -- so far, we’re making pretty good progress.”

Trustee Tallulah Holmstrom, a physician, asked whether KershawHealth should begin in-house reporting of “quality-based reimbursements” now rather than waiting for the requirement under health care reforms due to hit in 2013.

“Do we need more exposure (to this)? It’s going to come from the top down,” Holmstrom asked.

Weeks said the finance committee would be the appropriate body within the board to report those figures. Corbin said he thought Holmstrom’s idea was a good one, and Board Chair Jody Brazell said he believes the hospital is already going through an “aggressive ramp-up” of focusing on quality.

In other business, Weeks asked trustees to suggest topics for the board’s quarterly education sessions. Also, trustees agreed to move their May meeting from Memorial Day, May 28, to that Tuesday, May 29. The board usually meets on the fourth Monday of each month at 6:30 p.m. at the Health Resource Center on Battleship Road in Camden.

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