By Gretchen Brummel, PharmD, BCPS, Vizient Pharmacy Executive Director
Michael Oinonen, PharmD, MPH, Vice President, Pharmacy Networks
Margins are tight everywhere in healthcare, but a hospital's pharmacy department has a strong capacity to bring value — especially if that organization has an established chief pharmacy officer as part of its C-suite.
Every patient who comes to the hospital will interact in some way with the pharmacy department. In addition to a hospital pharmacist's role ensuring the safe and effective use of medications, they have a wide range of responsibilities including:
- Regulatory compliance: Pharmacists ensure pharmaceutical regulatory protocols are in place and enforced. Some of these recent regulations include new Medicare guidelines, the Drug Supply Chain Security Act, 340B regulations and more.
- Technology: Pharmacists often interact and engage with a variety of technologies, including leveraging artificial intelligence to improve the medication use process, optimizing contract management systems and ensuring patient care through telehealth. They also must understand and keep track of the entirety of the supply chain and revenue cycle via various data systems.
- Clinical care: Pharmacists at the executive level champion leading clinical practices — spanning ambulatory and inpatient care — often across multiple facilities within a health system. They are one of the primary clinicians responsible for a patient's drug therapy and essential to disease state and comprehensive medication management. Their activities run the gamut — from preventative care and medication device use education to antibiotic selection and complex medication dose adjustment in multiple organ system failure.
- Quality improvement: Nearly all quality improvement initiatives and measures within a hospital touch pharmacy in some way. Some examples include decreasing systemwide medication errors, managing sepsis bundles to improve patient outcomes and decreasing hospital-acquired infections through multidisciplinary partnerships.
- Population health: Pharmacists are critical to the continuum of care within their communities and serve those populations through comprehensive care. They promote community education around common health issues like smoking cessation and vaccine adherence.
Pharmacists also keep a pulse on trends and the changing healthcare landscape — from rising drug costs to payer and reimbursement model dynamics, and pressures coming from various market disruptors.
Healthcare systems estimate that at least 25% of overall system net revenue is attributed to pharmacy, which means that it could easily make or break a hospital's margin. Chief financial officers are realizing the pharmacy department is no longer a simple cost center or ancillary department, but rather is a high-value enterprise with significant influence over an organization's financial sustainability.
Within the past 50 years, the C-suite has evolved and expanded to include chief medical officers, chief nursing officers and other C-level executives who are integral to patient care. It only makes sense pharmacy should follow suit, given its expanding responsibilities within patient care and growing financial impact. There are currently at least 100 pharmacy leaders with chief pharmacy officer titles across the nation's health systems, highlighting the ongoing trend toward including this role at the C-suite level.
A chief pharmacy officer should be viewed as a coveted enterprise asset. Pharmacists today are building specialty pharmacies, infusion centers and 340B programs that are optimizing revenue streams for health systems and improving patient care. They're combatting rising drug prices by navigating dynamic legislative and payer-influenced environments. Pharmacy leaders also are executing innovative alternatives, such as establishing their own 503B compounding facilities and pharmacy benefit managers (PBMs) and having a licensed pharmacist who can speak to those complex processes is critical.
Pharmacy is a business within the overall healthcare system, accounting for a significant amount of an organization's revenue and non-labor spend and navigating complex regulatory policies — all while ensuring patient care and safety. Pharmacy's role and impact within a healthcare system will only increase as time continues; committing to and establishing a chief pharmacy officer at your organization is more than just advantageous — it's vital.
About the authors
Gretchen Brummel, PharmD, BCPS, is a pharmacy executive director at Vizient and provides support to the Center for Pharmacy Practice Excellence team bringing more than 27 years of experience in healthcare. Brummel's areas of expertise include clinical pharmacy services, pediatric pharmacotherapy, medication quality and safety, disaster preparedness and response, medication cost avoidance strategies, artificial intelligence, drug shortage and formulary management, medication use policy, rural pharmacy practice, clinical research and pharmacy informatics with a focus on pediatrics.
Michael Oinonen, PharmD, MPH, is the vice president of pharmacy networks. As the leader over Vizient's Pharmacy Networks, he helps convene pharmacy leaders across the nation to help lead the advancement of the pharmacy profession in support of healthcare transformation through collaboration, innovation and adoption of leading high-value pharmacy practice principals.