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It’s Time to Rethink Your Approach to Hospital Pharmacy Benefits
America’s hospitals play a critical role in the healthcare system including being available 24/7 to treat anything from a sore throat to a broken leg to a catastrophic health emergency, and maintaining the resources to respond to pandemics and manmade disasters. Hospital employees want strong benefits, but providing robust benefits and controlling cost can be challenging.
Healthcare has been plagued by staffing problems for a long time. Even prior to COVID-19, the US Bureau of Labor Statistics projected 11 million additional nurses were needed to avoid a staffing crisis.1 Employment opportunities for nurses were projected to grow at a faster rate (15%) than all other occupations through 2026.1 Hospital employers also face the staffing challenge and effects of burnout. Long common among first year doctors and nurses, new care
providers can struggle to cope with the reality of the job. Now, under unique and very complicated circumstances brought about by the pandemic, hospital employees are getting fatigued and falling ill at record rates.
There’s never been a moment in recent history where access to healthcare and other employee benefits was quite so important. Alarmingly small talent pools, mergers, acquisitions, and finding ways to make the most of employee benefits while also trying to keep the workforce engaged – healthcare’s HR leaders have a lot on their plates. And yet, finding ways to control healthcare costs will be even more of a focus than usual. The challenge for HR leaders is probably the greatest it has ever been. The greatest opportunity to get the most value for both employers and the hospital system is by switching to a holistic, hospital-aligned pharmacy benefit management approach that reduces waste, optimizes therapy, and insulates trend.
CODE RED: Hospitals Under Pressure
Hospitals and health systems are under tremendous clinical pressure from the COVID-19 pandemic. Less appreciated is the fact that they are also under enormous financial pressure.
Prior to the pandemic, hospitals and health systems already faced unique and complex financial challenges. Over the past decade, shifts to value-based reimbursement models tightened profit margins and compressed the market. As hospitals endeavored to streamline costs, the industry experienced startling shifts. More than 750 hospitals were involved in acquisitions or mergers between 2008 and 2014.2 Following that, the industry saw 5,000 physician practices acquired by hospitals between 2015 and 2016.³ Additionally, 180 rural hospitals have closed their doors because to financial duress since 2005.4
Enter COVID-19. Hospitals and health systems responded by immediately stepping up testing efforts and began treating critically ill infected patients but suffered revenue losses and incurred extra expenses they were ill-prepared to take on. The postponement of elective and profitable surgical procedures and a change in case mix to one loaded with high-acuity, lengthy stay COVID-infected patients were major hits. The additional costs associated with purchasing the required personal protective equipment, or PPE, have compounded the economic strain.