Unprecedented Drug Shortages in the United States: What it means for Children’s Hospitals
March 20, 2011
Posted by chcablogadmin in : Industry Trends, Quality
Editor’s Note: Please read the entire article for important information regarding drug shortages. Below are highlights.
Drug shortages are at their highest level in a decade. Some experts believe we are experiencing the worst shortage in 30 years and it will probably not improve anytime soon. What does this mean for your hospital and what efforts are underway to plug the holes in the dam?
The University of Utah Drug Information Service (UUDIS), who provides drug shortage information and content to the American Society of Health-System Pharmacists (ASHP) and Novation and works closely with the FDA, tracked a record 211 shortages in 2010—the highest in 10 years of monitoring shortages. In the first two months of 2011, more than 50 drug shortages have been reported.
Drug Shortage Side Effects
Patient safety: In an Institute for Safe Medication Practices (ISMP) survey last summer, 1,800 respondents reported more than 1,000 drug shortage-related “near misses,” errors and adverse patient outcomes including at least two deaths and several extended hospitalizations. Therapeutic drug substitutions with infrequently used products can create medication errors, unknown side effects and dosage errors.
Increased costs: Hospitals also report substantial drug shortage-related costs including the administrative burden to investigate and locate alternate supplies, create and implement crisis plans for shortages, and prepare and administer dosing and drug alternatives. Direct costs for procurement of drugs are increased dramatically if the pharmaceutical product in short supply is only available through alternate suppliers or other vendor relationships.
No Single Cause=No Easy Solution
There is no single solution to the problem. According to the FDA, about 54 percent of the shortages in 2010 were due to product quality problems. Two of the largest manufacturers of sterile injectables, such as propofol, had product recalls last year after the FDA found particulates in the syringes. Another 21 percent of the shortages stemmed from production delays, while 11 percent were caused from discontinuing a product, usually for business reasons. The rest were due to increased demand, raw material shortages and manufacturing sites’ consolidation or closure.
What is Being Done?
CHCA and Premier are:
- Working to ensure product alternatives are available and on-contract;
- Working with suppliers regarding product allocations;
- Regularly updating members regarding drug shortage statuses; and
- Premier PDIN newsletter provides drug shortage updates directly from FDA and ASHP Drug Shortage web sites.
In 2009, Premier launched a Failure to Supply program which helps alliance hospital members optimize recovery for drug shortage costs. This program is representing more than 1,100 members and has netted more than $3.5 million in costs recovered for failure to supply in its first year.
Last November, the American Society of Clinical Oncology (ACOS), American Society of Anesthesiologists, American Society of Health-System Pharmacists and ISMP convened an important summit along with manufacturers, wholesalers, distributors, group purchasers and the Food and Drug Administration and other regulators. In January, the group released recommendations for preventing drug shortages including: improving communication across the supply chain, removing barriers to suppliers and the FDA to minimize the impact of drug shortages, and clarifying the regulatory definition of “medically necessary,” which could prompt earlier reporting of impending shortages to the FDA.
CHCA and Premier are also identifying and participating in opportunities to lobby Congress for relief from the current drug shortage crisis. We are also in communication and collaboration with our counterparts at HIGPA and National Association of Children’s Hospitals and Related Institutions in their advocacy efforts.
Recent legislation has been introduced to address drug shortages. The Preserving Access to Life Saving Medications Act (S. 296) proposed by Sens. Amy Klobuchar (D-Minn.) and Robert Casey (D-Pa.), is an important first step towards preventing the patient harm that often occurs when a medication is in short supply. The bill would require manufacturers to provide the FDA with early notice of impending shortages, and to expedite importation of substitutes when necessary. The Obama administration is also launching a federal research institute to speed development of new drugs, though this will not address shortages of existing compounds.
What You Can Do?
1. Institutional Approach
- Create a crisis plan: identify drug shortages proactively along with therapeutic alternatives; prioritize patients and usage limits; conduct failure analysis to avoid look-like errors; establish a drug shortage network (CHCA can help); implement an organizational policy on alternate suppliers, and monitor shortage-related adverse events.
- Involve the medical staff in dealing with the shortages.
- Raise awareness of drug shortages and increase communication about the issue at all levels within your hospital.
- Consider establishing collaborative and reciprocal relationships with other institutions including local adult hospitals to share supplies and resources for alternative therapies.
- Reassure the patients; the majority of them won’t be affected by drug shortages.
2. Utilize Existing Relationships and Alliances
- Utilize CHCA and Premier support. CHCA will continue to provide current shortage information, leverage manufacturer relationships to secure products, and communicate with the pharmacy directors and Pharmacy Buyers Forum.
- Leverage your own vendor and manufacturing relationships.
- Reach out to other children’s hospitals in your state or region to arrange a reciprocal sharing program or even adult hospitals in your community.
We almost completely ran out of neostigmine to stock our 60+ anesthesia trays. We exhausted all of our options—Cardinal, American Reagent direct, Baxter direct and even personal contacts at AmerisourceBergen—to no avail. Through his contacts, Ben Lizak at CHCA was able to place an order the same day to obtain an emergency supply until our next anticipated release date. – Aaron Sinner, Pharm. D., Pharmacy Operations Manager, Phoenix Children’s Hospital.
Contact me (johnvaneeckhout@chca.com) or Ben Lizak (ben.lizak@chca.com) with an urgent drug shortage issue and we will do our very best to help you attain the necessary drugs without disruption of care.
3. Support Legislation and Advocacy
- Add your voice in support of resolving the drug shortage issues and the safety, access and quality of care, and financial burden felt by children’s Hospitals.
- Engage your government relations and public advocacy professionals on this issue.
- Urge your senators to cosponsor the Preserving Access to Life Saving Medications Act (S. 296).
- Contact your senators and let them know about the impact of drug shortages on the patients you serve.
- Michael Link, M.D., MPH
CHCA and children’s hospitals can also support additional legislative efforts to give authority to the FDA to respond more quickly particularly with indication and labeling drugs for usage. In addition, support efforts to review efficacy of expired drugs and their potential so that expiration dates may be extended safely as well as work with payers to understand and accept temporary substitution regimens and not stick the patients with the price. – Michael Link, M.D., MPH, Pediatric Oncologist at Lucile Packard Children’s Hospital and Stanford and ASCO President-Elect
4. Don’t Buy from Gray Marketers
- Gray marketers are charging hospital 10 to 20 times contract price for these short supply products.
- Quality cannot be assured since you don’t know how they gained access to the product.
- The drugs could be counterfeit and since pedigrees aren’t officially documented and tracked, you assume a huge liability risk when dealing with these distributors.
- Recognized distributors have a documented chain of custody.
Working Together
The drug shortage issue is not going to be quickly or easily resolved. It may get more intense with supplies increasingly dwindling before resolution occurs. If we can get some discussion beyond the FDA and the regulatory realm, we can begin to resolve these issues. Without robust dialogue and proactive plans of action, denial of treatment or an increase in adverse events may be inevitable and devastating to your patients and their families as well as your staff.
We hope you will talk with your pharmacy directors and leadership teams and plan your course of action to resolve these issues. CHCA and your children’s hospital colleagues are available to help you navigate this issue.
1 comment so far | add a commentFebruary ACO Call: Evolving Environment and Cook Children’s Progress
March 20, 2011
Posted by chcablogadmin in : ACO Update
Presenters:
Dave Anderson, BDC Advisors
Larry Tubb, Senior Vice President, System Planning, Cook Children’s Health Care System
Larry Tubb
CHCA began the first of a series of conference calls highlighting children’s hospitals’ network structures and payment schemes in the evolving ACO, post-reform environment. Dave Anderson from BDC advisors introduced the call with an overview of the drivers and current definitions of the ACO environment. Larry Tubb from Cook Children’s described his organization’s aggressive movements to capture the best “learnings” for population health.
Dave Anderson—Overview of the Current ACO Environment
With recent political haggling over the affordable care act, the insurance side seems to be up in the air. However, there seems to be good bipartisan support for the provider side. Providers currently have a lot of enthusiasm about the goals of value based and accountable care. The private payers now seem to be getting involved. There is a lot happening; let’s evaluate the drivers:
1.) Prolonged recession draws down available funds;
2.) Continuing consolidation of commercial payers with government’s role expanding;
3.) Change in the physician marketplace including increases in employment models and physician shortages;
4.) Health systems consolidating and more mergers possibly on the horizon;
5.) Desire to decrease the number of uninsured, and
6.) Belief in goals of accountable care, desire to better manage the health of a population.
Don Berwick, head of CMS, indicated the enemy is fragmentation and therefore strong structures of care are necessary. He says both institutional reform and payment reform are needed in tandem. Payment reform in the 1990’s failed due to a lack of institutional reform.
Now, let’s analyze the array of value based payments. The goal is to change incentives to improve care, not merely focus on activities.
1.) Shared shavings: if achieve or exceed target, providers share in the savings gains;
2.) Pay for performance: if achieve cost or quality goals, provider receives a bonus; and
3.) Bundled payments: condition specific or membership-based capitation for a defined population. (Massachusetts has moved bundled payments to the next level; the entire state may be moving to capitation.)
Health systems cannot jump into new payment schemes all at once. A path of institutional change must be taken to get there. The focus must be on creating a child-centric (not patient centric) model with all resources devoted to the right care at the right place at the right time.
Defining an ACO:
CMS ACO definition: an organization of health care providers that are responsible for quality and cost of care of those assigned to them from their FFS populations.
Global ACO: accountable for all care for a population
Focused ACO: accountable for all care for certain conditions or certain procedures for a specified period of time
There is an easy self test to determine if your organization is an ACO. Do you consider an ER admission a good thing for your hospital or an ambulatory sentinel event or failure to provide the right care at the right place at the right time?
There are pitfalls to ACO and you have to be careful not to fall into the crevasse—resources are not controllable and incentives are different for each entity.
In the future, the focus will continue to be on quality and a bundled payment approach.
Larry Tubb, Cook Children’s Health Care
At Cook Children’s about 50 percent of the referral base comes from a freestanding, self-governing 280 physician group practice comprised of about 90 primary care physicians and the balance of specialists. Cook Children’s Medicaid HMO has 90,000 members.
What’s different for Cook Children’s from six months ago? We now have clearer definitions and parameters around ACOs. Other organizations have provided clarity on their agendas and positions regarding ACOs and potential parameters for clinical integration. Regulators payors and providers are interdependent in this environment. Understanding positions enables clarity in the conversations. It is a learning environment and we are all evolving.
What is Cook Children’s doing?
1.) Meeting with physicians, nurses and others to simply learn as well as defining a common language;
2.) Exploring our capacity and options (e.g. potential shortfall in numbers of peds specialits);
3.) Exploring gaps in our integrated delivery system in terms of becoming and ACO (e.g. what’s missing and where are we ACO capable), and
4.) Conducting strategic planning, particularly with our governance, on how to collaborate with others in the marketplace and provide for the ability to move forward with strategic partnerships.
What’s our relationship with the external environment?
- More CEO to CEO exploration and conversations with adult providers (either as warning shots or collaboration opportunities);
- Seeing consolidation in the adult marketplace with adult providers buying large physician groups;
- Pro-active discussions with the state – asking them about their most serious pediatric issue and developing approaches to bring back to them—let us solve it as a pilot, then use the model. Within this endeavor, we are now exploring partnering with other provider based managed care Medicaid organizations to provide care for the SSI populations. The state is now taking this idea to the federal level as a potential demonstration project.
What are the potential dangers going forward?
1.) Organizations must not assume that a financial intermediary structure for risk is the only option going forward. Other options such as direct contracting or subcontracting with adult providers as the pediatric provider of choice are also viable.
2.) Health care is the provision of medical care, but the absence of health is the precursor. We want to preserve health outside of the medical care model, e.g. addressing obesity. When addressing real health reform, the organization must move from a patient centric model to a kid-centric model. We also want to reach outside of our institutions into the communities for prevention and education.
What are the basic infrastructure requirements?
1.) Network development and understanding institutional capabilities
2.) Ability to make tough institutional decisions
3.) Understanding customer decisions
4.) Understanding tradeoffs and costs; currently lacking information (Medicaid health plans might have a better understanding)
5.) Systems that can project costs and define plans will be well position for the future.
Medical care is about rescuing people and putting them in the hospital. Don’t miss the current opportunity to go upstream. Let’s reverse the dollars from the current spend of three to five percent on prevention and 97 percent on care. We must reinvest in the community and change the game.
Questions from audience:
Q: (for Larry) How did you get physician alignment at Cook Children’s?
A: We get 50 percent of our referral base from the freestanding physician group and 30-40 percent from private pediatricians or family doctors. We had challenges in getting alignment in this mixed community model. Our solution was to make the doctors part of our governance structure. They represent 40 percent of the governance group and provide oversight and protection of the entire health system. They can’t advance their own agenda. It took two to three years but there was no other way to do it. Our docs aren’t just stakeholders—they are part of who we are.
We are currently looking at value based incentives for physicians. Should we employ more and who? How do we approach others outside of our network? We are looking at various integration strategies.
Q: (for Larry) Do you have good metrics to determine true costs?
A: We can pull some costs, but it’s not perfect. Our best metrics are around specific conditions such as asthma. We can compare the cost of the visit in the ER, clinic, private practice and home visit. Even Medicaid HMOs don’t have perfect access to these metrics but can usually analyze a subset of the population.
Editor’s Note: The March ACO call this past Thursday featured Stephen Peiser, Associate Vice President of Contracting for Children’s Hospital Los Angeles. Stephen discussed the impact of the ACO environment in LA and the hospital’s multi-pronged approach. We will provide notes and a link to the podcast in the next several weeks.
JAMA Publishes Research Emphasizing Acuity in Children’s Hospitals
March 10, 2011
Posted by chcablogadmin in : Academic Medicine, Cost Reduction, Quality
“Hospital Utilization and Characteristics of Patients Experiencing Recurrent Readmissions Within Children’s Hospitals,” by lead author Jay G. Berry, M.D., MPH, an attending physician in the Complex Care Service at Children’s Hospital Boston; John Neff, M.D., from Seattle Children’s Hospital, and colleagues from six other CHCA Owner Hospitals, along with Matt Hall, Ph.D., and Jacqueline Kueser from CHCA, examined recurrent hospitalizations within a 365-day interval at 37 CHCA hospitals utilizing PHIS data.
One important finding was nearly 20 percent of admissions and one-quarter of inpatient expenditures ($3.4 billion) were accounted for by a small group (2.9 percent) of patients who were re-hospitalized at the same hospital four or more times within a one-year period. Many of the patients are children with chronic health conditions that require multiple, unavoidable and necessary re-hospitalizations. However, the re-hospitalizations associated with ambulatory care sensitive conditions and those associated with repeated hospitalizations for the same problem may be potentially avoidable. This growing acuity for children’s hospitals creates a necessity for more in-depth analysis of these complex cases and potential strategies to meet the patients’ health care needs, optimally manage their acute illnesses, and minimize their chronic illness exacerbations.
Jay Berry, M.D., MPH
It may be important for each CHCA hospital and their quality and leadership teams to examine children who are re-hospitalized repeatedly back to their hospital, particularly those children with complex, chronic health conditions who require substantial resources and staffing. — Jay Berry, M.D., MPH
Note: For more information about research and clinical innovation at Boston Children’s visit: Vector Blog or Dr. Berry’s blog entry on this paper.
add a commentSt. Louis Children’s Hospital: Low-Tech Solutions to Improve Labor Productivity
March 6, 2011
Posted by chcablogadmin in : Cost Reduction, Manpower & Workforce
Leaders at St. Louis Children’s Hospital have developed some innovative, simple and cost-effective ways to improve communication and alignment between their finance and clinical staff members regarding labor productivity. Through a blend of training, improvement techniques and user-friendly tracking tools, front line managers are better equipped to understand and flex staffing to meet budget demands. By building employee capabilities in this area, the hospital achieved cost savings of more than $3 million while simultaneously enhancing patient satisfaction and employee engagement. Learn about the executive strategies that made it all possible.
Lee Fetter
Several critical success factors were common across all of our labor productivity projects: (1) Establish stakeholder buy-in, (2) Acknowledge and work to remove workflow barriers from the staff perspective, and (3) Provide easy-to-use staffing decision tracking tools. — Lee Fetter, President and Senior Executive Officer, St. Louis Children’s Hospital
