Benchmarking saves hospital $1 million

Area of Science:

• Healthcare administration
• Pharmacy management
• Revenue cycle optimization

Background:

• Sarasota Memorial Health care System's pharmacy charges were found to be $15 million below average compared to peer hospitals.
• A discrepancy in medication charging processes was identified as the root cause of revenue loss.

Purpose of the Study:

• To investigate the reasons for Sarasota Memorial Health care System's below-average pharmacy charges.
• To identify and implement a solution to recover lost revenue due to uncharged medications.

Main Methods:

• A quality improvement team conducted a comparative analysis of pharmacy charges against peer institutions.
• The team investigated the medication distribution process to identify charging errors.

Main Results:

• The pharmacy was not charging for all medications at the point of distribution, leading to substantial lost revenue.
• A simple process change was implemented to ensure all dispensed medications were charged correctly.

Conclusions:

• Accurate and complete charging for all dispensed medications is crucial for financial health in hospital pharmacies.
• Process improvements in pharmacy charge capture can lead to significant revenue recovery.