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Hospital pharmacy indexes: a tool for assessing purchasing and inventory control performance
American Journal of Hospital Pharmacy
|June 1, 1980
Summary
Hospitals can use price and value indexes to track drug costs, differentiating between price and volume changes. These indexes aid in cost analysis, forecasting, and improving purchasing and inventory management.
Area of Science:
- Health economics
- Hospital administration
- Supply chain management
Background:
- Hospitals face complex challenges in managing drug product costs.
- Differentiating between price and volume fluctuations is crucial for accurate financial analysis.
Purpose of the Study:
- To present a methodology for developing price and value indexes for hospital drug expenditures.
- To demonstrate the utility of these indexes in operational and financial management.
Main Methods:
- Constructing a price index involves selecting representative drug products, assigning weights, choosing a base period, and using a fixed-weight aggregates method.
- Calculating a value index requires knowledge of acquisition cost changes over a period.
Main Results:
- Price indexes isolate the impact of price changes on drug costs.
- Value indexes capture the combined effects of cost and volume variations.
- The derived information supports cost analysis, operational forecasting, and inventory control.
Conclusions:
- Price and value indexes provide valuable insights into hospital drug procurement.
- These tools enhance the measurement and assessment of purchasing and inventory control.
- Implementation can simplify procurement processes and improve overall operational efficiency.