Beyond pharmacy basics

At a glance…

By employing a medication management system, LaVie Care Centers improved overall resident outcomes while it reduced waste and returns, minimized inventory, and provided monetary savings.

Managing pharmacy services is an essential, but frequently challenging task for many long-term care facilities. Tampa-based LaVie Care Centers was looking to move beyond the basics of filling prescriptions to approaching pharmacy as a model of “medication management” focused on clinical outcomes that drive financial performance, rather than vice versa. LaVie Care Centers provides a comprehensive array of management services to 122 skilled nursing and rehabilitation centers in 16 states throughout the United States.

For LaVie Care Centers, understanding the best pharmacy approach-one that embraces medication management as opposed to just dispensing pills-put the spotlight on three key issues: care, cost, and compliance. These are issues important not only to LaVie, but also every nursing facility in the United States. LaVie’s experience in reevaluating its pharmacy approach is relevant to any facility and is the focus of this article.

Put pharmacy in perspective

The traditional pharmacy model that most facilities use does not empower caregivers to focus on the very reason they are at their jobs: resident care. When staff is required to manually manage details of pharmacy (such as faxing orders), less time is spent with residents and human error jeopardizes safety.

When 15- or 30-day supplies of medication are dispensed, many medications are discarded when resident prescriptions change, resulting in substantial waste and cost to the facility. In addition, the cost of noncovered prescription drugs is most often covered by the facility, while awaiting reimbursement. This can be a time-consuming and cash-intensive process that competes for nursing time better used for direct resident care.

Documentation, as well as clinical management of a resident’s drug regimen, continue to challenge providers. Reporting and dashboards are needed to help ensure compliance with federal guidelines and to avoid deficiencies.

LaVie’s solution

Looking for ways to continue a mission centered squarely on resident care, LaVie Care Centers understood that by focusing pharmacy services on care, financial performance should follow.

LaVie deployed a medication management approach from Millennium Pharmacy Systems in 22 of its Florida-based facilities. The chosen system combines a “Just-in-Time” dispensing methodology with computerized prescription ordering, formulary management, bedside medication and treatment administration, and corresponding electronic medical records and reporting. The system improved overall resident outcomes while it reduced waste and returns, minimized inventory, and provided monetary savings.

According to LaVie, the system provides them with added benefits, such as:

  • Electronic clinical and interchange alerts helping to drive appropriate care and manage expenses

  • Elimination of manual month-end reconciliations and audits

  • Electronic Census Sharing, which prevents erroneous billing

“While the concept of change was first met with hesitation, the transition was seamless. A computer system was new to many, yet the training was simple and now, even staff members that were initially reticent love it,” says Adam Smith, RN, C, director of nursing at Countryside Rehab and Healthcare Center, a member of the LaVie family. “I have information available to me that allows me to think about the therapies being received by residents and work with physicians to make appropriate changes to medications. Before the new system, half of my residents were on proton pump inhibitors. I was able to reduce usage by more than 80%. Not one resident has gone back on these meds.”

Doing the math

Along with an improved system for caregivers, LaVie reports the approach to medication management has yielded positive financial results. The following are areas of savings and projected returns the organization is experiencing:

  • Reduced Quantity Dispensing. Pharmacies charge an average of $8 per month dispensing fee for two, 15-day drug supplies. The medication management pharmacy service approach charges a $4 dispensing fee per month for three- or four-day supplies. The average resident takes 10 prescriptions. Each month the potential savings for a 120-bed home with a 25% Medicare/Managed Care/VA case mix per month, per patient is $1,200. Bottom line: Reduced quantity dispensing resulted in a savings of approximately $14,400 per year on dispensing fees alone.

  • Potential for Unnecessary Drug Elimination. Residents often take hospital-prescribed drugs longer than necessary. With traditional pharmacy approaches, a chain of 20 nursing centers could easily spend an estimated $480,000 per year on one class of medications, such as proton pump inhibitors. The medication management model includes education alerts, clinical guidelines, and reports to assist in clinical assessments. Bottom line: Technology-enabled clinical care can reduce usage by 50%, resulting in an estimated annual savings of at least $240,000 for just one class of medications.

  • Dedicated Resource for Medicaid and Medicare Part D Noncovered Drugs. When a resident requires a noncovered drug, the cost of paying for those drugs comes off the facility’s bottom line. If paperwork isn’t submitted properly, reimbursement won’t follow. A complete medication management pharmacy service provides dedicated reimbursement specialists to pursue claims and ensure payments are received. Bottom line: A 20-facility chain can save $120,000 per year by reducing its noncovered claims by just 25%.

Ahead of the curve

Changing pharmacy service providers can be an overwhelming idea, but long-term care facilities will soon feel the impact of MDS 3.0 and healthcare reform. MDS 3.0 will bring increased medications into nursing centers as they care for clinically complex residents. The Healthy Future Act of 2009 addresses industry pharmaceutical waste and mandates utilization management for efficiencies.

Long-term care needs to consider options for improving its pharmacy approach. In the words of Amy Spears, director of pharmacy services at LaVie, “Facilities should not put off making the change. The benefits for improved care, cost, and compliance are far too compelling to ignore.”

Pam Selker Rak is president of CommuniTech, LLC, and is an independent consultant for organizations in long-term care, healthcare, and beyond. She can be contacted at (412) 221-4550 or


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Long-Term Living 2010 June;59(6):38-39

Topics: Articles , Operations