Prescription For Success: Invest in the Pharmacy Now to Realize Financial Growth

In the more than three years since the Covid-19 pandemic began, hospitals across the country are still feeling the negative financial effects. On top of this, inflation is adding additional pressure on hospitals to cut any unnecessary costs and save their bottom line.

According to Kaufman Hall, hospitals experienced steep margin declines in 2022, in large part, due to an increase in labor costs. To add further flame to the fire, labor expenses are predicted to increase as hospitals lost over 105,000 employees during the pandemic.

In order to offset their losses, particularly those stemming from high labor costs, hospitals are following protocol by cutting staff positions at a record rate. But when it comes to the pharmacy, eliminating “unnecessary” positions may have the opposite effect.

That’s because cutting pharmacy-related labor costs is more expensive in the long run than investing resources. By making cuts in the pharmacy, hospital leaders are inadvertently harming their bottom line while  attempting to fix their financial position.

The real source of costs

The first pharmacy staff positions to be cut are usually lower-level technicians. This means pharmacists need to take on the added burden and  tasks of purchasing, inventory management, unit inspections and filling automation, among other responsibilities. therefore ultimately taking time away from pharmacists’ job of efficiently managing resources and drug costs and implementing initiatives that can drive new sources of revenue.

In fact, most of the costs in hospital pharmacies are associated with medications and their proper management, not labor. Improper management of medication inventories can trigger expensive mistakes such as medication waste, medication errors and reduced efficiency. Additionally, mismanaged pharmacy inventory can result in medication unavailability for patients– meaning that expensive latent costs like extended hospital stays and poor patient outcomes can be prevented at the pharmacy level.

All of these combined factors point to the opportunities that start with adequate resources at the pharmacy level.

The benefits of a fully-equipped pharmacy

Shortage of labor continues to be a pervasive problem for hospital systems. According to Becker’s Hospital Review, more than 60% of hospitals are short on front-line pharmacists. Hospitals leaders need to do more to ensure they have enough qualified pharmacists on staff to meet patient needs.

By taking a proactive approach to addressing workforce shortages and investing in the pharmacy, hospitals can not only improve patient care but also potentially reduce costs associated with medication mismanagement and turnover.

The hard truth is that a significant number of pharmacists are unsatisfied with their workplace. The American Pharmacists Association saw nearly 4 in 10 negative reports concerning working conditions in 2022. With a lengthy pandemic and an understaffed workplace, pharmacists are burnt out, overworked and looking to leave. This growing dissatisfaction in the pharmacy will bear a hefty cost on hospital performance.

Amid a shortage of high-quality workers, ensuring that current employees are healthy and happy at work is incredibly important. Instead of putting the needs of pharmacy employees aside, hospital leaders should instead focus on investing in the pharmacy. By offering competitive salaries, retaining pharmacy technicians and listening to pharmacy leaders during hospital budget decisions, pharmacies can retain experienced staff and solve its workforce issues.

This tactic will improve the welfare of employees, lead to better patient outcomes and ultimately save hospitals  money in the long run.

Looking forward

A positive future for hospital systems depends on recovering from Covid’s financial losses. However, hospital executives should rethink the immediate impulse to achieve savings by cutting pharmacy jobs and instead focus on fixing this integral part of a hospital system’s functionality. Putting the focus on supporting pharmacists can help hospital systems better serve patients, control costs and expand care into their communities.

Photo: Irina_Strelnikova, Getty Images