Savings Case Study

Cost savings may be achieved in a number of ways. Multiple fax lines can be replaced by a single line at a central server; nursing time spent on clerical tasks can be saved and thus can be more productively spent on patient care; individual drug costs can be reduced with formulary controls and alternative generic selections.

Concerning drug costs within a facility many factors contribute. These factors include the number of patients, patient's health, the number of drugs ordered per patient, etc. However, one factor that may be controlled is the average cost per drug ordered.

In our case study drug cost for the years 2003, 2004 and 2005 were analyzed. A definite impact on cost occurred while using the MedScend system in 2005 compared to 2004. The total cost of drugs increased in 2005 by 11.1% compared to a 31% increase the year before. The average cost per RX actually went down almost 9% compared to a 6% increase the year before providing a 15% differential. MedScend has consistently helped lower the average cost per drug.

Facility Details:

  • 270 Beds
  • 3 Physicians
  • 3 Nurse Practioners (Place orders as do physicians)
  • 26 RNs
  • 27 LPNs

Nurse Time Savings (Average cost $30/hr):

  • 5-10 mins reconciling monthly reviews (done 270 time/month=$675-$1,350/mo)
  • 5-10 mins per pharmacy call backs (frequency undetermined during survey)

Faxing cost:

  • 1-2 mins nursing time faxing orders (avg 72.25/day = $36.125 $72.25/day)
  • Phone lines/toner $78/mo/unit * 8 units = $624/mo = $7,488/year

Per Rx Drug cost ($1.2m/year total drug cost):

  • 9% reduction vs. 6% increase = 15% differential (more on following charts)
  • Cost avoidance of 15% = $180k avoided potential per drug cost
  • Achieved through out of formulary control, alternative generic suggestions, drug ordering reviews (DC Returns, etc)

  • Q1 cost rise each year (03, 04, 05)
  • Q4 ends higher then Q1 (except for 05 with a full year of MedScend rollout)
  • Q4 05 ends lower then Q1 03
  • Over time price/drug rise
  • Prices peak before MedScend implementation
  • Out of Formulary controls/generic alternatives/drug usage reviews help bring cost back down