Peter L. Salgo, MD: Are these newer drugs that much more expensive? I gather the answer is yes.
Debra Goff, PharmD, FCCP: That would be correct, yes. You’re going from some of the MRSA drugs that are $10 a day to $100 to thousands of dollars. So, they’re not just a little bit more, they’re a lot more. You have to be very fiscally responsible in how you decide to use them. So, they can be the best spent money if it prevents a hospital admission or it could be a total waste of money.
Andrew Shorr, MD: If the patient is coming to the hospital anyway because they need wound checks, pulse checks, whatever, that’s not the right patient.
Sandy J. Estrada Lopez, PharmD, BCPS (AQID): That’s not the patient, right.
Peter L. Salgo, MD: Where you’re going to see the cost saving in this drug is the lack of facility use, basically.
Sandy J. Estrada Lopez, PharmD, BCPS (AQID): Yes.
Andrew Shorr, MD: Correct.
Jason Pogue, PharmD, BCPS-AQID: It also guarantees compliance, and I think that’s big, at least in my patient population that I deal with.
Peter L. Salgo, MD: How do you monetize that?
Jason Pogue, PharmD, BCPS-AQID: It’s very difficult.
Andrew Shorr, MD: The way you monetize it is you look at readmission rates in 30 days.
Sandy J. Estrada Lopez, PharmD, BCPS (AQID): Right, absolutely.
Andrew Shorr, MD: Which, as a CMS benchmark, actually is something people are very focused on right now. And if you can show that because you didn’t put the PICC (peripherally inserted central catheter) line in, they didn’t get readmitted at 30 days because they either didn’t overdose on the best stuff that they cook in Ohio or they didn’t get a secondary complication from the PICC line, that’s cash in someone’s pocket at the hospital administrator level.
Jason Pogue, PharmD, BCPS-AQID: To your silo point though, that comes into play, right? That whole thing has to have all of the different players from the different groups because no matter how you look at it, that’s $3000 into my budget, and why is the budget up this month? Even though you’ve stopped, you have to have that.
Andrew Shorr, MD: So, it’s your budget, it’s not the hospital’s, for my patients?
Jason Pogue, PharmD, BCPS-AQID: Yes, it’s mine, right.
Andrew Shorr, MD: OK. I was just trying to understand that.
Peter L. Salgo, MD: So, we should turn this upside down, I guess. If we know the cost of this medication, which is high, what is the cost in dollars and cents of noncompliance? Because the cost of not using this drug is that somebody has to comply. Somebody has got to use it, come back, use the pills, do whatever you need to do. How do we monetize that? Can we do that?
Sandy J. Estrada Lopez, PharmD, BCPS (AQID): You can say the cost of noncompliance at the most basic level could be an admission that wouldn’t have had to be done otherwise, right? So, you can find out from your facility what the average cost of an admission for a skin infection is. But I would say probably $8000 to $10,000 would be an accepted cost, with much higher charges certainly out there. So, if the patient stays for 3 days, they stay for 7 days, an entire course of IV antibiotics, then you can double that number or more.
Peter L. Salgo, MD: And what about the doctor who says, “Well, you know, this was a community-acquired infection. Whatever that may mean these days, which is meaning less and less, I’m going to use a less effective drug, but it’s likely to work”? What is the cost of that decision across the board, all-comers?
Debra Goff, PharmD, FCCP: Yes, so that’s the test of failure. The most expensive antibiotic is the one that doesn’t work. That’s where you have to know what the probability of this antibiotic working for this patient is. And so, there is a cost for failure, and it is usually prolonged length of stay. And there’s a societal cost. If you’re working for a living and you’re sitting in a hospital and you can’t work and you have children at home, it starts escalating and snowballing, all the other people affected by that failure. So, there’s a lot of, “We don’t put a societal price tag on that,” but that is the reality of our decisions.
Andrew Shorr, MD: Can I be precise about my words here? Because this phrase “less effective” keeps getting batted around, and I think that’s an entire misnomer or falsehood. There’s no evidence that these newer drugs are more effective, right? The other agents, if they’re not effective, it’s because you didn’t pick the right spectrum of activity.
Debra Goff, PharmD, FCCP: Or the right dose.
Andrew Shorr, MD: Or the right dose, right, all of these things. But the drug itself isn’t less effective. It’s the doctor or the pharmacist or the clinician who made a bad choice among the tools in the toolbox.
Peter L. Salgo, MD: So, they picked the wrong drug.
Andrew Shorr, MD: Right. I would be careful of that because, again, I think it gets back to this conversation we started with, which is, how did we get in this map? It’s we didn’t personalize that, the decisions we make, we own. And I think we need to say that “less effective” implies that it’s the drug’s failure. If the drug didn’t work, part of it is doctor failure. We picked the wrong drug.
Peter L. Salgo, MD: Picked the wrong drug. The other question I have is this whole question of silos. Well, it’s my $3000. Who says? How come we can’t just get this is the hospital silo, and it’s our problem as an institution? That takes the onus off of you and it allows more across-the-beach, if you will, waterfront decisions to be made. Why can’t we do that?
Sandy J. Estrada Lopez, PharmD, BCPS (AQID): We try, but it’s a challenge. So, when we talk about antibiotics, it’s the pharmacy budget that’s getting hit for using more expensive antibiotics and it’s the overall hospital budget that benefits from not having extended length of stay. But go back to the rapid diagnostic example: It’s the lab that has to purchase this particular test or this particular instrument, and then particularly the pharmacy may benefit from less utilization of antibiotics. And so, we actually have a scenario where our health system would not support bringing in a new rapid diagnostic because of cost to the lab that was not budgeted. We actually had to collaborate with the lab and transfer money from one budget to another budget, such that we could have this. So, I think we’re getting there, but it’s all about collaboration, and all the way to the very top.
Peter L. Salgo, MD: You mean you have to talk to one another and actually play nice in the sandbox?
Sandy J. Estrada Lopez, PharmD, BCPS (AQID): Yes.
Peter L. Salgo, MD: Look, I’m not a CPA and I don’t play one on TV, but it occurs to me that if this sandbox belongs to all of us, savings here could offset expenditures here unless you build these artificial walls.
Sandy J. Estrada Lopez, PharmD, BCPS (AQID): I think that occurs to all of us in this room.
Peter L. Salgo, MD: Who’s it not occurring to is what I’m asking.
Andrew Shorr, MD: The dilemma for the hospital administrator, again, is part organizational because they send out budgets and they come into buckets. And there’s very little at the leadership level, strategic thinking in the classic MBA sense, looking about where the system is going to go in the mission. But at the same time, our hospital leaders—and I appreciate this, nonprofit hospitals, which all of us work at—live on 2% margins. The Stop & Shop that I went to get my coffee at this afternoon has a better margin as a grocery store.
Peter L. Salgo, MD: I hope so.
Andrew Shorr, MD: We are always in a mess. We are constantly the focus of efforts by CMS to reign in cost, and often the budget is balanced on the back of the hospital. So, even if you could break down those silos, there’s going to be only escalating cost pressure on institutions. And perhaps that actually means it’s the opportune time to actually make these arguments. But you have to have a well thought out argument that shows it from a systems level to the right person in the C-Suite.