PPP javamardi [post midterm study]
Four Costs Associated with Inventory meanings 1. Acquisition cost 2. Procurement costs 3. Carrying costs 4. Stock-out cost
1. Acquisition cost: The price the pharmacy pays for the product[everything that may be associated with acquiring the inventory: cost for utilities, (other thing may sell, eg photos, to be able to pay for inventory) "all costs for pharmacy to be able to have stuff on shelf"] 2. Procurement costs: The costs associated with purchasing the product [basically just directly related to product: the vendor/price and item cost] 3. Carrying costs: The storage, handling, insurance, cost of capital to finance the inventory, and opportunity costs 4. Stock-out cost: The cost of not having the product on the shelf when a patient needs or wants it
Learning Objectives
1. Explain the importance, both financially and operationally, of purchasing and inventory management to a pharmacy. 2. List purchasing objectives and inventory management objectives for a pharmacy. 3. Describe procurement and carrying costs for a pharmacy. 4. Calculate inventory turnover rates and use this information to make purchasing inventory control decisions. 5. Describe three methods of inventory management. 6. Describe the role of technology in improving inventory management in pharmacies
The 5 Dysfunctions of a Team
1. Inattention to results(top of pyramid) 2. Avoidance of accountability 3. Lack of commitment 4. Fear of conflict 5. Abscence of trust
Overcoming The 5 Dysfunctions of a Team
1. Inattention to results: Public declaration, focus on results 2. Avoidance of accountability: Publications of goals, standards, reviews[create environment of accountability] 3. Lack of commitment: Deadlines, worst-case scenarios[foster commitment] 4. Fear of conflict: Managing for conflict, extracts buried disagreements 5. Absence of trust: Personal histories, personalities, profiles, vulnerabiluty of leaders[build trust]
465.188 Medicaid Audits of Pharmacies 1. Notice? 2. Time requirements for audit conduct [time for pharmacy to provide doc for discrepancies, May not be conducted during, conducted for x times/ year] 3. The report is to be provided to the pharmacy within________ with the results of the audit. 4. Any unfavorable audits can be repealed through The Agency for 5. Does not include audits conducted by the
1. Medicaid audits are conducted by giving a 1-week prior notice of the initial audit. 2. Audits must be conducted by a licensed pharmacy in the state of Florida. ৹ 10 days must be given to the pharmacy to provide documentation for a discrepancy ৹ May not be conducted during the first 5 days of the month ৹ Only conducted for 1 calendar year 3. The report is to be provided to the pharmacy within 90 days with the results of the audit. 4. Any unfavorable audits can be repealed through The Agency for Healthcare Administration. 5. Does not include audits conducted by the Medicaid Fraud Control Unit of the Department of Legal Affairs.
Steps of Strategic Planning [template on slide 6]
1. Organizing team, including key stakeholders 2. Identifying organization's strategic direction 3. Conducting a strategic analysis 4. Defining major goals 5. Developing an action plan 6. Developing a monitoring and evaluation system 7. Communicating the plan to others S
Table 24-2: Purchasing Objectives
1. To obtain the right *products * 2. To obtain products in the right *quantity* 3. To obtain products at the right *time * 4. To obtain products at the right *price * 5. To obtain products from the right *vendor*
III. Goal #3 Promote excellence in business practices through administrative, financial, and clinical efficiencies.[operational efficiency and financial performance]
. Tactics i. Stabilize the TMH 340B Drug Pricing Program ii. Develop partnerships with local Pharmacies with Contract Pharmacy relationships iii. Create a consistent monitoring process for the TMH Pharmacy Productivity Metrics iv. Develop a systematic reporting process for the TMH Pharmacy Business Review, and report up through the Senior Leadership Team
Code of Federal Regulations cont'd
If the third-party auditor or certification organization finds that a pharmacy application does not accurately and consistently import, store, and display other information required for prescriptions, the pharmacy must not process electronic prescriptions for controlled substances that are subject to the additional information requirements.
Chapter 7 Strategic Planning to Achieve Results
Learning Objectives After completing the chapter, the reader will be able to: 1. List the primary components of a strategic plan. 2. Define the mission, vision, and values of an organization. 3. Explain the value of an organizational SWOT (strengths, weaknesses, opportunities, and threats) analysis. 4. Differentiate between goals, objectives, and tactics 5. Determine the elements of a monitoring and evaluation plan. 6. Make recommendations to improve communication of a strategic plan. 7. Discuss requirements for successful execution of strategic plans. 8. Evaluate benefits and criticisms of strategic planning.
have an impact on the overall acquisition cost[right price]
List price and terms of sale
Purchasing—Right Price
List price and terms of sale have an impact on the overall acquisition cost *• Terms of sale * - Discounts ---• Quantity - noncumulative or cumulative ---• Cash - for prompt payment ---• Serial - multiple discounts - Dating ---• Prepayment ---• Collect on delivery ---• Delayed or future
Effective inventory management decreases the cost of _____________, resulting in increased gross margins and net profits
goods sold and operational expenses
Conducting a Strategic Analysis One framework used to conduct a market analysis is Porter's five forces:
[14] o Threat of entry or new competition o Threat of substitute products/services o Bargaining power of consumers o Bargaining power of suppliers o Intensity of competitive rivalry
Goal #7 Promote excellence in Health Informatics Pharmacy System to support the TMH System Infrastructure
a. Tactics i. Create a Pharmacy Informatics Team ii. Improve the use of Automation in the Drug Distribution System iii. Create a standard approach to evaluate current system utilizing best practice, gap analysis, and key metrics iv. Develop a department scorecard to report up to Senior Administration v. Create a department dashboard to report to the Pharmacy Team vi. Develop an internal training program to support the growth of Big Data in Pharmacy
Goal #5 Grow TMH Pharmacy's Ambulatory Care Presence in the Community/ Physical alignment and collaboration
a. Tactics i. Create an Outpatient Pharmacy to service Employee Colleagues and TMH Patients ii. Create a TMH Specialty Pharmacy program iii. Enhance communication to ensure provider and team member awareness of patient safety issues and clinical outcome programs including all off site TMH clinics
Goal #4 Promote excellence in the education of future health care professionals and enhance TMH partnerships with affiliate/Academic and medical center development
a. Tactics i. Expand the TMH Pharmacy Residency Program 1. Grow the PGY1 Program - Expand from 3 students to 4 (plan for 2022- 2023) 2. Develop the PGY2 Program - 2022 - 2023 adding Admin Resident 3. Develop partnerships with FAMU for the Health System Administrative PGY2 Residency (Starting Fall 2022) ii. Broaden the existing Teaching Relationship with FAMU - provide Adjunct teaching resources (Dr. Kynard) iii. Pursue potential MBA / MHA Residency Opportunities with FAMU
I. Goal #6 Maintain Adequate Pharmaceutical Resources for TMH Patients/ Advnaced technology and analytic solutions
a. Tactics i. Grow TMH Pharmacy participation in the Vizient GPO Alliance ii. Participate in the Vizient End Drug Shortages Initiative iii. Develop a systematic approach to manage drug shortages in the TMH organization from a departmental perspective. iv. Develop a monitoring process for the review of drug contracts that is collaborative with current TMH Supply Chain processes v. Develop relationships with FDA approved 503B Compounder Facilities and review their status as an ongoing process
Goal #2 Provide timely and appropriate access to health care
a. Tactics i. Telehealth ii. Redefine technician roles iii. Develop TMH Pharmacy Transitions of Care Model
A SWOT analysis purpose
is used to assess an organization's internal *strengths and weaknesses and external opportunities and threats*
Long-term goals are organizational outcomes that reflect the ____________ and provide movement toward realizing the vision
mission of the organization
Action Planning *The action plan's objectives and tactics may address the four Ps* of marketing:
o Product o Price o Promotion o Place
Action Planning The action plan should include:
o SMARTER objectives o Tactics necessary to achieve goals o Timeline for accomplishing objectives o Assignment of responsibilities o Identification of available resources
Defining Major Long-term Goals SMARTER goals should be:
o Specific o Measurable o Acceptable o Realistic o Time-based o Extending o Rewarding
Identifying Strategic Direction Identify the overall purpose of the organization, its future direction, and its priorities:
o Vision: the organization's long-term goal(s) and aspiration(s) o Mission: the organization's purpose o Values: the organization's central priorities
Conducting a Strategic Analysis External opportunities and threats may be analyzed in terms of STEEP trends:
social, technological, economic, ecological, and political
New Pharmacy Application
• 465.022; Pharmacies; general requirements; fees • Must be 18 years of age or older • Requires fingerprinting at background checks at the state and national level • Amount of interest/stake in the pharmacy (%5 or more) • Developed policy and procedures • Prescription department manager listed • Submitted with an application fee of $255.00 • 64B16-28.100 Rules for Pharmacies; general requirements; fees • If everything goes well, the Board of Pharmacy will issue a permit.
Dispensing of Schedule II & III Meds
• Application to comply with the Controls Substance Act of 1970 • Pharmacy must first be permitted by its respective state. • Once permitted, a registration for dispensing of controls must be submitted to the Drug Enforcement Agency (DEA). • DEA Form 224 • http://www.deadiversion.usdoj.gov/ • The fee is currently $888.00 dollars for a three-year registration
Table 24-4: Criteria to Select Vendors
• Are they reliable and dependable? What is their order accuracy? Do they have a good reputation? • Will they provide the information and documents needed to meet the Drug Supply Chain Security Act (e.g., drug pedigree information, transaction history, transaction information, and statement that the drug is not stolen, diverted, or counterfeit)? • Will they negotiate price and purchase terms with the pharmacy? Will they help to ensure contract compliance when ordering? • What is their delivery schedule? • Are they innovative? • Do they provide financing and credit options? • Do they have good customer relations? How often will a representative call on the pharmacy? Can I develop a positive business relationship with this supplier? • Do they offer any value-added services? Will they help with advertising and promotion, provide inventory reports and analyses, or assist with pharmacy layout and design? Do they offer a private-label line of products? • What technology do they offer to help with purchasing and inventory management?
CE Broker & NABP
• CE Broker website: https://cebroker.com/ • NABP: https://nabp.pharmacy/ o Learn your NABP number, you will need it in the future
Chapter 64B16
• Chapter 64B16, Florida Administrative Code, includes the rules promulgated by the Board of Pharmacy. The Board is required by law to promulgate certain rules to implement specific mandates with Chapters 465, 456, and 120, Florida Statutes. From these statutes, the Board has been delegated specific authority to promulgate other rules so long as the rules are consistent with the laws. • The rules are developed by the Board of Pharmacy and uphold the desired standards for the State of Florida. • These rules MUST be consistent with the laws.
Federal Law
• Constitution of the United States and Amendments • *Federal laws known as *titles* set the minimum standards for each state*. • State laws MUST meet federal requirements •* The Federal Code of Regulations (FCR) * • Title X, XXI, and XLVI
Integrity of the Drug Supply Chain
• Counterfeit products • "Authorized distributors" • Chain of custody —accurate drug pedigree - Electronic track and trace technology - Radio frequency identification (RFID) tags - Allows for more efficient and targeted drug recalls • SNI - standardized numerical identifiers combined with NDCs
Preparatory Auditing Agencies
• Different companies are available to provide mock surveys for your organization. ৹ Barrines & Associates ৹ Soryring Consulting • For a fee, a team will come in and use TJC checklists to identify any problem areas there may be in the organization.
Specialty Pharmacy supply management challenges
• Drug and biologic products with high costs or present reimbursement challenges • Special handling or storage requirements • Require administration at time of dispensing • Other patient support
State Laws
• Each state can make laws more restrictive to meet its needs. (Example: changes in prescribing practices for opioids in Florida) • *Florida Statutes * • Chapter 120, 456, 465, 499, and 893 • The Board of Pharmacy •* Administrative code * • Rules for pharmacy practice • 64B16
The Department of Health
• Florida DOH website: https://www.floridahealth.gov/ o Licensure and Regulation o Select Pharmacy
Types of Vendors
• Full-service or Wholesaler (middleman) • Some large pharmacy chains perform wholesaler functions in-house • Group Purchasing Organizations (GPO) • Pharmacy buying group • Direct purchase
Organizing a Strategic Planning Team [who should be on it]
• Individuals throughout the organization can contribute ideas, information, and experience to the strategic plan • Managers and employees directly involved in day-to-day operations generally have a strong grasp of what may or may not be needed • External stakeholders tend to contribute unique perspectives and valuable input
Pharmacy Types & Permits • Information is available in Chapter
• Information is available in Chapter 465 and 64B-16 • These are the state laws and Florida administrative code
Supply Chain Management Introduction
• Inventory - Represents a pharmacy's largest asset - Least liquid current asset • Four general costs - Acquisition - Procurement - Carrying - Stock-out or shortage • Inventory management means minimizing the investment in inventory while balancing supply and demand • Effective inventory management decreases the cost of goods sold and operational expenses, resulting in increased gross margins and net profits • Effective inventory management is important in meeting consumer demands, making sales, and retaining customers
Development of Key Performance Indicators what are they examples
• Key Performance Indicators are *a well-defined performance measure* that is used* to observe, analyze, optimize, and transform a healthcare process* to increase satisfaction for both patients and healthcare providers alike • Examples of Pharmacy KPIs are Medication Errors (per 1000 DCs); Employee Satisfaction, Total Expenditures; Revenue / Expenses Ratio; Medication Related Patient Satisfaction (Press Ganey)
Inventory Management—Role of Technology
• Manage *inventory* faster and more accurately • Integrates the management of* inventory, information, and costs*, allowing for a wide array of reports and *analyses* - Purchase-trend report - Sales-analysis report - Item-movement report *• e-procurement * - ordering inventory via the internet - Even Class II controlled substances *• Radiofrequency Identification (RFID)*
Summary
• Number of factors that influence the purchasing and inventory control mechanisms • Don't want to minimize to much that it hurts sales—too many out-of-stock situations • Relationship with wholesaler is important • Three different methods of inventory management • Purchasing and inventory are important both operationally and financially
State Laws
• Online Sunshine, Official Internet Site of the Florida Legislature • There are 48 titles or different categories • Title 32: Ch 465 • Rules 64B16, Florida Administrative Code • Title 33: Ch 499 • Title 46: Ch 893 • Title 10: Ch 120
Operations
• Operation requirements for a registered, licensed, certified, or permitted practice setting. • Questions for opening a pharmacy and day to day operations. • What type of pharmacy permit do you need • New pharmacy application requirements • Licenses required: pharmacist, intern, and technician • Space and equipment • Management of inventory (Legend & Controls)
Inventory Management attempts to
• Practice of planning, organizing, and controlling inventory so that it contributes to the profitability of the business - Minimize the amount invested in inventory - Minimize the procurement and carrying costs - Balance supply and demand
Federal Laws
• Published in the Federal Register o Govinfo.gov website o Office of the Law Revision Counsel United States Code o U.S. Food & Drug Administration (FDA) • There are 50 titles broadly covering a variety of topics o Known as the Code of Federal Regulations (CFR) o Title 1 - General Provisions o Title 7 - Agriculture o Title 11 - Federal Elections • CFR Relevant to Healthcare o Title 20 - Employees Benefits o Title 21 - Food and Drugs § FDA, DOH and Human Resources § DEA, Department of Justice § Office of National Drug Control Policy o Title 42 - Public Health § Section 483.60 - Pharmacy Services
REMS and Restricted Distribution
• Risk evaluation and mitigation strategies (REMS) - Special training or certification of health care providers who prescribe or dispense the product - Special certification of pharmacies or institutions which dispense the product - Limited dispensing of the product to certain settings - Patient requirements to have lab tests, enroll in a registry, or agree to monitoring prior to receiving the product • Examples: OxyContin, Onsolis, and Vandetanib
Inventory Management—Factors to Consider
• Selection of generic products • Reduction of inventory size • Returned-goods polices • Management of unclaimed prescriptions • Monitoring shrinkage • Use of formularies
Strategic planning Introduction
• Strategic planning may be used to pursue and achieve organizational goals and desired results • Organizations use strategic planning to establish long-term directions and formulate and implement strategies to accomplish objectives while taking into account environmental variables o A strategic plan involves deciding where the organization wants to go, how it can get there, what it needs to watch out for, and what it is likely to cost
What is a "Disruptive Technology?"
A disruptive technology is one that displaces an established technology and shakes up the industry or a ground-breaking product that creates a completely new industry
Pharmacy Management
Objectives 1. Describe different pharmacy audits and governing bodies. 2. Understand causes for disciplinary actions by the BOP. 3. Distinguish and discuss pharmacy permit types. 4. Identify, choose, and conclude licensure requirements and associated fees. Readings Chapter 11: Risk Management in Conemporary Pharmacy Practice in: Pharmacy Management Essentials for All Practice Settings. Desselle, et al. Chapter 20: The Basic of Managing Risk in: Pharmacy Management, Leadership, Marketing, and Finance. Chisholm-Burns, et al.
Pharmacy Management Review(march21) [*watch*]
Objectives • Federal laws • Legislative Acts • State laws (Florida) • The Department of Health (DOH or known as the department) • Pharmacy types • Different pharmacy permitting/licensure • National Association of Boards of Pharmacy (NABP) • CE Broker • New pharmacy application
Pharmacy Management
Objectives • Review and discuss federal and state laws. • Recognize different statutes and rules governing the practice of pharmacy. • Navigate different statues and rules to be compliant with regulatory requirements. • Overview for the submission of a new pharmacy application
• Requires pharmaceutical drugs to be traced throughout the supply chain • Pedigree information must be stored for *at least 6 years*
Outlines critical steps to be implemented by 2023 Drug Supply Chain Security Act [DSCSA]
Inventory Management—Evaluating
*• Inventory turnover rate (ITOR) * - Most common ratio used - ITOR = cost of goods sold / average inventory value (at cost) - Higher is better—as long as not running out of stock *• Net-profit-to-average-inventory ratio * - Whether the inventory is being used efficiently to make a profit - Greater than 20 percent
Inventory Management—Methods
*• Visual method * - Look at the number of units in inventory and compare them with a listing of how many should be carried *• Periodic method * - Count the stock on hand at predetermined intervals and compare with minimum desired levels *• Perpetual inventory systems * - Computerized - Most efficient - Can tell precisely the amount of inventory on hand for any product at any given time
Four Costs Associated with Inventor
- Acquisition - Procurement - Carrying - Stock-out or shortage
Purchasing—Right Product Pharmacy managers should evaluate the following factors when deciding what products to order:
- Past usage - Target market - Pharmacy image and goals - Formularies - Industry data - Industry representatives - Consumer information
Multistate Pharmacy Jurisprudence Examinatio
2.3 Operational requirements for a registered, licensed, certified, or permitted practice setting • 2.3.1 Requirements for the operation of a pharmacy or practice setting that is not directly related to the dispensing of pharmaceutical products • Issues related to space, equipment, advertising and signage, security (including temporary absences of the pharmacist), policies and procedures, libraries and references (including veterinary), and the display of licenses • 2.3.2 Requirements for the possession, storage, and handling of pharmaceutical products, preparations, bulk drug substances/excipients, and devices, including controlled substances • Investigational new drugs, repackaged or resold drugs, sample pharmaceuticals, recalls, and outdated pharmaceutical products • 2.3.3 Requirements for delivery of pharmaceutical products, preparations, bulk drug substances/excipients, and devices, including controlled substances • Issues related to identification of the person accepting delivery of a drug, use of the mail, contract delivery, use of couriers, use of pharmacy employees, use of kiosks, secure mailboxes, script centers, use of vacuum tubes, and use of drive-up windows
Inventory Turnover Ratio (ITOR) equation
ITOR = cost of goods sold/average inventory
Least liquid current asset
Inventory
Represents a pharmacy's largest asset
Inventory
means minimizing the investment in inventory while balancing supply and demand
Inventory management
Goal 1 patient centered quality care/continuously improve the quality and safety of TMH pts
Tactics i. Enhance medication reconciliation processes to support patient education and clinical outcomes ii. Maintain Joint Commission Accreditation and readiness in the TMH Pharmacy iii. Meet current USP 797, 795, 800, and 825 guidelines iv. Maintain current pharmacy quality assurance monitors and documentation processes v. Comply with Joint Commission Environment of Care standards vi. Enhance medication management and medication safety
may serve as a complement to a market analysis, which studies the dynamics of a market within an industry
The SWOT analysis
overarching activities that ensure an organization accomplishes the goals of the strategic plan
The action plan details strategies -
State & National Auditing Organizations: responsible for, 1.• The Agency for Healthcare Administration (AHCA) 2. • The Joint Commission (TJC)
• The Agency for Healthcare Administration (AHCA) ৹ The Agency for Health Care Administration (AHCA) is *responsible for the administration of the Florida Medicaid program, licensure and regulation* of Florida's health facilities and for *providing information* to Floridians about the* quality of care they receive. * • The Joint Commission (TJC) ৹ Joint Commission *accreditation and certification* is recognized nationwide as a symbol of quality that reflects an organization's commitment to meeting certain performance standards. The Joint Commission (TJC) conducts *unannounced accreditation surveys* of healthcare organizations to *determine their compliance* with nationally established Joint Commission standards. These standards deal with an organization's *quality, safety-of-care issues, and the safety of the environment* where the care is provided. ৹ Inspections conducted *every 3 years*
465.188 Medicaid Audits of Pharmacies
• The report is to be provided to the pharmacy within 90 days with the results of the audit. • Any unfavorable audits can be repealed through The Agency for Healthcare Administration. • Does not include audits conducted by the Medicaid Fraud Control Unit of the Department of Legal Affairs.
465.016 Disciplinary Actions
• This part of the statute lists the many ways a licensed pharmacist can be held accountable by the BOP. •Violations of *HIPPA, substance abuse, failure to report, and committing errors or omissions* during specific pharmacy functions are all examples of punishable offenses. • 64B16-25.170 Probable Cause Panel • The severity of the punishment is determined by the BOP with fines ranging from $250 to $ 10,000.
Purchasing—Right Quantity at the Right Time
• Three Types of stock - Cycle stock - Buffer or safety stock - Anticipatory or speculative stock • Estimate the minimum quantity • Establishing stock depth • Reorder point = [(review time + lead time) × average demand] + safety stock • What is the budget? - Open-to-buy budget
Code of Federal Regulations; Electronic Prescriptions
• Title 21: Auditing electronic prescriptions for controlled substances • Page 44: 21 CFR 1311.200(a), (b), and (c) ৹ Pharmacies are *unable to use electronic prescription systems until a thirdparty audit or certification* review determines the application complies with DEA requirements. ৹ If approved, the audit/certificate must be sent to the pharmacy. ৹ If the pharmacy does not comply, by law the pharmacy can not use their electronic prescription system until they comply. ৹ Controlled Substance Ordering System (CSOS) • If the 3rd-party auditor/certification organization finds that a pharmacy application doesn't accurately & consistently import, store, & display other information required for prescriptions, the pharmacy can't process e-prescriptions for ctrld substances that are subject to the additional information requirements.
Pharmacy Audits Department of Health Inspections Frequency of inspection?
•64B16-28.101 Prescription Area Accessible to Inspection ৹ New pharmacies are inspected twice during the first year ৹ Annually thereafter ৹ If there have been three successful inspections, thereafter any pharmacy without disciplinary actions will be inspected every 2 years • A reasonable amount of time will be given if any information is needed by the Department regarding shipping tickets, drug transfers, or for the inspection of invoices.
