How Beverly Hospital discovered an annual cost savings opportunity of more than $200,000.
Beverly Hospital, a small community health system with three hospitals and 340 beds, discovered a new strategy for reducing drug purchasing costs and increasing operational efficiency by collaborating with Yankee Alliance, a regional group purchasing organization (GPO), and Safecor Health, an FDA-registered unit-dose repackaging vendor.
Through this type of collaboration, Safecor Health identified commercially available unit-dose oral solid and liquid products, with bulk alternatives, that could be repackaged into unit-dose at a significantly reduced cost. Safecor Health also assessed the current bulk products repackaged in-house.
Discovering Significant Drug Cost Savings
To determine the potential annual savings opportunity, Safecor Health performed an analysis of Beverly Hospital's previous 12-month drug purchase history.
- The purchase history was categorized into two groups: oral solids and oral liquids.
- Safecor Health completed a line-by-line analysis to identify the total number of doses purchased and the corresponding cost of the commercially available unit-dose product.
- Safecor Health then identified alternative bulk medications for those commercial unit-dose products identified.
- The cost-per-dose of the commercial unit-dose products as compared to the cost of repackaging bulk product — purchased on contract through the wholesaler — with Safecor Health, including repackaging fees, to evaluate savings opportunities.
Safecor Health identified 192 products with a minimum of 500 doses or a savings of $250 or greater for a total annual savings opportunity of $264,180 ($777 per patient bed).
Of the 192 products identified, Beverly Hospital initially converted 20 items totaling $91,554 ($269 per patient bed) in realized annual savings.
Packaging Labor and Materials Savings
In addition to the drug cost savings identified, further savings and increased operational efficiency were measured by compiling data for bulk medications Beverly Hospital previously repackaged in-house but instead outsourced to Safecor Health during a one-year period.
Efficiency was measured as pharmacy hours saved by outsourcing repackaging, and cost savings were measured as avoidance of salary dollars and materials from reduced in-house packaging.
"Safecor Health was extremely responsive and helpful throughout our conversion. In addition, they are knowledge leaders in the area of repackaging and provided helpful advice on regulatory requirements for any in-house repackaging we were unable to outsource."
Hope Violette, Directory of Pharmacy - Beverly Hospital
Unit-Dose Repackaging as a Cost Savings Strategy
The strategic collaboration with Safecor Health and Yankee Alliance allowed Beverly Hospital to uncover a significant reduction in drug costs. Additionally, increased operational efficiency may be realized by decreasing in-house labor around unit-dose repackaging.
Safecor Health has completed numerous cost savings analyses for customers and determined the average cost savings opportunities typically range between $200 to $700 per patient bed — even after Safecor Health’s repackaging fees.
Download a copy of the full case study — including data — here.