Safety First Blog

Part 2: The Tale of Two Formularies

Posted by Laura Paxton on Mar 22, 2023 11:15:12 AM
Laura Paxton
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As I shared in Part 1 of this Formulary blog series, hospital consolidation is nothing new, but as novel technology is implemented and the latest regulations are enforced, the process continues to be complicated. While the benefits of combined organizations are numerous, blending two entities and their formularies, realizing those benefits is a major undertaking. 

In conversations with more than 100 hospitals and systems, we’ve seen two common types of consolidations from the perspective of the formulary. The acquiring systems usually go one of two ways with their formulary:

 - System-wide formulary that all facilities access
 - System-wide formulary that each facility pulls from to create its own formulary 

In the previous Safety First Blog, I explained the logistics, benefits and challenges of merging into a single system-wide formulary. In this blog, I’ll outline the second most common route taken when consolidating formularies. 

In this situation, the healthcare system manages an umbrella formulary with assessed and approved drugs. The facilities or markets within that system then each have a formulary based on the umbrella formulary. For instance, a system may include a market that specializes in cardiology and another that specializes in trauma, and of course, each formulary looks quite different. However, if a trauma hospital cares for a patient who is also receiving cardiology treatment, the patient’s required medications are easily accessed thanks to the system-wide formulary and connection to the cardiology hospital’s formulary. 

In formulary management software, each facility, whether it be a children’s hospital or an oncology facility, can see which drugs are approved in the system-wide formulary within the formulary management dashboard, and the individual facilities where that drug is already approved are also identified. 

Also, each drug monograph should show what restrictions apply to the selected drug, including Service Line, Formulary Location, Service Population, Prior Authorization Required, Restrictions, and more. All facilities can also access medication safety information and see if the drug is High Alert, has Black Box Warnings, LASA, etc. 

Similar to the overarching system-wide formulary, this arrangement provides previously standalone facilities with negotiating power, medical coding, medication options, compounding opportunities, and even a greater sense of community gained by being part of a larger organization. 

However, in this system, the markets also have the autonomy that an overarching system-wide formulary does not provide its facilities, which many facilities prefer after operating independently. On the other hand, their pharmacy directors maintain the formulary and also benefit from the system’s added support of centralized drug approval and all the safety information and resource materials through their EHR or formulary management system.

Because each market manages its own formulary, more resources may be required at each facility to assess inventory and request drugs to be assessed by the Health System Pharmacy and Therapeutics Committee. The system itself may need to mediate when a market requests access to a new drug, and the umbrella formulary may be larger than that of a system that maintains one formulary for the entire system. 

Managing the consolidation or acquisition of a hospital is a massive project with many moving pieces - one of which is the formulary. Because the formulary plays a central role in patient care & safety, the speed and the way in which it is organized is vital. However, each of these methods has unique benefits and challenges.

Register today for the first USP <800> Preparedness Lunch + Learn on April 6, and mark your calendar to spend upcoming lunches with Rpharmy. We’re here to support you in this critical effort to improve your organization's health and well-being, and we hope to see you soon.

In the meantime, check out our Safety First Blog for the USP <800> information and resources you need. 

Topics: Rhazdrugs, Policy, USP <800>, Formweb

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