Cost Management

Reducing Pharmacy Costs Without Sacrificing Care

Medications are a significant component of any long-term care facility’s budget. Custom Care’s Cost Management consulting aims to help you manage and contain those costs while still providing optimal pharmacotherapy for residents. We don’t just fill prescriptions; we actively work with you to find efficiencies and savings opportunities that can make a big difference to your bottom line.

Our approach to cost management is multi-faceted:

• Customized Formulary Development: We’ll collaborate with you to develop a facility-specific formulary – a list of preferred medications for common conditions, emphasizing efficacy, safety, and cost-effectiveness. By engineering a formulary tailored to the needs of your resident population, we ensure prescribers have guidance to choose medications that achieve outcomes without unnecessary expense . For instance, if we know many of your residents require cholesterol management, we might recommend preferring a generic statin that’s proven effective and inexpensive. We strive for a high generic dispense rate (HealthDirect’s experience shows an ~85% generic mix is achievable ) – generics are typically much cheaper and often just as effective. We review which brand-name drugs you’ve been dispensing and see if we can switch to generics or therapeutic alternatives to save money . Your formulary is developed based on evidencebased medicine and also customizable to physician preferences – we involve your medical director or frequent prescribers so they buy into the cost-effective choices . The more collaborative this process, the greater the impact on cost savings for the facility.

• Drug Regimen Reviews (Financial Focus): As part of our regular consultant pharmacist medication reviews, we include a lens for cost. We identify any unnecessary medications that could be deprescribed (with physician approval) to simplify therapy and reduce cost . Sometimes residents remain on drugs that are no longer needed (duplicate therapies, vitamins/supplements with no clear indication, etc.). By discontinuing those, you save money and potentially improve the resident’s care (no one wants to take pills that aren’t needed). We also flag therapeutic interchanges – for example, if a resident is on an expensive medication and there’s a less costly alternative in the same class that’s just as effective, we’ll recommend that to the prescriber. We always balance cost with clinical appropriateness; we’ll never suggest something that compromises care quality. The focus is on simplicity and optimal therapy – often, simplification itself (fewer meds) leads to savings.
• Pre-Admission Screening for Costs: Our Continuum of Care service (PRE program) doesn’t just check clinical issues; it also looks at financial impact. When reviewing a potential new resident’s med list prior to admission, we identify high-cost drugs and see if changes can be made upfront . For example, if a hospital discharge order includes a very expensive brand-name drug that isn’t on the resident’s insurance formulary, we can catch that and work with the doctor to substitute a covered alternative before the resident arrives. This proactive step avoids starting a therapy that will hit your facility or the resident with huge costs or that might have to be changed later anyway when insurance won’t cover it . Similarly, for Medicare Part A admissions, we try to ensure regimens are optimized so that when the resident goes to Part D (after discharge), they’re on meds likely covered under Part D – this continuity avoids a scenario where the facility pays under Part A for brands that then the resident can’t afford under Part D. It’s a strategic approach to formulary continuity that saves money and hassle.
• Cost Alerts and Education: We keep you informed about cost-related matters. If there’s a price spike on a commonly used medication (which does happen due to market changes), we’ll alert you and propose alternatives. We provide periodic cost-saving tips in our communications or during quarterly business reviews – such as reminding that splitting a higher-strength tablet (if appropriate) might be cheaper than using two lower-strength tablets, etc. When nurses and prescribers are educated on cost implications (like using a $5 generic vs a $500 new drug when appropriate), they become allies in cost containment. We foster that awareness by sharing knowledge – for instance, hosting an in-service for your team on “Medication Cost Management in ALFs” where we highlight practical examples and successes.
• Billing Reviews & No Surprises: We audit our own billing to ensure you’re not being overcharged. Our clean billing system manages copays and pending charges internally whenever possible, rather than pushing administrative burden to your facility . We directly bill private-pay residents to keep those charges off the facility ledger . We also ensure that when a resident’s Medicare Part A stay ends, those drug costs stop hitting the facility and shift to Part D or bill to the resident appropriately . In short, we design our billing practices to prevent unnecessary facility costs, which is a key aspect of cost management often overlooked by less involved pharmacies.
• Results: Effective cost management consulting can lead to significant savings annually for a facility, all while maintaining or even improving quality of care. Fewer unnecessary medications can mean fewer side effects and interactions, benefitting residents’ health. A well-crafted formulary can keep drug costs predictable and avoid crisis when a non-formulary med isn’t covered. And proactive medication management can avert hospitalizations, which not only is better for the resident but also avoids the costs and penalties associated with re-admissions (particularly relevant if you participate in any value-based programs or just for goodwill and reputation).

Custom Care Pharmacy becomes not just a vendor but a financial partner helping you navigate the challenging landscape of med costs. We understand that your resources are finite, and every dollar saved on pharmacy can be reinvested in resident care or staff or programming. Our cost management efforts are ongoing – it’s not a one-time audit, but a continual process of monitoring and refining to capture new savings opportunities as therapies and prices evolve. With us by your side, you can feel confident that you’re providing the medications residents need in the most cost-effective way possible, which is a win-win for everyone involved.