Healthcare expenditures create “silo-vision”
Institutional costs are always top of mind for healthcare administrators and pose a constant challenge. While non-labor expenditures increased approximately 24 percent in recent years, labor costs are the largest component of healthcare expenditures. 1 Out of a total 44 percent increase in healthcare costs between 2001 and 2003, labor costs accounted for the majority at 38 percent. 1 Avenues where hospitals may use their labor resources most effectively are key in this era of cost sensitivity.
Pharmaceutical Expenditures: A Broader Look
There are barriers to streamlining resource utility, one of which is a phenomenon best characterized as “silo-vision,” or a fixation by one department on achieving certain cost savings at the expense of greater cost savings to the overall institution. In fewer places is this compartmentalization clearer than in hospital medication distribution.
No single department accounts for the total cost of medication delivery.2 While the pharmacy department must assume the cost of medication acquisition and storage, other costs are taken up by other department budgets - such as nursing and respiratory therapy - for administration, monitoring and safety. Several departments are responsible for the medication delivery process as a whole, and cost becomes the sum of all the resources expended when a product or service reaches its end-user.2,3 However, a drug’s acquisition costs can often trump other savings accrued further down the healthcare pathway during a patient’s stay. It may seem appropriate to blame the pharmacy department; however, departmental priorities often reflect those of the hospital administration. Correction of this narrow focus can only be accomplished when higher level administration adopts a broader, pharmacoeconomic perspective regarding pharmaceuticals and other resources.
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