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Hospital pharmacy decisions, cost containment, and the use of cost-effectiveness analysis

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  • Sloan, Frank A.
  • Whetten-Goldstein, Kathryn
  • Wilson, Alicia

Abstract

The key hypothesis of the study was that hospital pharmacies under the pressure of managed care would be more likely to adopt process innovations to assure less costly and more cost-effective provision of care. We conducted a survey of 103 hospitals and analyzed secondary data on cost and staffing. Compared to the size of the reduction in length of stay, changes in the way that a day of care is delivered appear to be minor, even in areas with substantial managed care share. The vast majority of hospitals surveyed had implemented some form of therapeutic interchange and generic substitution. Most hospitals used some drug utilization guidelines, but as of mid 1995 these were not yet important management tools for hospital pharmacies. To our knowledge, ours was the first survey to investigate the link between hospital formularies and use of cost-effectiveness analysis. At most cost-effectiveness was a minor tool in pharmaceutical decision making in hospitals at present. We could determine no differences in use of such analyses by managed care market share in the hospital's market share. One impediment to the use of cost-effectiveness studies was the lack of timeliness of studies. Other stated reasons for not using cost-effectiveness analysis more often were: lack of information on hospitalized patients and hence on the potential cost offsets accruing to the hospital; lack of independent sponsorship, and inadequate expertise in economic evaluation.

Suggested Citation

  • Sloan, Frank A. & Whetten-Goldstein, Kathryn & Wilson, Alicia, 1997. "Hospital pharmacy decisions, cost containment, and the use of cost-effectiveness analysis," Social Science & Medicine, Elsevier, vol. 45(4), pages 523-533, August.
  • Handle: RePEc:eee:socmed:v:45:y:1997:i:4:p:523-533
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    Citations

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    Cited by:

    1. Martin, Douglas K. & Hollenberg, Daniel & MacRae, Sue & Madden, Shannon & Singer, Peter, 2003. "Priority setting in a hospital drug formulary: a qualitative case study and evaluation," Health Policy, Elsevier, vol. 66(3), pages 295-303, December.
    2. Gregory Merlo & Katie Page & Julie Ratcliffe & Kate Halton & Nicholas Graves, 2015. "Bridging the Gap: Exploring the Barriers to Using Economic Evidence in Healthcare Decision Making and Strategies for Improving Uptake," Applied Health Economics and Health Policy, Springer, vol. 13(3), pages 303-309, June.
    3. Eddama, Oya & Coast, Joanna, 2008. "A systematic review of the use of economic evaluation in local decision-making," Health Policy, Elsevier, vol. 86(2-3), pages 129-141, May.
    4. Williams, Iestyn & Bryan, Stirling, 2007. "Understanding the limited impact of economic evaluation in health care resource allocation: A conceptual framework," Health Policy, Elsevier, vol. 80(1), pages 135-143, January.
    5. Vuorenkoski, Lauri & Toiviainen, Hanna & Hemminki, Elina, 2008. "Decision-making in priority setting for medicines--A review of empirical studies," Health Policy, Elsevier, vol. 86(1), pages 1-9, April.
    6. Lin, Shu-Jou & Jan, Kuan-An & Kao, Jen-Tse, 2011. "Colleague interactions and new drug prescribing behavior: The case of the initial prescription of antidepressants in Taiwanese medical centers," Social Science & Medicine, Elsevier, vol. 73(8), pages 1208-1213.
    7. Williams, Iestyn P. & Bryan, Stirling, 2007. "Cost-effectiveness analysis and formulary decision making in England: Findings from research," Social Science & Medicine, Elsevier, vol. 65(10), pages 2116-2129, November.
    8. Hasle-Pham, Elodie & Arnould, Benoit & Spath, Hans-Martin & Follet, Alain & Duru, Gerard & Marquis, Patrick, 2005. "Role of clinical, patient-reported outcome and medico-economic studies in the public hospital drug formulary decision-making process: results of a European survey," Health Policy, Elsevier, vol. 71(2), pages 205-212, February.

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