New Procedures for Navy Pharmacy Save More than $35 Million, Improve Care

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By Annette M. Boyle

Capt. Edward C. Norton, MSC, pharmacy specialty leader for U.S. Navy Bureau of Medicine and Surgery

FALLS CHURCH, VA — After saving $22 million in Phase One, the Navy Pharmacy Financial Improvement Program has expanded from establishing target inventory levels to refining stock levels based on demand and availability — resulting in another $13.5 million in savings.

The Navy spends about $500 million each year on inventory for direct care.

Earlier this year, the program produced a new Standard Operating Procedures manual which codified best clinical practices across all Navy pharmacies and produced additional benefits for pharmacy staff and patients.

“Initially, we asked sites to set inventory levels they thought they needed, and we evaluated how well they moved toward their own goal. After the first year, they gained an understanding of the interplay of inventory levels, finances and patient needs and we saw an additional 29% reduction in inventory,” said Capt. Edward C. Norton, MSC, pharmacy specialty leader for U.S. Navy Bureau of Medicine and Surgery.

Pharmacies in the continental United States now keep less than a 30-day supply of medications on hand, while those overseas maintain an inventory of up to 45 days, to allow for additional shipping time.

“These numbers are averages, as pharmacies will have just a few days on hand for fast moving items and have well in excess of 30 to 45 days of infrequently used but critical life-saving medications,” Norton told U.S. Medicine.

Pharmacies that run short of medications generally can place an order by 4 p.m. and expect it to be shipped the following day. In addition, each pharmacy can receive as many as three drop shipments per month, enabling them to receive drugs and supplies later the same day.

Hospital Corpsman 2nd Class Rachel Cruz-Bowser inventories prescription medicine in the pharmacy at Naval Station Everett Branch Medical Clinic in Everett, WA. The clinic provides health services to military personnel, DOD civilians and their dependents residing near Naval Station Everett. U.S. Navy photo by Mass Communication Specialist 2nd Class Jeffrey Willadsen.

Branding Navy Medicine

The Pharmacy Financial Improvement program proved so effective in managing inventory to meet critical needs while reducing costs that program leadership set their sights on broader processes — standardizing key clinical processes.

The team first reviewed processes at pharmacies across Navy facilities and identified best practices.

“We thought that if all pharmacies followed the best practices, it would improve patient experience and safety,” Norton said. “We have a mobile patient population, and we want to make it as seamless as possible for our people to move between facilities. We’re branding Navy medicine much like McDonald’s. It’s about creating expectations of experience.”

Previously, Navy policy stated that “Navy pharmacies may transfer prescriptions from other sites,” but some chose not to, said Norton. So if, for example, a patient moved from California to Maryland, the California pharmacy might have said there was no problem with transferring prescriptions, yet the patient might arrive in Maryland to find that the pharmacy there did not accept transfers. The new standards mandate that all pharmacies accept prescription transfers.

Patients also might have encountered difficulty picking up prescriptions because of differences in how pharmacists used the DRX [dispensing] system.

“Some pharmacists saw the system as an administrative program and checked as completed when the prescription was filled, not when it was picked up. If the patient actually went elsewhere to pick up the medications, the system would show that they were already dispensed and the patient couldn’t get them,” Norton noted. The SOP clarified when the record should be marked as complete, giving patients more options for pick-up.

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