Pharmaceutical expenses at Boston Children’s Hospital have risen fourfold during the last five years, a study has found.
The analysis of expenses was conducted by researchers in the Department of Anesthesiology, Perioperative and Pain Medicine at Boston Children’s Hospital. Departmental expenses were analyzed from April 1, 2011 to March 31, 2016, and were found to have increased from $750,000 per year to nearly $3.2 million. During the same period, the quantity of units ordered increased about twofold.
“Our first instinct was that the patient population was growing, our kids were sicker, we were using and buying more [pharmaceuticals], therefore expenses are going up,” said Amanda Baier, MPH, program manager at Boston Children’s Hospital, and the lead author of the study. “We very quickly learned that was not the case.”
Ms. Baier and her colleagues stratified their expenses into categories in an effort to find patterns related to specific types of drugs (Table). For each drug category, the amount spent, number of units and cost per unit were calculated for each year. Additionally, pharmaceutical regulations and policies which may have affected pricing and availability were searched.
|Table. Drug Categories Surveyed in Cost Analysis|
“We wanted to see whether there were policies, drug shortages or regulatory issues contributing to these increases,” Ms. Baier said.
The researchers found significant cost-per-unit increases in many surveyed categories, including 15,025% for vasodilators, 598% for beta blockers, 384% for local anesthetics, 305% for paralytics and 243% for opioid analgesics. Particularly large increases were seen in the 2014-2015 time period.
“Around this time,” Ms. Baier said, “a large pharmaceutical company purchased one of the vasodilators that we use. The day they purchased it, they jacked the price over 200%. That type of action contributes to the increases seen here.”
Policy, Regulatory Changes Also Factors
Additional contributors were policy changes, such as a Drug Enforcement Administration schedule change for hydrocodone products—from Schedule III to II—and a neostigmine shortage. However, the majority of increases seem to be due to pharmaceutical company pricing. “The pharmaceutical industry really has their thumb on us in terms of pricing,” Ms. Baier noted. “It’s possible [these increases] are caused primarily by pharma simply charging what they want.”
According to co-author Izabela Leahy, MS, BSN, RN, executive director of the Department of Anesthesiology, Perioperative and Pain Medicine at Boston Children’s Hospital, this information is an important aspect of continued discussions regarding the cost of medical care. “I started looking at pharmaceutical expenses to begin the discussion about the rising cost of health care and health care reforms. Lowering the cost of care and improving patient satisfaction and outcomes are critical components of the Affordable Care Act and the Triple Aim Reform.”
She added, “While hospitals are moving away from fee-for-service reimbursement and toward flat-rate bundled payments, physicians and nurses are asked to increase their productivity. Yet, there is very little focus on controlling the cost of pharmaceutical expenses. This fixed cost that continues to increase may lead to less efficient and potentially less safe care practices.”
Ms. Leahy, who originally presented the findings at the 70th PostGraduate Assembly in Anesthesiology (abstract P-9064), also said, “Health care reform should include all aspects of care, including a close evaluation of the cost of pharmaceutical expenses by challenging pharmaceutical companies and government regulatory agencies to lower the cost of medications.”