1 - 80% of the active ingredients in US drug products are manufactured overseas - “Big Three” full service wholesalers now control 90-95% o Cardinal o Mckesson o Amerisource Bergen - Specialty pharmaceuticals account for 20% of the market (in $$) - Distribution centers are operated by retailers, hospital consortia - 4 issues with drug distribution o Drug shortages o Counterfeiting o Importation o Reimportation 2 - Surescript – countries largest e-prescribing network, a network of networks - Surescripts formed by a cooperative effort of o NACDS o NCPA o PBMs o Mail Service Pharmacies - Surescript does NOT develop or sell software - Surescript works with IT vendors - Prescribers, patients pay nothing - 24% of patient visits in 2010 involved an electronically-delivered medication history. - 2010 – 25% of new prescriptions sent electronically - Solo physicians – 30% - Practice with 2-10 – 42% - Practice with >100 lag- 22% - 2007 e-prescribing legal in all states - 2010 DEA permits e-prescribing of controlled drugs - Medicare Part D requires e-prescribing capability3 - Profitability ratios – way to measure the success of a company o Gross Profit Margin – ability to generate profits o Net Profit Margin – fraction of net profit for every dollar of sales o Return on Assets – ability to generate profits using assets o Return on Equity – profits from funds provided by owners or investors - Liquidity ratios – short term financial obligations o Current Ratio – measure of the ability to pay off “short-term” debt  Ratio of 2:1 is considered good o Quick Ratio (Acid Test Ratio) – looks at the most liquid of the current assets to determine ability to reduce short term debt quickly - Turnover ratios – efficiency with which a company uses its assets o Inventory Turnover Ratios – measure the efficiency of using the assets o Receivables Turnover Ratios – how quickly receivables are turned into cash4 - Types of Culture o Pathologic – whistle blowers shot, failure is punished or concealed, no new ideas are allowed o Bureaucratic – messengers listened to if they arrive, new ideas present problems o Generative – trained and rewarded, far-reaching reform o Punitive Culture  Focused on the person  Perfection expected  Severity of discipline based on severity of error  Emotionally satisfying  Fear of reporting, no learning, no improvements o Blame-Free Culture  Amnesty for all  Acknowledges human fallibility  Perfection viewed as impossible  Error is viewed as weakness of the SYSTEM  Too lax o Just Culture  Balances the system and the individual  Shared accountability  Challenging to implement and maintain - Three Manageable Behaviors o Human Error  Inadvertent action  Slip, lapse, mistake o At-Risk Behavior (DRIFT)  Behavioral choice; Human nature  Risk is not recognized or is mistakenly believed to be justified o Reckless Behaviour  Behavioral choice  Conscious disregard towards a substantial and unjustifiable risk - Risk = Severity x Likelihood - Safety ~ Reasonableness of Risk5 - 45% of patients DO NOT receive care in accordance with best practice 6 - Analytic thinking comes to us naturally - Has taught us about HOW the world works - You cannot understand the BEHAVIOR of a system by taking it apart - System Thinking – method for understanding the behavior of a system without taking it apart - System is defined by the INTERACTION of its parts 7 8 - Insurable Risk – unpredictable for the individual, but predictable for the group o Occurrences are independent o No moral hazard o Substantial $$ loss is possible - For stated coinsurance to apply to a loss, defined level of coverage is required. - Liability and casualty insurance – protection against loss from negligence - Types of Commercial insurance o Property o Liability and casualty o Workers’ comp o Business interruption o Key person - Personal insurance o Home, auto, personal property o Liability o Professional liability o Life o Disability o Nursing home 9 - Strategic thinking assesses o SWOT – Strengths, Weaknesses, Opportunities, Threats- Strategy represents HOW - Intuitive thinkers – natural strategic thinkers - Analytical thinkers – natural strategic planners - Pay attention to many things simultaneously; everything affects everything else - Pay attention to what you CANNOT control 10 - 5 information technology domains o Store, retrieve, and analyze health information o Optimize the medication prescribing/ordering process o Aid in clinical decision making o Automate the medication delivery process o Facilitate pharmacy management - Terminologies and standards for healthcare informatics - 5 pharmacy informatics applications - ICD 9 – assigning codes to diagnoses - ICD 10 – codes for diseases, signs and symptoms, abnormal findings, complaints, social circumstances, and external causes of injury or disease. - HL7 – health level 7 – standards for exchange, integration, sharing, and retrival of electronic health information. - ISO – international organization for standardization – ensure that products and services are safe, reliable and of good quality o ISO 31000 Risk management o ISO 9000 – Quality management - Device classification FDA o Class I – lowest risk o Class III – greatest risk (support or sustain human