Drug shortages cost hospitals just under $360m annually in labor expenses

June 26, 2019

Drug shortages are challenging pharmacy teams in hospitals across the nation, and according to new survey results released from Vizient, Inc., on average, hospitals in the U.S. dedicate more than 8.6 million hours of additional labor hours annually to manage drug shortages. The financial impact adds up to just under $360 million annually in labor costs for time spent seeking supply and implementing mitigation strategies that enable continuity of patient care.

The survey, “Drug shortages and labor costs: Measuring the hidden costs of drug shortages on U.S. hospitals,” also showed 100 percent of responding facilities have experienced shortages, with nearly two-thirds of respondents reporting that they had managed at least 20 shortages in the six-month period from July through December 2018. 

Controlled substances, local anesthetics, antibiotics, electrolytes and emergency injectables such as “crash cart” drugs continue to be the most common drug categories where shortages have had the most impact on hospital, revealed the survey results. Additionally, 38 percent of respondents reported one or more medication errors directly related to a drug shortage in that same time period. 

“We know that, looking just at additional labor costs, the impact to U.S. hospitals annually is at least $360 million,” said Dan Kistner, Senior Vice President, pharmacy solutions for Vizient, in the statement. “When you also add the cost of more expensive alternative therapies, direct purchases outside the hospital’s traditional channels, medication errors and cancelled or delayed medical procedures, we believe the actual cost of drug shortages to hospitals is significantly higher.” 

Labor expenses related to managing shortages, both inside and outside the pharmacy, are creating a substantial burden on talent and resources for hospitals. The survey respondents, which included 365 Vizient members from acute and non-acute care facilities including health systems, academic medical centers, self-governed children’s hospital, behavioral facilities, long-term care facilities, specialty hospitals and ambulatory care facilities, showed that 44 percent of hospitals were incurring staff overtime expenses and 46 percent were managing the additional time by redistributing the workload. 

Kistner also connected with Healthcare Purchasing News to share some solutions and advice for handling drug shortage issues. “To lessen the impact of shortages, providers should implement one or more task forces or committees dedicated to addressing drug shortages and allocations,” Kistner advised. “These groups should meet weekly, and in some situations even daily, to assess current shortages, the hospital’s inventory levels and, most importantly, patient needs. It is within that group that decisions regarding allocation should be made to make sure patients most in need have the product. This process also serves to alert other health care partners, such as nurses and physician leaders, to the shortages so they are aware when assessing patients and prescribing treatment.”

Kistner says the Vizient’s Drug Shortage Task Force is intently focused on developing new and creative solutions for either solving drug shortages or helping its members manage the situation as best as possible. “For example, Novaplus, our private label program, provides members with the highest fill rates on over 760 NDCs due to the commitment and predictability it gives the supplier community,” he said. “Meanwhile our robust data and analytics platform helps provide insights to organizations like the University of Utah who provide daily alerts to all providers on the latest drug shortages through their collaboration with ASHP. We also have dedicated pharmacy resources that help members find clinical pathways to mitigate shortages of complex or crucial medications.”