Financial_Impacts_and_Constraints

Financial Impacts and Constraints Imagine the world without hospitals. Additionally, imagine the world without medicine. The world would not be the same because people will die at a very young age. Medicine has kept many people healthy and has saved many lives. A close and happy relationship needed between pharmacies and hospitals. Medicine is very important in today’s society. Pharmacies help hospitals function daily so it is instrumental to its success; however, it can cause financial constraints for hospitals. Effects of a pharmacy Pharmacies make sure hospitals function on a daily. Pharmacy is a facility that exists to fill and dispense drugs and medications that prescribe by physicians or other caregivers (Langabeer, 2008). Pharmacists want to ensure they know what hospitals need and want so they are active participants in the health delivery process. Furthermore, pharmacists can help to improve the hospital’s efficacy, safety, and quality of medications on patient outcomes. The pharmacists can witness firsthand how the medicine affect people and make the proper changes needed to make the medication better. The effects of the pharmacies are clinical, organizational, operational, and financial. Pharmacies are often one of the largest and most profitable departments in a hospital (Langabeer, 2008). Therefore, pharmacies have a huge effect on the hospitals and management will monitor this department closely. One of the biggest effects it has on hospitals is the money. The pharmacy contributes the hospital’s bottom line. Despite if the hospital is big or small; it could hinder the growth of the hospital if not ran efficiently. The safety of the patient is the primary concern for health care facilities. The drugs have strict rules and regulations it has to follow so it could be on the market. The Food and Drug Administration regulate all drugs and compounding is not allowed. FDA states that traditional compounding typically occurs when an FDA-approved drug is unavailable or when a licensed health care professional determines that an FDA-approved drug is not appropriate for a patient’s medical need (Mullarkey, 2009). Pharmacies are required to be staffed and managed primarily by pharmacists because state and national boards require all dispensing of drugs and medications to be performed by registered pharmacists licensed in that state (Langabeer, 2008). It is very important because patients will have the correct drugs or medications are given to the nurse or physician. This ensures the health of the patient. Collaboration with other health care providers is important. Collaborations allow pharmacy to understand what is needed of them. Pharmacy practice has grown in hospitals of all sizes and types. However, hospitals and health systems have yet to realize the full value of pharmacy services. To some degree, that situation will continue unless pharmacists tell their institutions what they should be looking for and expecting in terms of clinical results (Glazier and Malen, 2007). Each healthcare provider is different yet the pharmacists learn from each other. Pharmacists have to treat each healthcare provider differently because the state of health of the patients is different. Collaboration gives an insight of demands needed from each healthcare provider. With collaboration, pharmacists have to satisfy demand at high quality and service. Each healthcare provider has different demands so it is important pharmacists to understand this. Hospitals and other health care providers are satisfied when the medication or drugs are in stock. Quality and service are the main goals of the pharmacy. Hospitals want to have the medication in a speedy time. Possible Revenue Constraints The pharmacy is the most profitable department in the hospital. Therefore, the pharmacy is followed closely by management. Management provides extra attention to this department because the importance of it. Like any other business, the pharmacy has it ups and downs. If business is good, the hospital is thriving. If business is bad, the hospital would have major concerns. The hospital or health care facility needs the pharmacy to maintain a level beneficial so it can profit from it. Management has to monitor the down times or the cycle times of services. A cycle time is the period required to complete one cycle of an operation; or to complete a function, job, or task from start to finish (business dictionary, 2010). The cycle time is a good indication if the pharmacy is efficient or not. Usually, the more efficient a department is, the more money the department could make. If the cycle of time is slow, it set off a chain of reaction. If the pharmacy is slow, the drugs or medications needed are not on time. Furthermore, physicians or nurses have to wait around until they obtain what they needed that set them back. Another financial constraint of a pharmacy could be cost per dose. If the cost per dose is high, it is taking money away from the pharmacy as well as the hospital. Pharmacies want to keep this count low so it can capitalize or profit the extra money. The lower the amount for cost per dose means the labor costs are low or reduced. If labor costs are high, it will put the pharmacy and the hospital in serious financial constraints. The bottom line would be affected so the sacrifices will have to be made. Many people lives are in the hands of pharmacists. Accuracy is just as important as efficiency in the pharmacy department. One of the responsibilities is to fill the patient’s prescriptions. Not only pharmacists have to ensure the prescriptions are filled quickly, they have to be correct. If not filled correctly, the hospital would face many violations and steep fines. Important, the patient’s life is at stake. The incorrect prescription could lead to worse health or even death. If something like this occurs, the hospital will lose money, and could set the hospital back for years. Additionally, the hospital will lose ruin its reputation, and some of it patients. Informed Decision Despite all financial statements are different, all are equally important. The balance sheet, cash flow statement, and income statement play a role in the decisions of the hospital. The balance sheet is a good reference to have, but it is not necessary to have in this situation. The condition or position is important, but it does not affect the final decision. The cash flow statement should be the second statement management should review. The cash flow statement allows management to review the pharmacy daily transactions. Management could review where most of the department money comes from. Management could capitalize and market it drugs more. Also management could review where it is losing money. The income statement is the most important statement to make the best informed decisions. The income statements allow management compare trends from year to year. Spotting trends are very helpful because management could make the proper adjustments to profit for that particular time frame or quarter. If the hospital makes the proper adjustments, the hospital can save thousands or even millions. Hospitals and pharmacies have the same goal or objective. The goal of hospitals and pharmacies are to aid people with their health. The pharmacy is the most profitable department in the hospital. A close eye needs to be kept on this department besides it affects the bottom line. The pharmacy is one of the most important department in the hospital and vital to the organization’s success. The effects of the pharmacy can be easily hinder the organization if handled incorrectly. The cycle time has to be low to be successful. The pharmacy is producing more when the cycle time is low. Strict laws have to be followed by pharmacies. Control drugs have been released prior to use. Only pharmacists are allowed to distribute drugs that ensure safety for the patients. Collaboration would only enhance what the demands are of each health care provider. The different kind of medication will vary between the health care providers. With insight of this information, pharmacists can better service the health care providers. Financially statements must be reviewed daily and quarterly. Financial statements allow management to compare trends from year to year. Management could make adjustments to improve revenue and processes for the hospital and pharmacy. References Langabeer, J. R. (2008). Health care operations management: A quantitative approach to business and logistics. Sudbury, MA: Jones and Bartlett Publishers, Inc. Business Dictionary . (2011). Cycle Time. Retrieved from http://www.businessdictionary.com/definition/cycle-time.html Glazier, H., & Malen, J. (2007). Pharmacy staffing and productivity. American Journal Of Health-System Pharmacy: AJHP: Official Journal Of The American Society Of Health-System Pharmacists, 64(22), 2320. Retrieved from EBSCOhost. Mullarkey, T. (2009). Pharmacy compounding of high-risk level products and patient safety. American Journal Of Health-System Pharmacy: AJHP: Official Journal Of The American Society Of Health-System Pharmacists, 66(17 Suppl 5), S4-S13. Retrieved from EBSCOhost