When establishing a progressive specialty pharmacy service line, there are many factors to consider, financial success being primary among them. In order to accurately capture the financial performance of a health care business, the development and evaluation of financial key performance indicators (fKPIs) is paramount in alignment with patient care.
Specialty pharmacy is a particularly metric-heavy, compliance-driven market segment. A KPI is a metric that conveys the success (performance) of a service or operation in reaching established objectives. In specialty pharmacy, KPIs are used to monitor the financial and clinical health of the program and drive change within the program as it grows. All KPIs should be SMART goals (Specific, Measurable, Attainable, Relevant, and Time-based) and should be bundled to measure performance across all areas of the business: financial, operational, and clinical. KPIs should be monitored at routine intervals, and the interval should be designed to allow leadership to make changes necessary to continually improve the performance of the specialty pharmacy.
To align specialty pharmacy services with the strategic financial priorities of the organization, those in health-system pharmacy leadership may utilize fKPIs. These properly vetted fKPIs will ensure alignment with external forces, including accrediting bodies, payors, and manufacturers. Additionally, they will assist in monitoring growth within the specialty pharmacy business and its service lines. Significant dollars invested by the health care entity are required to upfit and sustain a new specialty pharmacy. It is the intent of the health care enterprise that the initial capital outlay translates into a positive return on investment with sufficient cash inflows to sustain growth into new service lines. Given the infrastructure costs and financial solvency of the program, pharmacist leaders should be proactive in developing fKPIs as they plan and implement a new pharmacy book of business.
Once the identified fKPIs are crafted by the specialty pharmacy leaders and discussed amongst key executive leaders, the metrics are used to support and communicate the success and value of the specialty pharmacy. These fKPIs should be developed with all stakeholders considered, having the organization’s strategic priorities in mind and, to the extent appropriate for the organization’s culture, communicated to all staff, including those within and outside of the pharmacy service line.1
Develop fKPIs with evidence-based decision making; fKPIs should aid in the development of a decision-making culture that relies on actual and forecasted clinical business data. Other KPIs require significant consideration with the specialty pharmacy line including clinical and quality metrics. Clinical and quality metrics very often tie into significant financial savings in all areas of pharmacy and are the most important surrogate measures for the impact on patient care. Demonstrating the value of these clinical and quality surrogate KPIs to senior leadership is critical to establish best practice specialty pharmacy services.2
KPI development will be dependent on your organization’s strategy and goals. Those fKPIs that have been found to be integral to communicating the financial value and success of programs and teams are illustrated in TABLE 1. Of course, given your data sources and enterprise priorities, not all of these data points will be collectable or applicable. Broad and routine dissemination of these indicators will serve to keep stakeholders interested in the program’s health and trajectory. It is recommended to start with those indicators most critical to the organization’s business, opting to monitor a few at the outset.
Discussions with executive leadership will elucidate which fKPIs hold leadership values and how they interpret their impact. This important feedback will allow you to modify your approach and further refine those most essential fKPIs. Note that a thorough preview of all communications, especially anything financially related that leaves the department, must be free of error and ambiguity. Inevitably, due to myriad circumstances, fKPIs may require a correction or further refinement due to an error or omission. Should this occur, it must be communicated promptly and with full transparency, with all source documents updated accordingly.
Communicating Complex Data
As the pharmacy leadership team builds-out essential fKPIs, routine, effective, and efficient communication with the appropriate display of fKPIs is paramount. Regular communication of fKPIs should include key observations for the specified duration. These observations may include favorable or unfavorable performance observations and any relevant insights that can further help add context to the changes observed. This information can also serve as an “executive summary” for all stakeholders.
In addition to the brief executive summary synopsis, provide readers with an attached deep dive, complete with visual analytics explaining the key observations and trends. Illustrative examples that leverage the organization’s business intelligence tools can demonstrate potential options as you build or refine your specialty pharmacy fKPI strategy. Finally, include the sources and business line assumptions from which the data is derived; this information typically appears on the final page of the summary. These assumptions will assist in providing disclosures and other relevant information while also ensuring data integrity. The aim of the executive summary and your detailed analysis is to proactively communicate service line financial values and trends, as well as provide anticipatory answers to questions, thus building sustainable trust with the readership.3 (See TABLES 2, 3 and 4 for sample display options.)
Tips for Developing fKPIs
The most successful organizations develop fKPIs with culture in mind. Important not only for specialty pharmacy, fKPIs enable the ability to connect what drives business decisions with staff and processes. Engaging and orienting workers around fKPIs is a way to improve employee engagement and enroll the entire team toward the goals of the organization. Revisiting the fKPIs in huddles, staff meetings, and empowering staff to own certain parts of the meeting, the fKPIs are an effective way to meet organizational goals, engage staff, and improve patient care.4
In addition to engaging employees, fKPIs should also have a patient focus. Specialty pharmacy is a very competitive market segment, and as in any well-run business, keeping the patient at the center of all decision making is crucial and will differentiate any organization from the competition. fKPIs can provide direct quality care throughout the continuum of care from provider visit to medication in hand, further highlighting the importance of tying fKPIs to clinical and quality performance.4
As we face unprecedented challenges that may extend for the foreseeable future, impact organizations with progressive pharmacy leaders must continue to communicate the value and essentialism of each of their pharmacy service lines, including specialty pharmacy. As the positive trajectory of the specialty pharmacy business continues, its financial value is best communicated and illustrated by strategic and quantifiable fKPIs.
Robert P. Granko, PharmD, MBA, FASHP, is the director, field pharmacy services, for Premier, Inc, and adjunct associate professor, division of practice advancement and clinical education, UNC Eshelman School of Pharmacy, in Chapel Hill, North Carolina.
Dan Green, CPA, MAC, is a senior financial analyst for pharmacy services at Cone Health in Greensboro, North Carolina.
Molly Schneider, PharmD, MHA, CSP, is director, retail and specialty pharmacy services, at Cone Health.
Nicholas P. Gazda, PharmD, MS, BCPS, CSP, is the assistant director, specialty pharmacy services, at Cone Health.
Adam S. Wolfe, PharmD, MS, BCPS, is the community and specialty pharmacy operations manager at Truman Medical Centers at the University Health Specialty Pharmacy in Kansas City, Missouri.