The Impact of Pharmaceutical Expenses and the Use of Flexible Budgets at The Johns Hopkins Hospital
Abstract
Pharmaceutical expenses are dramatically increasing and must be adequately forecasted, planned, and controlled. Hospitals must invest in analytical methods that identify changing patterns in drug utilization and that identify those units that utilize appropriate resources as models of healthcare delivery. A flexible budget model for pharmaceutical expenses and the underlying cost analysis represents one such opportunity for hospitals to adequately manage pharmaceutical budgets. The purpose of this study was to evaluate the pharmaceutical costs, Length of Stay (LOS), and the All Patient Refined-Diagnostic Related Group Severity Index (APRSI) for the Functional Units at the Johns Hopkins Hospital (JHH) for the development of a justifiable flexible budget model for the pharmaceutical budget. This was accomplished by applying traditional multivariate techniques to perform a quantitative analysis of the hospital pharmaceutical costs. Specifically, four areas were examined: LOS, APRSI, pharmaceutical costs by Functional Unit, and by Major Diagnostic Group. The results of these techniques and the implications for further use in a flexible budget model at JHH are discussed. The research showed that although LOS and APRSI provided a statistically significant explanation of variance in pharmaceutical costs, the correlation was not sufficient to justify using these measures in a flexible budget model.
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 01, 1999
- Accession Number
- ADA408802
Entities
Organizations
- Academy of Health Sciences