Developing Condition-Specific Hospice Formularies for Congestive Heart Failure and Depression Conditions and The Evaluation of Their Economic Impact

Abstract

With the increasing costs of providing pharmaceutical care, hospices in the U.S are burdened with the high costs of providing optimum healthcare. There is a need to implement cost-containment strategies such as drug formulary at hospices that will aid in curbing pharmacy-related costs. While most hospices do not have a formulary, there are some that have a preferred drug list of most commonly used drugs, however, they lack appropriate methodology for the purpose of including or excluding particular drug(s) on the list. The main objective of this study was to develop rational hospice drug formulary based on scientific methodology. The study also investigated the economic impact of the drug agents that were selected for the formulary. This study was conducted at a hospice center located in the rural township of Alabama State. Multi-Attribute Utility Theory (MAUT) methodology was employed to develop a rational hospice drug formulary. MAUT is a systematic drug selection method that assists the P&T committee in selecting appropriate drugs on the basis of assessing important drug attributes such as efficacy, safety, cost, and dosage-form related parameters. For each therapeutic drug class, members of the drug selection committee at the center ranked and weighted their preferences for different drug attributes that were considered most important for final drug selection process. The preference values were combined in mathematical formulas with the literature-based values that were obtained through systematic literature review process to yield total utility score values for individual drugs. Within each therapeutic class, final decisions to include particular drug on the formulary were made on the basis of total utility scores i.e. those drugs with highest total utility scores were selected for the formulary. The drug selection committee at the hospice successfully developed condition-specific drug formularies using MAUT methodology. For each condition, three categories of drug costs (i.e. total drug costs related to the condition; specific-drug costs; and other drug costs related to the condition) were computed and compared across pre and post-formulary groups. For each condition, all types of drug costs were found to be lower in the post-formulary group as compared to the pre-formulary groups, however, these were not found to be statistically significant at an alpha of 0.05 (except depressionspecific drug costs). Due to the contract price differentials in the pre and post-formulary periods, adjustments to the drug prices were made to the post-formulary drug prices. After adjusting for the price differentials, post hoc analysis for the formulary agents were conducted and drug costs incurred before and after the implementation of the formulary were compared. The analysis showed that on a per patient day level, about 8 cents was saved as a result of implementing depression formulary; and about 44 cents was saved as a result of implementing CHF formulary. Thus the study showed that, annually the hospice of EAMC could achieve an estimated cost savings of about $456.00 and about $1813.00 as a result of implementing depression and CHF formularies respectively.