Kuldip Patel Explains the Value of Insourcing

Kuldip Patel’s value analysis team has helped Duke University Health System save millions of dollars by insourcing certain medications

While pursuing residency training, Kuldip Patel came across a report from the Institute of Medicine that changed his life—and the lives of countless patients. The aspiring pharmacist learned of the frequency of medication errors, and knew he’d not only found the right career path, but that he’d need to take steps to make a big difference. “I knew I needed to help hospitals and health systems get better at reducing errors,” he says. But rather than a lone maverick revolutionizing the field, Patel knew the best way to make change would be for the industry to constantly learn, share, and improve together. “Collaboration is extremely important,” he says. “If you standardize and limit the number of variations and focus on the customer, you decrease the possibility of medication errors.”

An important early step of those efforts for Patel came at Hospital Corporation of America, where he acted as assistant director of pharmacy. The facilities operator was an early adopter of pharmacy technologies such as bar-coded medication administration and computerized order entry. Patel was able to get involved and gain expertise in these innovations on the ground floor, which led to a role as pharmacy operations coordinator at Orlando Health. The Florida facility hired him specifically for his tech insights, as it was only just embarking on implementing EHRs and other technologies. Sharing knowledge was an essential part of his career goal, so the move made perfect sense.

Kuldip Patel, Duke University Health System

After four years at Orlando Health, Patel found the opportunity to make an even bigger impact on patients at Duke University Health System (DUHS). Founded in 1998, the system comprises three hospitals, as well as physician practices, home hospice care, and other support services spread across North Carolina. As associate chief pharmacy officer, Patel has taken every measure possible to standardize, ensure quality, and make safe the system’s pharmacy procedures—both by collaborating internally and by looking externally to positions on boards and committees across the country.

One prominent project was the launch of a value analysis team at DUHS. The team is composed of the system’s pharmacy directors, as well as leaders from contracting and procurement, and other medication stewardship managers. Upon its founding, the team set a benchmark against other health systems, and found that DUHS had a significant opportunity to help manage drug expenses, and in turn offer better care to patients. This involved, in part, identifying advantageous contracts with drug manufacturers and using those advantages as leverage to get manufacturers to bid against each other for the system’s business. By working together across the entire organization, the team was also able to peg formulary items that were being purchased consistently across the system and determine the best costs and how best to utilize supplies. “That’s really ultimately what cost savings is all about: bringing value in using drugs the way they have been studied and intended to be used,” Patel explains.

As drug costs continue to rise, finding ways to manage that expense and utilize savings to better serve patients can make a big difference for an organization. Since the team identified the places they could manage costs and implemented their plan, DUHS drug expenses have remained flat, a major achievement for an organization of its size.

That cost stabilization comes, in part, from the decision to insource certain drugs that had previously been purchased from manufacturers. “We purchased a lot of drugs that were compounded, and when you purchase premade products, specifically sterile preparations, there is a premium to that cost,” Patel says. But although DUHS had the facilities and expertise to produce the sterile preparations themselves, it needed to update infrastructure and add resources such as additional staff to make the move feasible. The potential savings long-term, though, were deemed more than sufficient to justify the investment. “We were able to efficiently bring thousands of sterile preparations that we used to purchase from the outside compounding pharmacies and prepare them in-house,” Patel explains.

Not only have these efforts gone a long way toward improving outcomes for patients, they have also made a big impact on reducing drug costs for the health system. In fact, the team’s focus program alone has saved the Duke University Health System more than  $6.5 million in just five years.

Patel’s highly collaborative leadership style has been a key driver throughout all of these efforts. “You have to maintain laser focus on being consistent and standardized, which can be difficult across a system with multiple hospitals,” he says. “Sometimes compromises had to be made, and at other times we had to make executive decisions to determine a single best option, rather than having three different ways of delivering a particular medication.”

Following consistent standards throughout the entire system became even more important at the onset of the drug insourcing program. The focus in the past had been following chapters 797 and 800 of the United States Pharmacopeia’s guidelines, which govern sterile preparations and hazardous medications (such as chemotherapy), respectively. As chair of the sterile preparations oversight committee, Patel can help ensure that the pharmacy staff, nursing staff, providers, and other team members coming into contact with the insourced drugs will be doing so by the book in order to maintain safety for patients and the providers themselves. “My team makes sure we’re monitoring and documenting all that on a consistent basis to remain compliant, and it also maintains that documentation electronically,” he says. “We have a deep interest in continuing to build that service line, and we’re investing additional funds to build the necessary infrastructure to expand the program to become a registered 503B facility. We would get inspected by the FDA, and we would need to comply with CGMP (current good manufacturing practices) standards.”

Maintaining high quality and safety standards, of course, gets back to the inspiration that started Patel on the course to his role in the first place: sharing ideas to make a difference in the lives of patients. “I learn so much from others facing similar challenges. Learning from others gives me the ability to know what I don’t know,” Patel says. “The network helps build knowledge and covers gaps I might have, and at the same time, I get to share some of my experiences with others. It’s a reciprocal relationship that drives the profession and drives the practice.”

Photo by Jared Lazarus/Duke