STATEMENT OF
WILLIAM A. CONTE
DIRECTOR
EDITH NOURSE ROGERS MEMORIAL VETERANS ADMINISTRATION
MEDICAL CENTER, BEDFORD, MASSACHUSSETTS
BEFORE THE
COMMITTEE ON GOVERNMENT REFORM,
SUBCOMMITTEE ON NATIONAL SECURITY, VETERANS AFFAIRS AND
INTERNATIONAL RELATIONS
UNITED STATES HOUSE OF REPRESENTATIVES
BOSTON, MASSACHUSETTS

July 22, 2002

Mr. Chairman and Members of the Committee:

I want to thank you for the opportunity to testify on lessons learned by VA in providing effective and efficient management of pharmaceuticals. A key component in providing these services has been the creation of Consolidated Mail Outpatient Pharmacies ( CMOPs) to provide timely, accurate and cost effective mail out prescription services. While Mr. Ogden highlights the entire Department's successes in the overall pharmaceutical management program, I would like to concentrate on the CMOP production concept and its ability to deliver these cost effective services to the veterans we serve.

First, I would like to explain the CMOP operation since these systems are quite unique and complex. A CMOP is a centralized operation utilizing assembly line techniques, robotics, and software interfaces and automated filling systems to produce an accurately filled prescription, within accepted pharmaceutical practices, packaged for delivery. Good management practices, including inventory management, quality assurance and accounting, are the core of the operation. Patient specific information is sent daily from the individual facilities or "host sites," to the CMOP via a software interface. The CMOP processes the request and mails the package containing the prescription(s) to the veteran. All labels and patient information reflect the host facility information, which makes the entire CMOP process transparent to the patient. It is as if the prescription were mailed from the host facility. One could view the operation as a vending service for the host facility. Information on cost, lot numbers, date of fill, etc. is electronically returned to the sending station upon completion of the order and placed in the patient's electronic medical record.

I would like to underscore a few critical elements that were addressed by VA over a period of time, which enabled this highly efficient CMOP network to become a reality and achieve its goals. They are as follows:

• Creation of a National Formulary system.

  For years VA Hospitals operated with local Pharmacy and Therapeutic Agents Committees. These committees reviewed and recommended for inclusion or deletion pharmaceutical items on the local formulary. A strong commitment to provide the appropriate drugs for use by the local Medical staff, with an emphasis on best value, was predominant in all VA Hospitals. In 1992, VA created a national utilization database of actual dispensing actions system-wide. This forms the basis for national contracts for high volume, high cost pharmaceuticals. The VA National Formulary system is a product of centralized coordination of grass roots process, which reflects evidenced-based medicine at the patient/provider interface.

  Computerized Pharmacy software

  VA, as judged by many, currently possesses the most sophisticated automated medical record system. This order entry system was created in various stages over the past 16 years. As various software packages, including a comprehensive pharmacy program, were implemented locally, it gave VA a significant advantage in terms of transferring data among facilities. Standardized software gave VA the opportunity to link facilities to the CMOP's. With minimal software development requirements, facilities were able to download mail prescription workload to the CMOPs in minutes. Currently, the Bedford CMOP downloads data from over 50 sites and returns the information (e.g. date filed, lot number, etc.) to the sending facility on a daily basis.

  National contracting of pharmaceuticals

  For years, VA has worked diligently to accumulate data and bid competitively for the best price on pharmaceutical items. This has enabled the system to remain cost effective in terms of cost per prescription. Use of generics, when efficacious, has been a contributing factor in holding down overall drug costs. Without this national approach VA would not be able to achieve these results. Use of these National contracts and a strong, clinically based National Formulary allows local medical centers to maximize resource utilization.

   

  Creation of the CMOP operation - Linking of technology to achieve a centralized production system that provides accurate and timely prescription filling and mailing.

  In the late 1980s, VA envisioned the automation of the mail out prescription services to be provided at each Medical Center as a centralized, highly automated prescription-filling operation. The first systems were at the Leavenworth, Los Angeles and Bedford facilities. These sites were experiments in linking production technology (assembly line techniques) with known automated counting devices. Within 2 years, the three sites reached their estimated capacities and, with innovative staff ideas, pushed the systems beyond estimated production potentials. Clearly, they were extremely cost efficient in terms of labor and timely in terms of service. Turnaround times were less than 2 days, and in many instances, were within 24 hours. These initial systems eventually exceeded production levels of 15,000 prescriptions per day. The national average CMOP dispensing cost (labor, light, heat, supplies, mailing etc) is approximately $2.15 per prescription. The newest systems at Hines, Leavenworth, Murfreesboro, and Charleston are now capable of producing over 60,000 prescriptions daily with a goal of over 80,000 daily. All CMOPs are Joint Commission on the Accreditation of Healthcare Organizations (JCAHO) accredited. Many have won numerous awards. The Bedford facility is the recipient of the VA's Scissors Award, the Vice President's Hammer Award, and the local Federal Executive Board Achievement Award.

  Prime vendor contract

  In 1993, the full conversion to a prime vendor concept enabled the facilities to reduce inventories size and manage more efficiently. CMOPs quickly utilized this advantage since large volumes of items were being turned over daily. The inventory turnover rate at the Bedford CMOP is 60 times a year. The prime vendor, over a period of time, has been able to accommodate the rapid growth, deliver items on a daily basis, automate the billing with the CMOP inventory system, and provide a significant discount for prompt payment. The just-in-time inventory system now used by the Bedford CMOP has reduced the need for large inventories, decreased out-dated and return items, and improved service to veterans due to the decreased numbers of out of stock situations.

  This is a brief description of the CMOP and the VA national system that contributes to the quality, cost effective pharmaceutical services we provide to our veteran users. I would like to highlight a few of the advantages of this coordinated system:

• Decrease in error rate: With the automated systems utilizing bar code technology, the human element of filling high volumes of prescriptions has been reduced significantly. Use of digitized pictures and bar code validation have reduced the error rates to almost an un-measurable level. Use of automated packaging equipment will reduce packaging errors. A full quality assurance monitoring system using statistical process control (SPC) is in place to identify and eliminate any errors at all CMOPs.
• Maximization of Pharmacist expertise at the facility level: As the burden of filling prescriptions is removed form the local facility, local Pharmacists have been able to provide clinical services in areas that demand their expertise. At the same time, their intervention at the point of service can provide additional cost savings by promoting and contributing rational prescribing practices.
• Maximization of production of staff: The use of automation to bring the product to the Pharmacist in the CMOPs (vs. utilizing professional staff to stock and retrieve products) has enabled CMOP professional productivity to exceed rates of 1,500 - 2,000 prescriptions daily.
• Improved service to the patient: In the past, mail out functions within local facilities were not automated and tended to fall behind in timely service to the patient. In the Northeast (to include VISN 1 and VISN 3), the Bedford CMOP has been able to accept and complete mail out workloads within 36 hours. This greatly reduces patient inquiries at the local level concerning status of the prescription refill request, maintains continuity of Medicare and enables numerous staff in the clinics to focus on hands-on care.
• Meeting demands for service: This coordinated system enables VA to meet the rapidly increasing demands for prescriptions due to the expansion of access via Community Based Outpatient Clinics.

In closing, I want to underscore that, through a nationally coordinated effort over the past 15 years, VA has been able to achieve:

• An extremely efficient system for the effective clinical review of pharmaceuticals,
• A distribution system of pharmaceuticals to patients in a timely, efficient and cost effective manner,
• A data system to gather information on the use of pharmaceuticals,
• A cost efficient method to nationally procure pharmaceuticals, and
• Developed the software necessary to effectively enable the coordination of these efforts.

I will be happy to respond to any questions from the Committee.

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