By: Phil Brummond, Dave Hager and Steve Rough
In a modern health system, previous publications on the minimum skills and competency areas required of a top pharmacy leader are incomplete. The most recent substantial work in this space was the High-Value Pharmacy Enterprise (HVPE) Project, published in AJHP in 2021. This paper outlined the following core competencies: emotional intelligence, continuous professional development, strategic planning, driving innovation, business acumen, professional organizational involvement, and mentorship. These are undoubtedly valuable in health system pharmacy leadership and in many other leadership roles across different industries. They are unlikely to change over time and were likely true 10 years ago.
Meanwhile, the health system environment is changing rapidly. While these historic skills are essential, they may not be sufficient to fulfill the high demands placed on current pharmacy executives. For example, one area of growing importance in terms of core competencies is ensuring continuous accountability for compliance. As we work with clients, we see that this maintenance work, particularly as health systems grow, is pushed down the priority list at the risk of patients and the career of the health system pharmacy leader. Some of these core competencies, like professional organizational involvement, are valuable within the profession, but can be detrimental to the top pharmacy executive’s standing within their health system. As Visante works with top health system pharmacy programs across the country, we’ve identified eight essential skills that are needed to meet the ever-changing needs of the health system pharmacy enterprise.
Mastery of healthcare finance complexities. While the HVPE describes general business acumen as an area of core competency, it references budgeting, reporting, business plan development, revenue cycle, project management, and strategic planning. Top health system pharmacy executives need to have a depth of knowledge far surpassing the level obtained in an MBA program. Instead, they need to understand where the money flows throughout the system – which entity is profiting at each step in the medication use process and what levers are available to favorably shift value back to the health system.
Another facet is the rapidly changing nature of health care finance – even a month in lapse of focus can have dire consequences to a health system. For example, in a given month you may encounter federal legislative changes on drug pricing (e.g. Inflation Reduction Act of 2022), new entries into the retail pharmacy space (e.g. CostPlus Drug Company, Amazon Pharmacy), actions by pharma in relation to 340B (e.g. ESP Data requirements), or changes within payer’s strategies to contain infusion spend (e.g. Cigna and Aetna oncology site of care restrictions). Constant vigilance and systems for staying up-to-date are essential. The ability to understand the value proposition in each of these to the main players in-market, and to take action strategically and proactively, are vital skills.
Tangible ideas for new pharmacy revenue streams, such as: optimizing the medical benefit pharmacy revenue cycle, specialty pharmacy, and home infusion. Given half of health systems have negative margins following the pandemic, health system senior leaders are relying on pharmacy departments to create new programs, services or strategies that bring in new hard dollars. Historically, negative margins have led to a focus on labor expense savings, but health system leaders are nervous, for now, to put pressure back on their workforces. How long this reluctance will last as the federal government’s pandemic financial support runs out will be highly variable.But make no mistake – either top pharmacy executives will have an arsenal of new revenue ideas or they will be asked to find labor expenses to play their part in shoring up health system finances.
Values that place the organization, not pharmacy, first. This is one of the most significant changes since the rise of the Chief Pharmacy Officer (CPO). The strategy behind the CPO’s elevation was that pharmacy would finally have the seat required to best advocate for pharmacy – and have a voice similar to other team members such as nurses and physicians. What has largely transpired instead is that the CPO is looked upon like other administrative or financial leaders similar to laboratory or supply chain. The expectation is not to be just an advocate for advancing the profession, but instead this is a three to five-year role to move the priorities of the organization forward, largely around new business ventures. If successful, the CPO gains additional areas of oversight and can even find themselves taking on additional responsibilities having a broader influence on organizational strategy. Building a 20-year leadership career by stabilizing and slowly progressing the pharmacy department is no longer desired by senior leaders at the top organizations.
Advanced negotiation skills and the ability to leverage them with external business entities (group purchasing organizations, wholesalers, pharma, automation vendors, technology companies, start-ups, etc.). The medication use process is ripe for disruption, and health care in general is seeing a growing number of new entries into the market. Given the exorbitant amount of money the US spends on health care, everyone is trying to solve health care’s problems. So new technologies and services are often targeted at health care, and top pharmacy executives will have as many partners outside of health system pharmacy as they have inside it.
Real innovation will likely come from these outside groups, as it has in every other industry. Leaders who have networks that will allow them early access to new services will provide a competitive advantage to their organizations. Again, senior health system leaders are not just looking for innovation that will advance pharmacy’s goals, but for solutions that will deliver results to patients more holistically. This will require a broad array of partnerships that may fundamentally change where top pharmacy executives spend their time. For example, the potential impacts of artificial intelligence (AI) on pharmacy is an area that has received a lot of talk but little action. A top pharmacy executive will need to have the right partnerships to make AI in pharmacy a reality. This will set a new standard for the profession, and potentially for healthcare more broadly.
Entrepreneurial skills beyond traditional silos of inpatient, ambulatory, and retail. This is a type of innovation that will produce tangible new revenue streams for the organization, and it requires expertise in setting up separate business entities. This could include creating their own technology platforms, spinning out parts of their existing work into LLCs, or even marketing their services in areas of excellence to other health systems. These leaders will seek accountability for areas of medication use not typically thought of within the pharmacy purview to create new financial opportunities and partnerships. We commonly see this in employee health plan design, population health and overall infusion strategy including site of care. Leaders whose journey followed one of the transitional silos of inpatient, ambulatory or retail may be at a competitive disadvantage unless they can gain expertise in these emerging areas.
Creativity in how to maximize pharmacy supply chain value for the organization. The potential benefits to patients and the organization are significant when the pharmacy supply chain is optimized, improving access to care and financial performance. Currently, we work with a number of clients where an outside view has found traditional opportunities they are missing. Our consultants also identify that few organizations look beyond traditional opportunities to maximize savings. Moving beyond this short-sighted approach should involve planning for the worst-case scenario in terms of possible pharma and regulatory erosion of 340B savings. Great executives will have plans in place for how they will pivot today’s services and resources in the event that 340B savings are reduced in the future.
Transformational leadership to move from an organization to a system. This comes down to three major steps. First, the leader needs to have insight into optimal system structures that meet the unique needs of their organization. Next, they need to tie business and clinical performance to that new structure to get support to implement it. Finally, they need to have the change management skills to establish the system structure. Pharmacy can lead the way in this area as a clinical department where system approaches create real value back to the organization. This can be a model for others to follow.
The ability to attract a diversity of top talent in a world of workforce challenges. Every pandemic has had workforce implications that rippled through society for years, and it is naïve to think this will not be our future as well. Given the breadth of expertise needed and the patient populations we serve, highly skilled and diverse candidates will be critical. The old model was to establish a health system pharmacy administration and leadership residency program to keep the talent you developed. While this is still necessary, the demands are much higher now for diversity of experience. The network of leaders pharmacy executives will recruit from needs to be broader. Nationwide, we see , organizations hiring thought leaders from other sectors outside of pharmacy, including analysts, project managers, and even former executives from adjacent health care fields (PBMs, wholesalers, retail chains, etc.). This will not be about smooth sales pitches, but having a regional and nationwide network that pulls talent in and retains them.
As a top pharmacy executive (or future executive), this is a daunting list. As Peter Drucker famously said, “Universal genius has always been in scarce supply.” There are not enough leaders who have all eight of these skills, plus the core competencies to occupy all the health systems who need them. And those with these competencies don’t always have the bandwidth to accelerate the changes they aspire to lead. Having a trusted partner to shore up soft spots in any of these areas will be essential to most, if not all, health systems. This could be accomplished through insourcing leaders with expertise in these areas and fostering regular dialog with them to ensure competence, or by engaging an outside consulting firm with deep expertise in these areas for guidance. Top health system executives realized years ago that health care was changing too quickly for one person to master all the complexity. So they turned to consultants for help, keeping one to two on retainer at all times. Visante is seeing pharmacy executives who lean into this benefit similarly to their senior leader counterparts. As is often said, a leader needs to act like the position they want to grow into.