Financial Constraints

Financial Impacts and Constraints Paper

Patience Kofi

OPS/HC 571

April 11, 2011

Gusti McGee

Financial Impacts and Constraints Paper

Pharmacy Effects on Operations Management

On a daily basis, a manager operating a hospital encounters increased demands on improving values and the quality of patient care with controlled costs of various departments. According to (Health Care Financial Management, 2010), pharmacy costs can easily exceed 10 percent of a hospitals total cost. To effectively function as a pharmacy operating manager, it is essential to understand challenges pharmacies undergo. With the rising costs of prescription drugs, operations managers must find cost-effective ways to ensure quality and safety of care. According to (Langabeer, 2008), pharmacies represent multiple operations management challenges including: inventory, personnel management, technology and automation, management controls, location analysis and selection, procurement, and network distribution.

Understanding pharmacies challenges of growth of mail-order medications, technology, increased demands of aging population, and even the stress of attracting/ retaining employees greatly affect the success of the hospital. Operation managers should be able to handle the challenge of medication safety and supply utilization. They must possess the ability to comprehend and adapt to changes that many pharmacies face daily as well as knowledge of how the effectiveness of the supply chain will enhance operations and the bottom line profits. Hospital pharmacies typically have more complex clinical medication management issues rather than customer relations and business. Poor pharmacy performance can affect profits if the product demands exceed the medicinal supply, along with negative effects on patients’ health and safety.

Inventory Control

The goal of operation management is to sustain, protect, and project the operational side of things. Ensuring that the hospital has the most...