Charity Care and Ethics

MAY 01, 2006
James C. McAllister III, MS, FASHP; Pharmacy Times Editor, Health-Systems Pharmacy Section

We as hospital pharmacists have traditionally minimized drug expense through formulary management, negotiation of contracts, elimination of waste and diversion, and optional inventory-management practices. Continuing efforts to promote cost-effective prescribing, emphasizing a focus on optional drug-therapy outcomes, and enabling pharmacists to modify orders based on therapeutic-interchange policies also have contributed to limiting drug-expense inflation. When I look retrospectively at the growth of my drug budget over the last 8 years, I am proud of my staff's efforts to assume a sense of fiscal responsibility for the clinical enterprise without compromising the quality of care we provide.

Despite this success, I am anxious about our preparedness for the future. The cost of technology, skyrocketing pharmacist salaries, novel drugs with 5-digit prices, and individualized therapy based on genetics promise to keep us under the financial microscope during the foreseeable future. Without question, hospital executives will look to our profession and its members for guidance and leadership to ensure that drug therapy does not "break the bank."

Among the many factors that will increase costs of providing comprehensive pharmacy services in the future, the provision of charity care is the most daunting. Our first challenge is to understand the definition of charity care from an accounting perspective, from state and federal government perspectives, and from the hospital perspective. Presuming that charity care is differentiated from bad debt, pharmacists need to appreciate those differences as well. The concept of charity care is daunting, because I believe that we are approaching a time when hospitals and society must come to grips with the financial implications of providing unabated charity care. In doing so, I suspect that the use of drugs for patients for whom limited or nonexistent payments are anticipated will come into question. These patients are not limited to "indigent" or "homeless" people but include those of "limited means," such as seniors on fixed incomes and illegal aliens.

Pharmacists with patient-focused or administrative responsibilities must be prepared to actively participate in, or even lead, discussions about limiting drug use in selected populations. As distasteful as this practice sounds, it appears inevitable unless health care financing reform takes place. We will need to understand the principles of ethics that apply to making health care decisions, policies that guide practitioners objectively and consistently, tools to assess comparative value of health care interventions, and much much more. Finally, we will need to determine where all of this understanding fits into similar strategic planning for the entire clinical enterprise.

It seems to me that the best place to start is by partnering with schools of pharmacy and professional associations to develop educational opportunities for current practitioners, residents and future leaders, and all our students. We must become facile with ethics, comparative value, and the principles on which both are based.

Mr. McAllister is director of pharmacy at University of North Carolina (UNC) Hospitals and Clinics and associate dean for clinical affairs at UNC School of Pharmacy, Chapel Hill.

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