From Inventory to Insight--Rethinking Medication Management for Clinical and Operational Performance

In this episode, Randall Lipps Founder, Chairman, President, and CEO of Omnicell, discusses from inventory to insight, rethinking medication management for clinical and operational performance. Highlights of this episode include: How to reduce costs within medication managementHow system wide visibility can change decision making for health system leadersCentralized medication distribution and automationAI-driven analyticsEfficiency and caregiver supportHow to drive enterprise-wide cost optimization Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome Randall Lipps. Randy is the founder, chairman, president, and CEO of Omnicell, a company transforming pharmacy care delivery with a comprehensive portfolio of medication management solutions. Inspired by inefficiencies he observed during his daughter’s birth and his experience in airline operations, he founded Omnicell in 1992, growing it into a publicly traded company in 2001 that now serves healthcare systems worldwide. Recognized for his industry leadership, he was elected to the Bellwether League Hall of Fame in 2014 and has served on the American Nurses Foundation Board of Trustees. Randy and his wife, Kathy, actively support a range of charitable endeavors, while Omnicell fosters volunteerism and charitable initiatives through its Omnicell Cares program. He holds bachelor’s degrees in economics and business administration from Southern Methodist University. In this episode, we’re discussing, from inventory to insight, rethinking medication management for clinical and operational performance. Welcome, and thank you for joining us, Randy. Randall Lipps: Well, Kelly, thank you so much for having me here today. It’s always fun to talk about the numbers, especially with folks who are thinking about the numbers all the time. Kelly: Yeah, exactly. Well, let’s go ahead and jump in. So, Randy, as I read your bio, you don’t have a healthcare background initially, so what drove you into healthcare from the airline industry? It must be an interesting story there. [laughter] Randy: Yeah, when I got out of school, I went to work for the airlines, and the airlines had a ton of numbers, kind of like healthcare, I guess. And it had some of the same profile: it had a lot of employees in order to run an airline, a lot of capital, and a lot of regulation, things you will also find in healthcare. And in order for us to survive in the airline industry – at that time, it was American Airlines – we had to lower our cost. There was no other mandate other than to lower our cost, and we had to do that by eliminating work that we didn’t really have to do, minimizing the necessary work, centralizing it so that we could then really get a good perspective on it, and then eventually automating it. As I experienced healthcare through my own daughter’s long-term stay in a hospital, I realized there were some of the same opportunities that existed in the airline that there is in healthcare, so some Stanford students and I launched a venture to go find out ways to make things more efficient and easier, particularly for nurses and pharmacies to do their jobs with less cost. I mean, what was ingrained with that thought process when I entered the airline is it’s great to think about soft costs, but you’ve got to save hard dollars when you come up with new technology and new automation, and so that’s always been on the front of my mind in the way I think and we move the company forward. Kelly: I love that story. I mean, it’s just so interesting that you’re kind of sharing those commonalities between two industries that we wouldn’t think have anything in common but seemingly do. With U.S. healthcare spending nearing $5 trillion, where do hospitals have the biggest untapped opportunity to reduce costs within medication management? Randy: Well, that is a great question, and medication management is really the– it’s a tale of two cities, right? One, it’s the cost side, particularly on inpatient, and the other side, of course, is the revenue opportunity or the earnings opportunity that you have with the outpatient side. And so, a good organization must take advantage of both of those, so let me just cover those. On the inpatient side where everything is a cost, it’s really important to eliminate unnecessary work. And this is clearly seen as you see the consolidation of providers and hospitals and sites, that there’s duplicate work done at these sites. So, first step, eliminate unnecessary work, and then minimize the necessary work. The things that you have to do, be sure that you don’t do– that you do them, but that you don’t exaggerate them. And here’s the key. And many of these organizations have already figured this out. You then centralize it. You bring that critical work that you’ve minimized into a central location. There you have the expertise, you have the ...