September 23, 2020

How the Cloud Can Elevate Healthcare and Medication Management

Michael Korthuis  
Vice President of Engineering, Omnicell

Medications are one of the highest budget line items for health systems and over 10% of overall healthcare spend. So it stands to reason that hospitals want to closely manage their medication inventory to reduce costs and free up budget for staff and further investment. Of course, the biggest opportunity for cost savings is the reduction of medication-related problems.

In a national survey performed by the Institute for Safe Medication Practices, 20% of practitioners surveyed reported that adverse patient outcomes occurred because of a lack of inventory management and monitoring of supply levels. Hospitals spend $563 million in readmissions, $359 million in medication shortages, and $7.5 billion on medication diversion.

So, what’s the solution to lower medication costs and patient risk while delivering positive business results? In a word: intelligence.

Data intelligence is nothing new to healthcare, as providers, government, and payers all are leveraging technology to improve efficiency, compliance, affordability, and patient care. And while some healthcare entities are still hesitant to move data into the cloud, that’s exactly where it needs to be to maximize its potential impact. The richness of cloud-based data allows doctors, nurses, and pharmacists to view lab results or consult on medication notes, improving collaboration between healthcare teams regarding treatment plans that can now happen securely with a single click.

The health system pharmacy is a key department where cloud-based data and technology can have a significant impact. Having visibility into your medication inventory through a cloud-based solution allows for the precise tracking and tracing throughout the entire medication supply chain and lifecycle—from the wholesaler to the nurse’s glove to the patient. Yet while there is significant potential for technology to improve patient care while lowering costs, some health system pharmacies still remain hesitant to adopt cloud-based solutions.

Why the pause? There are two main reasons: one, concerns about costs; and two, security compliance, specifically regarding patient data and care.

Determining the return on investment for cloud-based pharmacy intelligence solutions is relatively easy: no up-front capital costs needed for servers, hardware, and data centers—as is the case with on-premise solutions. With a cloud-based solution, teams can focus on the business of pharmacy and impacting patient care, rather than managing IT systems.

A cloud-based solution will give your clinical team immediate, anywhere access to inventory visibility and actionable insights. The benefits of a fully connected system are truly endless, allowing pharmacists to do the following:

  • Identify and understand trends and anomalies
  • Right-size inventory, reduce waste, and cut costs
  • Gain greater visibility to eliminate diversion risks
  • Reduce stock-outs
  • Optimize ordering and improve business results
  • Streamline processes and workflows to ensure operational excellence 
  • Easily share critical insights with team members and executives
  • Assign, monitor, and manage team priorities using workflow tools
  • Manage spend and purchasing patterns based on medication usage—real-time inventory adjustments based on actual demand

Once considered a security liability, the cloud offers health systems a distinct advantage over on-premise solutions. Today, cloud providers offer security features that combat attacks to keep data safe; they also adhere to strict standards for security and compliance and have technical controls in place for managing intrusion detection and potential hacking issues, among others. For healthcare, the cloud data centers should be certified for HIPAA and safe harbor compliance controls.

With a cloud-based solution, health systems and pharmacies no longer have to worry about security upgrades and patches that may not happen with on-premise solutions due to lack of resources and technical staff limitations. A cloud-based solution—with predictive and prescriptive analytics, identification of diversion risks, and real-time data—is the most modern and intelligent approach to medication management.


The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of any other agency, organization, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author(s). These views are always subject to change, revision, and rethinking at any time and may not be held in perpetuity.

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